The Value Creators Podcast Episode #26. 11 New Mental Models for Business

/0 Comments/in /by

Mental models are defined as fundamental assumptions that shape the way individuals perceive and interact with the world. When our mental models are wrong, we can’t see the world as it really is. New mental models introduce a new and better understanding. This episode of the Value Creators podcast introduces eleven fundamental mental models, ranging from understanding value as a subjective creation within the minds of customers, to the strategic accumulation of knowledge within a firm, to the pivotal role of empathy and the transformative nature of marketing as behavior. Each mental model contributes to a new holistic paradigm designed to guide entrepreneurs in creating sustained value.

Mental models contribute to the necessary shift in business mindsets towards a dynamic approach that emphasizes the continuous flow of experimentation and the ongoing refinement of knowledge through error correction. 

Resources: Hunterhastings.com

Shownotes:

0:00 | Intro: Choosing Right Mental Model for Success

02:43 | Mental model Number 1: Value is Created by the Customer

04:07 | Mental Model Number 2: Knowledge

05:13 | Mental Model Number 3: Empathy 

06:23 | Mental Model Number 4: Marketing

07:26 | Mental Model Number 5: Design

08:15 | Mental Model Number 6: Innovation

09:30 | Mental Model Number 7: Entrepreneurship

11:08 | Mental Model Number 8: Finance and Accounting

12:13 | Mental Model Number 9: Organization

13:08 | Mental Model Number 10: Business is a Flow

14:05 | Mental Model Number 11: Knowledge Accumulation

15:20 | Wrap-Up: Value Creation For Customers

Knowledge Capsule:

Mental Models for Success:

  • Mental models as fundamental assumptions about how the world works…
  • Correct mental models lead to valid conclusions, while incorrect ones result in mistakes.

Mental Model Number 1: Value Creation Paradigm

  • The customer is the creator of value.
  • Challenge the traditional view of businesses creating value; instead, recognize customers as value creators – since value is subjective and is generated in their minds.

Mental Model Number 2: Customer knowledge is the source of competitive advantage

  • A lasting competitive advantage for firms comes from accumulating and compounding customer knowledge and understanding..

Mental Model Number 3: Empathy as a business tool

  • The tool for building customer understanding is empathy.
  • Empathy is not “thinking as they think” – it is a simulation of the customer’s experience and how the customer evaluates it.
  •  The simulation enables businesses to understand and address customers’ unmet needs.

Mental Model Number 4: Marketing is behavior not communication

  • Marketing is not communication and persuasion.
  • Marketing is behavior, an act of love towards customers.

Mental Model Number 5: Reverse the flow of design

  • Design is working backwards not forwards – backward from the customer and their experiences and desires., 
  • By working backwards, design ensures that customer wants are integrated seamlessly into products and services.

Mental Model Number 6: Innovation is continuous

  • Innovation is not an event – it must be continuous, unceasing experimentation and improvement.
  • The greatest innovation lies in innovating new business models..

Mental Model Number 7: Entrepreneurship is the only route to value creation

  • The value creation process is enabled through entrepreneurship, not management.
  • Entrepreneurship translates customer’s genius in sensing that things could be better (How do they know?) into innovative products or services through continuous new action.

Mental Model Number 8: Finance and Accounting should look forwards as well as backwards

  • Traditional accounting can’t accommodate value creation – the intangibles that create customer value.
  • Make sure your accounting balances backward-looking tracking with forward-looking economic calculation.

Mental Model Number 9: Rethink organization

  • Don’t organize!
  • Encourage self-organization and autonomy for employees interfacing with customers.

Mental Model Number 10: Business as a Flow

  • Don’t plan!
  • Adopt a continuous flow approach in business and individual work.

Mental Model Number 11: Unceasing knowledge Accumulation

  • Constantly critique and improve knowledge through collaborative open-minded critique and error correction.

The Value Creators Podcast Episode #25. Jacqueline Porter on The Power of Visual Design

/0 Comments/in /by

Visual design is an important element in value creation, especially in telling a brand’s or a business’s story in a way that engages with customers and communicates shared values. Visual designers are multi-talented artists and storytellers with an acute understanding of customers and their emotional responses to visual cues. Our guest this week is Jacqueline Porter, an accomplished professional in her field and a very successful business owner in her own right.

We explored the business of design and creativity from the challenges within design education, and the drawbacks of rigid design frameworks and the value of subjective, creative approaches. A notable reference to a transitional figure in design Steve Jobs shows how simplicity and creativity – rules and no-rules – can work together.

The conversation moves to the realm of implementation in branding, exploring the delicate and shifting balance between fixed and flexible elements. Jacqueline advocates for constant evolution, telling a story with a dynamic interplay between exploration and exploitation for sustained success. Consistency is achieved with creativity, empathy, and adaptability.

Resources: https://www.jacquelineportercreative.com/

Shownotes:

0:00 | Intro

02:28 | Jacqueline’s Defines Visual Design: Inclusions, Exclusions and Importance

03:54 | Nike Example: What Represents a Good Design?

05:32 | Jacqueline on Branding: Advertising’s Impact

06:54 | Professional Approach: Visual and Wood Synergy in Business

09:28 | Clients Don’t Know What They Want: Process VS magic

11:02 | Lum Spirits Story

15:51 | Color Palette: First Step for Visual Representation of Lum Brand

20:09 | Visual Design Mastery: Empathy, Psychology and Branding

21:23 | History of Rules VS No Rules

22:54 | Newtonian Economic Thinking and Bauhaus Analogies

24:42 | Steve Jobs Simplicity is a Transitional Example

26:27 | Designer Examples: Getting Outside of the Box

29:05 | Crack is Wack

32:22 | Implementation of Design

34:50 | Wrap Up: Fixed and Flexible Idea

Knowledge Capsule:

We can all think of excellent elements of great visual design:

  • They become an important part of our lives, our thinking, and our engagement with the world.
  • Jacqueline chose the Nike swoosh to illustrate.

Subjectivity in Design:

  • Design is a field where the subjectivism we advocate in value creation is uniquely valuable.
  • Every customer will respond personally and idiosyncratically to visual design stimulus. It will mean something different to different people.
  • Understanding the psychology of subjective value is a skill for designers.
  • Breaking traditional rules can generate more acute emotional responses..

There was a 20th century movement to make design obey objective rules: “good design”.

  • Bauhaus is associated with the “good design” concept, with prescriptive rules about function, simplicity and order.
  • When these rules were taught in design schools, it raised concerns about students becoming replaceable, like interchangeable parts, due to strict design boundaries.
  • New approaches like the Stanford D School approach left these rigidities behind, introducing the same empathic process for design as we use for value creation: understanding customer emotions, preferences and contexts comes first.

Steve Jobs as a Transitional Example:

  • Steve Jobs, despite being rules-oriented, broke conventions creatively.
  • Achieving simplicity in design while incorporating complexity in technology.

Examples of Breaking Design Rules:

  • David Carson’s defiance of good design ideals led to influential graphic design in Ray Gun.
  • Exploration of unconventional layouts, upside-down pages, layered typography, reflecting punk culture.

Great design can have huge social impact:

  • “Crack is Wack” : Keith Haring’s appeal from the heart about the crack cocaine epidemic..
  • The powerful impact of design in raising awareness and creating a call to action.

Empathy and Emotional Storytelling:

  • Hunter and Jacqueline discuss the recurring theme of empathy in effective design.
  • Emotional storytelling through research and understanding user experiences.
  • Jacqueline described the storytelling journey of Lum vodka seltzer from “illuminating the night” to “illuminating life” led to a major visual rebranding.

Brand Design and Implementation:

  • Discussion on the balance between fixed and flexible elements in branding.
  • The need for consistency in brand recognition while allowing for creative evolution.
  • Embracing constant change and evolution in design.
  • The balance between exploration and exploitation for sustained brand success.

Visual design parallels value creation in its leverage of creativity, rule-breaking, empathy, and constant evolution in the field of design and branding.

The Value Creators Episode #24. Amanda Goodall on The Power Of Expert Leaders

/0 Comments/in /by

In our ongoing series investigating leadership in business – coming from the skeptical perspective of “Is there such a thing?” – we meet Amanda Goodall, a professor of leadership at Bayes Business School, City University of London, specializing in the influence of leaders and managers on performance, shares insights from her book “Credible: The Power of Expert Leaders.” 

She has a new perspective on business leadership. It’s not a general management function that can be taught in an MBA course. It can’t be learned from leadership courses. It can’t be implemented by management consulting firms. Leaders must first be experts in their field and the core business of the firm.

Amanda shares the importance of experts in providing a clearer sense of purpose and fostering a longer-term organizational perspective. The dialogue concludes with a call to establish expert-friendly environments, and emphasizes the removal of impediments to harness expertise for organizational success.

Resources:

https://amandagoodall.com/

https://www.goodreads.com/book/show/63251919-credible

https://www.amazon.com.au/Credible-Expert-Leaders-Amanda-Goodall-ebook/dp/B0BS3FS9XH

Knowledge Capsule:

Evolution of Management:

  • Amanda discusses the historical transition from individuals working their way up through the industry to the influence of Taylorism in the 1940s.
  • Taylorism introduced a hierarchical structure, separating workers from managers, marking a significant change in organizational dynamics.

Role of Business Schools – making leadership generic and generalized:

  • Highlighting the initial existence of business schools that provided specialized education tailored to specific industries.
  • Business schools transitioned towards offering more general degrees, such as MBAs, contributing to a generic approach to leadership and management.

Management Consulting Firms – promoters of generic leadership:

  • Management consulting firms became promoters of generic leadership principles, differing from business schools.
  • The irony is that these firms, despite promoting generic leadership, are led by individuals who are internal experts, having worked their way up within the organization.

Metrics Obsession and Bureaucracy:

  • Amanda emphasizes that metrics and measurements control more and more aspects of the business. Where non-experts don’t understand the core business, they use metrics for assessing performance.
  • This results in a metric-obsessed and bureaucratic approach, impairing decision-making processes.

Importance of Expert Leadership:

  • Expert leadership contributes to a clearer sense of purpose within organizations.
  • Expert leaders win the respect of those they work with, precisely because of their expertise, and create a more collaborative and collegial workplace.
  • Expert leaders are more likely to invest in research and development, contributing to a longer-term organizational perspective.

Creating Expert-Friendly Organizations:

  • Amanda emphasizes that expert-friendly organizations recognize and cater to the needs of core workers, valuing their expertise.
  • Expert-friendly organizations can remove unnecessary barriers to expert direction, such as excessive rules and bureaucracy, to create an expert-friendly work environment.

The Value Creators Podcast Episode #23. Moshik Temkin on Leadership By Warriors, Rebels, and Saints – Leadership Wisdom from the Pages of History

/0 Comments/in /by

Moshik Temkin is a historian who offers an alternative perspective on leadership. He asks, do leaders make history or does history make leaders? Those two forces can’t be separated. While leaders contribute to shaping history, they are also molded by powerful historical forces. This nuanced perspective is evident in analyses of historical figures like FDR, Margaret Thatcher, Martin Luther King Jr., and Malcolm X, emphasizing the role of circumstances in leadership’s response to complex historical challenges, ultimately leading to significant changes in their respective nations. The conversation explores moral leadership in the civil rights movement, comparing the approaches of Martin Luther King Jr. and Malcolm X. Despite their distinct styles, both leaders shared a commitment to collective progress and justice, challenging the prevailing emphasis on individual success. Temkin addresses the ethical dilemmas leaders encounter during crises, prompting reflection on the justifiability of extreme measures for the sake of victory.

How does this discussion contribute to the question of leadership in business? Leadership is subjective. We look to those who we feel can guide us, whether in politics or business. There are principles that cross both fields.

Resources: https://www.moshiktemkin.com/warriors-rebels-saints

https://www.moshiktemkin.com/

Knowledge Capsule:

Leadership Perspectives:

  • Moshik Temkin explores the complex relationship between leaders and historical context, emphasizing that leaders both make history and are influenced by historical forces.
  • Rejecting a simplistic view of leadership, Temkin suggests that circumstances and historical momentum often shape the significance of individual leaders.

Individual Leaders in Historical Events:

  • Examining historical figures like FDR, Margaret Thatcher, Martin Luther King Jr., and Malcolm X, Temkin highlights how leaders interact with historical events and crises.
  • While acknowledging the impact of individuals, he emphasizes the role of historical circumstances in determining the success or failure of leadership.

Moral Leadership and Collective Progress:

  • Delving into the civil rights movement, Temkin discusses the contrasting leadership styles of Martin Luther King Jr. and Malcolm X.
  • Both leaders, despite their differences, shared a commitment to collective progress and justice, emphasizing the importance of leaders focusing on the well-being of the entire community rather than individual success.

Transformative Leadership:

  • Temkin underscores the concept of “transformational leadership” by citing examples such as FDR and Margaret Thatcher, leaders who brought significant changes to their respective nations during critical periods.
  • These leaders exhibited the ability to transform existing structures and navigate through complex historical challenges.

Leadership and Decision-Making in Crises:

  • Temkin explores the difficult decisions leaders face in times of crisis, referencing instances like the decision to drop atomic bombs on Japan during World War II.
  • The conversation touches on the ethical dilemmas leaders encounter, questioning the justifiability of extreme measures in the pursuit of victory in war.

Leadership’s Collective Impact:

  • Acknowledging that leaders play a role in shaping history, Temkin emphasizes the collective impact of historical forces and societal structures on the emergence and effectiveness of leadership.
  • The conversation prompts reflection on how understanding historical context is crucial for comprehending the complexities of leadership.

The Value Creators Podcast Episode #22 Cynthia Kay on Small Business, Big Success

/0 Comments/in /by

We live in a video age, which opens up a vast array of entrepreneurial pathways. Video is a field for open-ended free creative expression, as well as for tightly managed business tools built for ROI. It’s the ideal field for creative entrepreneurial small business innovators. Cynthia Kay of CK and CO is both a business founder and CEO of a video production business, and a consultant and advisor to small businesses. She shared some of her insights and a preview of her 2024 book Small Business Big Success. 

Resources: 

CK’s business resources site: https://cynthiakaybiz.com/

Books you can buy now: https://cynthiakaybiz.com/books/

Cynthia Kay’s upcoming 2024 Book – Small Business, Big Success:
https://www.amazon.com/gp/aw/d/B0CFWFZQTS/ref=tmm_kin_swatch_0?ie=UTF8&qid=1700618573&sr=8-3

Knowledge Capsule:

Value Proposition:

  • Like any other entrepreneurial business, a video production business needs a compelling value proposition.
  • A value proposition is always about meeting customer needs – what need are they filling by paying for video production?
  • No matter how creative, video production must offer a customer value that exceeds perceived costs. It must make customers feel proud and fulfilled, and give them a sense of standing out from the crowd.
  • This often includes educating them on how to use a supplier’s services, e.g. the many different benefits and values available from one video shoot.

Operational Excellence:

  • High creativity does not in any way reduce the need for a video production business – or any small businesses –  to prioritise operational excellence.
  • Customer expectations of excellence are high, no matter the size of the supplier they choose.
  • CK advocates the use of top notch systems, procedures, and automation to enhance overall efficiency. Build the back room to be as strong and dependable as possible. Every business can deploy the best systems.
  • Owners must be in the operational trenches.

Return on Investment (ROI) Challenges:

  • Calculating  ROI in creative fields is a challenge – but must be done as part of the customer value proposition.
  • There’s such a thing as subjective calculation – e.g. recognizing the role of anecdotal evidence in demonstrating the value of creative services.
  • Focus ROI on the things that matter for customers.

Being the Best in Business:

  • Whatever business you are in, set out to be the best.
  • Making – and living up to – such a claim can be based on multifaceted performance.
  • Consider factors such as understanding client needs, building strong relationships, and optimising the utilisation of budgetary resources.
  • One of CK’s propositions is to be the best at getting the most of a client’s budget, whatever size it is. That’s an excellent “best” claim.

Small Business Success Strategies:

  • Pick your customers carefully – pick those who will love you and those you can grow with.
  • Commit to building relationships over time.
  • Build great teams that are right for the client, and turn them loose.

Supporting Small Businesses:

  • Cynthia Kay not only runs a small business,she plays a big role in helping others and in supporting small businesses in general.
  • She’s actively involved in associations and support groups, and urges other small businesses to do the same.
  • She gives her time to the facilitation of roundtable discussions, and offering advice on common challenges faced by small businesses, including scaling and team development. These kinds of discussions can yield enormous value for participants just by sharing experiences.
  • It’s good for small businesses to support other small businesses and build the business backbone of the neighbourhood, the town, the city, the state and the nation.

The Value Creators Podcast Episode #21. Forging New Relationships Between Entrepreneurs and Capital with LaSean Smith

/0 Comments/in /by

LaSean Smith outlines a business investment partnership built on permanent capital, emphasizing long-term commitment and trust-building between an investor/source of capital and a business. The discussion covers disciplined methodologies, leadership transitions, and a unique compensation approach using Phantom Stock Shares. LaSean predicts a rise in smaller, values-based companies, and underscores the significance of audience and automation in acquiring and revitalizing brands. 

There can be a shift towards stable, smaller businesses connected to communities, challenging the trend of dominance by larger and larger corporations.


Resources:
CAGR Investments: https://cagr.com/

Knowledge Capsule:

Permanent Capital Strategy:

  • There’s an investment strategy and a business strategy based permanent capital. It’s not widely used but has broad potential. It emphasizes the importance of long-term commitment by both the investor and the business. Short-term operational demands are entirely left to the business CEO.
  • LaSean Smith explains the advantages of having an investment structure that accommodates a longed shared journey, building a high degree of trust and confidence.

Operational Approach:

  • LaSean highlights a disciplined methodology to tighten business processes and leverage content-based marketing to assist companies. 
  • Small and mid-sized businesses often miss the great efficiencies available by automating processes. And they waste resources on direct sales and inappropriate marketing tactics.

Leadership Transition:

  • Permanent capital is a long-term investment; it works when there is a corresponding long-term commitment of current operators.
  • Some CEOs may want to avoid continuing in the business, especially in cases where technical founders find themselves dealing with aspects like sales and marketing, which they may not enjoy. Relieving them of that burden may extend their tenure.

Phantom Stock Shares:

  • Permanent capital embraces a unique approach to leadership compensation using Phantom Stock Shares – aligning incentives by granting bonus or dividend shares that compound in value until the leader leaves the company. This helps in providing a simple ownership structure and shared incentives without diluting ownership equity for the investor.

Cash Flow and Value Creation:

  • The conversation delves into the concept of cash flow and value creation, discussing how businesses can fade over time if not innovating. Lasean emphasizes the importance of adding technology and content marketing layers to ensure longevity.

Audience and Automation:

  • The concept of audience and automation is highlighted as a critical factor in the success of businesses, especially those acquiring old brands. Engaging content marketing towards a target audience allows for driving brands through existing supply chains, reducing customer acquisition costs.