May 2019, London
Europe's biggest event for commercial and digital travel execs
Lessons in how to adapt, thrive and ‘make it simple’
Joerg Esser continues on the quest for simplicity and finds that an EyeforTravel keynote address made by Glenn Fogel in 2017 still provides inspiration
In recent weeks I have found myself contemplating if British businesses facing Brexit could benefit from the physics-way of thinking. Maybe, just maybe, my proposed Make it S.I.M.P.L.E. framework that I outlined in a post last month, could even help British politicians on both sides of the political spectrum move forward with elegance! Wishful thinking, you might say.
In any event, faced with growing competition, endless choice, and changing consumer behaviour in the travel space, where I spent 10 years of my professional life, I’m hopeful that that if nothing else, this next post might provide some food for thought. And I’d welcome feedback!
First let’s start with the S in the acrostic, which stands for ‘solution’. As I wrote last month: ‘Everything starts with a problem statement and, very often, what we are looking for in the first instance is a solution. But no solution to a problem is ‘simple’ in absolute terms’, and, if there is anything we can learn from Brexit it is just that!
Indeed, to find a solution to a problem first requires a frame of reference. And there is little wonder that Einstein’s famous quote continues to resonate. ‘If had an hour to solve a problem I'd spend 55 minutes thinking about the problem and five minutes thinking about solutions.’
Einstein’s quote retains a timeless quality. Questions are the Answers, a page-turning read from Hal Gregersen, executive director of the MIT Leadership Center, and well-known author and motivational speaker on innovating in business, speaks for itself. “Brainstorming for questions rather than answers makes it easier to push past cognitive biases and venture into uncharted territory,” he wrote in a Harvard Business Review article earlier this year.
In other words, don’t jump the gun. Before finding a solution, it is important to clearly define the problem, to ask questions, and then ask some more, something that scientists understand well. This certainly isn’t new but in a world of seemingly endless choice, opportunity and change, it becomes critical. Meanwhile, almost every problem can be solved, but choosing the right one to tackle must be paramount.
Almost every problem can be solved, but choosing the right one to tackle must be paramount
Perhaps if David Cameron, the prime minister, who led Britain into the Brexit referendum, had spent longer thinking about the problem statement, history would have taken a very different course.
Another point to make is that things don’t stand still. In physics, Newton's laws of motion, first published in 1687, laid the foundations of classical mechanics in a stunningly ‘simple’ way. They explain, among other things, how everyday objects move and how planets orbit each other. However, what those laws do not grasp are the characteristics of quantum mechanics, the method of describing the phenomena of subatomic particles, which became transparent in experiments, only in the first half of the last century. So, it is now true to say that Newton laws are no longer a solution to describing all objects in our world.
Right, enough of politics and pure science, what I have set out to do with my S.I.M.P.L.E. framework is to apply the ‘physics-way’ to business, as a way of finding solutions.
When it comes to business the focus must be on solutions to a given problem, and in an increasingly complex world, simplicity is imperative. And, there is a growing body of research to back this up.
The case against complexity
Faced with too much information, the decision-making network in the human brain fails to compute, argues Daniel Levitin, a neuroscientist and best-selling author in his book, The Organized Mind. His argument goes that the processing capacity of the conscious mind has been estimated at 120 bits per second. In order to understand just one person speaking we need to process around 60 bits per second; more than two people and we zone out.
But that’s not how it was meant to be. As hunter-gatherers, says Levitin, people encountered around a thousand other humans during their entire lifetime, the number you may pass by on an afternoon stroll in Manhattan.
Endless choice is another challenge of our modern world. In 1976, the average supermarket stocked 9,000 product units, according to Levitin. By 2014, that had ballooned to 40,000 and yet, for the average person, only 150 supermarket items are enough to cover about 80% of their needs.
Not easy to see then, why Amazon, which love or hate it, has been so successful. By helping customers navigate growing complexity in the retail space, both by understanding and anticipating the needs and wants of its prime customers, and delivering these in an efficient and relevant way, is an example of what makes for a powerful business proposition in today’s world.
Consumers can only absorb and process a limited amount of information within a given period of time; empirical evidence has shown that consumers make poorer choices with more information
Amazon has addressed what Levitin refers to as ‘load effect’. Consumers can only absorb and process a limited amount of information within a given period of time; empirical evidence has shown that consumers make poorer choices with more information.
Too much choice is a bad thing
Ever stood in a store paralysed by choice? In my case, it’s what used to be a simple white shirt. In my view, the world did not ask for ‘slim fit, body fit, modern fit, whatever fit,’ thank you. This level over over-differentiation is just plain annoying, even if the company wants to call it ‘innovation’. All I asked for was a simple white shirt.
Experiences like this can make consumers question whether they are making the right decision. According to American behavioural scientist, Aldar Shafir, and Daniel Tversky, a cognitive and mathematical psychologist, the mere existence of uncertainty alters how people make decisions, even when the uncertainty is irrelevant.
It gets more worrying. Psychologists Amos Tversky and Daniel Kahneman have argued that people are unable to ignore information that is irrelevant to them. So, there is a real neural cost of being presented with information you don’t care about and can’t use.
Given too much choice consumers often make the wrong one. In my case, splashing out on 20 shirts in one go, just so that I can avoid the experience in the not too distant future.
Businesses have an opportunity here to help swamped consumers cut through clutter, by simplifying the choice
Businesses have an opportunity here to help swamped consumers cut through clutter, by simplifying the choice. Dan Ariely, another leading thinker in the field of psychology and behavioural economic argues that if consumers can choose which parameters to receive information about, as well as how much, they make better decisions.
Companies today that are investing in systems to ‘hyper-personalise’, the process of making highly relevant offers, based on previous customer data, and in real-time, could be on the right track.
In essence, then it is fair to say that the more complexity there is in the market, the more simplicity stands out. It is also probably fair to say that consumers, who are bombarded with information, want companies to solve the problem of overwhelming choice.
In business, problem statements are about giving companies focus and direction.
Formerly known as the Priceline Group, Booking Holdings is a good example of a company, which identified a clear problem statement. To oversimplify somewhat: how to keep the purchase of travel online simple, as growth accelerated through the post-internet bubble of the noughties and beyond, with a series of mergers and acquisition.
CEO Glenn Fogel, who was speaking at an EyeforTravel conference in 2017, also argued that too much complexity is the greatest threat to large companies. He admitted that although scale had helped Priceline to reinvent and improve its offering, there was a “flipside to this, in that it also brings complexity”. Also, he added, “if scale was all that mattered then Microsoft would dominate the Internet, or if you go even further back IBM…”
Aside from having ‘humility’ and hiring the right people, Glenn, argued the secret to the company’s success was a simple one; to acquire companies and give them independence.
“One of the dumbest ideas in the world would be to say let’s buy that company and tell them what do to. We buy them so that they can tell us what to do,” he said.
One of the dilemmas facing businesses today is whether to, on the one hand, share services with others in order to reduce costs or to retain resilience through independence. Of course, it’s a trade off. But having a ‘simple’ approach to governance at the holding level, allows companies to adapt accordingly.
Today Booking Holdings may have new concerns, not least the foray of Google and Facebook into travel, but with simplicity so embedded into its DNA, it will no doubt adapt and thrive.
Companies have come a long way in conversing with customers to understand their needs. And yet, often talk doesn’t get to the heart of the matter.
Rather than trying to find a top down solution, companies could just ask customers, and do so directly – simple! By asking for problems that customers encounter is very powerful and goes a very long way in relationship management, as well as actually fixing the problem.
This is where the ‘test and learn’ culture that is so rigorously applied by Booking Holdings, and others in the travel industry like Skyscanner and Trainline, emerges from. While it always requires some imagination to extract how exactly to improve their services, it can almost certainly help to identify and prioritise where hurdles have arise.
This last point, the requirement for imagination, leads us nicely into ‘I’, the second letter in the S.I.M.P.L.E. framework.
Intuitive – it doesn’t have to be fireworks
Since we talked Newton and the falling apple in my first post, let’s play with that well-worn cliché, ‘the apple never falls far from the tree’. While it may seem fairly obvious, the meaning of this is that since our parents, or those who raised us, set the biggest example, we are like to at least partly resemble them as adults. Like most overused clichés - ‘better safe than sorry’, ‘ignorance is bliss’, ‘there is not time like the present’ – they seem entirely obvious, or perhaps a huge generalisation!
I’m not suggesting that your solution should be trivial, but it’s perfectly okay if it seems unsurprising with hindsight. In fact, it should be. Creativity is incremental, only incremental.
This is not to say that an intuitive solution is easy to find – there are so many ways to combine all you know and experience that finding an easy answer can be elusive until the ‘eureka’ moment strikes and it all falls into place. Just like Newton’s apple falling from a tree could now be viewed as a huge generalisation for applying the same law to other objects. To the point of change being incremental, Newton when congratulated for his achievements said modestly: “If I have seen further, it is by standing upon the shoulders of giants”.
Understanding that ‘intuitive’ doesn’t have to mean surprising, is also a reminder that big problems do not necessarily require big solutions. Since we were talking about the travel industry earlier, queues of customers at the front desk of a hotel. By investing in mobile check in, as Marriott has done, and freeing up front desk staff to meet and greet, hotels can greatly improve the all-important customer experience. Another example, which nicely explains how important it is to accurately define the problem: In a high-rise building in New York there were endless complaints about elevators operating too slowly. But the problem, wasn’t the speed of the elevators, rather that the elevator halls felt claustrophobic, which made people feel that they were waiting too long. Installing mirrors in the spaces solved the problem – simple!
Getting into the groove
Intuitive solutions should inspire teams to get into the groove. They don’t have to be comprehensive, but they do need focus and punch. Get it right, and they can be easily understood in a given business context, and the ripple effect will spread quickly. After all, companies can be like expanded brains, with individuals acting like neurons.
In the ideal scenario, companies would act as communities of individuals united to a common set of goals, with each performing specific tasks. The art is to narrow the focus without stifling creativity, and if solution is intuitive enough, everybody should get it. It should snowball through the organisation, gathering intensity and specificity, and taking both employees and customers for a memorable ride.
This guest column was contributed by Joerg Esser, who spent over 10 years in the travel industry in various roles at Thomas Cook. He is a regular moderator on the EyeforTravel event trail and is a consultant to Roland Berger. His views are his own.