Game of Cults email 5 of 45: The logical

 

The automatic door is logical. There are those who physically can’t open doors, and a machine can do it for them.

The next logical step is to get rid of the doorman.

Why pay someone to do something a machine can do more efficiently?

Here’s some more business logic.

Years ago, I used to do business with General Electric and a few other Fortune Fifty companies. They used to have accounts payable departments full of ladies who made sure the bills got paid.

Business logic took over. Automated workflows were utilized, and expensive local departments were shut down. The work was routed to cheaper overseas payment departments. Those US ladies lost their jobs.

Logic wins again…

Or did it?

In both cases we see that it’s logical to optimize costs, but doing so may sacrifice value creation.

Let’s look at both logical decisions through different lenses.

What door am I opening?

Is it the door to a hotel?

What experience does the building owner want those entering to have?

If we own a hotel, the doorman serves a broader purpose than just opening the door. He can give directions, hail a cab, chase away vagrants, but most of all, the doorman sets the tone for the hotel experience.

Is it possible that a doorman could attract higher room rates?

The same goes with the lady in accounting.

Over time, you could build a relationship with her and she would be your savior when you look to get your invoice paid.

When a cog got stuck, you could call her up and she would chase down what went wrong.

Did the delivery guy forget to sign something?

Was it miscategorized?

A call and some follow-up would result in bumps being smoothed out. At the very least, she creates the appearance that the issue is being handled.

Knowing you had Alice chasing down your payment made you feel like you had a connection. She could have been sitting on her ass in the break room eating cake with Bertha and gossiping about the guy in the mailroom, but that wasn’t what you thought when you got off the phone.

You thought she was bird-dogging the paperwork and getting you that money you needed for next week’s payroll.

In the outsource-verse, you feel helpless. You are getting the next operator and they all sound young and dumb like they just turned on a computer for the first time. You come away feeling you should call right back to see if the next minion will give you a different answer.

That ethos affects the service you provide. In my case, I began to feel like it wasn’t worth putting in the extra effort for a customer who couldn’t pay enough attention to pay for past services.

The reality is that, over time, the call center with optimized workflows is far more efficient, but as humans, we want to know that there’s another human being helping us with our problem, even if she’s just as stuck in it as we are.

Reason and logic can be your enemy.

The world we live in has more access to data than ever before. Access to data makes us logic biased. The answer must be in the data, and logic is the process to release the answer.

There are several flaws in this thinking.

The first is in my two examples, where logic is routinely applied, you repeatedly get the WRONG solution.

This is Dr. Akers’s idea, that a system designed to do the wrong thing will get more wrong over time.

Are we trying to run a low-cost hotel or a high-priced hotel?

If the objective is to be the premier hotel, we might remove the automatic door openers and hire a team of valets and doormen.

Are we trying to build a low overhead company?

Maybe we outsource everything but how we manage our suppliers. Keeping them happy and well fed gets better service to us and our customers.

We are in an age where there will be massive disruption, destruction, and creation from technology.

Without technological innovation, the golden age of content creation wouldn’t be unfolding right now.

The abundance of science and technology doesn’t mean logic is the way to all success. In fact, logical application of the wrong idea will lead to inevitable failure.

Logic confines our ability to see alternative solutions.

Logic reinforces limiting beliefs.

Logic constrains you to how the “industry does things.”

If I sound logical and back up my BS with statistics and facts, you fear questioning the premise. Rather than getting you to adopt my cult beliefs through faith-based strategies, I use logic. It can be far easier.

Here’s the illogic of science. The largest leaps forward have come from the application of creativity, not logic.

A scientist used imagination to challenge what we thought we understood, but had not proven wrong yet.

If you don’t believe me, here’s Richard Feynman in a video from 1964 where he shows that the best science comes from guessing.

Science is full of stories where illogical inspiration is the spark of discovery.

The story goes that Einstein formed his theory of relativity while experiencing a slight weightless when an elevator he was riding on suddenly moved.

It then took more than twenty years for other scientists to use logic and create the repeatable experiments that provided special and general relativity. Now the math is used in all GPS-based devices.

This email is to caution you on the application of the logic without first determining what the outcome you seek is.

Determine first what the desired outcome is. Is it to close a sale as fast and low cost as possible or to serve the highest lifetime value customers for your product?

This is where we turn things on their head. Rather than looking in the data for the logical reason, let’s use logic to create the experiment that proves or disproves our guess.

When I talk with people that have read Advantage, they often say the book makes sense. That it feels like the way they would like to do things, but not what they hear others are doing.

Trust your gut.

This season, we’ll be learning about illogical, irrational motivations, then using data and logic to test the emotional triggers and validate with data that we get results we seek.

Thank you for your attention,

Joe

One more thing…

How do we validate results in this business when the work today could take months or years to pay off and data can be sparse or dirty?

I suggest tracking a moving twelve-month and three-month moving average of sales, signups, or any other key indicator of success.

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We are in a business with huge swings related to seasons and launches. Without some method of filtering noise, we can end up chasing ghosts or missing slowly building trends.

Email 6 of 45