Author Archives: Ken Goldstein

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Things That Work, Things That Rot

I think I know why Apple is one of the most valuable companies in the world, if not the most valuable. Simply stated, the company’s products are elegant, and they work. They are intuitive, and they work. They are designed with vision, and they work. Most of all, they work.

Am I willing to pay a premium for that? You bet. Are a lot of other people? How do you think they amassed more cash than our Federal Government (which, incidentally, has proven of late that it does not work). Yes, people will pay a premium for elegant, intuitive, well-designed, visionary products that work. To the victor go the spoils. We get tremendously useful products. Apple gets our cash. We may grumble about the constant upgrade cycles, but we shouldn’t often grumble about the value proposition, We get what we pay for, and in my mind, it’s worth it.

My experience earlier this year buying my first iPad could not have been more pleasant. I began my research polling friends on my Facebook page for feedback on what configuration to buy, and not only got great information, but rave endorsements for the iPad2 itself. I then went to the local Apple Store and despite the fact that they were sold out of iPads, a very well-trained and nice salesperson spent a great deal of time with me going over my options, then suggested I order my iPad online (with free shipping and engraving) to get it sooner. Other customers in the store were also Apple evangelists and offered me lots of friendly tips on apps I might like. I went home, ordered it on a Monday afternoon, had it on Friday morning, and used it all that weekend without any need of a manual or user guide. To take this all the way home, on a recent business trip some of the functionality froze, but when I searched my issue on Google, there was plenty of user feedback that accurately told me how to “reboot” the iPad and unfreeze the grayed-out state I encountered. The fix from problem to resolution with community help took six minutes.

LoveCustomersCompare and contrast this experience with my recent encounter with my telecom company. Early last week, my broadband connection to the internet vaporized—gone, kaput, no warning, no connectivity—in the midst of this week’s heavy stock market trading, which made the timing even more problematic. With sweat inducing trepidation, I called the 800 service number, and after five minutes of voice assisted prompts, I got a very polite person on the phone. This person thanked me for my business, assured me I was appreciated, took my phone number in case we got disconnected, then began to ask me to plug and unplug things which I told him I had already done. Thirty seconds later he accidentally cut off the call. He never called back.

I dialed the 800 number again, went through the voice mail prompts, got another polite human being ten minutes later. This person apologized for the first person cutting me off. Then after some give and take and checking with her supervisor several times while she put me on hold, she communicated to me more than thirty minutes later that my “old” DSL modem, which they had sent me in 2005, was incompatible with a change they had made in their network “at the central station” (sadly, my neighborhood is largely stuck with ancient DSL technology, but that’s another grating story). She then congratulated me on my eligibility for a new and improved free modem upgrade, which she would order for me as soon as her supervisor approved it. I had to go to a meeting, and indeed, 45 minutes later she called and left me three voice mails to congratulate me again that the free modem had been approved and would arrive in 24 hours. It did.

Unfortunately when I connected the new modem, it did not connect to the internet, so I called the 800 number again. After the voice prompts I got another exceptionally polite employee on the line, and this person apologized for the fact that the new modem did not work, but told me a ticket was open and would be resolved by Friday. It was Wednesday. I needed to be online. The nice person said he would escalate the issue, but that a configuration change had to be made at the central station according to the notes in the file.

I lived without hard-line internet through Thursday, saved by my iPad which of course worked fine. On Friday morning I still had no internet, so I called the 800 number again, went through the voice prompts and got another wonderfully polite person who apologized again, but told me the switch at the central station had not been adjusted because of a work stoppage, asking me if I had heard or read about this. I said I had, but I wondered why they would have made a network configuration change earlier in the week, not told me, and sent me a free modem that needed to be configured at the central station when there was no one available to do that. The wonderfully polite person agreed with me that this was wrong, and said I should have been called before the change was made originally to advise me a new modem was coming before they had sent it. I asked if all this was supposed to happen without me calling and he said yes, absolutely, then apologized again for the inconvenience.

I asked when I would have my internet connection again, and he said he hoped it would be by Monday, if someone was available to make the change at the central station during business hours, since they did not work weekends, if they were working at all. I offered some less than polite words about the impact this was having on my ability to conduct business in a turbulent equities market, and suffice it to say, with a certain number of carefully worded phrases (including a promise to write this blog entry), my connectivity was restored about four hours later.

I suppose that’s one way to take a job to completion.

I write this not specifically as a celebration of Apple and an indictment of my telecom company. I offer it instead as a lesson in excellence and the loyalty a true commitment to customers will garner. What Apple does should be the norm, not the exception, but because it is the exception, they enjoy almost unreal loyalty from their customers. I believe most if not all businesses once aspired to such a level of passion, but today, not so much. Mediocrity seems to be good enough for a lot of businesses, and as customers, we are just supposed to grin and bear it. That’s one of the true costs of everyday low prices. Quality can become a coin toss.

Perhaps it is time to put a stake in the ground and demand better products and services in every capacity we consume. With all this choice, customers are supposed to be Job #1. But are we really? If we have been reduced to being consumers rather than customers, than at the very least, let us consume well—without frustration, without anger, with reasonable expectations of the value chain. I have a better idea: let’s not be consumers, let’s be customers and expect to be treated that way, with respect, forcing healthy market competition for our loyalty. We pay a lot for this stuff, honestly, we do. Quality should be a given.

Not much to ask, products and services that work—and that work well, all the time.

Then again, perhaps I might share with you another example of trying to replace a battery for a mobile device from a branded store where the device remains on sale but the batteries not so much. Nah, I’ll spare you, just scroll up and do a search and replace.

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The Disingenuous Bop

Imagine working for a company where more than 80% of your customers held you in disregard. Congress has achieved that milestone of late, with an 82% disapproval rating. I want us to internalize that carefully, as the vast majority of us continue to share a sense of patriotism and love of our country, the very freedom and opportunity and dignity we believe to be our core shared values as Americans. We are patriots and we love our nation, but 82% of us hold our employees in Congress in disregard. Is it possible that we have found a way to separate the institution from its inhabitants, that we can continue to have pride in the ideal of democracy separate and distinct from its practice?

Seems like a reach to me. I am struggling with it as our nation reflects the wounds of the war of words being waged on our behalf in Washington, where our representatives are charged with an absolute mandate to serve the public good above all else. I am having a hard time believing an election cycle or two with the peaceful reassignment of power is likely to bring broad healing,

I have been writing a good deal of late about process, looking for corollaries of acceptable norms between business and government, digging into the core of behavior where bad form results in bad outcome. The entire tone of the debt ceiling debate felt wrong to me, and I wondered again if what we were hearing publicly was the same as what was being said privately. To that end, I wondered about the very nature of the language spoken in chambers and to the public, the rules of order imposed historically to remind us that with each gavel banging resolution we remain on the same team with a common purpose.

The imposed civility of government dialogue (“the gentleman from Nevada,” “my distinguished colleague from the great state of Virginia”) clearly was intended as a matter of protocol to smooth out the edges of vehement disagreement. I suppose that makes sense. Yet when one or the other party was asked as the hours ticked away about the claim that”we were getting close to a deal,” inevitably the retort would be: “I don’t know what they are talking about.” Some may call that negotiation style, readying for backroom agreements. To me it all seemed laden with secondary agendas that in the acceptance of dysfunction became unofficially primary—disingenuous at best, destructive at worst.

The problem for me with disingenuous discourse—posturing, grandstanding, two-faced commentary—is that it a symptom of a fundamentally unhealthy organization. Saying one thing to someone’s face and another behind his or her back may provide a temporarily effective tool in maintaining order, but it is fraught with peril in the critical endeavor of building consensus.

If we all lost the battle together, perhaps we can take from it a lesson for the business minded in moral application and at least get our heads screwed on straight as it applies to office behavior. We’ve all had occasion to dance The Disingenuous Bop. Let’s put a spotlight on the dance floor and see what reflects in the disco mirror ball. In the business world we sometimes call this gossip, and we know it is rotten to the core. It can go something like this, two employees in an ordinary private exchange, talking about their boss…

Jane: What do you think about Barry?

John: I really like Barry. I just don’t think he is very good as a leader.

Jane: Yeah, I like Barry, too. He was great when he hired me. But now he doesn’t have a clue what he’s doing.

John: Did you read what they wrote about Barry in the Wall Street Journal?

Jane: Yes, I wrote him an email and told him I thought they were unfairly harsh. He needed the boost.

John: Yeah, me too. I hope that helped him feel better. But you have to agree, he had it coming. He championed that stupid project and we lost a ton of money on it.

Jane: Yeah, I know, I thought it was going to be high-profile so I asked Barry to put me on it and he did. Then the project tanked. I tried to get off it, but I was stuck on it. Luckily I’m not taking the heat, he is.

John: Yeah, you dodged a major bullet on that. Lucky you. I was in the final milestone review last month and I knew it was a dog. It needed at least another month of polish.

Jane: Did you tell the group more time might save it?

John: No, it would have pissed them off. They were so happy with it, feeling self-satisfied and even though Barry asked if anyone thought we were in trouble on it, I knew that wasn’t what he wanted to hear, so I just went along with the program.

Jane: You probably would have taken some heat for being disruptive, so you kept your head low, that makes sense. I just wish the project would have been a winner, because I was going to ride it all the way up and ask Barry for a raise and a promotion.

John: And you would have earned it, too, if the project had been a winner. Barry would have been a happy camper, so you probably would have gotten it. Too bad.

Jane: Yeah, what a lost opportunity. Hey, are you going to the party at Barry’s house this weekend?

John: Absolutely, wouldn’t miss it. Career limiting move not to go to his party.

Jane: Yep, I’ll be there too, same reason. Good thing we both made the guest list. I guess he still likes us.

John: Yeah, I like him too. I don’t really like his parties though.

Jane: Agree 100%. Boring and not fun. See you there.

Harmless water cooler chat? A bonding experience with a fellow employee meant in good humor? Of course you would never engage in anything like this. It is rooted in the disingenuous, ugly in every respect. A person of honor would either reset the give and take or walk away.

There is nothing about being disingenuous that is ultimately productive. We see the embers all around us. Dance carefully, your name could be substituted for that of Barry at any time. If someone plays the game with you, they’ll play the game against you. Honor by definition is consistent. Smug is not a long-term strategy. Not caring about not caring is not sustainable. We are meant to live in one world, not maintain parallel existences for convenience and expedience. Style is content. Integrity only has one face.

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Deadlines, The Final Frontier

Looks like we dodged a bullet.  The United States of America will not default on its debt, We The People will be allowed to borrow more money to stay current in our obligations by way of a vague deal to curb deficit spending going forward that the House, Senate, and President will find a way to stomach late in the 11th hour.  Why don’t I feel proud?

In my mind, the process for resolution which was recently described by Senator McCain as “bizarro” has been a farce of such epic embarrassment, it is impossible to comprehend as somehow reflective of our shared values.  Last minute threats and posturing and leverage and mano a mano entrenchment ignore the obvious framework of achieving a shared vision — that working relationships must continue long after the dirty work is done.  Last week in a fairly heated discussion thread about the debt ceiling on another social networking site, an astute friend of mine wrote:

…the whole situation is disappointing. No one on the national scene has really acted that well.   Should we even give them praise for negotiating?  Has it come to that–we have to praise people for doing what sensible people do?

His exasperation is well-founded, and leads me to ask again, why must we accept one set of standards of conduct for business and a different set for government?  This is especially troubling since so many people in government have spent at least some of their career working in the private sector, where market forces determine the kinds of norms of acceptability and consequence our elected officials seem to ignore.

To be clear, I am not talking about mission structure — government service is not profit minded by design, so of course decision-making is not intended to be ROI focused, that would be absurd.  We go to war because our security is at stake, it is a cost.  We fix roads and build new infrastructure because they are the backbone of our shared needs, they are cost centers paid for by taxes, they are not profit centers so boardroom discussions will always be different.  I am talking about standards of conduct, behavioral norms — like honest discussion and earnest debate and timely resolution.

Consider that last one for a moment: timely resolution.  Anyone who has ever worked on a project knows the meaning of the term deadline.  Anyone who has ever taken a class knows that the date does not move for the final exam.  Anyone who has ever paid a bill knows that the due date is not negotiable, miss it and you pay a penalty out of your pocket and potentially suffer a credit score impact.  Anyone who owes a balance on their taxes knows that April 15 is not negotiable — it’s not magical, it’s just not negotiable, it is the law.  Although deadlines appear to be abstracts — fictitious creations of human imagination imposed as structure on others to compel action — deadlines are part of life.  They are real.  We learn as children to address them and as adults to manage them, or we suffer the consequences personally and professionally.

Deadlines teach us to manage two of the great success factors of businesses and careers: timeliness and urgency.  Timeliness means just that, occurring at a suitable or opportune time — being appropriately on time according to expectation and need.  Urgency is the competitive advantage of not being satisfied with timeliness, getting ahead of the curve so that winning is more possibly in reach by better applied and more efficient use of time to create distance ahead of the competition.

What can we learn from government with respect to timeliness and urgency? Does government consider these to be core values, even expectations of government’s viability?  Does government consider timeliness and urgency as Nice-to-Have or Must-Have?  We observe their philosophical commitment in their actions.  My sense is, there is not much here worth emulating.  If anything, government process is the antithesis to lessons a good business understands — and that includes leaving big blocks of time for rigorous review.

Our elected officials for whatever reason simply do not seem to take the notion of deadlines as seriously as the rest of us.  In some ways, a lack of respect for deadlines is the very notion of an entitlement culture — if you do what is expected, you get paid, and if you don’t do what is expected, you still get paid, right up until you get thrown out by the voters.  When you get thrown out by the voters, you get a pension.  Perhaps we are seeing the reason why deadlines don’t seem to matter in the halls of Washington.

Perhaps the reason our government has become so dysfunctional is because we have allowed it to be so.  In the working world, there are rules, and if you violate them, there are consequences.  In elected office there only seem to be two rules:

1) Don’t be party to a scandal that your opponents can manipulate to your demise.

2) Get elected, then reelected.

Pretty much everything else seems to be forgivable.  A missed deadline is a missed deadline.  Since there is no profit motive, there is no personally assessed penalty.  That’s just wrong.  It lacks humility.

Bosses are often accused of setting arbitrary deadlines.  What is the difference between an arbitrary and real deadline?  Not much, really.  If the boss sets a schedule and declares that milestones must be accomplished according to the schedule, there is usually nothing empirical or even mythical about the published dates — well, maybe the December holidays for retail, or similarly calendar driven events.  Most deadlines are made up, they are criticized and chastised and the stuff of Dilbert moments — but imagine a business enterprise without them.  Someone has to be Dilbert.  Someone has to create urgency.  Urgency combined with innovation are the stuff of success, creativity combined with timely delivery are the stuff of investment payoffs.

Most of us hate deadlines, but we all know they drive us to make hard decisions sooner, get past analysis paralysis, come together as teams and deliver.  Deadlines are the stuff of anger and stress and resentment — and the stuff of competition and collaboration and reward.  We hate them, but we embrace them, because we aren’t given a choice.  Arbitrary or organic, deadlines make us get stuff done to the best of our ability given the time allotted, and with some success, we then often get the chance to come back later and improve on our progress.  Deadlines are motivation and measurement, realities we learn to meet as challenges.  That’s why bosses set “arbitrary” deadlines — because timeliness is an expectation for compensation, and urgency is often a path from good to great.

I am not a big fan of rules just to have rules, but as a boss, I have to insist on a few or work does not get done and value is not created.  Deadlines are sometimes extended or forgiven for good reasons, but anyone who has worked in a high performance environment knows not to take forbearance for granted.  An occasional exception for truly improved work or some extenuating circumstance?  Of course, that’s possible.  The same rotten outcome I could have had yesterday a week from tomorrow?  Not a chance.

Just hitting a date with no breathing room and a lousy set of deliverables is not making a deadline, it is surrendering to mediocrity and living to play another day.  If that is allowable process, dysfunction has triumphed over reason.  It’s not urgency, and it’s not okay.  In business, you would likely get fired for it, or your business would go under.

Urgency is hard.  Urgency is a factor in competitive advantage.  Urgency matters.

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Innovation Finds a Way

If there is one thing the history of evolution has taught us, it’s that life will not be contained. Life breaks free, expands to new territory, and crashes through barriers, painfully, maybe even dangerously.  — Dr. Ian Malcolm (Jeff Goldblum), Jurassic Park, 1993

When not engaging in polite conversation over the past few weeks that involved either unsound journalistic ethics at News Corporation or the pending apocalypse of the U.S. debt ceiling, the most popular question I tended to encounter was, “Do you think we’re in a stock bubble?”  Truth be told, that has been a raging topic all year.  The cover story in the current issue of Fortune is “Tech Bubble 2.0” with a reasonably balanced assessment of Is It or Isn’t It.   My assessment?  Got me.

Here’s what I know.

It’s sure not 2000.  The internet is real now and so are an incredible number of businesses being launched of late.  This new wave of entrepreneurial enterprises sits upon real business models either with real revenues and real profits or real revenues and reasonably predictable profits at scale.  The business models are new, unexpected, but sound.  Some are working wildly well and bringing buckets of cash to their corporate bank accounts with pleased and well served customers, employees, and shareholders.  Others hold promise to do the same, aren’t quite there yet, but don’t take a lot of imagination to understand how they will scale to profitability because their models make sense.

Corporate earnings appear for the most part to be sound, albeit with heavy cost controls in place that aren’t doing much for the unemployed.  If you are buying the major indices across the board — domestic and international, large and small, growth and value — fully diversified along with fixed income to your own level of acceptable risk, you probably aren’t having trouble sleeping at night (except, of course, when you think about resolution to the debt ceiling).  Are the markets volatile?  They are, but they always are.  Are the fundamentals and multiples reasonable?  Well, I’m not an economist or a trader, but the Dow looks pretty understandable to me.

So how about that bubble?  Major players in venture capital have issued their opinions and are easy to search on other blogs, I am hardly qualified to comment.  Is it likely that some valuations are products of hope, optimism, or hyperbole?  Tell me anytime when that’s not the case.  Have you ever heard a Realtor tell you it’s not a good time to buy a house?  It’s always a good time, if it’s the right house at the right price.  My sense is, same with equities, preferred and common, private and public.  Bubble is a broad and complicated idea, always easy to assess in hindsight, virtually impossible in the crystal ball.

That’s what I know.  Sorry if I disappointed.

Here’s one thing else I know: the innovation all around us is astounding.  I can’t remember a time when there was so much happening so quickly and so much of it actually looked like true value creation.  Here is small sampling of the mind-blowing advances all around us:

Apple — the iPhone was a game changer, the iPad is a life changer.  I think the iPad will change everything about media for a generation.

Netflix — another game changer, first movies by mail, then movies on demand, easy and affordable, changing entertainment distribution paradigms at every turn.

Zynga — will people buy virtual goods?  They will.  Can a tiny segment of your audience underwrite the ability for everyone else to play free and still create profits?  Indeed.

Pandora — here’s technology that lets you create your own radio station that not only plays the songs you already like, but introduces you to new music you probably will like.

LinkedIn — not long ago if you had your resume online you were job hunting, afraid of being caught by the boss; now you must have your resume online or you don’t exist.

Hulu — one new brand aggregator derives more advertising revenue from network created content than the total online revenue of all the suppliers combined; wow!

Groupon & Living Social — coupons used to be the least cool way in the world to shop; call them time sensitive Daily Deals and online drives consumers back to storefronts offline.

Twitter — people communicate in less than 140 characters and the world is connected through snippets of information that can alter public opinion and evangelize democracy.

Facebook — connect people with friends, redefine the verb like, open your platform, create the most display ad inventory imaginable, then enjoy the value of 750 million accounts.

Again, this is just a sample of very cool companies doing very interesting things, among them, creating jobs and creating wealth.  Each of these represents incredible creativity, brilliant execution, and deep levels of passion.  People are working hard, people are working smart, people are being rewarded.  With > 9% national unemployment still our challenge, it is inspiring to see there are paths out of the malaise.  There are lessons to be learned in the current Silicon Valley run-up, first among them, the key is innovation.

It is ironic this “Tale of Two Economies” comes at a time when so much of the nation’s economy is suffering, and so many job losses lead the gloomy headlines.  It’s also ironic that it comes just as we lose a much beloved company, Borders, which in its day reinvented our notion of what a bookstore could be.  When the first wave of internet companies changed the landscape, Borders leased their digital real estate to Amazon.  They never recovered.  I asked a former VP of mine her sense of this recently, to which she replied: “They just forget to keep innovating.”

Perhaps the former CEO of Intel, the incomparable Andy Grove, said it best and most succinctly in the title of his 1996 book: Only the Paranoid Survive.

While I will always be reticent to render an opinion on the fair market value of a company, I can give a resounding endorsement to so much outstanding work I see going on all around us, much of it disruptive, as it should be in an entrepreneurial landscape that favors creative destruction.

Given a choice to share an opinion on the bubble versus the landscape, I’ll take the landscape.  I like what I see.  I would like to see it spread.  The old jobs aren’t coming back, innovation and automation pretty much assure that, there is little point waiting.  Let’s hope the new business models work so that new jobs will replace them and all boats float with the rising tide.  Many companies will fail, but the direction seems right.

Creativity tempered by sound judgment is the currency of the new economy.  It remains largely an open playing field for anyone who wants to relearn on a daily basis everything they thought they knew.