Saturday, 26 October 2013

Too much data - how to decide - Part 2

To Much Data - Mistakes you can make !

This is the second part of the sharing of information on what we can do in these times of information overload - and its going to get worse.

This a continuation of a blog by a respected business associate.


Again its not the data - but how you use it thats important.

Tony Park
Businessgardener.com.au


Making Better Decisions with Evidence - Part 2

My last post, about using data and evidence to make better management decisions, ended with a question.
A book club did an A/B test showing that by making a welcome call to new members, first-year spending could be increased by 8% and first-year retention by 6%.
So the question I posed at the end of this article, without providing an answer, had to do with what this company should now expect, as they roll their “welcome call” program out to alltheir new members. Should they expect the same results as they had in their test, or worse results, or better results?
If you didn't yet read the last post, what do you think?
There were a lot of answers ventured in the comments section, but unfortunately the vast majority were wrong. The correct answer was (wait for it)...

The book club should expect worse results from its roll-out.

More than two thirds of those who guessed any specific answer thought that the results would be the same, and several people suggested that there was insufficient information to tell.
Only two people thought the book club should expect the roll-out to have worse results, which is actually the correct answer, but no one suggested the correct reason for expecting worse results (although kudos to Sam Walker, who suggested it was because of regression to the mean, which was certainly close).
No, the actual reason the roll-out of a successful A/B test should be expected to under-perform the test result has to do with the sample of tests we choose to roll out, which is inherently biased. We only roll out successful tests, right? No one would roll out an unsuccessful test, why would they ever do that?
But this introduces a statistical bias. Every test, no matter how big or small, will have elements of randomness to it. There is always a chance that the results of a test on a sample of customers will give results that are significantly better or worse than would be achieved for the whole population of customers, based purely on the random selection of test participants.
When you do an A/B test, if your random choice of test participants just happens to include a few very enthusiastic or valuable customers, for example, then your test result will be better than the average result you would get for all your customers. Or, if your test sample just happens to include some very lackluster customers, its result will be worse than the average for all customers.
These variances occur purely on account of the random selection of participants. The smaller sample size you use for your test, the bigger the variance is likely to be, but there will be some variance in all samples, no matter how large.
However, what this means is that by choosing only to roll out tests that show positive results, we are eliminating more randomly negative results, and including more randomly positive ones, right? That is, there is always a chance that the result of any test will be significantly better or worse than the average over all our customers, but if this random occurrence is negative, then we wouldn't be rolling the program out.
So, on average, we should expect more roll-outs to under-perform their tests than to over-perform them.
My purpose in putting this and the previous post up (and future posts that I plan in this series) is not to provide an academic course in statistics. No calculations or equations were needed to make the argument I just made. You don’t need to add or subtract numbers to understand the logic.
My purpose is to call your attention to the fact that even though, as managers, we are all now inundated with data, and even though we have immense computational resources at our fingertips, most of us are not yet skilled enough in our reasoning to be able to put these data to good use, as a general proposition. If we want the quality of our decisions to improve with the quality and availability of data and computational capabilities, then we first need to improve our statistical reasoning.
We need to improve our skill at using evidence to make good decisions.
A couple of comments on the previous post made reference to the fact that the book club I mentioned would also have to ensure that the data from its test results are not contaminated or biased in some way, and this is certainly true. Before you can rely on data at all, you have to be sure you can trust it.
So in my next post on this topic, I’ll discuss the conditions under which you can trust the data you encounter.


Friday, 25 October 2013

Too much data - how to decide - Part 1.

Brain Overload ?

There is so much information available now - some would say too much and you would think that management decisions would have improved from this surplus of information. 

However it seems that it has not improved and we need to see what we need to do to improve that step as well.

The information below outlines the challenge and in step 2, some solutions.

Tony Park - Business Gardener.

Part 1

Management Decisions in a Data-Rich Environment

 
When making a decision, today's business executive has access to roughly a thousand times more data, and a thousand times more powerful analytic and computational tools, than would have been available for making the same exact decision as recently as 1993. Unfortunately, however, the quality of the management decision-making process itself has not much improved.
Today’s managers are woefully under-prepared for using data and evidence to support intelligent, scientifically sound decisions, and most business executives are completely unaware of just how flawed their reasoning processes really are.
Let me give you an example. When I address business audiences I sometimes pose a simple question based on a case study. A few years ago, a European book club found that by calling its new members within their first month of membership, just to welcome them on board and inquire whether they fully understood the terms, first-year members bought 8% more books, and their likelihood of renewing their membership at the end of the first year increased by 6%, as well. No selling at all was allowed on these welcome calls; the calls were made purely to improve the customer experience.
Are you with me so far? OK, now I ask the audience:

How can the book club possibly know it was the calling program that achieved these results, all by itself?

Couldn’t it have been the selection of books being offered that year, or the arrival of a particularly successful bestseller? Or what about a fall-off in competition from some other book club? Or even an improvement in the country’s overall economy, for that matter? And what did the calling program achieve in the following year, anyway?
I have asked this very simple question of business executives in audiences all over the world, and all I usually get are perplexed looks. The vast majority of managers are simply flummoxed by the question. Only about half the time, in fact, does even a single executive suggest the right answer. And it is a very simple, very basic answer.
The book club knows that it had to be the calling program all by itself that achieved these great results because they didn’t call every new member. They only called a random sample of new members that year, and then they compared the purchase volume and retention rate between those who were called and those who were not. It was really that simple.
This kind of “A/B test” has become quite common in the age of interactive marketing, because now the vast majority of marketing activity is based on individual interactions with individual customers, the way the book club's business model worked years ago. If you want to know what offer to make to a particular kind of Web visitor, or what graphics will generate the most click-throughs, then randomly select a portion of your Web visitors to receive treatment A, and another portion to receive B. Google, Amazon, and other large, online businesses are capable of conducting and evaluating thousands of individual A/B tests daily.
A/B testing, however, is just one aspect of dealing more scientifically with data. And in future posts I’m going to talk about a number of additional issues, including:
  • Knowing when you can trust data, and when you can’t
  • How to avoid the rationality-impeding influences of your own human biases
  • Testing the null hypothesis
  • Planning ahead for randomness and unpredictability
  • Using the Law of Large Numbers and other principles to improve your decisions
If you think you’re already pretty skilled with the kind of reasoning required to make better management decisions in a data-rich environment, then you should have no problem answering this follow-up question:
Once the book club conducted its test and found that the calling program did, in fact, have positive results, they rolled the program out and began making welcome calls to all new members. What should they expect now?
  1. The percentage improvements will be the same?
  2. The improvements will not be quite as good?
  3. The improvements will be even better?
And why should they expect this?
To get the answer to this question, you can click here.

More in part 2.
Tony Park

Sunday, 20 October 2013

Value from Wisdom

Wisdom can create Value !

With the huge increase in information available on the Internet, further increased as it is shared across the world, there is a challenge on what is correct and how can we manage this avalanche of information.

This article below by Daniel Burrus, helps to understand the difference between information, knowledge and wisdom and how you can use it to grow your business.

Tony Park
Head Gardener - Business Gardener
www.businessgrdener.com.au

Delivering Exceptional Value Using Your Knowledge and Wisdom


In today’s net-enabled knowledge economy, simply being a data dispenser or an information source for clients is no longer enough. Because the internet is so readily available and easy to use, people can get data and information instantly. As a result, any employee, no matter how high or low they are in the organization, who dispenses data and information is of little value to customers, and they will perceive both the employee and the organization as a time-wasting commodity. To truly stand out and be a valued resource for customers and clients, you need to go beyond dispensing data and information and bring knowledge and wisdom to the interaction.
Think of it as a triangle. At the base of the triangle is data. Going up, next is information, then knowledge, and then at the triangle’s peak is wisdom. Using this illustration, the higher you go up the triangle with people, the more value you add to the relationship.
Before the Internet became widely used in the early to mid 1990s, few people had access to data and information, so that’s where companies created value (think of the travel agents, stock brokers, and the order-taking salespeople of yesteryear). Today, however, virtually everyone has access to data and information, so the value in providing it is gone. And in fact, the more you dispense data and information to people, the more you’re wasting their time…and they know it. But the more knowledge and wisdom you give them, the more time (and money) you will save them and they’ll want to spend more time with you.
To truly understand how valuable knowledge and wisdom are, consider this scenario: Suppose a colleague is introducing you to someone who can help you solve a challenge you’re facing. Which of the following descriptions of the person hold the most merit to you and would make you feel comfortable talking with him or her:
  • “This person has access to a lot of data regarding your situation.”
  • “This person has access to a lot of information about your situation.”
  • “This person is very knowledgeable about your situation.”
  • “This person has proven to be very wise in helping people with your situation.”
Obviously, the real value is in the knowledge and wisdom someone can offer. So the question then becomes: How do you make sure you’re delivering knowledge and wisdom rather than data and information? The following points will help you focus your conversation for the most value.
  • Take a consultative approach during every customer/client encounter.
When you’re talking with prospects, customers and clients, make sure you’re providing actionable knowledge and wisdom rather than simply giving them data and information. Ask yourself, “Am I providing something the person can easily find online, or I am giving the person consultative value and insight they can’t find anyplace else?” In fact, you may even want to keep track of how much data, information, knowledge, and wisdom you typically dispense so you have an idea of how much value you are providing.
Of course, this approach doesn’t mean you won’t dispense a little data and information. However, when you’re talking with someone, you want to make sure you’re not wasting anyone’s time, including your own. After all, why talk for 30 minutes about data and information when you can send a link to the same material? When you save time you create value, which ultimately leads to more business.
  • De-commoditize yourself.
Since data and information are commodities, you need to de-commoditize yourself—even if you’re in an industry that’s viewed as a commodity. For example, travel agents still exist today. However, the ones who are successful have gone beyond dispensing data and information and have found a way to add consultative value to their clients. If you call a travel agent and the person simply gives you prices and schedules, there’s no value there, you could have found that online. However, if the travel agent you work with asks questions and learns that you are allergic to feather pillows, that you need extra legroom on flights, and that you prefer certain amenities and are willing to pay for them, now the agent is able to weed out your options and only suggest things that are important to you.
In this example, the travel agent is saving you time. Sure, you could find this information on your own, but it would take a lot of searching and phone calls. So even though the agent is technically giving you information, he or she is framing it in a way that adds value. The agent is adding personal knowledge and wisdom to the information and tailoring it for your specific needs.
Unfortunately, too many professionals are stuck at the basic data and information level. Those who make the shift to dispensing knowledge and wisdom are of higher value in the marketplace—they bring in the most business and earn the most money. That’s the position you want to be in for long-term success.
  • Ask better questions to uncover the customer’s real need.
Many times a customer will call and ask, “Do you stock Product A, and if so how much is it?” The customer is pushing you into a data and information mindset. But if you answer the question directly, you’re giving little value. That’s when you need to take control of the conversation by saying something like: “To give you the best possible answer, tell me what you’re trying to accomplish. I may be able to save you some money and time.” At this point, the customer will tell you why they are interested in the product, and you can potentially offer a better solution.
Most people buy something and then find that what they bought is not exactly what they wanted or needed. Or, it is what they wanted or needed, but only for a short time because something else would have given them better long-term results. For example, an adult may decide to get back into bicycle riding so they can get in shape. The person walks into a bicycle store and asks, “What’s the cheapest bicycle you have?” Rather than show the customer the cheapest bicycle, a salesperson who delivers value would ask such questions as, “What’s your goal for biking? How long has it been since you last rode a bicycle? Do you plan to ride on flat surfaces, or on hills and mountains? What’s you skill level?” Now the salesperson can give the customer a consultative answer versus a data or information answer.
The key is to begin a dialog with people. Sometimes the thing that’s the cheapest is the most expensive, because it’s the wrong thing and needs to be replaced quickly. However, when you prompt people to tell you what they really want, you can offer them a better long-term solution. Even more important, by asking questions, you’re beginning a relationship. You’re indirectly telling the other person, “I care about you.” In contrast, if you simply spurt out the data and information, you’re indirectly telling the person that they’re just another number to you. Questions always open the door to more business.
Value-Added Success
The future is all about relationships and adding value to people’s lives. Therefore, your goal is to create growing relationships that are thriving rather than shrinking relationships where you’re becoming less relevant or obsolete. Focusing on a consultative approach by sharing knowledge and wisdom is the key. Remember, data and information can be printed on a handout; knowledge and wisdom are based on experience and best delivered through dialog. The more you focus on the latter, the more satisfied your customers will be…and the more success you’ll attain.
*****
DANIEL BURRUS is considered one of the world’s leading technology forecasters and innovation experts, and is the founder and CEO of Burrus Research, a research and consulting firm that monitors global advancements in technology driven trends to help clients understand how technological, social and business forces are converging to create enormous untapped opportunities. He is the author of six books including The New York Times best seller Flash Foresight.

Saturday, 19 October 2013

Business Principles to Live By

Hi my friends,

In business it can be a positive path, with a clear goal, a sound action plan and reviews along the way -or it can be chaos like a pin ball machine moving from achievement and challenge along the way until something happens.

However both can be positive to achieve your overall life achievement if you have underlying principles to live by.

Below are 8 of those principles that can create a foundation for your business life, these are from Jeff Hayden.

These are the foundations for a good business - same as you need the foundations for a good garden.

I have had some great achievements and a few setbacks, but I have seen that I need more information and now finishing off a MBA - and loving it.

If you want assistance in any of these, contact me - Tony Park at the businessgardener.com.au - I can assist you to make your business GREAT.

Tony Park

8 Business Principles that Last a Lifetime


Some business tenets tend to come and go. A company I worked for started a number of "game-changing" transformational programs only to quickly airbrush them out of our corporate history like a disgraced Politburo member so we could start yet another "business-critical" program.
We went from TQM to 5S to, shoot, I don't even remember. What I do know is that each was based on sound principles... but those principles tended to die with the program.
Fortunately I found some business principles I can follow forever. These are some of my favorites:
1. Focus on collecting knowledge...
Competing is a fact of professional life: with other businesses, other products, other people. (Business isn't a zero sum game, but it is a game we all try to win.)
Smart people win.
Smarter people win even more often.
Continually striving to gain more experience, more experience, and more knowledge is the second-best way to succeed. The best way?
2. ...And focus more on collecting knowledgeable people.
You can't know everything. But you can know enough smart people so together you know almost everything. And, together, you can do almost anything.
Work hard on getting smarter. Work harder on getting smart people on your side.
How?
3. Give before receiving.
The goal of networking is to connect with people who can provide a referral, help make a sale, share important information, serve as a mentor, etc. When we network, we wantsomething.
But, especially at first, never ask for what you want. Forget about what you want and focus on what you can give. Giving is the only way to establish a real relationship and a lasting connection. Focus solely on what you can get out of the connection and you will never make meaningful, mutually beneficial connections. (If it's not mutually beneficial it's not a connection; it's a relationship where someone is getting used.)
Approach networking as if it's all about them and not about you, and you will soon build a network that feels the same way. Then you'll make more than just contacts.
You'll make friends.
4. Look past the messenger and focus on the message.
When people speak from a position of position of power or authority or fame, it's tempting to place greater emphasis on their input, advice, and ideas. Warren Buffett? Yep, gotta listen to him. Sheryl Sandberg? Yes. Richard Branson? Absolutely.
That approach works to a point--but only to a point. Really smart people strip away all the framing that comes with the source--both positive and negative--and evaluate information, advice, and input idea based solely on its merits.
When Branson says, "Screw it; just do it and get on with it," that's powerful. When the guy who delivers your lunch says it, shouldn't it be just as powerful?
Never discount the message because you discount the messenger. Good advice is good advice--regardless of the source.
5. Always work on next.
It's impossible to predict what will work, much less how well it will work. Some products stick--for a while. Some services flourish--and then don't. Some ventures take off--and flame out. Some careers thrive--and then don't.
You will always need a next: a new product, a new service, a new customer or connection, a new job or even career...
No matter how successful you are today, always have a next in your pipeline. If somehow your current career or business continues to thrive, great: You will still have created a bigger pipeline of potential positions or products or customers.
Always having a "next" is how successful people weather the storm when times are tough... and grow even more successful when business is booming.
6. Eat as many of your words as you can.
When you look back, one of the best things to be is wrong because when you make a mistake you are given the chance to learn. (If you're always right you never really grow.)
Don't worry. Every successful person has failed numerous times. Most have failed more than you--that's why they're so successful today.
Own every mistake, every miscue, and every failure. Say you made a mistake. Say you messed up. Say it to other people, but more importantly, look in the mirror and say it to yourself.
Then commit to making sure that next time you'll make things turn out differently.
7. Always turn ideas into actions.
The word "idea" should be a verb, not a noun, because no idea is real until you turn that inspiration into action.
Ideas without action aren't ideas; they're regrets.
Every day we let hesitation and uncertainty stop us from acting on our ideas. Fear of the unknown and fear of failure are what stop me, and may be what stops you, too. Think about a few of the ideas you've had, whether for a new business, a new career, or even just a part-time job. Many of those ideas would have turned out well if you had given them your best effort.
Trust your analysis, your judgment, and your instincts. Trust them more than you currently do. And definitely trust your willingness to work through challenges and roadblocks.
Granted you won't get it right all of the time... but when you let an idea stay an idea, you almost always get it wrong.
8. Check out squirrel nests.
Yeah, we're hyper-focused. Yeah, we've got our head down and our blinders on. Yeah, we're 24/7, take no prisoners, failure is not an option gals and guys.
But occasionally we all need to lighten up.
Take me. There are acres of woods behind our house. It's like squirrel paradise. They're always leaping from tree to tree and scampering across the deck.
When the leaves fall their nests are visible high up in the trees. I've seen nests for years and wondered what they're made of (besides leaves) and how many squirrels share a nest. One day I stopped wondering and took a break to check it out.
Kinda dopey? Sure. But it was a fun five minutes that made me appreciate my squirrel friends a little more--and sent me back to work with a little extra oomph.
Success is a marathon, not a sprint. Explore. Take occasional breaks and indulge a curiosity. Once in a while, take the time to learn a little about whatever your "squirrel nests" might be.
It's fun... and we can always use a little more of that.
What principles of your own will you always follow?
Jeff Hayden
(photo courtesy flickr user Victor1558)

Monday, 14 October 2013

De-stress the office for success.

Times are a changing is a song by Bob Dylan and part of those changes has been the increase in stress in home and work environments.

Below is some information to assist you in helping your team members to de-stress, then they will assist you to make your business grow.

If you wish help in these processes, please contact me - Tony Park at Business Gardener - tony@businessgardener.com.au 

De-Stress

Are your employees excited to come to the office every day, or do they drag in late? Here at Wasp, we think building a strong (and motivated!) team is essential in small business. Avoid these six sins of office stress and make your work environment a place that employees want to be.

1.      Infrequent Feedback

Employees worry about performance when they don’t receive feedback from mangers. Eliminate this office stress by scheduling regular evaluations. Be sure to discuss positive areas of each employee’s work and areas for improvement. Establish an “Employee of the Month” or other reward system to showcase star performers and give employees a goal to aspire to.

Also, make sure your employees feel comfortable giving feedback to managers. While some employees may be at ease sharing problems or concerns in a face-to-face meeting, other employees may prefer to provide feedback using an anonymous survey or though a suggestion box.  Regardless of how you approach it, be sure the process is simple and that suggestions are taken to heart.

2.      Mundane Office Hours

Have you ever finished your work for the day at 3 p.m., but couldn’t leave until 6 p.m.? Or do you work best after 10 a.m.? Forget the traditional 9-5 office hours. If it works for your small business, allow employees to decide the set hours they are in the office.

Or, reward employees on Fridays by letting your team to come in to the office late or leave early. Switching up the norm will allow employees to relax for a few needed hours.

3.      Uncomfortable Work Space

Simple things like glaring computer screens, limited sticky notes or painful desk chairs can cause stress. Allow employees to select desk furniture and keep a “grocery list” for needed office supplies. Don’t neglect unconventional options like standing desks or stability ball chairs as healthy alternatives to everyday office chairs. Around the Wasp office, you can spot employees perched on stability balls, and the sales team sports sound-cancelling headsets to keep office noise out of calls. Check out these tips for more simple stress reducers.

4.      Cubicle Confinement

Don’t trap your employees at their desks all day. Encouraging your team to interact on a personal level can foster better cohesion and a happier work environment. In addition to team lunches or friendly competitions (we’ve seen a few footraces in our warehouse on a Friday afternoon), consider adding a ping pong table or pool table to a corner of the office. Supply the area with waters and healthy snacks like fruit or nuts for a healthy, interactive work break.

Team bonding shouldn’t end at clock-out. Treat your team to happy hour appetizers, join an intramural league, or start a running group to train for a local 5K. After all, teams who play together, stay together.

5.      Unhealthy Habits

Poor eating habits and lack of sleep and exercise create stress before your employees even enter the office. Help offset unhealthy habits by promoting health while at work. Instead of the all-you-can-eat taco bar, cater deli sandwiches with fruits and vegetables for the company lunch. For casual Friday, let workers wear sweatpants and bring in a yoga instructor for a mid-afternoon workout.

If your small business is home to a vending machine, encourage your provider to stock healthier options, like baked chips and granola bars, instead of your standard vending machine fare.

6.      Missing Direction

A major cause of stress for employees is not knowing where the company is going and their role plays in to the overall strategy. Involve your team in making long-term and short-term goals. Post long-term goals around the office and give short-term goals to each employee at their desk. When goals are accomplished, celebrate! Employees who know the goals of their company (and know specifically what they can do to help) are more committed team members.

Keep your employees low on the stress meter and watch the returns in your company’s productivity.


Contact Tony Park at Business Gardener - tony@businessgardener.com.au 

Outdated business models damaging business.

Hi all,
Things have changed since the GFC and brings to mind that business needs to be about change, to stay a step ahead - to ensure long term business survival.
Jobs have changed over the years, the needs and wants of potential customers have changed and businesses also need to change to suit these changes.

Below is an article from Stephanie Zillman on why you should review your business model.

If you want help in that review, contact me, Tony Park Head Gardener at Business Gardener - tony@businessgardener.com.au.
See what programs we have at www.businessgrdener.com.au

Outdated operating models damaging business

Stagnant

  2 Google +0  0  0

Call it laziness, call it a sheer shortage of time – or perhaps a combination of both – but many Australian business owners haven’t updated their business model since the GFC.
The problem is, a stagnant business model ensures potential growth is kept at a standstill.
Tony Kabrovski, Business Advisory partner of HLB Mann Judd Sydney said he sees many businesses with a completely outdated model.
“Business and consumer sentiment is now markedly different [since the GFC], and proprietors need to address this if they are to take their business to the next level,” Kabrovski said.
“For example, the pricing model in Australian businesses has changed significantly over the past few years and many businesses in the service industry have gone down an hourly rate model. We encourage our business clients to move away from that approach and adopt an ‘option based’ pricing system instead.”
In the case of a cleaning contractor for an aged care facility, this involved moving the business to an option based pricing structure, rather than simply providing cleaning services for a set number of hours.
“The services were broken down into a Bronze, Silver and Gold cleaning packages, with each package representing a particular level of included cleaning tasks. By moving away from an hourly rate based service, the business was able to operate more efficiently and within the time frame that suited it.”
Using an airline analogy, Kabrovski pointed out there is no point providing first class service to clients who are paying an economy class price. “Process effectiveness, and breaking a job up into individual components, is an area where efficiencies can often be introduced,” he said.
“When a business is running profitably, the proprietors don’t always analyse what is leading to the businesses current success and whether it is sustainable. But those businesses that allow their model to stagnate are risking their future success,” Kabrovski said.