February 16, 2010

Conversing With Your Customers

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Picture a middle-eastern bazaar on market day maybe in the middle of the eighteenth century. What do you see? People packing the square. Shouting. Cursing. Eying. Ignoring. Touching. Feeling. Negotiating. Settling. Paying. Carrying. Trusting. Not trusting. Knowing. Undecided. Decided. Rich. Poor. Packed. Tight. Close. Smelly. Smoky. Sensual. Nonsense. Cheap. Exquisite. Sunny. Shadowed. Wet. Rainy. Cold. Hot. Safe. Unsafe. Escorted. Unescorted. Free. Enslaved. Story. Sounds. Music. Singing. Horses. Monkeys. Pestering. Quiet.

Now picture a Target on a Saturday afternoon. How many of the adjectives above apply? Some of them just don't fly anymore. People want to be safe. They want a fair deal. Things have changed. Walmart the same way. The center of the retailing universe has become staid. Yes, the end-caps sell. So do the aisles, or, believe me, the items for sale won't remain at Walmart very long. But the experience has changed. Maybe it is a good thing. It might be what we really want.

Doc Searls (Levine, 76) says we really do want the bazaar, and that the bazaar has been re-created on the web. Want to argue? There's a place for you. Same with every one of the adjectives above. Quiet. Unsafe. Smelly. There's an idea.

Searls talks about a marketing assignment for a computer company that had spent years in the dark making their latest product. They wanted to make a big splash at the launch. There was no way. No one was interested.  They weren't part of the conversation, and, crucially, the conversation couldn't be created in an instant. My friend Shannon Barnes clued me in to The Cluetrain Manifesto. He does a good job with all the media out there. Twitter. Facebook, I guess. Linkedin, certainly. What's that mean for you? Want to launch a new product or service? Make sure you're part of the conversation (that might even be too simple - be part of the arguments) in today's bazaar, or have a very tough time marketing your new product.

Levine, Rick, Christopher Locke, Doc Searls and David Weinberger. The Cluetrain Manifesto. The end of business as usual. Perseus Books. 2000.

Connections, Not Sequences

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A Table of Contents is sequential. Following from the first chapter to the second to the third is the idea. Want to innovate? Forget about the Table of Contents. Focus instead on making connections throughout the book - throughout your company and your clientele - to make things new and worthwhile to customers.

Remember the pictures of bicyclists racing on those big-wheeled bicycles back in the last decades of the nine-teeth century? Bicycling has been a popular sport for a long time. The designs have changed, but it is a reasonable bet that you rode, if not owned, a bike when you were a kid. So, if we are all bicyclists, why did we mostly stop bicycling by our twentieth birthday? Shimano, after looking at the problem a bit, found out (Brown, 13). Bicycling is a cyclic business, something most marketing folks with expertise in the bike business will tell you. You are going to have down years. Shimano wasn't willing to accept that as a given, so they tried to do something about it. The first thing they should have done, if they followed the chapter-by-chapter scenario, was to go to their marketing department (or maybe their research and development department) and ask for a new flavor of bike for next year. They chose instead to look for connections in the biking community to see if they saw anything interesting.

Their classic assumption was that they should focus on the high end of the market. After all, they had thought all those years, you make more profits on higher priced parts and components. That makes for more profits, normally. Instead they looked down market. People stop bicycling when they hit twenty for a reason. If you've bicycled lately, you probably know why. The seats hurt. Leaning over isn't comfortable on your back. They found out a whole list of things folks hate about the experience (Brown, 14): people hate comparing themselves to lycra-clad sales clerks; the complexity - and cost -of owning a bike isn't conducive to a quick weekend ride; cycling on a clogged city street is dangerous to your health; maintaining a bike is a pain in and of itself; everyone owns a bike, but it has a flat tire, or a broken cable that has been broken and abandoned for years. Fix all that and you might increase sales. Thus was born (or re-born if you think about it) the coaster bike for weekend warriors who want a simple ride. Shimano makes components, so they had to convince manufacturers like Trek, Raleigh and Giant to follow along (Brown, 15). They didn't just make stuff. They designed campaigns for local bike shops to start with their local government. Safe place to ride. Safe equipment. Safe rules. Safe sold more bikes.

A simple concept if you think about it. Don't "complexify" your product to sell more product. Simplify it. Throw out parts. Make it easy to maintain. Make it a cool thing to do in your community. And -oh, this is cool too - sell more bikes. I didn't say it would be easy. It takes time to sell more stuff. But it is doable. Think about it.

Brown, Tim. Change by Design. How Design Thinking  Transforms Organizations and Inspires Innovation. Harper Business. 2009.

December 15, 2009

LA Region Creative Economy

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Interesting factoids thanks to the Otis College report on the Creative Economy (Otis):

  • Employment in direct jobs the creative industry is 342,300 with 858,500 total jobs in LA County; 44,500 direct creative jobs in OC with total creative jobs in OC at 92,500 (Otis, 7)
  • Employment in creative jobs is "sideways" since 2003 (Otis, 10).
  • Sub-industries (my word) include fashion, toys, digital media, product and industrial design, architecture and interior design, communication arts, art galleries, fine and performing arts, furniture and home furnishings, entertainment (Otis, 15-24).
  • Overall trends in creative economy employment are minus 2.3% through 2013 (Otis, 24).
  • LA County has eighteen universities, colleges, trade and technical schools with degree programs in creative programs; Orange County has three (Otis, 30).

Florida (reference in Mixner) posits that the core - the measure - of an economy is its level of creativity. The implication is that the emphasis of workforce preparedness should include not only science, technology, engineering and math, but also creativity. If in fact creativity numbers are in decline in the LA region, we've got something more to consider in workforce planning.

Mixner, Jack Watching Your Best People Leave Town. 12 December 2009.  http://mixnerstrategy.com/blog/2009/12/watching_your_best_people_leav.html

Otis College of Art and Design with Los Angeles Economic Development Corporation, Economic Information & Research Department. Report on The Creative Economy of the Los Angeles Region. November 2009. http://www.otis.edu/about/creative_economy_report_2008.html

The Greening of Orange County

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Interesting factoids about the growth of the Green economy in California, thanks to Next 10:

  • There are 18 million jobs in California. 159 thousand are in green technologies, 52 thousand in biotech, 228 thousand in software (Next 10, 2).
  • The GDP of California is $1.8 trillion with a 2.8% growth rate.
  • The population of California is 38 million, with a 1.5% growth rate.
  • There is a green value chain, from R&D, through manufacturers, suppliers and service providers. The bulk of the employment is in service providers (Next 10, 15) .
  • Orange County employment in green jobs has grown fifty percent since 1995; the highest growth rate is eighty-seven percent in Sacramento (next 10, 21).
  • Energy generation jobs in OC have grown 176%; highest is 200% in Central Coast region (Next 10, 23).
  • Energy efficiency jobs have grown seventy eight percent in OC; highest is 194% in Sierra region.
  • Green transportation jobs have grown 1,875% in OC; highest growth is 2,655% in San Diego region (Next 10, 27).

These are basically percentage reports. Employment is up. This clearly is a industry. Growth at 2.4% trails the general economy, interestingly. Investments could be considered in sectors with faster growth rates, like transportation (although you'd want to examine the real growth rates, as well).

Next 10 with Collaborative Economics. Many Shades of Green. Diversity and Distribution of California's Green Jobs. Next 10. 2009. http://www.next10.org/next10/publications/green_jobs.html

December 13, 2009

Satisfaction

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Want to be happier? Focus on significant actions says Goldsmith (92). Want happier employees? Forget about admonishing them to work harder. And stop with the trivial morale boosters. They don't make anyone happier. The personal keys: reduce TV; reduce web surfing; do fewer chores; exercise; spend time with people you love; challenge yourself. Focus on meaning at home and at work, not happiness; end up with more happiness. Try to figure out activities for yourself that, while they are fun to do, add meaning to your life.

Goldsmith, Marshall and Kelly Goldsmith. How Happiness Happens. Bloomberg Businessweek. 21 December 2009. 92. http://www.businessweek.com/magazine/content/09_51/b4160092992355.htm

Technology Platform: Market Disruption

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Table of Contents: The Innovator's Guide to Growth.

Forward - Clayton M. Christensen

1. Precursors to Innovation - Core business in control, growth game plan, allocated resources

Part One. Identify Opportunities

2. Identifying Non-consumers

3. Identifying Overshot Customers

4. Identifying Jobs to Be Done

Part Two. Formulate and Shape Ideas

5. Developing Disruptive Ideas

6. Assessing a Strategy's Fit with a Pattern

Part Three. Build the Business

7. Mastering Emergent Strategies

8. Assembling and Managing Project Teams

Part Four. Build Capabilities

9. Organizing to Innovate

10. Innovation Metrics

11. Conclusion

Anthony, Scott D., Mark W. Johnson, Joseph V. Sinfield, Elizabeth J. Altman. The Innovator's Guide to Growth. Putting Disruptive Innovation to Work. Harvard Business Press. 2008.

December 12, 2009

Watching Your Best People Leave Town

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First, the rise of Europe as a power in the 17th century. Then, the rise of the United States of America in the late 19th century. Now, the rise of all sorts of economies around the world, mainly China and Asia and including India (Florida Flight, 236). Florida thinks things aren't so dire. We have a chance if - if - we have a "multi-polar (Florida Flight, 237)" strategy. "Cultivate new industry sectors, prepare people for the future, and most of all remain an open society (Florida Flight, 237)."

For decades America attracted talent from all over the world. Things have changed. Folks can go a lot of places to educate themselves. China. India. Scandinavia. Canada. Australia. All will compete. Florida say we have a choice. Restore creativity and openness. Succeed.

Florida's next book focuses on where to live if you're going to succeed. He has maps and formulas that say who's on top, and who's on the way down. Well, we already knew that Flint has a problem. If you take the time, however, there is a message. Americans have done it all along: migrate for economic reasons. Our county has immigration and emigration according to economic conditions. Florida (City) calls this a strength and recommends migration at will for economic reasons. His premise is that education and where you went to school aren't as important as where you end up living. He posits that living in the big mega-cities of the future ensures success  because of the vibrancy of the larger community. The World is Flat got it wrong, Florida says. Having an Internet connection isn't enough. You have to end up in a vibrant community. Then he proceeds to map out all the communities and suggest good locations for you according to your psychographics. Luckily, I appear to have ended up in a good place for my psychographics. Of the five people from my Fortune 500 company who migrated to southern California when I did, two, maybe three, have returned. This wasn't right for me. Interesting how it works. Florida recommends a strategy of deciding where you end up, as community dictates economic success. OK, I'll buy that. I also will buy that life is more fun when there is a bit of serendipity involved. Arrive somewhere and look around. Is it a viable community for you, your business, or should you move on? Have a look, especially before you put down roots you can't transplant.

Florida misses a big point. The high schoolers I talk to are considering relocating, all right, but not to NYC or LA. They're considering points all over the world. I can't blame them and, if we plan now, we can keep them here. It'll take a re-focus of American schools on creativity, not just science, technology, engineering and math. An interesting mix, not just a technical one.

Florida, Richard. The Flight of the Creative Class. The New Global Competition for Talent. HarperCollins. 2005.

Florida, Richard. Who's Your City? How the Creative Economy is Making Where to Live the Most Important Decision of Your Life. Basic Books. 2008.

December 11, 2009

Web 2.0 Community Building

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Eight key points for building a Web 2.0 Community (Libert, 127):

  • Lead from the rear. Provide direction and then stand back. Let the crowd lead.
  • Know when to step in. You'll know when you have to take action. You just have to pay attention.
  • Form a club of like-minded people. Start with, for instance, satisfied customers.
  • Don't even try to hide. You're going to make errors. Admit them, fix them - and move on.
  • It's never going to be perfect. The coders will continue to improve things. Editing may take forever. (Here's a hint: late in the process, take control of the editing. It has to end somewhere).
  • Stir things up. A little bit of heat in a discussion makes the out-put stronger. Make sure you have a pretty good idea where folks stand.
  • Here's my favorite: Always say "Thank you." Pretty easy. I am amazed about how many people forget this simple step.
  • Don't encourage folks to pass through. Figure out how to engage them in what you are doing.

Final comments: if you are going to create a Web 2.0 project, don't let the crowd decide what your mission is. Decide, then invite folks to help out. Otherwise, you'll waste time you can't afford to waste.

Not only is it fashionable right now to build Web 2.0 communities, it just makes sense. Give it a try.

Libert, Barry and Jon Spector. We Are Smarter the Me. How to Unleash the Power of Crowds in Your Business. Wharton School Publishing. 2008.

Newest Management Buzzword: Jugadu

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My friend Peter Agarwal and I were discussing a new word (for me) that came from India: jugaad. Together we figured out that it meant "workaround." You've got a problem but no support whether from personnel or capital, what do you do? Work around the problem. You've acting in a jugaad manner. It ends up that there's a book being written about jugaad. Newest fad? Yes. Useful? Maybe it is intuitive and we all are doing it. Might be useful to think about and see if your team needs a five minute story about it.

Peter sent me this definition from Wikipedia:

Jugaad (Hindi: जुगाड़ Punjabi(gharuka)) are locally made motor vehicles that are used mostly in small villages as a means of low cost transportation in India. Jugaad literally means an arrangement or a work around, which have to be used because of lack of resources. This is a Hindi term also widely used by people speaking other Indian languages, and people of Indian origin around the world. The same term is still used for a type of vehicle, found in rural India. This vehicle is made by carpenters, by fitting a diesel engine on a cart.

"Jugaad" is also colloquial Hindi word that can mean an innovative fix,often pejoratively used for solutions that bend rules, or a resource that can be used as such or a person who can solve a vexatious issue. It is used as much for enterprising street mechanics as for political fixers. In essence, though it is a tribute to native genius, and lateral thinking.

Even though in everyday life, a Jugaad can be a solution, in context of Management, Jugaad is essentially a person who has some special capability or access to a resource or even access to another Jugaad that can be useful under extreme or special circumstances. A Jugaadu person is one who has numerous useful and cashable Jugaads. 

Jugaad is also mentioned by Jana. Need to learn how to develop products more cheaply? Maybe you need to do a little research on jugaad methods.

Jana, Reena. From India, the Latest Management Fad. BusinessWeek. 14 December 2009. 57. http://www.businessweek.com/innovate/content/dec2009/id2009121_864965.htm

Competing for Talent

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Three factoids about the up-coming battle for executive talent (Fernandez-Araoz, 72):

  • Tata Consultancy Services calculates the ROI of each new hire, by university. The best schools' graduating classes get blanket offers from Tata.
  • China is working to attract scientists from around the world. Singapore is shifting itself from a host for exec talent to a home. Subtle shift. Big meaning.
  • A European-based company just moved its entire management team to Singapore so they could see things "from the other end of the telescope."

In the early eighties Japan was the big nemesis. Today the rest of Asia is filling that role. The battles aren't done yet, but they will effect your hiring process in subtle ways. Now is the time to start planning.

Fernandez-Araoz, Claudio. The Coming Fight for Executive Talent. BusinessWeek. 7 December 2009. 72. http://www.businessweek.com/magazine/content/09_49/b4158080830272.htm

December 09, 2009

Assign Your Best Salespeople Early in the Cycle

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You have one meeting with the top brass in your biggest sales target. How do you prepare (Lay, 6)?

  • Lodge a provocation. Come prepared with information that will unsettle the potential client. "If you don't do this, now, this will happen."
  • Capture their reaction. No reaction? Leave. Concern? Push your case harder.
  • Give war stories. Tell them what happened with another client when they did it your way.
  • The close? A diagnostic. Charge for the diagnostic. If you do this right, expect them to find budget, even when there is no budget.

Who do you take to the meeting? This is not consultative selling. In consultative selling, you save your best sales people for late in the dialog. Regular folks found out what is going on. The sophisticated closers come in late, to close. Not any more. Take the best people early on. Arm them with the best information you've got, including war stories. Make the close earlier, even when you are not sure there is budget to do what you want to do.

Provocation is compelling, with new information (Lay, 5). You know they have angst. Address it. State your case and prove it with hard facts. Keep it executive level. Dealing with a manager? Go higher. Provoke. Lead. Force issues out.

Lay, Phillip, Todd Hewlin, and Geoffrey Moore. In a Downturn, Provoke Your Customers. The companies you serve are slashing their budgets-but you can still make the sale. Harvard Business Review. 2009.

December 08, 2009

Flip's Pareto: 80% of the Functionality; 20% of the Cost

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More than a year ago, we extolled the virtues of the Pure Digital Flip video camera (Mixner). Since then, the camera has sold millions of units in a down economy. The company has since sold to Cisco for $560 million. The Flip is still riding high. Sales still continue to be "off the charts," competitors are taking notice (and failing in their efforts), and the company is carefully adding features as costs come down (there is now a high definition version of the Flip for basically the same cost).

Capps calls products like the Flip "good enough" products (Capps, 118) because they give eighty percent of the functionality for twenty percent of the price, or, more succinctly, "twenty percent of the effort, features, or investment delivers eighty percent of the value to consumers" (Capps, 118). He lists a whole series of similar products and services (Capps, 113-118):

  • AutoCAD has a simple, cheap competitor called SketchUp that costs $500 versus AutoCAD's $4,000.
  • 90% of Google's ad revenue comes from text ads: no pictures, no celebrities.
  • Netbooks have minimal storage, minimal processing power, no graphics capability and they are cheap, small and light. Shipments are up seven-fold in 2009.
  • Kindle isn't high resolution or complex graphics driven. It is slim and has hundreds of book titles. Oh, and $310 million in sales its first year out.
  • Net calls aren't so hot. They are cheap, however. Skype sales are up forty-two percent year-to-year.
  • Conlin talks about the new simple in healthcare: Doctors who make house calls. A trip to the emergency room costs $1,500 on average; a home visit costs $150 (Conlin, 071). In this case the quality and the price is there. Not bad.
  • Wildstrom talks about Microsoft's new free virus scrubber. They tried to sell it and failed, so they are giving it away. It is apparently as good as Symantec's offering, but simpler and not as "invasive" on a computer.
  • Markoff talks about I.B.M.'s entry into the genome business with a targeted $1,000 report. Cheap, simple genomes will revolutionize medical diagnosis and treatment. Let's watch and see if I.B.M. is actually able to pull this off. Their personal computer decades ago was successful because they assigned the project to a remote team and left them alone. Let's hope they decide to do that again.

I am interested in one flaw in the discussion. I said it a year ago, and it still appears to be true: only small companies can create disruptive strategies that work. It's true until you begin to examine things a little bit closer (beyond the Microsoft and I.B.M. examples above). Two big-company examples:

  • Kaiser Permanente has a new clinic in Hawaii staffed by two physicians who are able to do eighty percent of what any walk-in customer/patient might need. What they can't do, they refer across town to the Kaiser hospital with full services. No one needs to cart around x-rays or patient records: they're digital and accessible everywhere in the system (Capps, 118).
  • It used to be that attack fighters were fast, heavily armed and devastating to the enemy. The only problem is they can't stay over a battle field for hours. Predator drones are the opposite (Capps, 117). They're light and minimally armed. They are also able to stay put to watch 24/7 (via video) what is going on over the hill or over the mountain range. They either fire their simple weaponry or call in the troops or the fighters.

Both the clinic and the drone were created by big companies (Kaiser and General Atomics). This deserves more study. Disruptive strategies work for small companies. They also work for big companies.

Capps, Robert. Why Lo-Fi High Tech Will Rule the World. Wired. November 2009. 111-118.

Conlin, Michelle. The Return of the House Call. BusinessWeek. 16 November 2009. 70. http://www.businessweek.com/magazine/content/09_46/b4155070821061.htm

Markoff, John. I.B.M. Joins Pursuit of $1,000 Personal Genome. New York Times. 5 October 2009. http://www.businessweek.com/magazine/content/09_46/b4155070821061.htm

Mixner, Jack. Disruptive Technology: Smaller Companies Have the Edge. http://mixnerstrategy.com/blog/2008/09/disruptive_technology_smaller.html

Wildstron, Stephen H. Microsoft Steps Up Its War on Hackers. BusinessWeek. 21 September 2009. 76. http://www.businessweek.com/magazine/content/09_38/b4147076993366.htm

November 27, 2009

A Recipe for Personal Success

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Jonathan Tisch talks about the way he views success as a CEO. One key point is about employee selection (well, actually three key points if you look closely): take your time to hire correctly; then train continuously; finally, recognize and reward for performance (Tisch, 70).

I'd call Tisch a sophisticated manager. Part of the family that owns the Loews hotels, he could be imperious and remote. My read on his is different. I find him approachable and interested in the communities in which the Loews hotels reside, an attribute that, while it is pretty normal, is shown to be a key to the Loews success. People don't just work for Loews. They choose to be there. Choose is a good word.

Tisch has twelve tips for success (Tisch, 227):

  1. Never start a paragraph with "I." Whoops, I already broke the rules.
  2. Listen carefully: You never hear a thing when your mouth is open.
  3. Make it a win/win situation: you can't have it all-where would you keep it?
  4. Do your homework: what you don't know can hurt you.
  5. Be media savvy: Your fifteen minutes of fame is coming-are you ready?
  6. Be creative: Learn to think upside-down, inside-out, and sideways.

There are six more in the book. I choose to read this book when I was preparing a talk on partnerships. The talk was really about strategic partnerships - alliances, really - for start-up companies. There was a little bit of topic-creep going when I started this book, but I ended up happy I'd taken the time to read it. One interesting topic I'd never seen mentioned before: the Department of Labor's Workforce Investment Board. I sit on the WIB in Orange County and continue to be impressed about how useful a little bit of help can be to employers and job seekers. Tisch clearly has the same opinion.

Tisch, Jonathan M. The Power of We. Succeeding Through Partnerships. John Wiley & Sons, Inc. 2004.

October 18, 2009

High Risk Collaboration

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With risk comes reward. Collaborate at a high level, increase reward. There is a hierarchy of partnerships worth considering, from transaction based partnerships, shared learning, customer interactions through service innovation, and, finally, end-to-end collaboration (Tyagi, 131). Collaborations can focus on increasing market position, reducing costs, increasing responsiveness, growth and reducing time to market (Tyagi, 131-131).

Why bother? OK, increased profits are one reason. They're a given. In this marketplace, however, they're not enough. A brutal word might be more apt: survival. Collaborate. Survive.

Tisch talks about collaborating to help lower income potential employees to succeed as hotel workers by applying Workforce Investment Board technologies during the welfare to work process a decade ago. It's still working for him (Tisch, 21). This was a pretty high level rish for him, as he was making investments in up-grading his hotels to four-stars (five-stars were too expensive and too risky. Four star hotels have the ambience of five but without, maybe, a quarter of the staff.) The federal/company collaboration worked. He suggested it to other hotels nation-wide.

Tisch, Jonathan M. and Karl Weber. Power of We. Succeeding Through Partnerships. John Wiley & Sons, Inc. 2004. 

Tyagi, Rajesh K. and Praveen Gupta. A Complete and Balanced Service Scorecard. Creating Value Through Sustained Performance Improvement. Pearson Education Inc. as FT Press. 2008.

Follow-on Success

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Win the race. Make the whole team famous - and more valuable. Lose team. Re-build. That was the process facing Lance Armstrong after his first win in the Tour de France. That, and the press's reaction to his win. They claimed he had cheated by using drugs to win his victory. Wasn't so, but what to do? New team? Yes. New PR? Yes. Same Lance.

The new team was necessary because all the good folks retreated to other teams. They got paid more, after all. You can't blame them. The PR? That was necessary because no one understood how Lance had won. When they couldn't see or understand his training regime, they balked (Wilcockson, 282) and cried "Foul!" Same Lance. Yes, again. After his bout with cancer, Armstrong came back fifteen pounds lighter. That allowed him to attack the hills better. Less weight, less to drag up the biggest mountains. His legs were the same, capable of long courses.

Armstrong utilized two new stragies. They were pretty obvious, but no one else was using them effectively: training and cadence. He rode all the legs of the next Tour all by himself, attacking them over and over (think about: he was attacking thirty mile hills over and over again - that's training) again until he understood how to win on them. Some of it was cadence: pedal in a lower gear, increase the number of revolutions, be more efficient (Wilcockson, 262) while, at the same time, attack going down the steepest slopes (Wilcockson, 122). All while training more than all the other pros.

So, you're trying to win at your market for a second time. Look at your team. Practice more on the hard parts (the hills) and the easy parts (the down hills). Change the cadence (speed things up - or slow them down). Might work for you.

Wilcockson, John. Lance. The Making of the World's Greatest Champion. Da Capo Press. 2009.

Pharma Strategy as Model for All

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Long term strategy takes a back seat, usually, to profits next quarter. That's the illusion, maybe even the facts. There are contrary examples worth remembering, however.

American pharma companies which wanted to sell more in Japan after WW II gave away tuberculosis medicine.  River-blindedness in Africa was solved the same way. They build recognition in a new market with the hope that that recognition would turn into profits down the way. It's happening again.

Traditionally, pharma companies have two methods: fund hugely expensive research and development operations and profit on the few drugs that make it through the process, or, as in public health initiatives, subsidize the distribution of drugs into a population unable to fund the pharmaceutical purchase itself. Both can make sense. There is another way.

Martin tells of a researcher who did it a new way that was just as effective (Martin, 109). The researcher examined drugs - old ones - that were no longer manufactured because they weren't profitable. She found new uses for the old drugs, got them approved, and took them to market in poorer countries. She built the model before she found the drug or the target market. Old drug, new market, new manufacturer. With a little bit of thought, the process may have applications in other applications, as well, maybe even in your industry.

Martin, Roger. The Opposable Mind. How Successful Leaders Win Through Integrative Thinking. Harvard Business School Press. 2007.

Design. Profit.

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Strategic "success can only be achieved in collaborations where all partners understand the fundamental role of creativity in the strategic plan. Business leaders who view design as little more that an aesthetic "fix" for dull and naive business models might temporarily look good in the media, but their moments in the spotlight are brief. It takes a day to create a fascinating "study," but years to create a new strategic business (Esslinger, 33)."

Esslinger's been involved in design at Apple (he owns frog design who advised on the Macintosh), designed the logo for Microsoft's Windows, made ship designs for Disney, and on and on.

He talks about the strategy of design. It's not just making things look good. It's about the whole company. Want a new airplane seat to save space and weight? Might want to look at the whole design of the interior of the airplane, and, while you're at it, the waiting area, the ticket taking area, and, oh yeah, the website. It's not a little thing. It's a big thing that effects the bottom line, big time.

Esslinger, Hartmut. A Fine Line. How design strategies are shaping the future of business. Jossey-Bass. 2009.

September 28, 2009

Story-telling Worksheet

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Denning's book has a premise: story telling is the way to make your company grow. Interesting concept. Sometimes useful. Here is a worksheet (truncated) on formulating a story about where you want to take your company (Denning, 99):

One piece of paper, three sections. First section: Where we've come from. Second section: Where you are now. Third section: Where you are heading. A line connects the sections. It ties the story together, "the journey of your life" (Denning, 99).

Now tell a short story (sixty seconds) about the first section. Review it for relevance. Tell it to other people. Check out if they understand it and have suggestions. Repeat for the next two sections. You now have a three minute speech to tell your team. Need a longer speech. Prepare more one minute stories. Add them to your speech.

Seem too simple? Try it. You don't want a complex formulation. You want simple stories, one after the other, to engage folks. They'll actually listen and engage. That's good.

Denning, Stephen. The Leader's Guide to Storytelling. Mastering the Art and Discipline of Business Narrative. Jossey-Bass. 2005.

Kawasaki's Revolution

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Kawasaki was the marketing person involved in the launch of the Macintosh computer at Apple. His book is full of lists on how to do stuff related to new product launches. Lots of lists. Here's a list on why hiring market research consultants aren't necessarily useful all the time (Kawasaki, 115):

  • You probably know - or will recognize - the subtleties that a trained researcher will miss.
  • Because you don't focus on research per se, you'll notice more. Hang around places where buyers congregate. Look for what they need. Figure out how to supply it. Kawasaki talks about market research for auto show rooms. Without a Mom on the team, it would forget that Moms would love to have a place to put the kids while they wait for a car repair, pr better, buy a car.
  • Sam Walton strolled through lots of competitor's stores. He'd notice it. By the next Monday, it was happening at WalMart. The Saturday management meeting made sure of that. Fast to market. More profits.
  • Use folks with lots of different experiences on your market research teams. If they're all the same, you get fewer useful ideas. More ideas, more profits. Makes sense.

Kawasaki, Guy with Michele Moreno. Rules for Revolutionaries. The Capitalist Manifest for Creating and Marketing New Products and Services. HarperBusiness. 1999. 

Reengineering Useful in Down Times?

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You'll remember that business engineering got a lot of press in the nineties. I revisited Hammer's book to see just what is applicable today. Here's Hammer's part of a list of things to do to make sure your process works (Hammer, 201-213).

  1. Don't fix the process - change it.
  2. Focus on process, not trivialities. Look for big issues to address, or don't bother.
  3. Focus on values and beliefs as part of your process. Ignore them? Ignore your employees who are watching very carefully for a reason not to help you.
  4. We talked about trivialities. Minor results are the same. Big results, or don't try.
  5. Don't give up. Well, that's obvious, but how many instances can you supply where a company you are involved with gave up too quickly?
  6. Don't constrain the scope. Everything is on the table, or nothing.
  7. Move through, around, by culture if you must. Don't get mired down.
  8. Bottom up doesn't work. Without the support of senior management, you've got nothing.
  9. Now here's one that I don't like so much: Don't assign someone who doesn't understand reengineering to lead the effort. Well, remember, this book was written by consultants. They want you to hire them, and no one else. Remember that when you decide to hire them or not.
  10. Reengineering has to be at the top of the agenda. Focus on the most important items that are likely to get the biggest results.
  11. One project at a time, and only one project at a time. Concentrate your efforts if you want to succeed.
  12. Don't stop when folks resist change. Resistance just might be healthy indication of results just over the horizon.
  13. Get things done. Don't take too long. Get going.

Hammer, Michael and James Champy. Reengineering the Corporation. A Manifest for Business Revolution. HarperBusiness. 1993.

Garry Wills on Napoleon

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There is Wills on Washington (Cincinnaticus). There is Wills on Lincoln (Lincoln at Gettysburg). Then there is Wills on everyone else, a treatise on leadership discussing thirty-two good, and not so good, leaders. In this case, Napoleon is the good. We're going to forget about the bad and focus on the good of Napoleon.

Six key points that resonate with leaders today (Wills, 89-92):

  1. Forget about victory for its own sake. Winning the battle, winning a town, without winning the war is useless waste of energy. Pick your battles.
  2. "Attack in head-long lunges (Wills, 90)." Small groups, left to fight alone, lose energy and become fearful. Concentrate your legions. Give them drums and noise makers. Scare the enemy so they run before they engage.
  3. "Fight toward supplies (Wills, 91)." Napoleon didn't travel with a lot of supplies. Ammunition, probably. Food, maybe not. If the troops wanted to eat, they had to fight their way to the food, which was always on the other side of the enemy.
  4. "Fight only with preponderant force on one's own side (Wills, 91)." Mass your troops. Wait until your forces out-numbered the enemy. Split the enemy forces and fight them one at a time, never all at once. That meant he couldn't allow them to concentrate.
  5. Here's one I like: simplify. Fight head on. Don't go around, forget about ambushes, and all the convoluted battle plans everyone else had. Attach. Head on. Now.
  6. Finally, keep moving. If the enemy was fixed in a town, ready to sit it out, entrenched, find another army to fight. Keep moving. Don't lay siege, especially for a long time. Abandon, wait for the enemy to emerge, engage. Don't wait around if you can help it. Remember, if you are waiting around, you aren't fighting toward food. You're starving. Starving isn't good, especially if you didn't have supply trains coming.

Wills talks about Napoleon's first real campaign in Italy. He defeated two armies and was on his way to Vienna, having beat two other French armies to the punch. That wasn't supposed to happen, especially from an up-start like him. At the last minute, Napoleon stopped. He didn't attack Vienna. He just didn't have enough strength. Everyone at the time said he failed. Well, maybe so. Actually, if you look at it, he showed good decision making ability. At Vienna, he would have lost. Why fight a battle you're going to lose? Napoleon knew the answer to that one.

Wills, Garry. Certain Trumpets. The Call of Leaders. Simon & Schuster. 1994.

September 18, 2009

A Leader Has to Have Followers - and What Else?

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It's pretty obvious that leaders have to have followers. Since we all watch CEOs in action, knowing when they are going to fail might be a good thing to know, yes? I think so. Wills takes the time to detail the leadership styles of thirty-two different leaders, half of them successful leaders, the others not so effective. Some of the leaders failed because they couldn't inspire any one to follow them. That's pretty obvious to see. Usually, corrupt folks are found out eventually. Not a very good leadership style. (OK, Madoff took a little bit longer, I'll warrant. He's an outlier, wouldn't you agree?)  What about the rest? They couldn't find followers. OK. Why?

There seems to be one effective predictor of failed leadership, namely, leaders and followers without a goal that they all agree on. Now, Madoff's staffers must have been following along, at least to some extent. Why they did it isn't clear. If they profited, why aren't they in jail, you ask? My prediction: they will be eventually. That's still an outlier example. Most CEOs, when they fail, fail because folks are not helping to create their company goals. The CEOs have followers, yes. But the followers aren't buying into - or, don't understand - the results the CEO needs from them.

Three key things to remember: There has to be a leader. There have to be followers. They have to have a common goal that they all agree to.

We could stop right here and call this the end of the lecture. Not so long ago we talked about failure in corporations (Mixner). We followed Block's description of failure. He said that effective leaders are stewards, not dictators. Stewards follow more democratic principles than dictators. As a result, because they allow their teams to make decisions - even about values and vision, usually high level tasks - on their own, their teams buy in to what they do and perform at a higher level, usually at much higher levels. That's good for everyone.

When we mix Wills (got to have a leader, followers and a goal) with Block (the best thing is to let the team make up their own values and actions with a little very high level training on how to do those things) we've got something very valuable. Let's combine terms, sort of like algebra: steward leaders, enlightened followers, high level goals that they create together and that they all buy in to. Now we're getting somewhere. Think about it.

Mixner, Jack. Democratic Strategy. References Block's Stewardship. http://mixnerstrategy.com/blog/2009/09/post_1.html 

Wills, Garry. Certain Trumpets. The Call of Leaders. Simon & Schuster. 1994.

September 16, 2009

Beware the Omniscient CEO

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I took a graduate class in comparative literature along the way. The idea was to understand how to evaluate a book quickly not only for its conciseness, but also for its applicability. We'd ask ourselves who the narrator was in important scenes, how knowledgeable that narrator was, and, further, what kind of axe that narrator had to grind. I find myself doing the same thing with strategic plans.

In literature, they examine the narrator's point of view. In strategic planning, we do the same thing. The omniscient point of view (the narrator knows everything, is all knowing) is pretty obvious sometimes, especially when the CEO dictated the plan without any input from the team. Objective point of view (tell what happens without stating anything else) (Literature) loses the feeling of it all. When you are discussing values, for instance, forgetting about feelings may not be a very good choice. Whether the narrator participates in the story either directly (first person) or indirectly (third person point of view) sometimes shows through.

Having an omniscient CEO isn't all bad, especially when you're going through tough times. It is dangerous, however, in the situation where all creativity of the team at all levels is wrung out of the system. Sometimes, sales people - and loading dock people, for that matter - know what is best for the organization. Not allowing them to make decisions on their own isn't a very good idea, even when they are making strategic decisions.

When you think about it, while we live in a democracy, our businesses aren't very democratic. Leaders sometimes stay leaders for many, many years. In a democracy, elections and term restriction limit the amount of damage any one person can do. In a business, that isn't always the case. When a CEO is saying, "I know what is right for the organization," and doesn't brook any real comment about what she/he is saying, watch out. Dictatorships get things done, yes. Sometimes, however, they forget to do the important things, like motivate employees to help the company succeed.

Literary Analysis Guide. Point of View. http://www.ci.maryville.tn.us/mhs/studyskills/CompGuide/LitAnaPOV.htm 

Literature. Exploring Point of View. Types of Point of View. http://www.learner.org/interactives/literature/read/pov2.html

September 07, 2009

The Harley Davidson Story

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My good friend George Morrisey, a professional consultant if there ever was one, suggested that I read the Zimmerman/Tregoe books on strategy back when I was first setting up my consulting practice. George was interested in the Tregoe explanation of Driving Force and how it applied to corporate strategy. The idea was to identify the driving force of an organization and, with it, the time frame for its application. Combine the force and a time frame into a quantifiable strategy. Critical issues were identified and planned for if there were supporting strategies that made sense.

Recently, I found the Zimmerman book in the library. It is interesting because it talks about culture and how to amplify its effects throughout the organization. My first impression of this discussion was that the strategy of spending a lot of time identifying the culture and then trying to communicate senior management's perception of values throughout the organization was just that - a strategy that took too much time to implement in this fast changing environment. That's my assumption, especially when it is amplified by Block's book on stewardship. Block, Tregoe and Zimmerman are all trying to effect positive change at an organization. Block uses management lightly, expecting them not to dictate a value system, but to open a dialog with customers and employees to deteremine what values and strategies are important to each part of the organization. No one grinds on results, because each person in the organization knows the metrics that are important to them and their individual customers and operates to them. Tregoe and Zimmerman are more analytical, spending large quantities of energy in examining the current belief system in an organization (Zimmerman, 219) and trying to effect its change to make it jive with management's point of view.

Zimmerman's team was involved in the turn-around at Harley Davidson in the early eighties. There is an entire chapter on what happened there. Basically, they realized that their bikes were over-priced and marginally shoddy, with, however, wonderful brand recognition. Their job was to fix the shoddiness and lower the price, something they were able to help the Harley team accomplish. Everyone was happy. Good story. Harley hadn't applied quality techniques yet; lean manufacturing was something that they couldn't even fathom early on. But they had craftsmen who cared about the bikes they produced. That was enough. Engaging teams of craftsmen to resolve they problems was enough to "kick-start" Harley for another twenty year run of success.

I feel like I have to say that I like the Zimmerman method better than the Block method, but I can't. I see value in both their points-of-view. Stewardship - letting the team figure things out, and do them without explicit direction - and beliefs set from above that flow throughout the organization are, in the end, be very similar. They feel different, but they're not. Interesting.

Block, Peter. Stewardship. Choosing Service Over Self-Interest. Berrett-Koehler Publishers. 1993.

Tregoe, Benjamin B. and John W. Zimmerman. Top Management Strategy. What It Is and How to Make It Work. Quickstone. 1980.  

Zimmerman, John Sr. with Benjamin B. Tregoe. The Culture of Success. Building a Sustained Competitive Advantage by Living Your Corporate Beliefs. McGraw-Hill. 1997.

Jobs at Pixar

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Those of you have been following what I write will be aware that I am interested in Steven Jobs management techniques - or lack thereof - at Apple. After leaving Apple the first time in the mid-eighties, Jobs started a new computer firm, Next. He had money. He had time. He was mad. A good combination for starting a tech company. It didn't really work, unfortunately, and Jobs ended up selling some of the Next operating system to Apple in the late nineties, presaging his return as CEO. We know all that. I wanted to know about Jobs's time at Pixar. Did he act the same way? Was he as pushy? Or - and this is what really happened - did he just sign checks and leave folks alone because he couldn't really influence the art at Pixar, as everyone was better than him at animation. That's basically how it worked. Jobs ended up investing $55 million ($5 million to buy the company from Lucas Film (Price, 7), and $50 million over ten years to keep the doors open). Ultimately, his job was to stay out of the way, let the management in place run things, and, importantly, arrange for distribution agreements of Pixar animations through Disney, and, finally, the sale of the whole company to Disney. Along the way, Jobs was part of the reason that Eisner ended up leaving Disney, to be replaced by the more affable Iger, who Jobs could get along with, and, who, with Jobs nudging, bought Pixar for stock worth at that time $7.4 billion. Not a bad performance for Jobs. Patience paid off.

Price, David A. The Pixar Touch. The Making of a Company. Alfred A.Knopf. 2008.

Democratic Strategy

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A while back we talked about Machiavelli and John Bogle (Mixner).

Machiavelli says, basically, it is all right to break the rules, especially if you do so to reach your ends. Bogle says that the ends aren't your ends, they're society's. Character and courage don't count for much if they are all about you, instead of us.

Machiavelli was writing way back when, Bogle, last year. Bogle was trying to make sense of the melt-down in the financial markets over the last decade. Machiavelli was selling his services, his knowledge. Block adds words to the discussion that are worth reviewing here.

Democracy is all about people having a say in their future, capitalism not so much. Owners and managers - bosses - exert special powers in the workforce that vary from the democratic ideal. Bosses aren't elected to terms that are finite. Do it right, and a boss can hold on for a very long time. We assume that as we enter the plant gate, it is all right to leave some of your decision making ability behind. Bosses indeed do know better, and we'd better realize it - or else. No, it is not so blatant, but when was the last time you spoke what you were really thinking in a weekly review session, unless by chance, you were the boss - the manager - in the meeting?

Block has thought through a lot of this. His point of view is worth sharing. Normally, planning for the future of an organization takes place at the highest levels. A team - and, usually it is a team - of senior managers joins together to consider the values of the organization, its mission, its vision, objectives for the next years, and maybe even specific strategies for the organization to follow. The assumption is that the plan will be carefully articulated, shared with the organization, and, here things start to get sticky, implemented at all levels of the organization.

You know as well as I do that implementation is where all strategic plans begin to fail. Great plan, poor implementation. We see it all the time. We didn't have time to implement the plan. Customers were asking for stuff, so we didn't have time. Something like that, right? So, do you pitch the planning process and give up? Maybe not. But what to do?

Modify the process. Don't be dictatorial. Let the team determine what is important to them and their work. "Values spring from the top," you say. Maybe. Forcing the entire organization to use a time-clock may not make sense. Forcing the entire organization to follow edicts from headquarters may not make sense. We all say, "We knew that." Since you knew that already, what were you doing? You were defining some of the company's values locally, that's what. "You're caring for a sick child today. I'll cover for you." The work will get done. Control shifts from HR to individuals in their own work units. But "HR has to control," you say. Maybe not. Nor does a boss have to control if she does things right. Set parameters, yes. What customers, broadly, do we target? OK. Clarity, then is a management role (Block, 32). Value-added ways to address a market. Again, a management role (Block, 32). But the how and whys? They get answered not by senior management, but by the folks who know the answers. Reward goes down in the organization as it is no longer the carrot it once was. Punishment goes down too. The team rewards and punishes, not management. Direction goes down; clarity goes up.

So, who keeps their job in this new environment? People who understand that they are not subordinate, but equals, that's who. Want someone to protect you and your job? Not going to happen. Your responsibility is making sure a team wants you enough that they ask you to play in their game. That's not management's job. It's your job. Eventually, we'll need fewer managers, won't we? The teams will manage themselves. Some managers will realize that managing, even coaching, is an empty title. They had better be doing some work, not just managing. "But the reports due at the end of the month," you say. Is anyone reading them, anyway? Isn't it better to interact with customers, rather than managers, anyway? That's your job. That's management's job, as well.

Who leaves the organization? People who don't hold up their end of the bargain. Not interfacing with customers? Maybe it's time to leave. Don't know who your customer is? Maybe it is time to leave. Or, more properly, maybe it's time to find out, and do something about it.

Block, Peter. Stewardship. Choosing Service Over Self-Interest. Berrett-Koehler Publishers. 1993.

Bogle, John C. Enough. True Measures of Money, Business, and Life. John Wiley & Sons, Inc. 2009.  

Mixner, Jack. The Virtuous Leader. http://mixnerstrategy.com/blog/2009/01/the_virtuous_leader.html

August 25, 2009

Helping a Team Create

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Usually I am lucky. I visit the library about weekly to get another armful of books. I usually don't have to go farther than the new books shelf to find things that interest me. Lately, things haven't been so rosy. People aren't donating as many cool books, and, seemingly at the same time, the library isn't adding new, interesting books at the old rate. So, on my last trip, I had to visit the regular shelves to find new reading.

I lucked out. Of the four books I found, Hall's is the most creative. And that's what it is all about, how to spur creativity at your company. OK, that's not really what it is all about. It is really about how you can hire Hall and his team to spur creativity at your company. They do a good job, so that's OK by me.

Now, the biggest thing I learned from Hall is that the first step is not to take a first step. Silliness makes more sense than structure. He has all sorts of games and processes meant to foster good ideas for new products and new marketplaces. That's all good. There's one list I liked a lot. Since silliness is the root of all new product ideas, Hall suggests a series of silly questions to help out. Here are three of them. You'll have to get the book to read the rest. Remember, it is in the library. The three questions (Hall, 132): 

  • What would be the simple solution?
  • What would contradict history?
  • What would be the most outrageous solution?

Consider: Hall is the sort of guy who, before he takes your gig, will visit a store where they sell your stuff (or your competitor's) and just watch people buying things on the same aisle as your stuff. He'll ask questions, maybe, but it seems that early on, he just watches. Simple enough. You could do it. But that is the point. You could do it, but you never will. Do it. Talk to people. Squeeze the Charmin (Hall worked for P&G, so maybe he really did squeeze the Charmin). Look around. Be creative. Take the day off and just watch. Don't act official. Be unofficial. Dream stuff up. Let it brew a while, then actually do something about your crazy ideas. A thing could happen: you give up on your crazy ideas. In the light of day, back at the office, they look trite, foolish. Well, remember Hall's admonition. Try crazy stuff. It works, I'll bet. At a minimum, it sure beats sitting around the office. More fun, too.

Hall, Doug with David Wecker. Jump Start Your Brain. Warner Books, Inc. 1995.

August 20, 2009

Hack and Hacker Defined and the Ethics Thereof

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Hack: as a noun, a "project undertaken or a product built not solely to fulfill some constructive goal, but with some wild pleasure taken in mere involvement (Levy, 23)." 

The hacker ethic:

  • "Access to computers-and anything which might teach you something about the way the world works-should be unlimited and total. Always yield to the Hands-On Imperative (Levy, 40)!"
  • "All information should be free (Levy, 40)."
  • "Mistrust Authority-Promote Decentralization (Levy, 41)."
  • "Hackers should be judged by their hacking, not bogus criteria such as degrees, age, race, or position (Levy, 43)."
  • "You can create art and beauty on a computer (Levy, 43)."
  • "Computers can change your life for the better (Levy, 45)."

Levy, Steven. Hackers. Heroes of the Computer Revolution. Penguin Books. 1984. 1994.

Optimism in the Face of Crisis

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Bill Gates, the philanthropist, is optimistic about world health (Coy, 46). Others say "people are no longer taking crazy, overleveraged risks, so they're less vulnerable to blowing up again.... For those reasons instability leads inevitably to stability (Coy quoting Peter L. Bernstein in Harvard Business Review, 44)."

So, has the pendulum started to swing in the other direction? Are the bad times over? No one is sure, so you have to be careful. Even more, even if things start to swing, no one knows how long this cycle will last, or, importantly, how high it will go. We'll just have to wait and see. Opportunities will present themselves. Our job is to be ready to take advantage of them when they appear. Have the right people on board. Have a plan. Be ready to implement quickly. Nothing has changed.

Coy, Peter. The Case for Optimism. BusinessWeek. 24 & 31 August 2009. 041. http://www.businessweek.com/magazine/content/09_34/b4144040812940.htm

 

August 19, 2009

Unraveling of a Strategy?

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When they first tried to sell Jell-O, no one would buy it because it was new and made of "interesting" ingredients. When it was made up into the final product, it was sweet, tasty, and everyone who tried it liked it. But how to get people to try it, that was the question. They finally figured out how to get things started. Since they couldn't give out free samples door-to-door because of laws preventing salespeople to do such things, they gave out a free recipe book that drove folks to buy the product at the store in the center of town. Sales finally took off (Anderson).

This evolved into such things as giving away a razor so folks would buy razor blades to fit the razor - forever. Every MBA knows this as the "razors-and-blades" strategy. It works.

HP has done this for years with their ink jet printers. They sell the printer for give-away prices. Then they price the ink high. People buy.

Looks like HP's strategy is being challenged by the new cheapness of the American buying public, and businesses. Printing and imaging volumes are down twenty percent (Vance) from last year. So, is this the end for the HP printer business? HP is responding with tie-ins with MySpace and other web media. Something's got to give, somewhere. The ink strategy for HP has worked for a long time. It is going to take some effort to make it continue. Maybe focusing on related markets would work, or, more risky, new products into new markets. Let's keep watching.

Anderson, Chris. Free. The Future of a Radical Price. Hyperion. 2009.  

Vance, Ashlee. H.P. Tries to Keep the Ink Flowing. New York Times. 19 August 2009. http://www.nytimes.com/2009/08/19/technology/companies/19hewlett.html?_r=1&ref=technology