My Favorite Business Books of the Year

“I am learning all the time.  The tombstone will be my diploma.” ~Eartha Kitt

“Books are the bees which carry the quickening pollen from one to another mind.” ~James Russell Lowell

And my all-time favorite quote about reading…

“Outside of a dog, a book is man’s best friend.  Inside of a dog it’s too dark to read.” ~Groucho Marx

I love to read books and absorb new information and ideas. In this final post of the year, I thought I would share some of the books that most inspired me this year. I hope you might also get great value from them. Some of them aren’t exactly business books, but I got business value from them and I thought you might benefit similarly.

Without further ado, and in no particular order, here are my favorite books of the year:

Customer Culture bookCustomer Culture: How FedEx and Other Great Companies Put the Customer First Every Day
by Michael D. Basch

This one was recommended to me by Anna Barcelos after I wrote my post on the 4 Keys to a Customer Centric Culture. Luckily, I think I was largely on the same page as Michael Basch, but I learned so much more about company cultures after reading his tome. Basch was a co-founder of FedEx and their initial SVP of Sales and Customer Service. He relays plenty of his learnings at FedEx, but he also relates the stories of other customer focused businesses small and large. He even covers an incredibly innovative Australian dentist office! Many of the stories sparked plenty of ideas in my mind, and I even excerpted one to highlight in my blog post on the power of naivete. Basch gives some very specific and easy-to-follow advice on creating the types of customer-focused cultures that drive businesses that simply succeed more because of their focus on their customers.

Why Can't You Just Give me the Number

Why Can’t You Just Give Me the Number? An Executive’s Guide to Using Probabilistic Thinking to Manage Risk and Make Better Decisions
by Patrick Leach

Every manager and executive should read this book. Patrick Leach does an excellent job explaining the concepts of probabilistic thinking and decision making, and he does it in everyday language that is easy to consume for business people who don’t necessarily have advanced degrees in mathematics. He makes a very compelling case for using probabilistic thinking to greatly improve the bottom line. This book, more than any other, was the inspiration for some of my posts on Monte Carlo simulations.

Hidden BrainThe Hidden Brain: How Our Unconscious Brains Elect Presidents, Control Markets, Wage Wars and Save Our Lives
by Shankar Vedantam

This is a book that I actually didn’t love immediately after reading it. However, the concepts I got from it kept creeping back into my brain, and maybe that’s an even better way to value a book. I excerpted a bit of it in my most recent blog post on the power of our hidden brains to dominate our decision making in ways we don’t consciously realize. Author Shankar Vedantam deftly manages to explain complicated brain inner workings through easy-to-read stories that illustrate the concept and leave lasting memories.

Upside of IrrationalityThe Upside of Irrationality: The Unexpected Benefits of Defying Logic at Work and at Home
by Dan Ariely

I included Dan Ariely’s first book, Predictably Irrational: The Hidden Forces That Shape Our Decisions, as an all-time favorite in last year’s list of best business books. While the experiments and ideas in that book were probably more useful in the marketing and merchandising functions, I would say this book is much more about human interactions and general management and leadership. Ariely focuses on topics such as the effect of pay on performance, the motivational value of creating things, and the high addiction of our own ideas. As you might guess from the title, Ariely’s conclusions are not often what we’d expect but extremely beneficial.

SwitchSwitch: How to Change Things When Change is Hard
by Dan and Chip Heath

Anyone who’s attempted to implement major change in an organization knows how difficult it can be. This book is an excellent guide for how to implement and encourage change in business and in life. I loved not only the tips but the explanations about why we humans have such a difficult time with change. The Heath brothers use a metaphor of the Rider and the Elephant to describe the rational and emotional parts of our brains that are so fundamental to accepting and embracing change (and making decisions of any kind). It’s an excellent way to visualize the concept and a concept that I’ll not likely forgot.

ClickClick: The Magic of Instant Connections
by Ram and Ori Brafman

I actually dedicated a post to this book. This is a fascinating look at the reasons people click with each other. The authors really break it all down and in the process provide an excellent roadmap for creating better connections between people. Used in a business environment, this knowledge can help up create better functioning, happier and more productive teams.

design of everyday thingsThe Design of Everyday Things
by Don Norman

This is not a new book by any means, but I somehow never read it until this year. I found this book to be extremely eye opening and completely fascinating. Don Norman spends a lot of time talking about the design of objects like doors and faucets, yet the design principles he discusses and the human psychology learnings that go into those design principles are absolutely relevant to usable designs of things that didn’t even exist in the time he wrote this (the ’80s) — like websites. I explored just a couple of these concepts, and how they apply to retail websites,  in a post earlier this year.

And just for kicks, since I’m a music nut, here are my top 10 albums of the year:

  1. Trombone ShortyBackatown
    A great combination of jazz, funk, hip-hop and rock. Trombone Shorty rips on both the trombone and the trumpet. Standout track: “Hurricane Season.”
  2. Florence + the MachineLungs
    Technically, this record came out in 2009, but the Grammys have nominated them for Best New Artist this year I think I get to include the record in my list. Great vocals from Florence and the drums in particular are amazing on this record. The sound is powerful, a bit dark and different from anything I’ve ever heard. Standout track: “Dog Days are Over”
  3. Grace Potter & the NocturnalsGrace Potter & the Nocturnals
    Grace Potter can flat out sing, and the songs on this record are top-notch. This is just good, ol’ rock ‘n’ roll and a rollicking good time. Standout track: “Paris (Ooh la la)”
  4. The Gaslight AnthemAmerican Slang
    Gaslight Anthem are kind of a Green Day meets with Replacements and (not surprisingly since they are from New Jersey) jams with Bruce Springsteen. Standout track: “The Spirit of Jazz
  5. Mumford and SonsSigh No More
    The bluegrass tinted pop from British newcomers Mumford and Sons is highly infectious. Very impressive vocal harmonies as well. Standout track: “Winter Winds”
  6. Sons of SylviaRevelation
    A band of brothers (I assume their mother is named Sylvia), these guys have put together what I guess could be called an alt-country record because it’s basically pop music with country instruments. Lead singer Ashley Clark can flat out wail, and the band certainly holds their own. Standout track: “50 Ways.”
  7. Sharon Jones and the Dap KingsI Learned the Hard Way
    Sharon Jones and the Dap Kings are the best of the new wave of R&B retro, and this record does not disappoint. Standout track: “Money”
  8. OzomatliFire Away
    I’ve been an Ozomatli fan for a long time, but I think this is their best record since 2001’s Embrace the Chaos. Great combination of Latin, hip-hop and rock, and the songs are lots of fun. Standout track: “Yeah, Yeah, Yeah, Yeah”
  9. Aloe BlaccGood Things
    I suppose Aloe Blacc is a bit of an R&B retro artist, but he’s got a sound that feels both contemporary and throwback at the same time — and he’s very smooth. Standout track: “I Need a Dollar”
  10. SantanaGuitar Gods: The Greatest Guitar Classics of All-Time
    Carlos Santana teaming up with a bunch of guest vocalists to record some of rock’s all-time great guitar songs (sort of — I’m not sure Dance the Night Away would be my choice for a Van Halen song). Artistically, this is not particularly impressive. However, it’s a lot of fun to just listen to Carlos Santana wail away — even when he’s stepping all over the melodies. Standout track: “Back in Black”

What were your favorite business books of the year (and music, too)?

Do we really need the frying bacon close-up?

bacon fryingThe scene opens with a wide view of Owen leaning over the stove. Next is a close-up of Owen’s face peering down at the skillet, a bead of sweat dripping from his forehead. For two seconds we see a close-up view of sizzling bacon before returning to a wide view of Owen scooping the bacon out of the pan and carefully placing it just so on a plate of eggs and French toast. Cut to a scene of Owen bringing this newly prepared breakfast to his bride in bed.

”Happy Anniversary, honey.”

The budget conscious movie producer drops the script on the table and stares at the director.

“Do we really need the close-up of Owen’s face? The set-up for those shots adds a ton of extra cost. And the bacon close-up? Really? Does that really add anything to the story? Are we going to sell even one less ticket if that shot is not in the movie?”

But the director insists, “Yes, we have to have those scenes. They add the emotion and visceral impact that is required to tell the story, to let the audience feel Owen’s love. They are as essential to the story as the dialogue. Those shots are the difference between a professional film and a home movie, and no one will pay to see a home movie. They may not list the close-ups as the reason they don’t like the movie, but trust me, they’re a much larger factor than you think.”

The director is right. (And don’t worry, this post will eventually get to the retail relevance.)

I’ve been reading a lot about how our brains make decisions. Books such as How We Decide, The Hidden Brain, and Switch all explore the two parts of our brains that combine to formulate our decisions. Scientifically, those parts of the brain are the neocortex and the amygdala. In Switch, the Heath brothers call them the Rider and the Elephant; others call them the rational brain and the lizard brain. Whatever we call them, our decisions are the combined effort a conscious part of our brains that control our rational thinking and an unconscious part of our brains (the Hidden Brain) that controls our emotions.

Think you don’t make emotional decisions? Think again.

It turns out that without our emotional brains, we wouldn’t be able to make decisions at all. In How We Decide, Jonah Lehrer recounts the story of a man whose brain injury caused his amygdala to stop functioning. As a result, he was utterly incapable of making even the simplest decisions in life. Without an emotional brain to push him toward a decision, his rational brain simply went into analysis paralysis.

Our brains are extremely powerful, but they’ve got a lot going on. As a result, they basically compartmentalize processing power and take shortcuts when encountering situations that seem similar to past situations they’ve encountered. While this compartmentalization is generally very efficient, it has its drawbacks. Here’s how Shankar Vedantam explains it in The Hidden Brain:

The conscious brain is slow and deliberate. It learns from textbooks and understands how rules have exceptions. The hidden brain is designed to be fast, to make quick approximations and instant adjustments. Right now, your hidden brain is doing many more things than your conscious brain could attend to with the same efficiency. The hidden brain sacrifices sophistication to achieve speed. Since your hidden brain values speed over accuracy, it regularly applies heuristics to situations where they do not work. It is as though you master a mental shortcut while riding a bicycle—bunch your fingers into a fist to clench the brakes—and apply the heuristic when you are driving a car. You clutch the steering wheel when you need to stop, instead of jamming your foot on the brake.

Now imagine the problem on a grander scale; the hidden brain applying all kinds of rules to complex situations where they do not apply. When you show people the faces of two political candidates and ask them to judge who looks more competent based only on appearance, people usually have no trouble picking one face over the other. Not only that, but they will tell you, if they are Democrats, that the person who looks more competent is probably a Democrat. If they are Republicans, there is just something about that competent face that looks Republican. Everyone knows it is absurd to leap to conclusions about competence based on appearance, so why do people have a feeling about one face or another? It’s because their hidden brain “knows” what competent people look like. The job of the hidden brain is to leap to conclusions. This is why people cannot tell you why one politician looks more competent than another, or why one job candidate seems more qualified than another. They just have a feeling, an intuition.

This same “leap to conclusion” occurs when people visit our websites. They come to our sites with a preconceived notion about what a quality website looks like, and many times those preconceived notions have much to do with the types of design elements that many “rational” thinkers would equate to the frying bacon close-up described in the movie scenario above. It’s hard to imagine how a rounded borders versus straight borders might effect someone’s likelihood to convert, but it will because the hidden brain is making lightning fast decisions about a site’s credibility based on everything it sees and how closely what it sees matches up to its past experiences with what it found to be credible websites. A customer will not likely point to border type as a reason she didn’t buy; she’ll just feel uneasy enough about the site that her ultimate decision to buy will go negative.

Conversely, the right design can play a huge role in increasing a site’s credibility and turning that decision to buy in the right direction. For example, there have been numerous experiments conducted over the years that show how the price of a bottle of wine can genuinely affect people’s taste. In his blog, Jonah Lehrer discusses the wine experiments and “The Essence of Pleasure” and shows how paying close attention to the “essence of a product” or a site, like “Coors being brewed from Rocky Mountain spring water, or Evian coming straight from the French Alps” can actually lead to a change in sensory perception. This, of course, is what good branding is all about and it can absolutely make the difference between new customers further engaging with our sites or bouncing off to another site.

Since customers won’t generally be able to tell us about specific design elements that are causing them discomfort, we need to use various techniques to help us get to the heart of the truth. Multivariate testing can be a great way to understand the immediate value of different designs. Combining multivariate testing with a predictive voice of customer methodology like the ACSI methodology used by ForeSee Results (shameless plug) can really help us understand the long-term brand impact in ways that simply multivariate tests alone cannot. It’s critically important to understand our customers’ perspectives on design in context with their overall future intentions in order to get to a truth of design’s impact that even the customer could not tell us directly.

Metrics and methodologies can point us in the right direction, and then we need to hire and trust talented, professional designers to do their thing. In the end. high-quality, professional design speaks well to the hidden brain and leads to enhanced credibility. Enhanced credibility facilitates a better selling environment. So, yes, we really do need the frying bacon close-up.

What do you think? How is design treated in your organization? What tips do you have? Or are you not buying it?

The Straight Line to Business Success

Walking in circlesDid you know that we humans can’t walk in a straight line without visual cues to keep us focused on our path? Not only can’t we walk straight, we actually walk in circles if we can’t clearly see where we’re going.

It seems we also drive our businesses in circles if we don’t have strong focal points like clearly defined visions, goals and strategies.

I learned this odd fact about humans walking in circles when listening to a recent NPR piece that covered a research paper on the topic written by Jan Souman, Ilja Frissen, Manish Sreenivasa, and Marc Ernst. According to the paper:

We tested the ability of humans to walk on a straight course through unfamiliar terrain in two different environments: a large forest area and the Sahara desert. Walking trajectories of several hours were captured via global positioning system, showing that participants repeatedly walked in circles when they could not see the sun. Conversely, when the sun was visible, participants sometimes veered from a straight course but did not walk in circles. We tested various explanations for this walking behavior by assessing the ability of people to maintain a fixed course while blindfolded. Under these conditions, participants walked in often surprisingly small circles (diameter < 20 m), though rarely in a systematic direction. These results rule out a general explanation in terms of biomechanical asymmetries or other general biases. Instead, they suggest that veering from a straight course is the result of accumulating noise in the sensorimotor system, which, without an external directional reference to recalibrate the subjective straight ahead, may cause people to walk in circles.

It’s easy to see the parallels in our business environments. Without a clear vision of where we’re going, it’s easy for “accumulating noise in the sensorimotor system” (I love that phrase) to send us off course. In the world of retail, we’re constantly bombarded by internal and external demands for short-term change. Those demands are often driven by overly narrow data analysis (such as daily or even hourly comps), emotional reactions, gut feel, wild ideas, competitive shifts and more.

So what do we do about it?

We can’t stop the noise, but we can provide ourselves some solid focal points and guide rails to keep us on a straight path towards ultimate success.

  1. Write a meaningful, compelling, and easy-to-remember vision statement

    I’ve often personally had negative reactions to even the idea of vision statements because so often they are overly wordy and meaningless to everyone in the company who wasn’t in the room when they were developed (which is generally almost everybody). A particularly bad example would be something like: “We are committed to achieving new standards of excellence by providing superior human capital management services and maximizing the potential of all stakeholders – clients, candidates and employees – through the delivery of the most reliable, responsive, flexible, and cost-effective services possible.” Too wordy. Too many buzz phrases. Not enough inspiration. Not enough meaning to most people in the company or its customers.

    All too often, vision statements like the previous example are created in a boardroom, printed on posters hung all over the company and almost immediately ignored. And then the business runs in circles.

    But it doesn’t have to be this way. A carefully created vision statement can be the focal point that drives all business decision and keeps the entire company moving in a straight line to success.

    Consider the following excellent examples and how they might guide your decisions:

    Amazon: “Our vision is to be earth’s most customer centric company; to build a place where people can come to find and discover anything they might want to buy online.”

    Google: “To organize the world’s information and make it universally accessible and useful”

    Ritz-Carlton (they call theirs a “credo”: “The Ritz-Carlton Hotel is a place where the genuine care and comfort of our guests is our highest mission.

    We pledge to provide the finest personal service and facilities for our guests who will always enjoy a warm, relaxed, yet refined ambience.

    The Ritz-Carlton experience enlivens the senses, instills well-being, and fulfills even the unexpressed wishes and needs of our guests.”

  2. Develop measurable goals that lead toward the vision
    There are millions of articles online (according to Google it’s more that 3 million) that explain how to set good business goals, so I won’t go into all of that.

    But I will say just creating “SMART” goals is not enough. The goals have to also be aligned with the vision and serve as milestones along that straight walk to success. It’s entirely possible to create a specific, measurable, attainable, relevant and timely goal that doesn’t progress us towards our vision. I suppose you could argue that “relevant” should be the attribute that aligns us with the vision, and it should be, but I’ve seen “relevance” twisted to individual agendas too often to rely on it without comment.

    So the goal has to lead us toward the vision. For example, a Ritz-Carlton hotel manager might have a goal that says “Improve lobby ambience scores on guest satisfaction scorecard from 83 to 85 by December 31, 2011.” That would be something that specifically aligns with the vision and tells the manager how well he’s walking the straight line to the success.

  3. Implement brand  and service guidelines to establish boundaries
    Brand guidelines are also critical to help us understand what boundaries we can work within on our straight line to success. I think of them almost as swim lanes. We might not swim perfectly straight, but as long as we stay in our lanes we’ll have the latitude to deal flexibly with changing conditions while continuing to head toward our vision. Consider Ritz-Carlton’s 12 service values:

    1. I build strong relationships and create Ritz-Carlton guests for life.
    2. I am always responsive to the expressed and unexpressed wishes and needs of our guests.
    3. I am empowered to create unique, memorable and personal experiences for our guests.
    4. I understand my role in achieving the Key Success Factors, embracing Community Footprints and creating The Ritz-Carlton Mystique.
    5. I continuously seek opportunities to innovate and improve The Ritz-Carlton experience.
    6. I own and immediately resolve guest problems.
    7. I create a work environment of teamwork and lateral service so that the needs of our guests and each other are met.
    8. I have the opportunity to continuously learn and grow.
    9. I am involved in the planning of the work that affects me.
    10. I am proud of my professional appearance, language and behavior.
    11. I protect the privacy and security of our guests, my fellow employees and the company’s confidential information and assets.
    12. I am responsible for uncompromising levels of cleanliness and creating a safe and accident-free environment.

Of course, the entire process is not as simple to implement as it is to write about. But I’ve found over the years that dedicating considerable thought to providing clear, compelling direction for all employees to follow a relatively straight line can help prevent destructive business circles and keep us on the straight line to business success.

What do you think? What types of business direction have you seen that worked best for you? Would you share some examples? How about the opposite? When have you seen it all go horribly wrong? What can we learn from those failures?

Retail: Shaken Not Stirred by Kevin Ertell


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