Kevin Hoyt

Business Theories and Concepts

It’s the end of the fiscal year here at Adobe, and that means time for the annual review process. Of course the end of the calendar year isn’t that far away either which means more personal introspection. As I look back, one of the things that has surfaced is my tendency to rely on specific chunks of business knowledge that have come through for me time and again. While this list isn’t comprehensive, here’s a collection of some of those chunks that stand out.

I should start out by saying that some of my business habits are so ingrained in my personality, that I don’t even know where they came from. With that in mind, this list is only partial. The tidbits that follow aren’t in any particular order, but just as they’ve come to me while thinking through the year past.

80/20 Rule (Pareto Principle)

I generally see this applied when talking about features – whether that be features of a web site, a product, a gadget, or something else entirely. The concept is that 80% of the people only use 20% of the features. In my experience however, this doesn’t only apply to lists of things, such as features, but also to business in general. For example one might suggest that 80% of the business is run primarily by 20% of the people. That’s a really scary thought, and isn’t universally true, but tell me that you haven’t been in a situation where that felt like what was going on.

Gruber’s Rule of Three

You won’t find this in a book. Dave Gruber is a fellow employee here at Adobe. He was also a fellow employee at Macromedia. He was also a fellow employee at Allaire. Point being is that he’s been around for a while. He’s generally responsible for product marketing, and this “rule” came from a pre-meeting conversation we had one day.

The concept is that it generally takes three times to get a product “right.” The first release is really based almost entirely on assumptions, and as such generally lacks a lot of polish that consumers expect. Once that release is out there however, you can collect feedback to better understand what is needed. The second release then is really about getting the features right. The third release is where the real innovation starts to happen and a mature product with all the spit and polish emerges.

Don’t agree? Take a look back when Adobe Flash Catalyst 3.0 is released. Or, look at Flex 1.0 through 3.0.

Just like the 80/20 rule, this doesn’t really have to apply only to products. I find myself using this rule in a number of places. There’s something about “three” that just works. A baseball game has three tries and you’re out. When you’re trying to learn a new skill, saying skiing, you really feel proficient on the third trip. At that point you start expanding on your abilities and move into mastery.

Mythical Man Month (Brooks Law)

This tends to be a pretty hot topic in the world of programming – at least if you’ve been around long enough. The book of the same title was originally released in 1975, and generally states that adding manpower late in the project, only makes it later. I tend to generalize this in saying that you can’t always just throw more resources at something and get it done faster. This is true well outside of programming and software development – only one person can hit a nail at any given time. Throwing resources at a problem does not necessarily make the problem go away.

The Bell Curve

This book was released in 1994 and gained some infamy for the controversy of it’s theories. I was transitioning from military service into college at that time, so this concepts in this book have stuck with me. The basis of the book is that intelligence is a better predictor of success than is socioeconomic status.

How does this apply to business? Maybe it doesn’t. At the very least however, it causes you to question what intelligence is, and that’s what I like most about it.

Is how smart somebody is relative to the number of books they’ve read? Relative to the number college courses they’ve taken? Does lots of coding make a good programmer? It might surprise you to learn that many of the Flash Platform evangelists don’t have computer related degrees, yet they are clearly some of the best at what it is they do.

Crossing the Chasm

Turn the bell curve upside down and you get a chasm to cross (weak transition, I know). Decidedly business here, this book focuses on the delta between the early adopter and the early majority. It should come as no surprise that given my background (Allaire, Macromedia, Adobe), and my job as an evangelist, that my world tends to revolve around this chasm.

Right now, as an example, we at Adobe are hard are work trying to get Flex across that chasm. We’ve put the number of one million developers in place as a general measure of success. The hope is that at one million developers, the momentum of the product becomes such that we move from early adopters to early majority, and establish longevity and broader success for the product.

Emergent Behavior

You ever see a bunch of birds in the park all take flight at once? Then they all seem to go in the same general direction? But who is guiding them? Is there a leader? How about that scene in the movie “Finding Nemo” where the school of fish points Marlin and Dory in the direction of Sydney? Why do fish tend to swim in schools, and where are they going? This is the basis for emergent behavior, or simply, emergence.

You see this in business all the time. One company sees an opportunity and pursues it. Assuming they cross the chasm, so then do a bunch of other companies. Maybe that’s just following the money? Maybe following the money is an emergent behavior? Drilling down further, there’s a big trend towards SOA right now. Why? Is it better?

The concept of distributed computing has been around for a while, and has manifest itself in a number of ways over the years. Yet, right now, we’re all doing SOA. Do you know why? Did you ever stop to think about why? Or are you just implementing SOA because everybody else is too?

I’ve found that in many cases, companies adopt entire technology stacks just because – as an emergent behavior, without ever stopping to think about why.

Freakonomics (or simply Economics)

When you look at emergence in economics, you land at the stock market. Economics on the whole is a fascinating subject. Make no mistake that I’m no master of it either. When I took economics during my undergrad studies, it almost failed the class. I’ve started graduate studies a number of times only to be shut down by economics classes. It wasn’t until recently, when I read the book Freakonomics, that economics made sense to me.

Ever since then, I’ve been finding myself applying economics principles that never made sense to me before, such as the Law of Diminishing Returns, or Economies of Scale. Economics, and the statistics that power it, are core to the nature of business. Yet often business ignores these concepts. It’s such a pity because economics on the whole can be applied in a much broader manner, as Freakonomics reveals.

William Edwards Deming

Deming is an statistician most well known for his work around improving production and quality during the Cold War era. While most of his work is centered around the production of tangible goods (e.g. his work with GM), many of the concepts are deeply seeded in the United States military – at least during my time they were. When I was taught leadership in the Army, though I didn’t know it at the time, I was being taught Deming’s System of Profound Principles.

If you’re a manager, these are excellent principles to understand and apply. If you’re not a manager, then these are principles that if you start practicing now, well serve you well when you do become a manager (should that be your choice). As an extension of Deming’s work, I’ve found the area of Total Quality Management specifically valuable.

Maslow’s Hierarchy of Needs

Our actions as humans, though complex in their foundation, ultimately have some causation. I work to pay for the things I want. You might work to keep busy. Maybe you choose not to work. Why we make these decisions, and based on what value chain has always fascinated me. In that sense, I often find myself referring regularly to Maslow’s Hierarchy of Needs.

This hierarchy is generally drawn as a pyramid, representing the the number of individuals that occupy each tier. The tiers are physiological, safety, belonging, esteem, and ultimately self-actualization. While the theory has its critics, in my experience, Maslow’s model has provided the easiest foundation for addressing human needs.

Are my employees getting food and have a place to sleep? If there are problems with the expense reimbursement system, then it may be that these represent challenges. Do they have a good work/family balance? Well, evangelists travel extensively, but too extensively can lead to problems. Getting all the tiers properly supported results in someone that can creatively and spontaneously solve problems on demand, and that’s good business.

Correlation vs. Causation

Since I mention “causation” above, I figure it’s worth mentioning that the concept of correlation versus causation has served me well through the years. The idea is that there’s a difference between two things happening at the same time, and one causing the other. Essentially, if I hit my hand with a hammer, I will feel pain. That doesn’t mean that just because I am feeling pain, that I hit my hand with a hammer.

This amazingly simple principle may seem like common sense, but you’d be surprised at just how often business tends to forgo this reasoning.

“We added this feature, and downloads of the product tripled, so what we need is more of that type of feature.” While downloads increased, and a type of feature was added, and they both happened in the same timeframe, what’s to say that the cause of the downloads isn’t due to some other variable? An increase in staff perhaps? Maybe the marketing message changed and the technology was more approachable? I’ve actually seen products fail by not accounting for all the variables – or at least more than two.

Shannon-Weaver Model

If the Bell Curve talks about intelligence, I think the other side of that equation for me is in being able to communicate. You may be the most intelligent in your class, but if you can’t communicate your thoughts, then that intelligence is wasted. If you want to make sure you’re communicating effectively, then this model warrants your attention.

The model deals with what actually goes into effectively communicating. It calls out several parts including the speaker, the message, the transmission, the channel, the reception, the receiver, and the feedback. When you’re trying to present a message, spending some time contemplating each of these phases will serve you well. What am I saying? Why am I saying it? What’s the forum? Who’s supposed to be listening? How will I know if I was successful? It’s the last one that I find we most often forget about.

Anthony Robbins (Neuro-Linguistic Programming)

Really? After all these greats, you’re going to list Anthony Robbins, Kevin? Well, yes! I first encountered Robbins when I picked up his book “Unlimited Power” during my college years. In flipping through the pages in the store, I found the concepts presented to be fascinating. When you read the book you learn that these concepts belong to a school of thought called Neuro-Linguistic Programming.

There’s a lot to digest in that school of thought, but it turned me on to some very powerful principles. Say for example that you’re talking to somebody and they have their arms crossed; what does that mean? Are they leaning on something? Touching something? Where are they looking? What does all that mean? Even more importantly is can you use it to project a certain statement of your own? This is just one aspect of NLP.

Don’t believe me? Next time you’re having an important conversation, or a conversation that you deem important and want well received, do what the person on the other side of the table is doing. Don’t blatantly mirror them, but if they are sitting, and leaning forward, then you do the same. If they cross their legs at the ankles, then you do the same. Watch the effect it has when you’re sending the body signals that tell the other person that you relate to them.

Taken to the n-th degree, these concepts can be very powerful, and it’s that type of foundation that I picked up from Anthony Robbins.

Conclusion

I realize that a lot of this must come across as particularly arrogant. Make no mistake here, that I don’t claim to be some master of business and high finance. Generally speaking, I have a good job that I enjoy, and I feel that I’ve had some modest amount of success along the way. To have made it through all the acquisitions and layoffs over the past decade, I had to have done something right, right? If for nothing else, this has been a pleasant stroll down memory lane, and a gentle reminder that we all learn from those that went before us – standing on the shoulders of giants.