On Tuesday, February 3, 2009, Jones Lang LaSalle Inc., a real estate services firm, reported a 60 percent decrease in quarterly net income. Their stock soared the next day, gaining 17 percent.1
On Thursday, July 17, 2008, Google reported earnings of $5 billion—a whopping 39 percent increase over the prior year. Google’s stock plunged—losing more than $40, nearly an 8 percent decrease.2
Five billion dollars of income was a huge number—both in dollars and percent—but it was less than what Google’s investors expected. And though Jones Lang LaSalle’s earnings were headed in very much the opposite direction of Google’s, investors were expecting even worse.
Human expectations are powerful. So powerful that they can turn a 39 percent increase income into bad news and a 60 percent decrease in income into good news.
Expectations are truly the lenses through which we, the higher-thinking but highly emotional hominids of the world, see… the world.
Expectations mold reality, which, if anything at all, is the continuous experience of having our expectations affirmed, refuted, or surprised.
Using expectations to your advantage
Effective companies and knowledge workers are good at managing expectations in two key ways:
- Under-promising and over-delivering
- Creating positive surprises
A tale of two expectations
As great as the iPad is, it would seem far less amazing had it been promised to arrive in 2008. And it would have been a major disappointment if Apple had promised Flash or promised printing or promised a USB port—or promised any “feature” that wasn’t shipped.
Apple ships products, not promises. In doing so, they all but completely ensure positive surprises when they pull the veil on the latest iThing.
Not all companies are like Apple.
Hewlett Packard—like so many companies in the touch screen era—have slipped into the habit of “show but don’t ship.” That is, over-promising and under-delivering. Often, never delivering.
HP’s new head, Leo Apotheker, wanted to change that (or so it seemed earlier this year). In January, he told the BBC that
“HP will stop making announcements for stuff it doesn’t have. When HP makes announcements, it will be getting ready to ship,” he promises, saying the products launched on 9 February will be on sale just a few weeks later.
On February 9, HP’s iPad-killer, the TouchPad, took center stage. It was a beautiful product. Unfortunately, one glaring feature was missing: a ship date. If the TouchPad was to slay the iPad “just a few weeks later,” it would have to do so among dragons and pixies—or wherever the laws of the universe allow vaporware to gain real market share.
It seems that even HP’s announcement that they would no longer announce products too early, came… too early.
Why don’t people manage expectations well?
The reason many people and organizations fail to manage expectations is simple: It’s hard.
Managing expectations requires restraint and maturity. It requires an unwavering adherence to a simple but tough rule: Don’t tell people what you have before you have it. In a world that moves faster every day, following this rule isn’t getting any easier.
But that also means the spoils available to those who can manage expectations well are growing richer and richer.
Expectations and brand capital
Managing expectations is a constant exercise in managing one’s own emotions and ego.
It’s about confidence and timing. And it’s about understanding that the expectations that frame your product are actually more important that what you produce. Really.
Whether you’re a large corporation, an entrepreneur, a corporate cubicle worker, or a receptionist, your job should be to brand yourself in a positive light. World class brands are built and differentiated largely through the effective management of expectations.
Consistently delivering your product or service on time and consistently delivering positive surprises will keep your clients, customers, and bosses super happy.
I don’t care what you do for a living, I’m talking to you.
How to build brand capital by managing expectations
Pad deadlines. Show restraint when suggesting deadlines for your deliverables. If you think you can get something done in a day, say it will take three days. If you think it can be done in a week, say two weeks. Don’t try to dazzle people by telling them how fast you can do something. Show them.
Ask for time to firm up deadlines. They’re so important: deadlines. If a deadline is tentative, say so upfront. Scope out the project, then offer a firmer, well-informed deadline later.
Save surprises. Practice the art of not giving away everything upfront. When you hand off your product to your client or boss, it’s always better when they walk away with more than they thought they’d get. That means they can’t know everything in advance. Positive surprises.
Communicate, communicate, communicate. If things aren’t going well, communicate with your client or boss ahead of time. Don’t wait until the last minute to postpone a deadline. Don’t wait until the last minute to tell them that something will be missing. Minimize negative surprises; maximize positive surprises.
Strive for incremental improvement. Even if your job is to do the same thing every single day, make a goal to do it a little better each time. Compound greatness, no matter how small.
Most importantly: Understand that what you deliver and how you deliver it is what counts in the end. That’s what people remember.
See you through their eyes
So much of this is art. But it’s all about building a reputation based on execution and punctuating execution by beating the expectations others have for you.
And it’s about understanding that you have a ton of control of what others expect, and that, in turn, empowers you to best the expectations of you.
If you consistently beat deadlines and “go the extra” mile (by artfully promising less mileage), you won’t be remembered as the person or company that “pads expectations.” You’ll be remembered as the one who can be counted on. The one that's on time. The one that delivers. And you’ll stand out in an ever expanding sea of salesmen who never close the deal.