April 2010 Entries

10 Things I Learned from Disney #8: Adversity is the Sharpening Stone of Success

In a previous post, I cataloged the many challenges of Walt Disney's career. It seemed to everyone, including his brother Roy, that just when things were going smoothly, Walt would find a way to court disaster yet again. Adversity became a way of life for Disney studio's. It they weren't struggling, they (and I use the collective team advisedly - I actually mean Walt) weren't happy.

This is not exclusive to the Disney organization. Ray Kroc, founder of McDonald's, used to say: "As long as you're green, you're growing. As soon as you're ripe, you start to rot". Kroc also said, "If you're not a risk taker, you should get the hell out of business". And as any good Darwinist would tell you, there's nothing like environmental adversity to speed up the pace of evolution. Adversity brokers no maybes. Almost good enough isn't nearly good enough to succeed when the chips are down. You either win or you lose. You either succeed or you fail. Judgment is swift and ruthlessly accurate.

What this means, in the hands of a nimble and bold leader, is an incredible opportunity to hone the edge of a successful company. Employees can rally against a common challenge, and the bigger the challenge, the faster and more effectively they'll rally. Great accomplishments come in the face of great adversity.

I suspect Walt knew this at a fundamental level. This is probably why he assiduously avoided comfort and complacency, seeking instead to lead his company balanced on the ragged edge of disaster. He embraced challenge and courted adversity. He thrived on it.

So Lesson # 8 is this - Don't be afraid of adversity. Find the opportunities that lie within. And, in the words of Rahm Emanuel, never let a serious crisis go to waste. Those that live their entire lives in their comfort zones live very small lives indeed. Those that flaunt boundaries and incite challenge live big and leave huge footprints.

posted @ Friday, April 30, 2010 4:04 PM | Feedback (5)

Google and Microsoft: Signs of Hubris, Signs of Humility

From my admittedly limited vantage point, I've noticed a subtle but significant shift in what's coming out of the respective campuses of Microsoft and Google. And it's not so much the innovations, although it certainly resonates there. This has to do with attitude and culture. This is the touchy-feely stuff that I chalk up to gut instinct, with no empirical backing. So, take it for what it's worth, but I will say that my gut has a pretty good track record.

The Age of Cockiness Returns

Google has come full circle. They started with a cockiness that was understandable, given their immediate success. Google was everyone's online Golden Child. The founders (from which the brash attitude was inherited) surrounded themselves with an equally cocky, equally audacious group of young geniuses. The collective culture was bold, arrogant and had little patience for the mediocre or mundane. They also had little respect for anything beyond the bounds of "Google-world." If it wasn't part of Google, it somehow was less relevant, less valuable and less interesting. This was a company that fully intended to conquer the world, and it seemed that world conquest was within reach. Google was getting their fingers into everything, and it seemed that everything they touched would turn to gold.

Then, four or five years ago, Google's attitude changed. They started reaching outside the walls of "Google-world," sincerely looking to forge relationships with partners. Googlers developed a quieter confidence: less bold, less brash. They actually sought others' opinions. Now, it appeared that Google might be accepting the fact that conquering the world might be, at a minimum, a collaborative effort.

But in the last year, I've seen a return to Google's original attitude. The humility is disappearing and hubris again rules the day. It's almost as if, now that Google is the king of the hill and is drawing more than their fair share of scrutiny, much of it negative, they've gone into defensive mode. They've circled the wagons and drawn more inside. As I said, the changes are subtle, but noticeable. I believe they've grown up as a company and have had to face some harsh business realities. But in the process, they have responded by becoming defiantly self-confident and dismissive of dissenting views. They seem to once again be retreating into the safe and welcoming arms of "Google-world." Somehow, though, this time the cockiness rings a little hollow.

We Really Want You to Like Us

Contrast this with Microsoft. Microsoft was the company everybody loved to hate. For years, it was the brunt of jokes in the search marketing world. The only question with Microsoft, it seemed, was which foot were they going to shoot themselves in next? Miserable failure after miserable failure exasperated everyone, both inside and outside of the Redmond mother ship. If Mack Sennett (or the Three Stooges, or Judd Apatow and Seth Rogen -- pick your cultural context) ever ran a software company, surely this would be it.

But in the last year (roughly about the same time Google started circling the wagon) I've seen a different Microsoft. It's humble, but it's also ready to deliver. They've knocked the chip off their shoulder and seemed to have put the bumbling behind them. They're executing and cranking out some pretty decent stuff. Somehow, they've pulled back from the brink of irrelevance and are now ready to be a contender. I've had varying shades of criticism of Bing, but I've never said it wasn't a much-needed step forward in their search offering. It's miles ahead of anything Microsoft had done in search previously. But it's not this battle that interests me. It's the next fight that Microsoft chooses to pick. Given the change in attitude, I'm not sure I would be betting against them. As one Microsofter confided to me, "We're at our best when we've had the crap kicked out of us."

I have no idea what this means in the big picture, but I do know that the tone and temper of an organization is a pretty reliable indicator of future success. Perhaps I can sum it up best in this way. It's almost as if Google is already prepared to defend themselves against future criticism. Microsoft, on the other hand, is doing everything in their power to rebuild a broken relationship by impressing the hell out of you.

posted @ Thursday, April 29, 2010 9:39 AM | Feedback (3)

10 Things I Learned from Disney #7: Surround Yourself with People More Talented Than You

Walt Disney was not a particularly talented animator. In fact, if it weren't for longtime Disney animator Ub Iwerks and many others that followed in his footsteps, the peak of Disney animation might have looked like this:

Rather than this:

It was Ub and many, many other animators that made Disney the animation powerhouse it became. Walt very quickly (and shrewdly) realized that to reach the success he envisioned, he had to step away from the sketch table and focus his talents in other areas.

Most accounts indicate that Walt was not a particularly gracious boss. He was a fanatic about detail, a relentless task master and routinely demanded the impossible. One of my favorite Disney tidbits (unfortunately, I couldn't find a source for this online, so I'm going from memory) happened during the making of Bambi, a film many consider to be the best of the Disney classics, coming at the height of the studio's power. Walt envisioned Bambi as a classic melding of animation art , a powerful soundtrack and a simple but heartfelt story. Fantasia, made two years earlier, attempted to take the first two elements to new heights, breaking new ground in animation art set to a classical soundtrack. Never satisfied for long, Walt wanted to raise the bar even higher with Bambi. The film's production was stretched out from 1937 to 1942 so Disney could avoid using second-string animators, maintaining the film's rich "painterly" texture.

Because of the long timeline, the production of Fantasia and Bambi overlapped. Disney composers Frank Churchill and Edward Plumb were working on the soundtrack that would go behind the climactic forest fire scene when Walt dropped in to check progress. Churchill and Plumb played the work in progress for Walt, who listened for awhile, then interrupted with, "No..that's not it. It's not powerful enough. This is apocalyptic. The music has to match. Wait..I'll be right back."

Walt disappeared for a few minutes, then returned with a reel from across the hall, where Fantasia was being scored.

"Here..we need something like this." Churchill and Plumb listened in disbelief.

"But that's Beethoven!"

"Yes..so?"

"You want us to compose 'something like Beethoven'"?

"Yes."

In the end, Disney got what he wanted, a score that still stands as a classic. Churchill and Plumb received two Academy Award nominations for the score, but unfortunately, for Churchill, the recognition came after his tragic death.

One can debate Walt's treatment of his employees (Iwerks left Disney for a 4 years span because of a falling out with Disney and a bitter strike after Bambi led to the end of Disney's Golden Animation era) but you certainly can't question his eye for talent. Again and again, Walt was able to accomplish the impossible because of the talent he was able to draw to him. The lesson learned here is not how to manage your employees (as much as I respect what Walt did, he was not a shining example of employee empowerment) but rather the importance of recognizing your own limits and assembling a team that can take you farther than you could ever go alone.

posted @ Tuesday, April 27, 2010 11:33 AM | Feedback (4)

10 Things I learned from Disney #6: The Power of Stories

In the Disney Theme Parks, two of Walt's great loves are on open display. The first comes from Walt's inherent gift for storytelling. Most Disney rides are more than just a jolt of adrenaline. The thrills are seamlessly integrated into a story. Whether it's Pirates of the Caribbean, Splash Mountain, The Tower of Terror or Indiana Jones, there is a distinct storyline to each ride, with a beginning, a middle and an end. Walt was, at his core, a natural born story teller.

Walt's other love was his fascination with technology. Walt believed that technology was the hope for a brighter future and he had a childlike fascination for it.

With Disneyland, and with the later Disney parks, Walt's dream was to bring his two loves together. He wanted to create an environment where great stories could come to life, allowing us to immerse ourselves in them. And, with technology, he wanted to provide a showcase for it's promise and potential. Technology played a vital role in bringing the Disney stories to life, through innovations like animatronics and sophisticated special effects. But it was Tomorrowland and, later, Epcot, that Walt envisioned as the true shrine to the wonders of technology. And in these two examples lies a cautionary tale for us to heed.

The Power of a Story

As I said in an earlier post, humans are wired to love stories. If you have to get details to stick, the best way is to put them into a story. The human brain seems to respond naturally to the structure of a story, perhaps because stories are time tested distillations of how we see the world and what we find interesting about it. Stories are possibly the most highly evolved of all human communication forms, next to grunts of warning or delight. Stories have lifted us to new heights, with the power of narrative being a constant through all our art forms, across all cultures. There is no society or tribe on earth that does not tell stories. And if you look at Disney's best loved rides, you'll find the ones that stay truest to the ideal of telling a story are the ones that stand the test of time.

But technology has not fared as well in the Disney Parks. Of all the lands in Disneyland, Tomorrowland has been the one that has required the greatest number of overhauls. What was once wonderful quickly becomes woefully dated. The challenge with technology is that it never stands still. You have to constantly re-imagine the future, because we relentlessly chase it. If you take technology and showcase it, you also freeze it in time, which soon passes it by. Even Epcot (originally standing for Experimental Prototype Community of Tomorrow) hasn't managed to stay ahead of today. It's no longer a glimpse of the future, but rather a quaint testimonial to what the future might have been.

Technology Fades, but Stories Live On

So, in the world of Disney, the power of stories has stayed as fresh and powerful as the day they were first told. But the lure of technology has rapidly faded, necessitating constant overhauls and retrofits. The lesson I've learned from that? Technology in itself is not an end goal, but rather the means to an end. Technology for humans started when we first realized that materials from our environment could be re-purposed to give us an advantage. The stone axe, the spear or the bow and arrow had no inherent magic. Their value lay in the things they let us do. Technology in and of itself is a empty promise, it only takes on meaning when it allows us to do something we couldn't do yesterday. And that's why we drive technology forward, pushing our advantage through the tools we adopt. Technology is a factor in the equation of human productivity, but it's the result of the equation that matters.

Stories, however, speak to the heart of the human condition. They resonate with a different part of our brain. Technology gives us tools. Stories give us our soul. In looking at which of Walt's two great loves eventually emerged triumphant in the hearts and minds of guests, it's clear that stories strike closer to home. And in that is a very timely lesson for us. We have become infatuated with technology, but we should remember that it's how we apply that technology to do very human things that matters. And it's those things that will eventually make their way into our stories.

posted @ Monday, April 26, 2010 10:35 AM | Feedback (2)

Captiva-ting Conversations from the Search Insider Summit

First published today in MediaPost's Search Insider

I promised MediaPost a wrap-up (from the programming chair's perspective) of last week's Search Insider Summit. Honestly, from the moment that Brett Brewer from Microsoft first fired up Pivot to the final moments of day three, when Jen Milks and Michelle Prieb from Ball State gave us a glimpse into the minds of Gen Next, I couldn't have asked for anything more from my presenters. I've programmed a lot of these shows now and have never had as much positive response as I have from this one. Well-done, each and every one of you.

A lot has been said about the new TED-style format. I actually had a few TEDsters reach out to send best wishes prior to the summit. They also wanted feedback about the success of the show. I think it's fair to say that the adopted TED format was a hit. Attendees loved the pace of the presentations, the varying perspectives presented -- and, most of all, the conversations that were catalyzed by the content.

Here are a few of the many highlights from three days of SIS:

Brett Brewer from Microsoft Labs - putting Pivot through its paces and giving us some jaw-dropping visualizations of data and how we can work with it. There's some very cool stuff coming out of MS labs.

Mark Watkins from Goby - driving home the point that every search is launched from a relevant personal context, and if engines could somehow understand that, it would be a huge leap forward for Web search.

Matt Kain from The Search Agency - making us all realize just how important really-good hair is -- and also how, more and more, we're launching our searches through apps that offer fingertip functionality.

Mike Moran from Converseon - causing us to rethink our whole approach to search optimization. Imagine, optimizing our Web sites for people rather than algorithms!

Chris Copeland from GroupM Search - asking us to imagine what the online world (and our media plans) might look like if there were no Google, and also scattering oblique mentions of Tiger Woods, Jesse James and "Brokeback Mountain." There's not enough therapy in the world to drive out some of the images that Chris brought to my mind.

Scott Brinker from ion Interactive - giving us the job description for a brand-new role within organizations, that of the marketing technologist. Scott made us realize the time is ripe for an individual comfortable in the worlds of marketing and technology, one who can bridge the chasm between them.

Yvette Lui from Facebook - showing us how the landscape of information dissemination is forever altered, and why we search marketers have to understand the new reality.

And, in the last session of the Summit, Michelle Prieb and Jen Milks from Ball State University, giving us a glimpse at what the ever-demanding Gen Next wants in their online search experience. Hint: everything, aimed just at me and available instantaneously! Oh, and while you're at it, don't be evil!

The bar was set high, with these talks being just a sample of the many presenters who took the stage. As always, though, the conversations that happened in the hallways, during the roundtable breakouts, on the golf course, beaches and during the sunset cruise somehow managed to exceed the formal presentations. This is a show about connections, community and conversations. The best part of the Summit is, was and always will be the attendees. It won't be easy, but we will make this show even better next time. Mark it on your calendar, because you really don't want to miss it.

posted @ Thursday, April 22, 2010 11:24 AM | Feedback (0)

10 Things I Learned from Disney #5: The Importance of Simultaneous Satisfaction

If you set out to entertain families, you have an inherent challenge in front of you. Successful family entertainment has to appeal not just to one one person, but a group of distinct individuals. In the average family, you have several demographic and psychographic divides to bridge: males and females, age groups ranging from grandpas and grandmas (or great grandpas and great grandmas) to newborns, different education levels, different areas of interest, different levels of patience, different tastes in humor, different thresholds for motion sickness. The question, if you set out to keep a family happy, is how do you possibly keep everyone happy at the same time?

Everybody Laughs..Just at Different Jokes

Walt knew this. It was the challenge that led to the birth of Disneyland. Keeping both adults and children happy in a film or TV show is relatively simple. Early on, producers of successful family entertainment, including Disney, Warner Brothers and Hanna Barbera learned the importance of a multi-level story line. At one level, popular cartoons would entertain children with colors, actions, pratfalls and simple humor. But writers also weaved references into the storyline that would be picked up on by adult viewers. These included pop culture references, double entendres and more sophisticated verbal gags. The device worked well, endearing Fred Flintstone, Bugs Bunny and Donald Duck not just to one generation at a time, but several. The fact that TV and film offered not just video but also an audio track allowed the creators to use the two to appeal to two audiences at once. When the kids were being entertained by the visuals, the adults could catch the more subtle references in the dialogue.

The Secret of Happy Families

But how do you maintain this multilevel appeal when you move beyond the two dimension world of TV or film to the fully immersive experience of a visit to a Disney park? Disney wanted to create an experience where both parents and children could be entertained simultaneously. First of all, the parks had to be immaculate. While children may be more tolerant of a little dirt and crease, nothing makes a parent's stomach turn faster than the unsavory environment of the typical amusement park. Visions of weird infections, salmonella and just genera ickyness leap immediately to mind. If parent's were to relax in a Disney amusement park, Walk knew it had to be spotless.

In the last post, I also talked about attention to detail. This becomes more important to the experience as you get older. Your appreciate the care that has gone into the engineering of your experience. It provides a sense of value for your admission price. Kids are plugged more viscerally into the thrill, the excitement and the magic of Disney. They suspend belief easier. We adults tend to be more skeptical, which makes us appreciate the lengths that Disney is willing to go to to maintain the illusion.

A Restroom around Every Corner

But perhaps the biggest reason is that it seems Disney has gone to great lengths to anticipate the needs of a family. It's uncanny how, just when you start thinking you might need something, it magically appears around the next corner. Washrooms, food booths, sit down restaurants, benches for resting, stroller drop off areas - all these seem to be seamlessly and conveniently integrated into the experience. Yes, a day at Disneyland or Disneyworld can be gruelling for even the most diehard fans, with plenty of highs and lows, but it seems that just when frustration seems to mount to dangerous points, relief is close at hand.

I remember one summer visit during an exceptionally busy long weekend. We were heading out of the park and our nerves were frazzled. Yet, I was told we had to make one more stop on Main Street to pick up a souvenir in one of the shops. While not thrilled at the prospect (getting the hell of there was my primary goal) the day was redeemed by an exceptionally friendly Disney employee who managed to bring the smile back to our faces. And that, perhaps more than anything, is the Disney secret of simultaneous satisfaction. Rather than the bored, vacant expression that's commonly found on staff faces at the competition (Universal is particularly notorious for this) it seems that everyone at Disneyland is genuinely happy you're there. Disney people are awesome, but that's actually one of the 10 Things I learned from Disney, so more on that in a future post.

We're Only as Happy as the Group We're In

To wrap up this post, let me touch on some reasons why simultaneous satisfaction is so important if you're targeting customers in groups rather than as individuals. Perhaps the best way to illustrate this is with an example. Restaurants are another business that typically targets groups. Think about what happens if just one person in the group has a substandard experience. You talk about it. And suddenly, even if your experience was fine, you become dissatisfied. Our opinions about joint experiences are formed as part of the group. We defer to the decision of the majority, and typically, the consensus will sink to the level of the least satisfactory experience.

The other reason why group experiences are so important can be found in the way they're recalled. Daniel Kahneman had an interesting presentation at the last TED conference about experiential vs remembered happiness. This is one of the little illogical quirks of humans. We make future decisions based not on how happy we were experiencing the actual event, but on how happy we remember being. This is critically important when we look at the group dynamic I just described in the restaurant. If we go to Disneyland as a group, we will also tend to remember our experiences when we're with the same group. And, as we relive our remembered experience, our happiness level will sink to the lowest level of the group. If not everyone was happy, no one will be happy.

There's a flip side to this as well. If we were all generally happy (the little annoyances tend to fade with time) the nostalgia effect tends to boost and sharpen the level of actual experience. We remember good things as great. I'm not sure Walt knew the psychology of simultaneous satisfaction when he insisted that Disneyland would be a place where both parents and children could all be happy at the same time, but it's worked out pretty well for him.

posted @ Wednesday, April 14, 2010 2:47 PM | Feedback (5)

10 Things I Learned from Disney #4: Details Make the Difference

There are a lot of theme parks in Southern California. The competition for Disneyland is tough. Yet, for over 50 years now, the pattern has been the same. People plan their vacation around Disneyland, spending 3 to 5 days at the park, and may add a day at one of the other parks - Universal, Knott's or Magic Mountain. If you looked at the size of the theme park pie and the slice that Disney carves off, the imbalance would be remarkable. Why does Disney suck up over 80 cents of every theme park dollar spent in the region?

It's not the rides. Universal's rides are probably more technically impressive. Magic Mountain and Knott's certainly has more thrilling rides. Disney's biggest coaster, California Screamin', is a rather mild ride for a coaster fanatic (which I am).

I believe there are several reasons, and I'll try to deal with them in individual posts. Today, I want to talk about attention to detail.

The Hotchkiss Detail Obsessive Guide to Disneyland

My family has been to Disneyland at least 6 times. People hate visiting the park with us because we have routines (others are less kind and call them rituals, or cult-like behavior) that have to be adhered to. It's important which side of the train station you enter onto Main Street on. And you don't rush past the circle at the top of the street. You spend a few minutes lingering and drinking in the atmosphere. You either stroll (never rush) down main street or take the horse drawn tram. You may stop at the Blue Ribbon Bakery for a coffee. You make your way to the Partners statue at the center of the park for a few minutes with Walt and Mickey and while you're there, pay particular attention to the flowers planted around them. Take note, because they may be completely different tomorrow. From the center in front of the Castle, we then veer to the left, usually ambling through Adventureland and head towards New Orleans Square because the first ride has to be (this is non-negotiable) Pirates of the Caribbean.

Pirates is one of our favorite rides, earning it's place as a Hotchkiss Tradition. And it's not because it's thrilling (it's not) or technically amazing (although it may have been with the ride debuted in 1967). It's because the attention to detail on this ride is simply amazing. It's the last ride that Walt himself personally oversaw the design of. Everything has been thought through, down to the smallest scar, gold doubloon or cobweb. And that is the Disney difference. You won't find that fanatic attention to detail in Universal, Knott's or Magic Mountain. It's a Disney hallmark.

It's What You Do Between the Rides that Counts

Disney knows that in between the momentary jolts of adrenaline, it's the details that build an experience worthy of a 3 or 4 day investment of your family's time. Disneyland has this down in spades. Each square foot is jammed with amazing detail, carefully crafted and maintained to add to the experience. And I'm not even talking the obscure Disney-mania touches like Hidden Mickies. I'm talking about carefully planned sight lines, well placed benches, meticulously groomed greenery and the architectural detail on buildings, to say nothing of the imagination fuelling touches found in rides like Splash Mountain, Peter Pan, the Haunted Mansion and Indiana Jones. The competition cut corners. Walt absolutely forbid that in the making of Disneyland.

The post-Walt Disney Parks have struggled with this. We've been going to Disneyland for over 20 years now, and the overall look of the park hasn't changed much. Toontown was added and a few new rides have debuted, but 50 years of planning and development have created an almost perfect entertainment experience. Major overhauls aren't needed. The same can't be said for Disney's California Adventure. Disney is currently overhauling huge sections of the park because the same detailed magic was missing. Visitors treat California Adventure more like a typical theme park, rushing from major attraction to major attraction without lingering to enjoy the experience on the way. Of all the rides in California Adventure, the Twilight Zone Tower of Terror is one of the few engineered to the same standards of detail that you'll find in the earlier rides. But this legacy of detail isn't found so much in the rides, but rather the transition zones between the rides. It's here where the acid test of detail is really found. It's detail that keeps crowds amused while they're waiting in line. It's detail that keeps them from feeling like cattle, shunted from one chute to the next.

Most Skip the Details, Disney Doesn't

So what's the takeaway? Disney's eye for detail came from an absolute certainty about what his visitor's wanted and an iron-willed determination to deliver that without any compromise. Every last element of the visitor experience was considered and planned for. Every detail you see in Disneyland had a purpose - to make the visitor happy.

I think too many corporations rush past the details when it comes to the experiences of their customers. It's because details take time. They're hard work. You can get lost in a forest of detail. And obsessing over detail just doesn't seem that profitable. In fact, if you get lost in the wrong details, it can be sure death for a corporation. But yet, details make the difference for Disney. Why? How does Disney avoid the trap of paying attention to the wrong details? They know which details are important because they take the time to understand what is important to their visitors. They spend a lot of time thinking about how visitors perceive and interact with those details. This is a legacy from Walt. It comes from a leader that obsesses about details.

Apple and the User Experience: A Lesson Learned

Another example of attention to detail is Apple. They obsess about the user experience. I recently watched someone demo their new iPad. You know what was one of the first things he showed me? How the iPad mimicked the look of turning an actual physical page in a book. Depending on where you place your finger on the page, the page itself curls up appropriately. It's a silly little detail, but it was important in creating a Wow experience for this new owner. And it's something that stood out to me as one reason why, eventually, I have to get an iPad. It's a feature that probably took an absolutely silly number of hours of programming to implement but it was important to Apple because it was important to users.

Detail can differentiate you from the competition. It adds a premium to the value you provide. It tells the customer that you value them as users (or visitors), not just as another wallet to be emptied.

posted @ Monday, April 12, 2010 7:39 PM | Feedback (3)

Shaking Things Up in Captiva - TED style!

It's pretty much non-stop travel for me for the next few months. I'm posting this from Chicago, where I moderated a BMA Luncheon on integrating social media. It was a great turnout (packed room). Next week, it's off to Captiva in Florida for the Search Insider Summit, the topic of today's column. I'm really looking forward to the Summit!

Today you sit there, an audience spread across the digital marketing landscape, scraping together a few precious moments on your daily calendar to read this column. Next week I hope you'll all be basking in the sunshine of Captiva Island, Fla., your cranium brimming over with tidbits and brain-bombs about search and the industry we toil in. The Google-gods willing and major algorithmic overhauls aside, we can all get away from the daily grind long enough to step back and take a look at where this whole thing might be going.

A Summit Three Years in the Making

I've been fortunate to work with MediaPost to help program the Search Insider Summit for the past five shows (I think, the brain's a little numb at this point). Over time we've refined and tweaked to the point where we had a pretty smooth-running operation. This time, however, I decided to change all that. I've never been a particularly loyal adherent to the maxim: If it ain't broke, don't fix it. I believe in mixing stuff up on a pretty regular basis. In this case, the catalyst for change was a chance to attend the TEDActive conference this spring.

I loved how TED managed to lodge particularly toothsome concepts in my brain (at a breathlessly unrelenting pace, to be honest) and then throw me loose amongst the TED-sters (yes, it is a little cult-like) to try to digest in my limited downtime.

The resulting conversations were nothing short of amazing. The first day at lunch, I was sharing a picnic basket with five other strangers and eavesdropping on a conversation happening beside me. The topic? The role of mirror neurons in determining the vicarious enjoyment on thrill rides at an amusement park. I didn't catch names at first, but one speaker owned an amusement part in New Jersey, and the other was a professor of neuroscience at UC Irvine.

This past week, as I was zipping past TV channels, I saw a familiar face. There was my neuroscience prof! He was appearing as himself on the crime drama "Criminal Minds." He just happens to be one Dr. James Fallon, a world-renowned expert on the psychology and neurology of psychopaths! Now, where else could you just happen on a conversation like that?

The Convergence of Conversations

That was the spirit I wanted to create at Captiva (minus the psychopathic stuff). Like TED, we have an atmosphere that invites conversations. The informal and intimate atmosphere is conducive to brainstorming. And this time, I wanted to borrow from the TED concept and transition what happens up on stage to be more forward-looking and strategic in nature. I wanted to give more people a chance to share their thoughts, so I borrowed the TED format of a mix of 18-minute and five-minute (TED actually limits to three-minutes) talks. Plus, we retained unique Search Insider traditions like our roundtable break-out sessions.

The challenge I threw at presenters was to crystal-ball the question: Where is search going from here? I divided the question into five parts: the core technology, the user experience, the marketing strategies, the search marketing industry and the data and tools. Then, with the help of our advisory board (Gian Fulgoni - Comscore, John Nicoletti - Google, Stefan Weitz - Microsoft, Chris Copeland - GroupM and Frank Lee - The Search Agency) we created a 3-day agenda from the pitches we received. It's promising to be a fascinating summit. And for good measure, we're bringing Ball State University back to re-envision Google through Gen-Next eyes.

It was a little hairy, taking a tried-and-true format and reinventing it, but I think you'll be pleased with the results. See you soon in Captiva!

posted @ Thursday, April 08, 2010 2:52 PM | Feedback (1)

10 Things I Learned from Disney - #3: Leadership Matters...a Lot!

Finally, getting back on track on my Lessons from Disney series:

How many companies today are run by caretakers? How many of the Fortune 500 are run by CEO's who are really just thinly disguised accountants?

The Leader of a company determines the heart and soul of that company. If you run the company by your profit and loss statements, you'll end up with a fiscally responsible corporation that will slowly screw itself into the ground. If you have a reckless leader, you'll flame and burn in spectacular style. Somewhere in between the extremes is where you have to live

Walt Disney was not overly concerned by fiscal responsibility. That was Roy, his brother's job. Walt drove the company by embracing risk. Roy lost his hair by trying to balance Walt's enthusiasm.

Risk is the fuel that drives the future. And risk is risk. It can only be calculated up to a certain point. After that, you have to close your eyes and jump. Walt jumped again, and again, and again, each with spectacular style.

1923 - Walt moved to Hollywood from Kansas City with a short film called Alice's Wonderland that he hoped would net him a distribution contract. The film was pretty much all Walt had. He managed to secure a contract and teetered on the edge of bankruptcy for 4 years. And just when he looked like he had a winner, in a new cartoon character called Oswald the Rabbit, the distributor stole both the rights and the animators, shutting Walt out.

1928 - After losing Oswald, Walt started from scratch with Mickey Mouse. But he only created two cartoons with the new character before deciding to risk it all with the first sound cartoon. The struggling studio dumped everything they had into the cartoon, Steamboat Willie. Luckily, Walt's gamble paid off. Mickey was a hit.

1937 - Building on the success of Steamboat Willie, Disney turned out a series of profitable Mickey Mouse cartoons, and added the Silly Symphony series, netting himself a number of Academy Awards in the process for pushing the boundaries of animation technology and art. but Walt soon found a new dream worthy of risk - the first full length animated movie. It what was quickly becoming predictable behaviour for Walt, he risked all their profits from the animated shorts on Snow White. And, as before, it was a phenomenal success, becoming the highest grossing movie until Gone with the Wind bumped it from it's perch.

In it's following releases, Disney struggled with finding the right balance between budget and profitability. The war restricted access to foreign markets so profits relied on domestic audiences. Walt continued to push the envelope of what was possible with animation in Disney's next two releases, Pinocchio and Fantasia. This came at a cost - a budget that meant these films didn't break even until decades after their debut (thanks to eventual release on VHS and DVD). Walt continually tried to find the right balance between artistic accomplishment and profitability, eventually finding a happy middle ground with classics like Bambi, Cinderella and Mary Poppins (another technical and artistic milestone). It's amazing to consider how quickly animation progressed, from the primitiveness of Steamboat Willie to the polished art of Show White in just 9 short years.

In the interim Walt also explored TV and live action features, finding significant success in both. Finally, it seemed, Disney had found the groove that led to sustained profitability. Almost any other leader would cling to this groove for dear life, building up the bank account and enjoying the rewards that come with success. Not Walt.

1955 - Walt got restless when he stayed in one place too long. he became bored with incremental improvement, no matter how profitable it proved to be. Walt thrived on risk and new, monumental challenges. And so, he looked for a new one. Walt was 54 years old and had been running Disney, in one form or another, for 35 years. By any measure you might want to apply, he was successful. And he risked all this, everything, on a new dream - an entertainment park. Disneyland represented Walt's biggest roll of the dice yet, because he had everything to lose.

This restlessness and desire to push the limits epitomized the Disney company for the first 45 years of its history. Walt and the company were really one and the same. His leadership determined the soul of the company. When he died of lung cancer at the age of 66, he left a hole in the heart of Disney that took years to mend (and some might say Walt was never successfully replaced). Never let it be said that one person does not determine the direction of a huge corporation. Disney was testament to the fact that a single person's vision and ideals can shape and guide a company for decades. This is not the job for a caretaker or bean counter. This is a job for someone who can grasp the impossible and shape the future.

posted @ Wednesday, April 07, 2010 8:14 AM | Feedback (3)

Human Irrationality Online

Follow up column to yesterday's post, first published on MediaPost's Search Insider on April 1 (come to think of it, somewhat appropriate that a column on human irrationality ran on April Fool's Day!)

Last week, I talked about the work of Daniel Kahneman, Amos Tversky, Herbert Simon and George Akerlof, key figures in helping define the foundations of consumer behavior, both rational and irrational, that dictate the realities of the marketplace. Today, I want to talk about how these emotional and cognitive biases and limitations play out online, but first, a quick recap is in order:

Prospect Theory - The role of psychological framing and emotional biases in determining human behavior in risky economic decisions. For example, how we're more sensitive about loss than we are about gain.

Bounded Rationality - How we cannot endlessly consider all alternatives for the optimal behavior, but rather rely on "gut instincts" to help sort through the available alternatives.

Information Asymmetry - Why the marketplace has traditionally been unbalanced, with the seller almost always having more information about the product than the buyer.

This is Nothing New...

As I said last week, these are all hardwired human conditions that have been present for hundreds of generations, even though it's only been recently that we've learned enough about human behavior to recognize them. And it's these inherent tendencies that have changed the marketplace since the introduction of the Internet. The huge volume of information available online allowed us to shift the balance of the marketplace to be more equitably distributed between sellers and buyers. Let's explore how each of these occurrences drove the behavioral change, which was enabled, not caused, by the introduction of the Net.

We understand that risk is present in almost all consumer transactions. This fact brings Prospect Theory into the picture. We will unconsciously employ our emotional biases to deal with the risk inherent in each purchase: the greater the risk, the greater the degree of bias.

The Risk/Reward Balance

Consumer motivation relies on us mentally balancing risk and reward. The balance between these opposing forces will dictate how we deal with risk mitigation. If there is a high reward -- for example, buying our mid-life crisis sports car or taking our dream vacation -- our emotional biases will be tilted towards maximizing this reward. Consumer research is really more about wish fulfillment than it is about risk mitigation.

But if there is little or no reward, our research takes a much different path. Think about how we approach the purchase of life insurance, for example. There is no inherent reward here, just risk -- or rather, mitigation of risk. And insurance salespeople mercilessly exploit the emotional bias of loss by getting you to picture your family's future without you in it.

Informed Does Not Always Equal Rational

This risk/reward balance will dictate what our online research will look like. And this is where Akerlof's Information Asymmetry comes in. One of the ways we mitigate risk is by educating ourselves about our purchase. We look up consumer ratings, read reviews and pore over feature sheets.

Today, consumers are much more informed than they were a generation ago. But all that information does not necessarily mean we will make a more logical decision. We humans tend to look at information to support our emotional biases, rather than refute them. So, the balancing of information asymmetry is still done through the lens of our emotional and psychological frames, as shown by Kahneman and Tversky. We have access to information online, but each of us may walk away with different messages, depending on the lens we're seeing that information through.

All This Information, All These Choices...

And that, finally, brings us to Simon's concept of Bounded Rationality. We have more information than ever to sift through. As I said a few columns back, we can employ different strategies to make decisions. Some of us embrace bounded rationality, or satisficing, making us more decisive. It's important to note here that the fact we're trusting our gut to make these satisficing calls means that we may be trusting emotion rather than logic. Others try to optimize each decision, weighing all the variables. While this is perhaps a more rational approach, it can tax our cognitive limits, leading to frustration and often abandonment of the optimal path, resulting in a decision that ends up being a "gut" call anyway.

Our need to access information to mitigate risk has lead to the behavioral changes in consumer behavior. The Internet enabled this. It wasn't technology that changed our behavior; it was just that technology opened the door to allow us to pursue our hardwired tendencies.

posted @ Tuesday, April 06, 2010 3:44 PM | Feedback (1)

The Four Horseman of the Consumer Behavior Apocalypse

From MediaPost's Search Insider Column, first published March 25, 2010

Right out of the gate, let's assume that we all agree consumer behavior is in the throes of its biggest shift in history. And the cause is generally attributed to the Internet.

While I don't disagree with this assessment, I believe there may be some misattribution when it comes to cause and effect. Did the Internet cause our consumer behavior to change? Or did it enable it to change? The distinction may seem like mere semantics, but there's a fundamental difference here.

"Cause" implies that an outside force, namely the Internet, pushed us in a new direction that was different from the one we would have pursued had this new force not come along. "Enable" is a different beast, the opening of a previously locked door that allows us to pursue a new path of our own volition. I believe the latter to be true. I believe we weren't pushed anywhere. We went there of our own free will.

Free Will? Or Hardwired Human Behavior?

But, even in my last statement, language again gets us in a sticky place. "Will" assumes it was a conscious and willful decision. I'm not sure this is the case. I suspect there were subconscious, hardwired behaviors that had a natural affinity for the new opportunities presented by the online marketplace.

For most of our recorded history, we have assumed that rational consideration and conscious will forms the basis of human thought. If we did seem programmed automatically to respond to certain cues, this was as a result of being conditioned by our environment, the classic Skinner black-box approach. But when we were on top of our game, we were carefully considering pros and cons, making consciously deliberated decisions. These were the forces that drove our society and our behaviors. This theory formed the basis of economics (Adam Smith's Invisible hand), Cartesian logic, and most market research.

But in the last few decades, this view of rationality riding triumphant over human foibles has been brought into question. In particular, there were three concepts put forward by four academics that caused us to question what drove our behaviors. These folks uncovered deeper, subconscious routines and influences that lay buried beneath the strata of rational thought. And it's these subconscious behaviors that I believe found the new online opportunities so enticing. Let's spend a little time today looking at these four thinkers and the new paradigms they asked us to consider.

Amos Tversky and Daniel Kahneman - Prospect Theory

Adam Smith's Invisible hand, driven by the wisdom of the market, has been presumed to be the ultimate economic governing factor. The assumption was that each of us, individually making rational economic decisions, would ultimately decide winners and losers and capitalism would stay alive and well.

But Tversky and Kahneman, in their paper on Prospect Theory, showed that the invisible hand might not always be guided by a decisive and logical mind. We all have significant hardwired cognitive biases that often cause us to make illogical economic choices. For example, if I offered you $1,000, with no questions asked, or a chance to win $2,500 based on a coin toss, you'd probably take the sure bet, even though mathematically, the odds for net gain are better with the coin toss.

Prospect Theory shot some holes in the previous theory of Expected Utility, a model where we carefully weighed the pros and cons of a potential purchase based on a return on investment model. Emotional framing and risk avoidance played a much bigger role than we suspected, handicapping our logic and often guiding us down non-rational paths. Tversky and Kahneman single-handedly found the new discipline of Behavioral Economics and changed our thinking in the process.

Herbert Simon - Bounded Rationality

Simon's concept of Bounded Rationality superseded Kahneman and Tversky's theory, but it dovetailed with it very nicely. Even if we are rationally engaged in a decision, Simon argued, we couldn't possibly optimize it, especially in complex scenarios. There were simply too many factors to consider. So, we took "gut feeling" short cuts, which Simon called "satisficing," a combination of satisfy and suffice. We short-listed our consideration set by using beliefs and instincts.

To make the satisficing short list is the goal of any brand campaign. At some point, logical weighing of pros and cons has to give way to calls based primarily on instinct. And, as Kahneman and Tversky showed, those instinctive calls may well be based on irrational emotional biases.

George Akerlof - information Asymmetry

The last piece, and the one that really drove the online consumer revolution, is George Akerlof's Information Asymmetry theory. Traditionally, there has been an imbalance of information between buyers and sellers, to the seller's advantage. The seller always knew more about what they were selling than the buyer did. This made purchasing inherently risky.

With an absence of information, consumers created strong beliefs about brands as a way to guide their future buying decisions. Brand loyalty, whether rational or not, filled the void left by a lack of information. Manufacturers and retailers carefully controlled what information did enter the marketplace, pushing the positives and carefully suppressing the negatives.

These three concepts, intertwined, defined the psychological make-up of the market prior to the introduction of the Internet. In my next column, I'll explore what happened when these behavioral powder kegs were exposed to the fanned flames of the digital marketplace.

posted @ Monday, April 05, 2010 7:42 AM | Feedback (2)