If you want to be up on the latest in management trends and buzz, the place to be is at MIX, Gary Hamel’s latest website – a derivation from MLab I think. For those not aware of who Gary Hamel is, think modern day Drucker.

MIX stands for Management Innovation eXchange, and the website is pretty quickly building up a lot of good management content.

The premise of the site is that management in its current form is getting stale, if not already outright rotten. Taking on the 25 Moonshots for Management, MIX aims to leverage its users to collaborate openly on how to reinvent management.

I love the idea of reinventing management. However I sometimes wonder if part of the problem with management is that us management nerds think that every leader in a business needs to be a good manager. What I mean is – when I work with my clients, often they are experts at their craft and captains in their industry, but I show up and immediately try to transform them into good business managers.

I could certainly argue both sides of this concept, but MIX could argue it better! Check it out…

Thanks,

Rick Maher

A friend and I were talking about an experience he deals with in his business. Basically he finds that his customers fall into three categories:

1. Happy Customers
2. Unhappy Customers Effective at Rectifying their Unhappiness
3. Unhappy Customers Ineffective at Rectifying their Unhappiness

We were analyzing how customers control their own destiny in achieving their category, but that the behaviors that lead to achievement of the categories are not behaviors that are taught in any classroom either of us had ever been in.

Some call these behaviors “people skills,” others call it “savvy,” but I call it “social engineering.”

It’s the behaviors that a person uses to interact with other people in order to get what they want.

I witnessed a situation at the airport this past weekend that I think demonstrates the key principles:

My flight was delayed and after boarding and sitting on the plane for an hour, all the passengers were forced to get back off the plane and arrange a new schedule with the airline representative.

The first few passengers worked quickly, and methodically through their options with the representative. Then the next passenger took a different approach.

When he was told his flight options, he began screaming at the representative that her airline was causing him a terrible inconvenience, not to mention lost money, etc.

As you can imagine, he had a very difficult time arranging for a new flight schedule.

I am asserting that his difficulty in arranging a new flight schedule was not primarily due to his particular needs being greater or more difficult than the other passengers, but rather due to his inability to engineer the social interaction between himself and the airline representative.

What I learned from the effective social engineers (first few passengers in line):

• Asking pointed questions politely allows the representative a guilt-free opportunity to add on options that she previously failed to identify
• Offering empathy toward the representative’s stressful task of having to reschedule an entire plane full of passengers without any help was quickly reciprocated in the representative being empathetic to the inconvenienced passengers social engineers
• Openly disclosing to the representative that the social engineers were also leveraging the assistance of their travel agent via phone put the representative slightly at ease, and simultaneously sparked a sense of urgency for the representative – almost as if the rep wanted to beat the travel agent to the solution in a little race!

What I learned from the ineffective social engineer (the screaming passenger):

• Speaking loudly and rudely to the representative drew attention from all sorts of people in the area, and caused the representative to become openly / loudly defensive, distracting her from the ultimate task of finding the best alternative flight schedule
• Hiding efforts to identify a solution with a travel agent from the representative led to confusion by the representative and hesitation to pull the trigger on booking the best alternative flight selection
• Making big body movements such as dramatic paces to and from the representatives station tempted the representative into moving on to service the next passenger in line who looked to be less intimidating and therefore more appealing as someone to serve, again slowing and hampering progress of finding the best possible flight schedule.

These lessons learned I think really boil down to a few key principles that you need to know and understand in order to be effective as a social engineer.

1. Recognize what is flexible and what is rigid – in this example, flights around the world are not going to reschedule themselves to accommodate one passenger.
2. People like being a part of a solution, but hate being a part of a problem – the representative wants to be the one that saves the day by finding a flight schedule that you are happy with, but hates to be the one drawing attention at the center of an angry screaming person
3. People operate within their normal constraints unless shown how not to – the representative assumed that everyone’s final destination was that of the final destination in her airline’s reservation, but when a customer said “I can fly to XYZ instead of ABC if there are good options,” the representative was able to open up a whole new set of potential solutions

Social engineering can do a lot more than minimize your travel delays in case of a flustered airline representative. Here are a few other recent instances of how I think being an effective social engineer has helped me:

• Politely thanking an administrative assistant by name evoked her to offer “next time you need xyz, just let me know I have access to the calendar!” Had I not thanked her, she would most likely not have even verbalized a goodbye as I walked past.
• Surprising my fiance with a small bouquet of flowers seemed to buy me some lee-way in chowing down on sweets which she normally would harass me about.
• Asking “is everything ok?” of someone who forgot about a scheduled appointment (instead of getting angry at them over it) spurred them to fit me in quickly rather than just cancel the appointment.

Although, sometimes social engineering requires being stern, perhaps even loud and borderline rude:

• As a soccer referee, if a tactical foul was made early in the game I would purposely establish my presence and control by exclaiming loud enough for all the players to hear, “NOT TODAY!” in attempt to proactively prevent repeated offenses.
• On many consulting projects I rudely pointed out errors in peer’s work in order to embarrass my peer into fixing the errors prior to the client seeing them and discrediting our collective efforts.

Here’s the bottom line: consciously considering multiple behavior options in interpersonal communication can yield great results. Social engineering FTW!

I want to start a business. Usually that statement evokes one of two responses:

1. Why don’t you?
2. So do it!

I respond similarly for both:

• I have a ton of business ideas that I think are viable and could be lucrative, but I don’t love them, and can’t imagine dedicating myself to them at this point
• I don’t have or don’t want to risk the cash that would be necessary to start the business

Those that know me, know that I’m a big proponent of transparency, and in that nature I’m going to risk riches by posting a few of my Big Ideas for businesses here for the world (honestly I get about 10 visitors per day to the site…) to read.

I’ve mentioned before that I believe there to be an opportunity to revolutionize postal service by implementing a scan & email alternative in order to slash physical transport of mail therefore smashing down costs.

Another idea that I’ve been kicking around for a long time is that of revolutionizing wallets – specifically all the plastic within them. I mean ALL the plastic within them.

UPDATE: Cool! I just used PlanCruncher to create a simple business plan for One Card (pdf).

Here’s a list of all the plastic in my wallet right now:

• Driver’s License
• Old Student ID (for scamming student discounts out of various vendors)
• Debit Card
• Credit Card 1
• Credit Card 2 (I would imagine that many people have more than 2)
• Hotel Room Key
• Frequent Flier Card (I actually have about 15 of these things, but only one in my wallet at this moment – the rest are in my brief case)
• Grocery Store Discount Card (grocery store clerks finally cracked down and stopped letting me use one they had handy)

That makes 8 cards currently in my wallet. On each of them is a magnetic strip that contains some amount of information about me.

Other people have different / more cards:

• gift cards
• employee id & office security access cards

Here’s the crux of the business idea – sell a card that allows people to compress all of these cards into one card. When you open an account with a credit card / bank, get a room at a hotel, sign up for a frequent (flier / diner / shopper) account, join a club, etc. you would be able to add that information to your “one card”. Maybe via a magnetic strip reader that you hooked up to your computer via usb, maybe via a web interface that you could access with your iphone…

How to Make Big Bucks!

I think there are a few ways to generate revenue in this business.

1. Subscription Charges
2. Credit / Interest
3. Vendor Transaction Charges
4. Vendor Credit Account Manager
5. Arbitrage
6. Concierge
7. Analytics

Subscription charges

This seems to be the simplest and cleanest way to generate revenue. The idea being that you charge “one card” holders some amount per year. Basically this is emulating a credit card annual fee.

Credit / Interest

Again, emulating current credit card revenue channels, grant “one card” holders a line of credit and charge interest greater than the cost of capital on their balance.

Vendor Transaction Charges

Noticing a pattern? In the same manner as credit card companies, charge vendors a percent of every transaction.

Vendor Credit Account Manager

Here is a new revenue channel idea! Sell a service to small businesses whereby you allow them to use your account with each of the major credit card companies (visa / mc / amex / etc). Scale a large enough network of vendors and earn profit by offering these vendors transaction rates lower than they are able to get from the cc companies alone.

Arbitrage

This is my favorite – albeit possibly the most far-fetched idea. It mostly centers around gift cards and affinity points / miles. Let me illustrate the idea using a possible scenario:

Christmas Day – John gets a $50 Best Buy gift card and loads it into his “one card” account

December 26 – Sue charges a $100 Best Buy purchase to her “one card” account

December 26 – “one card inc” pays best buy with john’s $50 gift card and $50 cash transfer

December 26 – “one card inc” bills Sue for $100 cash

Eventually – Sue pays off her $100 balance, and “one card inc” accrues interest on the $50 that came off the top from John’s gift card

Eventually – John uses some / all of his Best Buy gift card credit and “one card inc” loses the ability to accrue interest on the cash paid by Sue

Possibly – John never uses some / all of his gift card, one card enjoys accruing interest forever!

Inevitably – Retailers (e.g. Best Buy) would revolt! You’d be stealing their game! This arbitrage is exactly what they do! This arbitrage model would be hitting them from both sides: gift cards would be redeemed much sooner, and in full. A friend well versed in the retail industry tells me that gift cards on average still have 30% of their value after one year.

Also – run a similar scheme with frequent flier miles!

Concierge

Back to the old credit card revenue stream model – offer “one card” holders a service to purchase anything through “one card”. Ideally “one card” adds value beyond what is available through other channels – faster service / delivery, access (e.g. tix to sold out events), cost (e.g. through scale – credit card companies are doing this now with services such as credit monitoring).

Analytics

Credit card companies are trying to do this now, but seem to really suck at it. The idea is that as a hub of consumer activity, you would know a LOT about consumer preferences and tendencies, and that this knowledge is valuable. The key would be making it saleable beyond the junk mail machines that are currently at work. For example, waive the card holders’ annual fee in exchange for them linking their facebook / foursquare / etc. accounts to their “one card” account thereby adding an additional layer beyond pure purchasing and demographic info. Or allow customers to pay off their balance through viewing (targeted) advertisements on their account webpage.

In Response to the Haters:

Here are a few of the arguments commonly puked out by haters when I tell them this idea:

• What if you lose the card? You’re screwed!
• Actually, if you lose your wallet with all 8 cards in it you’d be screwed. Do you have all 8 card issuer phone numbers on speed dial to cancel quickly? I bet if you only had to make one call you’d be happy.
• While you try to build a credit card transaction network large enough to make this profitable, one of the big players will smash you!
• Indeed this is one of my fears, but if you launch with a compelling enough value proposition, I think you could carve out a nice segment then put up targeted fights with the big guys… or maybe even sell out to a big guy and hit the links!
• Credit cards are a dead media! Haven’t you ever heard of “cube”????
• YES!!! One thing I would love more than going from 8 to 1 pieces of plastic in my wallet would be going from 8 to 0! If you created “one card inc” you would be exceptionally positioned to transition to “consolidated accounts and virtual payments inc” – I promise
• Retailers / airlines / etc. would never allow the arbitrage idea
• Maybe not verbatim in the manner that it was presented, but what if as “one card” you gave Best Buy $50 gift card plus $50 cash plus $x for the gift card acceptance enticement. So long as you were confident that you could earn greater than $x in the interest, it’d still be worth trying. Perhaps eventually “one card inc” could become a “gift card administrator” with strategic partnerships with retailers.



One of the many business ideas I toss around with friends is a service where physical postal mail is scanned and emailed to the recipient.

About a month ago, I commented on a post at The Operations Room, entitled Green Mail. The post was about the USPS transitioning to a more fuel efficient delivery fleet, but I mentioned the idea of them cutting their fleet drastically and moving to a scan / email service. In response to my comment which mentioned that privacy issues could be sorted out, the following comment appeared:

The bits on “the mail is scanned” and “Privacy issues could be sorted out” are the funniest (oh, yes, someone will open my mail and scan it, and there won’t any privacy issues!).

As it turns out, there are people willing to risk it. Finland’s postal service announced this week that they will be starting a pilot program this week.

In an effort to increase efficiency, cut carbon emissions, and reduce costs, Finland has begun a pilot program wherein snail-mail letters are converted into PDFs and made viewable online by their addressees, in advance or in lieu of physical delivery.

The Operations Room also caught this news, and brought up a few other potential roadblocks to paperless postal service:

What happens when someone sends you a check? I realize that worrying about checks is almost to the point of worrying about replacing a turntable stylus, but they still presumably have to worry about grandmothers sending birthday cards with a little something inside it.

Yes! I love receiving checks and cards stuffed with cash in the mail! I hate the hassle of going to the bank though… So postal service, please forward all checks and cash right on to my bank please! Or… Great, I’ll expect those checks and cash in my once weekly delivery!

It turns out there are other services like this available already. Earth Class Mail and Swiss Post (video below) offer a system whereby they scan the envelope exterior then you log on at your convenience and mark each item as:

• Deliver to me as normal (or any address actually like my winter home in Florida) OR…
• Shred and recycle (my name is not “Resident” or “Neighbor” thank you very much) OR…
• Open, scan contents, and email to me

Swiss Post Box has licensed the ECM system and created this video introducing the service and process:

Other Options Currently Available

Canada Post has also started a program (Canada ePost) to reduce the amount of physical mail being transported around although is currently limited to a certain list of participants and has not reduced the daily delivery routings. Another take on this idea is Zumbox which allows senders to mail electronically to a postal address of anyone who has signed up for the Zumbox service. Zumbox has gotten some municipality support (San Francisco and Minneapolis to name two) by aligning with a green initiative called “Paperless Please,” but has also not resulted in a reduction in postal routings.

The Operations Room author goes on to ask:

What about magazines or catalogues? Do users of this service have to make do with web-based media? I can’t imagine that will play well with publishers.

First of all, assuming that the email postal service would be receiver opt-in, I can’t imagine publishers being so dumb as to not play along. Talk about Voice of Customer!

That said, I’d be the first to admit that I enjoy flipping through a physical magazine. However, some would argue that today’s iPad release marks a shift in print based content delivery, not to mention the ongoing growth of smartphones, netbooks, and general wireless media access. If the technology were right, I might realize that I enjoy browsing a magazine on an electronic device even more…

Also, there are obvious benefits to the publishers in transitioning from print based to electronic delivery. Most notably, advertisers are moving more and more online because of its ability to serve targeted, relevant ads rather than blanket ads (i.e. one in every copy). And I’m confident in stating that web based content is cheaper to produce at almost any scale, and enables massively greater reader interaction (e.g. magazine “covers” with targeted images or headlines, “similar article” linking, comments, “tweet this” links… the list goes on…).

Catalogs and pure advertisements may initially have a more difficult time coping with the idea that they should no longer send out paper, although I bet they would pay a postal service for information on who click “shred” and who clicked “scan and email”… Is it really worse than sending a paper version to every house in the neighborhood and blindly wondering how many went directly into the nearest trash can? (Pre-approved credit card offers, I’m looking at you…).  Marketers go to extreme lengths to identify what images, what copy, and what timing converts the best from a mail-out to redemption or sales. Currently though they are often left with sales as their performance metric – leaving a gap between when the customer received the mail to when they “redeemed.” If they were able to identify which slogans elicited a “scan and email” or “deliver to me” and then also measure sales or redemptions, they have a more precise measure of the effectiveness of their materials, and more detail on where the conversion hit or missed.

But Where is the Value-Add?

If value was high enough to just move everything currently utilizing the postal service to the internet, it would have happened already. And there is no question that some (perhaps most) people do not trust the postal service to handle their personal mail. Indeed this was the knee jerk comment on my initial comment on The Operations Room first post on the topic.

But this is exactly where I can see the value.

Currently the sender places the piece of mail in a mail box where at least one person will have to handle it to pick it up before it is routed through untold numbers of machines and human hands and eventually placed into one more postal service employee’s hands for delivery to the recipients mailbox. Would you know if any of those humans were crafty enough to be able to open and re-seal your mail after reading your personal information? Do you trust the people at your bank / employer / lawyer / [insert service provider] to not read your personal information and sell it to the highest bidder?

Making this email postal service viable is all in its execution.

How I Would Do It:

Many are aware of the automation capabilities in terms of mail handling. My experiences in corporate mail rooms has taught me that paper mail can be opened and separated without any human interaction other than dumping a bucket of mail into a hopper. From there, standard paper and envelope sizes are automatically sorted and arranged for automated scanning, and non-standard pieces are separated for manual handling.

So, if I were a postal service looking to add value here is what I would do:

1. Secure the process in a “clean room” where all activity is monitored closely to employee badges (or biometric identification… my laptop requires a scan of my fingerprint, why can’t a post office scanner)
2. Educate customers (mail receivers) on the extent of automation and security; “When you send paper mail, 10 humans touch it. When you send and receive ‘E-Post’ 3 humans touch it – all in the secure confines of the ‘E-Post’ clean room.”
3. Create a “material” option whereby a sender could require that the original physical parcel be delivered. This would serve for legal documents, mail order goods, etc.
4. Allow receivers to set “filters” – e.g. ‘if sent by [fill in the blank e.g. Grandma] deliver [choose delivery medium e.g. Physical Mail - Don't Open & Scan]
5. Set the price structure from economical to expensive: electronic original, standard size original, non-standard size original

Bonus: This very idea has actually been used as far back as WWII! Check out Victory Mail!

I came across a cool site today that is as dedicated as any other I’ve found to business operations management as I define it.

The Operations Room is written by two Kellogg School of Management professors (Martin Lariviere and Gad Allon).

A couple of their recent posts especially caught my eye – Green Mail and Efficiency Expertise.

Green Mail touches on how the USPS is taking notable steps toward reducing it’s carbon footprint, and in the comments I rant a bit about how it seems so easy to revolutionize the postal system… I’ll probably have to craft a more thorough post about this in the future…

Efficiency Expertise comments on a recent podcast by NPR – Our Messy Inefficient Economy where someone in a similar operations improvement consulting role to the one I have worked comments on how they help companies improve, and a few of the drawbacks of the work too.

Great blog gentlemen, please keep it coming!