Category: Rants

The Harsh Realities of the Business World

I was recently lucky enough to get to take 6 weeks off for a sabbatical, where I was able to really get away from the life of a consultant and just spend time with my family. Upon returning I reached out to a number of people with whom I work or know in the industry and wanted to catch-up. I had two different people, both of whom I respect deeply and who I think are some of the best and brightest in the industry, regal stories about how fed up they were with the industry and how they were losing faith in the system. This conversation is hardly new, but the stark difference between the “real” world and what happens in the corporate world was striking.

Without fail everyone comes to realize the limitations of the corporate world, and while every organization is different, the things you see, especially at the largest corporations, are almost all universal. One of the hardest things I have to deal with as I try and mentor new people or people who I want to help in the industry is help them really come to grips with this reality and help them see that there is hope, but that they will always be making choices: what is good for the company vs. what is good for them.

With that in mind, I wanted to help express some universal truths that I think everyone should be comfortable with if they want to really exist for any period of time in this business world.

Most effort is wasted –
This becomes striking clear when you start doing exploratory casual analysis and look at the impact of work or entire departments. The number of times in the last 5 years that I have taken a few minutes of effort and the end result has shown that entire years’ worth of effort had negative impacts to the bottom line cannot be counted on my appendages. There are entire disciplines that people have devoted their entire life to that have no impact whatsoever and are nothing more than phrenology.

But 100% of people think they do excellent work – This really hit home today with one of the conversations as the realization that action is confused with value really came home. Most people assume their actions are providing value, and because of the preponderance of data out there, most can find ways to come up with some story to justify their actions.

I have had multiple engagements where it started with the person showing reports and graphs and presentations showing massive value to the program, only to take a few minutes and dive into the numbers and show that not only was it not improving the business, in multiple cases they were actually causing catastrophic harm to the business. It happens everywhere, at least 70% of case studies are full of 100% fake data. People are so desperate to please their boss or make themselves look good they find ways, often subconscious, to show their value. It is not malicious, it is just sociopathic.

My favorite story of this was when I was working with a group that was reporting how great their recommendation tool was and how it was generating 18% more revenue! In reality they were only looking at the revenue increase of the products recommended (3 out of a library in the hundreds). When doing just a standard analysis of the entire revenue stream, there were piles of data that showed they were losing 6% net revenue for the entire company, totaling millions and millions of dollars.

People are not rewarded if a company makes 3% more money from their actions, and as such they treat the lack of complaining as the ultimate sign of success. We never look at what could have been, only what was and how people reacted to it. Context is something you have to strive for and work hard to get, every day, otherwise almost all stories and data is meaningless. This often leads to many long term problems…

Because of this most people have no clue what they are talking about – If you can come up with a story to justify any action, you don’t dive to see if you are right, most effort is wasted, and the only thing people look at are the stories you weave, why would you need to know what you are talking about? It is far easier to create a narrative out of the air then it is to actually be able to back up anything you are talking about. Thanks to fear, Dunning-Kruger, and just common greed, this is allowed to take place. The more someone is able to convince people of their story (which is a different skill then actual results), the more they move forward, the more people believe it, and the more people want to copy it. It is a self-fulfilling cycle and one where actual knowledge is scorned because it serves as a direct challenge to the empires built by these people. If you really want to improve things, you must always make people go where they don’t want to, because the safe shores are the ones without accountability and that sound like the same things they have always been doing.

People who build the tools and work at agencies often know even less – I have direct experience with a large number of tools, and I am lucky enough to know “thought leaders” at a large number of other tools and agencies, and I can tell you as a whole most of the people you hear talking couldn’t provide value to you if their lives depended on it. They have become experts at telling you what you want to hear, not telling you what you need to hear. The top people in the industry are story tellers who weave a tail of telling you to do basically what you have been doing, but justify it with fancy terms or new actions to get to the same place. Tools become designed for this, people get advancements for this, and oftentimes anyone who doesn’t want to take part of this vicious cycle move on to other endeavors, meaning the worst become the ones their longest, gaining power and only making the cycle worse. I can attest that the top 5 agencies I know in my space, I know multiple top people at all of them and not a one knows anything about providing value, or even cares. They do the same tired actions because that is what they have always done, and they don’t get called out on it, so why should they change? To quote one famous person in our industry, “I throw a grenade and try to get people to come to me when they run from it.”

And you thank them for it – You know why the tools are designed to do things that aren’t valuable and the top agencies are run by people who tell stories and have no clue what they are doing?

Because you do not hold them accountable

I have worked with exactly 3 organizations in 12 years where results mattered, the rest just want to sell a story internally, do something new, and then do more actions that make their boss happy. You buy the story, do the failed actions, sell that story internally, which results in promotion which propagates the cycle. The cycle spreads and just as stated before, knowledge of other ways is simple a risk. This is why you find people in these places that are so good technically, but very few if any in most organizations that have any clue about strategy other than repeating the same tired failing things that everyone else repeats. Organizations want people to do what they say and tell them it is golden, not to make them money. The only person who is going to really hold you accountable for value derived is yourself.

But all hope is not lost – This environment is where we exist, and it has been that way since you started and will be far after you are done working. The environment doesn’t change, so it is up to you to decide how to deal with it. Just because people don’t want to change doesn’t mean they won’t, it just means it isn’t easy. Just because others don’t hold you accountable does not mean that you can’t. Just because doing what others want will help you move forward, it doesn’t mean that you have to sell out at all opportunities. It is a balancing act, both of survival and how to tackle these complex problems. The thing that makes people survive or be good is that they don’t hide from the reality, they embrace it, they might get frustrated, but they come back and push back even harder tomorrow. If you give in, if you become cynical, if you just give up and take the easy path, that is your decision, just as it is to do the right thing even if it is not best for your career. No one can tell you what the right choice is, all they can do is help you see that you are making these choices and help you make the one that is best for you.

And when you do overcome these problems it can be the ultimate high –
Just because the entire system might be designed to keep things from progressing does not mean that progress isn’t made, only that it is rare and incredibly hard fought. I had the pleasure to also be on a call today with a client who has come from an org with no background in testing, who just threw up tests because they thought they should and who had no resources and no knowledge, who in the last 9 months has transformed to the point that they have a separate team, great discipline, good educational base, and who is running a series of exploratory tests. That moment, which I wish happened all the time but doesn’t, makes it all worth it, at least for me.

In the end, it isn’t about what title you have, who thinks you did well, it is about what are you trying to accomplish and did you hold yourself accountable to it? People can do good work, almost all of the problems I outlined above happen subconsciously, not consciously. People aren’t out to screw each other; they just do it and then rationalize it away. Opening up someone’s eyes, or making it so they don’t have to do the easy thing just because is all you can do.

Choose what you want, and then do it. Don’t let the system dictate the outcome, it is up to you to overcome, adapt, or become a cog in that machine.


Rant – Testing is about the Driver, not the Car

I recently answered a question on the value of testing on Quora and was asked to re-post my response here by a few people I know in the industry.

Question: I’ve been all about A/B testing, but then I just read this post from Erik Severinghaus. Is A/B testing as valuable as we think?

Answer: Like many things in life, the answer is not that simple. Think of it like driving a car, there are good drivers, slow drivers, oblivious drivers, angry drivers, and skill ranges from low to professional. The issue is in the driver, not in the concept of a car.

Testing is much the same way. The reality is that in many organizations (including many that champion testing to death) there is very little value in how they are leveraging testing. There are many cases where testing is actually costing those companies money, because they are not disciplined in how they approach things, they focus on idea validation and do not understand how to act on data, doing things like blindly following statistical confidence. If you look at how he describes testing in that blog post, then this is where those people are at. If MVT is simply a way to throw a bunch of items against a wall and choose a winner, then you know that you are firmly in this realm. In those cases, I would argue that testing is worse then a mouse pad, it is more analogous to a cup holder in a car. It is there, people use it, they get enjoyment out of it, but it has nothing to do with where the car ends up or how fast it gets there.

There are other organizations which look at data differently and who use testing in a different manner, one used to focus and leverage resources and one that is not used for validation or “choosing 2 headlines”. In those situations, there is very little that can be said to describe just how valuable testing is. Testing changes the direction of entire organizations, it proves people wrong, it focuses resources and it allows for the exploration of alternative feasible options and allows you to really know the value of actions, not just argue them. It is a tool whose use is to find out what the most valuable of many different routes are, and then help you drive down those roads providing more and more value at each step. Those scenarios are more analogous to testing being the GPS, describing routes and shorter distances, as well as helping maximize time and fuel.

In both cases, there are ways to automate the process to lower decision time and to increase the efficiency of the test itself. That doesn’t address the real problem however which is if the entire vision of testing is wrong, then it doesn’t matter what system you use to make decisions or how you leverage MVT. It really doesn’t matter what sized drink goes into the cup holder, or how many different drinks can be placed there over time. If you are going down the other thought route, then how fast your GPS updates, what information it uses, and what factors you use to decide routes can have a massive impact on where you end up.

RANT: Quora question – How has A/B testing evolved over the years?

If we look at just online A/B testing, I think that there have been a number of major changes over the past few years. Looking back, testing started out as a “cool” feature that a few companies did and that was only available through internal IT set-ups or from a very select few companies who offered very limited testing options. During this time you had major debates on things like partial versus full factorial testing, data waves, efficiency and iterative testing. You did not have a ton of segmentation built into tools and for the most part, tools required a bit more knowledge of how to work with different groups. You also had the first wave of people claiming to be “experts” starting to saturate the market.

If you look now, we have many more tools and much richer information to segment and target to. You have a preponderance of tools available and the cost to get these tools live has gone down dramatically. Testing has gone from the few to the many, and as such more people are far more interested in the impact that testing can have…

The problem is that the growth of tools and share of mind, there has not been an equal growth of understanding of data or testing discipline. We have created access to tools and made promises and support people who have no clue what they are doing. Instead of a few tools trying to create the best product available, the market is saturated and tools are instead focusing on the lowest common denominator with things like GUIs, integration, and very bad advice to companies to make it seem like what they want to do is actually going to drive revenue.

The power of these tools is light years ahead of where they were just 5-6 years ago, but the actual value derived by most organizations has dropped precipitously as focus shifts from discipline to things like targeting, or handing control to your analytics team, or content optimization. Even worse, the area of the “expert” has exploded with everyone and their brother talking about “best practices” that are nothing more then empty excuses for you to do their “test ideas”. They search out validation for their ideas from empty knowledge basis like whichtestwon. Personalization has become a common refrain, but there is so little understanding of what is needed to actual derive value from discipline that 7 out of the last 7 groups I looked into the outcomes of their programs were losing money, not even coming out neutral. In reality most testing is now nothing more then a function or commodity for organizations, believing that the mere fact of having a tool or running a test in some way correlates to the value derived.

As you see the market saturate with tools, the knowledge gap has become the driving factor in determining success. With so many programs unknowingly failing at just about anything they do, the reality is that the difference between the “haves” and the “have nots” has gotten critical. My favorite axiom of, “you can fail with any tool, it is only when you are trying to succeed that the tools matter.” has never been more true.

That is not to say that all is lost, because there has been 2 developments that are looking great for the future. The first is the growth of some of the tools in the marketplace do allow for much more value then ever before. The ability to segment and look for causal inference, and the move away from confidence as a blind measure of outcome have been great advancements and allow organizations to make much better decisions. While a majority of the market is lowering the common denominator in order to make groups feel better about their results, there is equally a few groups that are attempting to raise the bar and derive more value, not more myths. The second is that you are also seeing a growth of N-armed bandit type of yield optimization options hit the market, as we move farther and farther away from opinion dictating outcomes, and closer and closer we get to rational uses of data, the more value can be achieved and the more people get used to the fact that their opinion or their test ideas are pretty much useless.

My sincere hope is that in another year or two, that we have moved past this personalization insanity and instead are talking about dynamic user experiences. That we have stopped talking about data integrations, and are instead talking about data discipline. That tools stop trying to tell people how easy and fast it is to get a test live, and instead focus on the parts of testing where the value comes from. More then anything, I hope that testing matures to the point that people fully understand that it is a completely separate discipline and one that requires completely different ways to think about problems then analytics, or traditional marketing, or IT, or product management, or really anything else out there. Testing can provide far more value with far fewer resources then just about anything else an organization can do, but it is going to take the maturation of the entire testing world in order for people to stop being led not by results, but by bad marketing messages. Time will tell where things go from here.

The Great Dark Truth of Analytics: Sociopath or Prisoner’s Delimma?

One of the great ironies of our industry is all the time wasted talking about “Big Data” or “Governance” or a thousand other small wasted catch phrases. All of these are simple attempts to show a “maturation” or growth of the online data world. While there is enough backlash to point out that none of this is really new, it is simply the online matching the offline Business Intelligence path. A world that never has produced 1/50th of the value it also pretends to. The irony lies not in what is being debated or not debated, or if online and offline are the same, but in the fact that we all talk around the real issue and do nothing to address it.

The reality is that most BI work is a wasted effort, designed to facilitate a predetermined wish of some executive, and that the people rewarded are never the ones that actually provide the best analysis, but the ones that produce the analysis that best helps make others agenda’s move forward. The online world is simply following suit, to the point that we no longer look at how many reports you can create as justification for existence, but now how can you create a fancy graphic or data to support one groups agenda or another. This evolution follows a normal path from creation and storage, access, and now delivery of data, without one time dealing with the real issues at hand. Human beings are both awful at understanding or leveraging data, but also most people (especially those in marketing) are awful at their jobs.

If you think about it, it’s not that shocking that marketers are horrendous at their jobs; they make a living telling stories and trying to convince others of things that have no basis in reality. This means to exist in this world, you are left with two options: Act like a sociopath, or unconsciously acquiesce to some sick permanent version of the prisoner’s dilemma, but in this version as long as no one points out how full of it the person speaking is, they will return the favor. Both diseases leave the same outcome, a group of people who exist to propagate the work of the same group of people, and who seek outside justification, be it awards (from the same group), data that is only searched for one way to support them, or case studies of people who did the same thing and likewise lied their way to “success”.

The scare and threat of data is that when used in a rational manner, it can shed light on the real value of the day to day actions we hang our hat on. We can find out just how horrendously off our preconceptions are. One of the great ways to succeed at testing is simply to bet against people, as people are so rarely right that just picking the other direction creates a winning streak that would allow you to live as a billionaire if you could translate it to Vegas. You will quickly find that most experts are nothing more then storytellers, and that most of the largest gains companies made are often the least publicized, but those that are shared are often subconscious attempts to get others to fall pray to the same mistake that they too wasted months on. With almost no effort you can prove that most actions taken provide no value whatsoever to the company, or are so inefficient that they are far worse. The data and evidence is easy to get, but we avoid it in order to cope within this world.

Why can’t people act rationally more often? Why is data accepted and abused, why do we seek confirmation not information? Why do we not worship those that get results instead of those that tell stories? The answer is simple, we fear most that which may hurt our own world view. If everyone was willing to search for the right answer, we would all be better off, but as soon as one weak person accepts the word of one sociopath, we are all set on down this path, or suffer silently the fight against the tide.

This is not a new problem, Kant, Engels and many others have been talking about this problem for hundreds of years; we just find new names for the same human weakness. We seek out people to do attribution, and then believe it tells you anything about generation. We seek out those that confirm our hypothesis, not those that disprove them, despite the fact that the disproven hypothesis inherently has a better outcome. We want people to speak at conferences and point out why everyone else is screwed up but why we can change and do the exact same things that they were railing on, but now with a new name. We want to find a site that tells us “which test won”, not one that helps us be better tests or to achieve any value whatsoever. We are constantly searching for the next affirmation to justify who we are, not improve who we are.

“Reality” is not a kind mistress for those that are even slightly interested in it. Empirical Realism is looked at and talked about, but practiced by so few that it is almost as meaningless a buzzword as “personalization”. While it helps companies, it rarely helps those that which to exist in a corporate environment (see prisoner’s dilemma). We are forced to make a Sophie’s choice, do what makes others happy or that which helps our company. We all try and find ways to convince ourselves and others that we are not faced with this choice, yet we only succeed when we stop caring about or thinking about anything other then our own gain. In order to facilitate this, we find every way possible to make the mental pain go away and to find others that will tell us it will all be ok.

So if this is the sandbox in which we play, is it any wonder that our “heroes” are those that best project the best ways to make others believe what is being done matters? We worship at the altar of Avinash, or Peterson, or Eisenberg’s or anyone else we can find that as justification for what we were already doing. We have no way of knowing if what they say is correct, and personal experience shows that following most of that advice leads to immensely fallible results. Far be it from an inquisitive mind to question if the current action is the right one, or if there is a better way to think about and tackle problems. We instead allow others to dictate to us, so that we can avoid cognitive dissonance and rest easy at night… ok, on second thought, most marketers are both suffering from living in a prisoner’s dilemma and are also sociopaths. The data shows that these are not mutually exclusive but complimentary. Glad we got that squared away…

If you want to really make a difference, if you are tired of this same old world or of those charlatans who propagate it, are you prepared to fight the tide? Are you able to evaluate your own work, to go past the comfort and to find out how wrong you are, in just about everything you do? Are you then able to get past that mental scarring to do the same for others? Will you back down the first time someone pushes back, or will you make it your quest to do the right thing when it is neither profitable or easy to do so?

The history of business shows that rarely if ever does this problem truly go away, or does the better answer win. While history is written by the winners to justify their existence, randomness and the trampling of others are bred into every page of this twisted form of storytelling. And yet, until we deal with this real problem, until we are more interested in doing the right thing then the easy one, what will really change?

We will continue to waste time and effort on data, in order to justify wasted time and effort in most other efforts. We will continue to seek new words for old problems, and we will continue to make heroes those that most hold us back. Until we stop propagating the lie and until we look at ourselves first, how can we ever really deal with the real problem of data. Not the collection, not the sharing, not the presentation, but the people who are wired to use that data in the least efficient and most self-serving way possible. You want to solve big data, you want to change the industry, stop wasting time on tag management or Hadoop, solve the people, since there is where all problems lie. Don’t solve how do you share your point, but how do they think about and are they rationally using data to find an answer, or only to justify one?