Friday, July 20, 2012

Try Out a New Career Before You Make the Leap


Different paths can lead you to new careers, and there are ways to explore these paths with little to no risk. 

You can build different skills on top of the strengths you already have. There are brainstorming exercises to imagine new possibilities. You can research different fields of work, talk to friends, and attend company presentations.

But what if you're still puzzled? You may not know what works until you've tried it. INSEAD professor Herminia Ibarra has written that "it's nearly impossible to think out how to reinvent ourselves." Instead, you may need to experiment directly in a new field.

Nina (name has been changed) is a great example. As a new corporate officer, she was unhappy with her political office environment. She also feared she'd missed her true purpose: being an artist.

Nina had considered art when finishing college, but she needed a job and transitioned to corporate life. But art remained on her mind — and it was something she continued to pursue in her free time: "Throughout the years, I kept thinking about art. I painted on the occasional weekend. I visited art museums on business trips. I wondered what it might have been like to do the art thing."

Nina took vacation to attend a painting seminar in New York. Recalling her feelings the last day, she said, "I was on fire. It was like being in love. I felt like I was awake for the first time in years. I just turned 50. I realized if I don't do this now I won't ever do it."

On the plane back home, she decided to change careers. Just like that.

Nina needed no big assessment. She knew. For 25 years, her art had been both an engaging hobby and (in hindsight) a career experiment. She didn't know at the time if she'd ever sell any art, but she now has a MFA, and she's selling pieces and takes great personal satisfaction from creating things.

You, too, can experiment with a new career. Like Nina, you can dip your toes in and learn about a new profession before diving headfirst into it.

First, set up your career experiment. Think about how to build on your capabilities and imagine new possibilities. Seek opportunities to get deep, hands-on exposure to the fields that result.

If you're already working, you can experiment on nights and weekends. Maybe you can volunteer for an additional role within your organization. Or perhaps you can find a volunteer role with a small nonprofit that relates to the field you're testing. You might take classes or get serious about a hobby.

If you aren't juggling a full-time position, you can certainly do most of these things, but with more available time you also have additional options. Consider a full-time volunteer role, a paid part-time job that relates to your aspirations, or a degree-conferring educational program that allows you to both prepare for and learn about a career direction.

Then, imagine your "curriculum." Just like a research scientist, know what you hope to learn. The more explicit you are about learning objectives, the better.

What might be in your curriculum? Consider these sample questions:
  • The purpose: What do you hope to accomplish in this field? What do people do in their day-to-day jobs? Does it match your interests?
  • Skill level: How you see yourself stacking up against peers? Does the prospect of achieving true mastery in that line of work excite you? Can you imagine advancing into a leadership position?
  • The culture: How is performance rated? What is the level of teamwork? How do people communicate? Are there any ethical issues in the field?
  • The lifestyle: How intense is the work? How many hours per week will you be working? Is travel involved?
Take out your curriculum periodically. Judge what you're learning and what more you need to discover.

The best way to learn from the experiment is to treat it seriously. Success will help you decide if it's the right field for you, and it might lead directly to a job offer. Success also will help you build a network and a record of accomplishment, as well as any skills you may need if you take a different career path.

But beware of too much experimentation. Testing new directions can be seductive — a way to do things while putting off tough decisions. Don't get too comfortable. Experiment, learn what you need, and then decide.

If you're moving from a corporate office to launch a new venture in that field, that's a big change. If you're thinking of leaving the corporate world to open a restaurant, that's huge. You're starting over, leaving much of your past behind. It's hard to know. You may make the best decisions if you first experiment with possibilities.

Have you experimented with career directions? What did you learn?

HBR article: Bill Barnett

Wednesday, July 18, 2012

There Is No Single Best Measure of Your Customers


Single-question customer metrics have become very popular. Companies all have their favorites. Some go for the traditional Customer Satisfaction measure, others the now famous Net Promoter Score. The most recent addition to this panoply is the increasingly popular Customer Effort Score, which tracks the amount of time and effort that customers have to put into solving after-sales problems.

Each claims to be the one metric that managers need to measure, monitor, and act on, because it promises a better correlation with business performance than any other existing measure.

So which of these is actually the best? A lot depends on what you measure performance with. In making the case for their Customer Effort Score, Matthew Dixon, Karen Freeman, and Nicholas Toman correlated the three measures with levels of customer repurchase and overall levels of spending. The results are shown on the graphic in figure (1) below.

But the picture is rather different if you correlate the three measures with customer loyalty. In a recent study, we analyzed 9,732 customer responses related to 102 different service companies in 19 industries. We looked at each measure to see if (a) it predicted loyalty in individual customers and (b) it predicted customer loyalty levels for companies as a whole. The results are presented in figure (2) below.

What's the Best Customer Measure?
(1)Figure 2 (from Wiesel et al).jpg
(2)Figure 1 (from Dixon et al).jpg

What accounts for these huge differences? A lot, we believe, has to do with sample bias. The official Customer Effort Score question ("How much effort did you personally have to put forth to handle your request?") can be asked only if a customer has actually contacted the company after a purchase for some reason. The Dixon, Freeman, and Toman research only looked at those customers who could answer the question. What this means is that while customer effort scores have good predictive power for spending by one group it can say nothing about the loyalty and spending of all types of customers.

Our research, however, included customers who couldn't answer the Effort question: of the nearly 10,000 customer responses in our data set, only 1,741 had contacted the company with a request.

The takeaway from his comparison is that you need to be very careful what you use your metrics for. Customer Satisfaction is not, perhaps, a good way to predict the future expenditure of people who have to deal with your after-sales service but it does looks like a good way to predict your overall levels of customer loyalty, while NPS is clearly a good predictor of the individual customer's attitudes.

The implication of this is that the growing reliance on a simple single customer metric is a very dangerous trend and we strongly urge companies to adopt a more nuanced multi-dimensional approach to predicting customer behavior. After all, if we visit a doctor for a check-up, we wouldn't want the doctor to rely solely on our body temperature to assess our health, would we?

HBR Article: Thorsten Wiesel, Peter C. Verhoef, and Evert de Haan

Monday, July 16, 2012

Act Fast, but Not Necessarily First


Speed is killing our decisions. The crush of technology forces us to snap react. We blink, when we should think. E-mail, social media, and 24-hour news are relentless. Our time cycle gets faster every day.

Yet as our decision-making accelerates, long-term strategy becomes even more crucial. Those of us who find time to step back and think about the big picture, even for a few minutes, have a major advantage. If every one else moves too quickly, we can win by going slow.

No one understood the challenge of time-pressured decision-making better than military strategist John Boyd, arguably the greatest fighter pilot in American history. Boyd developed a decision-making framework that our best leaders use today, in military and in business. It is known by the acronym OODA, for observe, orient, decide, and act.

As a pilot, Boyd advocated lightweight, maneuverable aircraft. He helped design the F-16 Fighting Falcon, which could be used like a switchblade in a knife fight. A pilot could pump the control stick back and forth, force the adversary to overshoot, and then flick through buttonhook turns to gain a tactical advantage. Boyd could outmaneuver his opponent — not by acting first, but by waiting for his opponent to act first.

Boyd saw these pilot tactics as a metaphor for longer-term strategy. What matters in battle, he said, is not merely speed. He developed a time-based theory of conflict, derived from Sun Tzu, in which the crucial insights for a fighter come in four stages. First, observe the rapidly changing environment; second, orient yourself based on these observations, process the disorder, and understand when and how your opponent might become confused; third, decide what to do; and finally, act at just the right moment, when your opponent is most vulnerable. Boyd spoke of operating "inside" your adversary's time cycle: once your opponent moves, gauge his degree of overreaction or underreaction and swoop in accordingly.

The ultimate goal of OODA is to act fast, but not necessarily first. This applies to lots of things beside armed conflict. In general, we make better decisions when we minimize the time it takes to decide and act — so that we can spend more time observing and orienting.

Consider professional athletes. Because a pro baseball or tennis player has only half a second to hit the ball, it might seem like the key to success would be going faster. But high-speed studies show that professionals are better than the rest of us because they start their swings later. They wait a few extra milliseconds, so they can take in more information about the speed and trajectory of the ball, then orient themselves in order to make an ideal swing.

The same applies in business. The faster we can execute a decision, the more time we free up to understand the task, gather information, and analyze the issues. If we require too much time to decide or act, we are forced to finish observing and orienting earlier. And if we act too quickly, we might respond to a problem that changes or even goes away before the deadline. The four-step OODA framework works for decisions of all types, small and large:

1. Observe
The first step of any good decision is to take in information. What are opponents doing? How are they superior or weaker? Are there relative drawbacks to your product or service?

This first step is the easiest one to ignore under time pressure. But it is the anchor to good decision-making. Great leaders assess how the winds are changing before they set sail.

So the first step is simple: what do you see?

2. Orient
Once you have gathered the relevant information, the next step is to process it and position yourself for a decision. Orientation means becoming aware of the implications of what you are seeing. How important are particular strengths and weaknesses? Where is the open water?

The second step also gets lost when time is tight. Yet without a proper orientation, a business will head off in the wrong direction.

3. Decide
Finally, once a manager has gathered information and understands the key questions (who, what, when, and where), it is time to make a choice. Notice that this step is distinct from action. It is purely mental, the moment before implementation.

For the third step, it is important to make a confident, firm move. This decision is not the first — nor will it be the last. There will be time to adjust later. Remember, the enemy is watching.

4. Act
Finally, every businessperson understands the importance of execution. Once a decision has been made, it should be implemented in the most efficient, straightforward manner. Don't look back.

The fourth step is not the final one. Once it is complete, go back to step one: observe. Don't second-guess. Instead, assess. How quickly do you need to change your product cycle? Are your customers changing? 

What information do you need? Ask these questions, and then look. As a pilot, Boyd would constantly adjust his speed and tactics, cycling through the "OODA Loop" to refine his plans, confuse his opponent, and maintain superiority.

Boyd, like the most successful business decision makers, outgunned his competition because he was so good at managing delay. He got fast in order to go slow. He used time, instead of letting time use him.

HBR article: Frank Partnoy