ChaosScenario

The Value of Y-O-U

Recently I read Value-Based Fees: How to Charge and Get What You're Worth by Alan Weiss. I've coveted this book since I wrote Innovation by the Hour last year. After I worked through my rather large (and growing) stack of reading material, I finally was able to get my hands (and eyes) on it, and I am glad I did! (Thanks to Lisa for the recommendation).

Many, if not most, people in service industries bill for time and material. This is problematic in industries whose output includes ideas, for who is to say when (or on whose dime) ideas were generated? Who owns the idea formed in an employee's head if it never sees the light of day?

Weiss argues that the problem is far more pernicious. Many of the headaches involved in consultancy or agency relationships stem from a systemic flaw in their billing methods. Weiss says it plainly: It's "simply crazy" for consultants to base fees on time and materials. When you sell value and do your job correctly, you maximize your margin while ensuring the client feels like they got a bargain.

That is the definition of a "good deal."

The book is well-written, memorable, and at times shockingly honest. Weiss says he's glad his accountant hasn't read his books, because he'd pay a lot more if he had to pay for value, not for time and materials.

He also practices what he preaches. The Kindle version of the book, which obviously does not require printing or distribution fees, is still $32, which is much more than typical new releases sell for on the Kindle, and not much less than the printed version, brand new. This is because Weiss is selling an idea and techniques to implement it, not paper and ink.

That idea in the book is worth the same regardless of the method in which it's distributed. And if you're currently billing by time and material, at $32 or $100, it really is a bargain.

The Supply and Demand of You
Weiss claims that "There is no law of supply of demand in the consulting profession." What he's referring to is that the fees you charge should have nothing to do with your supply of hours in a day, week, month or year.

However, as Weiss himself iterates elsewhere, there is only one person in the universe who is the product of your education, skills and experience. The supply of you is exactly one.

The question, then, is what is the demand for that product? It depends on what value you mutually establish.

• What are the client's business objectives?
• How will success be measured?
• What results can you deliver against these objectives and metrics?

You, as a product, may be of significant value to a client, regardless of how much time you need to spend on a project, as long as you are willing to believe in your value enough to make yourself accountable to actual, measurable results. Do the work necessary to educate the client and establish agreement on what your goals are.

Then you can both come away confident that you've been successful at meeting those goals. The client will feel like they got a bargain, and you will come away knowing you've been adequately compensated for your expertise.

Pick up the book today. You'll be glad you did. - Cam Beck

What is "The Fun Theory" really worth?

A couple of people took note of VW's campaign "The Fun Theory." Most recently Corley suggested it "further's VW's corporate social responsibility." Ultimately, I believe she is correct in saying that, but it's a broad statement begging to be unpacked.

To be sure, this campaign isn't about VW being socially responsible. It's about VW wanting others to associate the word "Fun" with VW.

The campaign is simple, unexpected, concrete, and each of the demonstrations have the trappings of a story, and presumably the effort is designed to get people excited about the possibilities (emotion). Together, all of these are components of a sticky message (PDF).

But is it credible?

Let's take a look at some of the videos that are currently on their website.

One is the piano. The question is "How do we get more people to take the stairs instead of the escalator." According to VW, the answer is to make the stairs FUN, of course.

I guess that's one way to do it, if you have $40K (or whatever) to spend on labor and materials. The problem, in this case, is that the owners of the stairs get no benefit from such an investment.

Additionally, their efforts may actually lead to injuries due to people trying to play a song on the stairs. There's no fun in that. I'll bet VW won't post any videos of anyone falling down the stairs.

The other, more cost-effective way to do it, without unnecessarily increasing the temptation to be careless on the stairs, is to turn off the escalator. It doesn't cost a thing (it actually saves electricity), and the number of people who use the stairs instead of the escalator increases to 100%.

It reminds me of something I read from Roger von Oech. I'll do my best to not butcher it in my retelling.

Villagers of a certain town were horrified to discover evidence that they had been burying people alive. Exhuming a coffin, they found that the lid had been clawed by the (currently) deceased. Upon this discovery, they exhumed a few more graves and found many others with these same characteristics, letting them know that it was a normative problem.

The elders were gathered together to figure out how to deal with this. They came up with two ideas.

One idea was to run a string into the grave with the person believed to be deceased. One end of the string would be tied to the hand of the one they buried. The other would be tied to a bell in the graveyard. If the grave keeper heard the bell, he'd discover its source and save the person buried alive. The focus of this effort was to ensure no one was buried alive.

The other idea was to build a large spike into the coffin top, so that when it was closed, it pierced the heart of the body in it. The focus of this effort was to ensure that everyone buried was dead.

As I mentioned to Corley, the issue I have with the effort is that some of them are impractical, and I suspect VW knows that. What they're trying to do is give people a reason to think of "fun" when they think of VW. Regardless of whether the association has validity with respect to their automobile choices, if people believe it to be true, it may as well be.

However, if this effort gets people thinking about the ways they can increase the "fun quotient" in their user experience, they can increase adoption rates. This is laudable not only from a social standpoint, but also from a business standpoint.

Notably, it doesn't have to be an investment of tens of thousands of dollars unless there is a corresponding financial benefit for making the investment.

Whatever the case, I'm interested in seeing other entries in this campaign. Keep track with me at TheFunTheory.com, or enter one yourself. - Cam Beck

Happy Birthday, U.S. Marine Corps

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Follow @USMC on Twitter.

Have a Solemn "Freedom Appreciation Day"

For the East-bloc countries and those bordering them, there was a long buildup to November 9, 1989 -- now recognized as the day the Berlin Wall fell. Those of us living in West Berlin were abuzz with anticipation because the cries for freedom began to crack the Iron Curtain.

Still, if you'll pardon the pun, nothing was set in stone. In February of that same year, Chris Gueffroy and Christian Guadian, believing the standing order to shoot those who tried to escape had been lifted, made an attempt to breech the wall. Guadian was captured, and Gueffroy was shot dead. The border guards fired 10 bullets into his chest.

In March, an electrical engineer named Winfried Freudenberg and his wife, Sabine attempted to build a balloon to carry them both across the wall, but when a student reported them to the police before balloon was ready, the Freudenbergs decided to send just Winfried across. The police did not attempt to shoot at Winfried as he crossed, because they feared causing an explosion, since the balloon was filled with natural gas.

The balloon crashed in West Berlin, and Winfried died instantly.

In the course of the Berlin Wall's existence, official records indicate 171 people died trying to escape to freedom, including 18 year old Peter Fetcher, who bled to death after being shot in 1962. You can imagine the impact seeing a grave marker dedicated to him had on me, a 15 year old high school student.

How could they not know it would come to this?

Three days into the wall's construction, East German guard Conrad Schumann, seeing his opportunity to experience freedom coming to an end, famously abandoned his rifle and darted to the West. Now free, he settled in Bavaria and lived a long life separated from his former friends, colleagues and family, but never felt at ease about the entire experience. Said Schumann, "Only since 9 November 1989 have I felt truly free." Sadly, he hanged himself in 1998.

The grass is always greener on the outside of the prison bars, but as the tragic case of Conrad Schumann shows us, being outside of them doesn't guarantee happiness.

The curse of freedom is still superior to the blessings of compulsion

In history we have seen plenty of formidable walls. However, in most cases, they were constructed to keep enemies out and to protect their own citizens and property. Until the Berlin Wall, they were never meant to keep entire peoples prisoners in their own countries.

But in the years since reunification, the people of the East have discovered that freedom isn't easy, and it certainly isn't free. The blessing of freedom is that people may succeed as far as their abilities, will, and not a small amount of luck allow them. However, success is not guaranteed. It's assured, in fact, that some efforts will fail -- and fail miserably. And sometimes it's hard to recover from failure.

Not only that, but there are plenty of fraudulent peddlers, hooligans and ne'er-do-wells willing to separate a fool and his money. Having once been separated of one's life savings, it's natural to be skeptical of one's own judgment -- or the system that doesn't protect ourselves from it.

Without the symbolic -- but tangible -- manifestation of oppression that the Berlin Wall gave us, I fear we may be blind to the invisible barriers erected right before our unseeing eyes.

Yes, being free means we can go from place to place without fear of being shot in the chest and be left to die in a puddle of our own blood.

But that's only part of it.

Freedom also means we may risk everything -- dedicate all of the time we spent learning how to do something and the money we've accumulated in our lives -- for a chance to provide something of value to others -- even if our motivations are self-serving. We have the freedom to succeed, yes. But comparable social reciprocation means that we cannot compel others to keep us from failing. That would infringe on their freedom.

Or so goes the theory. Recent events show us that even countries we consider to be bastions of freedom may contradict the values they claim to aspire to.

What will we do about it? Are we so dedicated to the proposition of freedom that we are willing to face whatever consequences come in its pursuit?

The good news is that we probably don't face the same risks that Chris Gueffroy, Winfried Freudenberg and Peter Fetcher faced.

The bad news is that we still may be compelled to keep others from failing under penalty of imprisonment (try to not pay your taxes that are paying for the bailouts if you doubt me).

But, unlike Conrad Schumann, we have nowhere to run.

Our best hope, then, is to guard the gates of freedom so that we are the place everyone wants to escape to. We must jealously protect our freedoms, which means we must know history well enough to recognize when they might be in jeopardy.

Today, the anniversary of the fall of the Berlin Wall, is as good a day as any to remind ourselves of that. But instead of wishing you a happy "Freedom Appreciation Day" just to give you another reason to celebrate with fireworks and barbecue, let me wish you a solemn one, instead -- so that we never forget our awesome responsibility. - Cam Beck