(People especially seem to love numbers that go up; The Dow, Twitter Followers, Facebook friends, salaries, and so on.)

None of this is really much of a revelation, but the idea is still significant. Measurement is the bridge that links innovation to execution. It’s how you understand if your good idea is actually good, and it’s how you’ll move from concept to constant.

Given all this, I was really interesting to learn about Goodharts Law (via Boing Boing.) It’s a little wordy, but it basically states that people pay attention to the things that are measured, and because of this extra attention things that are measured change. (That’s is basically more or less what I wrote earlier.) I have to admit, I’m sort of surprised that this maxim hasn’t surfaced sooner, since 60% of the business articles in the past five years seemed to have been about innovation and/or metrics.

So where do we go from here? Well for me, this all makes a pretty good case for being very careful how you design your measures – what you monitor, how you think about it, and how you share this with a larger audience. The small but important point is that no one really said measuring things makes them any better, it just gives them more attention. Where it goes from there is all a matter of design.

Measure the change you want to see – it’s the law.

I’ve always liked the idea of these two moments working together, it’s kind of a nice reminder to not over-promise what you can offer. It’s also reinforces the importance of having continuity between your identity/packaging and your product. At one time or another, we’ve all been really excited to buy something only to be disappointed later with the results of what we’ve bought. In that case, the first moment was won, but the second was lost…you have to nail them both, I like this act of bringing things into harmony.

From here I started to wonder what actually happened next. It struck me that those marketing moments are missing a bigger, more important truth – you’ve bought something, you’ve tried it…now, knowing what you know, would you buy again? Would you repeat? If you’re in the business of thinking hard about FMOT and SMOT, shouldn’t you also be worrying about the Third Moment of Truth?

(Important note: The world doesn’t need any more clever marketing phrases, that’s not really the point here. It’s a term that references the other two moments…I’m using it for the thought exercise. Also, the core concept isn’t new – companies obsess over repeat purchase.)

Ok, so if you argues that the First Moment of Truth was about believing a product was for you, the second moment was confirming, or knowing, it was for you, would the final more important moment be about preferring what you’ve had over what you could have? Framing these things linearly might look roughly like this…

What I sort of think is interesting is that you make different investments to get people to try something than you do to get them to love it. And while consumers move across that line left-to-right, companies have to earn those capabilities right-to-left.

I think getting product experience right is more about culture than it is about execution. When an organization agrees on an idea, it can motivate around it and execute against the concept. (This is sort of the reason someone in P&G coined the First Moment of Truth and the Second Moment of Truth….and why P&G does this type of thing very, very well.) If CPG companies had lingo and agreements around product experience, I wonder how different the products we use today? It’s really hard to agree on what passes for ‘excellent’ vs. ‘good enough’. WOuld these companies deliver differently if they had to ‘win on the third moment of truth’?

Maybe everyone gets this already, it’s pretty straight forward. But if everyone got it, wouldn’t every car door close like a BWM? Wouldn’t every airline have amazing service? Wouldn’t every burger taste like In-n-Out? You see there’s the rub, I don’t think most companies worry (or spend) as much on their offer and they do on their marketing…and I wonder if that’s a cultural problem more than it is a business problem.

I sort of live for these moments in presentations. It’s probably the same attraction that keeps baseball fanatics glued to their television for hours of what appears to be a pretty boring game. After waiting patiently, and watching things slowly play out, something goes very wrong, At that point, all hell breaks loose. At that point, you see who’s the power player in the room, who’s done their homework, and who’s completely out to lunch. This part of the meeting was pretty mush a wash, that argument basically threw itself out the window. This presenter had just committed a pretty common error, one I now refer to as a Large Market Fallacy.

I’ll get to the details on LMF, but first a slight detour.

When I was in undergrad, I remember that some odd curriculum requirement forced me into a course on Logic. I think I was somehow dodging some history requirement, and the class ended up providing me with one of the few textbooks I kept beyond school. There was this fabulous section in the book that listed out scores of logical fallacies. Things like red herrings, slippery slopes, etc. were explained in detail. The book did a great job of taking pretty common arguing topics out of context and explaining why the arguments were problematic. This is where my head went when the overall market hit the trillions, (really?)

Ok, back to the market sizing.

I read a great piece in the WSJ around Large Market Fallacies earlier this year. (They weren’t using the phrase, but that was essentially the problem). This author used a great metaphor around selling a can of coke to every kid in China. The general idea is that people created flawed plans when they assume that the market holds an opportunity just because the market is massive. These business plans just want 5% of a MASSIVE market, which seems totally reasonable, right? I mean, 5% is a small share, so how could they fail.

I often wonder how people end up in this situation. For sure there are many reasons, but I have to believe that you only drive down this road if you don’t intend on executing the plans your making. If your on the line for these projections, you have a wholly different approach to things.

Ok, so enough ridicule, how do you get around this type of thing. Some markets are actually huge, how might you go about entering? Well, try to make the market small. Think about finding a niche (or creating one). Either cut it down to something digestible, or use a DDP and build a bottom-up estimate of investment versus return. (ex. “In the first year we’ll hire 50 sales people and we estimate that those 50 people will generate $20M in revenue.)

It’s not about being a hero in the business plan, it’s about getting closer to figuring out how you’ll actually launch your venture/product/service. If you just serve up a large market with no logic around how you’re going to success, there’s a pretty good chance you don’t really know who your customer is.

A small side note: I really, really wanted to refer to this sort of thing as a Chinese Market Sizing. Partly because I’ve seen it a lot when people size market opportunities in China (it’s a massive market and the plan has no idea how things really work there). However, taken out of context, I’d just sound like an ass, but still I think it would be a hilarious scenario.

You: “What was the problem with the plan?”

Me: “Chinese Market Sizing”

You: “Ohhh, Too Bad.”

That statement sort of offended my sensibilities at first. How can business models just happen? They take time, they’re complicated, and most of the time they fail. Also, edge economies are less proven. Wouldn’t that require more big brains and lots of ‘innovation’? It felt odd to say those models just happen.

Then, last week, I was doing some client work with experience models. I think I made my own offhanded statement saying something like “well if there’s nothing to experience, there doesn’t seem to be any value to pay for.” Not a real lightening rod of a thought…but then I realized; no experience, no value…no value, no business model. I was starting to get it.

So I went back to Haque’s article, and things made more sense. It’s all about what type of value are you delivering – connections, experience, physical goods, service, piece of mind, whatever. If you create that (and it’s valuable to someone), the business model will happen. It’s not that the business model doesn’t matter, it’s just that the model is only part of the platform. Without the value, you have no (real) model.

I was left wondering why this concept had been so difficult to digest at first, seems straight forward enough. I decided it was tough to swallow because business models just don’t change that often, and new business doesn’t mean new model. You may sell something new to the world over the web, but if it’s just about web fulfillment, it’s not a new model (which is fine). In fact most businesses are buying into proven models and spending all their resources making that model survive.

All this just takes me back to why prototyping is so important for building a new venture. It’s abou tfiguring out the need and the value first and then building a model that will complement the core promise. By prototyping, you’re committing to exploring different ways of delivering value. If you do it right, you’re not too invested to learn. If you do it right, you’re making room for some serendipity. If you do it right, you aren’t looking for shortcuts, you’re looking for answers.

I like that concept because it reminds me how managers use the constraints they have to effect change. They look for underlying meaning and momentum in the work and then expose it to make things happen. The best manager, just like the best designer, becomes invisible as the work gets better. In my view, they both should be very ego-less jobs. Unfortunately, that’s rarely the case. Oddly, When I think about great managers, I usually think about Charles Mingus.

Mingus was a brilliant jazz musician, but at heart he was a manager. Not quite a people manager (he was know to be a difficult person), rather he was a manager because he had a vision for his music. He knew what his collaborators could offer and he coaxed the group into creating amazing things.

Mingus was different from most of his contemporaries, he was a band leaders first and a soloist second. The likes of Miles Davis and John Coletrane loom large in jazz history for they’re amazing instrumental abilities. Mingus made his mark by getting everyone to make music together. You’ll notice the difference if you listen. Miles Davis will have a backing band with pieces that set the stage for elaborate solos. Contrastingly, many times Mingus orchestrated everything to happen at once, this way he could create a mood and make a statement. That is the mark of an amazing manager. (And that’s no slight to Miles.)

Mingus could slowly bring together a mood, whip it into a frenzy, then help it find it’s place again as he moved the listener through many emotions…

Or he could playfully lumber along creating infectious melodies…

Mingus also wasn’t above setting collaborators up to trade phrases like good friends catching up over a bottle of wine.

Whatever he did, he brought others talent to bear. That’s the thing, he was focused on the entire experience – just like a good designer, just like a good manager.

Mingus wasn’t the only great orchestrator, but few had his range. He’s often compared to Duke Ellington. Ellington usually played pretty safe with his arrangements, Mingus usually goes further afield (which is harder to do with a group). The important thing was that the music was never one soloist going it alone. He not only had a vision of where he should go, he knew how to make space for four or five others along the way. He made them part of the experience and that made the experience better.

For me, that’s inspiring. That is how it should be done.