Hugh Molotsi

This article was first published on the Lean Startup Co. blog. Perhaps the most underutilized assets in most companies are the ideas in their employees’ heads. It makes sense that the people spending most of their day working on products or with customers are bombarded with insights on new and better ways to serve those customers. But in too many companies, employees are not empowered to do anything with their ideas. Instead, decisions on what ideas to explore are made by senior leaders. But these senior leaders don’t have the same proximity to insights because they spend most of their working day meeting with other senior leaders. We call this the Insight-Decision Divide . Bridging the Insight-Decision Divide requires companies to develop a culture of innovation where every employee is empowered to work on their own ideas. Foundational to empowering employees is giving them time to innovate. If employees’ time is fully subscribed to their day jobs, they won’t have time ...

Fred Reichheld, the inventor of the Net Promoter Score (NPS), defines bad profits as earnings at the expense of customer relationships .   These are profits from customers who feel misled, mistreated, ignored or coerced.   Customer relationships are harmed by blatantly bad experiences like a parking valet returning your car with a damaged fender and refusing to accept responsibility.   But customer relationships are also harmed by the more mundane – raising prices, charging for support, or removing features. Why are bad profits bad?   Because these bad experiences turn customers into detractors.   And detractors won’t be shy about telling others to stay away from your products.   What Reichheld has taught us is that an offering with a negative NPS (more detractors than promoters) will have a hard time growing and is primed to be displaced by a competitor. But if bad profits are so bad, why do so many companies use them?   That’s b...