How to Target Innovation

When I conduct executive training, one of my favorite activities requires participants to consider a typical set of processes common in the insurance industry: Develop Products and Services, Customer Service, Manage Revenues, Manage Distribution Channels, Market Products and Services, Underwriting, Claims Fulfillment, Manage Provider Network, and Plan and Manage the Enterprise.

I ask the group to tell me which process is most important to an insurance company. Quite often, the first answer will be Claims Fulfillment. “Why?” I ask, and they will say, “Because this is why customers get insurance in the first place.” I usually respond that Claims Fulfillment is a very important process, but I want to know which is the most important process. Someone will then suggest Manage Revenues because it is how the company makes money. Again, I commend them for their answer, but I still want to know the most important process. This goes on for a while, until nearly every process has been suggested. Eventually I stop the group and say, “Okay, I am going to give you the answer to this one: ‘It depends.’”

I then tell them about the strategies of four insurance companies serving relatively similar markets.

Unum Insurance. Unum is the market leader in disability insurance, a firm that differentiates itself by its skill in assessing and pricing risk. Unum claims, for example, to have such finely tuned data that it can distinguish the difference in risk between left-handed and right-handed doctors who drive Volvos and live in New Jersey.

Progressive Insurance. This company has achieved a remarkable level of excellence in claims processing and, as a result, has become one of the most profitable firms in the industry. Progressive’s loss adjusters operate from vans with cellular communication links and computer workstations. Driving around their assigned territories, they are often at the scene of an accident before the police. In many cases, claims are processed on the spot, and it has been known for a check to be handed over by the company’s loss adjusters at the site of an accident.

State Farm. Competitive positioning for State Farm depends on its exclusive (and extensive) network of agents and offices. Its wide geographic coverage is reinforced by the company’s motto: “Like a Good Neighbor, State Farm Is There.” The firm differentiates itself from the rest of the pack by this type of branding.

USAA. The customers of USAA are primarily in the transient, mobile military services. Because its customer base is so mobile, USAA tries to be as helpful as possible to its customers. At one time, USAA was the world’s largest user of toll-free numbers, which it uses as the main means to communicate with customers. These investments have paid off. In 2007, USAA was rated the #1 Business Week customer service company.

What is the most important process to Unum? It is Underwriting. For Progressive its source of differentiation is Claims Fulfillment. For State Farm, its Distribution Network is critical because the large volume it generates spreads its risk across a broad swath of the population. And USAA is focused on Customer Service. Capabilities that are strategic for one organization may well be less critical for another in the same industry. All four of these companies are essentially in the same business, but each concentrates on a different process to achieve its competitive advantage and its differentiation in the marketplace.

What is YOUR most important process? When I ask this question of CEOs, top executives, and employees, there is typically a very long, uncomfortable silence. Most people do not think of their business in these terms.

Although the question is simple, the answer requires significant reflection and alignment. And answering this question is important for determining your innovation strategy. In particular, how to focus your innovation investments. Companies have limited resources that must be invested in the processes that will have the greatest impact on the bottom line.

Here is a framework I use to help organizations prioritize their innovation investments.

Consider that your processes fall into three levels of strategic importance: “differentiating,” “core,” and “support.”

Differentiating processes (or I prefer the word capabilities) are those that set you apart from your competition. These are your most important capabilities. Ideally you only have one or two of these capabilities. At USAA, for example, this is Customer Service.

Core capabilities are critical to your business, but are not your source of competitive advantage. These create direct value for the customer. For a manufacturing company, core capabilities might include order fulfillment, order acquisition, and product support.

Support capabilities are necessary for running the business, yet are not considered core. Quite often, these are thought of as HR, IT, or finance.

Categorize all of your capabilities and then consider different strategies based on their position:

• Support work should be minimized, and ideally, outsourced as much as possible. Cost containment is the main strategy while still assuring high quality.
• Core work should be simplified and automated whenever possible. The objective is to turn these capabilities into well-oiled machines. Efficiency is the main strategy.
• Differentiating work is typically knowledge work and is where you want to make the greatest investments in innovation. Ideally, you want to empower knowledge workers to deliver non-cookie-cutter results that will continually set you apart from your competitors.

There are several important points to note with this model:

1. Because innovation seems glamorous, companies often try to focus on differentiators before they have a good foundation. This is a mistake. You must have your “core” capabilities working well (efficient, low error rates, high service levels) before you can start worrying about your differentiators.

2. The most valuable use of this model is not at the enterprise level, but rather when used within each capability. Even support capabilities have components that help differentiate the company. For example, a major consulting firm was re-evaluating its corporate training curriculum and used this model to assist. They first determined which classes provided capabilities necessary to beat the competition – that is, their “differentiators.” For these, in house custom courses were developed. For “core” consultant skills, they partnered with world-class training organizations to provide tailored versions of existing training. And for less important, support skills, they used off-the-shelf training modules (outsourced training).

3. Sometimes, your differentiating capability can be one that ensures that the work of others is repeatable and predictable. Wal-Mart invests heavily in the ability to connect stores, warehouses, and vendors through leading-edge technology. The employees who develop these computer systems are Wal-Mart’s most valuable knowledge workers. McDonald’s innovation labs help ensure that every customer gets the same quality hamburger.

4. If you are #2, #3 (or worse) in your industry, your differentiating capability should ideally be different than that of your leading competitors. When you are playing catch-up, changing the rules of the game is critical. It is hard to beat someone at their game.

5. Your differentiating capability should be something that is difficult for your competition to replicate. One service company I worked with claimed its “offerings” were its competitive differentiator. I asked the group, “How long after introducing a new offering does your competitor offer the same deal?” The answer was, “In as little as two weeks.” Unless you want to reinvent yourself on a weekly basis, you should find a differentiator that is difficult to replicate and is uniquely yours.

This is an extremely powerful framework, and its uses are unlimited.

What is YOUR most important process?

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Surveys Uncovers Surprising Results

Back in the 1980’s, executives used to joke that you would never get fired for buying “Big Blue” (IBM) computers. It’s not that IBM was the best, but you knew they would not screw up.

When I worked for Accenture (then Andersen Consulting), the Economist once called us “The McDonalds of the consulting industry. You know what you will get and it’s not fillet mignon.” People hired us not to get highly creative solutions, but rather to be assured of a successfully implemented solution.

There is a reason why consulting firms are so successful.

People choose safe, tried and true solutions over those which may be better yet have a risk of failure.

This is human nature. People take risks to minimize losses, yet play it safe when it comes to increasing gains.

But how much of a gain must be dangled in front of us before we will risk giving up the sure thing? I’ve been conducting a survey to find the answer.

Here’s the first question posed to respondents:

Which would you choose?

• Option 1: A guaranteed gain of $75K or
• Option 2: An 80% chance of getting $100K and a 20% chance of getting nothing

Our survey found that 75% of the people go for the sure thing, option 1. People play it safe when it comes to increasing gains. But how safe?

What if the upside is increased to an 80% chance of getting $150K? Now, 57% take option 2. Still, 43% play it safe, even though there is an 80% chance of doubling their money.

What if the upside is increased to $225K? 76% choose option 2. This means that, 1 in 4 people still play it safe even when the potential upside is 3 times the original amount. When we increase the upside to $450K - 6 times the original amount - we still have 20% of the people who go for the sure thing.

It appears that people believe the expression, “A bird in the hand is worth two in the bush.” Interestingly, the original Old English expression was, “”Better one byrde in hande than ten in the wood.” That seems even more accurate.

Ok, let’s look at the loss side of things.

Here’s the first question posed to respondents:

Which would you choose?

• Option 3: A guaranteed loss of $75K or
• Option 4: An 80% chance of losing $100K and a 20% chance of losing nothing

This time, when presented with a loss rather than a gain, 71% go for the riskier option 4. People take risks to minimize their losses. [As an aside, when I ask audiences this question, the percentage of risk takers is closer to 90%]

Increase the potential loss to $125K and 44% still go for the riskier option 4. When the potential loss is increased to $250K, 22% of the respondents still opt for option 4.

If you plot these responses (risk-taking probabilities against expected gains), they make a nice “S” curve as depicted in the graphic left.

What does this graph tell us?

It clearly supports the premise that people take risks to minimize losses, yet play it safe when it comes to increasing their gains. The loss of $1,000 hurts more than a gain of $1,000 feels good.

This means that you can sell someone more easily when you focus on losses rather than the gains. This might explain why Al Gore has been so successful with his “Inconvenient Truth.” Instead of focusing on the benefits of a cleaner environment, he focused on the “meltdown” associated with the status quo. Can anyone say Nobel Prize?

The shape of the curve also gives us a bit more insight. First, the gain of $2,000 does not feel twice as good as the gain of $1,000. Equally, the loss of $2,000 does not hurt twice as much as the loss of $1,000. There is a point where we become numb to the increased gain or loss.

Another potentially useful take-away is what I call the “risk/reward tipping point.” This is the point where the “S” curve flattens out on both the loss and gain side. This occurs at the point when 80% of the people take the desired action. And based on my research, this ratio is a little under 3.

What does this mean?

The hoped for win (the upside) must be three times the guaranteed amount in order for most people to risk the sure thing.

There is a reason why the status quo wins out in business, politics, and life. Rarely are we given options where the benefit is three times the sure thing/current situation.

On a final note, there was some interesting research on this topic…but with a twist. Researchers at Duke University, in a paper entitled “Sleep Deprivation Elevates Expectations of Gains and Attenuates Response to Losses Following Risky Decision” (Venkatraman, Chuah, Huettel, Chee), wrote that this risk-taking profile changes when someone does not get enough sleep.

When kept awake for 24 hours, the study (supported by brain scans) showed a double whammy: people became more optimistic about potential gains and they were also numbed to the negative feelings associated with losses. They would act riskier and have less regret (distinct from disappointment) about bad decisions. Their decisions were often bad decisions. If you go to Las Vegas, be sure to get plenty of sleep!

Our ancestors lived in a world of scarcity. Therefore it is not surprising that we do everything in our power to horde what we have. Unfortunately, our desire to play it safe can cause us to miss out on big opportunities. Risk taking is fundamental to innovation. And innovation is critical to long-term success.

If you want to see some of this stuff action, be sure to read my entry on 10½ Ways to Improve Your Life – By Losing. This may give you some tools to enable you to take healthy risks to improve your life and business.

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How to Change an Organization’s Culture

Much literature has been written on branding.

But what is a brand? Can you define it in just 6 words?

No, it is not Nike’s “swoop.” It is not McDonald’s “I’m Lovin’ It” jingle. It is not Accenture’s Tiger Woods ads. It is not the design of my website or my “Unconventional Thinking” tag line.

Erik Hansen, Tom Peters’ brand manager (and a good friend of mine), said it quite eloquently. A brand is… “what your customers say it is.”

What is great about this definition is that it gives you direct access to changing your brand. To change your brand you must change your customers’ perceptions and experiences. No logo or advertising campaign has ever done this.

Much less has been written about culture. Can you define it in just 4 words?

This one is a bit trickier. If you Google “definition of culture” you will find a wide range of thoughts on the topic. Webster’s definition of organizational culture is “the set of shared attitudes, values, goals, and practices.” Not bad. But it does not give you direct access to changing your organization’s culture.

Try on this definition.

Culture is… “what your employees say.”

It not what they (or you) say it is, but rather what they say.

It is defined by the conversations. Verbal, written, and unwritten conversations. These might be your mission, vision, rules, and policies. But quite often, your culture is more powerfully defined by the informal conversations that take place.

Conversations between employees. Conversations between bosses and subordinates. Conversations between employees and customers. Conversations between employees and their family and friends. And most importantly, the conversations that take place in the heads of your employees.

Given this, how do you change a culture?

You change the language.

There is a reason I have been dedicating so much blog space to the power of language. Yes, I am fascinated by language. But more importantly, the words we use define our culture. The words we use impact risk taking, perceptions, and motivations.

I would love to hear your thoughts on these definitions.

In future blog entries, I will discuss specific ways in which you can change your organization’s culture by changing its language.

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How to Be Present to Every Moment

Imagine the following situation. You are single and live in New Jersey just outside of New York City (NYC). Your employer wants you to work in London for a few years. You are excited about the possibility of living overseas and are interested in the job. Assuming that the costs of living for New Jersey and London are roughly equivalent, which option would you choose?

1. Temporary Option: You stay an employee of the NYC office and are “on loan” to London. You continue to pay your mortgage/rent in New Jersey, but can rent/sublet your place to someone during your absence. The company pays all of your expenses in London: housing, food, and travel to and from the US. They cover the difference in taxes between the US and UK. Basically you have no expenses for the three years you are there and you can sock away 100% of your salary. Your stay is temporary. After your time overseas, you will return to the US.

2. Permanent Option: You transfer from the NYC office and become an employee of the London office. You are paid in British pounds just like all other British employees and you pay UK taxes which are higher. Although you sell your house in New Jersey and have no expenses in the US, you need to cover all of your expenses in London. There is no guarantee of a job in the NYC office should you decide to return to the states.

Financially, option #1 is a SIGNIFICANTLY better deal.

But when faced with this situation in real life, I chose option #2.

Why?

Three years is a long time. I wanted London to feel like home. I wanted to live like a native. I wanted to know that there was no return to the US. It forced me to be present to what I was doing and to take full advantage of England. I formed new social circles. I dated. I lived as though I would be there forever. London became my home. A little more than three years later, I was back in the US, without a job.

Although from a financial perspective, it may not have been a great decision, it was the right decision. I had the most spectacular three years of my life. Had I chosen option #1, I may never have felt settled. I always would have known that I was leaving. It would have been a missed opportunity.

How often do you live with uncertainty? How much of that uncertainty is created by you in your mind? How much does this uncertainty ruin your present moment experiences?

Have you ever been in a great relationship…yet continually worried about it ending? Maybe you were concerned that your partner didn’t love you as much as you loved them. Or perhaps you thought that your relationship was just too good to be true. Although you have great times together, these concerns permeate your mind. Doesn’t the uncertainty about the future affect your pleasure now? Doesn’t it also this increase the likelihood that your greatest fears will materialize and your partner will leave? Let’s face it, most relationships eventually end. You leave your partner, your partner leaves you, or your partner dies. But if you live with the anticipation of that ending, you will never enjoy the present.

Have you ever been in a job that you didn’t like? Did you daydream continuously about leaving…yet three years later you are still in the same job? Instead of dreaming about the future, be present to what you can do today in your job. Look for new opportunities internally. Do the best job you can. Find ways of adding more value. If you are focused on leaving, you will be miserable. And the odds are, you will lose your job because of poor performance. That’s when you will begin to daydream about how great your job used to be.

Being present, without worrying about the future, is not easy. Could I have chosen option #1 and treated London like my home? Quite possibly. However, for me it was better to take what seemed like a permanent option, even though it was just as temporary.

What if everything is temporary? But what if the option we choose - temporary versus permanent - is the one thing that determines our happiness?

Where in life are you living the “temporary option,” where you think/hope/fear that your current situation will end? Where is this not serving you well? How can you choose the “permanent option” so that you are living fully in each moment?

This may be THE key to happiness.

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How One Word Can Change Your Beliefs

Once again we explore the power of language. This one was given to me by Michael Wiederman, Professor of Psychology at Columbia College.

Imagine that you serve on the jury of an only-child custody case following a relatively messy divorce. The facts of the case are complicated by ambiguous economic, social, and emotional considerations. Therefore you need to base your decision entirely on the following few observations:

Parent A has an average income, average health, average working hours, a reasonable rapport with the child, and a relatively stable social life. This parent is essentially average in every way.

Parent B has an above-average income, minor health problems, lots of work-related travel, a very close relationship with the child, and an extremely active social life. This parent has both notable strengths and notable weaknesses.

Here’s the interesting part…

If the jury is asked who should get custody, most people choose Parent B.

If the jury asked who should not get custody, most people choose Parent B.

Adding one word changed people’s responses and beliefs.

When asked who should get custody, people look for the positive attributes and see that Parent B has more positive attributes than the blander Parent A.

Conversely, when asked who should not get custody, people look for the negative attributes and see that Parent B has more negative attributes. Therefore Parent A should be awarded custody.

This is an example of the psychological concept, confirmation bias.

This is important to keep in mind as we get closer to the Presidential elections. Political polls, such as the Gallop Poll, are often biased (unintentionally or other) by the wording of the surveys. Think critically before you make important decisions.

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10½ Ways to Improve Your Life – By Losing

In two previous blog entries, (#1 and #2), I discussed the psychology behind risk taking. In particular, I explored why people take risks to minimize losses, yet play it safe when it comes to increasing gains.

In this blog entry, I discuss a number of implications of this mindset. Here are 10½ – potentially irrational - ways in which people do everything in their power to minimize losses, even though the gains that can come from risking the loss can be amazing.

1. CREATIVITY: According to studies, 98% of children age 5 are highly creative, yet only 2% of adults over the age of 25 are. Why? One reason is that children do not worry about looking silly. Adults do. Adults will stifle a potentially great idea in order to avoid losing face. Action: Add some play to your life and work. Stop being so serious. Take improv comedy lessons. This will certainly get you comfortable with looking silly!

2. INNOVATION: Companies continue old business practices, processes, and products because the perceived risk of losing these is too great. Action: Keeping a business or product because of sunk costs is stupid. Ditch anything (including people) that is not working. Ask yourself, “If I were starting my business from scratch, how would I design it?” If it is different than your current model, then maybe you should get rid of a few things. What you stop doing is often more important than what you start doing.

3. INVESTING: Stock owners often hold on to investments that they would not buy if they did not already own them. Or worse, if they own a stock that is tanking, they buy more on the belief that “because I own it, it will recover.” I did this with Webvan stock. I kept buying more stock as the share price plummeted, convinced it would bounce back. Alas, you can’t buy anymore when it is worth nothing. Action: Sell anything in your portfolio that you would not buy if you did not own it. Low transaction costs make holding on to duds irrational (unless tax implications indicate otherwise).

4. CAREER: People often stay in unsatisfying careers because the “devil you know is better than the devil you don’t.” I know what you are thinking. “Why should I give up my crappy job that gives my ulcers and high blood pressure? I worked my entire life to get where I am.” Um, I don’t know. Maybe because there are at least 1,000 better careers for you. Action: If you don’t love your job, quit. Ok, not so fast. But imagine leaving your job. Explore what is possible. When you discover something better, list all of the reasons why you are still not prepared to leave your current situation. Then find ways of addressing each of these concerns.

5. CUSTOMERS: Are all of your customers profitable? Are all of them desirable? The odds are, you have many customers or customer segments that are just not worth the effort. Ironically, companies often spend an inordinate amount of time with customers that provide the least returns. Action: Ditch the least profitable 20% of your customers. Or at least find creative ways to make them more profitable – and less time consuming.

6. DATING: People will do anything to avoid losing face. The fear of rejection stops people from asking others out on a date, even though if they said “yes” it could lead to a new relationship. Action: Stop being a wimp! Rejection never killed anyone. Ask out that person you’ve had your eye on. Go up to a stranger in a bar and say, “I’m thinking of changing my name to Romero. What do you think?” (if you don’t know the Romero story, click here)

7. RELATIONSHIPS: Imagine that you are in a relationship that is going nowhere fast. Your gut tells you it should end, but for some reason you do everything in your power to keep the relationship alive. Action: First, do what you can to bring the relationship up to the standards you deserve. If that does not work, find an equitable way of ending things and moving on. Do you really want to wake up 25 years from now in the same wretched relationship?

8. BELONGINGS: Go through your closets. Look in your bookcases. How much “stuff” do you have that you really need? How much of it would you buy if you did not own it? 20%? 30? Certainly not more than 50%. I often hear people say, “as soon as I throw something out or give it away, that’s when all of a sudden I find a need for it.” Although this phenomenon is not true, it seems real. As a result we hold on to things “in case” we need them, rather than “because” we need them. Action: Go through everything you own. If you haven’t used it in a year, put it in a box. If after a year you haven’t opened the box, give away (or sell) the entire box.

9. HEALTH: People will spend a lot of money on health insurance – a way of reducing losses associated with an illness. But they won’t put much time or energy into increasing their health. Action: For every dollar you spend on health insurance (loss prevention), spend at least 10 cents on things to improve your health. Get a gym membership. Buy vitamins. Get a massage. Take a stress relieving vacation.

10. REQUESTS: People are often afraid to ask for help because they don’t want to seem needy (lose face), or impose upon and risk losing their friends. Action: Identify 10 requests you could make of 10 different people (e.g., a connection with a person who may be able to help your business, feedback on a new business idea, financial support, moving your house). Then, ask these people for help. You may be surprised to find that few people say “no” and that most people are willing – and want – help you.

10½. Why do I blog on a regular basis? One motivator is to avoid losing readers. I currently get 50,000 visitors here a month. I intentionally write for a mass-market to attract as many diverse readers as possible. I have considered writing only for a niche market (e.g., corporate innovation), but I know in doing so I would lose a lot of readers. I realize that having fewer, yet more active readers may actually be a good thing. Alas, for now, I like appealing to a large audience.

Where in your life have you given up something only to find a huge gain? Where have you held onto something knowing it was holding you back?

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How to Leverage the Pain vs. Gain Mentality

In an earlier blog entry, I discuss the power of language. I want to explore this a bit further today.

Here’s my variation of the “Asian disease problem” mentioned in that earlier blog entry:

Which would you prefer?

• OPTION 1: A guaranteed gain of $75,000?
• OPTION 2: An 80% chance of gaining $100,000 with a 20% chance of getting nothing?

When I give a speech and ask the audience this question, 75% choose Option 1. This percentage is consistent across all groups, regardless of who is in the audience.

Ok, what about the following? Which would you choose?

• Option 3: A certain loss of $75,000?
• Option 4: An 80% chance of losing $100,000 with a 20% chance of not losing anything?

When audiences answer this one, 99% choose option 4.

This once again supports the premise that people will take risks to reduce losses, yet will be more risk averse when it comes to increasing gains.

Interestingly, when you look at these options, even though most people choose options 1 and 4, options 2 and 3 give you better returns. On average, you will gain $80,000 with option 2 and will lose $80,000 with option 4.

Look around and you may begin to see examples of advertisers focusing on losses rather than gains, with stellar results. For example…

How many mattress commercials have you heard that say, “Buy our xyz bed and you will get your best night’s sleep ever.” Yawn. Boring. The commercial may put me to sleep, but it’s not going to get me to buy a bed.

Consider this actual advertisement. “If your mattress is 10 years old, it weighs twice its original weight due to the dust mites that accumulate over the years.” Ouch! This makes me want to replace my mattress now.

Instead of selling customers on how great your product or service is, show them the downside of using a less reliable alternative. As a friend of mine says, “If you need open heart surgery, would you shop for a cardiologist based on price?” She then launches into the risk associated with not getting it (your product/service) right.

What examples have you seen of great sales pitches, advertisements, or anything else that uses this concept?

P.S. One place where this concept apparently does not apply is on TV game shows. I see people on “Deal or No Deal” risk a certain $500,000 for a 50% chance of winning $1 million. Their interviewing process must do a great job at finding the few people who really do take risks to increase their gains.

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How to Change Your Results by Changing Your Language

Which magazine do you think men are more likely to buy:

• a men’s health magazine with the cover, “Lose Your Gut Fast” or
• a similar magazine with the cover, “Get Six Pack Abs”?

One study showed that over 80% of men chose the first cover – “Lose Your Gut Fast.” Why?

People are more interested in avoiding (or reducing) pain than they are in increasing pleasure.

The Austrian economist, Ludwig von Mises, once said that three requirements must be present for an individual to change:

1. The individual must be dissatisfied with the current state of affairs.
2. They must see a better state.
3. They must believe that they can reach that better state.

That last point is critical as it relates to the “gut” issue. When someone is 20 pounds overweight, as many Americans are, six pack abs may be desirable but seem inconceivable. I sometimes joke that I would be happy with a “two-pack.” Only when your gut is gone will the idea of six pack abs seem like a possibility.

Tversky and Kahneman demonstrated how people change their perceptions when the same problem is stated in different ways. The classic example is the “Asian disease” problem (1981) where a group of individuals were asked the following question:

Imagine that the US is preparing for the outbreak of an unusual Asian disease, which is expected to kill 600 people. Two alternative programs to combat the disease have been proposed.

• Program A, which will save 200 people
• Program B, where there is 1/3 probability that 600 people will be saved, and 2/3 probability that no one will be saved

Which of the two programs would you choose?

Tversky and Kahneman found that 72% of those asked chose the “risk averse” position – Program A. The prospect of saving 200 lives with certainty was more promising than the probability of a one-in-three chance of saving 600 lives.

A second group of respondents were given the same story of the Asian disease problem, but were provided with different options.

• Program C, where 400 people will die.
• Program D, where there is 1/3 probability that nobody will die, and 2/3 probability that all 600 people will die.

Which of the two programs would you choose?

A whopping 78% of respondents in the second problem chose the “risk taking” position – Program D. The certain death of 400 people is less acceptable than the two-in-three chance that 600 people will die.

Of course, options A and options C are identical, as are options B and options D. Yet the different phrasing stimulated completely different responses.

This study again shows that people will take greater risks to minimize (or reduce) their pain, yet they will play it safe when the option is to increase their pleasure.

Barry Schwartz provides some other excellent examples in his Scientific American Mind magazine article (August/September). One example he sites: “Appeals to women to do breast self-exams that emphasize the benefits of early cancer detection (gains) are less effective than those that emphasize the costs of late detection (losses).”

In my article, “How to Tell If Your Intuition Is Good,” I discuss how we get attached to what we have. When taking a test, we remember (painfully) situations where we had an answer correct, changed it, and therefore got it wrong. Surprisingly, we rarely notice the reverse. We are more aware of our losses than our gains.

Many years back I did work for a client. Although I would have been happy to do it for $9,000 (not actual figures) they agreed to pay me $10,000 for my efforts. Unfortunately, due to shoddy work by a subcontractor, I volunteered to refund $1,000 (out of my own pocket) to the client, netting me $9,000. Interestingly, I would have been happy getting paid $9,000 for the job, yet getting $10,000 and losing $1,000 still irks me to this day.

The loss of $1,000 hurts worse than a gain of $1,000 feels good.

When you are trying to get someone to change (or buy your product/service/ideas), do you focus on their gained pleasure or eliminated pain? From my experience, the latter is much more effective.

What are your examples of where you changed your language and got different results?

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How to Balance Work and Life

A few years back, I was an instructor of Stephen Covey’s “Principle Centered Leadership” course within Accenture. Over 75% of the attendees said that achieving balance in their life was their number one reason for taking the course. This is not surprising given the fast pace of life today.

But what does balance mean?

Balance implies two opposing forces that reach equilibrium. This is not very easy to do. Remember when you were a kid trying to balance with someone else on a sea saw? Either you were up or you were down. But rarely were you balanced.

In life, either we are working hard or we playing hard. But we are not in balance.

Maybe balance is not the solution. What’s the alternative? Integration.

Find ways of integrating your work life and personal life together. Make them indistinguishable, so that it is all just part of your life. In doing this, you free up more time (because you are often “killing two birds with one stone”), you gain new interests (because you often get involved in activities you might otherwise avoid or not make time for), and your life becomes whole rather than piecemeal.

One simple example is that of a professional speaker who loves golf. He now includes golf lessons as one of his client offerings. He gets to do what he loves while making money.

This concept applies to increasing time for relationships. Find ways of doing things together with your partner: hobbies, interests, chores, or even work. A husband and wife I know are actively involved in each other’s interests. He now takes cooking lessons with her (her interest), and she goes golfing with him (his interest). They created time by integrating their activities, enabling them to have more time for their individual pursuits.

How can you begin to integrate the pieces of you life?

The process is simple. First, look at what things interest you most. These can be anything from hobbies to professional interests to simple pleasures. Next, ask how you can shift your daily schedule to “imbed” these items activities in what you do. This will require some creative thinking. Finally, have the courage to ask for what you want. It’s not always easy, but it is always possible.

Many years ago, I decided I wanted to be a professional speaker and an author. Instead of leaving the security of my consulting job, I decided to shift my responsibilities to include writing and speaking as part of my job. Unfortunately, this role did not exist. Therefore I needed to “create” a position that was of value to the organization – and then have the courage to ask for it and make it happen. I did. And my idea grew into a 20,000 person organization. As part of my job, I wrote a book that was sold (internally) to 40,000 consultants and clients. I was giving as many as 100 speeches a year to tens of thousands of people. I integrated my professional aspirations into my daily job. This eventually led to a book deal with a major publisher, which I used to launch my professional speaker career.

Here’s a fantastic – and radical – example.

My brother-in-law, Gary, sells cancer insurance door-to-door. While I have no interest in perpetuating stereotypes, I am guessing that most people would cling happily to their current job if door-to-door sales was their only other alternative. But he likes it. It has afforded him the opportunity to meet wonderful people, help families in the community and make a fairly good living. While enjoyable, admittedly his job is not his passion. His passion is travel, and like most Americans, he squeezes this love into one, maybe two weeks over the course of a year.

One night, after a particularly difficult day on the job, Gary and my sister Deborah engaged in a conversation as to how he could create more passion within his career. It was unacceptable for them to wait for retirement or a windfall of money to land in their account. They wanted to live their dreams now, while they could. So they engaged in a spirited discussion and brainstormed through a variety of ways they could infuse more passion into their lives today.

After much deliberation, the pieces started to fit together. It just so happens that Gary’s company is licensed in 47 states around the country! And as long as there are doors to knock upon, he can work in any. It was in that very moment that the decision was made. They rolled up their sleeves, did a bit of research, sold their home and purchased a 38 foot motor home so that they could hit the road and do his door-to-door job, state-by-state. No longer would they have to pine for those measly two weeks per year to enjoy the beauties that this country has to offer. Now, they could live it every day.

Initially, the thought of living in a giant box for a year was a bit daunting for my sister. So it was her turn to explore her passions. Having been involved with numerous charitable organizations in the past, and having let that slip in recent years, she longed to get back into the community to make a difference. It occurred to Deb that they would be a rolling billboard, and there had to be a way to raise awareness and funds for a worthy organization given the continuous travel schedule they had created. It didn’t take long for Deb to partner with a charitable foundation, St. Baldrick’s, an organization that raises money to combat childhood cancer, to create a nationwide awareness tour.

Their lives are totally integrated. Gary can continue his day job, the two of them get to travel 100% of the time while spending more time together as a couple, and they get to make a difference in the world.

If you would like to learn more about their SuRVivor Tour or make a tax deductible contribution, visit them at www.thesurvivorrv.com. In support of my sister’s efforts, I will be donating an audio version of Goal Free Living for each contribution made to St. Baldrick’s of $50 or more.

Although Gary and Deborah’s idea of integration may be a bit radical for most, the concept of integration can be done for anyone in any position. All it requires is a bit of creative thinking, some risk taking, and asking for what you want.

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How to Get More Done…By Being Lazy

Back in 1985, I worked for Unisys (then Burroughs) as part of an engineering co-op program while in college. This gave me hands-on experience working in the production control department for this large computer manufacturer. As I was leaving the company, the department head called me the laziest person he ever met. He meant it as a compliment. Let me explain.

When I started this job I worked 50 hours a week. My direct supervisor worked 60 hours a week. Life was good, until my supervisor was laid off and I inherited all of her work. Faced with having to work 110 hours a week, I decided to take a hard look at what we were doing.

Over the course of a weekend, I analyzed all of the activities I now needed to perform. I hoped to get my work from 110 hours to 50 hours (or less). Here’s what I found:

• Only 20% of my work was high value add “knowledge work.” These were the items I still needed to perform.
• Many activities we performed were non-value add. We had done them in the past, but they were no longer necessary, so I stopped doing them altogether.
• Several activities were really the responsibility of another department or individual. Therefore, I worked to get these activities assigned to the correct parties. Not only did this reduce my workload, but it also reduced the overall time required by the company as a whole.
• A large number of “transactional” activities were done manually and were candidates for automation (we used punch cards back then). None of these activities were very complicated, so I was able to write some simple programs in a matter of hours.

After only two days of analysis and work, I managed to get my workload from 110 hours to 20 hours. Given that I had free time on my hands, I looked for other activities in the company that could be made more productive.

I discovered a large computer program that was run once a week. It helped balance workloads across the entire company (don’t worry about the details). The software was exceptionally intricate and the data requirements were massive. It often took days to input the data. Due to the complexity of the program, it had to be run overnight. I analyzed the overall process and quickly developed a “rough cut” version of the software that took only minutes to input data and seconds to run. After using my program for a year, they found that its results were within 5% accuracy of the larger program that took over 100 times the effort to run.

Most people do whatever it takes to get the job done. I was “too lazy” to do it the traditional way. I don’t mind working hard, but I don’t want to work any harder than I need to. If I can get everything done in 20 hours rather than 110 hours, I can then choose how I spend my free time. I can spend my time being creative and develop new ideas, I can perform high value work, or I can take a break and relax. It’s my choice. And it is your choice too.

• What work do you do that is non-value add? Stop doing it!
• What work do you do that others can/should do? Delegate or outsource these activities. Get a “virtual assistant” to do your routine activities. Partner with someone who might be better skilled to do this activity.
• What work can be automated? Buy off the shelf software to help speed things up. Or use eLance.com to find someone who can build you a custom computer program.

Focus your energies on the items that are truly value add AND differentiate you from the competition. Eliminate, automate, or delegate the rest.

What other strategies have you used to get more done with less effort?

P.S. If the concept of getting more done with less effort appeals to you, be sure to read my article on “compass-driven strategic planning”

P.P.S. The picture to the right is the image on the cover of the Russian translation of Goal-Free Living. Looks more like “goal-less living” to me.

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