Personal MBA: Predictability

Personal MBA: Predictability

People like to feel in control. It makes it easier to make decisions when you are confident of the outcome. People hesitate and deliberate more when the outcomes aren’t so reliable. This fact makes predictability extremely important for the entrepreneur. In this section, Kaufman opens up by telling a story of a painting business started by one of his childhood friends in Columbus, OH. He explains that his friend, along with his brother, completely bootstrapped this company from the ground up and quickly became one of the preferred painting companies for several contractors in the Columbus area. Kaufman identified the key to their quick success as predictability. They did great work every single time, delivered on schedule and were always nice to work with.

Kaufman focuses on three primary factors that influence predictability: uniformity, consistency, and reliability. “Uniformity means delivering the same characteristics every time.” The example he gives is Coca-Cola. They put a lot of effort into making sure that every can of coke a customer purchase tastes exactly like the last one. When most people buy a coke, there is no question in their minds about what they will be tasting; they already know exactly how a  Coke tastes. “Consistency means delivering the same value over time.” Keeping with the Coca-Cola example, Kaufman explains why their experiment in the 1980s with “New Coke” was a complete failure. Coca-Cola intended to completely replace their old formula with this new one, but their customers expected their coke to taste exactly the same. The result was a terrible reaction to the new formula and Coca-Cola quickly returned to their old formula. The point is that companies have to prepare their customers for major changes or better yet, present a product that’s completely different as something entirely new. “Reliability means being able to count on the delivery of the value without error or delay.” In some cases, I think there is a bit of flexibility in this component granted you inform them of any issues way ahead of time. Sometimes, however, people are extremely sensitive to the reliability of a product or service. An example could be fire extinguishers or emergency services. When a person calls 911, they expect the appropriate emergency personnel to show up quickly and be prepared to deal with whatever emergency they are experiencing.

I like this section because I think it serves as an important counter-balance to the previous section on exceeding customer expectations. It’s nice to surprise your customers now and then with nice things. But when people are caught off guard, they become suspicious the next time they’re faced with a purchase decision. A company’s reputation is a fickle thing. Like trust in any relationship, it takes time and predictability to build, and it can vanish quickly. Entrepreneurs who focus on providing a predictable product or service are more like to be in business long enough to reap the fruits of their labor.  

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