I’ve been thinking about the Amazon Effect lesson from my customer discovery research of e-commerce from last week. There are a lot of tenets to the Amazon Effect including the rise of expectations of delivery, access to goods, etc. but the one I thought about most was.
The Amazon Effect has affected some of the longest-standing fundamentals of web. That is, time on site used to be a valuable metric. Amazon has proven that a winning strategy can be the opposite — get in, find what you want, check out and get out. Fast. Come back again.
- Organizational health starts from the top. Much like culture, leaders can determine the health of company. Eliminating office politics (big points here from Lencioni) while ensuring the leaders row all in the same direction fosters strong health. Removing politics and acting in as a single cohesive executive team cultivates greater success than operating well but in silos.
- Lencioni hits hard on trust across the executive team. This is the key to removing politics. Encouraging individual leaders to be vulnerable enables folks to work better together understanding individual purposes and reasons for actions – he encourages leaders to share vulnerable stories from early years (oftentimes, childhood). Trust enables leaders to have healthy debate, and agreement to move forward together as a team despite opposing feelings individually.
- Healthy organizations exhibit cohesive teams where the whole is greater than the parts. Organizationally healthy companies exhibit functional groups who may operate outside their functional silos and even, at times, reducing effectiveness of a functional role to support another function as long as the greater company is positively impacted. In one case, this could mean sharing engineering resources to help on the marketing or sales side.
- Meetings are big, big deal. Typically, meetings are also a waste today due to not only a lack of action, but poor structure and categorization. Lencioni argues for four types of meetings: the daily check-in, weekly tactical, monthly strategic, and quarterly off-site. In some ways, these meetings can actually increase the number of meetings in the short-term. However, long-term, meetings can reduce, but also be highly actionable making meetings productive. Being structured on the topics and the goals for each meeting type drive results. Lencioni argues that this is the biggest and lowest hanging fruit for companies.
This book was recommended to me by a friend who works at one of the top companies to work for in Atlanta. It’s not surprise why he recommended this as he’s seeing the book’s influence at his company. It’s clear to him how Lencioni was onto something on building organizational health.
- 90% of the web is made of consumers (“lurkers”).
- 9% will contribute occasionally, not often.
- 1% contribute to most of the web. This can apply to social networks, sign-ups, etc.
There are many ratios that have developed over time in business. These are not hard-fast rules. Instead, they are general observations much like the golden ratio in nature or pi. Here are a few other rules.
- 80/20where 20% of “xyz” contributes to 80% of some result. In consulting, I used to find ~20% of product SKUs contributed to 80% of the company revenue.
- 10/10/100from a sales leader panel about terminating a sales associate for poor performance/ poor fit. As a sales leader, you’re only aware of 10% of the whole problem. The fear of addressing the problem is 10 times the reality. And these problems are typically solved 100 days late.
- 10xis commonly referred to as the net benefit needed for a prospect to switch to a new solution as a “must-have”. A venture capitalist (VC) once told me you have to be at least 5x better/ improvement to even be remotely considered.
What are some other ratios you’ve heard of? (Outside of financial ratios.)
- You’re only as good as your last game. This is actually not true, but it sets up for some great motivation for your next game.
- You will make mistakes during games. However, the game keeps going. You need to, too.
- You and everyone else will be caught up in the game. Realize that what happens on the field can affect what happens off it. Realize when mistakes and emotions occur. Realize there’s a season full of games. Realize there are years of seasons.
I’ve thought about these a lot recently and the need for authenticity and vulnerability. In this way, a couple mistakes that have occurred recently that I hadn’t thought about before:
- Collateral damages. I have a “shopping list” of people who I’d like to work with. I’ve worked with many in the past. As I build out my team now and consider future endeavors, I think about this list. Further, that list contains persons who are part of teams of people I know. When I consider the people I want to work with, I think about the opportunities available for each individual. This, however, can fly in the face of the others on the team – the potential for collateral damage amongst individual relationships.
- Being impulsive. Yes, I can be impulsive. Couple this with my love for language and phrases, and I have a recipe to say the wrong things too quickly. I appreciate the way authors express thoughts or how orators influence crowds. My excitement, then, can cause me to use phrases that may not actually echo what I mean. In today’s world with rapid, instant messaging, this can be dangerous.
It’s funny as I think about soccer. Truly great, experienced players are thoughtful, calm, and patient. Read: not impulsive. Recent mistakes have illustrated little in the way of experience.
- Know Your Strengths and Weaknesses. Assessments like the Myers-Briggs, DISC Profile, Berkman, etc. can be simple ways of finding out more about yourself. These assessments may help you realize more about yourself to capitalize on your strengths and limit your weaknesses while building your career around your personal interests. I’d recommend, however, that as much as you limit your weaknesses, to also work on those weakness or what stresses you — this can help you be a stronger performer – “be comfortable being uncomfortable”.
- Building a Balanced Team. As a continuation of the Strengths and Weaknesses above, building a team for a startup or small business with balanced strengths and weaknesses allow for a stronger company in addition to its product/ service offering. For Body Boss, we do actually have differing personalities, and it challenges each of us to think more about why one another feels the way we do when we consider marketing campaigns, licensing and selling opportunities, or even just philosophies that shape our startup’s culture.
- Put Yourself in Your Customers’ Shoes. Marketing has psychology all over it. You have your target audience in mind. Do you know what language they speak? What style of communication they perceive? How about what really resonates with them so that you can grab their attention right away? Marketing is all about diving into the psyche of your customers and compelling them to engage with you.
- Sales is All About Your Customer. Many people will tell you that an effective sales strategy is to have the customer speak. I think this can be somewhat true in terms of getting engagement. However, why I like this rule of thumb is so that it gives me a break and a chance to listen to the customer and analyze him/ her. Customers are all different, and chances are, your product/ service has many value propositions. By sitting back and listening to your prospects, you can hone in on what matters to them and cater your value message accordingly.
- Threshold of Pain. My new friend asked me what signs a successful entrepreneur exhibits/ has. I have many thoughts to this, not necessarily from my own perspective, but witnessing others. One of the standout factors? Mental and emotional fortitude. Beyond the physical demands of being an entrepreneur (like lack of sleep), it’s the mental and emotional toll of going through the roller coaster ride that is entrepreneurship including feeling INCREDIBLE when new customers finding out about you to incredibly FRUSTRATED due to low user engagement, then back to a HIGH after a great exhibition at a conference, then dipping back down LOW from unsuccessful trial conversions. Because much of entrepreneurship is about passions and the creation of your own product, it takes a toll both mentally and emotionally. I recommend you watch Angela Lee Duckworth’s TED talk about this in “The Key to Success? Grit”.
A company, a product… in the end, behind the curtains are people. Perhaps this is also why psychology actually plays a significant role in business. For my fellow Starbucker, I think having a background in psychology will give her a different perspective, and with an MBA to help round out her business abilities, she’ll have a strong platform to build on.
What are your thoughts on how psychology plays a role in business and entrepreneurship? Where else do you feel psychology plays a critical role in business?