The Challenge Dividend

The Power of Vetting

(Sorry for my lack of posts lately.  I've had vacation and some busy work weeks.)

Don't you just love it when a rarely-used word seems to be everywhere you turn all of a sudden.  My word-of-the-month is "vetted".  No, it has nothing to do with Corvette - sorry for the lame pun and photo.  Instead, it's the "process of examination and evaluation" that is used to check into something or someone before a final decision is made.  It's also an interesting sub-point in the idea of The Challenge Dividend.

Most readers have heard "vetting" used to describe McCain and Obama's search for a Vice Presidential candidate.  We heard news stories of potential nominees that were and were not vetted.  In the past week we've seen praise for the selection of Joe Biden, a man vetted by many campaigns and decades in the Senate.  And this weekend we've seen analysis on the risk of the selection of Sarah Palin, a political newcomer who was vetted by a committee but not the harsh glare of national media.

Last week I encountered the concept of "vetting" while meeting management of one of my clients.  We were receiving our annual agency performance review (itself a great Challenge Dividend concept), and heard that - while lots of other new agencies are trying to do work for the client - the digital agency world is full of over-promising and under-delivering.  Our client felt great that we were doing great work and delivered on our promises.  In her words: "You are vetted."

The vetting process is smart for all manner of "hiring" decisions, and seems to be increasing as we have access to new tools and technology.  When I interview people, I usually take only a cursory look at the resume - and instead use tools like Google and LinkedIn to form my initial impressions.  Why?  Well, the resume is like a one-sided advertisement.  You only see the good stuff in the best possible light.  But other information, tools, and personal references help to "vet" candidates in a more trusted way.  And when I have to make a critical employment decision, I cannot afford to trust only a resume and a few hours of interviews.  Meanwhile, the act of vetting job applicants ensures that these people work harder to make impartial, positive impressions.

We'll see if the "vetting" concept dies away as the Vice Presidents are picked and the race for the White House is finished.  I think this one might stick around, as it's another powerful way that challenge drives improvement.

Inbox Victory: Challenge Accomplished

One of my guilty passions is a site called Buzz Feed, which scrounges the world for emerging trends.  It a cross between Brandweek and The National Enquirer, and I never get tired of seeing what microtrends is hitting next. 

A few weeks ago I remember seeing a trend called "Inbox Victory."  The trend was born from a site called Free Art & Technology, which challenged readers to empty their email inboxes and upload a photo of themselves celebrating.  It later got picked up by Boing Boing which means millions of readers and much glory.  Goofy, sure, but interesting nonetheless.  And for some reason this stuck in my head for a few weeks.  I now wanted to celebrate an Inbox Victory, and I started to whittle down my inbox.

Finally, last week I did it, and of course, my photo is above.  This is not a big idea, and barely serves as a microtrend, but it challenged me to act and by reading this maybe you'll do the same!

Why Things Suck - Challenge Dividend Edition

I've spent the past few weekends catching up on a stack of magazine subscriptions.  One article that I've spent a lot of time with is Wired's February 2008 cover article on "Why Things Suck."  The article lists 33 common things that suck most.

My firm belief is that when we come across "things that suck," we often find that they lack the Challenge Dividend.  In other words, they don't have enough pressure to improve.  So here's my take on Wired's things that suck because of little or no challenges:

• Air travel sucks because only a few players dominate the market, due to a mix of high costs of entry, government regulation, and big players' dominance of hub city markets.  Economists call this an oligopoly.  The upcoming Delta/Northwest merger will lead to more suckiness.
• Evite sucks because it has established a large user base that is hard for an upstart to overcome.  It's free but increasing is monetizing its user base by putting more and more ads in front of us.
• Medical Records suck because there is no market incentive to make them simpler and more portable.  Special interest lobbying prevents the government from making any real progress.
• Printer Cartridges suck because manufactures use lawsuits and complicated parts to prevent third-parties from entering with innovations and lower prices.  They lose money on the printers and screw us on the refills.
• Radio sucks because big companies like Clear Channel scooped up many stations (reducing competition) and took out costs (laying off local DJs and inserting software), while programming music for the lowest-common denominator listener.
• Roads suck because the government usually pays for them and has cut its budgets.  Meanwhile, big trucking companies that tear down roads pay the same cost as you and I - zero.
• Ticket Purchasing sucks because Ticket Master has a near monopoly on the market.
• Traffic sucks because market forces don't create incentives to travel in off-hours.  See roads above.

So the next time you run across something that sucks, think about whether there's a challenge or pressure that can be added to improve the situation.  In the meantime, take a vote on Wired's things that don't suck.  A few of my favorites are "a rooftop bar in spring" and "your kids being born."

Folgers Gourmet - make your own commerical

This is off-topic, but it's a cool piece of work that my agency got to do for Folgers.  Nice work, team

Engineers Learn from Failure

It seems that I'm not the only guy diligently tracking examples of where challenge drives improvement.  I recently discovered a new book by Henry Petroski, a professor of history at my alma mater, Duke University.  Petroski's book is called Success Through Failure: The Paradox of Design.  The thesis of the book is that engineers and designers often only learn how to improve by watching the very visible failure of others. 

A few interesting examples from Petroski make his point clear (from a recent Q&A in Duke Magazine):

• "Frank Gehry, the architect, designed the Disney concert hall in Los Angeles. Aesthetically, it's a great success. But one corner of the [polished stainless-steel] building reflected sunlight into a condominium complex across the street that was blinding and also heated up the condominiums by fifteen degrees. That would be an example of something generally working, but there's this unintended consequence. You could say that in the ideal world, that would have been anticipated. And in the future, it's another thing that designers will note what not to do."
• You go to the drugstore and you get a prescription filled, and it's in this container with a cap you have to push down and twist [to open]. These things became required when a lot of children were dying of overdoses of medicine that they weren't supposed to be having access to. The idea was, let's make child-resistant packaging—simple as that. But sometimes you can make something almost too good, and it turned out that a lot of older people and arthritic people couldn't open these packages, so they would ask somebody to open them for them, and if they did get them open, they'd leave them open. So these older people would leave open medicine bottles all around, and their grandchildren would come and visit them—same thing was happening."

I think Petroski's insight is one that we find throughout the history of human society.  We tell stories and revisit history as a way to remember and attempt to repeat the mistakes of the past.  This includes the failure of leaders and organizations - from Hitler to Enron.  But it happens everyday as fathers and mothers try to pass lessons to their children. 

At my office, we recently began publishing weekly stories of actual mistakes and successes that we have experienced recently.  And last year I wrote of how I have often improved most by learning from mistakes in new product marketing and new business pitches.

To err is human, as is to learn from our mistakes.  And yet again, challenge leads to improvement.

Weekend Competition Updates

Every once in a while I like to re-examine some historic posts where I've come across new news.  Here's two examples:

The $100 Laptop:
A few weeks ago I wrote about the growing competition between Intel and the not-for-profit One Laptop Per Child foundation (OLPC). Both groups are fighting to build a low-cost computer that can be produced in vast numbers and sold to developing nations around the world.  My argument was that this competition between the two groups - each with different strategies and tactics - would be good for the overall mission and society as a whole.  Simply put, competition would lead to a cheaper, better laptop, sooner.

However last week the competition ended.  Intel joined the 10 other companies that are members of OLPC.  After publicly chastising Intel on 60 Minutes, OLPC leader, Nicholas Negroponte, said:

"Intel joins the OLPC board as a world leader in technology, helping reach the world's children. Collaboration with Intel means that the maximum number of laptops will reach children."

We really won't be able to tell if a truce in the $100 laptop war will help or hurt the ultimate mission.  I believe it will slow progress for three reasons.  First, it eliminates the pressure of competition.  Second, it reduces the number of strategies to employ - like in evolution, divergence usually results in a better way.  Third, there are now 11 companies in the project, each with its own selfish goals and bent on using its own hardware and software; OLPC will be under pressure to keep its partners happy, rather then the poor children that are its customers.

Guitar Hero
Back in April I gushed about my experience playing Guitar Hero 2 for the Xbox 360.  My point was that the game is filled with a variety of small challenges and rewards that help players learn how to improve their skills and increase their enjoyment. 

For a while, the Guitar Hero franchise has owned the guitar play-along category.  As a result, one could argue that they have not improved fast enough.  Guitar Hero 2 is very similar to the first version, but simply adds a few songs.  It also lacks the ability to jam with friends over Xbox Live - a function that is increasingly expected among games.  Activision is preparing to launch GH3 in the Fall, but it too looks like more of the same.

Meanwhile, some new competitors are pushing the boundaries in the category and might drive further competitive benefits.  The biggest news is that MTV is partnering with Harmonix (an original developer of GH1 and GH2 who was case aside when Activision bought the franchise) to launch "Rock Band" this holiday season.  Rock Band will take the basic set up of Guitar Hero, but add the ability to sing along and play drums.  It will allow Internet play, and brings cooler new Fender guitar controllers.

While I keep working on my Guitar Hero skills, I am psyched that another developer is working to feed my hunger for more.  Bank on the guys at Guitar Hero quaking in their boots and working on adding new features and functions in response to the huge buzz already surrounding Rock Band.

Yeah, it's a goofy example to most people - but you cannot deny that challenge is driving improvement in the rock-a-long video game category!

UPDATE: OK, it stopped being goofy today because The New York Times featured a story today on how Guitar Hero is becoming the next karaoke at big city clubs.  I might have to start the Cincinnati version...

Reader Contest 2: Improve This - Winner!

UPDATE: I got fewer responses than the last contest, but I'm happy to congratulate "Peter" on winning the second Reader Contest.  Peter suggests that we use the challenge of the court of public opinion to help raise funds and raise a negative reaction against the plaintiff.  I especially like his call for $1 "micro-donations".  One would think that at least a million people would PayPal a dollar each to the defendant.  And with the global reach of the Net, this can quickly add up.  Peter, your iTunes gift card is on the way.

While I love Peter's answer, I would add another Challenge Dividend solution: a law that would force the plaintiff to cover legal costs if he loses his case.  My inspiration is a recent story in which a man tried to sue his dry cleaner for $54 million because of a supposedly misplaced pair of suit pants.  The entire story is pretty amazing - the plaintiff, Roy Pearson, is himself an administrative law judge in Washington, DC, and he actually cried on the stand as he represented himself in the case.  But this week Judge Judith Bartnoff threw out his complaint.

In addition, Judge Bartnoff ordered Pearson to pay the defendants' filing fees and other court costs.  Their lawyer is also asking for $100,000 in attorney's fees. (UPDATE: fundraising events helped send the defendants an additional $100k, and Pearson is about to be fired)  I believe this is a strong precedent and should be a more formal part of the legal process - if you fail to prove a basis for a case, a judge should be able to assign court and attorney costs to the defendant.  In the case below,  Dean Hancock would be forced to put some skin the game, and this may particularly discourage over-reaching into lawsuits against innocent bystanders like the tow truck driver.

But at the end of the day, the court of public opinion is probably the strongest challenge to frivolous lawsuits.  Our society increasingly frowns on "jackpot justice" and has turned people like Dean Hancock, Roy Pearson, and Stella Liebeck into public villains.  In a world in which people's mistakes are captured forever on Google, many people might think twice about testing these limits of law and society.

(The Original Contest):

In January I conducted the first Challenge Dividend Contest, in which the person with the best answer to the challenge here scored a $10 iTunes Gift Card.  Now it's time for Round 2.  I'm heading on vacation for a few weeks and decided to set this up to keep you thinking while I'm gone.  In addition, this particular issue is something that I actually don't have a good solution for.  So let's see what the wisdom of crowds can do...

In the early morning hours of April 29th, St. Louis Cardinals pitcher, Josh Hancock, was killed when he drove into a stopped tow truck.  Hancock's blood alcohol content was twice the legal limit, he was on the phone at the time, wasn't wearing a seat belt, and marijuana was found in his car.  It was a very unfortunate incident, but gladly no one else was hurt - yet.

On May 24, Dean Hancock, Josh's father, filed lawsuits against several individuals who were "involved" in his son's accident.  This included:

• The owner of the restaurant that served Josh drinks.
• The driver of the tow truck that Josh crashed into.
• The driver of the car that was being towed.

For just a moment, imagine being the driver of the tow truck or stalled car.  First, you are unlucky enough to be on the side of the road working on a car as others whiz by in the early morning.  Second, a drunken baseball player plows into your truck and car, you see his death before your eyes.  And finally, because your car stalled and this player was loaded, you are now the target of a lawsuit.

Clearly the law is there for Dean Hancock.  He can sue a ham sandwich if he wants, and usually insurance companies and individuals are so worried about jackpot payouts and bad PR that they end up settling because of only a threat. 

This contest asks the question: How can the restaurant owner, tow truck driver, and car driver use the Challenge Dividend to their advantage?  How can they challenge lawsuits that threaten their personal life savings and future earnings - when they did nothing wrong?  You may show alternatives that currently exist, or propose new laws that should be enacted.  Just make sure it uses the Challenge Dividend theory - i.e. something that challenges Dean Hancock in a way that leads to a better outcome for society.

The person with the best answer (selected by yours truly) will receive a $10 iTunes gift card. Entries should be placed in the Comments here, and the deadline is Monday, June 25, at 12pm EST.  One entry per household, and please keep total answers under 500 words.  Good luck!

The Battle for a $100 Laptop - UPDATED

The May 20 edition of 60 Minutes featured the One Laptop Per Child project, spearheaded by passionate MIT professor Nicholas Negroponte.  If you haven't heard, One Laptop Per Child (OLPC) is a non-profit organization founded by Negroponte in 2005 aimed at providing an internet-ready laptop computer to poor children around the world with a target price of $100 each.  The first half of the 60 Minutes story was a feel good piece (available here); but in the second half, Negroponte accused Intel of working to destroy his dream through its own low-cost computer effort.  This of course begs the question - is Intel's challenge driving improvement or killing Negroponte's dream?

So far, both OLPC and Intel are in the early innings of their competition.  OLPC has a $179 working model in tests in Cambodia and Brazil.  Intel's Classmate laptop at a similar price point was just recently released and is in similar testing.  Neither side has managed to secure major sales to governments in developing nations, however.  Negroponte claims that Intel is using misinformation and dumping product at a significant loss to stall OLPC's progress.  He references that fact that OPLC uses competing processors from AMD and is taking a $220 loss on each sale.  And he provided Leslie Stahl with a copy of a sales sheet Intel provided Nigerian educational leaders that makes questionable claims against its competitor.

I believe this fight in the low-cost laptop war parallels the history of the race to sequence the human genome.  Both were efforts to improve the lives of billions of people and pitted a non-profit group against for-profit businesspeople. 

As economist Gary Becker described in 2000, a private effort by Celera Genomics began 8 years after a global non-profit effort led by the National Institutes of Health.  Celera embraced an innovative gene mapping strategy that moved at light speed compared with the global government-sponsored team.  But the success of and competition from Celera "appeared to light a fire under the government's program."  At the end of the day, the genetic code was cracked five years ahead of schedule, probably saving thousands of lives.

Ironically, the OPLC organization's first mission statement embraced competition, essentially saying that "we win as long as someone makes the right product":

"OLPC is not at heart a technology program and the XO is not a product in any conventional sense of the word. We are non-profit: constructionism is our goal; XO is our means of getting there. It is a very cool, even revolutionary machine, and we are very proud of it. But we would also be delighted if someone built something better, and at a lower price."

But the new mission eliminates an embrace of competitors.  Anyone who has been through a mission project knows that these mission words come after endless discussions.  Clearly OLPC has embraced competition rather than cooperation.  It wants to win, not cede success to others.

I think this change of heart will work to OLPC's advantage.  By becoming a hard-nosed competitor with a passion to win with its preferred strategy, OLPC is better tooled to go against the likes of Intel.  On the other hand, I wish Negroponte would focus on making a better product, rather than accusing Intel of misdeeds.  By winning with a better product, rather than better politics, Negroponte will beat Intel in a way that provides the best product for billions of poor children.

Let the war to provide for the world's poor children begin!

UPDATE: I missed it 6 months ago, but Intel ended up joining the OLPC group, promising to cooperate as one force, but potentially hurting the competition that would drive innovation.  No problem, though, as last week Intel pulled out of the partnership.  It seems that Intel wanted to continue selling its own version and OLPC was unhappy. 

Embracing Constraints

In the Western world we seem to be obsessive about choice and options.  Our freedoms were won hundreds of years ago and we now take for granted that we can basically do whatever we want.  But we often forget the fact that the challenge of limitations and restrictions can themselves be liberating.  Garr Reynolds' Presentation Zen blog reminds us of this additional example of how Challenge Drives Improvement.

Reynolds makes the point that much of the work of designers is in fact aided by constraints:

• "Whether constraints are good or bad, enabling or crippling, is in a sense irrelevant; constraints are simply the way of the world."
• "In the field of design there is the belief that with more constraints, better solutions are revealed." (John Maeda)
• "What we can learn from professional designers, then, is that (1) constrains and limitations are a powerful ally not an enemy, and (2) creating our own self-imposed constraints, limitations, and parameters is often fundamental to good, creative work."

Reynolds refers to Marissa Ann Mayer, Google's VP of Search Products and User Experience.  Mayer claims that constraints on file size, fit with existing technology, and short development times help her team succeed or fail faster and come up with better ideas.  She says:

"Constraints shape and focus problems and provide clear challenges to overcome. Creativity thrives best when constrained."

I see the benefits of creative constraints everyday in my day job at an advertising agency.  My role at the agency often involves helping to build a strategic approach for a particular project, or weighing in on the fine points of a creative brief.  A solid strategy, measurable objectives, and creative brief help "frame" (i.e. constrain) the creative work that comes next. 

One of the quotes I often use in guiding teams is: "We've got to build the box to think outside of."  In other words, by giving some constraints - say, the product benefit or specific consumer insight - our creative teams are challenged in a specific way.  They apply their mind power in a focused direction and develop unique approaches that delight consumers while meeting business needs.  Alternatively, if we just said "come up with some big ideas", our teams would not know where to start.   And our clients would not know how to judge our work.

Taking a step back, maybe part of what we love about art is that it is the result of a man or woman innovating and expressing herself within firm constraints.  We are left to appreciate unique message within an understood setting.  A marble sculpture, watercolor on canvas or 17-syllable haiku are highly constraining media that still beget innovation and moving messages.

For my part, I know that focusing on a specific insight in this blog has helped me tighten my writing and hopefully attract more readers.  And the more I constrain myself with the Challenge Dividend message,
the more creative ways I see to apply it.

A Blog Year in Review

One year ago yesterday I began the public phase of The Challenge Dividend with this blog.  As in many things in life, an anniversary is a good time to reflect on progress, strengths and opportunities.  Like an annual employee review or personal reflection in the mirror on one's birthday, it is good to challenge oneself to reflect on and plan for how the next year can be even better.

My overall life objective for this project is simple yet aggressive: make The Challenge Dividend a tool that is used by millions of people around the world to better themselves and their organizations.  It is a lofty goal, but it helps me keep things in perspective.  I don't want to just "get published" or somehow turn this into turn this into a best seller.  I don't care if it happens next week or after I die.  I don't care if I don't make a dime from it.  This means that I have to take my time a bit, refine my skills, and find the right voice and audience to make an impact.  It might take twenty years to achieve this goal, and I am perfectly happy about that.

But even long-term objectives and projects need regular progress checks (yet another example of challenge that drives improvement).  Here are some of the strengths and opportunities from the year in review:

Strengths:

• Good use of blogging overall - I have taken my personal research and successfully turned it into something that the world can see.  This allows me to test my theory with real readers as well as refine my writing skills.  I am very proud of having 143 unique blog entries, far more than I planned heading into the project.
• Time management - My day job, family, and other fun hobbies keep me busy and I do not have a lot of extra time.  But I have been able to write an average of three complete "articles" per week.  Net, good progress without having to give up too many other pulls.
• The message is resonating - Most of my readers are friends and family and their feedback has been excellent.  Some of them now speak in "Challenge Dividend terminology".  For example, during a meeting of my executive team last week we used the Challenge Dividend as a way to judge odds of success in a new venture.  Two people have even claimed some personal motivation from this space.  That warms my heart and makes me feel that the ultimate goal is possible.

Opportunities:

• Progress toward a book - I believe that publishing a book is a major step toward bringing this idea to the masses.  However I have not met my hopes in terms of progress here.  My file of book notes and structure has not been opened in months.
• Audience size - I am excited by every single reader, but just wish there were more of them - and that more were outside of immediate friends and family.  I do get about ten visits per day from people who happen on my blog while searching for specific information.  I wish more of them added me to their bookmark list or feed reader.  Part of this is due to the fact that The Challenge Dividend cuts across many niches, while the most popular blogs hit on a very specific audience or topic.
• Blog design - I am not at all pleased with the template design for this blog, and I know from my day job that quality of design can make or break visitor trust and interest.  At the end of the day, I've got to get some outside help to make this sing.  Anyone out there with design skills looking for some freelance bucks, grab me.

Goals for the next 12 months:  Another key "challenge" is to publicly commit to some action steps.

• Write another ~150 posts.
• Build out a model for measuring the Challenge Dividend for oneself or organization (think of it as a scorecard, like Porter's Five Forces).
• Double my daily visits and subscribers.

Thanks so much to you, dear readers.  You provide the positive, motivational challenge to get up early, stay up late, and keep creating compelling content.

Bob G.