Creative Reaction

A pair of recent articles show how conglomerates are obsessed with piracy, and yet, ironically, are blind to their own roles in creating the impetus for it.

The first, from techdirt, where Comcast’s COO blames consumers for piracy and hopes to educate them “to respect subscription revenue”.

The second, a more detailed and analytic account from Ars Technica, is about Paramount seemingly blaming everybody on the Internet for piracy.

A big part of the issue is that conglomerates are so big and have so many business units, that they cannot innovate without hurting one of their own companies. And so they go crying to the government and ask for more regulation. It’s really kind of sad. They are limiting their own innovation and revenue streams, while alienating their audience.

Their audience is what drives business, and simply wants more control over what content it buys and how & when it buys it. It’s time for a shake-up.

Check out this awesome video of a passionate Small Business owner.

John Nese of Galco’s Soda Pop Stop sells more than 450 varieties and clearly loves what he does. He speaks about quality, consumer choice, the evils of corn syrup, and even what’s wrong with recycling. He cares about his customers. He cares about the companies he does business with; mostly independent businesses such as his. And he is clearly gifted with common sense. Case in point: instead of having a diet soda that tastes awful, drink half of an excellent soda (and you’ve cut the calories in half).

I seriously had moist eyes watching this; I found it that inspiring. I’m making my kids watch it tonight. And if I’m ever in LA, I’m going to visit his store.

It really bugs me when I see lists of how NOT to do things. Sure it’s an attention-getting device, but it is one with a completely negative undertone, requiring translation of all the negatives into positives. Besides, you can’t tell people to not do something negative. It doesn’t work. You can’t say to someone, “Whatever you do, don’t think about man-eating cows”; he is going to think about man-eating cows! Instruct people to do something positive, so they can do something positive!

So, I’m translating this otherwise excellent blog post into positives.

Ten Steps to Allow Creativity to Flourish:

1. Brainstorm constantly. Focus on one issue at a time for best results.
2. Praise new and unusual ideas. Even if they are incomplete or flawed, give them some breathing room.
3. Stress innovation, even with its inefficiencies. Innovation is supposed to be a little sloppy. (See below.)
4. Manage mistakes. Allow them to happen; in fact, encourage them. They are an inevitable part of pushing boundaries. Learn from them. Do not create rules to prevent them except in mission critical areas (or issues of public safety and medicine). Most importantly, teach mistake recovery.
5. Hold loosely onto plans. Better yet, build a prototype rapidly and cheaply, learn from its shortcomings. Reiterate, rinse & repeat.
6. Look to competitors, other industries, and academia for ideas. The buzzword for this is Open Innovation.
7. Find fresh brains! Recruit outsiders. People in an industry tend to think alike and to be blind in all the same ways.
8. Lead transparently. Share the business’ successes and problems. Work together to find solutions.
9. Stress health. Encourage breaks, adequate rest, exercise and socialization – both inside and outside of the workplace.
10. Train, train, train. Train people about your culture. Train them to lead. Train them to further your vision when you are gone.

In The “Psychic Benefits” of Nonprofit Work Are Overrated, Dan Pallotta rails against the idea of working at a significant discount because it’s the “right thing to do”. I can’t remember the last time a business post made me smile so much.

He makes an excellent case that making a lot of money and donating it to a cause is far better for everyone than taking a small or huge pay cut and working for the cause.

Making a difference in this world is not defined along the lines of profitability or non-profitability. It is not an either/or choice; it is both/and.

Last week I posted my transcription (with some editing) of Netflix’s HR Reference Guide, which was quite a project. Today I’d like to explain what I love and what I’d love to see. Maybe we’ll see some of the slides get updated one of these days.

(To follow along, you may want to open my transcription in another browser window)

I love that Netflix starts off by stating the importance of culture, something that most folks don’t even think about. Netflix stakes its future on it!

“Culture gives Netflix the best chance of continuous success for many generations of technology and people.”

This is completely true. A business’ strategy, goals, or mission will not last very long unless everybody in the company, from the leadership down, espouses them. However, the presentation doesn’t actually define culture. Creating and Sustaining a Winning Culture at Harvard Business Publishing offers this definition:

“Culture (is)… the values, mindsets, and behaviors that constitute an environment conducive to success. (It is) what holds an organization together and motivates the people within it to do the right thing rather than the easy thing.”

This definition ties in well with other elements of the presentation, though they may need to reframe things in terms of “mindsets” and “behaviors”.

To me, the most thought-provoking concept in the reference guide had to do with growth, rules, creativity, performance, freedom, and responsibility, where they took concepts that tend to be antithetical and rearranged them in a way that work together in a system of checks and balances. It goes something like this:

Most companies – Great Idea>Great Culture>Success!>Growth>Mistakes>Knee-jerk Reaction>Rules & Procedures>Beaurocracy>Brain Drain>Mediocrity>Crappy Culture>Murky Vision>Slow Death

Netflix – Great Idea>Great Culture>Success!>Growth>Mistakes>Recovery>Post Mortem>Fewer Rules>Flexibility>Better Talent>Better Company>More Great Ideas>More Success!

It’s brilliant!

I love their stress on personal responsibility as well. Responsible people deserve more freedom. They shouldn’t be punished (with Rules and Procedures) when someone acts irresponsibly. Responsible people own up to their mistakes, then have an opportunity to wow a customer by making things right.

Another awesome idea – basing compensation on market value. Wow. You want a raise? Don’t work harder; make yourself more valuable. You want to keep your head down and not be noticed? Here’s a nice severance plan for you. Buh-bye! There’s no tolerance for dead wood. And if you salary goes down a bit, it’s because the market as a whole went down. So learn a new skill. That is so refreshing.

A few things I’d like to see?

• Some mention of the importance of good physical health (diet & exercise), which boosts performance. (See Brain Rules and The Power of Full Engagement)
• Some mention of the importance of proper rest and vacations, which boosts performance.(See The Power of Full Engagement)
• Some mention of the importance of workplace friendships, which boosts performance. (See Vital Friends)
• Some mention of the importance of  healthy family life, which boosts performance. (See Brain Rules)

Bravo, Netflix! Let me know if you’d like to compare notes.

Let’s see some other companies step up to the plate!

I’ve been spending a lot of time thinking about the importance of companies’ cultures and came across this excellent Fortune Small Business article by entrepreneur Jay Goltz.

Goltz speaks from experience and doesn’t lay down hard and fast rules; he asks us to determine for ourselves what is important.

• “How far should we go to provide excellent service?”
• “How should employees treat one another?”
• “What kinds of errors are acceptable?”
• “How should we handle a conflict between the need to serve a customer and an employee’s needs?”

I love that he shows how much he values his own company’s culture and mission by placing it above his own ego. He sets quite an example! Check it out.

Back in August, I wrote that Netflix’s HR Guidelines Could be a Covert Recruitment Pitch when I read TechCrunch’s commentary on the slides and browsed through them myself. (“Reference Guide on our Freedom & Responsibility Culture” can be found here.)

Over the past weeks, not only did I read all 128 slides, I also transcribed them because I found them to be so inspiring. I then edited the resulting text quite a bit so it would make better sense to me, made some of the grammar a little more consistent, and added a few notes of my own, especially in the “Development” section, with which I have some issues. It was quite a project and it really opened my eyes. I’m a fan of Netflix and admire the company, but until now I did not realize what an outstanding culture they have.

The slides were intentionally uploaded by Netflix and contain no copyright. One important purpose of codifying a company’s culture is to attract talent which can self-identify with a company, so it is my hope that Netflix  continues to attract high-performance talent by posting my edited  and notated transcription below.

(PLEASE NOTE: Many of the notes are my interpretation. They clearly do NOT represent official Netflix policies, OK? Links to the original slide deck are above.)

—————————————————————————–

A Reference Guide for our Culture of Freedom & Responsibility

This Guide is for our salaried employees, as hourly workers have more structured jobs.

Q:
What gives Netflix the best chance of continuous success for many generations of technology and people?

A:
Culture.

Culture is how a firm operates.

Culture gives Netflix the best chance of continuous success for many generations of technology and people

For Netflix, continuous success = continuous growth in revenue, profits, and reputation.

Netflix needs a culture that supports rapid innovation and excellent execution, which are both required for our continuous growth.

There is often tension between rapid innovation and excellent execution, similar to the tension between creativity and discipline.

The culture must support effective teamwork of high-performance people, which can also provide tension, as high-performance people are very passionate.

The culture must avoid the rigidity, politics, mediocrity, and complacency that infects most organizations as they grow.

7 aspects of Netflix’s culture (a work in progress as we continue to refine it)

1. Emphasis on Values
2. High-performance (Employees)
3. Freedom & Responsibility
4. Context, not Control
5. Highly aligned, Loosely Coupled model of organization
6. Top of the market Salaries
7. Promotion & Development

VALUES
Nine behaviors and skills we value in fellow employees.

Judgement:

• Making wise decisions despite ambiguity
• Identifying root causes
• Thinking strategically and articulating what you are and are NOT trying to do.
• Knowing what must be done well now
• Knowing what can be improved later

Communication

• Listening to better understand, and not immediately reacting
• Being concise and articulate in speech and writing
• Treating people with respect regardless of status or agreement.
• Showing poise in stressful situations

Impact

• Accomplishing amazing amounts of important work
• Performing in a consistently strong manner so that others can rely on you
• Focusing on results (rather than process)
• Showing bias-to-action (rather than over-analyzing)

Curiosity

• Learning eagerly and rapidly
• Understanding our strategy, market, subscribers and suppliers
• Being broadly knowledgeable about business, technology and entertainment
• Contributing effectively outside of your specialty

Innovation

• Re-conceptualizing issues to discover practical solutions to difficult problems
• Challenging the prevailing assumptions when warranted and suggesting better approaches
• Creating new ideas that prove useful
• Keeping us nimble by minimizing complexity and finding time to simplify.

Courage

• Saying what you think even when it is controversial
• Making tough decisions without excessive agonizing
• Taking smart risks
• Questioning actions inconsistent with our values.

Passion

• Inspiring others with your thirst for excellence
• Caring intently about our success
• Celebrating wins
• Being tenacious

Honesty

• Being known for candor and directness
• Not being political when you disagree with others
• Only saying things about others that you would say to their faces
• Being quick to admit mistakes.

Selflessness

• Seeking what is best for the company, rather than yourself or the group
• Putting your ego aside when searching for the best ideas
• Making time to help colleagues
• Sharing information openly and proactively

Judgement. Communication. Impact. Curiosity. Innovation. Courage. Passion. Honesty. Selflessness.

We want every employee to embody these nine values.

A characteristic of Courage:
Questioning actions inconsistent with our values.

This one is especially important.
Akin to the honor code pledge, “I will not lie, nor cheat, nor steal, nor tolerate those who do.”

We are all responsible for consistency in our values.

Values are reinforced in our rewards, promotions and even how we fire.

HIGH PERFORMANCE
Imagine if every person you work with was someone you respect and learn from…
Imagine if all of your colleagues were stunning.

This is how we define a Great Workplace.

We do not define a Great Workplace by having benefits such as day-care, espresso, health care, sushi lunches, nice offices, or big compensation. We only do what efficiently attracts and keeps stunning colleagues.

We practice the art of hiring well.

We also have another practice:
(Merely) Adequate performance results in a generous severance package.

We are like a professional sports team (not a family).

Like a Professional Sports coach, managers must recruit, hire, develop and cut smartly to have excellent players in every position.

Who makes the cut?

This is the Keeper Test:
“Which of my people, if they told me they were leaving in two months for a competitor, would I fight to keep?”

Any people who you would not fight hard to keep need to be offered a generous severance package to make room for an excellent colleague.

You are responsible for your job security.
Ask your manager from time to time, “If I told you I were leaving, how hard would you work to change my mind?”

Q:
“Isn’t Loyalty good?”

A:
Loyalty is good; it is a stabilizer. As individuals and as a company, we will all hit rough patches. Star employees will be given an opportunity to prove themselves again. Loyalty however must have its limits.

Q:
“What about Hard Workers?”

A:
Hard work is about effectiveness, not effort. It is not about working long hours. Measurements can be based on how much, how quickly, and how well work is done, especially under a deadline.

Q:
“How do we handle brilliant jerks?”

A:
Some companies tolerate them; not us. The cost to teamwork is too high. Everyone must embody all nine values, and being a brilliant jerk contradicts many of them.

Q:
Why do we place such a premium on high performance?

A1:
For procedural work, the best perform at 2x average.
For creative work (“knowledge work”) the best perform at 10x average.

Q:
Why do we place such a premium on high performance?

A2:
We define a Great Workplace as having stunning colleagues.

FREEDOM AND RESPONSIBILITY
Characteristics of the rare responsible person:

• Self-motivated
• Self-aware
• Self-disciplined
• Self-improving
• Behaves like a leader
• Proactive
• Considers everything “his job”
• Picks up trash
• Behaves like an owner

Responsible people thrive on freedom and are therefore worthy of freedom.

Our model is to increase employee freedom, rather than limit it, to continue to attract and nourish innovative people, to have a better chance of continued long-term success. (Most companies restrict freedom as they grow.)

The relationship between growth, chaos, and restrictions:
Growth increases complexity and shrinks talent density, which leads to errors and chaos. Often rules and procedures (process) are created to avoid chaos. Procedures drive the talent away. Process inhibits innovation.

A better option.

• Ever-increasing performance, rather than rules, to fight chaos.
• Ever-increasing performance, which outpaces complexity.
• Running informally, utilizing self-discipline to fight chaos.
• Minimizing complexity.
• Valuing simplicity.
• Enabling and attracting creative talent by running informally, high compensation, and offering the freedom to make a difference.

Two types of necessary Rules;
Those that prevent disaster

• e.g. Incorrect financials
• e.g. Hackers steal CC data

Those that spell out immoral, unethical, and illegal behavior

In a safety-critical or manufacturing industry, preventing errors through procedures is mission-critical (or at the very least the most cost-effective)

In knowledge work/creative environments, “rapid recovery” is the best model.
Besides, high-performers make fewer mistakes.
If mistakes happen, high-performers fix them quickly!

Is a Process Good or Bad?
Good processes help talented people get more done.

• Updating a web site at regular intervals instead of randomly
• Keeping spending within budget
• Having regularly scheduled strategy meetings

Bad processes try to prevent mistakes which are easily recoverable.

• Pre-approvals for spending
• Multiple required sign-offs, projects
• Permission needed to hang a poster

Bad processes tend to creep in because preventing errors is so attractive.
(They often result from knee-jerk reactions to embarrassing mistakes)

Rules and procedures should be questioned and eliminated whenever possible.

Our culture is Results-Oriented

• No 9-5 work days.
• No vacation policy.

Netflix’s Expensing, Entertainment, Gift & Travel Policy is five words long.
“Act in Netflix’s Best Interests”

This generally means:

• Expense only what you would otherwise not spend, and is worthwhile for work.
• Travel as you would if it were your money.
• Disclose non-trivial vendor gifts.
• Take from Netflix only when it is inefficient and inconsequential to not take.
• To avoid using the company phone for personal reasons may be an inefficient use of time.
• To avoid using the company printer for personal reasons may be an inefficient use of time.

Summary:

• Minimize Rules while growing.
• Fight chaos with ever more high-performance people.
• Stress flexibility more than efficiency for long-tern success.

CONTEXT. NOT CONTROL
High-performance people will do better work when they understand the context.

The best managers set the context, rather than resorting to control.

Control-driven means:

• Top-down decision-making
• Management approval
• Committees
• Planning and process are valued instead of results
• (Do it because I say so.)

Context-driven means:

• Strategy
• Metrics
• Assumptions
• Objectives
• Clearly-defined roles
• Communication of what is at stake
• Transparent decision-making
• (Do this because it aligns with company objectives)

Control can be important under the following circumstances:

• In an emergency (procedures and commands must be followed.)
• When someone is in training (they need to learn context)
• When a colleague is temporarily in a position that is ill-suited.

If a talented employee does something dumb, a good manger will question the context (conditions) he set.

Instead of giving into the temptation to control, a good manger will put the desired results in context.

Managers must articulate goals and strategies.
Managers must inspire people to meet goals and follow strategies.

Proper context involves:
- Linking to functional and company goals
- Articulating importance and time-sensitivity
- Describing the desired level of precision and completeness

• No errors are permissible
• Errors can be corrected later
• Draft quality

- Pointing out the key stakeholders
- Explaining the metrics
- Defining a successful outcome

Investing in context is exemplified in:

• Training
• Openness to better strategies
• Focus on results

HIGHLY ALIGNED, LOOSELY COUPLED MODEL OF CORPORATE TEAMWORK

This is contrasted with the following models:
1) Tightly-coupled, Monolithic Model, where

• Sr. Mgt reviews and approves most tactics
• There are lots of cross-departmental buy-in meetings
• Keeping groups in agreement becomes as important as pleasing customers
• (which is dangerous and inefficient)
• Mavericks burn out
• Centralization allows for high degrees of coordination at the expense of agility

2) Independent Silo Model, where

• Each group executes its objectives with little central coordination
• Work requiring coordination suffers
• Alienation and suspicion between departments takes root
• Success occurs only when a conglomerate has companies in disparate markets

The Highly Aligned, Loosely Coupled Model

Goal: to be big, yet fast and flexible.

Teamwork effectiveness is dependent upon
1) high-performance people and
2) proper (good) context

Highly Aligned

• Strategy and goals are clear, specific, and broadly understood
• Team interactions are about strategy and goals rather than tactics.
• A large investment in management time is required to be transparent, articulate, perceptive and open

Loosely coupled

• Minimal cross-functional meetings except to get aligned on goals and strategy
• Trust between groups on tactics without previewing/approving each one – groups can move fast
• Leaders reaching out proactively for ad-hoc coordination and perspective as appropriate.
• Occasional post-mortems on tactics necessary to increase alignment

TOP-MARKET COMPENSATION
A core value of a high-performance culture.

Financial incentive from an Accounting perspective:
One outstanding employee gets more done and costs less than two adequate employees.

Instead of only making the hiring process market-based, Netflix also applies the same principles to its “Annual Compensation Review” (essentially re-hiring each high-performance employee for another year for the purposes of compensation.)

Top-Market Compensation Goals:
1) Every employee is an outstanding employee.
2) Every employee is paid his or her top-market rate.

(By the way, titles are not helpful when determining compensation.
Not every “Major League Pitcher” is equally effective or equally compensated.)

Three-part Compensation Test for an outstanding employee
1) How much would this employee be paid elsewhere?
2) How much would we have to pay to replace this person?
3) How much would we pay to keep this person if another company was “head-hunting”?

Three Corollaries:
1) Pay him more than anyone else likely would
2) Pay him (at least) as much as a replacement would cost
3) Pay him as much as we would pay if another company was “head-hunting”

Corporate Guidelines:

• There are no centrally-administered budgets.
• Each manager must use the above guidelines to align each team member’s compensation to “top-market” for his market and for his area each year
• Compensation is based on market value, not Netflix’s Success
• Managers should not use “fairness” or formulas such as percentiles or across the board raises

Therefore:

• Some team members’ compensation could rise dramatically based on their value in the marketplace (Also driven by their skills)
• Some team members’ compensation could remain flat or even decrease, while still remaining top-market

If managers use the three-part Compensation Test accurately, the following will be true:
1) Any employee leaving Netflix for another company will not be compensated as well
2) We will rarely need to counter an offer from another company for one of our high-performance employees
3) Employees will know they are being paid well relative to other options.

This compensation model is better than the traditional model, where employees automatically receive a raise each year based on good performance, for the following reasons:
1) Employees can become grossly over- or under-paid over time
2) Under-paid otherwise satisfied employees will seek employment elsewhere
3) Overpaid, unsatisfied employees become trapped.

(These conditions also contribute to low morale and “poisonous” employees)

In our model, employee success is a major factor in compensation because it influences an employee’s market value.

(This also motivates an employee to improve his skill set and grow personally in ways that increase his value)

By the way, Netflix considers it to be a healthy idea, and not a traitorous one, for an employee to understand his value in the marketplace, by talking to peers at other companies and even interviewing with them. (An important exception is interviewing with direct competitors who may be trying to gather information that is confidential.)

Additional information about our compensation model:

Netflix focuses it’s compensation on the highest possible salary in the following ways:

• No free stock options
• No bonuses
• Great Health Plan options with intentionally higher Co-Pays (to keep the premiums lower)
• No company matching of specific benefits

This compensation model is most efficient the following reasons:

• Salary offers the highest motivation of any other form of compensation
• It simplified by not offering bonuses (saving the company labor)
• Paying for stock options (with pre-tax salary) is another form of motivating an employee to participate in the company’s future success.

In addition, the employee has more freedom to spend his salary as he sees fit.

• The mix of stock (or Stock options) is the employee’s choice
• Since there is no company matching of specific benefits, the employee is not pressured into a means of compensation he does not want or need.
• Since there is no company matching of specific benefits, the employee does not feel that others who want or need those benefits are better compensated

(On the other hand, the employees may want benefits that are not offered. Pre-tax medical accounts and pre-tax retirement accounts, for example, offer financial advantages that an employee could not otherwise obtain on his own, negating a top-market salary. In this case, his peers at another company would have a financial advantage.)

(It might also be that the health and financial stability of employees, conditions that improve physical and mental well-being, are possibly not being encouraged by offering benefits. A lack of physical and mental well-being will adversely affect a person’s work and the company. It is in the company’s interest to promote physical and mental health.)

Employees choose the degree to which they want to link their financial future to Netflix’s success or failure by choosing for themselves the amount of Netflix stock (or stock options) they would like as a component of their compensation.

PROMOTIONS AND DEVELOPMENT

Promotions
At times, and within certain groups,there will be opportunities and growth. Some people, due to timing and talent, will have the opportunity for extraordinary career growth.

Baseball Analogy: Minor & Major Leagues

• Only the very talented play in The Show. (The Majors.)
• Even the most talented are subject to timing and opportunities
• Some players move to other teams when opportunities arise.
• Some Minor League players keep playing because they love the game.

There may not be enough growth opportunities for everyone who deserves a promotion, in which case we should celebrate when someone leaves the company for a bigger opportunity elsewhere.

Two conditions necessary for promotion:
1) The job has to be big enough
2) The person has to be a superstar in the current role and talented enough for the new position

If a talented employee meeting the above criteria needs to be promoted to keep them from leaving, the manager should look for opportunities to promote him now, rather than wait.

Development
We develop people by giving them the opportunity to develop themselves, by surrounding them with stunning colleagues and giving them the opportunity to work on big challenges.

Mediocre colleagues and unchallenging work kills the progress of a person’s skills (as well as his morale)

Because formalized development is rarely effective, we do not pursue it. No courses, mentors, working in multiple depts.

(Sorry. I’m not going along with this! Any broadening of skills, better understanding of others’ roles, personal development is completely helpful, enriching all of a person’s life, not just his career! Take a look at Pixar University, as an example.)

High-performance people are generally self-improving through experience, observation, introspection, reading and discussion, as long as they have stunning colleagues. (OK, but give them some opportunities to do this at work, too!)

Individuals should manage their own career paths, and not rely on a corporation for planning their careers. Similar to retirement planning – largely a matter of individual responsibility. (Still, both should be encouraged)

(Yet many people would benefit greatly from career planning, mentoring, financial planning, marital counseling, first baby counseling, all of which would make for better employees and many of which would reduce health care costs and absenteeism. Read Brain Rules by John Medina)

An Individual’s economic security is based upon his skills and reputation. We try hard to consistently provide opportunities to grow both. (Maybe these opportunities should be listed. The above statements seem to contradict this.)

Matt Heinz at Blogging Innovation: “I love the idea of employees… thinking of themselves like entrepreneurs.” I couldn’t agree more.

He asks rhetorically, “What constitutes a set of entrepreneurial attributes that employees could emulate?” then answers his own question. I’ve paraphrased (somewhat).

1. Customer-centric thinking.
2. Frugality
3. Creative problem-solving
4. Immunity to fear
5. Acceptance of failure

Imagine having an entire company of people with these qualities. Wow. That’s an engaged workforce.

Harvard Business Publishing analyzes the surge in the value of Britannica’s brand over the last year, as it leapt ahead of Nike, Virgin Atlantic, and Sony. Not bad for a company whose demise has been predicted for years.

Britannica knew its purpose, and that purpose is what brought perspective on how to innovate; and not simply to survive, but to thrive.

So if some expert is predicting the death of your product or service, think  hard about  your purpose. Perhaps this perspective will help you find a way to differentiate yourself and continue to succeed.

Who would think that a 128-slide HR presentation could be inspirational? This one  has statements such as, “Imagine if every person at Netflix is someone you respect and learn from”. Try to keep in mind this is a company that is big enough to be publicly traded.

TechCrunch has some great commentary and the embedded slide deck, which can be viewed full-screen.

Managers, set aside some time to scour this Netflix presentation. And be prepared to take notes.

I’m not a Dunkin’ Donuts fan, for a number of reasons which I won’t elaborate. I will readily admit, however, that I’m a fan of their marketing, which from their storefronts to their broadcast work, is completely consistent and beautifully executed.

I came across their Dunkin’ Run web site via Idea Sandbox, and once again I’m blown away. This is so perfect in every way, it resonates.

First of all it’s simple. It’s immediately recognizable. It adds three new icons consistent with their “America runs on Dunkin” “vocabulary”.

But here are the most brilliant parts: It simplifies large orders, both for DD and the customers. I repeat, large orders. It makes the “Runner” a hero. (By the way, is there a way for everyone to treat the runner?) Most importantly, it makes a return trip to Dunkin’ Donuts, not merely an event for the office or group, which in and of itself is admirable, but into a ritual, with all the emotional connections and memories that come with it.

(Plus, there’s an iPhone App with the same functions as the web site.)

So, the question for today is: how can we apply this love and care to our own products and services, entrenching our brands and our relationships with our customers? In this day and age, it’s survival.

Harvard Business Publishing has an excellent 10-lesson post about “organizations whose strong and adaptive ownership cultures give them a powerful competitive edge” distilling years of research and insight. In a sentence, a healthy corporate culture leads to happy employees and happy customers. Short, but very meaty post, much of which applies to Small and Medium Businesses. Chew well.

When I came across this recent ChangeThis Manifesto, I just had to smile, as it dovetails so neatly with this week’s other posts.

Ending the Illusion of Control notes “the dismal historical track record of much, if not most, economic forecasting”. 

Planning and forecasting have their place. Unfortunately, they are wrought with uncertainty. Making matters worse is the fact that “humans, driven by over-optimism and wishful thinking, often underestimate uncertainty even more than statistical models do”.

The authors assert that forecasts can be as addicting and dangerous as cigarettes and, therefore, should have warning labels. 

Nice.

Download it now.

Just yesterday, I posted about the fallacy of trying to control the future by predicting it, and now I’ve come across this. Matt at Signal vs. Noise  summarizes a long book-launching interview, in three simple points:

1. Conventional approaches and planning don’t work when you’re trying to get into new spaces
2. Assumptions are what get most companies into trouble, and
3. It’s not failure that companies need to avoid, but rather “failing expensively”

If I could add a fourth point it would be this:

4. A company’s best ideas will fall through the cracks unless there is a way to capture and process them 

So harness the collective insights of your employees. Move ahead quickly and get new products or services in front of people. Plan in such a way that when things do not go exactly as planned, you can quickly recover and move in a better direction.

Small businesses, you can take these cutting-edge insights which some of the more innovative corporations are implementing, and use them to your advantage within days, not months!

A really interesting piece on Mavericks at Work contrasts the differences in thinking between MBAs and Entreprenuers, and declares that Entrepreneurs are better suited to survive tough times. (Life is too short for spoiler alerts.)

The post focuses on the fascinating research of Saras D. Sarasvathy, which focuses on “the ‘causal’ reasoning used by MBAs versus the ‘effectual’ reasoning used by entrepreneurs.”

Lifting an entire section from the post:

Causal reasoning, she explains, “begins with a pre-determined goal and a given set of means, and seeks to identify the optimal—fastest, cheapest, most efficient, etc.—alternative to achieve that goal.” This is the world of exhaustive business plans, microscopic ROI calculations, and portfolio diversification.

Effectual reasoning, on the other hand, “does not begin with a specific goal. Instead, it begins with a given set of means and allows goals to emerge contingently over time from the varied imagination and diverse aspirations of the founders and the people they interact with.” This is the world of bootstrapping, rapid prototyping, and guerilla marketing.

The MBAs’ fallacy is that they try to predict and thereby control the future. Entrepreneurs forge ahead using the resources at hand and nimbly adjust to surprises.

Worth reading. Check it out.

So much for my “getting an MBA for the fun of it” plans. Unless there’s such a thing as a strictly entrepreneurial MBA. Hmmm…