It’s hard to believe that it’s been a full year since I donned a robe and cap to ceremonially celebrate my graduation from my MBA program at Cornell. It has been an amazing year since my graduation, even if the year passed quickly, as they always seem to.
You may have read the article which reports that Gallop found 70% of Americans are disengaged from their job. That’s too bad. But I would challenge the conclusion of the article which is essentially to do what you love and the money will follow or, to quote them:
“The best performers do so much extra study and work that they become experts, and often becomes wealthy as a result”
I think the key here is the under-emphasized “often”. Without any hard data, I would argue that while people that have earned their wealth are generally passionate about what they do, the inverse is not true. The article even vaguely hints at it when it says
“Start by identifying your natural talents, abilities and interests; develop them; and use them to solve problems that people are willing to pay you for.”
The key from this quote is “people are willing to pay you for”. The fact is: what you are passionate about might be something nobody wants to hear about, much less pay you for. Or it might be so specific that there is simply not enough people out there to actually pay you.
Now, you might launch into a counter argument about how money isn’t everything, and I would agree with that. Money isn’t everything, but money is a component of happiness and that cannot be overlooked. People will often make the comparison that people go to a job they hate just to make ends meet (which is a whole different issue that when you have a family you can’t just go off and do what you’re passionate about and hope money will come in – your family needs to eat tonight), but people often fail to make the very reasonable reverse argument. People will go to a job they love and come home to a place they hate.
Whenever people ask for my advice about what to do and how to balance their passion with work I tell them to pick their life goal. Don’t go after a career that will be perfect for you, but won’t pay the bills. Don’t take a job just for the money and hate your work. Do pick a job that you can reasonably enjoy and which provides for a life at home which makes you happy.
There is no single formula that works. For instance, if you are all about deferred gratification and can work a job you hate but retire at 40, and that’s how you’re going to be happy with your life. Go for it. If you are an optimist and think your passion will make you money no matter what, and trying and failing would be better than not trying at all – a la Gary Vaynerchuk – do it.
Ultimately, either is consistent with my philosophy to pick the life you want and go for it. So if you’re part of the 70% that are disengaged with your job, but consider that a fair trade-off for the stability and lifestyle it provides, I’m happy for you. Follow your life goal, with laser focus, readjust when necessary, and be happy.
How happy are you?
This has been a Thought From the Cake Scraps.
Opportunity cost – the cost of what you give up in order to do something else. It is something that is pounded into you in an MBA program. The question of “what else could be done with this time or money” constantly comes up. A great project will be passed on simply because there is an even better project to fund and a business cannot do all of the projects at once. Trying to do so will, most likely, lead to failure of many or all of the projects.
This concept of opportunity cost truly is an important concept. It is important to realize that choosing to do thing A means that you won’t be able to do thing B. It’s not good or bad; that’s just how it is. The problem that I’ve run into recently is that I’ve become more aware that every decision actually does have an opportunity cost. While this seems simple enough on the surface, it’s actually a bit of a problem. Thinking about what the alternatives might be isn’t all that productive for small decisions. Furthermore, the reality is that it’s not possible to know all of the ramifications of the actions you take.
With this realization, I have had to become comfortable with once again not thinking of the opportunity cost of small decisions. It simply isn’t worth it.
For example, like any good MBA I keep up on the news of the day. I enjoy getting the WSJ every day – paper delivery – as well as following headlines on various news sites. I’m also a sucker for a good magazine offer (tip: pay with check to avoid auto-renewal and just let it lapse). My RSS feeds are a wonderful source of consolidation, despite what Google thinks. There was a time when I could follow many of these things and still have time left over. As you know, that’s no longer the case and likely won’t be again. This is where opportunity cost comes into play.
Previously, I would worry about missing a day of news, an item in RSS, or not reading magazines cover to cover. My overarching thought was “what if I miss something?!” I had to let it go. There simply wasn’t enough time to catch up – I would just get further behind. And as items would build up, the task would grow ever more insurmountable and the gap would grow. Now I use an elimination strategy and don’t worry about it.
If I have not read the prior magazine when the next one arrives, the old one is recycled. Same with the paper. For RSS I simply allocate myself a certain amount of time to read. When time is up, I consider everything as read and start a blank slate. This has been a huge benefit for me because I feel so much more in control. When my WSJ subscription lapsed for a month, I just didn’t read WSJ for that month. Was I a little less informed on certain things? Of course, but not completely out of the loop. And so I continue to streamline and manage my time.
Worrying about what I might miss if I don’t spend the time reading all of these articles isn’t worth the stress. The opportunity cost isn’t as high as I thought it was.
As I continued to heighten my awareness of how I was making decisions, I discovered there was more in my life that could use the same treatment. Yes, a run to the store will take 30 minutes or an hour. Yes, that is time that I can’t do something else. Do I still find it a bit annoying that I have to go? Yes, but I have stopped obsessing about it. On the other hand, the reason I don’t have to obsess about it is because I’ve made cuts in other areas. I barely watch TV and it takes a act of nature to entice me to see a movie because it is so hard for me to enjoy watching video when I could be doing something else. But then, there are societal costs for not being able to make conversation about these things.
The first semester of my MBA program definitely put me into hyper-aware mode on how I was spending my time. Looking for all of the opportunity costs was productive until it was a source of stress. With the second semester finished it is clear that for some things, the opportunity cost just isn’t worth it.
What is your largest opportunity cost?
This has been a Thought From the Cake Scraps.
It doesn’t seem that long, does it? Just 15 minutes. 900 seconds and then it’s gone.
In my pre-MBA life that usually wasn’t all that big of a deal to get distracted for that long. Maybe it was a break to surf the Internet, play some games on my mobile device or read the paper. That life appears to have gone by the wayside, or at least it needs to for me to continue to keep up with the pace of my life.
What I’ve found is that during my day I actually have many breaks of just a few minutes, anywhere from 5 to let’s say 15. Because it was in between classes, I would just chat with friends or jump on my phone to play a game. That is simply no longer the case. I still make time for friends, but the rest of those breaks I have started cramming stuff into the gaps.
The WSJ comes to my door step every day and I pack it in my backpack and jump on the bus. For me the bus ride is a bust because I get ill in about 30 seconds of trying to read, so it’s a good thing the ride is short. Once I’m on solid ground not a minute is wasted. A 5 minute break is long enough to skim the section of the WSJ that I don’t have much interest in. 10 minutes will take me through most of the sections and 15 plenty for the entire paper.
My Series 9 Ultrabook is also one of the best purchases I have ever made. The ability to carry it anywhere and then flip it open and have a fully functioning computer at my fingertips in seconds is so helpful, I can’t begin to describe it. I have 6 different PowerPoint decks open right now along with probably 8 or more other programs. In just a few minutes I can respond to a few emails, update some PP slides I’m working on, or make some notes after a quick coffee chat with a recruiter.
I could also run and check my mail box, grab a cup of coffee, get a quick snack from the (over-priced) cafe, switch out my books in my locker, change into business formal clothing for a briefing, change back into street clothing afterwards, read a few pages from the homework, do a practice problem or two. The list goes on, but I have learned that each and every second counts, so I need to use it.
Another thing I could do is bang out a blog post.
What do you do with your 15 minute gaps?
This has been a Thought From the Cake Scraps.
I read an interesting post the other day about how the new generation of kids will never know what a pixel is and cannot imagine a life without touch screens. I’m sure many of us see it every day – children but a few years old (or less) interacting with tablets such as the iPad or eReaders like the a Nook or Kindle. As I thought about these interactions I also was reflecting on a conversation I had with a professor of user design that was telling me about how unintuitive these actions actually are. Nobody sits in front of something and naturally thinks “if I could just pinch to zoom…” This is a learned behavior, but nearly all touchscreen devices, that contain something which you would want to zoom in on, contain that feature. How is one to know?
As my mind wandered along this thought path I realized I had nearly visited this topic previously on this blog but never got around to publishing the entry. The post is still a draft but was written shortly after I got my first iPod Touch. I was likely one of the few people who actually went to the website where the PDF of the manual existed and read through it. There are all sorts of things in there that I bet the average user doesn’t know. Things as simple as “press space twice to auto-punctuate with a period.” This may or may not be common knowledge now – that’s not for me to judge – but at the time I can remember many proud iPhone / iPod Touch users who had no idea this feature existed.
I then also though about some recent interactions I had with other applications on my Incredible 2. You wouldn’t believe some of the undocumented (or perhaps they are and I just don’t take the time to find them) features these apps have. I find myself trying to guess what I can click on the screen. What happens if I swipe left, right, up, or down? Will the same thing happen on each screen of the app? And what about the long press? There are some features that I’m sure people have no idea exist because they’ve never tried the long press. And why would you? Isn’t the long press something we’re supposed to make fun of old people for? Like when they’re trying to type or click with a mouse and completely fail because they can’t get their finger off the key/button quickly enough?
But more and more these features are being built into new devices. Integrated as part of the experience and this, I realized, is why the stereotypical “old person” can’t keep up with technology. It is not that they cannot, but if they don’t keep making all of the small steps as technology progresses, when they finally try it is simply unintuitive because the technology relies on the user already having a level of presumed intelligence about how it “should work.”
The new devices and interfaces are built with a level of presumed intelligence. It is presumed you know the basics of interacting with a touch screen. It is presumed that you can go Google/Bing for help or additional instructions. Software that used to come with thick instruction manuals now come with a flimsy booklet, if you’re buying a physical product at all. The best you can hope for is a Quick Start Guide in most products. After that is it just presumed you can go and figure out how to get the rest of the info. Sure, there’s a website listed but it is not as if you go to the website and it will only display the things you are looking for.
Certainly this is not a new phenomenon. Each version of technology can and should build upon the past OR replace it altogether with something better. But, even full replacements will lean on still other presumed intelligences. Now, a great designer will tell you that things need to be stupidly simple – so simple a child could do it. The problem is, of course, that the children can do it. It’s the adults that have problems. And while one can lower the level of presumed intelligence that a product relies on, we must also continue to look forward and realize sometimes – for those that don’t put in the time and effort to keep up – technology will pass you by.
I intend to not let that happen.
Do you notice presumed intelligence in your daily life?
This has been a Thought From The Cake Scraps.
As I laid out in my last post, the hottest business trend of showing deep discounts just leverages the current sale-oriented culture. While one can find these deals in nearly every email that passes through the inbox, it is not more plainly laid out then with GroupOn where stuff is simply 50% (ish) off all of the time. Everything they are selling, every day of the week.
Rather than delve into whether or not GroupOn takes advantages of small businesses, I am going to stay focused on the business concept that drives GroupOn – discounts compel people to buy. Sometimes they need the item and most of they time they don’t. The thing is, the deal is just so darn good and the discount so darn large people are left asking themselves “how can I not buy this?”
The reality, of course, is that we’re still in the early phases of this broad based discount solution and businesses are still trying to figure out if there is a way to effectively use it as a marketing channel. Regardless of how it turns out, this is clearly a marketing expense and, therefore, will come out of the marketing budget as part of the promotion cost. Small businesses may not have the data or wherewithal to figure out the true cost, but my guess is that they will find out via word-of-mouth or their own P&L statements, even if they don’t have the gory details. With this in mind, let’s focus on the major players only for the sake of discussion.
When a company runs a promotion as significant as a GroupOn, they are surly going to be tracking everything they can to figure out if it was a good deal or not. Did the promotion drive enough incremental sales to cover, not only the cost paid to GroupOn and the cost of the goods/service provided, but also of the subsidized behavior (people who would have purchased anyway)? That’s a lot to overcome. The business benefit, for the moment, is more that it can help make a company look cool and interesting. It may even draw people back into the brand that have been away for a bit.
Still, it is all a marketing expense. It comes from a marketing budget. And this is what people fail to realize. A good that is on clearance is discounted because the business needs to move through the inventory and is, therefore, not a marketing expense. The loss of margin dollars comes out of a different part of the budget. The consumer is actually getting a deal here because the goods used to be sold at full price.
This is not the case with a deal like GroupOn (or LivingSocial). Since these are marketing expenses, the cost of a marketing is built into the cost of the product. That fact that you, as an individual, get the full price product for 50% off doesn’t change the fact that, in total, it didn’t cost the company anything. They simply didn’t run a “Buy one get one” promo or a “Gift with purchase” promo.
What this means for the sustainability of this heavy coupon culture is that it will only continue to work so long as there are enough consumers willing to continue to buy the product without a marketing promotion. My prediction is not that the discount culture will go away (although I am skeptical of the long-term viability of operations like GroupOn) but that you’ll see the same companies or the same types of companies use that type of promotion and that it will become stale.
For the moment I, as a consumer, would – and do – jump on that discount train but my prediction is that it won’t last as it currently exists. After more and more companies run those type of promotions we’ll start to see clear trends emerge. As those trends become more solidified even the less advanced businesses will start to see that “business of selling product/service A are never featured” and there will be more whitepaper style publications on the success or failure of the promotions.
While not as overdone as Black Friday, as Black Friday has a good 20 year head start, I would keep an eye on this. The simple truth is that a company cannot give away goods at 75% off (50% discount and then 25% to deal provider e.g. GroupOn) and not raise prices. The promotion is simply too deep and too short lived (versus a longer buy one, get one) to last. The math doesn’t work. So get the the deals now, while business still have not “marked ’em up to mark ’em down” and don’t fully understand what the expected cost really will be.
And remember, the “deals” at Coach Outlets actually have a higher profit margin than the full price regular stores on 5th Ave.
Did you get a deal recently?
This has been a Thought From The Cake Scraps.
As a marketer, I’m acutely aware of the benefits of a well ran promotion. And as a (top 30 under 30) direct marketer, I know the coupon/promo code is a valuable tool for attribution. Still, lately I have become frustrated with all of the discounting going on. I’m going to break this up into at least two parts to make it digestible.
Case 1: Black Friday
Remember when Black Friday used to mean something? Remember when it was a day of unheard of deals, available only that one day? It was great, wasn’t it? When it first started in the 1970’s, and really grew in the 1980’s, it was a day of great reveal. Nobody, it seemed, knew what deals would await them. Later, websites were created for the sole purpose of revealing the circulars which retailers tried to keep as quiet as they could. And then, what started out as a heavy shopping day due to most non-retail employees being on vacation, started to creep.
The creep started in a fairly innocent way. Stores would have day-after-Thanksgiving sales. And then The sales grew bigger and door-buster sales started to emerge. Stores needed the foot traffic and they needed people to shop with them before they shopped elsewhere. Prices, for the moment, could only go so low. Next, stores started to open earlier. First it was 6:00, then 5:00, then 4:00. Once the process started there was no turning back. The every year the door-busters came earlier until they opened at midnight. They could go no earlier. Just kidding. This year Walmart is opening at 22:00 Thanksgiving night.
While stores are racing to open earlier than ever, the tentacles of Black Friday started to invade other channels (including Cyber Monday). Signs, circulars, and emails started proclaiming “Black Friday Like Prices”. Amazon.com made the whole week a week of deals. I even saw “Black Friday in July” slogans to tell me just how good of a deal I was getting over the summer. As Black Friday neared, stores no longer strived to keep things secret. In fact, they now actively release circulars early and those sites that used to leak the deals are now commercialized versions of their old selves.
The immediacy of the day has been going downhill for quite some time. Then, Walmart pulled a game-changing move – again. In 2011 they will not only match competitors Black Friday prices on Black Friday (as they did in 2010) but are offering a price match that “is both forward looking and retroactive”. Basically, as long as supplies last, you’re good to go all season long. Talk about a lack of urgency.
Now, the important thing to keep in mind is that I’m not sure what the alternative is for these stores. The fact is consumers have a finite amount of money to spend on gifts and if a store doesn’t attract them in and get the consumer to spend at their store, the consumer will just go someplace else. Ultimately the consumer is the one who decides when enough is enough.
Will you be heading out at 22:00 on Thanksgiving night to shop?
This has been a Thought From The Cake Scraps.
Hope. Of all the things that motivate an individual to act, an action creating hope is one of the most powerful. Doing something that creates the possibility of a better and brighter future is an amazing draw. Better yet is when we’re able to partake in an act that has no immediate expense to ourselves and still creates the chance for a more fulfilling future. When a company is going through the process of finding a new CEO it is hope that prompts them to make offers considered excessive by the general population. Let’s explore that idea.
While this post comes fresh off my attendance of eMetrics, it has been on my mind for a while and the conference just reinforced the view I had. CEOs matter. Leadership matters. A company lacking leadership will not only flounder with the problems of today but will also be unequipped to deal with the issues of the future.
For this reason, when deciding on a new leader a company desperately wants to find the right person. If they believe they have found that person they become willing to do whatever it takes to get them. They promise “golden parachutes” of benefits to draw these leaders away from their current positions and provide a compensation package even more compelling.
Hopefully they never have to pay out the parachute. Hopefully the compensation is small compared to the value created. Hope. Hope. Hope. That is all the company has when making that hiring decision.
Not convinced? Two words provide the study that makes the point: Steve Jobs.
The impact of his second stay with Apple cannot be overstated. He took the company where he wanted it to go and made it the company it is today. Could anybody else have done that? Did anybody else have the connections he had? Would they be the same expert salesman? Did they have the ability to say no to almost everything such that the company could focus on a few things that will change the world? Many would argue the answer is a clear no. Steve had the whole package.
You probably own an Apple product. Having your life so impacted by an individual, consider, if he were alive today and in “free agency” what would you say is fair pay for him? I’m sure he had all sorts of golden parachute options baked into his contract. Stock options, salary, etc. All of the things typical of the “fat-cats”. And yet, his leadership changed lives of consumers everywhere and grew Apple to one of the largest companies (by market cap) in the world. Apple didn’t know that when they signed him on. It was a hope.
There may have been no better fit for Apple, but I’m certain there are other similar situations every day – companies believing they have found the right leader for their market, for their size, with their location, with their brand, etc. The company hopes it has hired their own version of Steve Jobs.
But sometimes they fail. In fact, in a recent article in Forbes, while the readership overwhelmingly voted Steve Jobs the best CEO, the editors disagreed saying he couldn’t do what he did at Apple in other verticals. If Steve had decided to move on (unlikely) the price another company would have offered could have been astronomical. Still, there is no guarantee it would have turned out. He could have failed. How ridiculous would that pay package look?
Case study after case study shows that the leader matters. Picking the wrong one can destroy a company and, with it, the jobs of all those underneath. When thinking of it in these terms – the fate of shareholders, employees, and customers – through the lens of hope, it is not so difficult to understand why pay has gone so high. Global competition has increased while the internet has made the cost of making a mistake soar.
So remember, the next time you hear about how much your company pays your CEO realize they’re looking for their own Steve Jobs. You probably don’t have all of the details and it could be that CEO’s performance that is keeping you employed at all.
Then again, they could just be overpaid. This is simply one take on an alternative point of view.
So, given his impact and the enormous value he created, could you overpay Steve Jobs if you knew losing him meant throwing away all Apple products (and the $75 Billion in cash Apple has)?
This has been a Thought From The Cake Scraps.
Circles are all the rage with Google Plus but, as any usability person will tell you, they are a pain to manage. That is why the Groups option in Facebook never got much traction. You have to be dedicated to keeping the lists current and managing the settings on the pages. Google tried to address this issue by forcing you to add people to a circle, but it is still a pain and still rather confusing. Facebook just took another stab at it.
I say just look at how people currently use social services and make a solution that solves this issue. Hint: it is not this silly all-in-one view that both Facebook and Google Plus have taken. The answer is right in from of them and the interfaces solution lies with Hipmunk.
In Hipmunk you can create several searches in a tabbed view while remaining in the same browser tab. The searches may be similar, but obviously different as well. The key is that you have a central place to manage multiple threads, each thread in a unique tab.
When you look at the social landscape there are clear breaks. Facebook is for family and friends. Twitter is for the masses. LinkedIn is for work. All are social; all are distinct. The answer is one interface that blends all of it together in a central place with unique tabs.
Circles and groups fail because you manage where you share it at the end of the sharing process, right before you click share. Think about how much easier it would be to share to “Google+Professionals”, “Google+Friends”, “Google+World”. Sure, have the concept of Circles live within this interface. Make it so you can share on +Friends and add the +Work circle to the “Share With” list. Have a Limited Profile list etc. The point is that by creating an interface that makes is unmistakably clear where you are sharing people can effectively manage their online presence.
Then bring it all together by having a central stream where the content flows into and make it clear (w/ an icon) where the post was originally shared from (+P, +F, +W or something cool). Or, maybe you don’t need a central stream. Maybe that’s what people say they want, but they don’t actually want it. Maybe the solution is that people naturally silo themselves into distinct groups and providing a central tool that allows them to select the silo they wish to view is the answer.
Google Plus is so close to this with the mandated Circles concept but still falls short. Get people to a central place to manage these different aspects of their life first (look at the success of TweetDeck). Then focus on how people would like to see them integrated, if at all. Right now I see these companies trying to solve for a problem (a central place for everything) which doesn’t seem to have much demand while they ignore that people want – to separate certain aspects of their life into silos.
Hipmunk has it right – give us tabs. One place, many views, and a central place to manage to distinct aspects of my social presence.
Does that sound like something you’d use?
This has been a thought from The Cake Scraps.
Walls are amazing things when you think about it. They are what divides one space from another. They define boundaries of rooms and space. And yet, if one takes a moment to think about it, there is not much to a wall. Just a stretch of material, however thin, spread out across a space. Walls don’t even have to be solid; some of the most important walls have gaps in them!
No matter what kind of wall it is, walls are all around us. It seems like every day you hear a speech about people that want to break down walls or you read an article about walls people have built up. Sometimes people want to build up one wall while taking another down. Regardless of the direction the wall is going, I feel like they are always applied to large issues. That the election of a non-white president was breaking down racial walls. That politicians need to tear down walls and work across the aisle. The problem is that these are Great Wall size issues and, while important and worthy of discussion, are not the things you and I probably deal with on a daily basis. Instead, I urge you to think about the smaller walls you might erect, perhaps without even thinking about it. Walls that are mere inches or fractions of inches in thickness rather than several feet or yards wide.
These small walls can have a profound impact on interactions – just think of a bathroom with no walls for the stalls. Small walls can make all the difference – both for better and for worse. For example, not including certain functional areas, individuals, or groups on the distribution of a memo or report can build a wall. Withholding information can create a wall. Not giving the full context of an email string when talking about the end result can build a wall. Not taking the time to make a quick fix for somebody can build a wall. You get the idea.
The beauty and the burden of all of this is that the choices are all yours. You decide how to interact with people and how to treat people. You decide if you are going to pause a moment to see if everybody is on board or if you are just going to keep talking. The largest walls start small and then layers are added over time. Be careful about how you create your walls. Relationships are what makes things work or not work. Connections make business happen.
Are you building walls?
This has been a Thought From The Cake Scraps.