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Update your user experience…or die!

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Your survival could depend on it!

Are you up to date with your user experience? I have been coveting my friend’s iPhone. It is true I have both a Palm Pilot and a Blackberry but the iPhone is getting more and more attractive. Not just because it has got a nice user interface, the reason is deeper.

I have a Macintosh. Palm made $1.6 billion dollars in 2006 but they haven’t updated their Macintosh software in several years, maybe even as much as a decade. The software is clunky, hard to use and it doesn’t integrate with Apple’s synchronization system, which lets everything else synchronize beautifully with the address book and the calendar.

Blackberry paid $450 million dollars to quit a patent suit early and resolve it so they could stay in business, and their software doesn’t properly handle certain types of calendar attachments. Their browser is poor and they don’t handle a type of e-mail accounts called IMAP, which let people have their mail on a central server and access it from many places.

Oh! And by the way and by the way, they have never bothered to come up with a way to synchronize with a Macintosh. From the user’s point of view that makes this products fairly difficult to use on the Mac without third party software and even with the third party software it is usually not as good and has bugs etc. etc.

But think about it for a minute: 1.6 billion dollars and Palm can’t be bothered to develop an updated version of 10-year old software? Hello! Blackberry 450 million dollars to settle a suit? Where is the $10 million dollars that they could use to make the Blackberry compatible with every existing calendar system, contact management system and sales management system in the world. They haven’t bothered.

I donâ’t know why they haven’t bothered but it doesn’t really matter because there is something out that there will work for me and that’s called an iPhone.

Palm is reported to be looking for a suitor because sales are down and they just don’t know what to do. Palm– update your system! Blackberry, I don’t know. They think the iPhones are a threat and until Blackberry realizes that people aren’t just buying a slick little package; they also wanted to work with their computer, well they are going to lose people to the iPhone as well.

One final example: I recently changed insurance companies and my new insurance company has no autopay option for my premiums. In the year 2008? Excuse me? It hasn’t occurred to them that the user experience for virtually every type of vendor (particularly one with recurring payments) now includes the ability to pay automatically either by credit card or by bank debit. Now it’s true in the short term that’s not going to make a difference. But it’s remarkable because they are the only bill in my entire life that has to be written out by hand every month.

If they are falling behind on that, what else are they falling behind on? So think about your product. Have you tried your competitor’s products lately? Have you noticed if sales are falling, where are people going instead of your product? When you use and evaluate the competitors, look at the whole experience and what you will find is that there are very compelling experiences out there, some of which may not be yours.

Leap on them, surpass them, develop your own experience, put some money into what it will take to make your product fun, happy, easy, simple and streamline to use and you just might find that you will be able to stay ahead of the competition instead of going to them asking them to buy you.

Once again, we penalize people who make smart money decisions

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It’s amazing. I always found it odd when applying for a mortgage that banks considered income, but not asset base. If I have a bunch of money and invest in an investment that’s growing in value by 33% per year but not throwing off income, they won’t consider that in deciding to grant a mortgage. But if I put the same money in the same investment that throws off taxable income every year, it reduces my effective return by more than a third (since my combined tax brackets are more than 33%).

Let’s review: Person A invests and is making 33% on their money yearly. Person B invests and is making 20% on their money. Yet banks consider person B, who made the stupider financial decision, to be a credit risk.

Not to be outdone, the State of Massachusetts is doing this now, too, with Romney’s mandatory Health Insurance law. (He claims to be business savvy, but if this is an example of his overwhelming business sense, I’m missing it.)

First, let’s look at the policies: the quoted premiums for a $2,000-deductible policy are $350/month ($4,200 per year). A $3,000 deductible policy is $300/month ($3,600 per year). So here’s the choice: I can pay a guaranteed extra $600 yearly for the $2K deductible, or I can risk that I’ll need more than $2,000 worth of medical help and if my bill makes it as high as $3,000, I might pay out an extra $1,000 under the higher-deductible plan. P.S. I haven’t even visited a doctor in five years.

So: guaranteed pay $600/year or take a risk of maybe paying $1,000/year? To me, the choice is obvious. Take the maybe $1,000, since I certainly won’t need $3k of medical coverage every year, and the extra $600 in premiums will be a guaranteed yearly payout.

But the wonderful MBA-inspired law mandates the $2,000 policy. So I’m stuck paying for this silly policy that’s a bad financial decision.

If you believe people should simply be required to buy their own insurance, Gosh darn it, let them buy the insurance that makes sense.

If you believe that we should have a national insurance program, Gosh darn it, do that.

But isn’t it absurd to say, “Gee, people aren’t buying insurance because they can’t afford it, so let’s just mandate it. And while we’re at it, let’s mandate a financially crappy requirement for the people who actually have some financial literacy.”

Romney, hats off to you. You made a third of a billion dollars writing checks to buy other people’s companies while they did the work to make them profitable (yes, yes, picking up a pen is hard work when you don’t have someone to sign for you, but we sympathize). Oh, right, you also laid people off to get those companies to profitability.

Of course, it made good practice for your time as Governor. You ran on a business development platform, and we lost 126,000 jobs during your tenure as Governor–more than any other state in the union. Perhaps you thought that eliminating residents of Massachusetts would bring economic health, the way layoffs let you quickly flip a company at a profit in Private Equity? Oh, right, then let’s throw in the health care plan that forces me to siphon off my money to private insurers by buying an inferior policy.

Hats off to you. I hope you run again in 2012. You’ll make a fine President. You can be the second in our new tradition of Presidential Harvard MBAs who have so keenly demonstrated their skill and acumen at making themselves rich, while gutting the organizations they run.

Happy or Successful? Which will you pursue?

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On a recent birthday I was looking back at the strategies that my friends from high school and college and I employed to get where we are today. We assumed that success would bring happiness, and as far I can tell, we were wrong. It turns out that the two are separate, even though marketers would have us believe otherwise…

Click here to read the entire Happy or Successful podcast as an article.

When is password security not security?

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In a wondrous attempt to increase security, more and more vendors are now requiring me to choose passwords of many characters with mixed case, numbers and punctuation. My bank does one better, where I have five different question/answer combinations they ask, then once I’ve passed their quiz, they display an image that I’m supposed to recognize as the “right” image. Plus, everyone wants me to change my password every 30 days.

This is a great example of security professionals gone brain-dead. Yeah, if my bank were the only website in the world that I used, there’s a slim chance I might be able to remember all that. But they’re not the only one. Every credit card company, insurance company, and bank account has a web login. Not to mention commerce sites, Amazon, eBay, etc.

When you put all that together, it’s very quick to see that the only way a sane human can possibly cope with five challenge/responses plus a mixed-case password that changes monthly is to write the whole thing down and keep it around.

The result? Far less security than before! Because all a thief has to do is find someone’s 50-page notebook of current passwords and voila–all security gets compromised in one easy step.

Security geeks: chill out. You’re undermining your own cause by going for theoretical purity and ignoring the way real people behave in the real world. Let me choose something that’s hard to guess, but easy to remember. Like my mother’s favorite record album in French, spelled backwards. And let me keep the password long enough to memorize it.The current high-security practices, alas, fail miserably.

Marshall Goldsmith on Peer Coaching (part 2)

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Marshall Goldsmith is an amazing executive coach. He has worked with several Fortune 500 CEOs and is currently a best-selling author (#1 on Amazon.com in the Leading People category). He has developed a couple of peer coaching techniques that will let you and any supportive friend coach each other to superb results. In this podcast, Marshall explains the second technique.

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What if you had $1 billion to spend on a Presidential campaign?

I was reading reports that Michael Bloomberg was rumored to announce his candidacy for President. A friend mentioned that he had reportedly said he would spend up to $1 billion to get elected (no sources were cited).

I was thinking: what would you do if you were going to spend $1 bn on a Presidential campaign?

Rather than spend it on vapid attack ads, I might spend it revitalizing a community, or doing something to make a concrete difference in the lives of many people, and then saying, “That’s the kind of thing I want to see happen as President.”

Would it work? I don’t know. But I’d rather see the money directly creating good than going to yet another round of media buys so we can all be inundated with the meaningless drivel that is campaign advertising.

The world is what you make it; what are you making it?

Chris Matthews was just commenting that Benazir Bhutto’s assassination was “a reminder of the dangerous world we all live in.”

In that moment, it struck me: we all live in a world of our own making. Oh, I don’t mean literally, though fans of The Secret may disagree. But our experience of the world is so deeply tied to our interpretations that what most of us call “truth” is nothing more than our own made up stories.

I look at the world today and see more than 6 billion people surviving. Many don’t have enough water or health care, but they’re surviving. It fact population continues to rise. That doesn’t sound like a dangerous world to me; that sounds like a world that’s provided us pretty much everything we need to thrive. Heck, we’ve even exterminated or controlled all of our natural predators.

To the extent we live in a “dangerous” world, that danger comes from other humans. For example, investment bankers and financial managers who deal in collateralized debt obligations. And yes, the occasional human being kills others. Sometimes it’s in war, or for political reasons, or whatever. And the media focuses on those events precisely because the violent, dangerous events are the exception, rather than the rule.

Most Americans have never suffered pain worse than a stubbed toe. We’re surrounded on the east and west by oceans so broad that no one can cross them without ample warning. We have Mexico and Canada to the south and north. The greatest danger there comes from having too much cheap labor and better ice hockey teams, respectively. As for the rest of the world, we have more intercontinental warheads than everyone else put together and then some.

In short, we’re the most dangerous thing in the world, and in the absolute scale of things, even we aren’t doing much damage. (Except unintentionally, to the environment, but that’s not what Chris Matthews was talking about.)

So Chris lives in a dangerous world because he finds the danger and then calls the world dangerous. He could also look at all the good things and call the world safe, secure, and happy. His choice.

And what is your choice? Which world do you live in?

If you want to bring this into a business context, since this is a business BLOG, let me ask you: when you look at your competition, your industry, and your trends, what stories do you tell? How do you explain the actions of others? The actions of markets? Do you tell a story of luck? Of skill? Of timing? Are you a victim of the market (“the failure of our initiative was because of a bad economy”) or are you a driver of the market (“we did everything we could think of and found the combination that let us become market leader in a mature market”)?

Examine your stories. They’re only stories, and they dictate your every perception, your every decision, and your every action. Choose your stories well.