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February 23, 2010

Mastery vs Performance Goals: Why the Type of Goal You Set Matters

Everyone sets goals. But, what most people don't realize is that the type of goals you set can have a major impact on your long term performance.

The most basic type of goal is known as a performance goal. These are goals that are directly correlated to an outcome. You want to get an "A" on that spanish test, or hit your sales quota.

These goals can be great in the short term, but they also have some downsides. Performance goals by their nature are rather shallow. If you had to cheat, at least you still hit your goal. If you made a mistake in the sales process, well at least you still hit your quota.

Performance goals also tend to undermine long-term performance. If you hit your initial goal, you become less motivated to continue towards excellence (after all you hit your goal). And if you don't hit your initial goal, you become discouraged and de-motivated because your self-worth is based on external inputs.

On the other side of the goal-setting coin are what's know as mastery goals. A mastery goal is when you set out to become the best you can be at a single task. Instead of trying to get an "A" in spanish, you try to become fluent in spanish.

Behavioral Researchers have found that mastery goals are more effective because your satisfaction isn't related to external indicators. Therefore you're less apt to give up in difficult circumstances, and you persevere through setbacks.

Mastery goals are always just beyond reach. This makes motivation over the long term easier to maintain. They're like a line that's asymptote. The curve of the line gets closer to the goal, but you never quite reach it. There is always something to strive for.

People that reach the pinnacle of their skills rarely set performance goals. They're more interested in competing with themselves, than gaining external feedback and validation. This orientation allows them to compete at a higher level over a longer period of time.

With Mastery goals there's always something to strive for. Even if it's as simple as being better at something tomorrow, than you were today.

February 18, 2010

Why The Future Will Be Built Around Exclusivity, Inconvenience, and Paid Content

In relation to my recent post, When Being Difficult Has Its Benefits, and in response to this interview with MetaFilter founder Matt Haughey (hat tip Noah Brier), I'd like to make the case that the future success of communities and content producers depends on raising the barriers to entry, not lowering them as many businesses have tried to do.

The biggest difference between communities offline and online is that the physical barriers to community have been shattered; you don't have to get out of your house to meet up, chat, or share. Likewise, gone are the days of changing out a CD or record, and the days of DVDs, books, newspapers, and magazines have all been numbered. Communities and content (which have increasingly become intertwined) are now easier to partake in than ever.

Witnessing the internet's growth from these lowered barriers, many business have chosen to build around the same concept. They assume, incorrectly, that because the internet's strength lies in convenience that their business model must also seek to eliminate all hints of inconvenience. In the same way that McDonald's approaches hamburgers, they don't completely ignore quality, but they relegate it to the back burner.

There's nothing inherently wrong with this approach, but it's bad timing. When the pendulum of industry swings in one direction, smart businesses anticipate the backlash and begin building in the opposite direction. Convenience online has been pioneered, but in its wake there's been left an opportunity to pursue quality -- an opportunity for content and communities formed around curation, insight, and analysis.

The benefits of low-barrier communities are overshadowed by a few large and prominent first movers like Facebook, and content frequently gets lost in the shuffle. By shuffle, I mean the 46 years worth of YouTube video watched on Facebook everyday, the sixty tweets sent out over Twitter every second, and the millions of blog posts that saturate the web.

In order for a community to thrive in the shadow of Facebook, the best option isn't to play Facebook's game (i.e. become a ubiquitous, convenient, social identity), but rather to build a high-quality, selective niche with targeted content. In short, the future success of content and community online hinges on sacrificing a little bit of convenience in order to enjoy richer, deeper experiences.

Typically, that convenience can be most effectively removed at the point of entry. (Once someone is a part of your community or takes the effort to create content, they rightfully expect to be catered to.) Raising the barriers to entry has several benefits.

By creating small obstacles, a community can effectively ward against spammers, passer-bys, and unsavory types. Moderation costs are reduced. Quality is increased, and respect for the community grows.

In an interview with journalist Suemedha Sood, Matt  Haughey, founder of the impressive community blog MetaFilter, says:

"[the signup fee] is mostly just putting a huge hurdle in front of having to deal with new users. ‘Cause it’s such a pain. The last ten years have shown that any time there’s press, like the New York Times writes something about us, 300 people sign up and then wreak havoc for a while, and then go away. [Without barriers to entry] it would just be a nightmare."

By increasing exclusivity, the perceived value of the community is also increased. It's long been known in commerce that a higher priced item is perceived as a higher quality item, simply because of its price. But whether you raise the price or create other barriers, increasing exclusivity creates value for people who choose to be members.

When you create exclusivity, you give people a reason to be proud of their membership; there's no pride in being part of a community that everyone is in. This pride is useful from a loyalty perspective -- people who are proud to be members of your community are more likely to pay for additional products -- but also from a social perspective: people are more likely to share content produced by a community that makes them proud.

Lastly, paywalls are a great source of revenue.

Like the food industry, there's plenty of room and reason for businesses to expand into more exclusive communities built around higher-quality, slower-produced content. While the tactical implementation of barriers to entry is very much up for debate; it seems inevitable that the future will see more communities and content producers succeed by raising barriers to entry. After all, the internet doesn't want to be free. It wants to get paid on Friday like everyone else.

February 11, 2010

Magical Realism: The Foundation for Effective Brand Promises

Successful marketing today doesn't sell features; it sells benefits. This product will save you time. This product will save you money. This product is important for your identity. But successfully selling benefits requires more than cut-and-dry statements. Selling benefits involves making a magical promise (and then fulfilling it).

A great example of a brand that makes magical promises is Coke; they regularly promise happiness. But ethereal concepts (e.g. happiness, liberty, or financial freedom) are only effective when placed in an appropriate context. That's where polar bears, Santa Claus, and long sleepwalking journeys come in.

In fiction this technique of mixing the fantastical with the everyday is called magical realism, and the author most well-known for employing it is one of my favorites. Again and again Gabriel Garcia Marquez takes what is real and tangible and sprinkles in some magic; he is never satisfied with surface level appearances. Marquez's stories push the reader to reexamine the routine in light of grander, more extreme contexts, driving home the emotional truths and themes of the story in a profound way that has made him famous. His friend Plinio Apuleyo Mendoza says to him:

The way you treat reality in your books... has been called magical realism. I have the feeling your European readers are usually aware of the magic of your stories but fail to see the reality behind it...This is surely because their rationalism prevents them seeing that reality isn't limited to the price of tomatoes and eggs.

Likewise, when brands venture to make fantastical, complex, deep promises, consumers don't always see the reality. When that happens, they may put up psychological barriers against the brand. Seth Stevenson at Slate gives a great example using a surreal Levi's advertisement:

I've been in movie theaters when this ad played during previews, and the audience seemed transfixed—left in stunned silence when the ad faded out. But a friend says he saw it in a theater where, at the end, someone yelled, to much deflating laughter, "They're pants!"

The magic was spoiled.

But the risk of spoiled magic is a necessity. Levi's may not be associated with America to everyone who wears them, but to someone, somewhere, the distinctly American context, although extreme, communicated a powerful message. The same goes for Coke's promise of happiness, the feeling of fraternity that goes with grabbing some beers, and the drama behind fighting germs in commercials aimed at mothers. Not everyone buys into the magic, but some people do, and that makes it worth the risk.

Without a magical brand promise, products are nothing more than a list of features: some sugar water, a fermented beverage, or a chemical combination that kills germs. It's only when a brand promises a reality that is, as Mendoza says, "more than the price of tomatoes and eggs" and takes steps to support that promise that it has a chance at selling more than me-too products.

February 9, 2010

The Role of Company Culture in Innovation

There are two types of organizations. Those that seek to constantly innovate, and those that seek to exploit their existing assets. Neither organization is better than the other. In fact, as organizations develop and age, their ways/methods naturally become more set in stone. They start following algorithms, instead of innovating. As a result they become more efficient at certain tasks and become more profitable. But, the unintended consequence is that they lose the culture required to drive innovation.

Proctor & Gamble is a great example. They have brand marketing down to a science. Their experience in rolling out consumer goods is unmatched. But, their ability to innovate in R&D declined over the years. Innovation is not algorithmic. To counteract this decline, they decided to take a completely different approach than you might expect. Instead of throwing tons of additional money into R&D and rebuild their culture, they now look to outside sources for innovation. If you have a great consumer goods product idea, they'll develop it and market it. They realized it was easier to let others do the innovating.

Pfizer does the same thing. Smaller innovation companies find new uses for drugs, and pfizer markets them. It allows them to focus on what they do best, and take advantage of the other company's culture of innovation.

This is in contrast to Microsoft, who has yet to develop a system of innovation that works. They struggle because any new innovation can be undermined if it threatens an existing business unit. And their existing business units are so focused on maximizing profits, and protecting marketshare that they inadvertently stifle innovation at the most basic level. To the business unit managers it's about self-preservation, but it hurts their long term prospects.

Dick Brass explained it thusly in a recent editorial in the NY Times.

When we were building the tablet PC in 2001, the vice president in charge of Office at the time decided he didn’t like the concept. The tablet required a stylus, and he much preferred keyboards to pens and thought our efforts doomed. To guarantee they were, he refused to modify the popular Office applications to work properly with the tablet. So if you wanted to enter a number into a spreadsheet or correct a word in an e-mail message, you had to write it in a special pop-up box, which then transferred the information to Office. Annoying, clumsy and slow.

The difference between Microsoft & P&G is simple. It's not that Microsoft they can't innovate, it's that there is a systemic bias that squashes innovation at it's earliest stages. Until that system changes, Microsoft will continue to struggle with bringing innovations to market.

February 4, 2010

Negative Space Marketing: Stand Out By Dialing It Back

This is a blog post about negative space. But, it's not about negative space as a design technique. It's about the idea of negative space as a way to differentiate your marketing communications in an overly crowded marketplace.

Every day we encounter hundreds of brands, all vying for our attention. Brands are shouting at us from bus stops, while we're at the urinal and from over designed flyers that are stuffed on our cars. TV commercials are interruptive by nature -- turning up the volume merely to get our attention. Banner ads flash, play video and kick in audio the second you get to a site.

Luckily, humans are great at adaptation. In response to these encounters, we've developed filters that help us block everything out. We've developed selective vision, and selective hearing. We're experts at ignoring.

So what actually gets noticed anymore? Marketing that doesn't try so hard -- that's understated, respectful and has value. Seth Stevenson of Slate recently referred to it as the soft sell approach. Coke's David Butler aptly described it in an older interview in Fast Company as well (Hat tip to the IQ Interactive blog for reminding me about the fast company article.):

As life gets visually noisier, brands that dial back to their core essence stand out by contrast

So next time you're creating a new marketing execution, think about dialing it back a bit. Give an overloaded mind a place to rest and focus. You might just get their attention in the process.