Cleaning Up Our Own Messes

When I was a teenager, I enjoyed waterskiing. With some springtime weather and a new driver's license, I was anxious to get our boat out of winter storage. My father consented and I drove some distance to pick it up so that we could go to the lake later that week.

After getting the boat trailer hitched to the car by the guys at the boat storage place, I headed for the nearest freeway entrance. Half a block before the onramp was a set of railroad tracks. As I crossed the tracks, I heard a funny "clunk" from the back of the car, but thought nothing of it. Just a moment later as I slowed to make a left turn onto the freeway, the boat on the trailer passed by me heading directly for a group of cars waiting at a red light a block away. Sparks flew as the front of the trailer bounced on the pavement. I prepared myself to turn into the boat trailer to prevent it from careening into the cars stopped at the light. Thankfully, the boat continued to veer towards the side of the road, where several cars were parked angularly in front of a store.

Time slowed to a crawl as the boat trailer hit the first parked car -- a large sedan. The trailer hit the frame of the sedan just behind the front wheel. It rolled on its side and the trailer stopped. However, with its great momentum, the boat continued, crushing the sedan and then flattening two sports cars parked next to it. The boat then banked off the front wall of the store and came to a stop in an empty parking stall.

There was another empty spot near the boat and I pulled into it. I walk into the store and ask sheepishly if I could use their phone. I called my father at work and told him what happened. His response remains with me to this day. He didn't curse, he didn't raise his voice, but instead uttered these remarkable words:

"Brett, call me back when you've got everything taken care of."

I made calls to the police and the boat storage place. I filled out the necessary paperwork and they hauled the boat, trailer, and cars away. And then, with great caution, I made the long drive home.

Now a dad myself, I am awed by my father's wise, level-headed response. His words taught me the value of not just empowering people to do something, but also to clean up their own messes when things don't go as planned. Often in business, when mistakes are made, the problem is pushed up a level or two and someone else is assigned to fix it. Great leaders, like my father, recognize that wherever possible, empowerment and accountability need to be welded together. Only then can we learn of the success that comes from cleaning up our own messes.

T.S. Elliot said it well: "Success is relative. It is what we can make of the mess we have made of things."

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Making Sense of Perilous Times

On Oct. 9, the Dow closed below 8,600 for the first time since 2003. It is off nearly 40 percent from its all-time high of 14,164, which came just one year ago. Banks around the world are being nationalized, Iceland grapples with the possibility of a "national bankruptcy," and credit markets remain seized. These are perilous times indeed.

Some, like Warren Buffet, see opportunities to make sizable investments. Others look for safety, trying to conserve cash. Some just stare blankly, hoping the crisis will magically disappear. What do you see?

Over the last couple of weeks, I've asked executives, clerks, managers, and small-business owners across the country what they think. Most are still trying to make sense of it all. The strategy cycle we discuss in The Breakthrough Company is a sense-making activity. Done right, it helps us quickly process insights, make decisions, take action, and improve.

Through our study of some exceptional breakthrough companies, we've learned they work tirelessly to compress their strategy cycle time. It doesn't take them three months or a major consulting project to refresh their strategy. They understand the value of velocity versus perfection. The strategy cycle is something they do formally every quarter with just a day or two of focused attention and then follow up as needed with mini-cycles.

You can start to compress your own strategy cycle time and enhance your sense-making by explicitly turning insights into action every day. Make it your mission to be a pro at it. Practice it like a great tennis player practices their serve. Work at it every day. Take 10 minutes right now and ask yourself, "What one thing should I do tomorrow that will have the biggest positive impact on my business?" And then don't stop until it's done.

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Maybe Second-Guessing Yourself Isn't Such a Bad Idea

James Surowiecki's 2004 book, The Wisdom of Crowds, suggested that the more minds you have working on a problem, the better the solution they produce. For example, if a large number of people were asked to guess the distance between Salinas, California and Geneva, New York, averaging their responses would yield a result closer to the actual distance than any of their individual estimates.

Now, a couple of researchers from MIT and UC San Diego have found that, when people are asked to estimate an unknown value a second time, the average of their two guesses is more accurate than their first guess. Psychologists had assumed that, when individuals are asked to estimate an unknown value, they would make their most accurate guess first. To have them guess again, it was assumed, would yield a less accurate guess. And thus, if you averaged the two guesses, the average would be less accurate than the first guess.

Vul and Pasher recruited 428 participants and asked them eight questions from the World Factbook (i.e. "What percentage of the world's airports are in the United States?"). Half the participants were then asked to make a second guess immediately after the first. The other half were asked to make a second guess three weeks later. For both groups, the average of the two estimates was more accurate than either of the estimates alone. Those who were asked for a second guess immediately after the first improved their accuracy by 6.5%. Those asked for a second guess three weeks later improved by 16% (perhaps this second improvement is due to ensuing Google-fever?).

In my book, The Breakthrough Company, I found that companies that developed strategy iteratively -- returning each quarter to key questions about the company's position and path -- adapted more quickly and typically outperformed their competitors. Here's more evidence that second-guessing yourself isn't such a bad thing after all.

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All The World's An Ad

Not getting enough Web advertising? The folks at Compulsion have figured out a way to turn any video content into a fully interactive point-and-click ad. You can learn more here.

The simple genius behind it is a video player that allows you to assign links to anything in a video. All you need as a budding invisible ad link designer is a Web browser -- absolutely no technical expertise required. The result is truly invisible advertising, since the content itself is the commercial.

Now, you may be asking, "If it's invisible, will people actually click on products on the screen?" Compulsion founder Scott Mahoney says click-through rates so far are running between 10% and 30%. If those click-through figures can be sustained after the newness wears off, he may be onto something.

Mahoney and Co. envision a world where entertainment and commerce merge almost seamlessly. As a result, we may not all be able to "bend it like Beckham," but at least we'll never be more than be one simple click away from a chance to own a pair of his amazing cleats.

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What If Steve Jobs Designed Medical Devices?

Amy Tenderich is a San Francisco-based journalist who runs the Diabetes Mine blog, a site that features diabetes-specific information, product reviews, and networking. She gained national notoriety last year when she penned an open letter to Steve Jobs asking him to apply his formidable design talents to the production of more aesthetically pleasing and user-friendly medical devises. In the letter, she laments the fact that medical-device manufacturers are "stuck in a bygone era; they continue to design these products in an engineering-driven, physician-centered bubble."

Now, Mr. Jobs may have been a little preoccupied with his iPhone redesign and price-point-reality-check exercise to commit the requisite neuro-cycles to the medical-equipment design quandary. So Ms. Tenderich cast the net a tad wider and invited the whole-wide-wired-world to the party. Seems like the would-be designers came up with some interesting ideas.

This whole thing got me thinking. When you contrast the pace and scope of innovation of a consumer electronic product like the MP3 player with a medical device like the glucose meter, the difference is staggering. The MP3 player is designed in a fiercely competitive, user-experience-driven process that charts disruptive innovations in terms of months if not weeks.

The medical equipment device is designed in a context that often involves third-party payments, insurance, and medical and government bureaucracies. And it allows designers to employ concepts from a bygone era. These products are designed in an engineering-driven, physician-centered bubble because these entities really are the customer, not the end user, and they will continue to demand innovation from a medical technology standpoint with little thought to user experience.

Design contests like the one initiated by Ms. Tenderich provide an interesting way to inject a little user experience adrenaline into the med-tech design process.

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Warren Buffett’s Big Bet

In "The Breakthrough Company" I spend a chapter detailing how important it is for a company to place strategically timed bigger bets in order to break through to extraordinary performance. Warren Buffett has just made public the fact that he is channeling his inner Jimmy the Greek and placing a very big bet. The Oracle of Omaha is party to a $1million wager that index funds will outperform professionally chosen hedge funds over a 10-year period when manager's hefty costs are included.

Buffett put up $320,000 against $320,000 from Protégé Partners LLC, purchasing a zero-coupon Treasury bond that will be worth $1million in ten years. The bet has been placed through The Long Now Foundation and winnings will be donated to charity. Protégé has selected 5 hedge funds to track in the contest with the S&P 500.
Buffett is simply putting his money where a lot of mouths and no small amount of empirical evidence have been since Burton Malkeil published the landmark A Random Walk Down Wall Street in 1973. It was in that work that he fired the famous shot heard 'round the financial world when he contended, "A blindfolded monkey throwing darts at a newspaper's financial pages could select a portfolio that would do just as well as one carefully selected by the experts." (For more about index funds, see The Only Guide to Investing an Entrepreneur Will Ever Need.)

The logic has always been that if you have the prescience to consistently isolate winners, that ringing I hear in the background must be Nostradamas calling to get your read on his latest predictions. Buffet asserts, "A number of smart people are involved in running hedge funds. But to a great extent their efforts are self-neutralizing, and their IQ will not overcome the costs they impose on investors. Investors, on average and over time, will do better with a low-cost index fund than with a group of funds of funds." Protégé contends, "Hedge funds have the flexibility to invest both long and short, they do not set out to beat the market. Rather, they seek to generate positive returns over time regardless of the market environment." Protégé argues top hedge funds have surpassed market returns net all fees.

Now the money is on the table, and the fun begins. Buffett has entered the world of John Anthony, Mathew McConaughey''s alter ego in "Two For The Money." The major differences being, Buffett probably isn't sporting six-pack abs, and he won't have to go back to work in the boiler room if he loses the bet.

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Holy Holograph! Princess Leia Is Coming To a Meeting Near You

On May 25, 1977 a science fiction film was released by 20th Century Fox that struck an unlikely chord in our collective consciousness. The Star Wars series went on to gross $4.5 billion at the box office and create a pop-culture phenomenon that has spanned three decades.

One of the speculative technologies that had the needle dancing on my I've-got-to-get-me-one-of-those meter was the R2D2-projected holographic image of Princess Leia pleading for Obi-Wan Kenobi's intervention. This seemed the ultimate solution to the communication challenge that has driven mankind since our ancestors first etched the family portrait on the cave wall.

The field of telepresence is knocking on George Lucas' trailer door as we speak. Cisco defines telepresence as "the science and art of creating visual collaboration environments, networks, and strategies that duplicate in-person meeting experiences as completely as possible." In other words, Princess Leia is coming to a meeting, presentation, or seminar near you. Check out this video of a telepresence demonstration staged by Cisco and UK-based Musion. By the way, John Chambers is in Bangalore and the other two guys are in San Jose.

Until recently, the only option for holding a meeting, conducting a seminar, or making a presentation was to fight freeway gridlock or surrender our liquids at the airport security checkpoint and show up in person, more than a little worse for the wear. Then along came Web applications like WebEx and we were able to accomplish many of these tasks without leaving our desks.

Soon there will be live holographic versions of each of us frenetically beaming into meetings around the globe. The next challenge? Figuring out how to tabulate frequent projection miles.

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Finding Hope in a Moment of Travel Rage

I boarded a plane last Saturday night in Atlanta dog-tired after a four-hour layover on a Saturday -- on a flight that was scheduled to get me home just after midnight. I'd be back at the airport to fly to San Diego Sunday morning.

I have traveled 140 of the last 160 days -- a 40-plus-stop book tour followed by digging myself out of a backlog of new consulting clients. As I settled into seat 4B, I thought, well, at least I got upgraded -- and then I remembered that my head phones were in my bag in the overhead. I stood up, dug them out and sat back down as two young soldiers passed me heading back to coach. I really should give my first class seat to one of them, I thought, and stood up on impulse. And then stood paralyzed between doing the right thing and settling back down into my comfortable seat. At that moment, the guy in 3B turned around and glared at me.

"Are you ever going to sit down?" he asked.
"Yes," I stammered. "Is it important to you?"
"You've been bouncing off the back of the seat like a monkey!" he shouted.
"I was just getting up to give my seat to one of those soldiers," I said.
"Then do it already!" he shot back.
I looked at him again and was struck with rage. He looked like one of those former frat-boy guys, a silver spoon kid. I couldn't help myself. I spit out the sarcasm: "You know what, you are a cool guy, and you've probably always been cool. Guys like you make me proud to be an American." He just stared at me.

I went and stood at the bulkhead as the flight attendant went back to coach and brought up the young Marine, and I went and took his seat in the back of the plane. I was so angry I couldn't think straight. I sat and fumed for half the flight at how rude my fellow passenger had been to me until another soldier sitting nearby approached me and said, "I just want to thank you for what you did for my buddy," he said—and my anger melted. As we talked I found out that they had been on planes for more than 23 hours and were returning home after three tours in Iraq.

When we landed, it took Delta 15 minutes to get someone out to operate the sky bridge, and my fellow passengers were ready to revolt as they staggered off the plane. When I walked into the terminal, I found the soldier I had given my seat to and his buddy waiting for me. The soldier I had put in first class walked quickly to me, stuck out his hand, and said, "I want you to know how much I appreciated your giving me your seat." I was embarrassed at what a small sacrifice I had made, in the face of what he undoubtedly had just gone through for me and my fellow citizens. From the look on his face, you would have thought I had given him the keys to a new Ferrari. I mumbled something like, "Well, we appreciate all that you guys do for us." He paused, looked me straight in the eyes, and said, "Hey man, it's all about you." The weird thing is, I could tell he meant it. He was a soldier because he loves America and its people. I was stunned by the profound honesty of his statement, and the pride he obviously takes in his job. He told me that now that he has finished his tours he was off to become a drill sergeant.

"Don't be too tough on them," I said.
He smiled and said, "Don't worry." He struck me as just the kind of guy that young men would follow into battle.

At that moment I decided I would never again sit in a first class seat when there is a man in uniform on the plane. I'm 6'3" and fly 150,000 miles a year -- coach class used to be my idea of hell. But meeting those two young guys changed everything. Giving up my seat is a ridiculously small price for the sacrifices these people make. And if this all sounds kind of sappy -- try it sometime. You are likely to be amazed by the quality of people protecting our liberty.

As I walked away from the two soldiers, I saw someone approaching me in my peripheral vision. It was the guy from 3B. All the frat boy swagger was gone. He had waited for me and seen me talking to the soldiers. "Hey," he said, "that was great what you did for those guys." Embarrassed again by the comparatively meaningless gesture, I shrugged. He continued, "And I am really sorry for being rude to you back there." What was left of my anger melted away, and all I felt was sympathy for a fellow road-warrior just trying to hold it together till he got home to his family at midnight. "Hey," I said, "I travel a lot, and my nerves get pretty frayed, too."

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