Charlie Alfred’s Weblog

Objective vs. Subjective

Take a moment to play a simple word association game. Look at the following table. What words or phrases would you use to label the rows and columns?  The goal is for each label to capture the concept that is common to the items in its row or column?

The column distinctions may be a bit more subtle than those for the rows.  One possible response is shown below:

The most important observation about the columns is the objective vs. subjective distinction.  As a general rule, people use subjective reasoning to evaluate alternatives and make decisions.  “Beauty is in the eye of the beholder.”  People go to flea markets and yard sales to pay money for other peoples’ junk.

The statement highlighted above applies equally well to both individuals and groups.  For groups, the “subjective” criteria results from a consensus, or from the dominant influence of its most powerful and/or influential members.  Either way, the “voice of the group” represents its collective will.

The problem gets more interesting when you are a provider of a product or service.  Different buyers (individuals or groups) will evaluate your offering from their particular point of view.  They will compare it to competitors and substitutes (including doing it themselves) using that same point of view.  This fact is at the heart of business strategy approaches like market segmentation and product differentiation.

Providers of products and services are forced to make tradeoff decisions.  These tradeoff decisions occur in three dimensions (most real-world tradeoffs involve more than one):

o  Sacrifice some of one feature in order to offer more of another

o  Sacrifice feature(s) to one group in order to offer more to another

o  Sacrifice feature(s) now in order to provide more later (or vice versa)

The first two types of tradeoffs focus on the present, and the expectation that current conditions will persist for the foreseeable future.  From an objective point of view, these tradeoffs consider the impact of constraints on features.  For example, if I’m heading to a baseball game and hear a traffic report about an accident (constraint), do I take a longer route (tradeoff decision) in order to arrive sooner than if I keep my original route(feature)?

The third type of tradeoff brings the uncertainty of the future into play.  Continuing the example above, what if the traffic report is about an accident that occurred 30 minutes ago?  How likely is it that traffic will have cleared by the time I would get there?  How much traffic has already diverted onto the route I am considering?

Another observation relates to the three subjective columns.  On the surface, the distinction between positive and negative seems important.  However, on closer inspection they are quite similar.  Both represent a range of possibilities.  On the positive side, the range is from excellent to OK.  On the negative side, the range is from OK to poor.  The delta between the high and low ends of each range is more significant than the absolute value of the midpoint.  In other words, a blown advantage can be as bad as experiencing a problem, while a problem avoided can be as good as gaining an advantage.

Let’s illustrate this with a variation of the earlier example.  Suppose the baseball game starts at 1:00.  The normal travel time is 45 minutes, and I want to arrive 30 minutes before the start of the game.  I could choose to leave as late as 11:45.  On the other hand, I could choose to leave earlier for any of the following reasons:

o  allow extra time for the possibility of heavy traffic (avoid the risk of being late)

o  capitalize on the potential for lighter traffic (opportunity to reduce transit time)

o  possibly arrive in time for batting practice (opportunity for extra feature)


Summary:

Individuals and groups make a very large percentage of their decisions based on subjective perception of value.  Each perception (or expectation) exists as part of a larger system.  Constraints and uncertainties inherent in this system limit the amount of value which is available, and force tradeoffs between different sources of value. 

It is very important that providers of value understand the three dimensions of tradeoffs.  Understanding the first dimension (one feature versus another) is easiest.  Understanding the second dimension (across contexts) is more difficult because it requires the provider to identify these contexts and see their perspective clearly.  Understanding the third dimension is most challenging, because of the difficulty of forecasting future events.

The next entry will discuss context, and the important role it plays in better understanding all three dimensions of tradeoffs.

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5 Comments

  1. Thanks for the compliment.

    Charlie

    Comment by charliealfred — September 11, 2009 @ 7:08 pm

  2. This is great! Where do you find this stuff?

    Comment by David Crowe — November 25, 2010 @ 8:23 pm

  3. thanks Charlie you are indeed a genious. Keep on such great works .wonderfull.

    Comment by Raphael Kazunga — March 30, 2011 @ 2:39 pm

  4. WONDERFULL

    Comment by Raphael Kazunga — March 30, 2011 @ 2:42 pm

  5. Raphael, I’m not a genius, but thanks anyway for reading, and the nice compliment!

    Comment by Charlie Alfred — March 30, 2011 @ 6:45 pm


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