The More Choice You Have, The Less There Is

Giving greater choice does not mean more will be chosen! 

Most people believe that having a choice is good. The belief here is that choice gives us freedom, so if we have more choices we have more freedom, the better it is for our lives.

But some research has found that this is not necessarily the case. Researchers set up in a shop and presented an array of tasty jams and enticed shoppers to buy a jar. In one version, there were six varieties shown to shoppers. In another, there were 24 jams. The second, larger array attracted more traffic. But the smaller array led to ten times more purchases.  The researchers concluded that sometimes we feel overwhelmed by the number of options available to us.

Having too much choice has two negative effects on people. Firstly, paradoxically, is that too much choice produces paralysis, rather than liberation. With so many options to choose from, people find it very difficult to choose at all. Think of comparing retirement plans or different car insurance policies.

Second, there are significant opportunity costs you incur, that is when you choose one option you try to assess the costs of what you have foregone i.e. the benefits you will not realize for the options you have not chosen.  Because people are naturally afraid of making a wrong decision so you perceive more of the costs of your choice than the benefits, and you are less satisfied with the alternative that you have chosen.

The implications for the paradox of choice hold equally true for your customers, your suppliers, your employees and others as they do for you.  So if you want to avoid your customers suffering from “analysis paralysis”, and for them to value the benefits of what they choose to buy from you, there are two things to do:

  • Give them limited choices – rather than asking them to compare offerings with many features and attributes keep them focused on the key ones that are important to them.
  • Use three options – for some reason, people find it easier to choose when they have three options to select from.  Provide them with three distinct offerings, and make the similarities, overlap, and difference clear and relevant. Make it easy for them to decide.

The paradox of choice is part of who and what we are. Learn to work with it rather than to circumvent it.

To view or download a PDF version of this blog click here

Share your thoughts and ideas here, or email me at andrew.cooke@business-gps.com.au

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Click here to find out more about Andrew Cooke and Growth & Profit Solutions.

3 Ways to Help Change the Perceptions of Others

Perceptions of Business Growth – What is REALLY happening?

by  Andrew Cooke, Growth & Profit Solutions

Is your business growing or not? Do you share the same view as your staff, your manager or your leaders?  How do you know if you do?  This article highlights the differences that exist, examines why they exist, and suggests ways to create a common understanding of the business’ growth potential and opportunity.

ImageA recent Australian study by Leadership Management Australia (June 2012) of over 2000 participants including Leaders, Managers and Non-Managerial Employees highlighted a major problem and disconnect facing business.  The perception as to whether their businesses were growing or not.

The Non-Managerial Employees firmly believed that their businesses were growing (71%) whereas Leaders and Managers have a considerably different outlook – with the belief that growth is declining. Only 47% of Leaders perceived their businesses as growing and 45% of Managers.  So what does this mean for business in dealing with the future?

An individual’s perception of a situation is their reality, no matter what you think.  It is how they ascribe meaning to a situation and is based on their beliefs, feelings, ideas and experience.  As such we are looking at how to overcome a clear difference of opinion and belief. Failure to do so can cause major problems between these groups.

So what can we do?

Firstly, the differences may be due to the time-scale that the respective groups look at the work of the business – employees focusing more on the immediate and short-term, managers for the mid- and short-term, and leaders for the mid- and long-term.  The longer the time-scale that you are working to the greater the level of uncertainty that you need to incorporate into your forecasts and plans.  We need to understand this.

Uncertainty comes from a variety of sources.  Externally to Australia there is growing uncertainty in relation to economic, environmental and even political conditions in a number of countries, whose ripples are being felt on Australia’s shores.  Within Australia there are internal uncertainties including the carbon tax and the mining tax which is exacerbated by a government suffering in the polls.

Secondly, employees need to understand the perspective of managers and leaders.  To do this the leaders and managers need to clearly and consistently communicate what the issues, opportunities and risks are and in doing so create trust.

Trust creates high-performing organisations (HPOs) and helps the business to achieve high revenues, profits and market share than low-performing organisations where trust is low.  These HPOs are also more effective at accomplishing their goals in critical areas including customer loyalty and retention; achieving predictable results; business agility and practicing innovation and creativity.

Thirdly, the business needs to actively engage employees in coping and dealing with these changes and engendering trust.  Key to this is establishing clear priorities and being able to cascade them to people so that they are meaningful, relevant and measurable; and building these priorities into their work creates alignment, traction and results.

To enable the business to grow requires more than leadership and good management.  It requires good communication, developing trust across and throughout the business, and the establishment of a commonly shared and understood perception of the business and its future growth. Creating this enables the business, holistically and at all levels, to engage proactively and develop opportunities and options for business growth.

Do you know how perceptions vary across your business and why?  What perception do you want to create for your business and how will you do it?  Share your ideas, experiences and examples of what has worked and what has not – ask your questions and let’s see what answers we can come up with.

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How to Find & Challenge Assumptions

How to benefit from making mistakes and challenging your assumptions.

by  Andrew Cooke, Growth & Profit Solutions

Make Mistakes

A common view is that failure is a bad thing.  It implies a lack of success, personal weakness and it makes you vulnerable.  None of these things are comfortable, enjoyable or desired and, as such, failure is to be avoided.

The problem with this is that the only way you can learn and grow is to fail.  It is a natural part of our way of life.  How many parents proudly remember their baby standing up for the first time, and walking without falling down?  Exactly, it doesn’t happen.  Yet we insist that as we get older so we must always know better, and so we must not fail or be seen to fail.

So let’s plan to fail.  Plan to fail by making deliberate mistakes.

If we are looking to make deliberate mistakes we are better prepared for the eventuality than if we make a mistake unexpectedly.  By looking to make a deliberate mistake you are immediately putting yourself in a mindset of testing, learning and developing.  If you make an unexpected mistake you are more focused on avoiding making the same mistake than learning from it.  One way helps you grow, develop and to focus on the upside; the other can make you more insular, reactive and focused on the downside.

“Consider the Opposite”

Psychologists use this technique, “consider the opposite”, to stop ourselves from drawing premature conclusions and, instead, ponder whether we might be misinterpreting the evidence. For example, “I think my partner is selfish–but, wait, maybe I’m just ignoring all the times he’s looking out for me.” Or, at work: “I think my colleague is being rude and abrupt–but what if he’s not being abrupt and is just trying to respect my time?

If there is such a potential upside to making decisions, then why not take control of the process and try to deliberately make mistakes which can learn or benefit from?  In their recent book, Decisive, Chip and Dan Heath tell the story of a company called DSI–Decision Strategies International, a management consulting firm.

The CEO at DSI, Paul Schoemaker wanted his colleagues to help him plan and execute a deliberate mistake, as a way of testing their assumptions about DSI’s business.

They approached this in 5 steps:

  1. Challenge the Conventional Wisdom – they listed the 10 key assumptions underlying their business.  Conventional wisdom is rarely articulated and even more rarely questioned.
  2. Identify Low Confidence & High Payoff Alternatives – they identified and focused on the three assumptions that they were least confident about and that, if proven wrong
  3. Select the option with the having the highest potential of benefiting from a strategy of deliberate mistakes.
  4. Plan to make the mistake
  5. Review results and identify results asking:

What was the difference between what we expected and what we got?

What changed or happened for this result to occur?

How can we replicate this or avoid this outcome?

What are the key leanings from this?

How should our underlying assumption be changed, modified or removed?

The three assumptions that DSI came up with were:

  1. Young MBAs don’t work well for us. We need experienced consultants on the team.
  2. The firm can be successfully run by a president who is not a major billing senior consultant.
  3. It is not worthwhile to respond to RFPs. Clients who use RFPs are usually price shopping or are going through the motions to justify a choice they have already made. (RFPs are requests for proposals. Customers send out RFPs to attract vendors to bid on their business.)

A further round of assessment led them to select number 3 as the one in which they had the least confidence, and which could have the greatest payoff. Now they were ready to make their mistake.

The firm’s policy had been never to respond to an RFP, but they resolved to respond to the next one that came over the transom, which, as it happened, came from a regional electric utility. The DSI team submitted a proposal with a budget of about $200,000, a price that reflected their normal fees but that they suspected would be well out of the client’s league. Schoemaker said, “To our surprise, the electric utility invited our firm to visit with the CEO and the senior management team to explore not only the project in question but others as well.”

Eventually, DIS earned over $1 million in fees from the client. Not bad for making a mistake.

But let’s be clear here, most of your “deliberate mistakes” will fail, and in the fact that failure should be encouraging because it means you’ve been making the right assumptions all along. Beyond the mistake itself, the willingness to test your assumptions has its own value. It signals to your colleagues that your work will be conducted based on evidence, not folklore or politics.

So where are you looking to make a mistake?

Excerpted from Decisive: How to Make Better Choices in Life and Work by Chip Heath and Dan Heath. Copyright 2013 by Chip Heath and Dan Heath. Published by arrangement with Crown Business, a division of Randomhouse, Inc.

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When Saying Nothing Gets You More!

Using silence to find out more

Silence is a powerful way by which you can elicit more information from people you are talking with – especially when talking with customers or interviewees.

silence-is-golden-2

A Golden Silence is when you pause, deliberately, so that you can listen without thinking of what you are going to say next. There are two forms of Golden Silence:

Golden Silence I – you simply pause for approximately three to four seconds after you ask a question,

and

Golden Silence II – you simply pause for approximately three to four seconds after the person responds.

Golden Silence I – this gives the other person, your customer or interviewee, a moment to think about what has been asked and how to respond.  This is likely to provide more solid information.

Golden Silence II – this gives you a better chance to understand what has been said, furthermore during the second pause the customer or interviewee will often reflect further and provide additional information.

Be careful how you use Golden Silence so it does not seem manipulative or intrusive.  The Golden Silence technique is mean to expand, not limit, the possibilities of Superb Communication.  As such, by paying close attention to how the customer reacts, it vastly improves your chances of reaching a better result.

Benefits of Golden Silence

  • The number of  interactions increase
  • The length of responses increases
  • The reliability of the information you get increases
  • Your level of comprehension increases
  • The opportunity for misinterpretation is reduced
  • The number of relevant unsolicited responses increases
  • The number of customers’ questions increase
  • Dialogue shifts to the customer’s real wants and needs, and away from those of the seller
  • It gives you more time to think

Techniques to Avoid

  • Using the phrase – ‘think about it’ – it is vague and can come across as a subtle put-down
  • Mimicry
  • Using ‘Yes…but…’ – this occurs when the dialogue is stalled
  • Rhetorical questions – they add nothing to the dialogue and can be manipulative.
  • Asking ‘Why?’ immediately after they reply – this can put people on the defensive.

If you found this article of use or interest please don’t hesitate to share it with others.

Click here to find out more about Andrew Cooke and Growth & Profit Solutions.

How to Improve Productivity Quickly

Raise Productivity – Build on Your Strengths, Not Your Weaknesses

by  Andrew Cooke, Growth & Profit Solutions

Raising ProductivityToo often in business we focus on our business’ and staff’s weaknesses.  The reasoning is that by addressing our weaknesses we can improve.  This is a fallacy.  The only way that you can improve and raise performance on a sustainable basis is by building on your strengths.

Let’s look at it diagrammatically.

 

Building on Weaknesses

In this first chart we are looking to address a weakness.  This weakness means that we are currently performing below the level of performance that is expected.  We spend time, effort, resources and money on this and we raise the level of performance – but only to the expected level of performance.  The risk here is that, despite your best efforts, this may not be sustainable as once the pressure is off the individuals they may revert to their old habits

Building on Strengths

In this second chart we are looking to build on and leverage a strength.  Currently we are operating the level of performance that is expected.  We spend time, effort, resources and money on building  this and we raise the level of performance – to a level of performance significantly above that which is expected.  As this is a strength, and a good habit that is in place, it is likely that this improvement will be sustainable – even when the pressure is off the individuals.  Here people are working smarter, not harder, in a way that is aligned with what they do well making it on-going.

The Implications

So what does this mean for us as leaders and managers?

Firstly, invest more effort, time and resources in developing your best people – not your mediocre people.

Secondly, and this many seems counter-intuitive,  but it pays to assign the best workers to the best bosses because that strategy results in the largest productivity gains.

For example, if 75% of your business’ value/productivity comes from 25% of the workforce then getting a 10% improvement from your top 25% means you’ve increased organizational value creation by 7.5%. Not bad. Your remaining 75% would have to boost their collective productivity by 30% — triple the top performer’s rate — to match that 7.5% net increase.

What’s the better and more rational bet? That top management can get a 10% spike from their top people? Or that they can get the demonstrably less talented, less capable, less productive three-quarters of their enterprise to dramatically increase their value outputs by almost a third? Which group would you invest in? I know where I’d put my money.

So What Do You Do?

Firstly, leverage your business and key performers’ strengths and make it into a virtuous cycle.  Secondly, don’t ignore the weaknesses – but remember it shouldn’t be the squeaky wheel that gets the oil and the attention.  You have limited resources; use them to the best effect.  Thirdly, look at how you can remove the weaknesses – either by changing people to roles where they are better suited, training (if it can produce sustainable improvement and after investments in your areas of strength), or removing them (take out the dead wood and non-performers).

A recent piece of research entitled The Value of Bosses from the National Bureau of Economic Research empirically argued (unsurprisingly) that bosses matter. Better bosses generate better results. Underlying this were two findings:

  1. That the most significant impact bosses had didn’t come from their motivational skills, but from teaching workers how to be more productive, i.e. capability building. That’s important.  Research showed that replacing a supervisor from the bottom 10% of the pool with one from the top 10%  increases output about as much as adding a 10th worker to a nine-worker team. Not only that, but about two-thirds of the productivity boost from working under a good supervisor persists even after the worker switches bosses.
  2. The second finding is that the most efficient structure is to assign the best workers to the best bosses rather than have the best bosses bring the weakest workers up to speed.

So to raise productivity on a sustainable basis build on your staff’s strengths, in doing this the business’ leaders and managers need to be able to teach their teams how to become more productive, and to cascade this skill and associated capabilities throughout the business.

What are you doing to enable your leaders and managers to practically develop these skills, so that they can develop them in others?  For ideas, insights and any questions please email me or comment here.

Share your knowledge, share the wealth!

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Risks of Conforming, The

Doing things with rigor takes effort, but not everything you put effort into is done with rigor. 

We often look at how hard we work as a measure of the quality of our work. But this is wrong. When you are looking at the quality of the outcomes you or your team produce you need to consider two elements:

  • Effort – how hard you work at getting the work done.
  • Rigor – how well you adhere to the process of getting the work done.

To be efficient and effective in your work you need to be high in terms of both the effort and the rigor which you apply.

An effort is focused on doing the best with the inputs (the tasks), it is about being efficient. Rigour is about focusing on the process of getting the work done, doing it consistently in the manner which has already been determined – this is about being effective.  You need to do both to produce long-term quality work outputs. As you can see in the matrix below the level of rigor and effort you make will largely affect your work outcomes.

The Rigor/Effort Matrix

 

 

 

 

 

 

 

  • Low Effort/Low Rigor – this is the worst situation where people, make little effort in getting the work done and when they do, they tend to do it in an ad hoc manner.  Processes and/or guidelines tend to be ignored, or not followed properly, and the work produced is poor quality, substandard, and costly (especially as work will need to be either redone or people in this quadrant will need a higher level of management oversight).
  • Low Effort/High Rigor – here people, make little effort in getting the work done, however, they do tend to follow the processes/guidelines that are in place.  So, although the work produced is of a suitable quality or standard, the work completed or produced does not meet expectations in terms of what need to be done or which has been planned.  Again this can result in further costs to the business as either more people are required to produce the necessary volumes, or those who are high producers are put under greater pressure as they pick up the slack.  This can lead to them being overworked, stressed and potentially more likely to want to leave for a less stressful job.  This can result in a business losing its best people and retaining the worst.
  • High Effort/Low Rigor – people make a lot of effort but do it in an ad hoc manner.  This can result in a lot of substandard or poor quality work being produced as they do not follow processes or guidelines. This can lead to a lot of waste, rework and may necessitate a lot of investment in quality control to try and manage the symptoms of low rigor.
  • High Effort/High Rigor – here people make a considerable effort, are engaged, and do good work on a consistent basis.  This produces great work for customers, improving customer retention, reducing costs, and improving revenue and profits.

Use this tool to assess where the individuals in your team are.  Assess their level of effort (1=very low, 10-very high), and the level of rigor they demonstrate (1=very low, 10-very high). From this plot them on the chart.

For each individual then determine where you want them to be and identify three actions that they can take that will help them bridge the gap.

So make the effort and be rigorous in doing it! Remember, doing things with rigor takes effort, but not everything you put effort into is done with rigor.

To view or download a PDF version of this blog click here

Share your thoughts and ideas here, or email me at andrew.cooke@business-gps.com.au

If you found this article of use or interest please don’t hesitate to share it with others.

Click here to find out more about Andrew Cooke and Growth & Profit Solutions.

Customers – Market Reach or Market Gravity?

The Only 2 Ways to Reach Your Customers

by Andrew Cooke, Growth & Profit Solutions

There are two ways to market to and gain customers, and two ways only.

Either you reach out to them, or they are attracted to you. One way you try to “push” them to come to you, the other way you attract them to you and your offerings and they “pull” themselves in. These two ways are at opposite ends of the spectrum

So what does this mean for you?

Market Reach Out

Many businesses try to acquire new business and new clients by going out and trying to find them – especially newer businesses and those who are in commodity markets. Typically this includes advertising, promotional activities and a lot of “telling” – proudly telling your prospective customers what you do.

This method involves a lot of effort and a relatively low return. You have to kiss a lot of frogs to find a prince, and often the princes that you do find are only there for the short-term before they hop off to your competitors. This is a costly and risky exercise where your resources, time and investment are used inefficiently and effectively,

As time goes on, you build up history and credibility, and you get smarter and more focused on what you do for your clients rather than what you do for yourself. You also begin to market yourselves using more targeted, interactive approaches that are relevant, of interest and of value to your customers – here you are listening to your customers. Ways to create gravity include, but are not limited to, testimonials, press coverage, articles in trade journals and magazines, speaking, referrals etcetera.

Market Gravity

As the awareness of your work, your reputation and your relevance to your prospective client increases so the dynamic begins to change. Rather than you having to seek out clients they begin to come to you. Your cost of acquisition of clients is lower, they are less price-sensitive as they see the value you can help them realise, and you get a better quality of client with whom you can develop long-term opportunities.

As such, your revenue and profit opportunities improve and you can become more selective both in terms of with whom you work and what kind of work you do. You are more strongly differentiated from your competitors, and prospects want you. Your business growth begins to accelerate with less effort.

How are you attracting your clients? Are you reaching out and trying to pull them in, or are you creating the ‘gravity’ so that they come to you? If you don’t build your own ‘market gravity’ no-one else will – so start work on it today!

What has worked or not worked for you? Share your knowledge, share the wealth!

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5 Keys for Self-Influence

Leadership is influence” – John Maxwell

by Andrew Cooke, Growth & Profit Solutions

Be the Change You Want to See

The difference between management and leadership is best described as management is about handling complexity, whereas leadership is about handling change.  Change is about successful influence, and influence is a personal skill that can be developed and grown.

People often don’t think of themselves as influencers because they fail to see that the common thread running through the triumphs and tragedies of our lives is our ability to exert influence.  It is the lack of our being good at exerting influence that causes us a great deal of grief, people tend to be better copers than influencers by choice.

Leadership is about influence.  When we influence others, we are leading them.  When we influence ourselves, we are self-leading.  That brings up the question, “What are the thoughts, behaviours and strategies that help us exert influence over ourselves?

5 Keys to Self-Influence

1.       Make peace with the uncontrollable. Figure out the things you can change, and then change them.  If you can’t change something, then learn to live with it.  This means changing your attitude about the uncontrollable.

“Give me the serenity to accept the things that you cannot change, the courage to change the things I can, and the wisdom to know the difference”.

You learn to live with it by making peace with it.  I’ve discovered – repeatedly – that worrying about something is not a good problem-solving technique.  You feel like you’re doing something, but it only makes things worse.  By not worrying, you make space for new thoughts and ideas to enter.

Let go of what you can’t control.  Invest your energy in things you can.  Your attitude is the first place to start.  Which means you must….

2.       Let go of the past. We know nothing is gained by pointing out what others did, or what’s wrong with them.  Yet we do this with ourselves.  Focus on how to make the future better rather than why the past was bad.  We learn from the past, but we don’t live there.  This means you need to…….

3.       Focus on what’s important. Don’t waste physical and emotional energy on the trivial.  This will help to eliminate “vicarious living”- the trap of talking about others rather than discovering how we can make a difference.  There’s a lot of nonsense in our daily discussions, and most of it doesn’t matter.  Is the investment on the topic really worth it?  What’s it worth 10 hours from now?  10 days from now?  10 years from now?  Playing it forward will help you determine its present value.  You can discuss debate, argue and be right, but is it worth it?  Train your mind to use the 10/10/10 approach before you invest time in the discussion.  Instead, why not……

4.       Invest in yourself. This is not an act of selfishness.  If I don’t take care of “me”, I can’t take care of “you.” Investing in me allows me to invest in you. Investing in yourself may mean putting some money, some time, and some energy on the line to contribute to your growth and personal development.  Investing in yourself allows you to invest in others. The more you influence yourself, the more you will influence others.  You cannot give what you don’t have.  One way to do this is to…..

5.       Invite feedback as an opportunity to be transparent. Feedback has positive benefits as you learn new information and skills.  But it also makes you more transparent.  It helps you develop an openness about who you are.  Feedback is not about pleasing others.  It’s an exercise in learning about yourself.  Growing in your personal curiosity and openness is attractive.  This kind of person is trustworthy, optimistic, flexible, poised, and cheerful. Transparency helps produce these traits.  People aren’t attracted to perfection.  They are attracted to transparency.  Feedback expands the boundaries of personal openness.

One of the greatest challenges in life is influencing yourself in a world that’s constantly pressuring you to conform your image to theirs.  It can be immobilizing!  Someone is always richer, prettier, smarter, stronger, younger, wiser, and funnier than you.  The paradox is that the more we influence ourselves to be ourselves, the more people like us.

And we like ourselves more too!

This article is partly based on the article, “5 Ways Smart People Influence Themselves” by Mick Ukleja.

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