I've been reading an interesting book called Viral Loop, by Adam L. Penenberg. In a part of the book that doesn't seem to flow with the rest, but perhaps explains the rest of the book better than the rest of the book, Penenberg goes on a tangent about human nature and the societal and human need to be connected with others, and yet be special. It jives with some of my recent thinking about business and life. Here are a few questions to get you thinking:
Why does that 3-9 year old boy or girl that you've never met before come up to you at the park and yell, "Watch what I can do!"?
Who was the most popular girl or boy at your school? Why? Were they actually the most interesting person? Why did almost everyone want to be friends with them?
Why do lunchrooms/cafeterias in every circumstance have tables that are full and tables that are empty? Why do you sit at the table that you do (likely the full one in some circumstances, and the empty one in others)?
Are the most popular movie actors and actresses the best actors/actresses?
Why do some businesses with great ideas fail? And yet why do you know what a Snuggie is?
Why do you like certain people, companies, products, candidates?
Why do combat troops follow certain leaders into battle against all odds?
Why do some sports teams/athletes know they can win no matter what?
Why did you share that funny quip on facebook? Why did you talk about or share that app with your coworker or family member or friend?
Why have or haven't you used the incentive program from work that pays you money if you bring in a new employee?
Why is it hard to sell something you aren't excited about?
Why do you make more noise when someone walks in the room?
Why did you share your food at dinner stating, "This is delicious, try some!"? And why did you equally enthusiastically say, "Ugh! This is disgusting! Here, try some."?
Something awesome, new, wonderful, cool, exciting, hilarious, lame, stupid, thought provoking or touching, just isn't that great without someone to share it with.
Robert Kiyosaki (author of the Rich Dad, Poor Dad series) talks about having the necessary business skills to succeed and building a BI triangle. He also states that every person and family and business all have a BI triangle that needs to be in balance to be a success.
Penenberg talks about the need for a product to be good, sharable, and easy to use in order to become a viral loop. You have to want to share it, or you won't...even if they pay you.
This is why incentive programs don't work well, but social media does. What matters in the equation is me...or you. How you touch your customer, friend, family member is more important than you or your product--because it includes them.
People repost that stupid facebook message because it makes them feel important and connected. People don't talk to strangers because they don't want to feel stupid (or get mugged). People sit alone at a table because sitting alone makes them feel safer than the chance of being rejected at the big table. People love to watch Brad Pitt because they wish they could bring him home for dinner. They watch Steve Buscemi because he's a great actor and happens to be in the film (how many of you had to look up who Steve is?). That little kid wants you to watch him, because an awesome trick isn't awesome unless someone can see how awesome it is. And because if no one watches him, he'll have to admit that he's not that awesome. Nobody wants that.
They say people can judge if they like a person in less than 5 seconds. The first impression is the most important impression because nobody likes changing their minds--they are usually right (or else they'd inherently be wrong...and once again Nobody wants that!). I think people can judge a business, or a website in the same amount of time. Only the cyber world functions much faster than the real world. This is both a blessing and a curse. You can become a success much faster, or a failure much faster. But you don't have as much time to make adjustments.
So, how do you make your business or yourself a success? You feed the need others have to be special and feel connected (this is often called customer service). You make yourself popular. The only problem is that I don't know the answer to the question: why was that boy/girl in school popular?
I'm convinced I'm going to have to watch all those horrible 90's chick flicks about high school girls becoming popular to understand.
Other thought provoking questions why does Pareto's law hold true in so many instances? Is the reverse also true?
Friday, August 8, 2014
Tuesday, August 5, 2014
When People Become Commodities
Stay with me on this one. It all comes together in the end.
In 1856, the Chicago Board of Trade enacted a system for grading corn. This was the introduction to the world of Number 2 Field Corn (for a more technical definition of field corn--if you like that sort of thing--please see the bottom of this post). No. 2 field corn is what most Americans (by "American" in this case, I mean citizen of the United States of America, as Canadians have not fully gone corny and can still buy a Coca Cola made with sugar which they shouldn't be drinking either) eat the most of every day. Think of high fructose corn syrup, corn syrup, corn starch, modified corn starch, corn meal, corn chips, corn flakes etc. And that's just the list of ingredients and products where you will recognize that you are drinking or eating corn, there is also the list of things you won't recognize that are derivatives of corn: ethanol (yes, your car consumes No. 2 field corn too), ascorbic acid, baking powder, caramel color, calcium citrate, caramel, cellulose, citric acid, dextrin, maltodextrin, dextrose, lactic acid, malt, magnesium citrate, xylitol, and my personal favorite, xanthan gum, and the list goes on.
So what's the point? Before 1856, if you wanted corn you would buy a bag of it with a seal or mark on it so you knew what farm it came from. If you didn't like it, you could "vote with your feet" or wallet and buy from another farmer. But you personally would vet the corn yourself. Different growers had different types of corn and growing methods that may yield a better or worse product, but you would get to decide what you liked best. Farmers did their best to produce the best corn at the cheapest prices.
After 1856, all corn that met the standard "No. 2 field corn" was brought to the granary and stored in one large pile to be processed together. Farmers did their best to produce corn that met the minimum standards (No. 2 field corn). As much of it as possible without regard to quality beyond the minimum "No. 2". Corn was officially a commodity. As such it became interchangeable with other corn meeting the minimum standard. Nobody cares where a commodity comes from. If gold comes out of the ground in South America or Africa it is interchangeable as long as it has the same number of carats. If your field corn tastes better than your neighbors, nobody will ever know, because by the time it reaches your table as corn flakes it has been mixed with all the other corn of the same grade and processed beyond recognition. The bottom line with commodities is that increased quality beyond the minimum standard is meaningless.
Earlier this year, I became a commodity. I began working for a healthcare staffing company. When a healthcare professional calls in sick unexpectedly, or has a baby two weeks early, or has a vacation that no one can cover, they call my company. My company sends a "No. 2 field healthcare worker". They send me. Or someone who is interchangeable with me and the person who we are replacing. We are commodities. We have the necessary degree, vaccinations, license and time available. I know of a healthcare professional who could not find a job after graduating (likely because of ageism). After interviewing at several companies with no success after the interviews, she took a job at a staffing company and then filled in for many of the people who were hired in her stead. The kicker--the companies had to pay almost double for her services (commodity prices rise during a shortage).
The problem with becoming a commodity is that you are treated like one. Just like with corn, the people I work for aren't looking for the best replacement. They are looking for any viable replacement. Also, it doesn't really matter what quality of care they provide as long as it meets the minimum standards (nobody dies and nobody makes a scene). What is the number one question a prospective employer is asking? "What is your productivity percentage?" This is akin to asking a farmer, "what is your yield per acre?" It is assumed that the yield meets the minimum standard and no more thought is given to quality. Quality is no longer the goal, quantity is king.
The sad truth is that you can have the largest yield per acre and still be unprofitable. Likewise, you can have all your employees be highly "productive" as a healthcare facility and still be in the red. Productivity matters only so long as you are profitable. Not to mention that with healthcare we are talking about workers and patients who are people and not products like corn. It's a little scary what may happen in the future of healthcare quality, when productivity is the primary driver.
As a side note, if you are in a field where you are commoditized, you need to either differentiate or "de-commoditize" yourself by making yourself or your product special in some way so you can justify charging more for it. Or you need to out produce your competitors and become one of the biggest purveyors of your good or service so you have some control or ability to bargain over prices or control the supply line. If you are unable to get large enough, some industries have had some success establishing co-ops to gain collective bargaining power. If that term sounds familiar, it is because of the labor movement (commodity workers) establishing unions (co-op) demanding worker rights last century.
What is No. 2 Field Corn?
No. 2 field corn is a grade designation of the U.S. Department of Agriculture Federal Grain Inspection Service. It is corn that has a minimum test weight of 54 pounds per bushel at 15.5% moisture. It has a maximum limit of 3% broken kernels and foreign material and cannot exceed 5% total damaged kernels.
https://www.extension.org/pages/39109/what-is-no-2-field-corn#.U93EF0DOdP4
In 1856, the Chicago Board of Trade enacted a system for grading corn. This was the introduction to the world of Number 2 Field Corn (for a more technical definition of field corn--if you like that sort of thing--please see the bottom of this post). No. 2 field corn is what most Americans (by "American" in this case, I mean citizen of the United States of America, as Canadians have not fully gone corny and can still buy a Coca Cola made with sugar which they shouldn't be drinking either) eat the most of every day. Think of high fructose corn syrup, corn syrup, corn starch, modified corn starch, corn meal, corn chips, corn flakes etc. And that's just the list of ingredients and products where you will recognize that you are drinking or eating corn, there is also the list of things you won't recognize that are derivatives of corn: ethanol (yes, your car consumes No. 2 field corn too), ascorbic acid, baking powder, caramel color, calcium citrate, caramel, cellulose, citric acid, dextrin, maltodextrin, dextrose, lactic acid, malt, magnesium citrate, xylitol, and my personal favorite, xanthan gum, and the list goes on.
So what's the point? Before 1856, if you wanted corn you would buy a bag of it with a seal or mark on it so you knew what farm it came from. If you didn't like it, you could "vote with your feet" or wallet and buy from another farmer. But you personally would vet the corn yourself. Different growers had different types of corn and growing methods that may yield a better or worse product, but you would get to decide what you liked best. Farmers did their best to produce the best corn at the cheapest prices.
After 1856, all corn that met the standard "No. 2 field corn" was brought to the granary and stored in one large pile to be processed together. Farmers did their best to produce corn that met the minimum standards (No. 2 field corn). As much of it as possible without regard to quality beyond the minimum "No. 2". Corn was officially a commodity. As such it became interchangeable with other corn meeting the minimum standard. Nobody cares where a commodity comes from. If gold comes out of the ground in South America or Africa it is interchangeable as long as it has the same number of carats. If your field corn tastes better than your neighbors, nobody will ever know, because by the time it reaches your table as corn flakes it has been mixed with all the other corn of the same grade and processed beyond recognition. The bottom line with commodities is that increased quality beyond the minimum standard is meaningless.
Earlier this year, I became a commodity. I began working for a healthcare staffing company. When a healthcare professional calls in sick unexpectedly, or has a baby two weeks early, or has a vacation that no one can cover, they call my company. My company sends a "No. 2 field healthcare worker". They send me. Or someone who is interchangeable with me and the person who we are replacing. We are commodities. We have the necessary degree, vaccinations, license and time available. I know of a healthcare professional who could not find a job after graduating (likely because of ageism). After interviewing at several companies with no success after the interviews, she took a job at a staffing company and then filled in for many of the people who were hired in her stead. The kicker--the companies had to pay almost double for her services (commodity prices rise during a shortage).
The problem with becoming a commodity is that you are treated like one. Just like with corn, the people I work for aren't looking for the best replacement. They are looking for any viable replacement. Also, it doesn't really matter what quality of care they provide as long as it meets the minimum standards (nobody dies and nobody makes a scene). What is the number one question a prospective employer is asking? "What is your productivity percentage?" This is akin to asking a farmer, "what is your yield per acre?" It is assumed that the yield meets the minimum standard and no more thought is given to quality. Quality is no longer the goal, quantity is king.
The sad truth is that you can have the largest yield per acre and still be unprofitable. Likewise, you can have all your employees be highly "productive" as a healthcare facility and still be in the red. Productivity matters only so long as you are profitable. Not to mention that with healthcare we are talking about workers and patients who are people and not products like corn. It's a little scary what may happen in the future of healthcare quality, when productivity is the primary driver.
As a side note, if you are in a field where you are commoditized, you need to either differentiate or "de-commoditize" yourself by making yourself or your product special in some way so you can justify charging more for it. Or you need to out produce your competitors and become one of the biggest purveyors of your good or service so you have some control or ability to bargain over prices or control the supply line. If you are unable to get large enough, some industries have had some success establishing co-ops to gain collective bargaining power. If that term sounds familiar, it is because of the labor movement (commodity workers) establishing unions (co-op) demanding worker rights last century.
What is No. 2 Field Corn?
No. 2 field corn is a grade designation of the U.S. Department of Agriculture Federal Grain Inspection Service. It is corn that has a minimum test weight of 54 pounds per bushel at 15.5% moisture. It has a maximum limit of 3% broken kernels and foreign material and cannot exceed 5% total damaged kernels.
https://www.extension.org/pages/39109/what-is-no-2-field-corn#.U93EF0DOdP4
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