JACK MIXNER STRATEGY

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Live dangerously. Tell the truth. Noonan talks about Reagan (Noonan, 212):

...Reagan thought honest words the only possible predicate for progress. ...He..remained consistent. The immature are always finding new truths, and the cynical are always discovering new philosophies to claim to believe in, but Reagan was neither immature nor cynical. And so was his consistency, which would have been impressive in anybody, but which was startling in a politician.

Let's parse out the important word, consistent. After his early union days in Hollywood, Reagan realized that his future evil empire was real. He stayed on message through those years and continued to stay on message through this GE speech-making days, his governorship, and his presidency. He stayed on message throughout. Now, as he became president, the Russians were looking for signs of how Reagan would act. Noonan thinks it was the air traffic controllers union strike that really started to turn the tide (Noonan, 222). The union threatened to close down American air space. Reagan said come to work or you are fired. They didn't come to work (at least most of them). They lost their jobs in short order.

I suspect that the Russians were expecting a blink, that Reagan would back down. Reagan saw the truth. The controllers wanted a huge salary increase. It wasn't right. He did the right thing. And the Russians watched.

This says quite a lot about being a leader. If you think little things - or big things, for that matter - are not important, you might want to reconsider. People are watching. The Russians watched Reagan and realized he was likely to do just what he said. Your team is watching you and making decisions as well. Make sure you are showing your true character at all times. And make sure your true character is the character of the right.

Reference

Noonan, Peggy. When Character Was King. A Story of Ronald Reagan. Viking. 2001.

Posted by jackmixner at 01:01 PM | Permalink

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Here is Moore's formula for creating a positioning statement (Moore, 161):

• For (target customer)
• Who (statement of the need or opportunity)
• The (product name) is a (product category)
• That (statement of key benefit-that is, compelling reason to buy).
• Unlike (primary competitive alternative)
• Our Product (statement of primary differentiation).

Reference

Moore, Geoffrey A. Crossing the Chasm. Marketing and Selling High-Tech Products to Mainstream Customers. HarperCollins Publishers. 1991.

Posted by jackmixner at 02:34 PM | Permalink

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Components: LEED 2009 for New Construction and Major Renovations (110 points total):

Sustainable Sites - 26 points

Water Efficiency - 10 points

Energy & Atmosphere - 35 points

Material & Resources - 14 points

Indoor Environmental Quality - 15 points

Bonus Points

Innovation in Design - 6 points

Regional Priority - 4 points.

Sustainability: "...a development that meets the needs of the present without compromising the ability of future generations to meet their own needs (Brundtland Commission, 1987 in Our Common Future)."

Benefits of Green Building (Energy, Professional, 16)

Environmental Benefits

• Green Building consume 26% less energy
• Green building have 13% lower maintenance costs
• Green building have 27% higher occumpant satisfaction
• Green building have 33% less greenhouse gas emissions

Economic Benefits

• Green market grows from $36 billion to $96 billion by 2013
• 2% market in 2005; 10% in 2008; 20% 2013
• Price same as not LEED certified
• Sale price of building 10% higher

Social Benefits

• 27% fewer headaches from proper lighting
• Sales in stores with skylights were up to 40% higher than without skylights
• Students with most daylighting progressed 20% than peers on math tests, 26% faster on reading tests.

References

Energy and Environmental Solutions. LEED Green Associate One Day Training. http://www.e2-solutionsinc.com/home.php?id=1

Energy and Environmental Solutions. LEED Operations and Maintenance. http://www.e2-solutionsinc.com/home.php?id=1

Energy and Environmental Solutions. LEED Accredited Professional Exam Preparation 2 Day Workshop. http://www.e2-solutionsinc.com/home.php?id=1

U. S. Green Building Council. http://www.usgbc.org/

Posted by jackmixner at 01:51 PM | Permalink

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My old friend Don Phillips once asked me which player on a Pop Warner football team is the most important. My response, was, of course, "Oh, it's the quarterback." Whoops. Don very quickly asked me why. Well, the QB drives everything that happens on the field. In the pros, obviously, the QB is the highest paid player on the team. But, remember, we're talking about Pop Warner, not the pros. There's a difference.

In Pop Warner football, if the QB doesn't end up with the football in his hands, nothing happens. Kids aren't necessaryily dexterous, so there is actually a very good possibility that, if you don't have a very good Center, your team is never going to go anywhere. One of your best players might end up being the QB, OK. But another good player had better end up playing Center. If you as a coach want to spend time with individual players on the field, the Center is a very good place to start. That even goes before practice to actual team selection. If you can, make sure you have a good Center.

Jim Collins actually has a whole chapter on the people topic entitled "First Who ... Then What" (Collins, 41). He has some tough advice, especially in these times. He points to the ascention of Wells Fargo from regional has-been to national power house. From 1983 til about 1998, the bank out-performed other banks. The effort to grow healthier and then larger actually started back in the early seventies when the CEO Dick Cooley started to very carefully put together a team (Collins, 42). It took him more than a decade to put his team together. Their efforts, working together, sparked the ultimate growth. Collins' criteria for selecting folks are interesting (Collins, 52): Ruthless could be nice for some companies. Rigorous is better. Not sure? Keep looking. Not happy with a current team member? Make a change (Collins, 56). Put your best people on the largest opportunities, not your problem children (Collins, 58).

OK, you say. What's the next step? Start thinking about what goes into your plan.

References

Collins, Jim. Good to Great. Why Some Companies Make the Leap ... and Others Don't. Harper Business. 2001.

Posted by jackmixner at 10:47 AM | Permalink

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In preparing for a series of presentations to small groups of CEOs, I realized that, strategically, I had a problem. Each of the groups is composed of CEOs with whom I want to discuss strategy while at the same time sending them home with some action items for the day after our discussion. That seems doable until you consider that many, many CEOs are entirely booked for the next three or four weeks, let alone tomorrow. Giving them homework to do might be a stretch. What to do?

Since I can't really expect a CEO to drop what she is doing to quickly implement homework from a speech, I needed a work around. So let's go with what we've got. One simple question comes to mind, "What are you doing tomorrow?" Let have a look. My bet is that, if we follow the Pareto Principal, we'll find that eighty per cent of that CEO's productivity comes from twenty per cent of her activities. There may be a strategic implication that is useful: there may be some things you don't have to do tomorrow. If you didn't do them, would you have more time to do something else, maybe even something strategic?

The "Fire! Ready! Aim!" mantra comes to mind. This next day action plan is really a "Fire!" plan. You already know what you are going to have to do, so you have to go ahead and do it. My only request? Carve out some time to do something strategic in your busy day. How? Don't do something - one of those eighty per centers, maybe - so you are able to give some thought to how to proceed strategically.

Let's have another look at the three words in the mantra. Next comes "Ready!" and "Aim!" If you give yourself some time, getting ready for planning is a very good thing to do. If you've never done planning, what comes first? Pick a team to work with you. Meet with them. Decide together what to do next. Just make sure the dialog is strategic, not just an eighty per cent activity.

Posted by jackmixner at 09:56 AM | Permalink

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Let's get right to it. What are Drucker's five important questions (Drucker, ix)?

1. What is our mission?
2. Who is our customer?
3. What does the customer value?
4. What are our results?
5. What is our plan?

Now, we all like Drucker's work. How could we not? The latest edition of his Five Questions text is just icing on the cake.  Complexifying his five simple questions might not be a good idea. Let's just suppose, however, that we decided to break the rules. What would we add?

Two additions come to immediate mind. The customer question, basically, "What do our customers think?" could have two additional key points, namely,

• "What do the folks who work here think?" and
• "What do our stakeholders think (after Palermo, Do the Right Things..., 1-6)?"

These questions really read closer to,

• "Would you recommend this company to your friend as a place to work?" and
• "Would you recommend this company to you friend or business associate as a good place to buy goods or services?" Finally, stakeholders are asked something like,
• "Would you recommend our company as an investment (after Palermo, 1-6)?"

Now, as we know, Drucker kept things simple. However, considering things a little bit more closely makes some sense.

Reference

Drucker, Peter F. with Jim Collins, Philip Kotler, James Kouzes, Judith Rodin, V. Kasturi Rangan, and Frances Hesselbein. The Five Most Important Questions You Will Ever Ask Your Organization. Jossey-Bass. 2008.

Palermo, Richard C., Sr. Do the Right Things...Right. It Is That Simple. A Step-by-Step Guide to World-Class Performance. The Strategic Triangle, Inc. 2003.

Palermo, Richard C., Sr. Leadership...A Return to Common Sense. A Leader's Common Sense Playbook for Uncovering the Right Things...and then Doing Them Right! The Strategic Triangle, Inc. 2006.

Posted by jackmixner at 01:49 PM | Permalink

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Consultative selling is a very useful sales process. You spend quite a bit of time figuring out just what a customer wants before you do anything. Then you work with the customer to make sure that you are both on the same page. Then - and only then - do you propose on the customer's needs. It is a very useful method  based largely on The One Minute Sales Person (Johnson).

Palermo uses a similar methodology for change management. He says look first at the current state of the organization and then look at the new, desired state (Palermo, Leadership, 38) and identifies six generic stumbling blocks to actually making the changes you desire:

1. Reward and Recognition
2. Key Measures
3. Strategies and Action Plans
4. Focused Training
5. Role Model Senior Leader Behavior
6. Focused Communications.

The title of this posting could also be, "You Want Change. You Also Want Results. Now." If it were only so easy. Have a look at the list. Fail at any one of the six items and your initiative is likely to fail. A crucial suggestion: admit defeat early. Plan for success. Measure yourself as you go into the change initiative to make sure you are ready for all six steps. If you are not ready, rectify the weaknesses early in the process (Palermo, 10-4). Don't wait around. Your action plans will include measureable objectives. That makes sense. Your team, especially the ones that didn't actually participate in the design of your change plan, won't really understand what is going on. Paint them a picture (Bridges, 55). Visual aides work, of all sorts. Meeting and discussing with all the different constituents of the change process also makes sense. Face-to-face. That takes time, yes. It also ensures that your change process has a better chance of success.

References

Bridges, William. Managing Transitions. Making the Most of Change. Addison Wesley. 1991.

Johnson, Spencer, M.D. and Larry Wilson. The One Minute Sales Person. Avon Books. 1984. 

Palermo, Richard C., Sr. Do the Right Things...Right. It Is That Simple. A Step-by-Step Guide to World-Class Performance. The Strategic Triangle, Inc. 2003.

Palermo, Richard C., Sr. Leadership...A Return to Common Sense. A Leader's Common Sense Playbook for Uncovering the Right Things...and then Doing Them Right! The Strategic Triangle, Inc. 2006.

Posted by jackmixner at 10:11 AM | Permalink

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Planning with the "end in mind" will make for a better plan that actually is implemented. We all are used to the classic SWOT analysis where you consider your company's internal strengths and weaknesses and your external threats and opportunities. We all tend to focus on weaknesses because, let's admit it, they're easy to come up with. Threats are pretty obvious, but many times they come from sources we can do nothing about. Strengths - and let's hope there are lots of them - help you decide what to focus on. If you don't have a strength to support a strategy, maybe it was a very good strategy for some other company.

Some thoughts come to mind: A simple SWOT analysis on a flipchart with a few people gathered around may not be enough. Spending just a couple hours or days a year considering your strategy may be woefully inadequate. Polling the room for opportunities is nice. You may in fact come up with a few good ideas. However, unless those opportunities are tied to actual execution you are wasting your time (Barrow). Everyone is busy. Unless you really commit resources to executing the plan, nothing is likely to happen. Folks, after all, are already busy doing what they are already doing. How can you expect them to do more? Those woefully short days of planning are flawed because they don't include any plan for monitoring performance. Just having the plan is not enough. Implementing is nice, but it can't be implementing in a vacuum. You've got to tie your planning to periodic, repetitve re-visiting of your strategies and the action plans you have put together to carry them out. Those re-visits have to take place with everyone regathered in the room to talk about progress, what changes to make, and what strategies or portions of action plans to drop.

Other ways to consider strategy (Center):

• Spending some time considering how other folks in companies in your industry and in companies you admire - bench marking - can be very useful.
• Considering you company not as an individual entity, but as part of a business ecosytem makes for more comprehensive strategy. Consider customers, yes, but don't forget suppliers, logistics, human resources, information technology, customer service, along with manufacturing and service delivery.
• The more people you have involved in the process, the better. The receptionist knows more that you might think. So do the folks on the loading dock.
• Simple, actionable, dated goals are easier to refer back to. People will forget the particulars, however, unless you make the objectives more relevant to the individuals involved. Tell a story about how your objectives work at your company. Include more narrative or, literally, stand in front of a small group and tell a story and ask for their feedback on implementing the plan based upon the story's description.
• Keep a score card of performance on objectives may be useful. Posting it on the wall works. So does posting it on the wall with a neon sign. They've done it with safety results at steel mills for years (remember the signs "462 days without an injury"?). How can you do it with marketing results, or HR results for that matter, in a similar fashion?
• Mission statements, done properly, will focus your company on providing products or services that match the company's core competencies. Straying from your core competencies may rightfully cause you to re-consider whether such straying really makes sense.

References

Barrows, Ed. Four Fatal Flaws of Strategic Planning. Harvard Business Reveiw. 13 Mar 2009. http://blogs.hbr.org/hmu/2009/03/four-fatal-flaws-of-strategic.html

Center for Applied Research. Briefing Notes: A Summary of Best Practice Approaches in Strategic Planning Processes. 2005.  http://www.cfar.com/Documents/BestPract.pdf

Posted by jackmixner at 05:29 AM | Permalink

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Akerlof's Animal Spirits Table of Contents (Akerlof, v):

• Preface
• Acknowledgements
• Part One: Animal Spirits
• Confidence and Its Multipliers
• Fairness
• Corruption and Bad Faith
• Money Illusion
• Stories
• Part Two: Eight Questions and Their Answers
• Why Do Economies Fall Into Depression?
• Why Do Central Bankers Have Power over the Economy (Insofar as They Do?)
• The Current Financial Crisis: What Is to Be Done?
• Why Are There People Who Cannot Find a Job?
• Why Is There a Trade-off between Inflation and Unemployment in the Long Run?
• Why Is Saving for the Future So Arbitrary?
• Why Are Financial Prices and Corporate Investments So Volatile?
• Why Do Real Estate Markets Go through Cycles?
• Why Is There Special Poverty among Minorities?
• Conclusion
• Notes
• References
• Index

Reference

Akerlof, Geroge A. and Robert J. Shiller. Animal Spirits. How Human Psychology Drives the Economy, and Why It Matters For Global Capitalism. Princeton University Press. 2009.

BloombergBusinessweek. The BusinessWeek Best Seller List. 7 July 2010. http://images.businessweek.com/ss/09/06/0611_bestsellers/10.htm

Posted by jackmixner at 10:01 AM | Permalink

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Traditionally, when the federal government battled a recession it had two main tools at its disposal, namely fiscal policy and monetary policy. You could reduce interest rates (monetary policy) and/or you could expand the money supply (fiscal expansion) (Akerlof, 86). When financial markets work, it is a straightforward task to stimulate aggregate demand using these two basic tools (Akerlof, 89). Unfortunately, because banks suddenly don't trust the system (and who can blame them) stimulating demand using these tools isn't working. Banks aren't making loans to business; they're keeping what funds they have on their balance sheets.

This time around the economy needs a greater boost than usual. Akerlof proposes a second target beyound aggregate demand, a target "for the amount of credit of different sorts that is to be granted. This target should correspond to the credit that would normally be given if the economy were at full employment. (Akerlof, 80)"

We all know why. Talk to any CEO and she will tell you that credit of any form is very tough to acquire. In order to book that new sale, a company needs to assure itself that it can actually produce what has been ordered and pay for the labor and materials related to the sale. Customers normally want terms for their sale, meaning, unless the company has funds to produce the order, the order isn't going to be produced unless someone supplies a credit line of some sort. Enter this new stimulus for credit.

For obvious reasons, banks pulled credit off the table. Interest rate reductions and increases in the money supply weren't enough to jumpstart the financial system, again. Enter federally provided (through non-traditional providers if need be) loans to reduce the credit crunch. Interest rate reductions and fiscal stimuli continue. Credit is added.

This is new. Some of the SBA lending guarantees currently available or discussed address part of the problem. So do guaranteed micro-loans (or not so micro loans). There may not be enough of them, but they are becoming available. If you need to leverage that new sale, look around for the funds. They are becoming more and more available.

Reference

Akerlof, Geroge A. and Robert J. Shiller. Animal Spirits. How Human Psychology Drives the Economy, and Why It Matters For Global Capitalism. Princeton University Press. 2009.

Posted by jackmixner at 09:54 AM | Permalink

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John Maynard Keynes first tackled the concept of "animal spirits" in his description of how psychology effected the markets.

Keynes Confidence Multiplier - the Keynesian Multiplier - rated the propensity of a consumer to spend, especially her or his propensity to spend part of a stimulus package. You had a choice. Spend your portion of a stimulus package, or save your portion. The more people who decide to immediately spend their portion of a stimulus package, the greater the impact of the stimulus, as that expenditure allowed the person or entity which received your portion to immediately spend, and so on. The higher the propensity to spend funds, the greater the impact. As computers and modelling were growing economic tools during the Depression and the periods following it, there ended up being a multitude of multipliers like the consumption multiplier, the investment multiplier, a government expenditure multiplier, and a confidence multiplier (Akerlof, 16).

Akerlof expands the discussion of the Confidence Multiplier's effect on economies to include Fairness, Corruption and Bad Faith, the Money Illusion, and, finally, economic Stories that effect results. If you have thought about it much, you probably realize that portions of capitalism are unfair. That realization may require closer examination. Involuntary unemployment has an economic cause (or certainly a psychological one), but that doesn't make it fair. The disenfranchised - the involuntary unemployed - seeth at their status which effects consumption. Inflation has an effect - a fairness effect - on aggregate output, as well (Akerlof, 25).

Corruption is a little more obvious, as we have a series of scandals to point to, like the Savings and Loan fiasco in the 80s, the Enron fiasco in the 90s and, more recently, the Subprime Mortgage market. These scandals effected not only their immediate environment, but the whole system. Hear enough about what is bad about a system and you may decide that just maybe your stimulus funds are better put into savings than into a newly "corrupt" investment.

If accounting is the langauge of business, business isn't working very well. Why? Well, after quite a bit of discussion, Akerlof (50) shows that accounting doesn't take into account inflation. Leave out inflation and you don't know what your savings account will really be in five years, your estimate of the current value of a bond will be off, you projection of a stock's price will be erroneous, wage contracts will be spurious, prices will be off (especially those contractually set into the future), and, those wonderful statements your receive about your stock holdings will suddenly be a lot less useful than you had expected.

Economists are supposed to base their predictions on facts, not stories (Akerlof, 54). There is a flaw here that explains why confidence takes a dive during a recession. All consumers hear is statistics. They don't hear stories about what is really happening, nor what economists think should be done. What economists forget is that facts don't drive markets - stories do. Eighteen banruptcies in your zip code or census tract don't mean much until you see those people thrown out on the street (OK, that doesn't happen much any more, I know). Then, the story of their plight will guide your decision making. You want to help, yes. You also don't want to end up in the same position. That effects your relationship to a stimulus package: you'd better save, the story goes, even when consuming is better for the economy. The stories people tell are more important than the facts.

So, some recommendations for your stategizing this summer:

• Start with confidence. Maybe there is a reason to build your team up.
• Make sure things are fair. Sometimes, fairness takes some explaining. You want to be fair to your current team and you want to be fair to your new hires. Fairness to each of those populations may read differently.
• Corruption does have an effect. You have to stand back and decide whether the shrinkage you are undergoing is a boost to limited salaries - or theft. Both effect ultimate profitability in very different ways.
• Southwest Airlines made more money through the last years than other airlines because it made fair estimates of the oil price increases and built those future prices into its contracts. When prices spiked, they had fixed price contracts that helped them weather the storm.
• Stories matter. Employees listen to what you say. If you are going to tell a story, consider what the real message is. Make sure it is confidence building. And, remember, a confidence building story is sometimes hard to come by, so don't just wing it. Finally, remember that your team won't remember the statistics - they'll remember the story. Make sure it is a good one.

Reference

Akerlof, Geroge A. and Robert J. Shiller. Animal Spirits. How Human Psychology Drives the Economy, and Why It Matters For Global Capitalism. Princeton University Press. 2009.

Wikipedia. Animal Spirits. http://en.wikipedia.org/wiki/Animal_spirits_(Keynes)

Posted by jackmixner at 03:04 PM | Permalink

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Here are the top twenty-five green companies in Orange County (OC Metro, 39): 

1. B. Braun Medical, Inc.
2. Towe Jazz Semiconductor
3. Sustainability Leadership Program, UCI Extension
4. Rent A Box
5. Stantec Consulting
6. The Costa Mesa Green Home
7. Yard House Restaurants
8. e-Recycling of Orange County
9. McCarthy Building Cos.
10. Miocean Fundation
11. Nova Vita Salon & Spa
12. OCB Reprographics
13. NuWa Textiles
14. Irvine Rance Water District
15. Kaiser Permanente Irvine Medical Center
16. Alere
17. Toshiba America Business Solutions
18. Waste Management of Orange County
19. Cox Communications
20. City of Irvine
21. Green Foam Blanks
22. The Irvine Co.
23. Poseidon Resources
24. UPS
25. Sharp Solar Energy Solutions Group and the city of Huntington Beach

Reference

Borgatta, Tina. The 2010 Green Team. OC Metro. June 2010. http://www.ocmetro.com/t-GreenCompanies_MAIN0610.aspx

Posted by jackmixner at 06:48 PM | Permalink

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"We're late on our software design project. What are we going to do?"

"Just add more people. More people means faster to alpha."

Ever had a conversation like that? Just throwing people at a project may not be the best solution says Fred Brooks in a now classic software design book. Brooks came out of IBM in the sixties where he managed the creation of big, main-frame software that took lots of time to create. Having seen it all, Brooks takes the time to share with us just what can go wrong on large software project - and how to avoid all the mistakes he watched happen over time. He has one basic premise. Actually, a bunch of them, but they all come back to the man-month.

Let's say management wants a computer program designed and implemented. They'll say, "Let's have it done by such-and-such date." Your job is to get the project done and the software implemented. Now, your company is like most others. It has a budget. So, wearing your best manager's hat you estimate how many hours you think the project will take. You do it pretty quickly, hand it in to the boss who approves it quickly, because, as we all know, the boss wants it done fast.

Brooks makes two points about the process just described: your estimate is always wrong because - are you listening? - you didn't plan enough for the ultimate implementation of the software (Brooks, 20). Interestingly, he says spend a third of your time planning before you even begin coding. Then, get the coding in a sixth of the time you have allocated to the project. "What?" you say. All the time should be spent on coding. Not if you want your software to work properly. You've planned it (and took a lot longer than you expected), you've coded it, and now, you want to implement it. You've forgotten half of the work, the early systems test (with the component test) and the late systems test with all the different modules in hand (Brooks, 20). They get half the work.

"OK", you're saying, "times have changed. We're making a different type of software than IBM made in the sixties." I agree with that. You've migrated to a different platform using all sorts of new bells and whistles, modifications and changes. I agree. My suspicion, however, is that Brooks has it right. Spend a third of your time planning, a sixth coding, and then, half of your time checking your work. That's Brook's first lessen.

The second one gets more interesting. When was the last time you delivered software on time? Never, right? Brooks has a formula for making up lost time. It's simple. Use the same number of - indeed, the same - coders. Extend the time. You can't do it right? It'll take too long. Well, adding more people won't save time. All you'll end up doing is messing up your time-line bringing people up to speed. The trainers are pulled from coding. The new coders never catch up (Brooks, 26). The only solution? I already told you: keep the same number of coders. Extend the time. Simple to do. Hard to sell to management.

What if you run a design firm? You have a job to do. Your firm's profitability depends on it. Estimate your project properly. Leave time for planning. Then, leave more time than you ever expected to test the result of your efforts before the code ever gets to a customer.

That's Brooks, 1982. The time has changed. The message has stayed the same.

Reference

Brooks, Frederick P. Jr. The Mythical Man-Month. Essays on Software Engineering. Addison-Wesley Publishing Company. 1982.

Posted by jackmixner at 03:23 PM | Permalink

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Parachute certainly has been a business basic text for decades. Since Bolles has focused so squarely on "Hard Times" this time around, re-examining his prescription for starting a job-change effort is in order. His three parts of a human mission (Bolles, 248):

1. To seek to stand hour by hour in the conscious presence of God, the One from whom your Mission is derived.
2. To do what you can, moment by moment, day by day, step by step, to make this world a better place, following the leading and guidance of God's Spirit within you and around you.
3. To exercise the Talent that you particularly came to Earth to use-your greatest gift, which you most delight to use,in the place or setting that God has caused to appeal to you the most, and for those purposes that God most needs to have done in the world.

Somehow, I don't think he'd mind if we each pause to consider what his statement means for us - and our teams.  

Reference

Bolles, Richard N. What Color Is Your Parachute? "Job-Hunting in Hard Times" Edition 2010. A Practical anual for Job-Hunters and Career-Changers. Ten Speed Press. 2010.

Posted by jackmixner at 12:53 PM | Permalink

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Being the younger brother and later to leave home, Teddy Kennedy formed a close relationship with his father, Joseph P. Kennedy. Teddy quotes his father suggesting how he structure his life (Kennedy, 162):

You can have a serious life or a nonserious life, Teddy. I'll still love you whichever choice you make. But if you decide to have a nonserious life, I won't have much time for you. You make up your own mind. There are too many children here who are doing things that are interesting for me to do much with you.

Teddy made his choice. He tried harder to have a serious life. He made all the errors we all know so much about. But he also made a choice to focus on what was serious. We owe him a lot for that.

Reference

Kennedy, Edward M. True Compass. A Memoir. Twelve. 2009.

Posted by jackmixner at 12:35 PM | Permalink

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I spent a lot of time at the Medical Device and Manufacturing show back in the winter. One of the neatest machines I learned about was a new x-y-z printer that made prototypes out of stainless steel. One of the prototypes on display was a new hip joint that had been made entirely using the x-y-z process. It wasn't smooth like you'd expect - they had built in micro-ridges on the polished surfaces to retain lubricating fluids so the joint would last longer and feel better. When I saw the Capell (When Body Parts Call the Doctor) article, I couldn't help but think of the MDM show.

When a new joint is starting to wear out, it hurts. If you could program the new part to whine - via, say, WiFi to your Doctor's office - when things aren't going correctly that failing joint could be replaced before it advance to the pain stage.

These stories are the fun of medical device innovation. Manufacture better. Build in technology. The x-y-z printer cost $600,000 if I remember correctly, not a simple expense if you are trying to upgrade your prototyping facility. The electronics in that joint might force you to go through a whole new application process to the FDA. The negatives could out-weight the positives, unless you consider a few things. There will be lots of innovations in your processes over the next year. If you choose to consider carefully which ones to invest in, you are farther down the way. You will reject some new innovations; others will get the green light. How do you choose?

Corning says have an innovation team, not in your silo but at the corporate level. Include lots of folks on the team. Force them to deliberate - quickly. Then, once they like an idea, keep the idea before the committee. Force them to track progress. Demand reports back. And, this is important, allow efforts to succeed by giving them assets repetitively, not just once or twice. The x-y-z printer spent the money to buy machinery that they weren't sure a market existed for. The Corning folks invested in a new glass (new in that, while it was created initially in 1963 as an auto glass, then never touched for decades) by allowing expensive ($300,000 a pot) test batches, not once but a series of times. And yes, they pushed production of the lines to get the test batches. The team said it was worth doing, ran the numbers, and continued to follow up. If the CEO was the only advocate, he would've forgotten about it by the time came around for the second test batch.

Allow the ideas to percolate up. Prioritize them. Follow-up. Sounds too simple, but it works.

Reference

Capell, Kerry. When Body Parts Call the Doctor. Bloomberg Businessweek. 12 April 2010. 54. http://www.businessweek.com/magazine/content/10_15/b4173054256568.htm

Holstein, William J. Five Gates to Innovation. Strategy+Business. 1 March 2010. http://www.strategy-business.com/article/00021?pg=all

Posted by jackmixner at 03:09 PM | Permalink

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When my Grandmother had cataract surgery in the late sixties, it was debilitating, to say the least. She was hospitalized and they kept her in bed for what seemed a very long time. She never really was her old self again. Now a days, that surgery is an out-patient procedure with very little downtime, if any. About twenty years ago, optometrists had to look for something else to bill for. Enter Lasik surgery in all its different types and phases. That worked for a while. In fact, I still get a mailing from my Optometrist about every other month saying that now is the time for me to upgrade my eyes with some sort of surgery so I won't have to wear my contacts. If you wear contacts, you're getting the letter, too. right? OK, I'm a late adopter. My Doc is trying to upgrade me, yes. I certainly won't pay as much for my procedure as the folks twenty years ago, of course. So, if you think about it, you realize they're already thinking of the next step. In my mind, it's not just the next improvement to Lasik surgery. I want to have telescopic vision, just like my digital camera. And I'll bet somebody's working on it. What do you think?

What's happened here is that the eye surgery market has matured over time. Cataract surgery is now very mainstream. Lasik surgery is very mainstream. In order to make the margins they used to make, eye surgeons need to be looking to the next eye improvement like, maybe, telescopic eyesight. Or, they can change their focus to something else that is profitable. Soon (if isn't happening already) nurses will be doing Lasik surgery. The Doc's will need something new.

Geoffrey Moore lays out the whole scenario (Moore, 61). If you look closely, the same type thing is happening to your tech company. After a while, especially if you have an approved medical device, for instance, you focus not on the next new thing but on how to improve your manufacturing process. That's the next step for you if you follow the natural progression from early stage products to later stage manufacturing. Here is the fun part: if you put some effort into your research and development efforts, now, you are able to cycle back to early stage products and re-invigorate your profit margins while you do it. That's the opportunity for you. It's what's happening in eye products. Quit improving your product. Go back and re-think it. When you do, your profits will go up. That's a good thing.

Reference

Moore, Geoffrey. A. Dealing With Darwin. How Great Companies Innovate at Every Phase of Their Evolution. Portfolio. 2005. 

Posted by jackmixner at 11:27 AM | Permalink

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When you're dealing with an unknown, potentially lethal biologic sample, the last thing you want to do with it is to open the sample container to take a whiff. In some cases, such activity is a death sentence. Unfortunately, that (Peters, 238) is exactly to one of C. J. Peters' team members did with a sample he suspected was Ebola, a very nasty virus, indeed. When the technician (actually a highly trained physician) finally realized his error and confessed, it was days later, after lots of people had been, potentially, exposed as well. Not a good start to a very tough story.

The Ebola sample came from a large monkey colony at a test facility in Reston, Virginia, just outside of Washington D. C. The colony, after much and diligent effort, was eradicated, along with the Ebola virus.

So, what is the strategic point of this discussion? The Army team in charge of cleaning up the monkey colony was long on education and experience. They knew what to do and how to do it. They were experienced. This wasn't a case of a strong leader out ahead of the pack telling everyone what to do. Each person on the team knew what to do and when to do it. If they hadn't done things correctly, lots of people could have gotten hurt.

The point, to return to the question, is that there are strategies that require highly trained and experienced personnel to effectively carry out. Some of those strategies require true "outside-the-box" thinking. Some of them require the opposite, let's call it "inside-the-box" training. Two different types of people are required. Moore's Chasm talks about crossing the chasm from early adopters to the main market. Lots of that is outside-the-box thinking. Bureaucratic thinking, maybe even mainstream thinking like getting things done right time after time, is inside-the-box thinking, more like the repetitive strategies (like quality upgrades and just-in-time processes) in Moore's Darwin. Next time you do your SWOT for a strategic analysis, you might want to consider the folks in the room and whether they are insiders or outsiders. Who get assigned what may be the difference between success and failure.

Reference

Mixner, Jack. Expertise - or Talent? http://mixnerstrategy.com/blog/2010/05/post_4.html 

Moore, Geoffrey A. Crossing the Chasm. Marketing and Selling High-Tech Products to Mainstream Customers. HarperBusiness 1991.  

Moore, Geoffrey. A. Dealing With Darwin. How Great Companies Innovate at Every Phase of Their Evolution. Portfolio. 2005. 

Peters, C. J., M. D. Virus Hunter. Thirty Years of Battling Hot Viruses Around the World. Anchor Books. 1997.

Posted by jackmixner at 04:58 PM | Permalink

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We all know about neurons in the brain. They are, supposedly, the place where thought takes place. Have more neurons, have more intelligence, or so the theory went. Until scientists looked at Einstein's brain. His brain looked just like yours and mine in terms of neurons. Where it differed was in the number of cells that were not neurons. In some areas of the brain, his "not neurons" were off the charts (Fields, 7). That led to a whole new exploration of the brain. They used microscopes, binary microscopes and electron microscopes. The problem with all those systems was that they worked on dead tissues. If you've ever run an electron microscope, you realize that the beam has to be focused on specially preserved, especially dead, tissue. So how do you look inside brain tissue - at the molecular level - to see just what is going on? Enter Atari and the generation of scientists the Atari-like imaging spawned.

First it was home computers with their readily accessible controllers and color graphics (Fields, 52). Attach a home computer to a microcope to a video camera and interesting things began to happen. Add a laser system and even more things showed up. You could see what was happening inside a live cell. So, what do you focus upon inside a living brain cell? Calcium transmits information from outside brain cells to the inside of brain cells. All this new technology allowed scientists to see calcium migrate - and when (Fields, 52). When scientists added fluorescing calcium-detecting dyes to brain cells, they could see which cells lit up and what kind of signal caused the flash.

This took new traits in your scientist (Fields, 54). In the past, the good scientists took their time. Preparing samples for an electron microscope that are worth anything takes time. Now, real time science required real time decision making. Your test brain cells only remained alive for so long. While they were alive you had to figure out what to do with them. When you was something on your computer/camera/laser imaging system, you had to figure out what it was - fast. Speed was a new trait. Fixing things on your equipment came in a close second.

Reference

Fields, R. Douglas. The Other Brain. From Dementia to Schizophrenia, How New Discoveries About the Brain Are Revolutionizin Medicine and Science. Simon & Schuster. 2009.

Posted by jackmixner at 03:13 PM | Permalink

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Novartis spent more than $100 million, maybe a lot more (Miller, 146), during the years between the mid-eighties and 2005 on xenotransplatation, "the use of live animal tissues and organs to heal sick people (Miller, x)." Ending in 2005, Novartis' investment over three years in the final xeno company they supported, Immerge BioTherapeutics, totalled $30 million. During the period, Novartis never saw a return on its investment.

With all the stimulus funding sloshing around our economy, billions of dollars seem more the norm, but Novartis' $100 million was a lot to them. For their money, they received significant results. Specially grown pigs with special genes were able to provide kidneys and hearts to baboons. The organs weren't immediately rejected. One kidney, in fact, lasted more than two months (Miller, 207).

Immerge and companies like it were established because there is a need for organs. Human donations aren't keeping up with demand. It seems there might be a calculation here to ascertain if federal spending on xeno projects makes sense. Totalling the lifetime of expenses for the normal kidney dialysis patient might give some indication whether additional NIH investments makes sense. We all know the answer. It all makes sense. The problem is "Where's the money to come from?" Not an easy question.

Reference

Miller, G. Wayne. The Xeno Chronicles. Two Years on the Frontie of Medicine Inside Harvard's Transplant Research Lab. PublicAffairs. 2005.

Posted by jackmixner at 02:28 PM | Permalink

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It may be that I am abnormal. I got all teary-eyed reading the introduction to Kennedy's autobiography, especially since we all know the outcome. A sad story in an inspiring family. Let's focus on the inspiration side.

Mid-way through the book (Kennedy, 230) we start to hear how it felt to be Bobby Kennedy, especially as a new Senator. He had a choice: he could do what all junior Senators did, namely, knuckle down, do his homework, and keep quiet, or he could act differently from the norm. He was the brother of a President. He'd already been Attorney General. How should he act as a freshman Senator?

"Bobby decided that he would take on issues that championed America's dispossessed, such as antipoverty bills and further civil rights reform. He searched out injustices and moral causes. His involvement in them lent them a sense of urgency they might not otherwise have inspired. As he grew and learned, he became more and more interested in people, as opposed to abstract issues (Kennedy, 230)."

Reference

Kennedy, Edward M. True Compass. A Memoir. Twelve. 2009.

Posted by jackmixner at 11:37 AM | Permalink

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Here's the story (Swan): hyper-active kid grows up, decides to become an adventurer and, because he read a lot of cool books as a kid about Artic exploring (and Antartic exploring, as well), decides he wants to retrace the steps of the original explorers in the Antartic. All good. We get that. All of us know enough about the topic to predict what happens next. Two things, actually. One, money is hard to raise for such an exploration. That's easy to figure out. Two, the explorers get in trouble. All this makes the story interesting. There's a twist in all this that makes it even better: the explorer becomes a green advocate and tries to change the world. Also predictable, if you think about it. I could stop now, but we need to consider the topic.

There are politics that make a solution for our green problems hard to solve. The science of our green problems is hard, as well. We don't know precisely what to do, especially when we balance the green problems with the capitalistic need for growth.

The federal government, in all sorts of ways, is trying to spur business to recognize the need for change, and more importantly, do something about it. In my speeches to entrepreneurs, I always try to make clear that there is no free money from the government. If you take a grant or a loan you're going to have to work to get it and then you'd better perform according to your business plan. Or you are in trouble.

So, we have to realize that the government is interested and that the government doesn't know what to do. We talked about capitalistic growth. Well, in less obvious terms, the government is pointing to an opportunity to fix things before it is too late. Take that government money or not, realize that the opportunity still exists for you and your company to do something. Think about it. What are you going to do? And how are you going to make it profitable?

Reference 

Swan, Robert and Gil Reavill. Antarctica 2041. My Quest to Save the Earth's Last Wilderness. Broadway Books. 2009.

Posted by jackmixner at 10:51 AM | Permalink

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Phase one of a formula for disaster (Lewis): Take a thousand home mortgages. Rank them according the odds that they will successfully be repaid (and, yes, a few other things, but let's just keep things simple). Stack them up with the best ones on top and the worst ones on the bottom. Divide them into sections - tranches, in finance-speak - and sell the best ones off at a high interest rate and sell the worst ones at a lower interest rate. That's normal stuff. Now it gets interesting.

Take a thousand of the worst mortgages and divide them up the same way, only, since they're all bad anyway, don't really spend too much time figuring out which ones are the bad loans and which ones are the good loans. Pile them up and sell them the same way you did the first batch of one thousand loans.

Do you notice something? I'm sure you do. Since the second pile was composed of all bad loans, it is almost guaranteed that some will go bad. That's, basically, a given.

Now the second phase of our formula for disaster: Assume that residential housing prices will continue to rise - forever. It seems logical enough. We've got lots of history that says housing prices rise over time. We all know what happened. There was a housing bubble. Houses stopped rising in value. In fact, they crashed.

When the finance guys ran the numbers on that second pile of loans we were talking about, they estimated that the whole pile would collapse when three percent of the loans failed. Whoops. We all know what happened. Somewhere around eight percent of the loans failed. The pile of bad loans really fell down. Whoops, again.

Now, in the past, we would have just felt bad for the bond-holders and moved on.

Phase three of a formula for disaster: things get worse. Some smart person realized they could make even more money on the bad loans by insuring their holders, essentially insuring that loans would never fail at more than the three percent rate, let alone the eight percent rate. Since they were so sure of their financial numbers, they did something really smart: they leveraged their bets, big time (or maybe more than that - thirty times or so, actually). Whoops, again.

Put all this in one pot and mix and you have what we got: an almost guaranteed formula for disaster. The best part? Someone - maybe ten someones, actually - predicted all this failure and shorted the market for insurance company stocks, and bad bonds. They made billions. We lost trillions.

Ah, capitalism. Pretty cool, until it's not.

Reference

Lewis, Michael. The Big Short. Inside the Doomsday Machine. W. W. Norton & Company. 2010

Posted by jackmixner at 10:30 AM | Permalink

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Sometimes experience matters. There was a patient. She "didn't feel too good (Gawande, 1)." The medical student assigned to her had done his best. The nurses were watching. All seemed well. The resident wasn't buying it. His experience told him that that patient warranted close following, more than the medical student was providing, so he took it upon himself to continue to follow up. This time, the patient was lucky. The resident found a problem on one of his frequent, unscheduled, visits and made sure things were put right. A good result for the patient. A good result for the medical student. A good result for the resident.

Even without the resident's close attention, basically, the patient got the best care in one of the best hospitals. However, without the resident's willingness to admit that he didn't feel good about what was going on, the patient would have probably had a wholly different outcome. His experience - call it gut reaction, if you will - made all the difference.

So, strategically, what's the difference? Lots. We might say, "Trust your instincts and act," and we'd be partly correct. There's more. Follow-up takes work. Showing up and asking questions repeatly is a part of success. Training the staff - the team - that doing things by book might not be enough seems obvious. Sparking their interest in following-up is part of your job. Not easy, I know. However, relying on "following the book" isn't enough. So, it takes two things to succeed, at least in this instance. Do things by the book, yes. But, at the same time, you've got to focus on the patient and the book. Keep looking when things don't feel right. Showing up isn't enough. Show up engaged works better. The trick here isn't easy, however. You've got to figure out how not only how to motivate yourself to show up engaged. You've got to do the same thing with your team.

References

Gawande, Atul. Better. A Surgeon's Notes on Performance. Picador. 2007.

Posted by jackmixner at 09:26 AM | Permalink

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The press has been full of comments about the fiftieth anniversary of Harper Lee's To Kill A Mockingbird. I thought I'd pull the book from the library and give it a quick read over the Memorial Day weekend. Interestingly, my local library didn't have a copy. It did have, however, Johnson's "Casebook to Issues, Sources, and Historic Documents" about the book. Since I have never had to write a report on Mockingbird I have never become informed by a more professional point-of-view and have missed some of the nuances in the book, clearly. That being said, I spent some time considering if there are strategic considerations to the book. Atticus Finch is the lawyer we have all come to know. He is heroic, at least he was, in terms of the times the book was written (the early sixties). But, times (may) have changed. Johnson presents Freedman's (Johnson, 189) point of view that Finch did what was expected of him and wasn't terribly heroic for what he did. He would have been more heroic if he had attacked the system independently of the trial and tried to limit inequalities in the community. She rebuts Freedman with Barge's obvious opinion (Johnson, 191) that times haven't really changed and that there are still opportunities for change to occur in how all sorts of people are treated in America, or around the world (not to mention Alabama).

Just for fun, I examined the Code of Ethics for a consulting organization in Orange County that I have been a member of on-and-off for twenty years. Its Code misses entirely the community nuances of Mockingbird, remaining focused on the professional expectations of consulting, probably correctly. However, and this is where things become strategic, I'll bet each of us, in our interactions with our peers and the community, have opportunities to re-examine what is right, and maybe make a few changes.  This is close to preaching, I'll admit, but like one of my friends likes to say, "Just sayin'...".

Another book I found for the long weekend, Kennedy's Compass, talks about responsibility in this simple sentence, "People responsive to the great human condition, and who've tried to alleviate its misery-these will be the ones who join Christ in Paradise (Kennedy, 29)." Responsiveness to customers is a business condition. Responsiveness to the community is one, as well.

Association for Professional Consultants. Code of Ethics. http://www.consultapc.org/files/codeofethics.doc

Johnson, Claudia Durst. Understanding To Kill a Mockingbird. Greenwood Press. 1994.

Kennedy, Edward M. True Compass. Twelve. 2009.

Lee, Harper. To Kill a Mockingbird. HarperPerennial Modern Classics. 1960.

Posted by jackmixner at 02:24 PM | Permalink

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In a way, Buckingham faked me out (Mixner) in his book First, Break All the Rules. His premise - don't try to change people; work with what you've got - morphed into "Don't hire based on experience; hire on talent." I bought the idea and wrote it up. Well, it ends up that there is, like most things, another point of view on hiring and managing.

Gladwell and Goleman both refer to Hogan's work (Hogan) to argue the opposite point of view. In their mind, talented people with outside the box thinking only take you so far. Gladwell derides Michaels' book The War for Talent (Gladwell, Department, 28), saying that, basically, Enron, in accepting McKinsey's thesis that talent was better than experience, hired the best graduates of the best business schools year after year because they were the best at "outside-the box-thinking." By continually thinking outside the box, however, those same super-qualified employees made all the mistakes we all know about so infamously. "It never occured to them that, if everyone had to think outside the box, maybe it was the box that needed fixing (Gladwell, Department, 33)."

It is always fun to pick on the winners. Any time a business text labels a company best-in-class or some such title, folks start to look for weaknesses. No company, basically, stands the test of time. Those that survive (and since Enron famously did not) will go through cyclic periods of success. Failure, however, is just over the horizon. When the numbers are starting to click is the time to re-evaluate strategy.

References

Buckingham, Marcus and Curt Coffman. First, Break All the Rules. What the World's Greatest Managers Do Differently. Simon & Schuster. 1999.

Goleman, Daniel. Managing; The Dark Side of Charisma. New York Times. 1 April 1990. http://www.nytimes.com/1990/04/01/business/managing-the-dark-side-of-charisma.html

Gladwell, Malcolm. Department of Human Resources. The Talent Myth. Are smart people overrated? The New Yorker. 22 July 2002. 28.

Gladwell, Malcolm. What the Dog Saw and other adventures. Little, Brown and Company. 2009.

Hogan, Robert, Robert Raskin and Dan Fazzini. The Dark Side of Charisma. Audio. http://www.wsradio.com/wsradio-player.cfm/type/windows/show/The-Doug-Noll-Show/segment/21070

Michaels, Ed, Helen Handfield-Jones and Beth Axelrod. The War for Talent. Harvard Business School Press. 2001. 

Mixner, Jack. First Break All the Rules. Which Rules? http://mixnerstrategy.com/blog/2007/10/change_or_not_to_change.html

Posted by jackmixner at 11:12 AM | Permalink

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The stent has upset the perfusion market. It is cheap (well, cheaper). It is less invasive. It replaces surgery to fix arteries, veins and all sorts of major organz. All good things.

But, in its time, the heart perfusion machine - the heart lung machine - was an innovative device that helped millions to survive major surgery and to live long lives. By oxygenating blood outside the body, the machine allowed surgeons to make repairs that, until then, would have gone unrepaired.

Cate, George M. A Final Look at Perfusion in the 20th Century. AMSECT (American Society of Extra-Corporeal Technology) Today. December 1999. 1.

Posted by jackmixner at 11:08 AM | Permalink

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A decade ago we started to hear stories of kids with Type I diabetes. Since then, the prevalence of the disease in children has continued to grow. Of course, kids hate the testing related to diabetes. Enter a parent with an idea. Why not hook the testing to the very popular Nintendo DS video game (Weintraub)? That brainstorm led to the Glucoboy testing system and then to the Didget system from Bayer. The idea is to entice kids to keep testing on a regular basis. Available now in Holland, Australia (Glucoboy) and Ireland (Bayer), here's hoping the testing system catches on.

The biggest concern about any new product like the Didget is whether it will get the sales needed to propel it into the bigtime. The inventor came up with a new way of looking at an existing technology. He's hoping it catches on. Bayer - a world-wide pharmaceutical powerhouse - is hoping for more sales of all its diabetes products.

There are a couple flaws I hope the system overcomes. A disruptive product, almost by definition, is cheaper and has fewer features than existing products. It doesn't fit into the normal way a product is normally taken to market (Moore, 64). In the medical device arena, if a product is not cheap then, hopefully, it is on the list of insurance approved products. The Glucoboy/Didget is neither cheaper nor approved for insurance reimbursement (Weintraub). Kids who use it have very high success rates for managing their disease, that's true. Bayer is assuming "parents will spend anything" (Weintraub) to control their kid's diabetes.

Rooting for any device that reduces kid's problems with diabetes is a good thing. Here's hoping the Bayer Didget finds its niche.

Bayer Didget. http://www.bayerdidget.co.uk/Home

Glucoboy. http://www.glucoboy.com/

Moore, Geoffrey. A. Dealing With Darwin. How Great Companies Innovate at Every Phase of Their Evolution. Portfolio. 2005.

Weintraub, Arlene. Diabetes Is No Fun-But It Can Be a Game. Bloomberg BusinessWeek. 19 April 2010. 62. http://www.businessweek.com/magazine/content/10_16/b4174062706997.htm

Posted by jackmixner at 09:18 AM | Permalink

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Just about the time you begin to wonder if VCs are making any investments at all comes word that VCs want to invest in the obesity space (Glasner):  Thythm Pharmaceuticals go $21 million; GI Gynamics go $15 million; Satiety got $25 million; Elixir Pharmaceuticals got $12 million; ValenTX got $22 million. All these investments have to do with treatments for obesity. Rush out to develop a new treatment yourself? It is probably too late, unless you really do have a disruptive methodology.

Reference

Glasner, Joanna. Rise in obesity makes VCs hungry for startups. Reuters. 25 Mar 2010. http://www.reuters.com/article/idUSTRE62O3SO20100325?type=smallBusinessNews

Posted by jackmixner at 10:37 AM | Permalink

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It is tricky to say who defined terms first in the busines press. Value chains have been around for a while. Porter talked about them. So does Moore. Moore also shows why Christensen should have talked more about value chains in his work on disruptive strategy. Let's see if we can reconcile all this into a workable strategy.

Porter's model worked like this (Porter, 60): Inbound Logistics flows into Operations flows into Outbound Logistics flows into Marketing & Sales flows into Service. There are overlays of Firm Infrastructure, Human Resource Management, Technology Development and Procurement. It is handy to remember, as well, that Porter (Porter, 12) compared Competitive Scope with poles of Narrow Target and Broad Target, to Competitive Advantage with its poles of Lower Cost and Differentiation, to yield his Three Generic Strategies of Cost Leadership, Differentiation and Cost Focus/Differentiation Focus. I suggested recently that the Orange County Business Council use the Porter Value Chain model for research they are performing for the Workforce Investment Board because the methodology has been around a while and is seemingly bullet proof for workforce projections. Customers and competitors are crucial to the model, as a firm is always bench-marking performance against the norms.

Moore (Chasm, 12) talked about a bell curve comparing five sequential consumer populations: Innovators, Early Adopters, Early Majority, Late Majority and Laggards. The crucial section (Chasm, 17) described the near certainty that, while Innovators and Early Adopters might like your new product, if you ever want to make money, you'd better figure out a way to "leap the chasm" of failure for most companies and figure out how to sell to the Early Majority, as their buying habits were vastly different from the Early Adopters in crucial ways. In Darwin Moore applies the value chain concept to innovation (Darwin, 38) while enhancing his discussion of the chasm by describing its effects on complex sales and volume sales.

Christensen explores the evolution of the disk drive market (Christensen, 16), pointing to the inevitability that disruptive products (from new, smaller, more innovative companies) are nearly certain to replace sustainably improved products (from main-stream companies). His team at Innosight follows with a methodology (Anthony) to keep your main-stream, not very innovative, company disruptive.

The Boston Consulting Group compared relative market share with growth rate in its Growth Share Matrix (Boston). Question mark divisions become stars or dogs according to the their relative growth rate compared to the competition and the growth of the market. Hopefully, stars become long-term cash cows, not dogs. The message from this is that divisions migrate from section to section according to market conditions.

Moore very usefully attempts a mash-up of all this disparate information. He amplfies Porter's value chain with overlays for complex systems requiring consultative sales processes and for volume operations where the sales process focuses on a closed-end transaction (Darwin, 38). Then, he applies four innovation zones (Product Leadership, Customer Intimacy, Operational Excellence, and finally, Category Renewal) to the Chasm bell curve. For instance, he defines four different innovation technologies that apply to growth markets (Darwin, 73) in the Product Leadership zone of his Chasm bell curve and ranging up to mature markets: Disruptive Innovation, Product Innovation, Platform Innovation and Application Innovation. You have a choice in your company. If you are rapidly growing, focusing on just a few strategies in this range makes sense. If yours is a mature company or - horrors - a declining company, returning to the growth market strategies also makes sense.

Specific strategies are strengthed when you consider the stage of your technology - and your firm.

References

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

Boston Consulting Group. Growth Share Matrix. http://en.wikipedia.org/wiki/Growth-share_matrix

Christensen. Clayton M. The Innovator's Dilemma. When New Technologies Cause Great Firms to Fail. Harvard Business School Press. 1997. 

Moore, Geoffrey A. Crossing the Chasm. Marketing and Selling High-Tech Products to Mainstream Customers. HarperBusiness 1991.  

Moore, Geoffrey. A. Dealing With Darwin. How Great Companies Innovate at Every Phase of Their Evolution. Portfolio. 2005.

Porter, Michael E. Competitive Advantage. Creating and Sustaining Superior Performance. Free Press. 1985.

Posted by jackmixner at 05:10 AM | Permalink