The Business Lessons of Jeff Bezos

Amazon founder Jeff Bezos related the timeless lessons he's learned for business success in a recent interview. The three big ideas are:

1. Think on a different timescale
2. Put the customer first
3. Always be inventing

Bezos stated that the three ideas go together. He related that thinking long term is essential because if you are continually inventing, you are going to experience more failure than success. A lot of inventions don't work - that's one reason why you need to constantly experiment. 

Bezos also recognizes that big things start out small. Inside Amazon, when a new business reaches some small milestone of sales, email messages go around and everybody's given virtual high fives for reaching that milestone. Bezos knows from past experiences that big things start small. The biggest oak starts from an acorn, and if you want to do anything new, you've got to be willing to let that acorn grow into a little sapling and then finally into a small tree and maybe one day it will be a big business on its own.

Step-by-step is another "absolute" Bezos/Amazon lesson. It recognizes that you can't skip steps. You have to put one foot in front of the other - things take time. There are no shortcuts, but you want to do those steps with passion and ferocity.

Love what you do. Recognize that not every day is going to be fun or easy. That's why it is called work. Bezos is passionate about Amazon. He thrives on the rate of change. He loves the fact that he gets to work with brilliant people who are focused on helping Amazon customers. He admits that there are things he does not enjoy doing, but at the end of the day, he believes that he is lucky to work alongside passionate people and asks, "why would I go sit on a beach?"

Making Better Data-Based Decisions

Big data seems to be all the rage. And how can you use big data to help your business? By ignoring it, at least initially, writes statistician Cassie Kozyrkov in a recent HBR blog. She advises that a key to more effective decision making is to frame the context of the decision before looking at the data. Doing so helps avoid confirmation bias and the Ikea effect. Confirmation bias influences decision making by using data to justify what you want to believe or “to selectively confirm the choice you have already made in your heart.”

The Ikea effect overvalues something because you have put a lot of effort into it. It’s the difference between good work and hard work. If you have invested time, resources and intellectual capital in a new venture, new line, new strategy development, etc., you tend to fall in love with the effort and the potential for a successful outcome. Because of your investment, your judgment becomes clouded and that generally results in bad decision making.

To overcome confirmation bias, set your decision criteria in advance. An example is to determine how much you would pay for a ticket to a concert without knowing how much the ticket actually costs. 

To avoid the potential pitfalls of the Ikea effect and confirmation bias, Kozyrkov advises framing the decision context in advance, starting with determining what you would do if you did not have additional data to evaluate. This is known as a default action.

Another way to look at the decision is to make a judgement call to determine the lesser of all evils, absent the information that will help you make a more informed decision. After determining your default position without access to any new information, determine how you are going to use the data before it arrives. What would the numbers have to say to make you change your position from your default action? To answer that question, Kozyrkov advises imagining various states of the world and identifying whether or not the default position you determined before the data showed up is right for each of them. This exercise allows you to create a metric that makes using the data more meaningful. The final piece of the puzzle is determining your tolerance for risk. After doing so, look at the numbers.

Educating Customers on Different Finishes, What to Expect and How to Care for Them, by Emma Coward (ProSource Supply), an Education Committee Member

The importance of managing homeowners' expectations of finish and maintenance.

 

When assisting in the selection process for faucets, door hardware and cabinet hardware, it’s imperative to consider both the finishes’ effect on the style of the space and the lifestyle of the homeowner. Some consumers expect their finishes to look exactly the same years after installation, while others prefer the old world look that living finishes can bring to a space. It is important to decipher which kind of homeowner you are working with prior to recommending the finishes that best fit their space.

Homeowners benefit significantly from having a basic understanding of the differing finish processes used for specific fixtures, and will then be able to determine if that will be a good fit for their lifestyle. This will also ensure that there has been ample communication on the care and maintenance required.

There are three main finishing processes: PVD (Physical Vapor Deposition), powder coating, and living finishes.

PVD finishes are the most durable, and require the least upkeep. This process forms a molecular bond to the fixture, which gives a hardened and highly durable finish. Products with a PVD finish will not corrode, discolor, or tarnish. PVD uses a variety of vacuum deposition methods. The fixtures go from a condensed phase, to a vapor phase, then finish with a thin film-condensing phase. This final film coating is then bonded to the solid brass or bronze body. It is still recommended that these fixtures be dried with a soft cloth after use to avoid water spotting.

The biggest enemy of all finishes is caustic cleaners. With the majority of homeowners using cleaning services, it is every showroom consultant's responsibility to impress upon their customers to NEVER use cleaners containing ammonia or bleach! Mild soap and water on a soft cloth is the preferred cleaning method for all PVD and powder coated finishes.

The powder coated process does not produce the same durability as a PVD finish. If treated properly though, they can maintain the same finish from the day they were installed. Today, the “Modern Farmhouse” trend has exploded in our market in the Southeast. Because of that, the flat black finish (a finish achieved by powder coating) has become a very popular option for every segment across faucets, lighting and door hardware.

Powder coated finishes are protected by a clear powder coating that shows the underlying finish. Powder coated finishes are susceptible to scratches and damage from harsh chemicals such as bleach and ammonia that can erode the top protective layer.

The most elusive of the finishing processes is the living finish. Depending on the core material - whether it be brass or bronze - will dictate how the finishes “patina." Generally, darker bronze finishes will lighten where fixtures are handled the most. Polished unlacquered finishes will cloud and darken across the entire fixture. Our market has seen a huge rise in polished unlacquered brass.

Thanks to their access of Pinterest and Houzz, homeowners can often have a misconception of how living finishes will age. It is our responsibility to inform them of the characteristics of living finishes. Water can also have an extreme effect on a living finish. Fixtures in a shower will age completely differently than the faucets and bath accessories in the same master bath. To protect and restore the original traits of these finishes, occasionally polish them with a polishing paste and then wipe with a soft cloth. To further protect the finish, apply a faucet wax.

Choosing the right finish can define a space, but in making that selection, it must also suit the homeowner’s lifestyle.

Has Luxury Lost Its Luster?

A sobering study of luxury consumers in Asia, North America and Europe found that wealthy consumers (i.e., Americans with average incomes in excess of $200,000) are no longer enamored with luxury.  Respondents seemingly have had enough luxury in their lives, evidenced by the fact that nearly 80% of the survey respondents said they are making fewer meaningful purchases. The current political and cultural environment, along with the growing gap in income disparity, are influencing wealthy consumers’ purchasing decisions.  Many wealthy consumers do not believe that now is the right time to purchase luxurious and conspicuously consumptive products.

Price is another deterrent to the wealthy's purchasing of luxury products.  Many affluent consumers do not believe that luxury brand pricing is worth it.  More than 67% of the respondents surveyed stated that many mass-produced brands offer a comparable level of quality to their luxury counterparts.  Another sobering statistic is that 53% of the consumers reported that they will only purchase luxury products when they are discounted. 

Historically, luxury products were associated with limited quantities, distribution and availability, and the highest quality materials and craftsmanship.  Traditional luxury brands that have expanded distribution and reduced quality are now paying the price for those decisions.  

There also has been a paradigm shift in the attitudes of luxury consumers.  They don’t need more things.  As Seth Godin noted, we no longer live in a world of scarcity where there was a need and desire to acquire more things.  Luxury consumers have enough things.  Luxury consumers live in a world of abundance where there is a scarcity of time and connection.  That’s a valuable lesson for decorative plumbing and hardware showrooms.  Luxury consumers are more interested in experiences than they are products.  That’s why savvy sales professionals and showrooms focus on how a new bathroom will make a customer feel and how it will contribute to a healthier and more enjoyable lifestyle.  Talking about features, benefits and product performance will not convince a luxury consumer to pay a premium for a product any more.

The Key To Retail Success

The headlines continue to feature retail meltdowns headlined by Sears, Toys R Us, Walgreen/Rite Aid, Gap, Mattress Firm and others.  Yet, online etailers are expanding their brick-and-mortar presence, most notably Amazon books and Amazon Go, Warby Parker, Bonobos, Caspar and others. What’s the key to brick-and-mortar success?  Data, finds a new study by Harvard Business Review and Snowflake Computing. Companies that make data-based decisions have the best chance to survive.  However, the study found that only five percent of retail and consumer packaged goods companies are considered data-driven.

Retailers across all spectrums understand that they need to obtain better insight into customer needs and expectations in order to speed up their decision making, and improve processes and cost efficiencies.  However, few companies with these stated goals are actually making progress in achieving them because they primarily do not believe they have the analytical abilities to change. The HBR/Snowflake Computing survey results were also mirrored by a Retail Systems Research July 2018 survey that found retail winners believe data is a strategic asset and critical to retail success.  

Not surprisingly, Amazon and other competitors encroaching on their market were cited as the top business challenges driving innovation according to the Retail Systems Research survey.  Other areas where data-driven retailers are out performing others are

• Operational efficiencies needed to fund customer initiatives
• Ability to meet rising customer expectations
• Investors demand for innovation
• Retailers with long term leases need to develop strategies to become more productive
• Other retailers moving more quickly 

Make Meetings More Effective

How many times have you sat through a meeting and asked yourself, “Why am I here?”  In the meetings that you host, is there a possibility that your attendees are asking the same question?  In a fascinating and highly informative new book, The Art of Gathering: How We Meet and Why It Matters, Priya Parker takes meeting design to an entirely new and more effective level. 

Parker advises that most people often misunderstand what makes a group connect and a meeting matter, and encourages anyone planning a meeting to ask these questions:  

• Why meet?
• Who is the meeting for?  
• What are the goals?  
• What is the problem we are trying to solve?
• How can attendees come together to come to a solution?

The more focused a particular gathering is, the more narrowly it is framed and the more passion it arouses, the more effective it will be.  Being very specific about a meeting’s purpose and goals sharpens the gathering, because people can see themselves in it.  Ask yourself - why is this gathering different from all the other gatherings (this is called the Passover rule)?  What is this meeting that other meetings are not?  What is the higher purpose? Every time you get to a deeper reason, ask why again.  What larger problems is the meeting trying to solve?  What is the desired outcome?  What do you want to happen and what can help everyone make the choices to get there? 

Six Productivity Tips From Daniel Pink

Daniel Pink is the author of four New York Times best-selling books and one of the nation’s great thought leaders. His books address fundamentals for future success, what truly motivates people, how to persuade others to buy what you want to sell and the secrets of perfect timing. Six of Pink’s favorite productivity tips are as follows:

1) Honor the 2-Minute Rule - If you can do something in less than two minutes, do it.

 

2) Don’t Waste Your Most Productive Hours - Your most productive hours are soon after you wake up. Don’t waste that time checking on emails or with busy work. Do your most important tasks at the beginning of your workday.

 

3) When in Doubt, Use the Pomodoro Technique - Pomodoro is a technique to break large tasks into small bites. Set a timer for 25 minutes and work nonstop until the chime rings. Take a five-minute break and do whatever you want to do. Then return to your desk and work another 25 minutes nonstop, break and repeat.

 

4) Take a Systematic Approach to Email - Don’t constantly check and respond to emails. Instead, set aside a set time period when you will deal with email in large batches during nonproductive hours. Consider using apps that filter emails and notify you of the ones that you need to address immediately.

 

5) Mark Your Progress - The most powerful motivator in the office is the opportunity to do meaningful work. However, it is often difficult to measure your progress. Pink recommends a monitoring tool that he found to be so effective he invested in the company. Check out IDoneThis.

 

6) Ask the Right Questions to Make Better Decisions - If you have to make a decision and are not sure which way to go, ask yourself this question, “What would you tell your best friend to do in the same situation?” This makes the decision a lot easier to make.

How to Improve Your Persuasion Skills

There are five keys to becoming more persuasive and able to convince others to do what you want them to do. The first key is determining whether or not the person has the skill set necessary to perform to your expectations. If you get frustrated when team members won’t do things your way, is it because they are simply stubborn or do they lack confidence? You will never convince someone who is deathly afraid of public speaking to deliver a keynote address. You can’t motivate someone to see the light if their bulb does not turn on.

A second key is to consider the benefit for the individual you want to persuade. If they do "X" for you, what will they receive in return? Make sure that the individuals you want to influence know the benefits they will receive from doing what you ask.

 

The third key is to determine if the individual you want to influence actually believes the benefits you promise. If you tell a builder that if they buy brand X, everything will be available in two weeks, will your builder believe you? It’s one thing to promise benefits, but it’s another to ensure that the person truly believes that what you are promising will be delivered. 

 

The fourth key is whether or not you can you make it easier and/or less costly to do what you want someone else to perform. Determine how you can provide an easy button. 

 

The fifth step is to lower the perceived risk. Look through the lens of the person you are trying to influence or persuade. What do they believe are the risks? Are those beliefs realistic? What can you say or do to minimize them? When you eliminate obstacles, it makes it easier to get to "yes".