Track 3: Innovation beyond technology

This session is dedicated to the possibility that innovation goes beyond just technological developments. Technology is important, but it is only a small part of innovation. For innovation to be more fully complete we must look at other areas including the internal processes of the organization and most importantly the very language we use. Innovating like this is hard work and not for everyone because it requires deeper thinking than is most often thought. If you believe you can attain this level of thinking, you are invited to attend this session.

Transcription:

Ed Kless (00:11):

So my first suggestion for innovation beyond technology is to the conference organizers. And I've been making this suggestion for years now, and that is you should charge a premium for those people who want to sit in the back of the room. Okay? And this way, oh yeah, because then this doesn't happen, right? He's got to worry about the speakers and feedback because the presenter is going to come out to where you are. So this should be the cheap seats up here, and if you pay, I don't know, a hundred dollars less, you have to sit in the front tables. I think that's brilliant. Don't you This? Well or better? You make him pay a hundred dollars more to sit in the back.

(01:08)

I'm only half kidding, by the way, flew in last night. I've got my performance enhancing drugs ready to go here. It's all good for knowledge workers, right? So let's jump in. By the way, this is me, Ed Kless, if you need to connect with me on Twitter at Ed Kless I'm also the only Ed Kless in the world. My parents are really into differentiation from a marketing standpoint. So it was very helpful. I, and I ask, I do check this every so often. I do search for my name to make sure that I'm still the only Es Kless, so it makes it easy to find me. All right, so let's talk about, this quote goes back to the early 1990s and I remember being aboard the Long Island Railroad train where I'm originally from riding into the city when I read this Nicholas Negroponte's book about innovation, and this one hit me like a ton of breaks. The only sustainable competitive advantage is the ability to out-innovate the competition. That's the only sustainable competitive advantage that we must continue to innovate. Peter Drucker said it this way. There's only two functions in a business marketing and innovation. The rest is just cost.

(02:16)

We have marketing, we have innovation. Everything else is just cost, which is true, but we have a challenge with this innovation and that is we're stuck in thinking that innovation must be the latest eye device, which are cool. By the way, I'm not opposed to this, although I think I need to update this slide. It now needs to be chat GPT, which anybody played with the chat gt. Good, good. This morning I had it. I had it. Pretend it was Jay Gatsby and I interviewed it and asked the questions and it responds Well, old sport, I am not even kidding. It's like that's pretty freaking cool, right? But yeah, so this slide will eventually be replaced by some AI thing, but point being is that we have this innovation must be technological because there's been a wonderful flurry of technological innovations over the last what century or so, two centuries, and we kind of get stuck into that.

(03:23)

But innovation does go beyond that. We're going to talk about some of these examples today. Take example, this one I guess this is technology. There's the wheel involved. But what I really love about this is it's a great illustration of what Matt Ridley, who's an author, who wrote several books on innovation. His definition of innovation is this. When ideas have sex, when ideas have sex, they create offspring. So this is if a stroller fell in love with a skateboard, this is what the offspring would look like. When I saw this thing, I was like, oh, and I have two kids, but mine are reversed. My oldest is the boy. But I remembered him hanging onto the side of the stroller like, stop, I'm trying to push her sister.

(04:14)

So my relationship with my son would be much better had I had this back in the day. That's a really cool thing. But keep that in mind because really that's what innovation is. Bringing sometimes two disparate ideas together and creating something new that didn't exist before. And it doesn't have to be earth shaking. It doesn't have to be that something that needs a patent. Okay, let's take for example the cloud. It took me, I worked for a cloud company, Sage. It took me good five years to realize that in the cloud meant on the internet as you really think about it, that's all it means. Where it's on the cloud, it's on the air. The cloud is mostly in the desert too, by the way, which is really weird when you think about it. That's where the cloud is. The physical cloud is in desert someplace. So a little bizarre in the cloud. All right? This however, I believe has been the biggest accounting transformation that's happened in the last century. I made this slide up myself. These are actually pictures that I took and that was moving from putting the receipts in the shoebox to the Ziplock bag, right? Because you know customs come to you with the Ziplock bag of receipts as opposed to the shoebox. That's been the greatest innovation in accounting. Well, because really this is the problem. Innovative accounting usually gets you thrown in jail, doesn't it?

(05:49)

Right? I mean, that's usually C Enron. WorldCom is innovative accounting. The Fed well won't go there. So this is the challenge. And so this is again why it's been a lot of technical transformation. But here's another great quote. This is from the late great Andy Grove, CEO and Founder of Intel. Disruptive threats come inherently, not from new technology but from new business models. Which new business models are the assemblage of these new technologies into one place, usually with things that have already existed, but a new compilation of those things. I mean, here's a guy. This is what his a chip company, he's saying, no, it's not about the technology, it's about the business model innovation where the huge inherent threats come from. It's put this way that which kills you does not look like you.

(06:53)

So the threat is not from other accountants, it's from things like chat, GPT. And by the way, I don't think that there's going to be an AI that is ever is going to take anybody's job. People who know how to use AI are going to take the jobs of people who don't know how to use AI. That's what's going to happen, which is why I can't figure out why my school district sent me an email Friday into my kids announcing that they would no longer be able to bring their own devices next year because they need to block this chat GPT stuff. I'm the one telling my kid, use it whenever, because he is a junior in high school. He is going to graduate hopefully in five years or so from college, and I guarantee you the job that he gets will require him to do what? Use AI.

(07:48)

So let's start it now, but it's the business model ultimately that is the biggest disruptive threat according to Andy Grove. So I want to talk a little bit about that. I want to talk about some business models, but before we get there, let's just experiment with Uber. Uber, if you think about it was really this, a great example of this compilation of all technologies that had existed that they finally put into one place, the app that was Uber, but Uber's greatest innovation as far as I, I'm concerned. This goes back what now? 10, 10 years. 10, 11 years Uber had been around, but to me the greatest innovation that Uber had and the distinguishing characteristic that differentiated them from the taxi companies that we would call is that unlike say the taxi company, which would say I'll be there in about 20 minutes, emphasis on the about is that Ubers let you know where the driver was and it's 18 minutes, 17 minutes, 16 minutes, and you get the countdown of when, I don't know if you've done any travel I have in, well even before Covid, any subway platforms next train in, I believe it was because Uber changed our framework.

(09:02)

We want to now know we would as human beings by the way. We would much rather wait a longer period of time, as long as we know how long the wait is. We're better with knowing the length of the weight than not knowing and to showing up sooner. We like certainty like that. So that was with the innovation that Uber, Uber I think really made on us because it's had an impact on society in general. All of these mass transit systems now have to tell you when the next train's coming or when this is going to happen, right? Cool stuff. Alright, so now we're going to get into the meat. That was kind of a warmup. I want to talk to you about a series of different innovations that I've observed over the last 10 years or so. Some of these go back even a little bit longer than that, but they're still valid today. And this one is innovation around pricing. This is the car company. Audi in northern Germany 10 years ago had a situation where it was the end of the year kind of thing and they, they're sitting around with the finance people and they got their spreadsheets going and they're like, well, okay, here's what we're going to do. We're going to offer 3000 euros off the price of the car.

(10:25)

And one of the guys on the team who is a behavioral economist said, well, see can't we do better? And all of the finance people looked at each other, it was a 4,000 euro would be better, but it makes our spreadsheets break so we can't do 4,000 euro. He says, no, no, no, no. Instead of TA taking 3000 euro off the price the car, how about we add 3000 euro on top of the trade-in value of the car that they're trading in? And all the finance people looked at each other and said that's the same thing. Of course the behavioral economist says the same thing. If you're a finance person, not if you're a human being, right? Because the 3000 euro on top of the trade-in feels like a better deal. If I'm trading the $7,000 clunker, so to speak, and I get an additional $3,000 on top of that, the perception of that is better because it's a higher percentage of the 7,000 than say the $34,000 a Euro car with 3000 off, which is less than 10%. So how would one practically apply this inside your business? Are you encouraging any of your customers to move from one technology stack to another technology stack If that ever happens? Here's what I suggest you do. Tell them that when they move from one technology stack to the other, you will buy their old technology stack from them and write them a check

(11:50)

For some amount. This will give them incentive to actually make the move. Especially if your technology stack is, I dunno, priced appropriately difference. It's like I'm going to buy your old technology from you once you move completely. This also solves a pretty interesting problem, which I hear from a lot of folks is especially if you do do primarily technology implementations, we don't know when the job is done. Nobody tells us when it's over. We don't understand when it's over when they're live. Well, here's how when they say yes, send us the check, that's when we know it's end. It's over because they're telling us to. Another alternative on this is perhaps if you are on a subscription pricing, which is a whole another session over the course of time, if you have an upfront price that you then lower at a certain point based on customer behavior, you can build that into the price. So we're encouraging that behavior to happen. So I think this is a great example, just this notion around innovation, around pricing. Next, innovation around experience. This is one of my favorite stories. I have to, and my colleague Wendy has had heard this story a million times, but this is, and we're, we're going back, Wendy, we're going back. This is the lobby. Anybody recognize this?

(13:18)

Wendy does. Okay, this is the lovely lobby of the Aria Hotel in Las Vegas. How many have been to the lovely hotel in the Aria in Vegas? Okay, see, okay, so yeah, this was at least one point. The picture that was on their website of the lovely lobby of the Aria Hotel. This was my actual check-in experience. You see the pink wall in the back there? It was terrible. It was an hour and a half on that line, an hour and a half. Did you not know there was a conference going to happen here? Was that unclear? What's odd about this is another hotel chain. In fact it was the Gaylord Hotels have done extensive analysis of this and you know what the number one predictor of satisfaction and loyalty is for hotel change. What the check-in experience, the check-in it's called bias. Once you walk in and have a good experience with the check-in process, you look for reasons to confirm that, oh yes, that was a lovely ice sculpture. The bathroom was very clean, this bar is kind of funky. Whereas if you have a lousy check-in experience, you're like fat ice sculpture, shit melty and crap. But I found paper toilet paper in the corner of the bathroom

(14:52)

And the bar looks a little bit agent and creping and they don't have the scotch that I like. So it's the number one predictor of whether or not you're going to be loyal and satisfied is the initial check-in experience with the hotel. I think the learning for us is that if you're going to invest in really sticking the landing on the onboarding experience for your customers, now this doesn't mean that you can do this and then abuse them afterwards, but you give yourself a much better chance as if the initial experience that they're having with you, and I think this goes just beyond onboarding, this even goes to their marketing experience of you and your organization. This one, how you sell is an indicator of how you will solve the process that you go through with them to decide whether or not you're going to take them on. Even as a customer. And I know I'm saying customer, I'm doing it on purpose to make you angry dear, we have clients, I don't know what this guy's talking about. I'll get there, I promise it's called, it's the shoulder rolling. Remember the film at 11, we'll get there. So innovate around the experience, but it's that initial experience. That's the place to start. Really stick the landing.

(16:25)

Really stick the landing so that they can look for more ways to say why they like you. Oh, another great one. Let's pretend we're going to do a Harvard Business case study review and we've decided that what we want to do is we want to put out a drink that can competes with Coca-Cola.

(16:47)

So let's brainstorm this. Shall we might sit around the table and go, you know what I think we need to do? We need to come up with a drink that tastes really good. People like the taste of Coke, but we've got to come up with something that blows it away from a taste perspective. Maybe in order to enhance them, what we should do is make the can bigger so they can buy more. Even that alternatively, let's even lower the price. We will establish a beachhead. We'll do some penetration pricing, establish that pricing, then we'll be able to raise our price later. Does this sound like all reasonable things to you? Right, to do not. A few of these folks who did the exact opposite first they made it taste like crap. Then they said we're going to put it in a smaller can and charge more for it.

Ed Kless (17:43):

What? Put that in your Harvard Business case review study, case study. But the key was the smaller can in my view, the innovation here was around the packaging in the smaller can because this says energy drink, which we all use Coca-Cola for the same thing. The performance enhancing drugs I was talking about earlier, but what does putting in a smaller can make it concentrated? There's five cups of coffee in that sucker. So the five hour energy people got into this and said, oh yeah, we can now do you we're going to make it even smaller and put 17 cups of coffee in that sucker,

(18:32)

Right? I have not ever had a five hour energy drink, but based on my consumption of coffee, I'm pretty sure I'd be clinging to the chandelier if I had like, right. But think about this, the innovation and impacting by changing the packaging. This has some other parallels too. There was a famous example from the seventies. This is a turtle wax of all things. They put out a high-end car wax to compete with their regular mid run of the mill car wax. It was a miserable failure until they doubled the price and made the container smaller. And then people look, guys, oh it's concentrated, flew off the shelves, flew off the shelves. So your packaging is the question, what's your packaging? How can you change the way it's packaged? More on that in a little bit. This is a innovation in customer uses, how the customer uses the product. This is developed by a guy by the name of Rory Sutherland. I'm going to show a video for you of Rory in just a little bit. He is the Vice Chair of Ogilvy and Mayer in the UK Vice-chair is a completely made up for him.

(20:02)

He's a little bit of a wacky guy, but he was doing a project for the National Health Service in the UK where what they wanted to do is make ensure that people would complete their course of antibiotic. And you probably have heard of this, but there's a real problem with when we are prescribed or over there is over the counter. But when we start taking an antibiotic, we are very bad at completing the course of antibiotic. So what we do is if it's say a seven day course, we take it for three or four days and then we feel better and we're like, well, let's just put that in the drawer in case I don't feel bad, bad, bad again. So we don't complete the course of antibiotic. Well, we usually get better, but the bacteria that's still left that we don't knock out in that next three days is guess what? The strong bacteria, because it survived the first four days of antibiotic. You see? So when we are then giving that bacteria to other people in that last three days when we should have knocked it out, we're only passing on the really strong bacteria.

(21:13)

This sounds familiar. This is like we are encouraging bacteria to get better and stronger by our behavior.

(21:22)

This is a real societal problem because then we have to come up with ever stronger antibiotics to be able to knock these things out. So what they wanted to do is they wanted to do a campaign, an ad campaign with the National Health Service to say, finish your course of antibiotic print billboards, ads, commercials on BBC one, two, and three that says we got to do, they said, Nope, we have a better idea. It's not going to cost you all that much money either. We want you to retool the pills so that you give, say it's a seven day course of antibiotic, there's six white pills and one blue pill, and the prescription now becomes take the six blue pill white pills and then on the seventh day take the blue pill. Turns out it significantly increases the probability that we as human beings complete the course of antibiotic it's processes called chunking. Chunking, which is taking a one step process and breaking it into multiple steps. When we chunk stuff down, we're more likely to do it. Do any of you have people in your firm that you delegate work to? Do any of you delegate work to customers that you have to have? Yeah. Okay, so experiment with chunking.

(22:47)

Break it into a two step process. Even if it doesn't make necessarily logical sense to you, do this then that do this then that. Now this is not a panacea, no pun intended with the pills, but what I've found in my work is that it significantly increases the probability that the person that I'm delegating the work to gets it done. It's not perfect, but you know what? I'll take significant increase in probability that works for me. It's a very practical thing. So chunk work down, chunk work down.

(23:37)

This one is, and I put the reference to this one on it. You can find this. This is from fast company way back when. This one goes back quite a ways. Over a decade innovating around customer focus process. And I'll take some of the blame for this and we say I'll for the collective sage and all software companies back in the day that existed way back when we first started putting stuff out on the web, especially taking e-commerce systems and orders. So this is what we did. We said, okay, we have our backend system and we want to put take an order on the website. Fine. Well, there's a process for that. The first thing we have to do is the customer has to show up at the website and they have to give us their customer information. They have to give us their name, their address, their blood type number of children, lets all this stuff on. There's a, and then once they give us that, then we will let them pick the items that they want to put into their shopping cart and then buy from us. Because that's how you did it in the back office. You had to create a customer before you could create an order.

(24:44)

What did every single one of us do when we got to the website that started to ask us personal information before we could start shopping? Bye-bye back button. Not going to do it. Nope. Turns out however, that if we first instead change the register now, which is what this company did to continue and allow the customer to put stuff into the cart first, they were more than willing to part with their personal information after they put stuff into the cart. This does not, if the world was full of Mr. Spock, this would not have been a problem, right? Because there's lo logic, sir, there there's no logical difference between those two processes, right? There's no logical difference. So if we were all Homer Simpson, I mean if we're all Spock, we would be fine, but the problem is most of us are Homer Simpson and we're like donuts. So it's it's different process. I guarantee you there's stuff that you're doing that you're doing this to your customers in some way. You are making them do a process because it's convenient for you the way they do it. I think, I don't know if this has stopped because I 10 years ago, abandoned my accountant for my tax.

(26:29)

Because I got really pissed when I got the stupid tax planner thing, the 70 page guide, that if I could have figured that out, I could have owned my own flipping taxes. So the weird part is that in trying to serve me by, oh, we gave you this whole big tax planner, look at how, look at how they lost me. I abandoned. I'm like, no, this is not what I need from you. So what are the things that you're having your customers do for your convenience that's at your convenience? Rethink that. All right, now we're going to innovate nothing. Well actually marketing, we're going to innovate marketing. I mentioned Rory Sutherland earlier. So this is a video of him from his TED Talk from a number of years ago, probably a decade ago.

Ed Kless (27:43):

I'll just let him explain it.

Presentation Video (27:52):

I've got an example here from Canada. There was a young intern at Ogilvy Canada called Hunter Somerville who was working in improv in Toronto and got a part-time job in advertising and was given the job of advertising shreds. Now this is the most perfect case of creating intangible added value without changing the product in the slightest. Shreds is a strange square, whole grain cereal only available in New Zealand, Canada and Britain. It's craft peculiar way of rewarding loyalty to the crown. And in working out how you could relaunch shreds, he came up with this.

Presentation Video character (28:45):

Shreds is supposed to be square. Have any of these diamond shakes going to new diamond shred material, the same 100% whole grain wheat in a delicious diamond shape?

Presentation Video (28:59):

No, I'm not sure. This is the most perfect example of intangible value creation. All it requires is photons, neurons, and a great idea to create this thing. And I have to say it's, it's a worth of genius, but naturally you can't do this kind of thing without a little bit of market research.

Presentation Video 1 (29:15):

So shreds is actually introducing a new product, which is something very exciting for them. So they're introducing new diamond shreds. Excuse me. So I just want you to socks there. So I just want to get your first impressions. When you see that and you see the diamond shredding box there. They look winner.

Presentation Video 1 (29:36):

I'm a little bit confused. They look like me. It is all, yeah, it's all in the appearance. It's kind of thinking about a six or a nine, like a six. You flip it over, it looks like a nine, but it's a six is very different from a nine and A W and never A W. Exactly. Actually you don't see, when I sat there, you just look like you turn on 10, but when you see like that, it is more interesting. Just drive a square one there, curve the bird.

Presentation Video (30:23):

No, naturally actually debate raged. There were conservative elements in Canada, unsurprisingly, who actually resented this intrusion. So eventually the manufacturers actually arrived at a compromise, which was the combo fact.

Presentation Video (30:51):

If you think it's funny, bear in mind there's, there's an organization called the American Institute of Wine Economics, which actually does extensive research into perception of things and discovers that except for among perhaps five or 10% of the most knowledgeable people, there is no correlation between quality and enjoyment in wine, except when you tell the people how expensive it is, in which case they tend to enjoy the more expensive stuff, more so drink your wine blind in future. But this is both hysterically funny, but I think an important philosophical point, which is going forward, we need more of this kind of value. We need actually spend more time appreciating what already exists and less time agonizing over what else we can do.

Ed Kless (31:29):

Almost a 400% increase in sales, they did not change the product.

(31:45)

I love this because it is literally an example and oh, by the way, when I say literally, I actually mean literally because most people when they say literally mean figuratively, have you noticed this phenomenon? They'll say, my head literally exploded. No, no, no, no, it didn't. You're still standing here and if your head literally exploded, you wouldn't be here. And they're like, well Ed, you're just being obs here. They're like, no, no, no, we need the word literally because if you think that we can change the word literally to mean figuratively when then what do we do then? We don't have a word for literally we'd have to make up a new word, wouldn't we? So this is literally positioning, market positioning on two levels. They changed the position on the box, they rotated it 45 degrees and they changed their market position in that instead of a stayed old, boring whole grain brand, they said, we have a sense of humor about ourselves. So they changed their position in the marketplace. Four dimension, 400% increase in sales. This is so hard for especially accountant types to understand that marketing creates value. It actually creates value

(33:37)

Out of words and stuff, but it doesn't change your cost. Love this example. All right, this is setting up for this last piece right here. Deirdre McCloskey, who is a economic historian out of the University of Chicago, wrote a series of books called the Bourgeois Trilogy, in which she posits the following, that the cause of the industrial revolution was not any technology, it was not the printing press, it was not the accumulation of capital pouring brick upon brick. It was the change in how the rhetoric around how we treated people who innovated up through about the late 17 hundreds innovate. Innovation was a bad word, like you oftentimes got killed for innovating and no, I'm not kidding. There's an example in the book of this guy, this Roman, who for all intents and purposes developed the formula for what we now know as what's the plates that don't break? I can't remember the name of it. What's that? Choral, right? He came up with the formula for chore and was producing glasses that didn't break. The emperor had him killed because he was going to take jobs away from the glaciers and the other people that made ceramics and stuff.

(35:26)

True story. So was only in the late 17 hundreds and early 18 hundreds that we as a species began to give dignity to those who innovated and did things creative. In fact, Deirdre McCloskey says she created a new term called innovism, just says that's what creates wealth in the world, innovism. And that of course leads to this a big change in the common opinion about markets and innovation. I claim cause the industrial revolution that is ideas or rhetoric enriched us. The cause was language. What I like about this is that this is really for accountants, a return to your roots. I want you to think about the terms that are used, accounting, audit. These are terms that have to deal with language. What would happen is there was a lord of an estate who would bring him, his accountant, who would give a oftentimes verbal accounting of what was going on at the estate. This person was listened to by the auditors. The word auditory audit means a listening, a hearing. So we're going back to the roots of what accounting was supposed to be about, relationship based, connection based, verbally based, explanation based.

(37:02)

If you haven't taken a look at, did any of you know who Hector Garcia is? Hands up if you know Hector, A couple of you. All right? Yeah. You need to check out he Hector Garcia's YouTube channel. He has a quarter of a million people and one of his latest videos, I don't know if it's the last one, this goes back about two weeks, is him cut and pasting a quarterly financial statement into chat GPT and saying, analyze this from a gross profit analysis standpoint. Compare it to other small, it was I think a construction company, small construction companies, and give me and pretend you were this customer. What questions would you have asked of this and answer them. And then he puts it all on a PDF file and sends it off. Now the argument that I've heard from people who've seen this, especially accountants, is like, fuck it's his. The answers are so phenomenal. They're just standard stuff for you, not for the CEO of that mid-size construction company, right? Incredible, incredible stuff. Lang language around this.

(38:30)

So here's my admonition. Oh, I got to talk about him first. I've got a little bit of time. Okay? This is one of my heroes. Werner Erhard. Love this guy. He's weird. Weird dude. Weird. Any of you fans of the TV show The Americans, did we have any watch the TV show America, A couple of you, Philip the he went to EST, he went to this thing called EST. EST was Earhart Seminar Training. This is the guy who invented it, invented them self-help stuff in the seventies, seventies and eighties. So he is a little bit of a wacky dude, but the reason why he's my hero, in addition to this great quote, all transformation is linguistic. If we want to change our culture, we need to change our conversation. He also beat the IRS in a tax case in their own court to the tune of about half a million dollars. Love this guy. All right? Anyway, if you want to change the culture, you need to change the conversation. I want you to begin by changing some of the words you use. That's it. That's the innovation. Change some of the words you use, and here's some suggest suggestions.

(39:43)

Don't do training. Don't do training. Do education from a marketing standpoint, which one, can you put a higher price on training or education? How many think training? How many think education? Do any of you like in your personal life fees or bills? Do any of you like those things? Do you like fees? When you get a fee? Do you like when you get a bill? Don't talk about it as fees and bill's a price. This is our price. Our price is and not our normal price either, by the way. Our price, our price. Price is a neutral word. Don't ever use the word discount. What you can do is give a preferred price. I'm giving you preference in price or a promotional price. If you come on board with us within this time period, you're going to get a promotional price, which implies expiration after a certain time period. The problem with giving a discount is what? Once you give the first discount, what happens after that? It's expected. We in the software industry have gotten ourselves into a trap, a discount trap. It exists still to this day, which makes my head hurt because we sell now mostly subscriptions, but we still do a lot of business in the last week of our fiscal year.

(41:28)

This makes absolutely no sense to me because we've got ourselves into this trap. This is what I was talking about earlier, why this was a setup. I know client, but the word client has its origins in ancient Rome. Lawyers in ancient Rome had clients. All lawyers in ancient Rome, by the way, didn't have a price or a fee for their services. They were all like public defenders, even public prosecutors. So there was no, it was just if you had a case in the Roman legal system, you were appointed a Roman lawyer who had to take it. That's one of what they had to do. And only if you were a citizen, by the way. So you had to be, had to be a Roman citizen. Then you got this and the people that they served with these people, they were clients. The word means one, leans a leaner incline, decline, recline all come from the same Latin root. And they have this thing about some kind of an inclination because the client needed to be fixed. They needed to be ah, got to fix them, they got to straighten them out, got to make them straight.

(42:58)

It was a very patron, benefactor type of relationship. We are in the know you are not the word exists, I think in its real natural state in social work today. Social workers have clients. I don't think that's what we want anymore. I think what we want, and I like the term customer, or better yet, if you're going to subscription member like that term even more, I like to think, I want you to begin thinking about your firms as a club. This sound familiar? Okay, inside joke there, I want you to think about your firms as a club and that the people who subscribe to you are their members. And the great American Express commercial from the eighties was membership has its privileges. You no longer offer benefits, scope of work services you offer privileges that they can take advantage of as members. No longer change orders, but change requests. We're doing project type work. We don't talk about services and output. Nope. We want to talk about results, knowledge, judgment or better yet, outcomes. What's the outcome that you're after? Quick, great illustration of this from my friend Tim Williams who is a marketing consultant. He consults with a lot of the large marketing of companies throughout the world, including Ogilvy and Ma and all those guys. And he tells this great story. He was, he's from Utah, but he inherited a property in Las Vegas, a house from his aunt I believe.

(44:48)

And he was going to put it on an Airbnb. So that's what he decided that he was going to do. So he flies into Las Vegas. He's not from Las Vegas, he's from Utah. And he, he realizes he needs to get a landscaper for this place because he's not going to be around to take care of it. So he calls some folks over, guess how many people he called by the way? Three. We always call all, call three people. Why do we call three people? Not why not just one? Because we need context for our price. When we get the first price, we don't know if it's a good price or not. We don't know, especially if we're in a market that we don't know. So you call three people and sorry ladies, they were all guys. They must be really sexist in the landscaping business. I don't know what's going on, right? So the three guys show up and the first guy is like, okay, I'm going to mow, I'm going to edge, I'm going to trim your bushes when they need it. What I'm going to do is I'm going to charge you $25 an hour and I'll send you a bill at the end of the month.

(45:51)

Okay? Next guy, he's got his clipboard and he's walking around, okay, yep, I'm going to edge, I'm going to mow, I'm going to take care of your bushes, but I'm going to give you a fixed price. $200 a month. Okay? Third guy comes, he's got the clipboard, he puts it down to his side and says, Tim, tell me about this property. Tim tells the story, inherited it from my aunt, I'm going to put it on Airbnb. Ah, the guy says, I got you Tim, you don't have to worry about this, right? Nope. He says, here's what I'll do for $350 a month. I will make sure that your house has the best curb appeal in the neighborhood. So then Tim asked the question of the room that he was to, which one do you think I went with? And we go, the third, third one. Third, third guy. He goes, no, I wish he doesn't exist. I only got the first two. The first guy was charging me for inputs, how many hours it was going to take. And the second guy was charging me for outputs, which is the list of services. The third guy who doesn't exist, who I wish I had was going to charge me for an outcome, which is what I wanted.

(47:13)

The outcome being best curb appeal in the neighborhood. So what is your business's equivalent or your customer's equivalent of wanting the best curb appeal in the neighborhood? What is that? This is not easy to think about. This is a challenge, it's really hard. But if you can get and understand what that best curb appeal in the neighborhood is for you, you're in good shape. I got three minutes left, two minutes and 37 seconds. Alright, so outcomes. Can we stop with the staff please? The staff. The staff. It's an infection. When I think of staff, I think I have staff, let's kind of move away from this. I'll give some credit where credit is due to the an ex CEO of Sage, Stephen Kelly who came in and said, colleague, change the word inside Sage to colleague. He's kind of stuck. I like the word really good and my colleague,

(48:21)

What I like about colleague, it's really broad If you think about it. You guys are colleagues, aren't you? Amongst each other. So your colleague doesn't even have to be somebody that you are directly work with. It can be outside, it can be even larger in the same profession. You're all colleagues. It's a cool inclusive word. All right, if I got another hour, which I don't could do the just on efficiency and effectiveness, I could do do an hour just on that or better yet, efficacious. Efficacious just means to the maximum possible benefit to the maximum possible benefit. And then lastly, I want you worried more about your time, your less about your time, capacity of your organization and more about your emotional capacity. What is your emotional capacity for dealing with stuff? Because this have, we had, you had this day, your first thing in the morning, you have this really gnarly situation with a client who calls and you're like, oh my God. And you're like, you're done emotionally for the day. It's like the rest of the day is I am going to get to the end of Facebook. I I'm, in fact, I'm going to go so far back in Facebook, it's going to turn into my space.

(49:35)

That's, that's my goal for the day. All right, so what's that emotional capacity? Alright, change the words. I want you to think about what words you can begin to change, even if it's just one word in your organization. Just start with changing your language. Pick a word. Any word doesn't have to be on my list. This is my information. I put this up there. If you're interested at all, go to ed klut.com/val and fill out my personal evaluation. This is used for my performance assessment at Sage, so I would love for you to do that. If this is interesting to you, I do do a radio show with Ron Bacon called the Sold of Enterprise Head over there to the soul of enterprise.com and you can listen to free podcasts. So good stuff. All right, thanks so much. Have a great rest of your conference.