Sales Consulting

The most important choice we can make is ‘to lead a full life’. Really understand everything. Decipher the causalities that govern a situation! Living a meaningful, a full life requires only one thing: to think. Think like a scientist. And, each one of us have enough intuition and brainpower to think like a scientist. Good luck is Preparation meets opportunity. Bad luck is Reality meets lack of preparation. An unprepared person has no freedom of choice

We need humble arrogance. Be humble to assume that one doesn’t know. Be arrogant- have the confidence that one is capable of figuring out how to make things work

The more complicated the situation seems to be, the simpler the solution must be. The key for thinking like a true scientist is the acceptance that any real life situation, no matter how complex it initially looks, is actually, once understood, embarrassingly simple.

There is no limit to how much a company can improve. Get rid of forecasts. Anything that doesn’t need to be so needs to be analysed, from first principles.

The most meaningful opportunities are the ones that open when a person realizes how to overcome a constraining situation. Repressing a problem is a waste of an opportunity

For a person to think clearly, what is needed is to accept the concept of Inherent Simplicity. Nature is exceedingly simple and harmonious with itself. Few levers run the whole machine

Reality does not contain contradictions, but it is full of conflicts. Normally leads to a bad compromise. Treat it like a contradiction: look for the erroneous assumption, the source of the conflict. Eliminate the conflict, don’t settle for optimization

Look for daring solutions, and shoot at the big problems. Question assumptions. The big difference between organizations and individuals is that with organizations, the underlying assumptions are perceived not as assumptions but as facts of life

Obstacles to thinking clearly: (1) The perception that reality is complex (2) The tendency to accept conflicts as given (3) The tendency to blame the other party (4) Saying “I Know”

The belief in Inherent Simplicity also implies a deep conviction that harmony exists in any relationship between people.

Win-Win: Such a state exists for any relationship; Look for it; it is the key for reaching a full life. Seek the other party’s win, it dramatically increases the chance of finding such a solution. Not the win that is in conflict but a different not less important win

Goldratt says the key to thinking clearly is to avoid circular logic, Simple! You start with an effect, any effect, and dive down to the root causes by asking: ‘Why does the effect exist?’ The difficulty is, when we do so, we will reach causes that are abstract entities: causes whose existence cannot be verified directly through our senses. They probably do exist, but we know it through logic and not through direct info of our senses

Circular logic is a point of no return for thinking clearly. We must look for atleast another observable resultant effect. Then, you can dive down for its root cause. Inherent Simplicity to the rescue

So, how does one practice thinking clearly? Use any opportunity to try to decipher the cause & effect. Be it a casual conversation with a stranger, a comment from your wife, or something that you are reading. The more you practice this, to the extent that it becomes your second nature, the easier it becomes. People will even start calling you a genius. And this search may not even take more than a second or two!

People are Good. Trust them

Logic does not exist in a vacuum. The only way we can come up with a hypothesis or a predicted effect is by intuition. And intuitions stems from emotion. We as human beings are standing on a 3-legged stool: emotion, intuition & logic!

We have our strongest intuition in the areas that are the most important to us. The more we practice thinking clearly the deeper our emotions in those areas become. The deeper the emotions, the stronger is the resulting intuition. Reinforcing helix

An Optimist but never leaving things to chance, Goldratt ensures the deck is always stacked in his favour: puts safety nets upon safety nets. Goldratt calls himself an optimist with experience: a practical visionary

What you will become is your choice. You can no longer find refuge in blaming others, or blaming circumstances, or saying it’s out of your control or beyond your abilities. You have to take full responsibility for your life. This will lead you to a full life but not an easy life

 

 

The Basics of Simplicity

1. Simplicity – Why people fear it so much

Simplicity requires that you narrow the options and return to a single path. Paradox of choices. “If the glove doesn’t fit, you must acquit.” “Ab ki Baar, Modi Sarkar”.

2. Common Sense – It can make things simple

The world is too irrational to be put into mathematical formulas. Get your ego out, Listen better, Be Cynical. Trust your common sense. It will tell you what to do.

3. Complex language – it can cloud people’s minds

Language is getting more complicated. “Empty your knapsack of all adjectives, adverbs and causes that slow your stride and weaken your pace. Travel light.”

1. Keep sentences short, remove unnecessary words.
2. Pick the simple, familiar word
3. Put action in your verbs.
4. Write like you talk.
5. Use terms your readers can picture.
6. Tie in with your reader’s experience. (The essence of positioning.)
7. Make full use of variety.
8. Write to express, not impress.

Don’t be suspicious of your first impressions, they  are often the most accurate.

A Simple Summation – Big ideas almost always come in small words.

Management Issues

4. Information – Too much can confuse you. Declutter to think clear

The first challenge is to acknowledge that you can’t absorb everything you think you need to know. And when you’re the one doing the communicating, be more economical in everything you write, publish, broadcast, or post online. You’re supposed to be a decision maker, not an information expert.

Demand that any report that reaches you have a one-pager. If it doesn’t, send it back. Send brief responses. Seven lines of text, One visual per slide is the ideal.

5. Consultants – the source of a lot of nonsense

Introduce simple ideas and get it done. Its about doing the right thing not the most fashionable. Don’t trust anyone you don’t understand.

6. Competitors – Simply think of them as the enemy

Companies must look for weak points in the positions of its competitors and then launch marketing attacks against those weak points.

• Defensive Warfare Is What Market Leaders Wage. Leadership is reserved for those companies whose customers perceive them as the leader … A rolling company gathers no competitors. They attack themselves regularly
• Offensive Warfare Is the Strategy for the Number Two or Three in a Category. Papa John’s attacked Pizza Hut at its weak point, ingredients. “Better Ingredients. BetterPizza.” Simple Story Great Results.
• Smaller or New Players That Are Trying to Get a Foothold in a Category by Avoiding the Main Battle Pursue Flanking Warfare. Uncontested areas. Eg: Dell
• Guerrilla Warfare Is the Land of the Smaller Companies. A Defendable Niche. Eg: Carribean Island

If you’re at war, it’s important that you adopt the qualities of a good general: be flexible, have courage, be bold, know the facts, be lucky.

7. Strategy- Differentiation

In real estate its location, location, location. In business it’s differentiate, differentiate, differentiate. – Robert Goizueta, former Coca-Cola CEO.

In a world where everyone is after your business you must supply your customers with a reason to buy you instead of your competitor. If you don’t offer that reason, then you had better offer a very good price. That reason is then packaged into a simple word or set of words that is positioned in the ultimate battleground, the minds of your customers and prospects. We call that “positioning.”

8. Customer orientation- POP not POD

One aspect of a marketing program that is often overlooked is that of reinforcing the perceptions of your existing customers. Make them feel smart about being your customers. Its not about knowing the customer, but the customer knowing about you

9. Annual Budgets- Necessary evil

Step 1. Prepare Marketing Plans

Step 2. Rank Product Opportunities

Step 3. Assign Advertising Tasks(for awareness not changing minds)

Step 4. Stop When You’re Out of Money

Put your money where your opportunities are, not where they were.

10. Prices- A thing is worth whatever the buyer will pay for it and your competition will let you charge

• You’ve Got to Stay in the Ballpark.
• People Will Pay a Little More for Perceived Value.
• High-Quality Products Should Be More Expensive.
• High-Priced Products Should Offer Prestige.
• Late Entrants Usually Enter on Price.
• High Prices and High Profits Attract Competitors.
• Don’t Train Your Customers to Buy on Price.

The commandments of discounting:

Don’t follow the pack, be creative, use discounts only to clear stocks or generate extra business, put time limits on the deal, make sure the ultimate customer gets the deal, discount only to survive in a mature market, stop discounting as soon as you can.

• It’s Hard to Win with a Low Price unless you have a structured, low-cost advantage over your competition. Southwest Airlines

Make Sure You Build Some Promotional Dollars into Your Price.

11. Mission Statements – Mushy Statement shows it has no direction

Have a clear direction. Put the basic strategy into the statement. Present the differentiating idea.  Make sure everyone in the company gets it.

12. Leadership

“The foundation of effective leadership is thinking through the organization’s mission, defining it and establishing it, clearly and visibly. The leader sets the goals, sets the priorities, and sets and maintains the standards.”

The best leaders are storytellers, cheerleaders, and facilitators. They reinforce their sense of direction or vision with words and action. A visible leader is a very powerful weapon. This kind of leader offers unique credentials for a company.

A Simple Summation – Good leaders know where they are going.

13. Long-term Planning

Are you writing your competitors plan? Spot trends, not fads, and capitalize. Flexible!

14. Organization

Conventional wisdom says that decentralization is good. It gets you closer to the market. Our view is that decentralization is bad. It dissipates your forces, adds to complication, and makes it difficult to keep things focused.

“If nothing ever changed, a decentralized company would be more efficient and effective than a centralized company. There’s no question that decentralization contributes to a sense of responsibility on the part of both the operating unit’s management and employees. But how does a decentralized company develop a focus? It doesn’t. Decentralization removes top management’s ability to point the company in one specific direction. And then to change that direction when conditions in the marketplace change. Decentralization is efficient, but inflexible.” Almost by definition, a decentralized company cannot have a focus on a correct strategic behavior or strategy. It can only serve as a center for accumulating financial results

15. Marketing

A differentiating idea is a competitive mental angle. The idea must be competitive in the total marketing arena, not just competitive in relation to one or two other products or services. Second, a differentiating idea must have a competitive mental angle. In other words, the battle takes place in the mind of the prospect. In our definition, a strategy is not a goal. It’s a coherent marketing direction, in the sense that it is focused on the idea that has been selected. Second, a strategy encompasses coherent marketing activities. Product, pricing distribution, advertising – all the activities that make up the marketing mix must be coherently focused on the idea.

Opportunities are hard to spot because they don’t look like opportunities.

16. New Ideas

Innovation has very little to do with genius. It has very little to do with inspiration. Let’s take an honest look at how the mind gets a new idea. It happens in three steps.

1. Preparation. Immerse in the problem. Collect information, data, and opinions
2. Incubation. While you are busy doing other things, a part of your unconscious mind is swirling. Your brain juxtaposes ideas, blends characteristics, funnels ideas together.
3. Illumination. A new and reasonably complete idea surfaces (seemingly out of nowhere). The simplest way to solve a problem is to borrow an existing idea. Military designers borrowed from Picasso’s art to create better camouflage patterns for tanks.

The simplest way to invent a new product is to adapt an existing idea

Substitute; Combine; Adapt; Magnify or Minimize; Put it to other uses; Eliminate; Reverse or rearrange.

17. Goals – They muck up marketing plans. Wishful thinking.

Bring reality. Stop trying to force things to happen and instead find things to exploit.

18. Growth is a byproduct not a goal

A simple and powerful objective is to shoot for share, not profits. As a market emerges, your number one objective should be to establish a dominant market share. Too many companies want to take profits before they have consolidated their position. Never finance the company’s losers with the earnings from the company’s winners. This dampens your ability to pour on the resources to your winners. In our experience, less is more. Don’t spread yourself thin with line extensions.

 

People Issues

Chapter 19 – Motivation

What that CEO should be delivering is a platform of ideas on “how we’re going to kick butt,” followed by “here are the fundamental training and tools to do it with.”

Chapter 20 – Self-improvement

Here is some simple advice to deal with self-improvement issues.

1. Understand what’s going on here. It’s a scam
2. Leave personal growth to the person.
3. Start by improving the basics.
4. After the basics, work on skill building. “You never send a changed person back to an unchanged environment, That’s Organizational Development 101.”
5. Remember, it’s called training, not recreation.

Chapter 21 – Success

Product Horse. Idea Horse. The other person horse. Riding is better than planning.

Is it Bold, Obvious, likely to disrupt the apple cart.

Chapter 22 – The Critics – Ignore them

 

In Conclusion

Chapter 23 – Simplicity

Papa John’s Pizza founder, John Schnatter “It’s all about better ingredients and quality and good old-fashioned hard work. thirteen years ago we simply decided to make a better traditional pizza. We now do that better than anybody does in the world.

Chick-fil-A  “We didn’t invent the chicken,” the ads say, “Just the chicken sandwich.”

Southwest Airlines. The airline was founded on the premise of keeping things simple. First there was only one kind of airplane, the Boeing 737. That made things simpler for the pilots and the maintenance people. Then there were no assigned seats, no food at all, no hubs, easy on, easy off is the airline’s philosophy.

The Kohl’s Department Stores. “We do 20 simple things that have impact taken together,” says CEO John Herma. “The key is the consistency of the execution.”

Hacking Growth uncovers the methods of how some of the big companies compound wins over time. It focuses on customers—How to acquire, activate, retain monetize them. It is a practical method for growth, involving close working of the cross-functional teams, data-mining for insights, and continuous testing to achieve more consistent, replicable, and data-driven results

The 4 Steps to Driving Growth

1. Build Growth Teams

It’s a cross-functional team

• Managed by a Growth Lead: Part Manager, Part Product-owner, Part Scientist. Lead needs to have fluency in data analysis; expertise or fluency in product management and an understanding of how to design and run experiments
• Other Team-members: Product Manager, Marketing Specialists, Software Developer(s),  Data analyst(s), Product Designer(s)

 

2. Make sure your Product is a ‘Must-Have’. Identify an aha moment that users love

• Creating a must-have product is the baseline requirement for rapid and sustainable growth— a product that people absolutely love; ‘can’t live without’ (vs. just ‘good enough’)
• One must not move into the high-tempo growth experimentation push until one know one’s product is must-have, why it’s must-have, & to whom (what’s the core value, to which customers, why)
• Two-part assessment to find out if your product is a Must-Have
  1. Must-Have Survey: How disappointed would you be if this product no longer existed tomorrow? Options—(a) Very disappointed (b) Somewhat disappointed (c) Not disappointed (it really isn’t that useful) (d) N/A—I no longer use it. Get at least a few hundred responses. If ‘very disappointed’ ≥ 40%, then the product is a ‘Must-have’. If not many Beta users, then better do Customer Interviews
  2. Assess the product’s retention rate: Tracking the no. of users who churn (weekly/monthly basis). Shorter time horizon helps deduce how many users are making the use of the product a habit
• Get out of the building to find out what your customers really want from you and your product, what the true objections and barriers are to your product’s success. Be dispassionate about your product. Listen and observe, don’t pitch
• Track the complete path of what a customer does—from first visit to making first purchase and then subsequent ones. Look for the behaviours that differentiate those customers who find your product ‘Must-have’ from those who don’t
• Remember sometimes, “You often don’t know what you’re looking for until you find it”

3. Identify your Growth Levers –

• Focus on the right levers of growth at the right time. Be rigorously scientific in identifying the kind of growth you need and the levers that will drive it
• Understand which metrics matter most for your product’s growth. Develop your ‘fundamental growth equation’. To find out essential metrics, identify the actions that correlate most directly to users experiencing the core value of your product. E.g. Uber—essential metric, no. of rides completed. So in addition to the no. of new people downloading the app, Uber would want to track in the no. of rides being booked, the no. of riders who return and rebook, and the frequency with which they are booking new rides
• Develop dashboards to report only the most important metrics that map to your growth levers. Present information in a way that is actionable. Use ratios
• Do Cohort analysis for deeper insights: Divide your customers or users into distinctive groups by a common trait

4. Testing at High Tempo – Learning more by learning faster. More experiments, the more you learn

• Generally, big successes come from a series of small wins, compounded over time
• The Growth Hacking process is a continuous cycle comprising four key steps:

1. Analyse—Do set of user surveys and a set of interviews, Analyse data and gather insights

What are my best customers’ behaviors? What are the characteristics of my best customers? What events cause users to abandon the app/product?

1. Ideate—Create Idea Pipeline, ‘The best way to have a good idea is to have lots of ideas’. Discourage Self-censorship
   • Idea Template: Idea Name, Idea Description (Who, What, Where, When, Why How), Hypothesis (cause & effect), Metrics to be measured (more than one, improvements in one metric come at the expense of others)
2. Prioritise—Prioritise experiments (‘Hacks’) on the basis of hard data rather than assumptions. Make experiment selection a collaborative process

• ICE score system: Impact— the degree to which the ideas will improve the metric, Confidence— how strongly the idea generator believes the idea will produce the expected impact, and Ease— the time and resources needed to run the experiment.
• Other Score Systems: TIR—Time, Impact, & Resources, PIE— Potential, Importance, & Ease

1. Test—Run the experiments & review results. Prerequisite—ability to both gather data on customer behaviour and measure product performance and the results of experiments

• Keep the experiment velocity high. Design Minimum Viable Test, then invest in more robust follow-on test
• Identify both the experiment group & the Control group—Not exposed to the experiment
• It’s critical that every experiment be designed to produce statistically valid results
• Analysis can only tell ‘what users are doing’, See patterns to know ‘why they’re behaving that way’
• When results are inconclusive, the best course is to stick with the original, or control, version.
• Do a growth meeting of 60 Minutes: Metrics review and update focus area (15 mins), Review last week’s testing activity (10 mins), key lessons learned from analyzed experiments (15 mins), Select growth tests for current cycle (15), check growth of ideapipeline (5 mins)
• US World War II commander General George Patton— “A good plan violently executed now is better than a perfect plan tomorrow.”

After the cycle, circle back to the ‘Analyse’ and decide the next steps. Look for early winners and invest. Quickly abandon those that show lacklustre results

 

Hacking the Customer Funnel

Use the above for different stages in the Customer Funnel: Acquisition Ò Activation Ò Retention Ò Monetisation. I haven’t summarised this section, as it is a set of ideas and examples. It’s best to read these

 

Avoid Growth Stalls:

Stalls are also often caused by companies

• Becoming overconfident of having secured a premium position in the marketplace
• Lose focus on their core products or services due to newly launched products
• Being complacent and failing to innovate in marketing efforts. This can happen by wrongly assuming, reached the limit of the results from their growth levers or potential of the pool of data
• Overlooking or disregarding organic channels of growth

One of the biggest challenges is breaking out of the bounds of currently successful ways of operating: the “if it ain’t broke, don’t fix it” mentality. Find ways to go beyond what’s “not broke” to in fact find something that works better

 

Other Key Points from the Book

• Bain & Company and Harvard Business School discovered— a 5% increase in retention leads to an increase in profits of between 25 and 95%, because just small gains in retention lead to compounding revenue growth the longer customers stick around
• 6 principles of persuasion from Robert Cialdini’s book ‘Influence’

1. Reciprocity—People are more likely to do something in return of a favour
2. Commitment and consistency—People who have taken one action are likely to take another
3. Social proof—People look to the actions of others to help them make their own decisions
4. Authority—People look to those in the position of authority to decide which actions to take
5. Liking—People will do business more readily with people and companies they like
6. Scarcity—People will take action when they are worried about missing an opportunity

• 7 core factors that make reviews and testimonials effective—CRAVENS: Credible, Relevant, Attractive, Visual, Enumerated, Nearby purchase points, and Specific
• Language/market fit: how well the language, you use to describe& market your product to potential Users, resonates with them & motivates them to give it a try. E.g. iPod: 1,000 Songs in Your Pocket
• attention span (the time one focuses on information online) is now 8 seconds (12 seconds in 2000)
• Effective rewards come in the form of status, access, power, and stuff (stuff being financial incentives or physical gifts). Good strategy is to blend tangible rewards, experiential and social ones
• To know how much to charge for a SaaS (software as a service), do a survey:

1. At what price point does [product] become too expensive that you’d never consider purchasing it?
2. At what price point does [product] start to become expensive, but you’d still consider purchasing it?
3. At what price point does [product] start to become a really good deal?
4. At what price point does [product] start to become too cheap that you’d question the quality of it?

Map the responses, and it would look like the below graph

 

What is the 80/20 principle? A minority of inputs lead to a majority of outputs

The 80/20 Principle asserts that a minority of causes, inputs or effort usually lead to a majority of the results, outputs or rewards. Typically, causes, inputs or effort divide into 2 categories:

• the majority, that have little impact
• a small minority, that have a major, dominant impact.

e.g. 20% of products or customers or employees are really responsible for about 80% of profits

(A useful cousin to 80/20 is the 50/5 principle. Typically 50% of a company’s customers, products, components & suppliers will add less than 5% to revenues and profits)

For Consulting companies,

• 80% profits come from 20% Clients— Large clients and long-term clients. Large clients give large assignments; Long-term client have higher cost to switch to another consulting firm & they tend not to be price sensitive
• 80% results flow from concentrating on the 20% of most important issues

Realize the difference between the ‘vital few’ and the ‘trivial many’. The implication of 80/20 is that output cannot just be increased, it can be multiplied! Conventional wisdom is not to put all your eggs in one basket. 80/20 wisdom is to choose a basket carefully, load all your eggs into it, and then watch it like a hawk!

 

• How to think & use 80/20: Acting on a few key insights produced the goods

1. 80/20 Analysis: Quantitative, Precise, requires investigation, provides facts, highly valuable
   Gather data. Arrange the data in descending order of importance; take cumulative data & percentage. Make comparisons between percentages in the two sets of data. Use Bar charts to  present data

Caution:

• When using the 80/20 Principle, be selective and be contrarian. Look at what really matters! g. Look at Distribution of profits, but not sales volume!
• 80/20 Analysis is based on a freeze-frame of the situation at a particular point and cannot provide a picture of the trend or of forces that could change profitability. Profitability analysis of the 80/20 type is a necessary but not a sufficient condition of good strategy

2. 80/20 Thinking: Qualitative, fuzzy, requires thought, provides insight, highly valuable
   Think deeply on any issue that is important to you. Make a judgement on whether 80/20 is working in that area. Act on the insight. Ask ‘What is the 20% that is leading to 80%? What are the vital few inputs or causes, as opposed to the trivial many?’

• Applying 80/20 to business: Generate the most money with the least expenditure of assets & effort
• 3 action implications

1. Successful firms operate in markets where it is possible for that firm to generate the highest revenues from the least effort. A firm can’t be judged as successful unless it has a a high ROI, and higher margins
2. It is always possible to raise the economic surplus by a large degree, by focusing on those market & customer segments where the largest surpluses are currently generated
3. Raise the level of surplus by identifying the parts of the firm (people, factories, sales offices, countries) that generate the highest surpluses; Give them more power & resources

• If you can identify where your firm is getting back more than it is putting in, you can up the stakes and make a killing. (And, the converse too—where you get less, cut your losses.) The ‘where’ can be anything: a product, a market, a customer or type of customer, a technology, a distribution channel, a department, a type of transaction, an employee or team
• Do an 80/20 Analysis of Profits by different categories of business
  • First, By product/product group/type
  • Second, By customer/customer group/type
  • By any other relevant ‘split’ having data e.g. geographical area, distribution channel
  • By competitive segment

Two other questions, besides profitability, those are key to strategy:

1. Is the segment an attractive market to be in?
2. How well is the firm positioned in each segment?

• Segmentation: The greatest insights come from a combination of customers & products into ‘dollops’ of business defined with reference to your most important competitors. A competitive segment is a part of business where it faces a different competitor or different competitive dynamics. i.e.
  • Do you face a different main competitor in this part of business compared to the rest of it? If yes, that part of the business is a separate segment
  • Do you and your competitor have the same ratio of sales or market share in the 2 areas: or are they stronger in one area and you in another
• 4 steps to lock-in your core Customers

1. Identify your key customers; and profile the heavy & frequent consumer
2. Provide them exceptional or outrageous service—beyond the call of duty
3. Target new products/services at this core customers, developing solely for & with them
4. Keep your core customers forever by developing relationship (strength, length, depth)

‘Serving the core 20% of customers must be a company-wide obsession!’

• Increasing Salesperson performance
  • Hang on to your high performers. Stay close to them
  • Hire more of the same type of salesperson. Ask them to hire more people like them
  • Identify what the top performers sell the most and what they do differently then
  • Get everyone to adopt the methods that have the highest ratio of output to input
  • Switch a successful team from one area with an unsuccessful team in another area
  • In Salesforce training: Train only those who are likely to stay on for several years

Sales Managers should:

• Focus efforts on the 20% of products that generate 80% of sales. Reward Salespersons for selling the most profitable products
• Focus on the 20% of customers generating 80% of sales & 80% of profits. Get customers ranked by sales & profits. Insist Salespersons spend 80% of time on their 20% customers
• Put the highest vol. & profit accounts under 1 salesperson/team, regardless of geography
• Lower costs and use the phone for less important accounts
• Get Salespersons to revisit old customers who have provided good business in the past
• Five rules for decision taking with the 80/20 principle

1. Not many decisions are very important. So, don’t waste time over the unimportant decisions
2. The most important decisions are often those made only by default. So, occasionally step back to look for intuition and insight, rather than analysis. What you need are intuition and insight: to ask the right questions rather than getting the right answers to the wrong questions
3. 80/20/100/100 rule: Gather 80% of the data and perform 80% of the relevant analysis in the first 20% of the time available, then make a decision 100% of the time and act decisively as if you were 100% confident that the decision is right
4. If what you’ve decided isn’t working, change your mind early. Don’t fight the market!
5. When something is working well, double your bets. Don’t settle for modest growth!

• Project Management: Focus all team members on the few things that really matter

1. Simplify the Objective. Have one simple aim
2. Impose an impossible time scale. This ensures the team focuses on the real value adding 20%.
3. Plan before you act. In this phase:

• Write down all the critical issues to resolve (If more than 7, remove the least important)
• Construct hypotheses on what the answers are, even if pure guesswork
• Work out what info required or processes to complete to test your hypotheses
• Decide who is to do what and when
• Re plan after short intervals

4. Design before you implement. Or there will be massive, costly rework

• Negotiation: Few points in a negotiation really matter. Don’t peak too early
• Applying 80/20 to Life: Work Less, Earn & Enjoy more
• Detonate Time-revolution: There is no shortage of time. We only make good use of 20% of our time
  • Dissociate effort and reward. Think Productive laziness!
  • Give up guilt. Doing what you like doing and making it your job is great, not wrong!
  • Pursue those few things where you are amazingly better than others
  • Identify the 20% that gives you 80%. Multiply that! Eliminate/reduce low value activities
• Aim to have a lot of money. Start investing early in life. But don’t get overboard
• Identify top relationships with allies & loved ones, nurture them. The best relationships are built on (a) Mutual enjoyment (b) Respect (c) Shared experience (d) Reciprocity & (5) Trust
• The 7 habits of happiness: Make happiness the choice
  (a) Exercise (b) Mental stimulation (c) Spiritual/artistic stimulation/meditation (d) Doing a good turn (e) Taking a pleasure break with a friend (f) Giving yourself a treat &
  (g) Congratulating yourself

 

• Simple is Beautiful! Progress requires simplicity. Simplicity requires ruthlessness
• 1/5^th of a company’s revenues account for 4/5^th of its profits & cash
• If you focus on the most profitable segments, you can grow them surprisingly fast. Harvest these segments- let go off the less profitable customers & products, cut off most support & sales effort, raise prices, and allow sales to decline and start making good profits!
• Larger firms losing Market Share to smaller firms—because of the cost of complexity. Additional scale without additional complexity will always give lower unit costs
• Outsource: Decide which is the part of the value-adding chain (R&D/manufacturing/ distribution/ selling/marketing/servicing) where your company has the greatest comparative advantage—and then ruthlessly outsource everything else
• Do not listen to Accountants who bleat about ‘exit costs’; a lot of these are just numbers on a page with no cash cost. Even where there is a cash cost, there is normally a very quick payback
• Go for the most ‘simple 20%!’ What is simple and most standardized is hugely productive & cost effective than what is complex
• Immense cost reduction can be achieved by reducing complexity. By winning the war between the trivial many and the vital few. Use three 80/20 insights:
  1. Simplification thro’ elimination of unprofitable activity
  2. Focus, on a few key drivers of improvements
  3. Comparison of performance
• A few key quotes:
• Most likely, you make 80% of profits and cash in 20% of activity, and in 20% of revenues. The trick is to work out which 20%
• Whenever you spot a 20% activity, run to it, immerse into it and use resources to exploit it
• True best-seller books never make it to the charts but sell a reliable quantity at high margin
• 01%of a person’s vocabulary sufficient for 50% of the things to do with a small hand-held!
• Market share gives scale to spread Fixed costs; helps raise prices
• The road to hell is paved with the pursuit of volume. Less is more
• A common excuse for not cutting the product-range by 80% is: ‘the firm will lose stature.’ In reality buyers aren’t interested in being distracted from the products they want to buy
• When reading a book: Read the conclusion Ò the intro Ò the conclusion, then dip lightly

“There is a virtuous and vicious cycle between responsibilities and relationships”. Bosses guide a team to achieve results—

• Create a culture of guidance that will keep everyone moving in the right direction
• Understand what motivates each person on your team
• Drive results collaboratively

 What Is Radical Candor?

1. Radical Candor happen when you ‘Care PersonallyÓ’ and ‘Challenge DirectlyÓ’.

• Radical: To avoid ‘not saying what we really think’
• Candor: Communicate clearly, but also humbly
• Care personally—Give a damn: It’s personal, deeply personal. Know each other at human level (Find time for real conversations)
• Challenge Directly— Willing to piss people off: Telling people when their work isn’t good enough

Radical Candor is HHIPP—It’s Humble, Helpful, Immediate, in Person (in private if it’s criticism and in public if it’s praise) and it doesn’t Personalize.” That last P makes a key distinction

2. Obnoxious Aggression: The 2^nd best thing on can do! (Care personallyâ, Challenge DirectlyÓ). People wold prefer to work for a ‘Competent Asshole’ than a ‘Nice Incompetent’. Obnoxious Aggression is a behaviour, not personality trait.
3. Manipulative Insincerity: Worst possible quadrant (Care personallyâ, Challenge Directlyâ) It happens when people are too focused on being liked or want a political advantage by being fake or too tired to care or argue
4. Ruinous Empathy: (Care personallyÓ, Challenge Directlyâ) “Having never criticized Bob for 10 months because I was trying to spare his feelings, I was now sitting in front of Bob firing him. Not so nice after all. When I told him, Bob pushed his chair back, looked at me, and said, ‘Why didn’t you tell me? Why didn’t anyone tell me?’”

 Moving Towards Radical Candor:

• Start by getting feedback, actively solicit it
• Give more praise than criticism: It guide people in right direction and it motivates people

Growth Management:

• Excellent performance- Gradual Growth Trajectory: Recognise, reward, but don’t promote (Alert: These are not B-graders)
• Excellent performance- Steep Growth Trajectory: Keep them challenged (Alert: Don’t be too dependent on them, they won’t stay in their existing role for long.) Remember not every Superstar wants to manage (a team, project)
• Managing the Middle: Raise the bar; accepting mediocrity isn’t good for anybody—everyone can be excellent at something. ‘Sometimes people just need to be thrown out of nest to spread their wings!’
• Poor Performance-Steep Growth Trajectory: The reasons could be a wrong role, too many expectations too fast, personal problem, poor fit between company culture & personality. Find the reason & correct it
• Poor Performance-Negative Growth Trajectory: Part ways!

Remember: People change and you have to change with them. But for that you need to know the person enough (Care personally)

 ‘Get Stuff Done’ (GSD) Wheel:

 

1. Listen:
   • Quite listening: Listening to silently without reacting any way. “I heard the things I didn’t want to hear”
   • Loud listening: Saying things to get reactions from people, and then listen. Quick to get opposing views or flaws in reasoning
2. Clarify: ‘As a Boss, you are editor and not the author.’ It’s important to clearly understand new ideas and the people to whom ideas need to be explained. Pre-meeting: It helps people to sharpen ideas and define problems. Create safe space to nurture new ideas—‘Hack week’, ‘Blue Sky’
3. Debate: ‘As a Boss, you job is to turn on the rock-tumbler’.
   • Keep conversations focused on ideas, not egos. Direct people to facts, don’t allow people to attribute ownership to ideas. Tell people in the beginning that they will have to switch roles, then they will listen attentively
   • Create ‘Obligation to dissent’
   • Call for a time-out, if people are exhausted or charged up
   • Be clear when the debate will end. Don’t take a decision because the debate has gotten painful. Set a decide date
4. Decide:
   • Push decisions into the facts, or pull the facts into the decision. Keep ego out
   • People with the best-information, close to work are the right people to decide
   • The Decider must get facts, not recommendations
5. Persuade: Emotion-Credibility-Logic
   • Address Emotions—Listener’s’, not yours
   • Credibility: Demonstrate expertise & humility (And track record of sound decisions)
   • Logic: Share the logic of the argument. ‘Show your work’
6. Execute:
   • Don’t waste your team’s time
   • Stay connected to the actual work that is being done—not just by observing, but doing too. Block your time for execution
7. Learn:
   • Don’t be under pressure to be consistent with your approach, opinion. “When facts change, I change”
   • Don’t change course just like that, explain clearly & convincingly why things have changed

Tools & Techniques:

1. Relationship:

• Stay centred: “You can’t give a damn about others, if you can’t give damn about yourself”— Put your own oxygen mask on first. E.g. of such a routine ‘Sleep for 8 hours, 45 mins exercise and breakfast & dinner with family’
• Trust is built on consistent pattern of acting in good faith
• Relinquish unilateral authority. Power & control are illusory
• The way you treat people will determines whether you get best | perfunctory | sabotaging effort

2. Guidance:

Guidance	Praise	Criticism
Get from	NA	− Publicly − ‘Is there anything I could do or stop doing that would make easier to work with me?’ − Let people endure your silence to speak out − Listen to understand, not respond − Make it safe & natural to people to criticise you − Have a Management-Fix week
Give to	−  Praise in public, criticise in private −  Be humble −  While giving feedback describe (a) Situation (b) the behaviour (good or bad) and (c) the impact observed −  Be helpful −  Give feedback immediately −  You don’t need to find time for it; it take 2-3 minutes! −  Don’t save guidance/feedback for Performance Review! −  Praise—Contextualised, far more personal and specific −  Don’t personalise the criticism −  Don’t have a gender bias

3. Team:
   1. Career Conversations: (1) Understand their Life-story (2) Understand their Dreams (3) Ask “What they need to learn to move in direction of their dreams.
   2. Growth Management: Figure out who needs what opportunities and how to provide them. Individual growth path is more prestigious than manager path
   3. Hire Superstars or Rockstars depending on the job
   4. Fire—necessary evil! Don’t wait for too long. Don’t decide unilaterally
   5. Promotions: Be fare. Reward your Rockstars too
   6. Be a Partner—Not an Absentee Manager or a Micro Manager
4. Communication: ‘Who needs to communicate with whom at what frequency’ (When to use which conversation mode)
   1. 1:1 Conversations: Listen & Clarify. Think as if you’re having lunch or coffee, not as a meeting!
   2. Staff meeting: Learn—review key metrics, Listen—put updates in a shared document & Clarify—Identify key decisions and debates (Don’t take decisions here!)
   3. Think time: Clarify
   4. Big Debate meetings: Debate. ‘Check ego at the door!’
   5. Big Decision meetings: Decide
   6. All Hands meeting: Persuade
   7. Execution Time: Execute
   8. Kanban Boards: Learn. Make activity & worflows visible
   9. Walk around: Learn & Listen. Learn about small problems to prevent big ones

Few Key Quotes:

• Culture eats Strategy for Lunch!
• Don’t sandwich criticism in 2 bogus positives
• John Stuart Mill: “The source of everything respectable in man, either as an intellectual or as a moral being, is that his errors are corrigible.”
• “I didn’t say Steve (Jobs) is right, he gets it right!”
• Number of small innovations gives a company its competitive advantage. Capturing one big idea is easy, but thousands of tweaks is impossible to see from outside, let alone imitating.
• Brits despite their politeness tend to be even more candid than New Yorkers. Their education system stress Oral argument as much as written
• “When facts change, I change”

‘Almost all major Business Decisions are the result of Team Problem Solving.’

McKinsey consultants are the special forces of the business world. Their specialty is ‘team problem solving.’ Their method is not magic; it’s quite teachable, although it requires discipline and the ability to tell a good story.

Although McKinsey itself does not use this term, the acronym ‘TEAM FOCUS’ helps remember the elements of the McKinsey method:

• Talk – A team that cannot communicate cannot solve any problem
• Evaluate – Teams must be able to assess their performance and make course corrections
• Assist – Team members help each other
• Motivate – To persuade the team to pull together, learn what drives each individual
• Frame – Define the basic issue or problem that your team must solve. What are its ‘issue trees?’ What hypotheses will you use to test your assumptions? Framing is the most vital step in the TEAM FOCUS model
• Organise – Frame the issues using ‘content hypotheses,’ or primary questions.
• Collect – Gather meaningful data
• Understand – Figure out how the data relate to ‘proving or disproving the hypotheses’
• Synthesise – Mould the data into a believable, compelling narrative

There are three ‘Rules of Engagement’ for each element to help understand the concept and provide guidelines for implementation

Talk

Team problem solving is an interpersonal process. Its most important element is simply talking. If team members cannot speak openly to one another, they will never get anywhere. To improve your team’s communication:

1. Communicate constantly: Over-communication is better than under-communication. Discuss everything related to the problem at hand. Interact by e-mail, telephone and in person. Document everything
2. Listen attentively: Put aside your personal agendas while others speak. Give all speakers the respectful attention they deserve
3. Separate issues from people: Ideas are good or bad on their own merits. Keep personality out of the equation—especially your own

Evaluate

‘You can always find something positive to say about any person—it just may take a little more looking’

To evaluate progress, establish goals. Team members must commit themselves to giving and receiving feedback, and must agree on the team’s objectives and the metrics they will use. To evaluate the work of the team, look at each members work style, areas of responsibility and achievements

1. Discuss team dynamics: Do this at the beginning of the project, at the midpoint and at the end, in the form of an ‘after-action review.’ Discuss personality styles, conflict resolution and progress reporting
2. Set expectations and monitor results: List all tasks and determine the order in which the team must do them. Assign tasks and ensure that each member takes ownership of his or her activities. Discuss timing. Track and document everything
3. Develop and re-evaluate a personal plan: A team is only as strong as its members, who must learn to assess their individual strengths and weaknesses realistically. Even more important, members must share their self-assessments with one another. Team members should commit to improve in their personal areas of weakness, for example, regarding listening skills, ability to be non-confrontational

Assist

In addition to understanding who does what and to giving and receiving feedback, team members must be willing to step out of their usual roles to help others when necessary

1. Leverage expertise: List the skills of individual team members, and then assign tasks accordingly. Make sure the team has members who possess the skills it will need to do its work
2. Keep teammates accountable: Team members must accept responsibility for their own parts of the project. Everyone should carry equal weight. Use status reports to inform members about their progress
3. Provide timely feedback: Make sure it is balanced and constructive

Motivate

Each team member has a different motivation: Money may motivate one; ambition, another; pride yet another. To optimise team performance, find out what drives team members

1. Identify unique motivators: Personality often determines motivation. Use ‘personality profiling tools,’ such as the Myers-Briggs Type Indicator, DISC (dominance, influence, steadiness and compliance), Big Five (openness, conscientiousness, extroversion, agreeableness and neuroticism) and Strengths Finder, to evaluate the personalities on your team
2. Positively reinforce teammates: Be observant. Put team members ahead of yourself. Be sincere in your praise. Don’t pressure team members. Stay in touch with the team even after the project is over
3. Celebrate achievements: This is the best way to build positive energy. Acknowledge every important milestone

Frame

You can’t solve a problem you haven’t identified. This is where framing comes into play

1. Identify the key question: Use precise language such as, ‘How can we improve profitability?’ Discuss the issue fully with those who know about it and whom it affects. Get their input about possible solutions
2. Develop the issue tree: ‘Information trees’ ask, ‘What is going on?’ To make an information tree, list every aspect of the issue – all the ‘topics for consideration.’ For example, if profits are the issue, the information tree will include these branches of information: revenue, which again breaks down into price and quantity; costs, which you can split into information, such as variable cost per unit and quantity, and fixed costs. Document all information. Outline the time frame
3. Formulate hypotheses: ‘Decision trees’ ask, ‘What can we do?’ To build a decision tree, begin with a hypothesis. Every ‘hypothesis must be falsifiable,’ that is, using data you can prove it true or false. ‘The company should improve its operations’ is a weak hypothesis, while ‘the company should double its capacity, increase employee annual bonus programs and cut its product line by 33%’ is a strong one. In addition to the main hypotheses, develop supporting or sub-hypotheses—(‘If this hypothesis is true, what else needs to be true?’)

Organise

Develop a strategic approach for your analysis. Follow these rules of engagement:

1. Develop a high-level process map: It will answer such important questions as ‘Who will do what?’ and ‘What will the end result look like?’
2. Create a content map to test hypotheses: Test the sub-hypotheses first
3. Design the story line: Develop an initial story line early in the process, then amend it as you learn more. As data accumulates, the story line becomes a ‘storyboard.’ The important players must be able to follow the final story line easily

‘Begin working on the final presentation story very early in the project – almost on day one.’

‘By the end of the project, [the story] will have developed and morphed into findings, conclusions and ultimately, recommendations’

Collect

You cannot prove or disprove your hypotheses without relevant data. Therefore, collect what you need

1. Design ghost charts to exhibit necessary data: These are ‘draft slides’ that illustrate your problem-solving ideas. They consist of titles that address the ‘so what?’ questions; ‘data labels,’ or educated guesses regarding the data; and the data itself, presented visually with illustrations such as bar graphs, pie charts or flow charts. Do not be reluctant to develop such initial slides: The problem solving process is iterative
2. Conduct meaningful interviews: These are even more important to problem solving than ‘secondary data.’ Talk to the appropriate people. Be smart during the interviews. Don’t steamroll interviewees to get the data you want. Write up interviews as soon as you finish them
3. Gather relevant secondary data: Keep the primary issues and hypotheses in mind.   Cite all data sources on charts and slides

Understand

Data without insights are meaningless. By the time you reach this stage, you should be able to support your hypotheses. Understand the information and formulate conclusions that can help you come up with recommendations

1. Identify the so what(s): Ask yourself how your insights will affect further analyses and the operations under review
2. Think through the implications for all constituents: Figure out how the insight will affect the ‘consulting team,’ the ‘client project team’ and the ‘client implementation team’?
3. Document the key insights on all charts: Put these ideas at the top of your slides. Express them in complete sentences

Synthesise

Develop a sound, convincing argument for your recommendations

1. Obtain input and ensure buy-in from the client: If your client doesn’t follow your recommendations, your work is pointless. Keep the client fully involved. Include all implementers. Discuss your story with the client before your presentation
2. Offer specific recommendations for improvement: Tie each of your recommendations to ‘governing points’ such as a ‘change in strategic positioning’ or ‘operational improvements’
3. Tell a good story: Start with the recommendations and then follow up with the data. Use a deductive structure. Group ideas logically. Use terminology that they understand. Different audiences may require different levels of data and detail

The McKinsey Way provides access to the problem-solving, communication, and management techniques of one of the most admired consulting companies. Anyone can take & use these learnings to be more effective and efficient—and, successful

Problem-Solving
The three pillars of building a solution @ Mckinsey are:

1. Fact-based: Facts compensate for lack of gut instinct & also bridge the credibility gap
2. Rigidly Structured:
   1. Think in threes
   2. Be MECE—Mutually Exclusive, Collectively Exhaustive: The problem should be broken down into issues which are MECE, means no overlap between 2 issues and at the same time all the issues should cover all the parts of the problem
3. Hypothesis-driven: Create an Initial Hypothesis (IH) at the first meeting itself.  Dig for the facts to test whether the hypothesis is right or wrong; adjust the hypothesis to match the facts and then, repeat the process. To structure an IH, begin by breaking the problem into its components—the Key Drivers. Make an actionable recommendation regarding each driver. Later breakdown each top-line recommendation into Benefits & Issues. The above exercise will lead to an issue/solution trace.

Developing an approach

• Understand the ‘Right’ problem; the problem is not always the problem stated! Use the 5 Whys and keep an open mind to ensure that you are addressing the cause and not the effect of the problem
• Don’t reinvent the wheel. Most business problems resemble each other more than they differ. Search for solution in your database or talk to Client’s Employees, Suppliers, Sister companies or People in your network
• Remember every client is unique!
• Don’t make facts fit into your solution (Be flexible while approaching a problem. Don’t let a strong initial hypothesis become an excuse for inflexibility)
• Pluck the low hanging fruit first; solve the easy problems. Continue to hit singles, not home runs. The way to success is to solve hundreds of little problems
• Make sure the solution fits for your client and they can implement it. (A wonderful business solution is useless if the company lacks the resources to follow the advice)
• Sometimes you have to let the solution come to you!
• Sometimes problems may be unsolvable. Suggest alternatives

80/20 and other rules to live by

• 80/20 Rule
• Don’t boil the Ocean (Do smarter data analysis)
• Find & focus on the Key Drivers that affect the business
• The Elevator Test—Explain your solution in 30 seconds (Only recommendations. No reasons)
• Always think of the big picture (Is it the most important thing you should be doing right now?)
• Learn to say “I don’t know” (Rather than giving silly solutions; because people will find out!)
• Don’t accept “I have no idea” (Ask few open-probing questions. Combine it with cultivated guessing)

Selling the study
Mckinsey never sells or advertises, it markets by very valuable insights and publications. The right way to sell a service or a product is to be there at the right time and make sure the right people know who you are.

Assembling a team

• Choose people with right skills, and personality
• Bond with the team and know them (at a personal level!)
• Let the team know what they’re doing & why they’re doing

Managing hierarchy
The One rule: Make your boss look good. If you do so, he will make you look good as well Do your job well. Keep your boss informed, but no information-overloaded

Doing research

• Always start with the Annual Report
• Look for outliers in data (Why has it happened, why they look especially good or bad)

Conducting interview

• Before an Interview:
  • Make an Interview questionnaire. Know what do you want
  • Have Interviewee’s boss set up the meeting
  • Plan to do Interview in pairs (One person asks questions, other person take notes)
• During the Interview:
  • Listen carefully
  • Paraphrase —Helps to correct wrong understanding
  • Use indirect approach to get to a topic, be sensitive to the Interviewees sentiments
  • Use ‘Columbo’ tactic: Present the facts that appear to conflict, give the person the benefit of the doubt, and then ask questions for clarification
  • At the end of an interview, always ask, “Anything else you wanted to tell me or I missed to ask?”
  • Don’t have long interviews (aim for 30 minutes)
• After the Interview:
  • (When you are back in office) Always write a thank you email or call in person to oblige for the interview

Conducting interview

• Be prepared. (Good practice: Share a pre-read)
• Purpose of brainstorming is to generate new ideas—leave preconceptions out of the room; bring the facts, but find new ways of looking at them
• Remember: There are no bad ideas; there are no dumb questions
• There are diminishing marginal returns on duration of a brainstorming session

Making Presentations

• Resist the temptation to tweak your presentation right up to the last moment
• Walk all Stake-holders at the Client-side thru’ findings/recommendations before gathering them into one room
• Keep slides simple—one message per slide

Managing Internal communication

• Keep the information flowing. Over-communication is always better than under-communication
• Three keys to an effective message
  • Keep a message concise
  • Ensure your message contains everything your audience needs to know
  • Ensure the message has a structure
• Always look over your shoulder; maintain confidentiality

Managing Internal communication

• Keep Client team on your side
• Engage the Client in the process. Difficult or impacting solutions need support from all levels of the organisation
• Be rigorous about implementation
• Deal with liability Team members

Surviving at McKinsey

• Find someone senior in your organisation to be your mentor
• Make travel an adventure will lighten your load.
• Take these 3 things with you wherever you go: Clothing, Tools–writing pad etc. and Personal-care items
• For recruitment, use case-based interviews to test analytical thinking process
• To get a life: Make one day a week off-limits; don’t take work home and plan ahead

Simplicity:

• One of the main purposes of simplicity is indeed to make life easier. Dealing with complexity is an inefficient and unnecessary waste of time, attention and mental energy. Something does not have to be comprehensive to be useful.
• The real purpose of thinking is to abolish thinking. The human brain allows information to organize itself into routine pattern of perception and of action. So, when we look at something we instantly recognize it instead of having to work it out every time.
• When local leaders have the ability to make their own decisions within clearly defined frameworks and with clearly defined general objectives, then the system is simpler and more responsive
• There are times when complexity in a machine allows greater simplicity of operation
• In any communication there is a fundamental challenge to simplicity. The main aim of communication is clarity and simplicity. Usually they go together – but not always. Communication is always understood in the context and experience of the receiver — no matter what was intended. Too simple a message may be elegant but might be open to misinterpretation

How to Simplify:

Much more important than simplicity as a value is simplicity as a habit. This means that simplicity becomes an automatic part of the design process whenever thinking is used. Values can be ignored but habits cannot be ignored

 Underlying them all are three key questions:

1. Core purpose: WHY? Why are we doing this at all?
2. Value: WHAT IS THE VALUE? Both the positive and negative values. Both for the user of the system and for the system itself. (Difference between value & benefit: ‘Value’ is the potential that resides in a thing and ‘Benefit’ is the delivery of that value to a person in certain circumstances)
3. Delivery: HOW? How are we going to carry this out in practice? It is usually the delivery mechanisms which need simplifying. The purpose of any operation is to deliver value to someone. The best operations deliver value to everyone involved.

Approaches:

• Do a historical review
• Shed, slim, cut and trim (Remember: If unnecessary things add to clarity or simplicity they should be retained)
• Listen with ears & eyes
• Combine different functions and operations
• Deal with the bulk and make provisions for the Exceptions
• Restructure
• Start afresh
• Do Provocative Amputation: What happens if we drop this?
• Do Wishful Thinking: ‘wouldn’t it be nice if. . .’
• Use Ladder approach: make each small process, or part of a process, somewhat simpler a la Kizen

The Simplicity Design Process

“What is needed is not more technology design but more ‘value concept’ design. Technology can deliver almost any value we design — but we are lagging far behind in the design of value.”

The design process consists of knowing where you want to go, finding ways of getting there and considering the various factors involved. There are four aspects:

1. Thrust: Gives a clear sense of what we are trying to do, what we are trying to achieve.
2. Alternatives: What are the delivery mechanisms—Standard approaches? Special approaches? (Remember: Avoid temptation to settle for the first approach that seems to Work & think further)
3. Considerations: Use these to know which the best-suited alternative. These include constraints, resources and If there’s a conflict (e.g. between cost, practicality and value or simplicity and practicality) the priorities become important. Conflicts solved by a further design process or by a straightforward ‘trade-off’
4. Modification: Even when we have decided on the delivery mechanism there may still be a need to modify this mechanism to take into account the various considerations. (Remember: Excessive modification usually destroys any simplicity)

Remember: While operations can be designed for the bulk of users, controls and instructions have to be designed for the most basic of users.

10 rules of simplicity

1. You need to put a very high value on simplicity—Not 2^nd order objective. When things are highly complicated we do often wish for simplicity. But when things are not complicated we rarely strive to make something as simple as possible. If something is not a problem it does not get any thinking time A search for simplicity should enable us to rethink everything – not only problem areas
2. You must be determined to seek simplicity: It is necessary to invest time, thinking energy, design effort and money in trying to make things more simple. This attitude should also be encouraged by the surrounding organization
3. You need to understand the matter very well— If you don’t, then the result of your efforts will be “simplistic’ rather than simple. Simplicity has to be designed. In order to design something you need to know exactly what you are dealing with and what you intend to achieve. True simplicity comes from thorough understanding. It is simplicity after understanding that has a value. Simplicity before understanding is worthless.
4. You need to design alternatives and possibilities: Analysis important is in simplification but in the end one has to ‘design’ a way forward. The first idea is unlikely to be the best—Produce more. It is not a matter of designing the ‘one right way’, but designing alternatives and possibilities, and then selecting one of them.
5. You need to challenge and discard existing elements— Not everything that is there really needs to be there. Things which were needed at one time may be no longer needed. Where something cannot be justified then ‘shed’ it
6. You need to be prepared to start over again—Modify if you can, if you cannot start afresh. Be clear about what you are trying to do and then set about designing a way to do it ignoring the existing system entirely. This is more difficult & expensive and less likely to be acceptable. Hence, it will need justification—What Benefits and why they cannot be gained thru’ modification
7. You need to use concepts. Concepts provide the first stage of thinking in setting the general direction and purpose. (Remember: The precise purpose of concepts to be general, vague and blurry) The purpose of the concept is only to ‘breed’ ideas. The ideas themselves do have to be concrete and usable. Develop concept first and then find alternative ways of delivering that concept with specific ideas and concrete detail. Once you have extracted the concept you can clarify it, improve it, change it and redesign it.
8. You may need to break things down into smaller units
9. You need to be prepared to trade off other values for simplicity—You may need to trade off that comprehensiveness for simplicity. (e.g. Perfection vs. Simplicity) This trade-off requires a clear sense of values and priorities. Make deliberate and conscious choices
10. You need to know for whose sake the simplicity is being designed. User or Owner, Customer or Operator, Designer or User?

A few guidelines:

• Do One thing at a time
• Verbalize—Think aloud. (Verbalizing forces precision on thoughts which are vague, indistinct and apparently complex. You do not have to agree with what you have just said to yourself!)
• Breaking things down into parts and Analyse (Dealing with separate things as if they were one is a most common source of complexity We are excellent at seeking ‘what is’ but very poor at designing ‘what may be’)
• Take Small steps: A journey of a thousand miles starts with one step. Sometimes you need to carve out the next step

Dangers of simplicity

• Oversimplification: Oversimplification means carrying simplification to the point where other values are ignored. Simplification stops when the values derived from simplification are balanced out by the increasing loss of other values
• Simplicity may be Unfair: If you do not fit into any of the simple boxes you will be unfairly forced into one of them — or ignored completely
• Simplicity can be insensitive at times
• Simplicity may be Boring: Richness and complexity are not the same thing. Richness is a deliberate choice — complexity is merely an absence of simplicity
• Simplicity may kill evolution: If a system is kept rigidly simple because any deviation threatens the simplicity, then these adaptive changes may be excluded

Al Ries and Jack Trout, successful marketing strategists, have distilled their years of marketing experience and findings into 22 Laws that govern the world of marketing. Violate them at your own risk!

1. Law of Leadership: Being first beats being better any day. Remember the second guy to climb Mt. Everest?
2. Law of category: Now that it’s very hard to gain mind share in a category where competition already exists, it’s better to create a product in new category than trying to attack existing categories. You do remember the first Indian to climb Mt. Everest, first woman to climb Mt. Everest. Create a category where you are first.
3. Law of Mind: Leadership in getting first to the mind of consumer, not necessarily the market
4. Law of Perception: Marketing is about perceptions. Reality doesn’t exists outside our mind. Honda leads in US but only third in Japan (after Toyota and Nissan). If the quality of the car was the most important thing it should have the same position in all markets. In Japan, however, people perceive Honda as a manufacturer of motorcycles.
5. Law of Focus: “The most powerful concept in marketing is owning a word in the prospect’s mind”. Owning means that if people hear or see this word they usually connect it with a company that “owns” this word. FedEx owns “overnight”. You can’t take somebody else’s word.
6. Law of exclusivity: Don’t try to take over a word that is already owned by competition. Burger King tried to take over word “fast” from McDonald; failed miserably. As did FedEx “worldwide” from DHL
7. Law of the ladder: Marketing strategy should depends on your position in the market. If you’re No. 2 you use different strategy than if you’re No.1 or 3. Be honest about that position in the campaign.
8. Law of duality: In the long run, every market becomes a two-horse race. McDonald & Burger King. Coca-Cola & Pepsi. Nike & Reebok. Crest & Colgate. Become the top 2 or join them ASAP.
9. Law of opposite: If you’re shooting for second place, your strategy is determined by the leader. Leverage the leader’s strength into a weakness. Don’t try to be better than the leader, try to be different.
10. Law of division: Over time a category will divide and become two or more categories. Cars became luxury cars, sport cars, RVs, minivans etc. Don’t target multiple categories with same brand. When Honda wanted to go up-market it created a new brand, Acura.
11. Law of perspective: Marketing effects take place over an extended period of time. Never sacrifice long-term planning. Sales improve profits but reduce the reference price.
12. Law of extension: There’s an unhealthy practice of extending the brand equity. Instead one should create new brands to address new markets/products.
13. Law of sacrifice: You have to give up something in order to get something. Usual suspects include product line, target market, constant change (stop forcibly changing yourself).
14. Law of attributes: For every attribute, there is an opposite, effective attribute. You have to find an unclaimed important attribute to own. Key is OPPOSITE, not similar.
15. Law of candor: When you admit a negative, the prospect will give you a positive. Candor is disarming. Every negative statement you make about yourself is taken as true. Then twist it. “With a name like Smucker’s, it has to be good.”, “The 1970 VW will stay ugly longer.”
16. Law of singularity: In each situation, only one move will produce substantial results. In marketing only thing that works is a single, bold stroke. To find that singular idea marketing managers have to be down at the front in the mud of the battle not at headquarters.
17. Law of predictability: Unless you write your competitors’ plans, you can’t predict the future. Spot trends. A company has to be flexible enough to attack itself with a new idea.
18. Law of success: Success often leads to arrogance, and arrogance to failure. Don’t be arrogant, drop the ego, be objective. Question everything. When companies become successful, they substitute their own judgment for what the market wants.
19. Law of failure: Failure is to be expected and accepted. Drop things that don’t work instead of trying to fix them. Don’t punish your people for failures they will stop taking risks.
20. Law of Hype: The situation is often the opposite of the way it appears in the press. The amount of hype isn’t proportional to success. Real revolutions arrive unannounced.
21. Law of acceleration: Successful programs are not built on fads but on trends. Best thing you could do would be to dampen the fad. By dampening, you stretch the fad and it becomes more like a trend. Maintain a long-term demand for your product by never totally satisfying the demand.
22. Law of resources: Even the best idea won’t go very far without money. Marketing is fought in the mind of the prospect. You need money to get in the mind and you need money to stay there. Use your idea to find the money, not the marketing help. The rich get richer because they have the resources to drive their ideas into the mind.