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Strategy vs Tactic

As received from Rahul Mehta

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Most Stanford students fail this challenge. Here’s what we can learn from their mistakes.

You’re a student in a Stanford class on entrepreneurship.

Your professor walks into the room, breaks the class into different teams, and gives each team five dollars in funding. Your goal is to make as much money as possible within two hours and then give a three-minute presentation to the class about what you achieved. 

If you’re a student in the class, what would you do? 

Typical answers range from using the five dollars to buy start-up materials for a makeshift car wash or lemonade stand, to buying a lottery ticket or putting the five dollars on red at the roulette table. 

But the teams that follow these typical paths tend to bring up the rear in the class. 

The teams that make the most money don’t use the five dollars at all. They realize the five dollars is a distracting, and essentially worthless, resource. 

So they ignore it. Instead, they go back to first principles and start from scratch. They reframe the problem more broadly as “What can we do to make money if we start with absolutely nothing?” One particularly successful team ended up making reservations at popular local restaurants and then selling the reservation times to those who wanted to skip the wait. These students generated an impressive few hundred dollars in just two hours. 

But the team that made the most money approached the problem differently. They realized that both the $5 funding and the 2-hour period weren’t the most valuable assets at their disposal. Rather, the most valuable resource was the three-minute presentation time they had in front of a captive Stanford class. They sold their three-minute slot to a company interested in recruiting Stanford students and walked away with $650. 

The five-dollar challenge illustrates the difference between tactics and strategy. Although the terms are often used interchangeably, they refer to different concepts. A strategy is a plan for achieving an objective. Tactics, in contrast, are the actions you undertake to implement the strategy. 

The Stanford students who bombed the $5 challenge fixated on a tactic — how to use the five dollars — and lost sight of the strategy. If we focus too closely on the tactic, we become dependent on it. “Tactics without strategy,” as Sun Tzu wrote in the Art of War, “are the noise before defeat.” 

Just because a $5 bill is sitting in front of you doesn’t mean it’s the right tool for the job. Tools, as Neil Gaiman reminds us, “can be the subtlest of traps.” When we’re blinded by tools, we stop seeing other possibilities in the peripheries. It’s only when you zoom out and determine the broader strategy that you can walk away from a flawed tactic. 

What is the $5 tactic in your own life? How can you ignore it and find the 2-hour window? Or even better, how do you find the most valuable three minutes in your arsenal? 

Once you move from the “what” to the “why” — once you frame the problem broadly in terms of what you’re trying to do instead of your favored solution — you’ll discover other possibilities lurking in plain sight.

‘- Anonymous

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Very interesting!

To me, there’s another way of looking at the problem and the winning solution.

While the goal is unambiguously identified and given to you, ask what are the inputs or resources made available to achieve the same.

Well, right away, the 5-dollars funding, a key resource in any project, sticks in the face.

Secondly, time as a resource – 2 hours are available for the enterprise for putting in all its efforts. This is also not difficult to guess.

The winner does something more – something, by no means obvious. He identifies even the 3-minute slot as a potential resource and figures out an imaginative way for use by the enterprise – sells it as a product!!

It seems you’re more than half way home if you are able to identify all the resources available for deployment and their potential for contributing to the goal at hand. Not a trivial task as not all resources stand out there holding placards nor do they list the ways how you could potentially use them.

Reminds me of a similar seemingly trivial problem, in an entirely different domain, of identifying the various stake-holders, visible and invisible, to be impacted/served by an IT system (or any project, for that matter); and how could they be possibly best served.

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Un-Applied Mechanics

Thaatha…’ (grandpa)

‘Yes, beta, tell me.’

‘You said Applied Mechanics is your favourite subject?’

‘Yes, beta, I just loved it, I still have a fancy. Used to score high in my Engineering. It lets you solve like magic, you’ll be amazed, problems involving rigid bodies, their motion, forces acting on them, With some assumptions, even elastic bodies…I forget…yes, now I remember…one of the first steps is to draw a free-body diagram where you separate out all interacting objects…sorry, I got carried away. Tell me what now?’

‘I’ve a problem here, can you help?’

‘Ah, bring them by cart loads…though a bit rusty after all these years, you know, when I get down to it, it’ll all come back. And, I’m sure, engineering has not changed since then…’

‘Thanks, thaatha, here it is:’

Well, this one did not come back to me…here I’m, managed to be out on an urgent errand. Not going back any soon!

End

PS: My analysis: The assembly on the right keeps the whole contraption in place keeping it from falling down. That done, the assembly on the left acts normally like a spring balance. I’ll go with 100. Willing to be corrected.

Problem Source: Bralington Chilufya

A software engineer was visiting his grandparents in the village.

On the following day, he took a round of the village.

On the outskirts of the village he came upon a strange sight he had not seen before. It was a thatched shed open on the sides. He saw a bull slowly and steadily going around in a rutted circle. And a man who seemed to be the owner was sleeping peacefully on a bench.

He stopped a passer-by and asked him what was happening.

Amused, the man explained it was an oil mill to crush oil seeds to extract oil. Sometimes it was dried coconut kernels (copra). These were held in a large mortar like structure and ground by a big pestle driven by the bull in a harness, sometimes a pair. .

He found it very interesting to observe this traditional oil-expeller in action.

A question occurred to him. To the passer-by: ‘What happens if the bull stopped…here the man is blissfully asleep.’

‘He’ll know. You see the bell round the bull’s neck? It’ll stop ringing.’

He was impressed with this simple innovative solution.

Returning home, he had to share it with his grandparents.

Just then, a thought came to him. Exclaiming in self-reproach: ‘Stupid of me – I didn’t ask….’

‘Why, what happened?’ inquired his grandpa.

‘What would happen…how would the man know if his bull stood at one place and shook his neck, ringing the bell?’

His father sorted it out: ‘Son, these bulls around here are not the work-from-home types.’

End

Source: A Whatsapp forward and image from Quora

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Fingers Are Five

There was a knock.

At this time on a Sunday?

He went up to the door. It was his manager.

Not unusual, though not in the last six months or so.

Summoning surprise and enthusiasm right for the occasion and gracefully dismissing the apologies for the unscheduled call, he invited him in, hurriedly closing the door on the draft and the chill out there.

Once the visitor was settled down in the living room as comfortably as the tired springs of the sofa would allow, he excused himself to the kitchenette on the far side to get some fresh tea and cookies.

In a short while he returned carrying the cups and plates and set them down on a centre-table.

The man was standing near the fireplace. Idly he picked up a piece of red-hot coal from the pile and set it aside.

He said he was on his way to meet a friend. Was early and hence…

Enjoying the hot tea and its flavour wafting up, they talked about this and that, mostly his. How did he get his food? What did he like most? How were the weekends? His parents back home…

In between, he did not miss noticing his manager eyes for a few moments distracted to the solitary piece of coal, now cold with the fire died out, covered with ash.

Some more on his friends, his hobbies…mercifully no shop talk.

The man looked at his watch, thanked him for the tea and stood up, ready to leave, once again apologizing for barging in thus. He picked up the piece of coal, dead, placed it carefully back in the pile, the coal catching it from the pile, going red hot and cackling almost immediately.

He turned around, winked at his host and found his way out.

**

Monday, team meeting: Presented, talked, suggested, agreed, nayed, shouted, pleaded…he was his old self. When they walked back, his manager smiled at him and…it was the same wink.

End

Source: A Whatsapp forward. Image: Pinterest

A lightly edited extract from an article by Geoffrey Keating (dated April 19th 2020).

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These are uncertain times for any business. 

Maybe you’ve seen your top of the funnel demand decreasing. Or your sales cycles are getting longer. While each company feels the impact differently, one thing is certain – businesses are being forced to adapt to change at a pace we haven’t seen before.

One strategy we’ve found particularly useful in trying times is doubling down on customer retention.

This isn’t a new insight. In the last five years alone, the cost of customer acquisition has increased by over 50%. Businesses have gradually started to switch their focus from “How do we acquire more customers?” to “How do we retain the ones we already have?” 

Getting a handle on Customer Retention:

When getting started with retention, the obvious first step might be to look at exit surveys or recently churned customers. It might sound counter-intuitive, but this is actually the wrong place to start. 

Instead, look at your best customers. 

Why did these customers stay with your product? What actions did they take in your product? Why did they expand their usage of your product? If you can figure out what and why, you can start to reverse-engineer that path for other users.

You’ll often hear these referred to as “activation metrics” or “aha moments”, the high value engagement actions and events. An analysis of these events will help you understand the behaviors that, when performed, best correlate with users continuing to use your product for an extended period of time.

The canonical example is best illustrated by Chamath Palihapitiya and the early Facebook growth team. They understood what actions separate their best customers from those they lost – namely those that added 7 friends in 10 days.

And once you understand these behaviors, you can optimize your product or communication to help even more users take these actions, see value from your product and ultimately become a long-term, happy customer.

Now that you’ve got a handle on some of the data behind your retention, it’s time to come up with creative ideas for predicting churn and improving retention.

One good example: For early stage retention, encourage new signups to take high-value product actions without delay.

Most products see a precipitous drop in engagement in the first few days. Those that don’t – Facebook, Twitter, Pinterest – do so by making sure users complete valuable product actions early on…

The other retention strategies, elaborated in the article, include looking for warning signals in terms of ongoing engagement intensity rather than mere clicking activity, communicating ROI whenever possible, avoiding single point failure by going beyond the champion in the company, optimizing the cancellation flow (seen to reduce the churn!)…

Of course the traditional wisdom of gleaning feedback from customers who left cannot be ignored. Churn is a natural byproduct of any business. Customers come and go, as does the demand for your product. Though it may be painful, make sure you have a well-considered exit ramp. Acknowledge the reasons they’re churning, address them, and make sure they leave endeared towards your company. You can use this data to either a) reclaim churned users or b) identify cohorts who are especially prone to churn, so you can get ahead of it. Best case scenario, you’ll open the lines of communication for a winback in the months ahead. But even if that’s off the table, you’ll get valuable insights you can use to help improve your product.

A quick win is tackling involuntary churn. Accidental cancellations or missed payments could account for a significant percentage of churn. The answer here is pretty simple: track the data and then create an automated email to remind users whose payments are overdue, or whose credit card is expiring…

**

The article and more may be read here.

End

An interesting article, fairly short, relevant for these times when we are told to do things we never did before for collective benefit, with wider implications and applicability. The original content is very lightly edited and recast here for easy reading and comprehension (highlighting is mine).

Here we go:

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Problem:

For the past two months, we’ve been told to wash our hands, wear face masks, and social distance. We’ve come up creative ways to do them all—with viral handwashing dancespublic pledgesZoom parties with live DJs, referred to as emotion-triggering devices. Judging by the beautiful photos of eerily empty public spaces around the world, most of us have been willing to comply—for now. But when will the novelty wear off? And what will happen to our new habits, still necessary for the public health crisis we’re facing?

Some countries, like Denmark and Austria, and several U.S. states, have already started to relax the strict stay-home regulations and are counting on their citizens to make smart choices to protect themselves and others. But are we confident that we’ll keep up our good behavior when left to our own devices? 

Solution:

Emotions are, by definition, temporary. So is attention. Using activity-mobilizing emotions such as fun, hope, anger, or fear can work exceptionally well to kick-start a new habit, but we still have months or even years of behavior change ahead of us. Before long novelty may fizzle out, motivation worn away and compliance unexciting. In fact it could get downright annoying.

Example: In 2009, designers created “Piano Stairs” at the Odenplan subway station in Stockholm. Each step was a piano key that made a sound when it was stepped on. The idea was to make it fun and easy for commuters to pick the healthy option of going up the stairs instead of taking the escalator. And it worked—for a couple of days. The initial excitement quickly gave way to the reality of rush hour, as commuters trampled over keys going up and down the stairs. To no surprise, the piano disappeared. But the video of the stairs gathered 23 million views on YouTube and is often still found in presentations by behavioral consultants.

So when the novelty fizzles out, how can we harness our current motivation and channel it into long-term change? The evidence is still sparse, but we do have several examples of behavioral interventions that have a longer shelf life. These are referred to as Nudges.

Nudges are of two kinds: Pure and Moral.

Pure nudges are simple changes to a preexisting choice environment meant to counteract simple inattention or laziness. They seamlessly blend in with their environment. They are typically not consciously noticed by the decision maker. Grabbing a ceramic cup conveniently stacked next to the coffee machine instead of a paper one from the cupboard does not require you to think about saving the rainforest before your morning coffee. The less conscious the nudges are the less they are prone to wearing off or even backfiring, regardless of whether you agree with the goal of the nudge or not. 

Two other examples of pure nudges: a) Perhaps the most successful example is Defaults. Individuals defaulted into pension plans, insurance in air-travel, two-sided printing, or renewable energy for their home seem to stick with the option. People either don’t notice it or don’t take the effort to change it from default b) Salience has also proven to be effective in the long term. Placing vegetarian food on top of a menu makes it more likely that customers will select it, and real-time feedback while showering reduced energy consumption of hotel guests. 

In contrast moral nudges are those that are fun or trigger fear, shame, or pride, rewarding “doing the right thing” with psychological utility or disutility. The nudges are meant to be consciously noticed. The most prominent one being the use of Social Proof—“9 out of 10 people in your city pay their taxes on time—you are currently not one of them” or “Compared to your neighbors with similar sized houses, you consume far more energy” or “Will you vote on Sunday? We will call you again and ask about your experience.” 

Social proof is powerful, no question—the frantic toilet paper buying we have seen in the past weeks was an unintended testament to that. In the short run, moral nudges can generate significant effects, but long-term behavior change is seldom. Further, moral nudges run the risk of backfiring. Individuals asked to donate repeatedly decided to opt-out of communication altogether, and others who regularly came out badly in comparison to their neighbors’ energy consumption were willing to pay money not to be contacted anymoreDeliberate defiance of these appeals could also explain the groups of college kids who went on spring break despite the health warnings or the Danish teenagers who now drive over the bridge to Sweden to party “because lockdown is boring.” 

Nudges can make it easier to do the right thing. All that said, taking past research in account, nudging on its own, whether moral or pure, won’t be enough to stimulate the required behavior change. The gap between what we want now (our lives to return to normal) and what we need to do (diligent maintain hygiene and continuous social distancing) is just too large. But that doesn’t mean lasting behavior change isn’t possible. We need to combine nudges with traditional economic incentives and regulations. Just like the traffic rules. We have laws, fines, and nudges (speed bumps or beeping seat-belts) that keep us and others safe on the road without invoking anxiety, shame, or fear every time we get into a car.

And designing the choice environment promoting/instilling long term habits. Example: Copenhagen, author’s hometown, has four large lakes in the city center, which have a small footpath around them that is popular for runners and people going for a stroll. At the start of the lock-down, the trail was converted to a one-way street to reduce the amount of tight face-to-face encounters. Currently, park guards control compliance, but already most people are in the habit of walking clockwise around the lake. A habit that can most likely be sustained with a simple sign and social norms. 

Like fighting climate change or obesity, overcoming this health crisis will be a marathon, not a sprint.  Our collective health depends on how we use these available mechanisms keeping in mind their long term impact versus the need.

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As it must have already occurred to you, interestingly these concepts are equally valid and useful to bring about changes in various aspects of organizational behavior!

The article by Christina Gravert may be perused here.

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An old classic from Hubspot:

The entire North American sales force of Frisky Dog Food was gathered together for their national sales convention at Miami Beach. In the great auditorium the marketing director was giving a performance that any revivalist would have been proud of. Using the old pattern of call and response, he was really working up the spirits of his sales team.

“Who’s got the greatest dog food in North America?” the marketing director asked.

“We have!” the audience replied.

“And who’s got the greatest advertising campaigns?”

“We have!”

“Who’s got the most attractive packages?”

“We have!”

“Who’s got the biggest distribution?”

“WE HAVE!”

“Okay. So why aren’t we selling more of the product?”

One bold voice from the crowd replied:

“Because the darned dogs don’t like it.”

**

The clip is available here.

End

For some reason I love to listen to children explain their paintings. One gets to hear stuff much unexpected.

The first drawing is by N, my 10 year old g-d.

As is my wont, the Q-A session followed.

First take a look at the painting before I tell you what ran in her mind while working on it:

This piece – words are mine, thoughts hers – captures the entire time scale for the human race. Planet Earth hanging at the top left represents ‘The Past’, the exploring astronaut shows the human enterprise today, ‘The Present’; and, the future? You see the colonies on the middle left, those are to-come-soon ‘The Future’ settlements in the new frontiers. So it’s one chotu picture for the humankind’s entire ‘The Past’, ‘The Present’ and ‘The Future’!! Logarithmic scale for Time? What’s that?

That’s not all. There are two other interesting elements in the picture: a) The bright Sun at the top right blazing in full glory – very unusual in pictures of dark outer space – is the beacon of Hope for the race and b) the flag carried by the explorer in his hand signifies cooperative human endeavor containing the emblems of all the countries on Earth!

So much wordless eloquence in a few square inches of paper!!

**

The second piece is from another 10-year old, A, also a g-d. Here it was a little different. It was going to be a painting from her for her mom’s birthday. The theme: a party scene. Invitees: only animals because her mom liked them. She took out a drawing book and selected animals in postures, small and big. Starting with the table in the middle, the invitees stepped in one by one taking their seats, not crowding each other. The ‘Hidden Line’ problem – the near obscuring the far – was handled on the way! Finally when the ‘dish’ came out of the ‘kitchen’ it had all panned out well as she wanted it to be! While light on symbolism’s, the composition, by no means simple, was deftly put together, with so many guests all kept together and apart in good shape and humor!

Here it is:

Now to the interesting part – conversation with the artist over her creation. It was fun to see how the child, unprepared, played me unfazed.  Not stumped, her off-the-cuff responses – quite imaginative and sensible. Looks like they make children differently these days! Here we go:

No humans? “They don’t mix well with animals in parties“

I persisted – not even the birthday girl? Thought I got her this time. “You see, she (the birthday girl) is not in it because she’s the one taking a snap of them. See, they are all looking at her? Only the cow is a little startled by the flash.”

Are you sure  they’re having fun? “Don’t you see the cake and candles on the table, balloons and even caps on a few heads? There, I gave the bunny a new dress! Everyone at ease and posing for the shot. If you noticed, the turtle (or a tortoise?) is even wearing a grin, mighty happy with the proceedings!”

I also learnt alligators get invited too without fear because they behave themselves well on such occasions!

**

So it went on…enjoyed every bit of peering into those little minds thinking, and me ready and wanting to be surprised.

End

When Life gives you lemons…

The government was paying no heed!!

So they found a local solution.

Watch it here.

End