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The ethereal quality of music, with its power to evoke the intangible, reminds us that at the heart of every business strategy should be the goal to connect, to move, and to inspire. Just as a beautiful piece of music is more than the sum of its notes, a successful business strategy is more than the sum of its data points — it’s an artful blend of logic, emotion, and timing.

Harmonising Patterns: The Synchronous Dance of Music, Mathematics, and Business

Music, mathematics, and strategy might seem like disparate fields at first glance, yet they share a profound connection that can enrich and inform business management. At the core of this triad is a common thread: patterns. Music is an auditory tapestry of rhythm and harmony; mathematics is the language of logical patterns; and strategy is the art of planning based on patterns of behaviour and market trends. Let’s explore this interconnection and its implications for business.

The Harmonic Convergence of Music and Mathematics

Music is an art form that moves us, stirring emotions that resonate deep within our psyche. Yet, underlying this ethereal quality is a rigorous structure as precise as any mathematical equation. Pythagoras, the Greek philosopher, discovered the numerical relationships between the lengths of strings on instruments and the harmonies they produce, effectively unveiling the music in mathematics.

Similarly, in business, “music” is the emotional intelligence and human-centric approach we use to connect with customers, understand their needs, and create resonating marketing campaigns. The “mathematics” is the data analytics, market research, and financial modelling that underpin our strategies with empirical evidence and predictive insights.

Rhythm and Routine: The Beat of Business

Just as music is built on beats and measures, business operations rely on routines and cycles. There’s a rhythm to the way markets pulse, to the ebb and flow of consumer demand, and to the cycle of product development. In music, a skilled composer arranges notes and chords to create a piece that moves seamlessly from tension to resolution. In business, a strategist organises resources and plans initiatives to navigate a company from challenge to success.

Improvisation and Innovation: Jazzing Up the Strategy

Jazz music is the epitome of spontaneous creation within a framework of understanding. Musicians take a theme and improvise, creating variations that are novel yet still harmonic. In business, this translates to innovation within the confines of market realities and company capabilities. The best strategists, like jazz musicians, are those who can take the familiar and twist it into something fresh and competitive.

The Silent Pause: The Power of Negative Space

In music, silence is as important as sound. The pauses give shape to the melodies and emphasise what is played. In mathematics, the concept of zero — the empty set — is a powerful tool that transforms the field. In business, understanding what not to do, when to pause an initiative, or when to pull back can be as impactful as knowing when to act. Recognising the negative space allows for a clearer view of the overall picture.

Conclusion: Orchestration of Business Success

The business consultant’s role is akin to that of a conductor, who must understand the score (the market), the capabilities of the individual players (the team), and the nuances of timing and dynamics to create a symphony of success. By learning from the relationship between music and mathematics, strategists can develop a more holistic and nuanced approach to business planning. They can craft strategies that not only resonate on a spreadsheet but also strike a chord with the human element of business — the customers, employees, and stakeholders.

Photo by Gustavo Fring

Organisations are complex entities, often reflecting the multifaceted nature of human interactions and the myriad of challenges that come with collective decision-making. At the heart of many organisations is the board of trustees, a group responsible for the overall governance and strategic direction. However, a toxic board of trustees can lead to significant organisational failure, particularly when there is a disconnect between the board and the delivery team. This blog explores the repercussions of such toxicity and mistrust, and how it undermines the capability of skilled delivery teams.

The Crux of Toxicity

A toxic board of trustees is characterised by a culture of scepticism, micromanagement, and an overarching lack of faith in the delivery team’s abilities. This toxicity manifests in various ways, from constant questioning of the team’s decisions to complete disregard for their professional opinions. It creates an environment where distrust is the norm, and where the delivery team’s expertise is undervalued.

The Delivery Team’s Plight

Imagine a scenario where you have a delivery team that is more skilled, more qualified, and more experienced than the trustees overseeing them. This team understands the nuances of the day-to-day operations and has the technical know-how to implement strategies effectively. Yet, their hands are tied by a board that does not trust them. This disconnect can lead to several issues:

1. Stifled Innovation: When a team’s recommendations are consistently overruled or ignored, it stifles creativity and innovation. The team becomes reluctant to propose new ideas, knowing they will likely be dismissed.
2. Decreased Morale: A lack of trust can demoralise even the most dedicated employees. Over time, this can lead to decreased productivity, a drop in quality, and a high turnover rate.
3. Inefficient Decision-Making: Boards without the requisite knowledge that second-guess their delivery team can cause delays in decision-making, leading to missed opportunities and an inability to react swiftly to market changes.
4. Risk Aversion: Boards that operate out of fear or lack of understanding may avoid taking calculated risks, which is often necessary for growth and adaptation.
5. Reputational Damage: As word spreads about the toxic culture, it becomes harder to attract top talent, and the organisation’s reputation can suffer, which can have long-term effects on sustainability and success.

The Root Causes of Mistrust

So why would a board not trust a competent delivery team? Several factors contribute to this dysfunction:

• Lack of Understanding: Trustees may not fully understand the complexities of the organisation’s operations and thus default to micromanagement.
• Ego and Power Dynamics: Some trustees may feel the need to assert their authority or validate their position by challenging the delivery team.
• Poor Communication: Without transparent and regular communication, misunderstandings can arise, leading to mistrust.
• Previous Negative Experiences: Past failures or missteps by the delivery team can colour the perception of current trustees, even if the team’s composition has changed.

The Path to Recovery

Addressing the toxicity in the boardroom is essential for organisational health:

• Education and Training: Trustees should be educated about the organisation’s work and the expertise of the delivery team.
• Clear Roles and Responsibilities: Establishing clear demarcations between governance and management can prevent overreach (the big one).
• Build Trust through Engagement: Involving trustees in aspects of delivery without overstepping can build understanding and trust.
• Performance Metrics: Use objective metrics to assess the delivery team’s performance, creating a basis for trust in their abilities (KPIs, not micro-statistical data).
• Open Communication Channels: Regular and structured communication between the board and the delivery team can bridge gaps in understanding.

Conclusion

When trustees do not trust their delivery team, they not only undermine the individuals within that team but also jeopardise the organisation’s future. Trust is a two-way street, requiring both the board and the delivery team to engage constructively and with mutual respect. Organisations must strive to build this trust to harness the full potential of their skilled professionals and navigate the path to success.

By addressing these issues head-on, organisations can turn toxic environments into thriving ones where the board and delivery team work in harmony for the greater good.

Photo by Andrea Piacquadio

Net Promoter Score – your customer feedback score. A measure of customer loyalty.

Steve Jobs was famous for saying that he never asked for Customer feedback. But when Ron Johnson was tasked with creating the Apple Retail store experience he needed a way to benchmark Customer loyalty. That same question had occupied the minds of management consulting firm Bain & Co. They found that many customer surveys failed to measure this important metric, and so they began a journey to develop a single question that could act as a customer loyalty benchmark. We’ll see how Ron fared later in this post.

The first thing they did was to seek out survey questions that had the strongest correlation with a repeat purchase. They examined thousands of surveys and found that just one question could accomplish this. That question is: Would you recommend us to a friend or colleague?

This is what the Bain & Co survey question looks like. It’s an 11 point scale from 0 to 10.

The survey starts with 0 rather than 1, since the number 1 can represent a “pole position” for some.

In analyzing the results, Bain decided to group responses into three distinct categories. The first group, known as Detractors, marked the answer 0-6. These guys don’t like you. The next group (answers of 7 or 8) and are known as Passives. They have no energy for your company. The final group really do like you and responded with a 9 or 10. These guys will recommend you and are most likely to repeat purchase.

Your score is calculated by subtracting the percentage of Detractors from the percentage of Promoters. Passives are discarded as they neither like or dislike you — but only for the purpose of the score calculation. Bain also recommends that a text question be added, so that context can be derived from the measurement with Sentiment analysis.

So now we have a score that can measure customer loyalty. It’s called the Net Promoter® Score, or NPS for short. What’s more, it’s a number we can trust because it’s an external measure and it’s a number used by our peers too. Every year Bain & Co publish a survey of scores so you can see how you measure up. Top firms like Apple, Amazon, and Costco score in the high 70’s That’s the number to beat !

The 11-point scale is nothing new, however. Thomas Juster came up with the same scale in 1966 as part of a buyer intention study. What’s new is that more and more leading firms are adopting this measure as their benchmark and employing tools that react quickly to feedback.

Dealing with the three categories of respondents

As mentioned above, Detractors simply do not like you. This is where all your bad profits are — “bad profits” because they are not repeatable. It’s very important to be able to identify this group and deal with them right away. The NPS app can send a “sorry for your experience” email immediately. Reacting quickly to a problem can often turn your detractors around! You can create different email messages based on each answer given, too.

As the name implies, Passives don’t really care one way or the other about your company. Typically they feel that they got what they paid for, but are also likely to defect as soon as a competitor appears with a similar offer. Identifying this group and sending them the right communications at the appropriate moment will be important. Sending the wrong message to the wrong group is a schoolboy mistake -one you can avoid with the NPS app.

Promoters are more likely to repeat buy, and are also less sensitive to price. Companies like Enterprise RAC actively use promoters in their marketing referral programs and they credit NPS with the success of that. All your good profits are here, because they are repeatable profits.

Thousands of companies like Lego, Facebook, Dell, and Apple use NPS. Let’s look at a few case studies.
When Ron Johnson was tasked with creating the great Apple store experience, he wanted to convert the local PC user using word-of-mouth and referral. NPS was perfect for that. Apple stores use email at POS to manage the score, so having a robust email capability was important to them too. Their NPS works so well they are also looking to add Net Promoter People, where the question is: “Would you recommend this as a place to work ?”

Container Stores, established in 1978, operate 60 locations across the US. Using the NPS app, they can see in real time the NPS for any given store and react when it goes up or down. That’s right — reacting when a score goes up is just as important as reacting when it goes down. Perhaps something good is happening that can be repeated in other stores! Each store manager can see how their individual unit is performing and their manager can see all stores for their region. If a store get’s a poor individual score, the manager get’s an email right away as does the customer. Being able to deal with detractors right away is a proven method to improve customer loyalty.

Harnessing sentiment analysis
Understanding what words customers are using to describe their experience is an important semantic measurement. The NPS app has built-in sentiment analysis so you can group customers by the words they use in their feedback.

Now that you know more about NPS what’s next?

Here are some questions to ask:

• Are we measuring customer feedback in a robust and consistent way?
• Are we using different survey methods in different stores or countries?
• Do we react to feedback right away?
• Do we know who our Detractors are?
• Do we know who our Promoters are?

Credits: Net Promoter is a registered trademark of Satmetrix. In this article we used examples from the book The Ultimate Question by Fred Reichheld with Don Markey. We also referenced the published papers of Economist F. Thomas Juster, who devised the 11-point buyer intention scale.

Photo by Efren Barahona on Unsplash

Our World In the 2020s Has To Address This Issue.

Let’s take a little look back at the things we have been taught about Economics.

OMG…you just switched off and thought ‘boring…I’m not interested’ but here’s why you should be and why I’ve made it easy to understand.

Firstly, and quite astonishingly economics calls itself a science. It is one of the many social sciences that isn’t really a science. Secondly, economists cannot agree on the definition of ‘Economics’ or indeed why it isn’t a science in its present form. But it should be a science…so please, bear with me.

Economics is a belief. It is a guess at what we might need and how we all pay for it. (Or will we?) Maybe we don’t need to pay for it. Maybe this ‘brave new [AI] world’ will provide abundantly for us and ask nothing in return…maybe, just maybe, we are on the threshold of a utopian lifestyle revolution and, well, just maybe, it was how it was supposed to be…all along…can you imagine what would have happened if…

Please read on…

One of my oldest and dearest friends invited me for breakfast the other day. This person has worked hard all of their life. They have taken risks. They pay their dues and they support many good works and charities. They’ve made a small fortune through their hard work and tenacity. They have played by the rules and contributed massively to society. I admire this person very much and I trust them.

We had a great time. We caught up with tales about our family and friends. We talked about life and love. We pretty much have the same beliefs apart from one or two fundamental issues around work. They maintain that work is essential. It is necessary. It is good for the soul. It is what is expected of us. It is good and wholesome. It is honourable. It is the answer to poverty. People just need to go out and work hard if they want to get on in life. “If I can do it”, they said, “anyone can”. They were resolute that work = happiness.

Now I really don’t want to diminish what they have achieved or their aspiration for others to achieve what they have…starting from scratch and being kind on the way up. I deeply admire them and love them.

So Why Don’t We Agree?

But the concept of work is a modern phenomenon. It came about because of greed. It happened because humans became a means to an end. It spawned the construct of master and slaves. It became most corrupt when people were made to work in order to create wealth for those that didn’t work. It blended the notion that doing work was subordinated in favour of telling others to do work. Somehow, telling people to work became more rewarding than doing the work. Economics is about the management of grossly disproportionate inputs and outputs.

Modern economics came about when we stopped using our gross domestic product to support people and instead, we were made to feel that it was more important to use people to support and serve the money that was being made from our gross domestic product.

It was power that saw the opportunity to be powerful and this power came from a subtle invention that money became a just reward for our toil and could be used to buy the things that others toiled to produce. Profit was made and it filtered up to the powerful.

Where Did It All Go Wrong?

It starts with the word of God. Wait…bear with me (again). There’s a reason it starts with God. Virtually all of our moral constructs, our beliefs and values all started with God…or at least they started with what the church says about God. This doesn’t require that you believe in God, just that you understand where your beliefs came from. They got passed down. They asked us to do the right thing…or else.

So, God says (in the bible) that the first man (Adam) broke the covenant with God and as a result, all men were sent to toil the land with their hands (there’s no mention of getting others to toil with their hands on your behalf). The problem we are facing, more and more, is we are being updated and uprooted by robots and AI. They can work 24/7, they make the right decisions each time, every time and they have far better emotional intelligence.

I know, I hear ya…how can a machine have better emotional intelligence than a human? Well. it’s because they make the right decision each time and every time…humans don’t.

So How Do We Fix It?

Economics is an art form bounded by the science of finality. There is no infinity in economics, there is simply managing the effective use of resources and aligning our expectations downwards towards sustainability. So the glaringly obvious answer to our existential conundrum is that we should work less, live off life’s abundant provision and consume way less than we are doing right now. Interestingly, this is also mentioned in the Bible.

According to Benjamin Davis
“Economics is the science that studies how scarce resources are allocated to meet competing and unlimited wants and how human beings satisfy their material wants and needs.”

According to Bradely R. Schiller 
“Economics is the study of how best to allocate scarce resources among competing uses.“

According to Jackson and Mclver
“Economics is concerned with the efficient use of limited productive resources for the purpose of attaining the maximum satisfaction of our material wants.”

Two of them claim that it is the study of allocating resources and one claims that it is their practical application. One definition I have seen that sees economics as a PLAN > DO > CHECK > ACT cycle of actions and analysis, is the one put forward by Investopedia. As the name suggests, their slant is towards trade and the investment and allocation of resources. This, I believe, is how we focus our attention on economic ‘output’.

So What Is Economics Again?

“Economics is a social science concerned with the production, distribution, and consumption of goods and services. It studies how individuals, businesses, governments, and nations make choices about how to allocate resources. Economics focuses on the actions of human beings, based on assumptions that humans act with rational behaviour, seeking the most optimal level of benefit or utility. The building blocks of economics are the studies of labour and trade. Since there are many possible applications of human labour and many different ways to acquire resources, it is the task of economics to determine which methods yield the best results.” ***

Nah…not in my book (or God’s)…Economics is a system whereby money is used to serve humans rather than expecting humans to be used to serve money…

*** Investopedia – Guide To Economics – Terms

Photo by Evangeline Shaw on Unsplash