Saturday, April 16, 2011

The Thank You Economy By Gary Vaynerchuk

The Thank You Economy

The Thank You Economy
By Gary Vaynerchuk

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The Thank You Economy isn't some abstract concept or wacky business strategy. It's the way we buy and sell, the way we're interacting as consumers, as employees, as entrepreneurs on all levels, right now. The way our marketplace functions has been evolving right before our eyes. Top-down, one-way exchanges are gone, replaced by relationships based on open, honest, and constant communication between customers and business. Today, individuals and brands that out-care and out-love their competition - those emphasising quality, value, responsiveness, and attention to detail, among other essentials - see the biggest returns. Gary Vaynerchuk contends that the people and companies harnessing the word-of-mouth power provided by multiplatform media - those that can shift their outlook and operations to be more customer-aware and fan-friendly - will pull away from the pack and profit in today's markets. In "The Thank You Economy", he dissects the companies on the leading edge, showing how they are succeeding - and sometimes failing. Laying out the ideas and insight that support this enormous change, Vaynerchuk explores these emerging connections - from consumer to consumer and business to business and everything in between. Passionate and persuasive, he reminds us that, surviving and thriving today it takes more than just hard work-it takes a heartfelt thanks to those who make it possible.

Product Details

  • Amazon Sales Rank: #342 in Books
  • Published on: 2011-03-08
  • Released on: 2011-03-08
  • Original language: English
  • Number of items: 1
  • Binding: Hardcover
  • 256 pages

    Features

  • ISBN13: 9780061914188
  • Condition: New
  • Notes: BRAND NEW FROM PUBLISHER! 100% Satisfaction Guarantee. Tracking provided on most orders. Buy with Confidence! Millions of books sold!
  • Editorial Reviews

    Amazon.com Review

    Amazon Exclusive: Gary Vaynerchuk on The Thank You Economy 

    The Thank You Economy is much more than saying "thank you." The Thank You Economy represents a much bigger movement. This book could easily have been called The Humanization of Business or Manners Marketing.

    I feel that we're living through the biggest culture shift of our time. The internet, itself, is 17-years-old. It's just hitting the social part of its life. It's just like growing up. As you get to 13, 14 and 15, you want to go out and go to parties. That's what's happening right now! The internet is growing up.

    What happens when we live in this word of mouth world where we're tweeting out "I love Company X's orange juice"? We're sharing thoughts that we never would have picked up the phone and called somebody about in the past. What happens when brands can be humanized? In The Thank You Economy, I tackle the issue of the ROI of social media and provide case studies. I think we wrote a much, much stronger book than I did with Crush It. When I say we, I mean the people in the social graph--the people that are living it.

    There is enormous ROI in social media. It's like my famous saying though, "What's the ROI of your mother?" The data isn't as black and white like it has been in the past. I firmly believe that the brands that have a soul and a heart and understand how to scale this will win.

    This is a comprehensive book from a guy that has lived in the social space for the last 6 years like I have. I live and breathe my community and I've been able to consult with big brands for the past two years on how to leverage this world of caring. This is the perfect book, not only for entrepreneurs who might have an employee or two, but also for brand managers and CMOs at bigger companies.

    About the Author

    Gary Vaynerchuk is a serial entrepreneur who has revolutionized the way people look at interacting with their communities. While building his family's local liquor store into a national industry leader, he observed the extraordinary potential of what he has dubbed the Thank You Economy. As a consultant, he introduced those same principles into the business world at large, with successful applications in sports, consumer packaged goods, and retail. Askmen.com named Gary to its list of the Top 49 Most Influential Men of 2009, and he was included in BusinessWeek's list of the Top 20 People Every Entrepreneur Should Follow.

    Customer Reviews

    Most helpful customer reviews

    43 of 47 people found the following review helpful.
    5PUBLISHED BOOK REVIEW!
    By Peter Klein
    Ideas & Innovation, Mullen, Social Influence - MULLEN
    Thank you for writing the Thank You Economy.
    Author, Social Media Pioneer, Gary Vaynerchuk

    As REM once said: "It's the end of the world as we know it and I feel fine." If anyone reading this hasn't realized that everything has changed, maybe Gary Vaynerchuk's new book The Thank You Economy will help smack some sense into you. At the very least, it will make the new world a bit less scary for you or your boss or your boss's boss. I think people will find that Gary V. is a wonderfully unlikely spokesperson and an incredibly steady voice of reason in a seemingly endless world of chaos. He intuitively gets it and can articulate and translate social media very well.

    Here's my take on the brand spanking new Thank You Economy, the latest from the author of the New York Times best-seller Crush It!, famous internet wine marketer, social media godfather, and overall feisty personality.

    The book opens by drawing some amazing parallels to the days when every store owner needed to endear himself to his small community, be an intrinsic part of it, and keep the community happy. If a customer was unhappy, word of mouth would spread and it would cause great problems. Then we became busier, more fragmented, less personal and our individual voices stopped mattering as much to businesses. Essentially they could get away with not caring.

    But, with the introduction of SM, we are back in a community where each individual's voice matters a lot and the business owner needs to authentically care and should want to communicate with the individual for a lifetime of ROI. That really simply sums up the incredible and undeniable role of SM today. While we have seen other authors point out the differences between pre- and post-industrial revolution society and how it relates to brands roles in our lives, Gary has put a lot of smart thinking into what this means for social media and drawn out useful conclusions for us. The book gives great easy-to-digest examples of some social media successes and failures we can all learn from. There is also content in here that won't sit easily with the ad community, but it's a viewpoint that needs to be heard. In fact, he makes a great case for why advertising and marketing need to continue to be more relevant and more entertaining then ever, why they naturally go hand in hand with SM if used properly by the right people. It also gives nice context to social media's role in relation to advertising and marketing. All stuff that should be smacking advertising and marketing people in the head, if it hasn't already. The book also underscores the need for absolute authenticity in SM and how to get there with your company.

    Gary's book should be required reading for anyone working, thinking or thinking about thinking or working in social media. Or anyone who works at a company that is thinking about using social (which should literally be every company in the world). The Thank You Economy has been written in a way that people who are very new to social and people who have been working in it for some time will get a lot out of it. Agencies and clients need to get their hands on it and distribute it liberally. It should be used by agencies to get clients (and there are still some) who don't yet know the invaluable value of SM to get off the fence. And it should be used as a tool by clients to get senior management who may not yet see the undeniable value of SM to be a lot less scared about it. It debunks the anti-social media myths and paths of resistance in very compelling and motivating ways.

    Like I said, thank you for writing this book Gary, it's a much needed smack upside the head for marketers and I think you just made all of our jobs a whole lot easier. Nice work.

    15 of 15 people found the following review helpful.
    4Gary really "gets it" timeless advice
    By Lindsay Nixon
    I'm a fan of Gary -- I like him, I like his passion, I like his success, I like his voice... and both TYE and CrustIt are GREAT books... IF you don't already have a business or brand, or you're just starting out. If you have a business/brand and are even marginally successful, you've already figured most of the information on your own. (It's sink or swim market).

    I'm thrilled both books exist for newcomers -- god knows I'd have preferred to read it in a book than learn on my own with trial and error -- and in a way, it was nice to be assured that I was "right" that what I was going was "the right thing" and "best." Both books made me feel really good about how I conduct my business, even if I didn't learn anything "new."

    However, don't not get this book just because you're running a successful business or brand! You can still pull some inspiration from these books, and maybe learn a thing or two. I made lots of notes, flagged pages, etc when I read through TYE because it spawned new ideas. It wasn't that Gary said "Do XYZ" but reading a story about some other company made an idea (sometimes totally unrelated) pop into my head -- Crush It did that for me to, so I will continue to recommend both.

    Looking fwd to more books Gary!

    18 of 20 people found the following review helpful.
    5Another HIT!
    By Jon Mitchell Jackson
    Get this book! Just as Gary did in "Crush It", he's written another "must read" book for every business owner or service professional (my fellow lawyers must read this book). Picked up an early edition late yesterday afternoon while my son was at soccer practice. Almost missed picking him up because I couldn't put the book down. Get it! Read it! And even more important, apply these tools, techniques, and approaches to building your business and helping others. Thank you Gary! Mitch/ NewWorldLawyer.com

    Enchantment: The Art Of Changing Hearts, Minds, And Actions By Guy Kawasaki

    Enchantment: The Art of Changing Hearts, Minds, and Actions

    Enchantment: The Art of Changing Hearts, Minds, and Actions
    By Guy Kawasaki

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    The author of the international bestseller The Art of the Start offers a new perspective on the art of influence.

    Guy Kawasaki's acclaimed books have established him as the entrepreneur's entrepreneur, and in The Art of the Start he wrote the essential contemporary guide for starting any new enterprise. Now Kawasaki turns to the mystery of influence and offers a compelling new take on this key force that drives any successful business or personal interaction.

    Enchantment's fundamental message is that in any transaction the goal is not to get your own way, but to bring about a voluntary, enduring, and delightful change of heart in other people, by working with and through them and enlisting their own goals and desires. It's enchantment that enables us to maneuver through difficult decisions, break people's entrenched habits, defy the wisdom of crowds, and get colleagues to work for long-term goals.

    Kawasaki's advice includes:
    • How to Achieve Rapport, Credibility, and Trust
    • How to Help People Enchant Themselves
    • How to Overcome Resistance
    • How to Enchant Your Employees...and Your Boss
    • How to Resist Enchantment

    Anchored by his road-tested wisdom and inimitable wit, Enchantment is another classic from one of the most respected voices in business today.

    Product Details

  • Amazon Sales Rank: #179 in Books
  • Published on: 2011-03-08
  • Original language: English
  • Number of items: 1
  • Binding: Hardcover
  • 211 pages

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  • ISBN13: 9781591843795
  • Condition: New
  • Notes: BRAND NEW FROM PUBLISHER! 100% Satisfaction Guarantee. Tracking provided on most orders. Buy with Confidence! Millions of books sold!
  • Editorial Reviews

    From Kirkus Reviews

    Apple's former chief evangelist leads businessfolk down the path to enchantment.

    The entrepreneur's entrepreneur is back with his 10th book, this time tackling the tricky art of influence and persuasion. Kawasaki (Reality Check: The Irreverent Guide to Outsmarting, Outmanaging and Outmarketing Your Competition, 2011, etc.) transforms the otherwise exhausted and overwrought tropes of how to win friends and influence people with a complete makeover here, whether he's talking about wardrobe choice or tips for effective swearing.

    The author, a modern-day Dale Carnegie, offers explanations on how to wield the most influence in the digital age: Push Technologies like presentations, e-mails and Twitter are discussed as active means of enchanting others, while Pull Technologies like Facebook, YouTube and LinkedIn passively draw them in. The author's suggestions for achieving likeability and trustworthiness, as well as overcoming resistance, are thoroughly explained and can easily translate from the workplace to the real world.

    Kawasaki makes good use of subheads and bullet points, rendering information in a searchable format. He ends each chapter with an anecdote that illuminates the effectiveness of his techniques—while it's not original, it's effective. The author's trademark light and airy style is on display, but it's his humor and empathy that makes the heavy use of BusinessSpeak and buzzwords more easily palatable.

    Informative, concise guide from one of America's most influential and, yes, enchanting entrepreneurs.

    Review
    "Read this book to create a company as enchanting as Apple."
    -Steve Wozniak, co-founder of Apple

    "Guy's book captures the importance - and the art - of believing in an idea that delivers something entirely unique to the customer. The power of a really good idea to transform the marketplace and individual customer experiences is huge, and this book offers a wealth of insights to help businesses and entrepreneurs tap into that potential."
    -Sir Richard Branson, Founder of the Virgin Group

    "Kawasaki provides insights so valuable we all wish we'd had them first."
    -Robert B. Cialdini, author of Influence: Science and Practice

    "The best overall treatise on interpersonal relationships since Dale Carnegie wrote How to Win Friends and Influence People."
    -Michael Gartenberg, research director, Gartner

    "Guy has written the small-business manifesto. There is nothing more important for entrepreneurs than to enchant their customers, and Guy explains exactly how to do this."
    -Jane Applegate, small-business management expert and author of 201 Great Ideas for Your Small Business

    "Guy teaches you how to pull gems from people's hearts and minds and how to become an effective practitioner of life's crucial domains. Clearly, I taught him well."
    -Dr. Phil Zimbardo, professor emeritus of psychology, Stanford University

    "You feel it when you drive a BMW, touch an Apple iPad, shop in a Sephora store, or buy shoes from Zappos. Kawasaki reveals how you can deliver the same enchanting experiences as these famous brands."
    -Robert Scoble, Rackspace videoblogger

    About the Author
    Guy Kawasaki is the former chief evangelist of Apple. He is also the cofounder of Alltop.com (an online magazine rack of popular topics on the Web) and a founding partner at Garage Technology Ventures. His nine previous books include the international bestseller The Art of the Start, as well as Reality Check, Rules for Revolutionaries, How to Drive Your Competition Crazy, Selling the Dream, and The Macintosh Way. He has a BA from Stanford University and an MBA from UCLA. He lives in Silicon Valley with his wife and four children.

    Visit www.facebook.com/enchantment

    Customer Reviews

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    64 of 69 people found the following review helpful.
    4Make an Impact with Integrity
    By Aaron Armstrong
    Marketing and leadership books are strange animals. Some are great and others make you want to stab yourself in the eye with a fork. Almost all, though, usually fall into one of two categories:

    1. How to develop a large and successful business; and
    2. Why all marketers are liars

    Enchantment by Guy Kawasaki is neither of these; instead, it's a book about one thing:

    Influence.

    "How can I influence others without moral compromise?" is the question at the heart of Enchantment. And it's an important one. There are a number of easy cheats to convince people to follow your leadership (carrots and sticks) or to buy your product or join your cause (incentives), but eventually those things always fail.

    Why? Because they're disingenuous. They don't tap into people's passions. They don't move the heart.

    And without that happening, whatever impact you have is fleeting at best.

    The "pillars of enchantment" Kawasaki puts forward ones you'd be hard pressed to disagree with:

    1. Be likeable
    2. Be trustworthy
    3. Have a great cause

    In other words, be someone you'd actually want to spend time with and offer something that matters. These seem like concepts that should be met with a resounding, "well, I should hope so." I mean, this seems to be common sense, doesn't it? That's thing about common sense, though. To paraphrase G.K. Chesterton, it's not that common sense has been tried and found lacking, it's that it's been found difficult and left untried.

    Unless you're likeable, it's extremely difficult to be found trustworthy. And unless you're trustworthy, no one will rally around your cause, no matter how good it is.

    Whether you're in the for-profit or non-profit world, whether you're in some form of vocational ministry or working for a huge conglomerate, who you are impacts everything you're involved with. Our character can be the scent of life or the stench of death, and we would all do well to remember that.

    The rest of the book tackles the implications of being enchanting, from launching your cause, overcoming resistance, using technology, how it plays out with employees and employers, how to make enchantment endure--and even how to resist it.

    A key principle that resonated with me is that of endurance. Even if you have the greatest cause, it's essential to remember that "enchantment is a process, not an event." You're working to build a relationship, not just get a sale or get someone to do something for you. And relationships take effort. This is something that is not easy for many in marketing and even in leadership positions to remember. The truth is, though, for many of us, it's easier to try to squeeze whatever we can out of our market today, and not think about the long-term consequences (like having no market in the future).

    This is where social media comes in handy, especially Facebook and Twitter (two resources that Kawasaki highly recommends). These two tools allow organizations and individuals to connect in ways that previously weren't possible. And used well, they can allow you to truly enchant your customer or supporter base by engaging on their terms. Dell, among other organizations, fields support questions via Twitter (I know because an associate contacted me once after I complained about my previous laptop). This gives people a great experience with the company, even if they don't like the product.

    One of the challenges with social media, though, is finding the right mix of promotion vs. conversation. Kawasaki suggests that if around 5% of your content is promotional, you should be in good shape, but he's also quick to point out that if people aren't complaining, you're probably not promoting enough (p. 115).

    (Does this mean my Twitter followers will be seeing a shift in my updates? Probably, and hopefully for the better.)

    Principles aside, the thing that caught my attention about this book is that it brought to mind people I know who are naturally good at this. They just seem to "get" that this is the kind of person you need to be in order to be successful. Take some time and look around your office, your school or whatever context you spend most of your day in, and I suspect you'll see at least one or two people who are naturally "enchanting" as well.

    So here's the big question: Will this book help you to be "enchanting" in your sphere of influence?

    Possibly. This isn't a book that guarantees that if you follow these 8 easy steps, you'll have more friends, better posture and piles of candy. What it does remind readers, though, is that the only way to really make a lasting impact on people is to act with integrity. That's a big deal and advice we would all do well to heed.

    If you have a chance, do pick up a copy of Enchantment. It's definitely a worthwhile investment and just might challenge you in a few places where you won't expect it.

    65 of 81 people found the following review helpful.
    2Hackneyed, poorly written. Enchanting? Puhleeez!
    By Karma Yogi
    I am one of the many random people worldwide that received a complimentary copy of the book. And much as I feel grateful for the gift, I'll be honest. The book did not enchant. It's mostly a collection of tips that I've come across from various sources before this. What did not help was that the author re-wrote those tips in his own writing style (which is far from enchanting...actually it is tiresome!) It seems the author is more an entrepreneur than an original thinker or writer.

    p.s. Btw, I got a link to a quiz on the author's FB page that offered to tell me how enchanting I was based on my responses. After filling out some 25 questions I clicked the Submit button to see my results and got a message that asked me to 'LIKE' the author's page BEFORE I could see my results. I was not enchanted. :(

    p.p.s When I last checked, the quiz had been tweaked. You can now participate only AFTER you LIKE the page. Looks like the author still doesn't get it.

    19 of 25 people found the following review helpful.
    2Not Enchanted
    By C. Reich
    If you read a lot of books you eventually run into the same material fairly often. That's the case for me with "Enchantment". While I generally admire Guy's work, I was not enchanted with this book.

    It is extremely basic stuff. Smile, firm handshake, don't dress like a slob---enchanting? Steve McQueen and his wife are returning to LA from Las Vegas by car and she needs to relieve herself. There's a line at the gas station restroom so she tells the gals in line that there's a movie star out front---the crowd runs to see the stars and she takes a leak. That's an example of creating a win-win situation. Well, next time I need to pee I hope there is a celebrity I can use nearby.

    I'm not going to bother recapping the story about the TV producer who repeats that she just liked Howard Stern about a zillion times. (Puke)

    Frankly, by mid way I had to resolve reading this book on an empty stomach. I find celeb stories dull and somewhat grating. Hell yes, if you're Bill Gates you'll be enchanting no matter what the hell you do. BTW, swearing is encouraged but must be used properly. (Bill Gates is my example)

    Unless you can see the turnip truck that just dropped you off pulling away, skip this one.

    Chris Reich
    (2 stars because the design is very good though the content is "see Flip run" basic.)

    Little Bets: How Breakthrough Ideas Emerge From Small Discoveries By Peter Sims

    Little Bets: How Breakthrough Ideas Emerge from Small Discoveries

    Little Bets: How Breakthrough Ideas Emerge from Small Discoveries
    By Peter Sims

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    What do Apple CEO Steve Jobs, comedian Chris Rock, prize-winning architect Frank Gehry, the story developers at Pixar films, and the Army Chief of Strategic Plans all have in common? Bestselling author Peter Sims found that all of them have achieved breakthrough results by methodically taking small, experimental steps in order to discover and develop new ideas. Rather than believing they have to start with a big idea or plan a whole project out in advance, trying to foresee the final outcome, they make a series of little bets about what might be a good direction, learning from lots of little failures and from small but highly significant wins that allow them to happen upon unexpected avenues and arrive at extraordinary outcomes.

              Based on deep and extensive research, including more than 200 interviews with leading innovators, Sims discovered that productive, creative thinkers and doers—from Ludwig van Beethoven to Thomas Edison and Amazon's Jeff Bezos—practice a key set of simple but ingenious experimental methods—such as failing quickly to learn fast, tapping into the genius of play, and engaging in highly immersed observation—that free their minds, opening them up to making unexpected connections and perceiving invaluable insights. These methods also unshackle them from the constraints of overly analytical thinking and linear problem solving that our education places so much emphasis on, as well as from the fear of failure, all of which thwart so many of us in trying to be more innovative. 

                 Reporting on a fascinating range of research, from the psychology of creative blocks to the influential Silicon Valley–based field of design thinking, Sims offers engaging and wonderfully illuminating accounts of breakthrough innovators at work, including how Hewlett-Packard stumbled onto the breakaway success of the first hand-held calculator; the remarkable storyboarding process at Pixar films that has been the key to their unbroken streak of box office successes; the playful discovery process by which Frank Gehry arrived at his critically acclaimed design for Disney Hall; the aha revelation that led Amazon to pursue its wildly successful affiliates program; and the U.S. Army's ingenious approach to counterinsurgency operations that led to the dramatic turnaround in Iraq. 

                 Fast paced and as entertaining as it is illuminating, Little Bets offers a whole new way of thinking about how to break away from the narrow strictures of the methods of analyzing and problem solving we were all taught in school and unleash our untapped creative powers.

    Product Details

  • Amazon Sales Rank: #3636 in Books
  • Published on: 2011-04-19
  • Original language: English
  • Number of items: 1
  • Binding: Hardcover
  • 224 pages
  • Editorial Reviews

    Review
    "Little Bets is a timely and compelling book that will change the way you think, a roadmap to success in the 21st century. And, a very enjoyable read." — Peter Georgescu, former CEO of Young & Rubicam

    "A fascinating and revealing journey through the real-life dynamics of the creative process. Vividly written and bustling with examples from comedy to architecture, Little Bets is a wonderful example of itself: a big idea that takes shape through many small discoveries. I highly recommend it for anyone with a serious interest in cultivating creativity in business, education or in their own lives." — Sir Ken Robinson, New York Times bestselling author of The Element: How Finding Your Passion Changes Everything

    "I have always believed that constant innovation is core to success. The methods Peter Sims provides in the highly engaging Little Bets will help you challenge the status quo and discover extraordinary new possibilities in whatever endeavor you're engaged in." — Howard Schultz, chairman and CEO, Starbucks

    "Want a big idea?  Start little.  Whether you're an entrepreneur or an artist, Peter Sims shows you how big breakthroughs start with little bets." — Chip Heath, author of Switch: How to change things when change is hard

    "I really can't say enough about this book; Little Bets rings so true to my own experience at Teach For America. Peter Sims does a huge service by showing the world how big entrepreneurial and innovative successes come to be -- and in the process reveals ways of thinking that aren't the product of anything elusive or enigmatic but rather of traits we can all learn and foster, such as openness, inquisitiveness, and perseverance." —Wendy Kopp, CEO and Founder, Teach for America

    "Peter Sims buries the myth that big talkers with brains and big ideas move industry and science forward. This modern masterpiece demonstrates that the most powerful and profitable ideas are produced by persistent people who mess with lots of little ideas and keep muddling forward until they get it right. Little Bets is easily the most delightful and useful innovation book published in the last decade." — Robert I. Sutton, Professor, Stanford University, New York Times bestselling author of Good Boss, Bad Boss

    "With examples that range from traditional businesses to stand-up comedians, Peter Sims shows that the path to big success is lined with small failures. Behind every breakthrough idea is often a host of experiments that flopped — and Sims shows how to leverage these "little bets" to produce lasting results. This is a powerful and practical book." — Daniel H. Pink, author of A Whole New Mind and Drive

    "In Little Bets, Peter Sims convincingly argues that we need a new model of creativity, focused around gradual improvement and constant innovation. If you're not learning while doing, Sims points out, then you're probably doing it wrong."— Jonah Lehrer, author of How We Decide

    "Peter Sims' exciting new book, Little Bets,is replete with stunning insights about innovation and the remarkable benefits of backing many creative initiatives that yield the big breakthrough. Corporate leaders everywhere can benefit from his sound advice."—Bill George, Professor, Harvard Business School and Author, True North

    "'Little Bets' is a big idea. Here's my bet: if you're passionate about innovation, creativity, and entrepreneurship, you need to read this book!" — Alan M. Webber, Co-Founding Editor, Fast Company magazine, Author, Rules of Thumb

    About the Author
    Peter Sims is the coauthor with Bill George of the Wall Street Journal and BusinessWeek bestselling book True North.  His work has appeared in the Harvard Business Review, Fortune, and TechCrunch and he is a contributor to the Reuters and Harvard Business Review blogs.  He received an M.B.A. from Stanford Business School where he and several classmates established a popular course on leadership.  He has spoken or advised at such organizations as Cisco Systems, Eli Lilly, Current Media, Molson Coors, Qualcomm, and Frost & Sullivan.  Previously, Peter worked in venture capital with Summit Partners, a leading investment company, and was part of the team that established the firm's London Office. 

    Customer Reviews

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    2 of 2 people found the following review helpful.
    5One of the best busines books I've read
    By Daniel Jaffe
    This book is easily one of the top-10 business books I've read. But it's about more than just business. The bets that Peter Sims talks about reach across every aspect of life, from business, to art, to child-rearing.

    Making little bets is about doing little tests. Try something. Get feedback. Refine. Get more feedback. The creative process is a hands-on experiment. Lasting, reproducible success comes from small corrections over time. The feedback you get from making little bets leads to the best outcomes... the ones you didn't and couldn't predict.

    I was fortunate to get my hands on an advance proof of "Little Bets" and was hooked from the introduction. Having been a courtroom criminal defense lawyer for more than a decade, having built and sold a successful tech company, and now working on my second tech start-up, this book spoke to me. Although I didn't know what to call it at the time, my successes in the courtroom and in business came from taking a little bets approach.

    If you are creative (especially if you work in corporate America), this book will probably solidify what you already know in your heart and give you the tools, confidence and case-studies to challenge the status quo. If you manage creative people, you can't afford to overlook this remarkable book. And if you're a parent, or teacher, or coach, or community leader, this book will give you tools that will make a world of difference to those who look up to you.

    Do yourself a favor. Order this book now.

    0 of 0 people found the following review helpful.
    5Great Read!
    By Pete Petersen
    Great book with a ton of really interesting stories and some very actionable techniques for shaping approaches, teams and cultures that foster innovation. Very entertaining, really enjoyed the read!

    Brainsteering: A Better Approach To Breakthrough Ideas By Kevin P. Coyne, Shawn T. Coyne

    Brainsteering: A Better Approach to Breakthrough Ideas

    Brainsteering: A Better Approach to Breakthrough Ideas
    By Kevin P. Coyne, Shawn T. Coyne

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    Change the way you think about new ideas by steering your creativity in new and more productive directions.

    Ideas. Whether the goal is to create a billion-dollar business, fix a broken process, reduce expenses, or simply find the perfect gift for that special someone, we all need a steady stream of breakthrough ideas—and we've all learned from experience that traditional brainstorming doesn't generate them.

    Former McKinsey consultants Kevin P. Coyne and Shawn T. Coyne have spent more than a decade developing a better approach—Brainsteering—that takes brainstorming and other outdated ideation techniques and "steers" them in a more productive direction by better reflecting the way human beings actually think and work in creative problem-solving situations. By introducing just the right amount of structure into the process, and asking just the right questions, Brainsteering has helped Fortune 500 companies, small not-for-profits, and individuals alike generate ideas they previously could never have imagined.

    Peppered with thought-provoking and entertaining examples drawn from the workplace and popular culture, Brainsteering can help anyone develop breakthrough ideas, whether working alone on a one-time problem or turning an entire organization into an ongoing "idea factory." And getting started is easy: simply ask the right questions, and good ideas will follow.

    Product Details

    • Amazon Sales Rank: #22057 in Books
    • Published on: 2011-03-01
    • Released on: 2011-03-01
    • Original language: English
    • Number of items: 1
    • Binding: Hardcover
    • 256 pages

    Features

    • ISBN13: 9780062006196
    • Condition: New
    • Notes: BRAND NEW FROM PUBLISHER! 100% Satisfaction Guarantee. Tracking provided on most orders. Buy with Confidence! Millions of books sold!

    Editorial Reviews

    From Publishers Weekly
    Tired of interminable brainstorming sessions dominated by a few bloviating blowhards--and rarely resulting in a usable idea? Good news: it's not only frustrating, it's been proven to be ineffective. While we all need a regular influx of breakthrough ideas, there's got to be a better way of sparking that creativity--and the brothers Coyne present a cogent way of doing it. They introduce readers to techniques for asking the right questions and sparking more powerful ideas. The concept underlying "brainsteering" is to encourage users to focus, to look into an idea deeply rather than ricocheting around, brainstorming-style. The Coynes present a number of real and proposed business cases, including successes like Forever Stamps and Jiffy Lube. Their logical thinking exercises will help readers to maximize their ideation skills, both by systematically exploring every possible nook and cranny of an issue to find new ideas, and by systematically evaluating and honing the results. (Mar.)
    (c) Copyright PWxyz, LLC. All rights reserved.

    Review
    "The authors pepper their narrative with [...] idea-sparkers, with an appendix that is worth the cover price… [I]f the book evokes a few creative ideas, it will have done good service." (Kirkus Reviews )

    "[The Coynes'] logical thinking exercises will help readers to maximize their ideation skills, both by systematically exploring every possible nook and cranny of an issue to find new ideas, and by systematically evaluating and honing the results." (Publishers Weekly )

    About the Author

    Kevin P. Coyne is a senior teaching professor at the Goizueta Business School at Emory University and a former senior partner and leader of the worldwide strategy practice at McKinsey & Company.

    Shawn T. Coyne is a management consultant with twenty-five years of experience in strategy, marketing, and organizational leadership at Procter & Gamble, McKinsey & Company, and other leading firms.

    Kevin and Shawn are the managing directors of The Coyne Partnership, a boutique consulting firm serving senior executives and boards of directors in both the private and public sectors. Their articles have appeared in the Harvard Business Review, McKinsey Quarterly, Sloan Management Review, and on BusinessWeek.com, and they have been featured throughout the media, including the Wall Street Journal, New York Times, BusinessWeek, CNBC, NPR, and Fox Business News.

    Customer Reviews

    Most helpful customer reviews

    5 of 5 people found the following review helpful.
    5Great book- wish I'd known this stuff sooner
    By Lauren
    Great book. Heard about it on Gabe Wisdom's talk show as I was driving home from work last week, and now that I've read it I wish I'd known this stuff sooner. After wasting way too much time in corporate brainstorming sessions over the past 20 years, I can relate to all the problems they describe, and their new approach makes perfect sense. Also like the fact that they offer so many tips on how to think up new ideas even if I'm working by myself. Two favorite sections are Part I about "asking the right questions" and Part IV about "how to create your own billion-dollar idea". And there's tons of examples -- favorite one was the Harvard swimmer who first invented the dolphin kick and went from freshman squad nobody to Olympic gold medal winner.

    4 of 4 people found the following review helpful.
    5How to come up with new and better ideas all day, every day, and even on demand?
    By Robert Morris

    Kevin Coyne and Shawn Coyne respond to that question by providing in this volume an abundance of valuable information, insights, caveats, and recommendations that quickly identify the "what" and then focus intensively on the "why" and "how" of what they characterize as "a better approach to breakthrough ideas." Heaven knows there are dozens (hundreds? thousands?) of books already in print that make the same claim. My own opinion is that the Coynes' approach is comprehensive, cohesive, and cost-effective...and one of the best I have as yet encountered.

    Their approach is research- and results-driven, based on two core principles: (1) "If you ask the right questions, answers and good ideas soon follow" and (2) "The right process for consistently generating breakthrough ideas looks very different from what [most people have] probably been taught." In other words, asking the right questions and following the right process will "steer" the brain to the right answers.

    It is worth noting that the material provided is based on revelations generated by more than 200 McKinsey client projects, refined further by other real-world applications of insights and practices. The Coynes come across to me as being diehard pragmatists who are determined to share everything they have learned about establishing and then sustaining a process by which to generate new and better ideas all day, every day, and even on demand.

    The exemplary breakthroughs they cite include easily portable personal computers (How to create one that fits into an overhead bin on an airplane?), direct sales of personal computers (How to by-pass costs and complications of the retail channel?), and large-scale "category killer" stores (Can hardware and office supplies be sold the same way Toys R Us sells its merchandise?) The visionary founders and co-founders of the most successful start-ups (e.g. Apple, Google, Facebook) all claim that they knew which questions to ask, how to answer them, and then how to apply effectively what the answers revealed.

    The Coynes organize their material within four Parts: First, they explain how to know what the right questions are and how/where to answer them; next, they explain how to maximize what they call "personal ideation skills" such as MECE (see Pages 72-73) and using analysis to identify anomalies; then they explain how to "lead others to great ideas"; and finally, in Chapter 10, they explain how to develop "your own billion-dollar idea." They identify and then discuss four principles that can help to guide and inform the development of a breakthrough idea, whatever its monetary value proves to be.

    Along the way, the Coynes explain what differentiates the Brainsteering approach from any others. For example, they note that it "exploits two tendencies that cause most people to miss certain kinds of insights. The first tendency is to be biased toward believing that any well-functioning process doesn't bear questioning...The second tendency is to simplify a complex world through norms and averages. People's lives are complicated. In fact, every element of their lives seems complicated."

    I think the Coynes were shrewd when they decided to frame their material within a series of questions that serve two separate but related and especially important purposes: They stimulate, indeed require disciplined thinking by their reader and thus encourage the reader to interact with the material; also, the questions serve as examples of the kinds of questions - and sequences of questions - that must be asked and then answered, not only about how to generate breakthrough ideas but also about a book such as this that claims to offer a better process to do that.

    4 of 4 people found the following review helpful.
    5Intellectual Candy
    By kupbar
    A book showing how to do something needs to have two things: ideas that really work and a style that interests and intrigues. Brainsteering has both of these characteristics. The authors' step-by-step processes are sound and will stimulate a wide range of great ideas. Their writing style is fun to read, exciting at points. Their stories illuminate the concepts and make them sound like something most readers could do. They present good and practical ideas in a way that's easy to absorb. I'm looking forward to trying some of this out.

    Recovering From Information Overload

    Always-on, multitasking work environments are killing productivity, dampening creativity, and making us unhappy.

    The importance of reserving chunks of time for reflection, and the difficulty of doing so, have been themes in management writing for decades. Look no further than Peter Drucker's 1967 classic, The Effective Executive,1 which emphasized that "most of the tasks of the executive require, for minimum effectiveness, a fairly large quantum of time." Drucker's solutions for fragmented executives—reserve large blocks of time on your calendar, don't answer the phone, and return calls in short bursts once or twice a day—sound remarkably like the ones offered up by today's time- and information-management experts.2

    Yet they are devilishly difficult to implement, and getting more so all the time. Every challenge recounted by Drucker in 1967 remains today: an unceasing rhythm of daily meetings, a relentless expectation of travel to connect with customers and far-flung reaches of the organization, an inordinate number of opportunities to represent the company at dinners and events. Add to these challenges a torrent of e-mail, huge volumes of other information, and an expanding variety of means—from the ever-present telephone to blogs, tweets, and social networks—through which executives can connect with their organizations and customers, and you have a recipe for exhaustion. Many senior executives literally have two overlapping workdays: the one that is formally programmed in their diaries and the one "before, after, and in-between," when they disjointedly attempt to grab spare moments with their laptops or smart phones, multitasking in a vain effort to keep pace with the information flowing toward them.

    Better solutions exist, and they aren't rocket science.3 What we hope to do in this article is help executives, and their organizations, by reminding them of three simple things. First, multitasking is a terrible coping mechanism. A body of scientific evidence demonstrates fairly conclusively that multitasking makes human beings less productive, less creative, and less able to make good decisions. If we want to be effective leaders, we need to stop.

    Second, addressing information overload requires enormous self-discipline. A little like recovering addicts, senior executives must labor each day to keep themselves on track by applying timeless yet powerful guidelines: find time to focus, filter out the unimportant, forget about work every now and then. The holy grail, of course, is to retain the benefits of connectivity without letting it distract us too much.

    Third, since senior executives' behavior sets the tone for the organization, they have a duty to set a better example. The widespread availability of powerful communications technologies means employees now share many of the time- and attention-management challenges of their leaders. The whole organization's productivity can now be affected by information overload, and no single person or group can address it in isolation. Resetting the culture to healthier norms is a critical new responsibility for 21st-century executives.

    The perils of multitasking

    We tend to believe that by doing several things at the same time we can better handle the information rushing toward us and get more done. What's more, multitasking—interrupting one task with another—can sometimes be fun. Each vibration of our favorite high-tech e-mail device carries the promise of potential rewards. Checking it may provide a welcome distraction from more difficult and challenging tasks. It helps us feel, at least briefly, that we've accomplished something—even if only pruning our e-mail in-boxes. Unfortunately, current research indicates the opposite: multitasking unequivocally damages productivity.

    It slows us down

    The root of the problem is that our brain is best designed to focus on one task at a time. When we switch between tasks, especially complex ones, we become startlingly less efficient: in a recent study, for example, participants who completed tasks in parallel took up to 30 percent longer and made twice as many errors as those who completed the same tasks in sequence. The delay comes from the fact that our brains can't successfully tell us to perform two actions concurrently.4 When we switch tasks, our brains must choose to do so, turn off the cognitive rules for the old task, and turn on the rules for the new one. This takes time, which reduces productivity, particularly for heavy multitaskers—who, it seems, take even longer to switch between tasks than occasional multitaskers.5

    In practice, most of us would probably acknowledge that multitasking lets us quickly cross some of the simpler items off our to-do lists. But it rarely helps us solve the toughest problems we're working on. More often than not, it's procrastination in disguise.

    It hampers creativity

    One might think that constant exposure to new information at least makes us more creative. Here again, the opposite seems to be true. Teresa Amabile and her colleagues at the Harvard Business School evaluated the daily work patterns of more than 9,000 individuals working on projects that required creativity and innovation. They found that the likelihood of creative thinking is higher when people focus on one activity for a significant part of the day and collaborate with just one other person. Conversely, when people have highly fragmented days—with many activities, meetings, and discussions in groups—their creative thinking decreases significantly.6

    These findings also make intuitive sense. Creative problem solving typically requires us to hold several thoughts at once "in memory," so we can sense connections we hadn't seen previously and forge new ideas. When we bounce around quickly from thought to thought, we know we're less likely to make those crucial connections.

    It makes us anxious and it's addictive

    In laboratory settings, researchers have found that subjects asked to multitask show higher levels of stress hormones.7 A survey of managers conducted by Reuters revealed that two-thirds of respondents believed that information overload had lessened job satisfaction and damaged their personal relationships. One-third even thought it had damaged their health.8

    Nonetheless, evidence is emerging that humans can become quite addicted to multitasking. Edward Hallowell and John Ratey from Harvard, for instance, have written about people for whom feeling connected provides something like a "dopamine squirt"—the neural effects follow the same pathways used by addictive drugs.9 This effect is familiar too: who hasn't struggled against the urge to check the smart phone when it vibrates, even when we're in the middle of doing something else?

    Coping with the deluge

    So if multitasking isn't the answer, what is? In our conversations with CEOs and other executives trying to cope, we heard repeatedly about some fairly basic strategies that aren't very different in spirit from the ones Drucker described more than 40 years ago: some combination of focusing, filtering, and forgetting. The challenge for these executives, and all of us, is that executing such strategies in an always-on environment is harder than it was when Drucker was writing. It requires a tremendous amount of self-discipline, and we can't do it alone: in our teams and across the whole organization, we need to establish a set of norms that support a more productive way of working.

    Focus

    The calendars of CEOs and other senior executives are often booked back-to-back all day, sometimes in 15-minute increments. Gary Loveman, CEO of Harrah's Entertainment, describes the implication: "You have to guard against the danger of overeating at an interesting intellectual buffet. I often need to cover a lot of functional terrain over the course of a day, but I'm careful not to be too light on deserving topics and to make the time to get to meaningful depth on the most important ones."10 Digital information overload compounds the peril of "overeating" by flooding leaders with a variety of questions and topics that frequently could be addressed by others, thereby distracting those leaders from the thorny, unpleasant, and high-stakes problems where they are most needed.

    Many executives respond through the old strategy of creating "alone time." Applied Materials CEO Mike Splinter, for example, finds time between 6:30 and 8:00 AM; Dame Christine Beasley, England's chief nursing officer, uses her traveling time; Brent Assink, executive director of the San Francisco Symphony, schedules any time he can find in the middle of the day. Bill Gross, chief investment officer at Pacific Investment Management Company (PIMCO), takes an extreme approach: "I don't answer or look at any e-mails I don't want to. I don't have a cell phone; I don't have a BlackBerry. My motto is, 'I don't want to be connected; I want to be disconnected.'"11

    None of this can work, says Assink, unless the management team knows it must keep moving throughout the day without rapid-fire input from the top. Assink has been explicit with his staff: "If they want an immediate response, it will have to be a phone call. If they send an e-mail they will get a response at the end of the day."

    What about the relentless barrage of information that pours in? Managing it may be as simple—and difficult—as switching off the input. Shut down e-mail, close Web browsers, have phone calls go automatically to voice mail, and let your assistant and team know that you are in a focused working session. Christine Beasley says, "If you're really addicted and can't be trusted not to check the BlackBerry when it's in your pocket or bag, you just have to leave it behind."

    Filter

    Of course, turning everything off just means that your inbox will be overflowing when you reconnect. And there's a danger of throwing out the baby with the bathwater: no one wants to lose the ability to stay in touch easily with the organization, customers, and other stakeholders or to "give a short and direct answer to quick questions," as Mike Splinter puts it, adding that "you don't want to be the blockade in the business cycle."

    A good filtering strategy, therefore, is critical. It starts with giving up the fiction that leaders need to be on top of everything, which has taken hold as information of all types has become more readily and continuously accessible. Rather, plain old delegation is as important with information as it always has been with tasks. As Gary Loveman says, "Keeping current on what is going on takes a lot of my time, but I only engage in depth personally on those issues that are best served by my involvement and are critical to the company's performance, either now or in the future." Christine Beasley has a similar view: "You cannot read everything. The things that I do look at are the things that matter, the things I really need to make a decision on."

    Some leaders now explicitly refuse to respond to any e-mail on which they are only cc'd, to filter out issues that others think require no action from them. You also may need to educate the people around you about what deserves to fill your limited time. Gary Loveman explains that "there is a substantial ante to get my time—you need to do some work, provide me with data and insight, let me read something in advance. That simple bar keeps a lot of the items of lesser importance off my calendar."

    Winning respect for your in-box, though, won't get you all the way there. Establishing an effective, day-to-day information-management support structure has become a critical success factor for senior executives. This structure may be elaborate, including a chief of staff for the CEO of a major organization, or as simple as a capable assistant who "is fantastic at managing some of my e-mail traffic, weeding out the things that I don't really need to see," as Christine Beasley says.

    Forget

    It bears repeating that giving our brains downtime to process new intellectual input is a critical element of learning and thinking creatively—not just according to researchers, but also to corporate leaders. Bill Gross says, "Some of my best ideas literally come from standing on my head doing yoga. After about 15 minutes of yoga, all of a sudden some significant light bulbs seem to turn on."12 Mike Splinter also sees value in physical exercise: "I find that just staying in shape helps me be more mentally crisp every day."

    Getting outside helps—recent research has found that people learn significantly better after a walk in nature compared with a walk in the city.13 And emotional interaction with other people can also divert attention from conscious intellectual processing, a good step toward engaging the unconscious. Sheri McCoy, chairman of Johnson & Johnson Pharmaceuticals Group, explains, "When I go home at night, I like to just say, 'OK, I'm not looking at my BlackBerry for two or three hours.' I'm just relaxing. I feel like that lets me conserve my energy and focus later." Christine Beasley has rules that protect her personal time at weekends, reasoning that "people can always get hold of me if it's urgent."

    A responsibility to hit the 'reset button'

    All this was easier back in Drucker's day, when we couldn't talk on the phone during the daily commute, we didn't bring multiple connectivity-enabling devices with us on vacation, and planes didn't have Wi-Fi. The strategies of focusing, filtering, and forgetting are also tougher to implement now because of the norms that have developed around 21st-century teamwork. Most leaders today would feel guilty if they didn't respond to an e-mail within 24 hours. Few feel comfortable "hiding" from their teams during the day (or on the drive home or during the evening) in order to focus more intently on the most complex issues. And there is the personal satisfaction that comes from feeling needed.

    But there is a business responsibility to reset these norms, given how markedly information overload decreases the quality of learning and decision making. Multitasking is not heroic; it's counterproductive. As the technological capacity for the transmission and storage of information continues to expand and quicken, the cognitive pressures on us will only increase. We are at risk of moving toward an ever less thoughtful and creative professional reality unless we stop now to redesign our working norms.

    First, we need to acknowledge and reevaluate the mind-sets that attach us to our current patterns of behavior. We have to admit, for example, that we do feel satisfied when we can respond quickly to requests and that doing so somewhat validates our desire to feel so necessary to the business that we rarely switch off. There's nothing wrong with these feelings, but we need to consider them alongside their measurable cost to our long-term effectiveness. No one would argue that burning up all of a company's resources is a good strategy for long-term success, and that is equally true of its leaders and their mental resources.

    Second, leaders need to become more ruthless than ever about stepping back from all but the areas that they alone must address. There's some effort involved in choosing which areas to delegate; it takes skill in coaching others to handle tasks effectively and clarity of expectations on both sides. But with those things in place, a more mindful division of labor creates more time for leaders' focused reflections on the most critical issues and also develops a stronger bench of talent.

    Finally, to truly make this approach work, leaders have to redesign working norms together with their teams. One person, even a CEO, cannot do that alone—who wants to be the sole person on the senior team who leaves the smart phone behind when he or she goes on vacation? Absent some explicit discussion, that kind of action could be taken as a lack of commitment to the business, not as a productive attempt to disconnect and recharge. So we encourage leaders and their teams to discuss openly how they choose to focus, filter, and forget; how they support each other in creating the necessary time and space to perform at their best; and how they enable others, throughout the organization, to do the same. This conversation can also be the right starting point for a deeper look at the information and technology needs of all the company's knowledge workers. (For more on how to tackle this thorny problem, see "Rethinking knowledge work: A strategic approach.")

    The benefits of lightening the burden of information overload—in productivity, creativity, morale, and business results—will more than justify the effort. And the more we appreciate the benefits, the easier it will be to make new habits stick.

    About the Authors:-
    Derek Dean is an alumnus of McKinsey's San Francisco office, where he was a director; Caroline Webb is a principal in the London office.

    The authors would like to acknowledge the important contributions that Matthias Birk, a consultant in the Berlin office, made to this article through his research on cognitive sciences.

    Thanks to McKinsey & Company

    How CFOs Can Keep Strategic Decisions On Track

    The finance chief is often well placed to guard against common decision-making biases.

    CFOs are often the most disinterested parties to such decisions. They seldom chair the relevant meetings, are often highly critical of decision-making dynamics and biases, and can cite examples of past successes and failures. With the technical support of the finance staff, they can also provide hard data to counter the inherent biases of other executives. Yet only a minority of CFOs are fully leveraging their position to change the dynamics of decision making—to promote institutional learning in the interest of better strategic decisions.

    To figure out why that might be so—and to look for techniques CFOs can use when playing this critical role—McKinsey's Bill Huyett and Tim Koller recently talked with Olivier Sibony, a director in McKinsey's Paris office and a coauthor of numerous articles on the subject of cognitive biases in business decision making.

    The Quarterly: Why aren't CFOs better at using their position to improve the quality of decision making?

    Olivier Sibony: CFOs often struggle with a confusion of roles. They're expected to be both the impartial challenger and an important player in getting things done. They advise the CEO on M&A, but they also drive the discussions with the targets. They have to make sure that the company has the right financing structure, and they're also supposed to negotiate with the banks. Resolving that tension between roles is where the CFO can do a better job.

    The way to do that, I would argue, is for the CFO to view herself not only as the impartial, cool-headed adviser of the CEO, nor just as the executor of the mechanics of a decision, but primarily as the owner of a safe and sound decision-making process—which is a role that no one else plays. And if there is one thing that we take away from the study of behavioral economics, it is that this role is vital. You need to have better processes to make decisions, because people can't make better decisions alone, but good processes can help if they build on the insights and judgment of multiple people. I'm not saying the CFO is the only person who can build such a process, but she's in a uniquely good position to build one.

    The Quarterly: Why does process matter so much?

    Olivier Sibony: Process matters in decision making because we can't learn from our mistakes the way we think we can. Cognitive biases are everywhere, we all have them, and we pretty much know what they are. We know we're overconfident, we know we're susceptible to anchoring, we know we underresearch things that disprove our hypotheses and overresearch things that confirm them, and so on. But these biases are hardwired, and there's not much we can do about them as individuals. So we can will ourselves to not be overconfident until we're blue in the face; we'll still be overconfident.

    You can test this yourself. Ask a group of people if they think they are above-average drivers. In the United States, nine out of ten will tell you they're in the top 50 percent. Now, they all laugh when they get that feedback, but you ask them to do it again and you get the same results. They all think that it's all those guys around them who are overestimating themselves.

    It's the same in business. We may agree with the proposition that businesspeople in general are overconfident. We may even accept that we've been overconfident ourselves in our past decisions, but we always think that this time will be different. Here I'm using the example of overconfidence because it's easy to demonstrate, but the same is true of other biases. Biases are very deeply ingrained and impervious to feedback.

    The Quarterly: So you depend on a multiperson process to control bias?

    Olivier Sibony: Exactly. You build a multiperson process where your biases are going to be challenged by somebody else's perspective. And as CFO, if you manage this process, your goal is to ensure that the biases of individuals weigh less in the final decision than the things that should weigh more—like facts. In other words, you can't improve your own decision making in a systematic way, but you can do a lot to improve your organization's decision making through a good process, and that's what CFOs are uniquely well placed to do.

    The Quarterly: It sounds like you're drawing a contrast between the processes of human interaction and decision making and the more obvious technical systems that the CFO runs—for example, around valuation procedures and merger-management procedures.

    Olivier Sibony: There is a contrast and there is also a synergy. The contrast is that CFOs already rely on processes to manage, as you point out, the technical systems. But it's very easy for people to subvert technical systems to get the answer they want. The typical example of this in M&A is when deal advocates work backward from the price demanded to determine how much in synergies the deal would require to make sense.

    What people spend a lot less time thinking about are the interpersonal interactions—the processes of debate—that ensure high-quality decision making. And that is where the synergy lies for CFOs: if you already own the technical processes, you can build on them to improve the quality of debate, for instance by adjusting the agenda, attendees, and protocols of key decision meetings.

    The Quarterly: What are some examples of process changes that companies can use?

    Olivier Sibony: Let me start with an analogy. Imagine walking into a courtroom where the trial consists of a prosecutor presenting PowerPoint slides. In 20 pretty compelling charts, he demonstrates why the defendant is guilty. The judge then challenges some of the facts of the presentation, but the prosecutor has a good answer to every objection. So the judge decides, and the accused man is sentenced.

    That wouldn't be due process, right? So if you would find this process shocking in a courtroom, why is it acceptable when you make an investment decision? Now of course, this is an oversimplification, but this process is essentially the one most companies follow to make a decision. They have a team arguing only one side of the case. The team has a choice of what points it wants to make and what way it wants to make them. And it falls to the final decision maker to be both the challenger and the ultimate judge. Building a good decision-making process is largely ensuring that these flaws don't happen.

    The Quarterly: How do you build a process that has these features?

    Olivier Sibony: My coauthor, Dan Lovallo, and I did some quantitative research on this.2 We asked executives to tell us about their investment decisions—which ones worked and which ones didn't and what practices made the difference—and we reviewed over a thousand of them.

    One of the practices that we found made the most difference was having explicit discussions of the irreducible uncertainties in the decision. Notice the difference between that kind of conversation and the one elicited by the typical slide in a PowerPoint presentation, with the title "Risks we identified and risk-mitigating actions we will take." That's the way you frame it if you want to look like a confident presenter and want the meeting to go smoothly: you suppress the discussion of uncertainties. Instead, you should be emphasizing them to make sure you have a debate about them.

    Executives reported some other things making a big difference—for example, whether the discussion included points of view contradictory to those of the person making the final decision. In other words, did anyone voice a point of view that was contrary to what the CEO wanted to hear or to what they thought he wanted to hear? And did the due-diligence team actually seek out information that would contradict the investment hypothesis, as opposed to simply building a case for it? These types of things can be hardwired into the process to make sure that they happen, and some companies do this routinely.

    The Quarterly: Let's talk about specific techniques. Take M&A as an example—does it help to assign people ahead of time to argue either side of a decision, regardless of what they actually believe?

    Olivier Sibony: When evaluating an acquisition, there is of course the issue of impartiality—as Warren Buffett said, relying on one investment bank to tell you if you should do a deal is like asking your barber if you need a haircut. And there is the more subtle issue of motivated error: even people who sincerely believe that their assessments are objective are in fact often biased in the direction of their own interests.

    So in this case, it can help in some settings to field two deal teams, at least at some stage in the process: one to argue for the deal and a second to argue against it. In other settings, if companies find that people avoid the direct confrontation that two deal teams imply, managers might prefer to ask the same people to argue both sides of the case or to make the uncertainties explicit. There are many different techniques to foster debate.

    The Quarterly: What other techniques come to mind as effective in M&A situations?

    Olivier Sibony: Another technique we find useful addresses the overconfidence bias. It is the "premortem," invented by psychologist Gary Klein, whom we interviewed in 2010.3 In a premortem, you ask people to project themselves into the future and to assume that a deal has failed—not to imagine that it could fail, but to assume it already has. Then you ask them to write down, individually and in silence, the three to five reasons why it failed. And that forces people to speak up about the risks and the uncertainties that they've kept to themselves for fear of appearing pessimistic, uncommitted to the success of the proposal, or disloyal to the rest of the deal team.

    A third technique is, at some point in the process, to write a memo explaining why the CEO should not do a deal, including the things the CEO would need to believe to not do it. Because by the time companies get to the actual decision meeting, everybody has forgotten about those reasons. So unless they've actually been recorded, no one's left to argue the negative case. Everyone's framing the positive case, and all the reasons you used to be worried about the deal have disappeared.

    Here's an example: when one company did a retrospective analysis of a deal that went wrong, it looked at a series of memos from the deal team to the investment committee, two months, one month, and two weeks before the deal was actually approved. The firm found that the top three things on a long list of worries in the first memo fell to the bottom of the list in the next memo and in the final memo had completely disappeared. Apparently, those concerns had been resolved to the team's full satisfaction. But when the deal was done and the acquirers prepared to take possession of the company, guess what were the top priorities on their agenda: the same three things that had been swept under the rug in order to do the deal in the first place. This illustrates the dynamics of deal frenzy: when you sense that everybody around you wants to do a deal, you're very prone to suppressing evidence that might lead you to not do it.

    Another technique we've used is to develop a taxonomy of deals and a checklist for each type of deal. Companies that do a lot of deals, especially private-equity companies, tend to function by association and by pattern recognition and to look at a deal and say, "Oh, this one is just like this or that previous deal." But usually the deals they're reminded of are not the failures but the great successes. And once they latch onto that pattern recognition, it's very difficult to see the broad range of things that actually can make the analogy irrelevant.

    What you can do to remedy this bias is to use techniques such as multiple structured analogies or reference class forecasting.4 The names sound complicated, but the techniques are actually simple to apply. Essentially, they are ways of making sure that you look at a range of examples, not just one, and to explicitly analyze what makes those examples relevant and what could make them less relevant.

    If you do enough deals so that you can actually recognize the different patterns, the way to use this technique is to identify the different types of deals and the things that matter for each. For instance, the things that we need to check in a deal where we acquire complementary product lines are not the same ones that we needto check for when we are doing a cross-selling kind of deal or a geographic-expansion kind of deal. So we will have different deal processes and different due-diligence checklists.

    The Quarterly: What advice do you have for CFOs who want to incorporate these techniques into their decision-making processes?

    Olivier Sibony: The crucial thing to keep in mind is that there isn't one magic technique that will strip out all biases. This is more about putting in place a process that includes techniques to correct for the biases to which you've been susceptible in the past: probably not 20 techniques but 2 or 3 that you can use to help you avoid those biases in the future.

    And once you put a process in place, it's only valuable if it's used consistently. First, because you're going to learn and become better at using the process. Second, because it is precisely when you're about to make a big mistake that you're likely to have made an exception. The temptation, when you have a decision-making process, is always to say that for a really exceptional, difficult decision, we're going to bypass the process, since the decision is an unusual one.

    That's precisely what you want to avoid. That's why you need a process and the habit of following it, not just a tool kit of practices that you use from time to time. That's why in areas where we don't tolerate failure, we have routines. If you fly an aircraft, you don't say, "The weather is really bad and we're already behind schedule, so let's skip the takeoff checklist." You say, "This is a flight like every other one, and we're going to use the checklist—that isn't negotiable."

    About the Authors:- Bill Huyett is a partner in McKinsey's Boston office, and Tim Koller is a partner in the New York office.

    Thanks to McKinsey & Company

    Building The Supply Chain Of The Future

    Getting there means ditching today's monolithic model in favor of splintered supply chains that dismantle complexity, and using manufacturing networks to hedge uncertainty.

    That future, spurred by a rising tide of global uncertainty and business complexity, is coming sooner than many companies expect. Some of the challenges (turbulent trade and capital flows, for example) represent perennial supply chain worries turbocharged by the recent downturn. Yet other shifts, such as those associated with the developing world's rising wealth and the emergence of credible suppliers from these markets, will have supply chain implications for decades to come. The bottom line for would-be architects of manufacturing and supply chain strategies is a greater risk of making key decisions that become uneconomic as a result of forces beyond your control.

    Against this backdrop, a few pioneering supply chain organizations are preparing themselves in two ways. First, they are "splintering" their traditional supply chains into smaller, nimbler ones better prepared to manage higher levels of complexity. Second, they are treating their supply chains as hedges against uncertainty by reconfiguring their manufacturing footprints to weather a range of potential outcomes. A look at how the leaders are preparing today offers insights for other companies hoping to get more from their supply chains in the years to come.

    Twin challenges

    The stakes couldn't be higher. "In our industry," says Jim Owens, the former chairman and CEO of construction-equipment maker Caterpillar, "the competitor that's best at managing the supply chain is probably going be the most successful competitor over time. It's a condition of success."1 Yet the legacy supply chains of many global companies are ill-prepared for the new environment's growing uncertainty and complexity.

    A more uncertain world

    Fully 68 percent of global executives responding to a recent McKinsey survey said that supply chain risk will increase in the coming five years.2 And no wonder: the financial crisis of 2008 dramatically amplified perennial sources of supply chain uncertainty—notably the trajectory of trade and capital flows, as well as currency values—even as the crisis sparked broader worries about the stability of the financial system and the depth and duration of the resulting recession. While many of these sources of uncertainty persist, it's important to recognize that new, long-term shifts in the global economy will continue to pressure supply chains long after more robust growth returns.

    The increasing importance of emerging markets tops the list of these uncertainties. Economic growth there will boost global energy consumption in the coming decade by about one-third. Meanwhile, the voracious appetite of China and other developing countries for such resources as iron ore and agricultural commodities is boosting global prices and making it trickier to configure supply chain assets. Worries about the environment are growing, too, along with uncertainty over the scope and direction of environmental regulation.

    These long-term trends have knock-on effects that reinforce still other sources of uncertainty. Growth in developing countries contributes to volatility in global currency markets and to protectionist sentiment in the developed world, for example. What's more, different growth rates across various emerging markets mean that rising labor costs can quickly change the relative attractiveness of manufacturing locations. This past summer in China, for example, labor disputes—and a spate of worker suicides—contributed to overnight wage increases of 20 percent or more in some Chinese cities. Bangladesh, Cambodia, and Vietnam experienced similar wage-related strikes and walkouts.3 Finally, as companies in developing markets increasingly become credible suppliers, deciding which low-cost market to source from becomes more difficult.

    Rising complexity

    Manufacturing and supply chain planners must also deal with rising complexity. For many companies, this need means working harder to meet their customers' increasingly diverse requirements. Mobile-phone makers, for example, introduced 900 more varieties of handsets in 2009 than they did in 2000. Proliferation also affects mature product categories: the number of variants in baked goods, beverages, cereal, and confectionery, for instance, all rose more than 25 percent a year between 2004 and 2006, and the number of SKUs4 at some large North American grocers exceeded 100,000 in 2009.

    ANOTHER UNCERTAINTY: Protectionism could change the economics of a supply chain at the stroke of a pen. Our research suggests, for example, that the total landed cost of making assembled mechanical products such as washing machines in a given low-cost country could plausibly swing up to 20 percent given different tariff scenarios.

    Meanwhile, globalization brings complexities as rising incomes in developing countries make them extremely desirable as markets, not just manufacturing hubs. Efficient distribution in emerging markets requires creativity, since retail formats typically range from modern hypermarkets to subscale mom-and-pop stores. In Brazil, for example, Nestlé is experimenting with the use of supermarket barges to sell directly to low-income customers along two tributaries of the Amazon River.5

    Meeting the challenge

    In such a world, the idea that companies can optimize their supply chains once—and for all circumstances and customers—is a fantasy. Recognizing this, a few forward-looking companies are preparing in two ways. First, they are splintering their traditional monolithic supply chains into smaller and more flexible ones. While these new supply chains may rely on the same assets and network resources as the old, they use information very differently—helping companies to embrace complexity while better serving customers.

    Second, leading companies treat their supply chains as dynamic hedges against uncertainty by actively and regularly examining—even reconfiguring—their broader supply networks with an eye toward economic conditions five or ten years ahead. In doing so, these companies are building diverse and more resilient portfolios of supply chain assets that will be better suited to thrive in a more uncertain world.

    From one to many

    Splintering monolithic supply chains into smaller, nimbler ones can help tame complexity, save money, and serve customers better. Let's look at an example.

    Splintering supply chains: A case study

    A US-based consumer durables manufacturer was losing ground to competitors because of problems with its legacy supply chain. Years before, the company—like many global manufacturers—had sent the lion's share of its production to China while maintaining a much smaller presence in North America to stay close to the majority of its customers. One legacy of the move: all of its plants, relying on a unified production-planning process, essentially manufactured the full range of its thousands of products and their many components.

    Now, however, increasingly volatile patterns of customer demand, coupled with product proliferation in the form of hundreds of new SKUs each year, were straining the company's supply chain to the point where forecasting- and service-related problems were dissatisfying key customers.

    In response, the company examined its portfolio of products and components along two dimensions: the volatility of demand for each SKU it sold and the overall volume of SKUs produced per week. Armed with the resulting matrix (Exhibit 1), the company began rethinking its supply chain configuration.


    Ultimately, the company decided to split its one-size-fits-all supply chain into four distinct splinters. For high-volume products with relatively stable demand (less than 10 percent of SKUs but representing the majority of revenues), the company kept the sourcing and production in China. Meanwhile, the facilities in North America became responsible for producing the rest of the company's SKUs, including high- and low-volume ones with volatile demand (assigned to the United States) and low-volume, low-demand-volatility SKUs (divided between the United States and Mexico). Ramping up production in a higher-cost country such as the United States made economic sense even for the low-volume products because the company could get them to market much faster, minimize lost sales, and keep inventories down for many low-volume SKUs. Moreover, the products tended to require more specialized manufacturing processes (in which the highly skilled US workforce excelled) and thus gave the company a chance to differentiate itself in a crowded market.

    However, the company didn't just reallocate production resources. In tandem, it changed its information and planning processes significantly. For the portfolio's most volatile SKUs (the ones now produced in the United States), the company no longer tried to predict customer demand at all, choosing instead to manufacture directly to customer orders. Meanwhile, managers at these US plants created a radically simplified forecasting process to account for the remaining products—those with low production runs but more stable demand.

    For overseas operations, the company continued to have its Chinese plants produce finished goods on the basis of long-run forecasts, as they had done before. The forecasts were now better, though, because planners were no longer trying to account in their models for the "noise" caused by the products with highly volatile demand.

    Together, the changes helped the company reduce its sourcing and manufacturing complexity and to lower its cost of goods sold by about 15 percent. Meanwhile, it improved its service levels and shortened lead times to three days, from an average of ten. Quality also improved across the company's full range of products.

    How many splinters?

    The first question for organizations exploring multiple supply chains is how many are needed. Answering it requires a close look at the way the supply chain assets that a company uses to manufacture and distribute its products matches up against the strategic aspirations it has for those products and their customers.

    This requirement seems obvious, but in practice most companies examine only the second half of the equation in a sophisticated way; they can, for example, readily identify which products they see as leaders on cost, service, innovation, or (most likely) some combination of these. Fewer companies seriously examine the operational trade-offs implicit in such choices, let alone make network decisions based on those trade-offs.

    Oftentimes, a good place to start is to analyze the volatility of customer demand for a given product line against historical production volumes and to compare the results against the total landed cost for different production locations. This information provides a rough sense of the speed-versus-cost trade-offs and can even suggest locations where supply chain splinters might ultimately be located. A global consumer-packaged-goods maker, for example, quickly saw that two-thirds of the demand associated with a key product line (about 40 percent of the company's product portfolio) could be moved from a higher-cost country to a lower-cost one without hurting customer service.

    Of course, companies must carefully check these broad-brush analyses against customer needs. The consumer goods company, for instance, found that packaging innovation was a differentiator for some of its products and thus configured a single production line in the new, lower-cost location to make packaging for several markets quickly. By contrast, in automotive and other assembly-based industries, we find that the customers' responsiveness and the complexity of individual products are important inputs that help determine where supply chains might be splintered.

    Second-order benefits

    While dividing a supply chain into splinters may seem complicated, in fact this approach allows companies to reduce complexity and manage it better because operational assets can be focused on tasks they're best equipped to handle. At the same time, the added visibility that a splintered approach offers into the guts of a supply chain helps senior managers more effectively employ traditional improvement tools that would have been too overwhelming to tackle before.

    After the consumer durables maker divided its supply chain into smaller ones, for example, it was able to use formerly impractical postponement approaches (producing closer in time to demand to keep holding costs low). The company's US plants now combined various SKUs into semifinished components that could quickly be assembled into products to meet customer orders (Exhibit 2). Indeed, the lower inventory costs this move generated partially offset the higher labor costs of the US factories.

    Likewise, the global consumer-packaged-goods maker found that after splintering its supply chain, it was more successful at applying lean-management techniques in its plants. Among the benefits: much faster changeover times in higher-cost production locations, enabling them to handle product-related complexity more effectively.

    Use your network as a hedge

    The advantages that multiple supply chains confer are most valuable if companies view them dynamically, with an eye toward the resiliency of the overall supply chain under a variety of circumstances. Will the various strands of a particular global supply network, for example, still make sense if China's currency appreciates by 20 percent, oil costs $90 a barrel, and shipping lanes have 25 percent excess capacity? It's critical for organizations to determine which of the many questions like these are right to ask and to invest energy in understanding the global trends underpinning them. Some companies are already thinking in this way. Nike, for example, long a leader in emerging-market production, manufactured more shoes in Vietnam than in China for the first time in 2010.6

    In fact, we believe that the ability of supply chains to withstand a variety of different scenarios could influence the profitability and even the viability of organizations in the not-too-distant future. In light of this, companies should design their portfolios of manufacturing and supplier networks to minimize the total landed-cost risk under different scenarios. The goal should be identifying a resilient manufacturing and sourcing footprint—even when it's not necessarily the lowest-cost one today. This approach calls for a significant mindset shift not just from operations leaders but also from CEOs and executives across the C-suite.

    At the consumer durables manufacturer, for example, senior executives worried that its reliance on China as a hub could become a liability if conditions changed quickly. Consequently, the company's senior team looked at its cost structure and how that might change over the next five to ten years under a range of global wage- and currency-rate conditions. They also considered how the company could be affected by factors such as swinging commodity prices and logistics costs.

    While China remained the most attractive manufacturing option in the short term, Mexico was preferable under several plausible scenarios.

    The company determined that while China remained the most attractive manufacturing option in the short term, the risks associated with wage inflation and currency-rate changes were real enough to make Mexico a preferable alternative under several plausible scenarios. Consequently, the company has begun quietly building its supplier base there in anticipation of ramping up its manufacturing presence so that it can quickly flex production between China and Mexico should conditions so dictate.

    Similarly, the global consumer-packaged-goods manufacturer is examining where dormant capacity in alternative low-cost countries might help it hedge against a range of labor cost, tariff, tax, and exchange-rate scenarios. The company is also factoring in unexpected supply disruptions, including fires, earthquakes, and labor-related strife.

    A North American industrial manufacturer chose to broaden its footprint in Brazil and Mexico to hedge against swings in foreign-exchange rates. In particular, the company invested in spare capacity to make several innovative, high-end components that it had formerly produced only in Europe and the United States because of the advanced machining and engineering required. The investment is helping the company hedge against currency swings by quickly transferring production of the components across its global network to match economic conditions. Moreover, the arrangement helps it better support its supply partners as they serve important growth markets.

    Making these kinds of moves isn't easy, of course, since any alterations to a company's supply chain have far-ranging implications throughout the organization. For starters, such changes require much more cooperation and information sharing across business units than many companies are accustomed to. Indeed, the organizational challenges are so significant that for many companies, a hands-on effort by the CEO and others across the C-suite is needed for success (for more, see "Is your top team undermining your supply chain?" on mckinseyquarterly.com).

    Nonetheless, the rewards are worthwhile. By creating more resilient and focused supply chains that can thrive amid heightened uncertainty and complexity, companies will gain significant advantages in the coming years.

    About the Authors:-
    Yogesh Malik and Brian Ruwadi are principals in McKinsey's Cleveland office; Alex Niemeyer is a director in the Miami office.

    Thanks to McKinsey & Company