The Rise and Fall of Nate Silver: A Lesson in Risk Communication

thinkstockphotos-543817436Political prognosticator and analytics guru Nate Silver rose to national fame by correctly predicting elections. But in 2016, Silver joined almost every other analyst by projecting a victory for Hillary Clinton over Donald Trump. Was Silver’s good luck over?

Cognitive Bias and the “Failure” of Data

Actually, Silver’s estimate for the 2016 election was closer to correct than almost anyone else’s. He saw Clinton as a heavy favorite, but still gave Donald Trump a roughly one-in-three shot of winning. But the world didn’t remember that part of the projection once the election results came in. They just remembered the part Silver got wrong. Nobel Prize winner Daniel Kahneman has an explanation: cognitive bias.

Kahneman studied how people make decisions and judgments, and he quickly discovered that they don’t make any sense. People like to think of themselves as logical and rational, but they mostly use logic to justify believing whatever they want to believe anyway. And one thing people absolutely love to believe is that the future is certain. Human minds loathe uncertainty. Uncertainty breeds anxiety and fear—sometimes paralyzing fear. So when given a number like “one in three” or “ninety percent,” they subconsciously convert the odds to “yes” or “no.”

This cognitive bias is often very useful. You probably never consider the statistical chance that you’ll be run over by a bus because if you did, you might never leave the house. It’s far easier, and probably mentally healthier, to treat the risk of bus accidents as a 0. But the tendency to round probabilities up or down can be disastrous in the business world.

Communicating Risk

Have you told your boss that there’s a 90% chance you’ll make the sale? If the deal didn’t go through, you were probably in a bit of hot water. Has a supplier ever told you her product’s failure rate was less than 1%? You’d probably be pretty mad if your order was a dud. The problem with both of those statements of probability is that they do a poor job of communicating risk. They invite the mind’s cognitive bias to take over and convert the estimate into a certainty. When that certainty turns out not to be so certain, it feels like a broken promise.

That’s why the world decided Nate Silver was wrong. They had rounded up the probability of a Clinton victory to a guarantee. When Trump won, it felt like Silver had broken his word. His failure wasn’t in the data—it was in the way he communicated the risk.

The lesson here is that quoting numbers won’t save you.

Don’t just toss out percentages—put them in context. Visualizations are one useful technique. If a product will fail one time in a hundred, a graphic with 99 white shapes and one black shape gets the message across far more effectively than the numbers. Analogies are also effective. A 90% probability? That’s about the same as the chance that an NFL kicker will make a 32-yard field goal. Anchoring the numbers to a familiar context creates a lasting impression. It forces the mind to acknowledge uncertainty.

In business and life, people care about honesty. But if your goal is to be trustworthy, it’s not enough to state the facts. You have to make those facts sink into others’ minds. When it comes to probabilities and risks, that task is taller than it looks.

Indra Nooyi: A Story in Being Yourself and Persistence

thinkstockphotos-500841556Have you ever heard of Indra Nooyi?

Maybe not, but you’ve probably bought her product at one time or another in the past year. Ms. Nooyi is the CEO of Pepsi-Co., the makers of the popular and well-known Pepsi soda brand. However, her position at Pepsi is not necessarily what is the most amazing fact of her story. Granted, reaching the status of being a Fortune 500 company CEO is huge and significant, but how Ms. Nooyi got her start is the real story. That’s because she risked everything with no safety net to fall back on.

Some Compelling Advice

Indra Nooyi came to the U.S. like so many other great minds, arriving as a student immigrant. Ms. Nooyi jumped to a slot in Harvard’s master’s degree program in business. However, graduating wasn’t her biggest challenge. It was translating her academic success into a result: getting a job. Ms. Nooyi’s first real interview was total failure – no connection, no rhythm, no job. However, she received a piece of advice from a professor that Ms. Nooyi has carried forward since then to her role as a CEO. She was told to simply “be herself.”

Ms. Nooyi clearly took the advice she received to heart. Not only has she been herself as intelligent, smart, persistent, and daring, she has also scored an enviable position of 75 percent plus support by her own employees worldwide. See if you can find a politician with as much support even when winning a national election.

What Makes A Person Successful?

For business owners and leaders, the lesson from Ms. Nooyi is to never forget what really makes a person successful. It’s not the suit, it’s not the past laurels, and it’s not the school degree. What makes the difference that catches people’s attention and gets their support is one’s personal confidence and persistence. Ms. Nooyi gambled everything with not just coming to the U.S. to succeed but to also establish herself in a highly competitive arena: business consulting. Had she failed, Ms. Nooyi would have had to return back to India and likely would have disappeared into a vast number of IT companies there; everything for her was on the line. But she persisted. And Ms. Nooyi, with her new advice on being herself, was quickly hired. That in turn became her path to eventually becoming Pepsi-Co.’s latest CEO.

A Better Choice

Business leaders trying to keep a company going will at some point face a challenge where everything has to be put on the line to get to the next level. Many don’t take that leap. It’s too risky, it’s too costly, or it’s too unknown. Yet from Ms. Nooyi’s example, the last thing anyone should be doing is trying hard to fake their way through the issue. Be yourself. Trust your skills and trust your gut to make the right the decision. That’s what got a person to a leadership role in the first place, so why should he or she be any different at the moment that counts the most? Risk, responsibilities, fears of what-if can all combine to make someone think behaving differently may be the best path forward. Clearly, from Ms. Nooyi’s example, there’s a better choice.

Improving Your Organizational Skills With Technology

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If you’re the type of person who wants to improve your time management skills, there’s a good chance that what you really need to do is improve your organizational skills. We spend so much time each day trying to remember where we put that important memo, when that upcoming meeting got rescheduled to, or simply trying to get our heads around what obligations we have today. All of this is wheel-spinning certainly isn’t driving your productivity forward in the way you need.

Thankfully, modern technology can be a huge benefit in terms of improving your organizational skills. You just have to keep a few important things in mind.

If You Can Add A Digital Version, Do So

One of the most important ways to use technology to help improve your organizational skills involves finally embracing some of the “digital” versions of “hard copy” techniques you may be holding out on. Case in point: an astounding amount of American adults own a smartphone, a device that is literally more powerful than the equipment used to pull off the NASA moon landings in the 60s. Yet many are still only using them to send and receive calls, respond to emails and send text messages. These are communications benefits, not organizational ones.

As an example, some people still like using a paper desk or wall calendar not only because of the intimacy, but because nothing can really go wrong with it. You make an important appointment, you write it down on your calendar, end of story. That information is always there. However, there’s also a chance to go one step further.

Your paper calendar doesn’t travel with you – your smartphone does. Get in the habit of using both a paper calendar for the tactile quality it excels at AND a “Calendar” app for the organization and especially the travel benefits. If you make an entry into your “Calendar” app on your iPhone, that data is automatically synced to your iPad and MacBook Pro, too. The same is true of data you enter into your “Reminders” app, your “Notes” app, your… well, you get the point. Making a habit of keeping both the paper and the digital version of something in this case creates a “best of both worlds” scenario.

The Cloud Is Your Friend

Along the same lines, let’s get one thing straight: it’s time to move as much of your daily life into the cloud as possible. Cloud storage isn’t just a “virtual hard drive.” If you’re only thinking of the cloud like a digital version of something like a flash drive, you’re not even hitting the tip of the potential iceberg.

When you upload a document into the cloud, it’s instantly available on all of your devices. It can be shared with anyone – both other employees and clients – in a mouse click. Anyone can edit those documents and you have complete visibility over all changes and access permissions. It’s also protected from things like hard drive failure and even theft. Thanks to both the military-grade encryption that services like Dropbox use and techniques like two-factor authentication, your data has never been more secure or accessible at the same time.

The most important benefit of all is that you always know where your data is – available, end of story. You don’t have to worry about what you’re going to do if you can’t take your laptop on a plane with you because you can be just as productive and have access to all of the same information on your smartphone.

These are just a few of the simple ways you can use the technology you probably already have access to. Once you take the time to setup something like cloud-based storage, the hard part has already been done. You won’t have to spend an hour or more each morning trying to remember where you put this or that. You’ll just know. You won’t need to wish there were more hours in a day because it’ll be easier than ever to do more with the ones you already have.

Lessons We Can Learn From Great Business Minds of Yesteryear

thinkstockphotos-87751432Business leaders of yesteryear can teach us lessons even today. Cornelius Vanderbilt, who dominated shipping and railroads; John Pierpont “J.P.” Morgan, who built a financial empire on investments and banking; Mary Kay Ash, who founded the exceptionally successful company Mary Kay Cosmetics; and John D. Rockefeller, who founded Standard Oil and was America’s very first billionaire are all worthy of admiration and have lessons they can teach us. Today, though, let’s look at one businessman, in particular, Henry Ford.

Who Was Henry Ford And How Did He Make An Impact in The Country?

Henry Ford, born in 1863, was a U.S. Industrialist who revolutionized automobile production, which allowed his company to mass produce cars, thus bringing the price down. This, in turn, allowed more regular folks to purchase cars and led to Ford Motors becoming hugely successful. In essence, Ford did more than creating a successful company; he revolutionized the entire transportation industry. Before his changes were implemented, most people were unable to afford such a luxury. Therefore, he took a product that was not widespread and made it applicable for the average consumer, thus changing the entire landscape of the country in several ways. Ford was able to achieve this success thanks to a few methods he applied within his business. These ideas are applicable to any type of business and can teach us as business professionals and entrepreneurs lessons on success even today:

  • Innovation is Everything: When it comes to innovation, Henry most certainly knew what he was doing. He utilized an assembly line technique that forever altered the way automobiles were produced. It’s worth noting that he was not the inventor of said assembly line. He only created an innovative way to implement the technique within his business. This is a great lesson we can learn from him today. You don’t have to come up with the idea or product in order to figure out a new way to utilize it.
  • Don’t be Afraid to Specialize And Offer Solutions to Undiscovered Problems: Henry Ford understood his market and specialized in it. He understood that it’s hard to find success when remaining too generic. He also understood his customer base better than they understood themselves. He was able to offer a product as a solution to a problem that his customer base didn’t even realize they had. He once stated, “If I had simply asked people what they wanted, they would have asked me for faster horses.”
  • Efficiency is Vital: Ford was such a believer in efficiency that he is credited with the creation of “Fordism.” This term basically describes a system of mass production that is both standardized and efficient. He understood the importance of keeping his workers productive and achieving a maximum output. He was able to do this, in part, by providing incentives. These incentives, which included a reduced workweek and better wages, resulted in worker loyalty and efficiency.
  • Don’t be Afraid to Learn Something New: Henry Ford once said, “Anyone who stops learning is old, whether at twenty or eighty. Anyone who keeps learning stays young.” Henry Ford was personally committed to learning. He was never content to learn all he could about a subject and just stay there. He didn’t want to just “be,” he wanted to grow. This is likely how he was able to come up with such innovative ideas because he never got stuck thinking or acting a certain way. Instead, Ford was always up for a new challenge. We would do well to emulate this in our own professional lives.

There are countless other lessons we can glean from Henry Ford and other businessmen and women like him who revolutionized their industries and achieved amazing success. The important point to remember is that they all stepped out, took a risk, and believed in their goals. That is the foundation for any great success.

“Take It From Me”- Why Testimonials Are So Effective

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Marketing is all about giving your customers the information they need to make an informed purchasing decision. Everything you do – from the copy you craft to the images you choose – is built around that simple purpose in mind.

But marketing itself has evolved over the years, away from the heavy reliance on the spec sheets of yesteryear. It’s essentially become an open line of communication between you and the people you’re trying to serve. People don’t want to be “sold to” anymore – or at least, not in the way they used to.

This is why customer testimonials are so important. Instead of “taking your word” for it that your product or service is going to impact their lives positively, it lets real customers hear from other real customers why the decision they’re about to make is a good one.

The Power of Testimonials: Facts and Figures

In addition to communicating with your audience, another essential goal of your marketing materials should involve building as much trust and credibility as you can. Your customers don’t just want to know that you can solve their problem – they want to know that you can do it better than anyone else. To that end, customer testimonials are incredibly effective – particularly in the world of print.

Part of the reason why testimonials are so important is that they help create a deeper, more emotional appeal for your branding. Consider the following statistics:

  • According to one study, the regular use of customer testimonials can help you generate roughly sixty-two percent more revenue not only from every customer but from every time they visit your brand.
  • Ninety-two percent of people said that they read testimonials when considering a purchase.
  • A further eighty-eight percent of consumers said that they trusted these reviews just as much as personal recommendations, according to the same study.
  • To top it off, seventy-two percent of those who responded to the survey in question said that positive reviews and testimonials helped them trust a business significantly more.

Simply put, customer testimonials create something of a self-fulfilling prophecy regarding your connection with your target audience. Someone enjoys your product or service, so you encourage them to leave a positive review or testimonial. Consumers naturally trust each other more than they trust just marketing collateral, so that testimonial adds more weight to the decision they’re trying to make. Those initial happy customers, therefore, encourage more purchases, which creates more happy customers, etc.

When you combine customer testimonials with other effective marketing tactics – like a heavy reliance on not just print but on print techniques that help your collateral stand out and make a unique impression – suddenly your message is being amplified in the best possible way. You’re giving an opportunity to let regular customers become brand advocates, which does more in terms of building trust, credibility, and emotion than you could ever do on your own. You’re also creating more brand advocates in the process, which is always a good thing.

The Conduit Theory in Practice – Speaker Willie Brown

thinkstockphotos-184174749Willie Brown, the former speaker of the California Assembly, never intended to have a political career when he was born. Brown was raised in a backwater town named Mineola, Texas, in 1934, a time when Texas and the South were not particularly conducive to the career dreams of African Americans. To find a better path, his family packed Brown on a train from Texas all the way to California. There, with the help of a professor, Brown found his calling at a state University and earned a law degree from the prestigious U.C. Hastings. However, he was yet to prove his greatest accomplishment.

In 1964, after a second try, Brown gained a seat in the California Assembly. There, he learned simply being unique didn’t get him much. He had to learn how to be a useful broker. In that respect, Brown quietly learned from his legislative tutors like Jesse Unruh and Philip Burton how to become a pivot point, a conduit between the many who want something and those with power. Positioning through legislative committees, Brown went from being a name in the Assembly to eventually to becoming its Speaker, one of the top five positions in state government. Brown held that chair for fifteen years, only to then retire and become the mayor of San Francisco in his later years.

Becoming A Conduit Point

For a business, Willie Brown’s story is an illustrative one; you don’t have to be biggest, most powerful player on the market to become instrumental. Brown, as an African American politician in the 1960s, was clearly not in the position to leapfrog right away to leadership or the Governor’s office. However, he did find a position that everyone needed and had to go through to get something. By identifying how and becoming a conduit point, Brown secured his future, which is what successful businesses do in their market.

A conduit point isn’t just limited to being between end retail customers and suppliers. Conduit businesses can easily do the same in the business-to-business market as well, often producing far greater revenues than they would on the retail side of things. However, positioning can be a challenge. One needs to see the entire market, not just a segment of it. Getting to the forest level instead of the weeds allows a business player to identify all the connection points and where being a conduit has the greatest potential for producing revenue. It also shows what is needed to be successful in that particular position. Sometimes some potential conduits are too challenging, and others may offer too little in reward for the effort. Picking the right market position takes some experience, which means a business needs to research well and study peers, suppliers, buyers, competitors, and middlemen. No one in a given market should be left out.

Willie Brown was an intensive study of his legislative peers, which is why he was able to position himself so well. He also took lessons from those more powerful than him rather than fighting them, using that knowledge to become one of the powerful ones himself. A growing business can learn a thing or two from his life example.

Spring Cleaning Tips For The Office

thinkstockphotos-1588438941When you think about it, you spend more time at your office than in your own home, not counting sleeping hours of course. Consequently, the atmosphere of your office, whether it be neat or disorganized, will greatly affect you and your employees in a myriad of ways. Therefore, learning how to keep your office clean is important. Before getting to the cleaning tips, though, let’s look at why a clean office is imperative.

A Disorganized/Dirty Office Is:

  • Unprofessional: If your office is cluttered, dusty, or generally disorganized, you will instantly appear less professional to clients/customers. You might say, “I’m too busy working to clean up after myself.” Well, consider the appearance of your office as you would your own. Would you come to work in your bathrobe simply because it took more time to get dressed?
  • Less Productive: Running a successful business is all about productivity. Getting things accomplished is the end goal. If you spend an hour looking for a particular folder under piles of other files and perhaps old take-out cups, is that a productive way to do business? Of course, it isn’t. By not having a place for everything and keeping everything in its place you are actually wasting billable hours.
  • Can Make You Sick: A dusty, dirty office can also cause sickness in a person who has a sensitivity to dust or allergens. Therefore, as a business owner, you might lose a part of your team to sickness simply because your work environment isn’t healthy. This reduces productivity simply by cutting down manpower.

 

Spring Cleaning Tips

Benjamin Disraeli, an author who served as Prime Minister of the United Kingdom in the 1800s, said the following about the importance of and commitment to cleanliness in all aspects of life:

“Cleanliness and order are not matters of instinct; they are matters of education, and like most great things, you must cultivate a taste for them.”

This quote exemplifies the importance of cleanliness perfectly. It also reminds us that cleaning isn’t always instinctual. That’s why a checklist of sorts is as worthwhile as a guide on whipping your office into shape this spring.

 

Primary Focus Areas

There are three basic areas you should focus on when cleaning your office. These include your workspace, your paperwork, and your technology. There are, of course, more areas to think about, such as the floors, bathrooms, and such, but just getting these three basic areas organized will go a long way towards creating a more productive working environment.

1) Organize Your Workspace

This is relatively easy; it just takes time. Simply go through your desk and throw away the trash. It sounds simple, but it’s amazing how many people don’t do this basic step. Get rid of/recycle old water bottles, carry-out cartons, and drinks. Also, donate or throw away anything you don’t use or that doesn’t work. Why keep a calculator that doesn’t function properly or hang on to a pencil that’s too small to write with? Simply getting rid of all the stuff you don’t need or use on and around your desk will help immensely.

2) Reduce Paper Work

As you know, paperwork is never ending, and if you don’t have a great file/shred system in place, it can really get out of hand. Part of cleaning off your workspace should include going through and shredding documents you no longer need. If you do need to keep something, create an easy-to-follow filing system to get these files off your desk.

3) Clean Your Technology

This tip should be taken literally, as in taking your computer apart and dusting it with the proper tools, as well as metaphorically. Clean the inside of your computer by deleting old emails and archiving those you need to keep.It’s also a great time to back up your server if you have one or update old software.

If you commit to putting things away at the end of every day, your office will never get as unorganized as it was. You might have to allow a few days for cleaning, but the increased production, as well as the creation of a more professional workspace, is well worth the time investment.