Good ole Jolly ole Scientific Method

Decision-making in business needs a ton of help. This field, fertile for improvement, may very well give us a decade of productivity gains ... if we can get it right.



The tools are 99% there to have data-based, risk-based, results-based, analysis-based decisions instead of the current brainstorm and committee approach employed today. They're new, so I forgive execs for not using them ... but the grace period will be up shortly. Once the first domino falls, we're likely to see a tidal wave of change in corporate decision-making models. We see hints of juvenile attempts at this in the hedge fund industry. These hints are actually just an outgrowth of the whole risk-math fad that blazed through banking in the nineties.



Here's a novel thought for you: The Scientific Method. Yes, the one from 8th grade. Need a refresher? Okay, just this once:


1/State the problem

2/Record Background Research

3/Construct a Hypothesis

4/Do the Experiment to test the Hypothesis

5/Draw a conclusion





In a corporate environment, this could be soft-sold using concepts already familiar: "Hypothessis" can be re-named "top-down analysis." The difference is recognizing that this is only one step in a longer process. Conclusions cannot be drawn from top-down analysis ... no, not even in whatever case you've just imagined.

"Do the Experiment" can be re-named "bottom-up analysis." The hypothesis must be tested against actual data, using actual logic and generating actual statistical results.

Communication

Here are two communication tips I constantly give myself:

1/ The first response to "what should we do?" should usually be "What's YOUR opinion?"
2/ To improve communication, use your listener's exact terminology and phraseology in your response.

The Annual Car Orgy

If ever you want a tiny firsthand glance at how ridiculous humans can get when they're endowed with inconceivable wealth ...

... go to Carmel, California in the middle of August. There, if you're lucky, you will find Pebble Beach Concours car show. There is no better or bigger display of car fanaticism on the planet, especially the kind of fanaticism that's expressed by the expenditure of absolutely senseless amounts of money (because they CAN) on pure toys. This stuff has no practical use whatsoever, and that's kind of the point. The median income of attendees is WELL into six-figures. Everyone owns multiple cars ... and houses ... and boats ... and probably a plane. Don't quote me on that, but you get the point.

Because of the demographic of the show, every "luxury" vendor (cars and otherwise) is there. So, aside from the ridiculous pumpkin-and-sage pants everyone wears there, what was all the rage among these famously fickle folks?

At the very top segment, the key is uniqueness. Cars are at a point where there's little additional benefit to more size and more power. And I'd say design is a huge driver right now; pure beauty also seems to have fallen off peoples' top-10 list. It's got to have an "interesting" or "evocative" design. Evoking what ? ... I don't think anybody knows. Bottom line, it's got to be attention-grabbing. To do that, it's got to be unique.

The breathtaking development of "mass affluence" over the past 30 years drives this. Over that period, the % of people below poverty line hasn't changed much, but people have moved in droves from upper-middle class to multi-millionaires. So, now the rich and very-rich are feeling a little bit ordinary. They are therefore driven to buy stuff that makes them feel different, unique. Thus "limited" everything is popular. Aston Martin's DB9 and Vanquish are just not special enough anymore ... you have to have the Zagato DB9 (of which only 99 were ever built). Ford build 4000 of their awesome "GTs" and then stopped even though they had a remaining waitlist of 1000 customers. Ferrari made only 400 uber-exclusive Enzos. They didn't even open an order book or place the cars in dealerships; rather, they sent invitations to certain existing customers. But that, too, just wasn't exclusive enough for some. Maserati (owned by Ferrari) was thus commissioned to use the Enzo platform to design a new, even more uber car, called the MC12. The factory made 50, with all purchasers hand-chosen beforehand ... Even THAT wasn't exclusive enough for James Glickenhaus. In an audacious attempt to buy his way out of an extreme case of inferiority complex, he acquired an Enzo in the secondary market (at more than double the original price) and tore the body off. He then had the world's top automotive design shop Pininfarina create a new, entirely custom body. From scratch. The car is called the P4/5 and "was commissioned as a modern homage to great Ferrari racing cars."

BTW, that's pronounced oh-mazh ... Dah-ling.

What else went over well at the show:

• There's lots of enviro-talk:
  




• Tesla - a new all-electric car based on a Lotus platform which has roughly Ferrari-level performance and costs under $150,000. 245 miles on a charge.
  
  
• Priuses are also very popular there as a statement
  


• Fractional car club membership ... like NetJets for Ferraris. NetJets, incidentally is even more popular this year.
  
  
• Customized ... everything. One billionaire bought a Ferrari Enzo (the most extraordinary sports car ever) for $1.5m, tore off the body, and had Pininfarina build an entirely custom body for him. Shaq bought a Lamborghini Gallardo and had it extended 8 inches to give him better leg room.
  
  
• 50's and 60's American muscle cars. Not the fastest, not the prettiest, not the anything-est anymore, but these cars get the highest prices at auction right now. Why? Every 60-year-old self-made millionaire out there is trying to regain his youth by buying "that car" they wanted but couldn't afford when they were 16. All these cars have to be customized with special wheels, special interiors, and especially special paint jobs. It's a Cali thing.
  
  
• Ferrari 612 Scaglietti - Ferrari's largest, most "user friendly" car ever, typically Ferrari with hand-sewn engangered-wildebeast leather or whatever, but also full of German-sedan style creature comforts and gizmos like full automatic transmission, GPS, iPod connection, in-dash tire pressure display. The car, of course has a 6 liter V12 engine which must get like 15mpg, but it's not the fastest Ferrari due to size. Basically, people own this car for the status of the brand, not for the car itself. It is no sports car.

FOLLOW UP: Apathy

“Apathy is the penultimate stage of decadence … civilizations proceed from bondage to faith to courage to liberty to abundance to selfishness to apathy to dependency back to bondage.” – Arnold Toynbee

United States of Iraq

It is a matter of inevitability that Iraq will become a federation of 3 states: shia, sunni, and kurd. Oil revenues should be pooled. National military and (minimal) federal govt costs should be deducted. Then the balance should be split equally. They will all think this is unfair. They are all perpetual whiners.

Follow Up: Sarkoszy

Sarkoszy is my man. Lets only hope he can stick to his guns and past philosophies on free markets once P-M (which he will certainly win). Beyrou is another carreer politician Chirac.

Talk amongst yourselves ...

To what extent is Kosovo, run by un/EU a model for future supra-nationalist governance?

What Will Tomorrow Bring: Melting Borders

Mutual fund which is geographically-neutral, measuring instead based on other metrics than country of origin

Core Marketing Strategies

The Ad men are gonna kill me. These guys make a very nice living by convincing corps that their marketing strategy has got to change. Different segment focus, different ad campaign, new product ... Change is the big trick in Advertizing ... which leads me to my point. Any given industry has structural attributes which dictate how revenues are generated. To increase revenue, a core marketing strategy simply needs to work on these drivers. The drivers don't change ... meaning the core marketing strategy doesn't have to either.

For example:
Consulting: increase change
Banking: increase transaction velocity

Silversun Pickups’ Lazy Eye melts in my mouth

I like to ridicule those who describe art, wine, coffee, or music in arcane stretches of unimaginable imagery and allusion. As if one could write a metaphor for a taste. WTF do "smoked exotic sandalwoods" taste like anyway, and why would you want that in your wine? In truth, only they themselves can really get meaning out of their descriptions. Yet they insist on publishing them for all of us to read and feel intellectually and perceptually inadequate about. Assholes all of them.

But in this case, I’m the asshole because the words I'onna use to describe this song are as arcane as the best the Stone has to offer. But in this rare case, they are the only and the perfect ones to describe the feeling (and that’s exactly and all it is).

Butter. Smeared across hot raisin bread. The initial Smashing Pumpkins-knockoff riff just keeps ticking rhythmically along throughout the entire song, mostly just below the cloudcover, but at lucky moments popping up above so it can be noticed. Nice to know you can count on it to always be there no matter what else is going on. It’s so sweet. So simple. So innocent -- from way back in our boyhoods, but also from way back in rock history. Pre-teen and pre-Pumpkins in fact. The simplest rock, played by the truest garage bands. Old college bands like Ween and Breeders and the like. No engineering needed or allowed here. Yet they make that plasticy hollow cheap-amp guitar sound swing and nearly twang.

The rhythms are what makes it so young. The nervous energy of youth uncontainable despite it’s owner’s best efforts. Quick and repetitive and simple and feel-good and unabashedly obvious like a habitually bouncing knee under the dinner table. Ripped baggy jeans, skater shoes, ballcap, and a cracking voice when he ventures to open his unsure mouth. Careening through everything at top speed because he KNOWS that whatever comes next will be even cooler.

And then the song picks up and screams out, takes risks, and flourishes, just like the boy in those daring moments of blind courage in the face of fears and uncertainty. Drink what the senior hands you. Talk to that girl. Kiss her among your fumbles. Drive home drunk and get away with it. And then call your buddies the next day to talk about how you shouldn’t have gotten away with it. Those moments with friends which he will someday realize defined his personality for the rest of his life. The lyrics, in that Ween-dead-ringer voice, fit the metaphor “I’ve been waiting all my life…but it’s not quite right …I’ve been waiting for this silence all night long … it’s just a matter of time…”

Yet again resurfaces the nervous, repetitive rhythm which drives the song on steadily, which is your teenage life’s steady heartbeat through all the fits and starts, ups and downs, excitements and boredoms, adventures and mishaps, growths and losses, contests and comparisons. That repeating phrase “everyone is…” but am I ? Do I rate? What question could be more age-appropriate to ask? Do you suppose those Silversun dudes meant any of this? Whether they did or didn’t I’m sure they relate.