business strategy


Sometimes not having a strategy is the best strategy

Dec 20th

48 comments

The importance of strategy is woven into the fabric of every consultation and class I teach.  I shout it from the mountaintops.  And yet, sometimes I break my own rules … and with good reason.  In a fast-changing competitive marketplace, sometimes not locking into a strategy is the best strategy.

I have an entrepreneur friend who said that his start-up company has a different direction every three months. On the surface, that may seem extreme, but when you are a small company, even something like gaining a new customer, hiring a new employee with special skills, or a sudden move by a competitor can dramatically create a course correction.

One of the most costly mistakes you can make in business is brilliantly executing an obsolete strategy.

In my particular field, the dynamics are changing tumultously. Right now, building a competency in social media marketing is barely-controlled chaos.

2011 was really a year of “wait and see” for me.  And I’m glad I took this approach.  It was uncomfortable in some ways but I needed to just let things unfold to see what monetization opportunities would emerge. Here’s what happened:

Although I have been teaching at the college level for several years, the demand for my services shot through the roof in 2011.  I was flexible enough to embrace opportunities that didn’t exist at the beginning of the year.

My consulting business shifted dramatically from multi-million dollar companies to multi-billion dollar companies.  I think this is where I am more comfortable, but it means I would have to risk more by taking on fewer, larger clients.  And can I find the right resources to help me scale in this way? Some big strategic decisions will have to made for 2012.

The speaking schedule also shifted quite a bit in 2011.  I evolved and matured as a public speaker and learned that I am very good at this.  Do I want to grow the speaking side of the business?  The trade-off with travel — is it what I want? I’ll have to bring focus to this area in the next year.

The Tao of Twitter, was released in February 2011 and was a surprise hit (at least to me!).  My second book will be released by McGraw-Hill in March and the publisher is expecting big things. This is going to throw me into a new public spotlight and undoubtedly open up more writing opportunities.  Should writing books be an emphasis going forward?

And then there is {grow}.  Blogging is the favorite part of my job but I have done a poor job monetizing the property, at least directly.  I have a new video series coming out in January and a few other ideas but I have definitely sub-optimized these opportunities.

This is a round-about way of saying that it was a very good strategy to NOT have a strategy in 2011.  None of these opportunities would have been fully available if I had decided early in the year to wed myself to one defined path.

Now, I need to be clear that although my strategy was in flux, being fully aware of my core competencies and points of differentiation were not. That’s an important distinction. In a dynamic marketplace, remaining open to strategic shifts is OK but it only works if you are clear about how you uniquely create value.

So I’m going to spend a little quiet time over the next few weeks assessing my opportunities, combining them with my passions, and defining the best monetization path and focus for the next six months. Even now, I don’t think I want to lock in completely. Is there even such a thing as a long-term strategy any more?

That’s the way things are playing out for me.  What is the role of strategy in your company? How has that changed with the increasing speed of business? How do balance the need to stay numble with the benefit of a strategic plan?

, ,

The customer is the customer. Adapt or die.

Dec 14th

35 comments

I’ve had a variety of sales jobs in my career and have dealt with some great people … and some world-class jerks. Not just difficult and demanding people, but unethical, bullying, liars at Fortune 100 companies.

One time, a powerful VP demanded that my company buy-back $1.2 million of our material due to a cosmetic issue that did not affect the performance of their end product. In fact, the defect would not even be visible to their consumer. It was a dicey situation. Yes, we were “out of specification,” but this was also going to be a painful financial hit for my company.  It was like being ticketed for going 56 miles per hour in a 55 mph zone.

In the end, we paid an $850,000 claim for the products that were made from the defective material.

I later found out this VP secretly sold the defective products to his customer any way, simply adding our claim payment to his bottom line (and annual bonus payment) through some accounting jujitsu.  My customer loved bragging about his cleverness to demonstrate the power he could wield over my company.

The dude was eventually fired for this type of behavior, but that did little to comfort me when I still had to work with him every day. And yet, I really had no choice but to take it or quit.  This guy was personally responsible for the acquisition of $1.5 billion of my company’s products — at that time, 10 percent of my employer’s total revenue!  I had a one-line job description: Don’t lose the account.

I knew that I would only be in the sales position for a few years at the most, so I decided to weather the storm and approach the challenge patiently and calmly, as long as my own ethics or any laws were not compromised.

I realized that the customer is NOT always right. But the customer is always the customer.  I was the one who had to adapt to survive and compete.

Fortunately, this is an extreme example but the point is, we can’t always demand that a customer — even a really bad one – change to conform to our needs and processes. Only we can change to adopt to the customer’s needs … or, if it gets too bad, quit.

Understanding this wisdom is difficult but a key to success in a fiercely competitive world.

This story came to mind because last week we had a debate on {grow} about the customer demands for rapid online service, even from hotels, restaurants, and other providers who are on the “value” end of the product line. This is an unfortunate development but they really only have one choice: Figure out how to adapt to the customer service needs AND maintain a low cost structure. They’re not going to be able to dictate customer expectations and still compete in the long term.

I’m currently working with a supplier that is imposing new processes that will take up more of my time and dramatically hurt my cash flow.  As a business partner, I want to cooperate and make the whole “system” better, but when I point out that their service levels are declining and the value of these new processes seems to be flowing in only in their direction, their response is defensive instead of responsive.  And you know … they might be right and I might be wrong.  I’m not perfect.  But I’m still the customer.

They may get away with it for awhile if the switching costs are high, but in general the information flow of the web has dis-intermediated many traditional competitive hurdles. It’s easier than ever to find new suppliers for most goods.

In the end, all of us who have to compete for a living know we have just one true source of competitive advantage –

LISTEN to our customers more intently than our competitors,

DISCOVER un-met and under-served needs, and

RESPOND more rapidly and effectively.

That’s it.  The customer is the customer. Adapt or die. Right?

, ,

The Top Five Crowdsourcing Mega-trends

Aug 31st

43 comments

 

I had my eyes opened to the massive growth of the crowdsourcing industry at a SXSW panel earlier this year.  Ever since then, I have been looking for an opportunity to bring more information on this trend to {grow}. I’m fortunate today to have an expert on the subject, David Bratvold, provide a guest post:

If you’re not yet familiar with crowdsourcing, it’s a new work process that involves getting a crowd of people to help with a task typically performed by one employee or contractor.  Imagine needing a new logo for your business.  Rather than hire a freelancer, agency, or in-house designer, with crowdsourcing you can post your need and several designers will compete and create a custom logo just for you.

While this is a common example, today crowdsourcing extends far beyond simple graphic design and can be broken down into four main subcategories:

  • Microtasks -
    Taking a project and breaking it into tiny bits as seen on Amazon’s Mechanical Turk (“the online marketplace for work.”).  Each crowd worker can only see his little bit of the project. You could hire one person to label 1,000 photos or hire 1,000 people to each label 1 photo.
  • Macrotasks -
    Similar to microtasks, however, workers can see more, if not all, of the project and can get involved with any portions they are knowledgeable in.  This form is most common with solving complex problems such as the X-Prize or seeking out a better recommendation algorithm for Netflix.
  • Crowdfunding -
    Getting a crowd to help fund your cause or project.  It’s unique because you set a monetary goal and deadline and you must get fully funded by your deadline or you’ll get nothing. Here is a list of 13 crowdfunding sites.
  • Crowd Contests -
    Asking a crowd for work and only providing compensation to the chosen entries. Commonly seen in design sites like 99designs, and the graphic design example in the opening paragraph.

(For a more thorough explanation, read “What is Crowdsourcing.”)

As the early stages of crowdsourcing continue to gain momentum, there are a few megatrends worth keeping your eye on.

1) Curated Crowds

The bigger your crowd doesn’t necessarily mean better output when it comes to crowdsourcing.  This has been made apparent with the early days of crowdsourcing design sites.  A design contest yielding 1,000 designs can become simply unmanageable.  If you offer a prize large enough, any monkey with a crayon could contribute.  I’m not saying a large crowd produces bad results, I’m simply stating there will be bad among the good.  Luckily, there are almost always a lot of great designs, but it takes extra time to sift out the bad.

Sites like Genius Rocket have begun shifting to a curated crowd model.  Anyone can request to join their crowd, however, they must prove they’re talented before being able to participate in some projects, or even at all.   LogoTournament has been silently curating their crowd since the early days.

2) Quality Improvements

As microtasking gains in adoption, more crowdsourcing platforms are seeing success with adding an extra level of quality control on top of the basic input – output model made popular by MTurk.  If you’ve used MTurk, you’re fully aware the results you get may be less than correct.  Sites like Serv.io & Microtask have added extra redundancy and QA checks to ensure high levels of accuracy.  If a client requests it, Serv.io can maintain perfect accuracy when needed.  As this option becomes more available, people will be demanding 99.9%-100% accuracy, considering it doesn’t incur a lot of extra expense.

3) The Standardization of Crowdsourcing

As it’s been pointed out, crowdsourcing is not an industry, it’s currently an undefined space.  The current leaders in crowdsourcing are working to define this space and standardize as much as we can.  Groups like the Crowdsortium are for players within crowdsourcing to discuss what’s going on.  Daily Crowdsource, along with David Alan Grier, are leading the pack towards standardization.  Grier has been pushing for a trade association for quite some time, and recently has begun publicly discussing it.  Daily Crowdsource, Grier, and other leaders are working to define the official taxonomy of crowdsourcing.  All these recent motions are to help standardize crowdsourcing in order to ensure a healthy future.

4) Corporate Acceptance

Crowdsourcing isn’t just a fad for early adopters.  In fact, several Fortune 100 corporations have taken a big step into crowdsourcing.  General Electric is leading the charge with multiple million dollar open innovation projects. Others like General Motors, Procter & Gamble, and PepsiCo continue to execute crowdsourcing projects (not just one-off publicity stunts).  Amazon even built one of the largest
crowdsourcing platforms.  It’s not often a new process is adopted so quickly by large corporations, but this will make it easier for other Fortune 100 corporations to begin crowdsourcing, which will trickle down to smaller corporations.

5) Early Adoption

Although you may be familiar with the term, crowdsourcing is still in the early adoption phase.  A very small percentage of people are familiar with everything  crowdsourcing can do.  Sure, any tech geek can name 99designs, but can you list 10 other uses of crowdsourcing?  Were you aware you could build a car, stress test your website, or volunteer your “waiting in line” minutes to a charity all with the help of crowdsourcing?

Have you tried crowd-sourcing yet?  What are your favorite applications and success stories?

David Bratvold is the founder of Daily Crowdsource, the #1 site for crowdsourcing news. His goal is to educate business professionals on the benefits of crowdsourcing.

JTGM8WER4WMM

 

, , ,

The end of marketing as we know it

Aug 26th

77 comments

One of my strategic partners bought me one of these Cisco umi devices. It’s kind of like high-definition Skype for a big screen TV.  He thought it would be useful for our long distance collaboration.

We ran into technical and service problems and it took us four months before the damn thing was operational. It was also priced too high, and then you had to subscribe to a pricey monthly service plan.  I honestly didn’t know how Cisco was selling these things into a home market which is what they were obviously trying to do through their Ellen Page TV ads.

I have a friend who works for Cisco and I suggested that any Marketing 101 student could have seen the obvious technical, competitive, and pricing issues with this product. All they needed to do was a little analysis and research. “That’s the problem,” he said. “They never did that. They are not even applying any type of basic marketing plans to their new product development and sales efforts.”

Is it posible that a blue chip company like Cisco is ignoring marketing fundamentals?

I have long wondered … when will it get to the point where the product development cycle becomes so short in the tech business that marketing became obsolete?   Here are further indications that we may have reached that point:

  • Last week Hewlett-Packard killed its entry into the tablet computer market (TouchPad), just 48 days after it was first put on sale.
  • A few months ago, Microsoft pulled the plug on its Kin mobile phones after less than two months of sales.
  • Remember how the A-List bloggers gushed about Google Wave? It was buried 77 days after it was launched.
  • Pure Digital, maker of the popular Flip camcorder, had planned to release the Flip-Live on April 13, but Cisco, which had just acquired Pure Digital, shut the entire division on April 12.

What the heck is going on here?  How could these big, smart companies make these seemingly big, dumb moves?  Don’t they have any business school grads who know how to do customer, product, and competitive research? Market testing and planning?  A SWOT analysis for Pete’s sake?

I’d like your views on this but it seems that there are a few factors at play here:

  • The short product development cycle and rapid rate of product obsolescence forces companies to take shortcuts on research and market planning expenditures. The product launch is now the same as the market test.
  • Frequent executive changes and consolidation in the tech industry forces a tendency to “clean house.”
  • When Apple is the dominant competitor, it is an expensive proposition to try to compete against them.
  • If a product is not immediately perfect, it is crushed by tech bloggers and negative social media buzz.

If I am correct and this does represent a point where the speed of business has outpaced marketing’s ability to research and plan, there are some serious implications for all of us.

Significant brand damage.  H-P didn’t just have a misstep, it breached consumer trust.  How can you put your faith in a company and its products if it is short-sighted enough to dump a major market entry in a couple of weeks? Your most loyal early-adopters just shelled out $500 to buy your tablet and you pull the rug out from under them?

The end of brand-building?   Take a look at this picture of the first iPod.  When it was introduced in 2001, it wasn’t the first MP3 player or the prettiest one, or the one with the most memory, but it was the product willing to stick with a plan and innovate at a breath-taking pace.  Apple didn’t build that brand over night. They did it right and gave the product a chance to grow. What is the world coming to when a company dumps a product before it ever has a chance to catch on?

What about competition?  Did you see that Facebook apparently abandoned its “places” feature after just a few months? This was supposed to compete with Foursquare. Are you telling me Facebook can’t knock Foursquare around? We need competition in the tech industry.  In fact these companies need competition.  The main advantage of Google Plus is that it has slapped Facebook in the face and said “Compete!” We’re sure to get better products out of it.  Apple seems committed to innovation but lets face it, without competition, their pace of change will slow too. Why spend heavily on R&D when nobody is even trying to unseat you?

Is this a weird and unprecedented moment in marketing history — the end of marketing as we know it — or is it simply an extended run of stupid?

Related Posts Plugin for WordPress, Blogger...
,
12345»10...Last »