Thursday, February 07, 2008

Great Expectations (Management)

One of the skills every marketer (if not every person) needs to master is the art of managing expectations.

Managing expectations is a "Goldilocks" task--too high, and they'll be impossible to meet; too low, and they'll detract from your accomplishments; just right, and you'll be a hero. Of the potential pitfalls, high expectations are perhaps the most dangerous.

High expectations are seductive. It feels good to have everyone saying good things about you. "The Next Bill Gates" is a favorite chestnut that the business press dusts off whenever a hot new company with a photogenic founder appears on the scene (see Andreesen, Marc; Abrams, Jonathan; and Rose, Kevin). But no matter how good it feels to ride the wave of hype, sooner or later, you'll have to deliver the goods. Too-high expectations carry a double-whammy: When they prove to be wrong, not only is the result a downer, it kills your credibility.

Take the impact of expectations on the current U.S. presidential race. Senator Hillary Clinton began as the prohibitive favorite. As recently as November, the Iowa Futures Market (the best predictor of presidential politics, since real money is at stake) showed that her chances of earning the Democratic nomination were 75%. That's what made her third place finish in Iowa so shocking. And as a result, in the immediate aftermath of the loss, she plummeted to a projected 25% chance of winning the nomination.

After that, however, the expectations game shifted. Now the high expectations shifted to Senator Barack Obama, as a tidal wave of coverage (helped along by his own strength at inspirational oratory) sent his poll numbers skyrocketing.

But while the excitement helped Obama's campaign in many ways, allowing expectations to get ahead of reality came back to haunt him.

Clinton had held a 17-point lead in New Hampshire, but it seemingly crumbled overnight as poll after poll showed Obama leading in the state. On election night, Clinton squeaked out a 3-point win. So who actually won? Was it Obama, for making up 14 points in less than a week, only to fall short at the end? Or was it Clinton, who held off her challenger when all expected her to lose.
The race was close enough for either explanation to take hold, but it was the latter narrative of Clinton's resurgence (despite being a frontrunner who had lost 14 points off her lead) that ended up holding sway.

We saw a near replay on Super Tuesday this week. After the South Carolina election (an unexpectedly large victory for Obama), Hillary and Bill Clinton indicated that they expected an overall victory once they took their message to the broader public.

Once again an Obama surge in the polls dropped the expectations for Clinton; I often thought that the national media was openly rooting for Obama to land a knockout blow. Here in California, poll after poll indicated that Obama had closed a 20-point lead, and had even pulled ahead of Clinton.

When the dust settled, an objective analysis showed a near-perfect tie. Obama won more states, but Clinton won the bigger prizes in New York and California. Obama won the critical swing state of Missouri, but Clinton overcame a tidal wave of endorsements to win Massachusetts. Obama came out with slightly more delegates, but it was statistically insignificant.

So who did win? Nobody. But both campaigns tried to frame the results as a win for their side--Obama by pointing out that he had overcome a big deficit in the earlier polls, Clinton, by arguing that she had done better than projected in the most recent polls.

Just politics? Perhaps, but just ask the folks at Joost, who went from being the future of television (Sequoia had to beg Joost to take their money), to the walking dead in less than 9 months.

Great expectations require even greater execution. 'Tis better to set and exceed realistic goals than it is to ride the wave of hype...right into the trash heap.

2 comments:

Michael Josefowicz said...

Just to add my 2 cents..
The way I think about expectations is that they exist in cognitive space.

Lots of important things exist in cognitive space - stock prices, brands, advertsing - mostly the stuff organized into "narratives" in the inside of your head that creates the lens that you use to see the world.

And then there is physical space. That's where you slam against the table or run out of money.

My approach is to try to manage expectations to help your team see the world in a real way.

But as a leader, keep your focus on physical space and never, never drink your own kool-aid. Sometimes it's really hard to do. Been there, done that.

Michael Josefowicz said...

sorry for the second comment but it was too hard for me to resist the opportunity to share my story about Super Tuesday (Stupid Tuesday?)

Based on the info map at NYT.com I like to connect the dots as follows:

Clinton,Inc wins the Bi-Coastal State Libs and a small region around Arkansas where there are deep embedded networks.

Obama LLC wins everybody else.

I'm starting to think that "Republican" and "Democrat" are much less useful buckets than "a confederation of Coastal Baby Boomer tribes and an emerging network of Google Generation tribes in the rest of America".

I would be curious if anyone thinks this might be a useful or neat way to look at it. If you do, have at it.