Picture source : theruleshavechanged.wordpress.com

A decade or so ago there was a lot of talk about black box media solutions.  About how in the future there would be so much information and data about people that you wouldn’t really need strategists any more you would just plug everything into a big black box and the right answer would come out.

I got myself into a bit of trouble to be honest by being vociferous in my denial of this. 

Well here we are a decade later.  Google has turned teenager.  Google Analytics is on every planner’s desk.  There is much more information and data from many sources.  There are breakthroughs on the way in terms of linking ad consumption and sales which will make the old techniques of media implementation anachronistic.

Our ability to precision target and follow through is much greater than it was back then and it is about to get better still.  Is it time for the strategists to pack up and go home then – or retrain as data analysts?

Not yet.  Partly because the best black box analytics, and here in Holborn we do have the best, is not going to give you the whole answer yet, it has gaps still.  Partly because optimising into a sub optimal position is a watch out anyway. 

But mainly because when we do great work, we are usually coming up with ideas based on intuitive understanding of consumers.  Great strategies require faith in those ideas, and faith that they will work on a grand scale when executed well.  You can rarely test a step change of communication strategy, because the requirements of doing a controlled small scale test properly change the strategy itself.

We remember and celebrate successful strategies more than the failures of course.  But it is worth remembering too that almost all of them required a leap of faith.  And that the next good strategy will require faith  before proof is available.

Image source : www.liambyeanddadbrickwork.co.uk

If there is one thing that all businesses have in common as they look at plans for 2012 it is that we all would like improved performance from our teams.  There is no one way that guarantees improved performance. 

You can try financial incentives.  One of the things that Jack Welch is often quoted as saying is that you don’t get the behaviour you ask for you get the behaviour that you reward.  So if you ask your sales team to be warm and friendly to their clients, but incentivise them purely on how much money they bring in, don’t be surprised if they sacrifice warmth for bonus.  According to the Welch theory if you incentivise them on service levels as well as sales targets it should work out better if you truly care about both factors.

Jack doesn’t know everything it seems.  Financial incentives are not always the right answer anyway for improved performance.

Dan Pink, NY Times journalist and author of Drive : the surprising truth about what motivates us (http://www.amazon.co.uk/Drive-Surprising-Truth-About-Motivates/dp/1847677681), shatters our preconceptions about cash bonuses as a way to get better results from people. 

Through a series of experiments Pink has proved that once you step outside the region of mechanical activity – shifting a pile of bricks from one place to another for instance – and into more complicated behaviour – like selling stuff to customers – then financial incentives often panic people and their performance levels decrease.  Having a large amount of money at stake, instead of motivating them, makes them worry about failure and so they underperform.  The higher the financial incentive, the less it works it seems. 

Even with mechanical activity however significant improvements are not necessarily achieved by incentives.  As long ago as 1909 Franck Gilbreth studied the process of laying bricks – one that people had been carrying out for thousands of years – and by carefully studying the process more than doubled productivity without increasing anyone’s workload.  For details see http://en.wikipedia.org/wiki/Frank_Bunker_Gilbreth,_Sr..

Gilbreth believed above all that all aspects of the work place need to be constantly questioned and improvements constantly adopted.  Gilbreth called his improvements in bricklaying techniques “Therbligs”. 

Ours is an industry in constant change.  Our need of Therbligs grows as the pace of change continues to increase exponentially.  For increased productivity you need to change working processes as well as review the incentive programme.

image credit : www.shoarns.com

It sometimes seems that everything is changing.  We rely more and more on predictions or forecasts of how things will turn out in the new environment. 

Forecasting.  Can’t live without it, can we?

Yet the wisest comment I’ve read so far about the Vickers Independent Commission on Banking Report is from the FT’s banking editor Patrick Jenkins who says :”However hard the commission has worked to study the knock-on effects, any shift in financial rules – and Vickers is just a layer on top of many others in Europe and across the world – will have consequences that are both unintended and unforeseen”.  http://www.ft.com/.

The intention of the report is clearly to protect the UK taxpayer, but we will end up with one of the toughest systems for banking in the world, and this will have repercussions both known and unknown.

Nicholas Nassim Taleb’s majestic book The Black Swan drives the point home again and again.  Forecasts cannot predict the unpredictable.  Therefore they are not much use when it comes to a crisis.

We don’t throw the analysis out however because of this truth.

All we can do is bear all of this in mind when we look at any kind of future trends.  Forecasters of any kind are prejudiced, they are likely to stick within established norms. 

It is extremely useful therefore to ask some what if questions that take you outside those norms.  What if demand doubled or halved ?  What if a brand (say Google ) outside our sector decided to enter it ?  What would Warren Buffet do ?