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Consumer behavior

The Analytics Payoffs

For a lot of years I’ve been sharing a conclusion from decades of observing small group activity. I believe that when 5 or more people work together effectively on a challenge they bring the intellect of at least a genius to the work. It doesn’t matter if the group members are smart or high in an organization or what we believe is well-educated. I watched it for years and then put a measure to it.

Back when we used to have more time during training or planning or decision-making settings I used to administer a short quiz fashioned after the preliminary entrance exams for membership in Mensa, the society of genius-level IQ holders. I would do it as an intellectual warm-up. In order to determine if you could gain entry to Mensa you would need to score at least 7 out of 10 correct answers.

Every group, whether made up of corporate executives or hospital maintenance workers, to which I gave the test scored 7 or higher. Around half would score perfectly.

Today, the use of analytic techniques is proving my point. At the Wharton People Analytics Conference an interview published on Knowledge@Wharton cited Google’s head of HR Laszlo Bock who is an evangelist for the use of analytics in the field. Teams, when put together correctly, are at least geniuses.

The Wharton interview is full of useful bits of information. Make sure an employee being “on-boarded” meets their management on the first day. A person’s success at a company depends heavily on who they work for. A team IQ is often greater than the sum of the parts. A mix of introverts and extroverts along with norms of behavior make the most productive teams. Moneyball got it right and is at least partly responsible for the upsurge in the people analytics.

Surprisingly, the best firm on hiring, according to Wharton experts, is Teach for America. A not-for-profit that has embraced analytics in order to get better teachers in front of kids. But the organization also knows that they don’t know enough yet. That’s a good lesson for those of us who are futurists. Go with the best information you have but always doubt it and find even better ways of making good decisions.

The biggest question about the use of analytics overall? Why more top leaders are not embracing it. Whether it’s a lack of hubris or a fear that it might replace jobs it’s a baffling question but the condition exists. I hope for a change.

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In almost all of my busiest industry niches there’s buzz about “Big Data.” Mostly buzz. Not much there, there yet. But it’s coming in a big way and the harbinger may be people measurement, especially help in hiring. Another observation I’ve made over the years of managing my own businesses was that a bad key person hiring (manager, salesperson, technician, creative talent) would cost at least 3-4 times their annual compensation. People analytics is proving it now.

While there’s more buzz about marketing analytics than anything else in the media my bet is on human resources as the place where the first major inroads will be for analytics in organizations.


The Consumer Christmas 2010

I spent time at the epicenter of American spending over the past few days. The Christmas shopping at Macy’s flagship store in Manhattan was, in a word, tepid.

Don’t get me wrong. The store was busy but large areas were deserted. A store that stays open 24 hours a day is a phenomenon in itself but those wandering the aisles were being attracted to sale racks and less-spendy areas of the store.

It was interesting that many of the fur-bedecked matriarchs leading families very slowly and deliberately through the store’s luxury departments were speaking other languages. A lot of Russian and many Asian languages filled the air as we steered around them.

It’s not surprising. Almost all surveys of consumer behavior in the U.S. show a concentration on reducing debt that is unprecedented. Spenders are coming to grips with the fact that jobs are not multiplying, they’ve got to make do with what they have, and the smartest thing they can do is get out from under credit card and other debt as quickly as possible.

Where was shopping intense in Manhattan? Jack’s Dollar Store located just a few blocks from our hotel. Wall to wall shoppers all the way up to the closing hour.

The most likely scenario for the economy, in my opinion, is a long slow recovery. What I observed falls in line with that. I think a GDP growth near 3% in 2011 will enable the unemployment rate to drop below 9%. Spending will return cautiously. It won’t be for big-ticket items but will begin to bolster support for more indulgent food, some travel, culture, entertainment, and family involvement.

We attended sold-out Broadway shows but there were half-priced tickets available up to curtain time at almost all shows. Movies that you would have to buy tickets for days in advance at prime viewing times were walk-up purchases. Top-rated restaurants were busy but not overwhelmed. On the eve of the Christmas rush I’ve been getting discount and free-shipping (even of the rapid variety) offers on a regular basis.

We’ve moved into an era of moderation and introspection. May we emerge more sober and wiser.

The E-Reader Killer

The other day I spent about an hour with an iPad.

Those of you who know me or follow this site know I’m a Mac convert. I switched from what the Apple cognoscenti refer to as the “dark side” seven years ago. It’s been a very good experience. Frankly, the Windows world has improved much since I left. But there’s a bigger issue here.

I believe I held the device that will kill the e-readers. Convergence is coming.

When I sit next to a Kindle or Sony user on airplanes I hear rave reviews. Convenience, long charge life, portability are the things they mention. But they also acknowledge it’s another gadget in the bag along with the laptop, smartphone, and various accoutrements of the business traveler today.

With the iPad – and what will be a shrinking horde of imitators over the next few years – you get much more than the reader. It’s really a true lap companion that does much more than just show you a replicated black and white page. It’s a full color, multi-tasking, e-mail and word processing handler – at the minimum. Some power users make them much more.

And the price is just a little more than double the e-reader. Why not spend the little more and get something that does way more than twice the lower priced gadget?

Key indicator – the dropping cost of e-readers. http://nyti.ms/afXw0u A price war has already begun. Developers see an adoption disruption early. Amazon bumps up its advertising.