Musings And Dialogue On Entrepreneurs And Decision Making (Part 4)

The following backdrop and questions apply to this part of the series of musings and open discussion on entrepreneurs and decision-making (See Part 1, Part 2, Part 3. Note that there will likely be a total of six parts for this series with a recap summary of feedback at the end):

New research is uncovering differences in types of decisiveness – for example, someone who can’t decide which dessert they want after dinner may not be the same as someone who puts lots of research into buying a car. When does a lack of decisiveness come from the need to get more information, and when is it simply putting off a decision (procrastination)?

It is very hard to generalize. As context, my immediate gut thoughts are that, in general, there are both emotional (e.g., "in the moment") and rational factors (e.g., looking at data) that entrepreneurs need to balance in order to make good decisions. Successful entrepreneurs will tend to be those that either have good business instinct from prior experience in the industry or comparable market and have an ability to look at facts. Alternatively, successful entrepreneurs may be those that have exceptional, innate, outlier-type business instincts and abilities to judge and facilitate people which compensates for weaker abilities to in analyzing factual information systematically (alternatively they may partner with someone who has these skills). I think it would be the rarer exception for a successful entrepreneur to be someone who can only look at rational factors, but this could work in areas like the hard sciences where intellectual property and ability to appropriate profits is high.

With that as my frame, to the question "When does a lack of decisiveness come from the need to get more information, and when is it simply putting off a decision (procrastination)?" my thinking is:

  • If the entrepreneurial team has a balance of experienced emotional- and rational-based decision makers, then putting off a decision is procrastination when the team cannot articulate what additional information or context would be needed to make a decision.
  • Alternatively, if the entrepreneurial team is made up of primarily experienced, emotional-based decision makers, then putting off a decision is procrastination either when they have made similar judgment calls in the past with substantially less information and risk or when they do not identify what complementary resource they need to help with the decision (e.g., legal counsel).
  • Alternatively, if the entrepreneurial team is made up of primarily rational-based decision makers, then putting off a decision is procrastination (presuming context such as market timing is right) either when past experience and knowledge is needed (e.g., prior entrepreneur consultation or complementary resource such as sales VP) and not sought or when excessive analysis is performed.

The basic gist is that I feel that entrepreneurs procrastinate (presuming the market timing is right) to make a decision when neither can they articulate what additional information is needed to make a decision nor are they actively seeking the complementary resource (in terms of balancing functional and emotional/rational decision-making traits) that they need to make an informed decision.

What are your thoughts and experiences?

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Operations Case Study: I Should Have Fixed The Car Myself Instead Of Going To Gaudin Ford In Las Vegas

Remembering a number of bad experiences with getting maintenance services at a car dealer, I tried to make the case to my in-laws that it would only take five minutes and ~$25/strut for two struts to fix the hatchback on my 2007 Ford Freestyle. There was likely a gas leak in one of the struts that was preventing the hatchback to stay up when I opened it. Simple fix, even for someone who knows practically nothing about cars. My in-laws said that the broken part should be covered by warranty and that I should just take it into one of the local, Las Vegas dealers. I resisted a bit, really for no good reason.

The real underlying reason why I didn't want to take my car to the Ford dealer … I didn't want to be embarassed in front of my in-laws with poor customer service.

Unfortunately, Ford Motor Company did not disappoint me.

Actually, I should have heeded an initial warning from the one-star rating review out of five stars for Gaudin Ford. Nevertheless, Gaudin Ford is one of the largest dealers in Las Vegas.

Here's the play-by-play and the key events. See if you can find the operational process problems (if not, I suggest consulting Reengineering the Corporation from my crash course consulting reading list):

  1. I call service department to see if they can take me at 9:30am
  2. Phone operator for service department says "yes"
  3. My father in-law and I drive the car 45 minutes or so to the dealer.
  4. I get car there a little early, and the service manager does a casual inspection of the hatch issue as well as a walkaround of the car (e.g., to check depth of tire treads)
  5. I get a printout saying that service is covered by the normal warranty and that I'll get the car back by the end of the day
  6. Should be a quick job (my father in-law remarks). When will the car be done? Answer: something to the effect of probably late afternoon.
  7. I ask whether they have the part to fix the hatchback. Service manager says that they should have it. If not, the parts warehouse should have it.
  8. Well we don't want to hang around for 5-6 hours, so we ask if there is way to get transportation back home.
  9. Gaudin Ford provides us transport back home, although we have to wait 30-40 mins longer than the original projection. Net-net ok so far.
  10. No call back of status by mid-afternoon, so I call into service center to see where are things at.
  11. Service manager says that there were a number of cars still in queue from previous day so my car hasn't been processed yet. Could I leave the car until tomorrow?
  12. Thinking about transportation logistics, I say "ok", but I think to myself that they shoudn't have taken my job in the first place if there wasn't time to complete the job on time.
  13. Next day comes – no calls by early-afternoon.
  14. I call service center to see where things are at.
  15. Service manager says that my car is just getting looked at.
  16. I ask when will car be ready. Service manager says by 4:00pm.
  17. I ask whether it can be done any earlier because I am in the area now (by chance) and it would be inconvient for me to have to come back much later. Service manager indicates that 4:00pm is the earliest.
  18. My father in-law and I make the decision to drop me off at the dealer while we are in the area.
  19. I arrive at the dealership and let the service manager know I'm there.
  20. Thirty minutes or so pass, and the service manager tells me that they don't have the part and could I come back another time so they can order the part?
  21. A bit frustrated, I'll tell him that I cannot since I have to leave town. I'll just take the keys and the car.
  22. He says that he has to close out the job and that I'll be checked out at the cashier desk.
  23. Forty-five or so minutes go by, and I wonder what's going on.
  24. I visit service manager again, and he says that he'll check as to what's going on.
  25. Thirty minutes or so pass, and I go to cashier desk. Cashier desk says that the checkout notice hasn't come yet.
  26. I visit service manager again. He is surprised to see me. He says that he'll check what is going on.
  27. I visit cashier desk again. Still no checkout notice.
  28. I don't know what's going on. I'm baffled, and I'm trying to decide if I should go look for the car myself on the dealer premises. Could I be charged if I tried to steal my own car back?
  29. I decide to stand there cluelessly for ten to fifteen minutes more, when the printout finally gets spit out of the printer.
  30. I checkout with the cashier (no $ charges, just signature), present the papers to someone to get my car, and head off.
  31. Dejected, I mentally prepare for when I will have time when I return to LA to have my car looked at.

So Ford disappointed me. Wasted my time. On top of it, the episode of poor customer service was in front of my in-laws (who have typically not bought American car brands, whereas I have practially always bought Fords).

The thought crossed my mind as to whether I should make a viral video about poor customer service, like was done with the video United Breaks Guitars.

That's shooting too big. Plus it's past my abilities as a musician.

My in-laws told me to Twitter the whole episode. They said that companies hate when you do "that sort of thing".

I'm not malicious, but I think a mini-case study is OK for a blog post.

In any case, I pose the question, "where did things go wrong?"

Musings And Dialogue On Entrepreneurs And Decision Making (Part 3)

The following backdrop and questions apply to this part of the series of musings and open discussion on entrepreneurs and decision-making (Part 1 here and Part 2 here. Note that there will likely be a total of six parts for this series with a recap summary at the end.):

Some researchers talk about humans trading off exploration (testing the environment) against exploitation (using resources once they’re identified). For example, see link about small children’s learning behavior here. Do you think entrepreneurs are more focused on exploration or on exploitation? How does this compare to other jobs?

My off-the-cuff thinking on these questions are that entrepreneurs tend to be stronger than other workers in terms of exploration mainly because exploratory skills align with the creativity skills that entrepreneurs often have. Whether entrepreneurs focus on exploration versus exploitation, however, has to do more with what type of business is being pursued than something specific to the entrepreneur's disposition or decision-making style relative to non-entrepreneurs. For example, if the entrepreneurial business is something relatively unexplored (e.g., introducing a household device that can interface with your computer for printing paper that can be folded into edible food), then the entrepreneur needs to tap into exploration skills. On the other, an entrepreneurial business that is a copycat business (e.g., introducing a lowest-cost mobile phone provider in a new geography like Canada), well then the entrepreneur needs to focus more on exploitation (with potentially small customizations or market studies in the local market).

What are your thoughts and experiences?

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Musings And Dialogue On Entrepreneurs And Decision Making (Part 2)

The following backdrop and questions apply to this part of the series of musings and open discussion on entrepreneurs and decision-making (Part 1 was here):

In many corporate environments, employees are very aware that time is money. For example, consultants become very accustomed to thinking about an hour of their time having a very specific dollar value, and that becomes a salient opportunity cost when they decide whether to spend time working on a task. Do you think entrepreneurs are as aware of the dollar value of time? Is this a good thing or a bad thing? Do you think it could explain some of your observed differences in decisiveness?

My thinking on these questions are that consultants tend to be more aware of their opportunity cost of labor than others, if only because bill rates are usually widely known in terms of $/hr internally within the firm and often with the client. From this perspective, however, I don't really see much of distinction between entrepreneurs and those salaried within a traditional company. I think it is atypical for entrepreneurs and those working within a traditional, non-consulting company to think in terms of either hourly opportunity cost or activity-based cost. In my experience, these latter groups are more focused on goals. I think employing the hourly opportunity cost concept to entrepreneurs and those working in companies could potentially be beneficial, but I have not seen a lot of this outside a manufacturing context.

What are your thoughts and experiences?

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Musings And Dialogue On Entrepreneurs And Decision Making (Part 1)

A bit of a new angle on this blog, this post is related to the early-stages of a research effort by my wife (who is a professor of marketing at UCLA's business school) with respect to entrepreneurs and decision-making. Though I am no scholar in the area of entrepreneurial decision-making, I understand that the area of overconfidence in entrepreneurs is a well-studied and documented bias, but that there may be other biases and decision-making characteristics of entrepreneurs that could be better understood.

The basic idea is that if you can better understand biases and faults in decision-making processes of entrepreneurs that one can improve the decision-making of entrepreneurs through training.

With that as backdrop, I'd welcome perspectives on a series of questions that I'll be posting here.

The first questions are, "How much of being a (successful) entrepreneur is innate personal characteristics (things like risk taking or creativity), and how much is a learned ability to manage behaviors (like ability to be decisive or to manage time well)?"

Here's my off-the-cuff perspective (as a person that does not consider himself an entrepreneur but a person closely involved with entrepreneurial ventures and approaches):

  • Nature – There's some things that entrepreneurs are born with. These things include dispositional characteristics like being a risk-taker, having a need for independence, having drive for success, being creative, having strong intuition, having persistence, and having stamina.
  • Nuture – There's some things that entrepreneurs can learn. These things include learning how to better communicate, how to network effectively, how to make decisions, and how to recognize proxy markets and adapt learnings. Potentially nuturable areas are learning empathy, sales, and trade skills relevant to intellectual property development (e.g., engineering, software design).

What are your thoughts and experiences?

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Mini-Brand Audit of Guitar Hero By Activision (Independent Research)

Listed below is a pre-release, draft copy of a brand audit on the Guitar Hero brand by Activision. I performed this mini-brand audit as a self-funded, independent party, and I created this document for reasons related to business development, marketing, and teaching purposes (brand management & consulting).

The purpose of a brand audit is to provide a company with a starting point for managing brand architecture, brand identity, and brand-building activities. Brand audits are often refreshed every one to two years and may be done by either internal staff of the company or external consultants.

Although I am a stickler for crafting problem statements, I did not explicitly articulate the problem statement assosciated with this audit (which is something I typically recommend in a consulting deliverable). That said, the general notion of an audit performed by an external 3rd party is to provide a wholistic, and independent view of strategy and tacics. I believe this document accomplishes that goal within the described limits stated in the document.

For the coming weeks, I would appreciate input and feedback from folks. I would also appreciate help in spreading the word as I am not a mainstream media channel. 🙂

Again, there are few angles I am thinking about in terms of releasing this note in the public domain:

  • business development purposes for consulting
  • general marketing & personal brand development
  • instruction and teaching purposes

I plan to finalize version 1.0 of the document and re-release around September 1, 2009 before key milestones are reached by Activision and competitors.

Thanks for your interest. Please help to spread the word!

Draft copy of brand audit here (PDF file replaced by update below).

Update (8/30/09): Version 1.0 of Guitar Hero brand audit here (PDF file).

Update (9/4/09): Guitar Hero and related subbrand logos get a bit of a refresh (see here and here). The changes are consistent with the strategies outlined in the audit.

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Interview On The Ethics Of Consulting

I was recently asked to do an interview at the consultant website, "Think Like A Consultant" on ethics & consulting. The full interview is posted here.

One question particularly of note was "What are the best ways to handle a client who appears to have unethical practices?" For that question, I responded as follows:

Fortunately, I have not been posed with many situations that are obviously troublesome. One area that comes to mind, however, is when a client asks a consultant to perform competitive intelligence, especially when soliciting for primary market information. Let’s say that a client has asked you to masquerade as customer and try to obtain information on a competitor (e.g., on pricing). Some company codes of ethics would strictly disallow this, as would many people’s personal ethical value system.

What I would try to do in these circumstances is to rework the problem statement and methods with the client. For example, perhaps the problem statement may be more about getting higher confidence in prospective pricing levels that the client is looking to put in the market as opposed to getting the exact pricing levels from the competitor. With the problem statement refined, you may find opportunities to solve the client’s problem in a more palatable way, such as through running focus groups with customers or industry distributors, conducting benchmarking studies, and other approaches.

Articulating and rearticulating problem statements are something fundamental to consulting and something which I've addressed before. For example, see here.

In any case, I'd be interested in feedback on the interview from folks. It is my third or fourth serious post in the blogpshere related to ethics, and I don't expect it to be my last.

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