Tag Archives: Decisions

Failure to Innovate Spells Decline

History has a way of repeating itself. JP Nichols, the CEO of Clientific, recites a passage from Theodore Levitt’s 1960 treatise “Marketing Myopia“ to illustrate how railroads missed a window of opportunity in their business life cycle:

“The railroads did not stop growing because the need for passenger and freight transportation declined. That grew. The railroads are in trouble today not because that need was filled by others (cars, trucks, airplanes, and even telephones) but because it was filled by the railroads themselves. They let others take customers away from them because they assumed themselves to be in the railroad business rather than in the transportation business. The reason they defined their industry incorrectly was that they were railroad oriented instead of transportation oriented; they were product oriented instead of customer oriented.”

railroadThen, Nichols makes the connection of this faulty business strategy to the modern banking system. As an industry, he feels the banks have become product rather than customer focused. Here’s how he describes the slippery slope slide into irrelevance:

Mature industries erode subtly at first. Hungry upstarts nibble at segments too small or unprofitable for entrenched incumbents to waste much energy protecting. But eventually the new entrants gain traction and move upmarket to larger and more profitable segments. And new categories are invented along the way.

Then, as it relates to banking, he writes:

Economic cycles wax and wane, but people will always look for ways to save and borrow, to move money from one place to another, and to occasionally get some advice from someone they trust. Traditional financial institutions like banks and brokerages held a near-monopoly on those activities for generations, but banks that continue to be bank-oriented will continue to lose to an increasingly broad group of competitors that are truly customer-oriented.

Think about what’s been happening around the edges of the banking industry. Peer-to-peer lending platforms and retailers’ captive financing programs have taken lending business that once was nearly the sole province of banks. New payments ventures like Square and Dwolla provide services that people want to use because of their great design and ease of use. SigFig is an online registered investment advisor with over $50 billion in assets tracked on its platform. Innovative startups like Simple and Movenbank are reinventing the whole notion of what it even means to be a bank.

The scariest part? None of those companies even existed five years ago.bank

In contrast to the banks’ inability to anticipate the needs of consumers as well as these new enterprises, Nichols salutes another highly regulated industry, healthcare, which he says, reinvests 10% to 15% of its revenues back into research and development, and “represented 21% of the $603 billion spent globally on R&D in 2011, according to a Booz & Co. study. Financials don’t even make the list, lumped in instead with the 2% of “other” industries, collectively in tenth place.”

Nichols, who was the first chief private banking officer for US Bank, challenges the industry to redefine what business they are in, as the railroads should have but didn’t. He feels that a redefinition of the industry to become more responsive to consumer needs and niche services to serve them would be revolutionary.

But, set aside railroads and banks. Look at your own organization now. How can you become more innovative? How can you light the fire of intrapreneurship so that it burns brightly a generation from now? Very simply: begin with the customer in mind and build something that will blow their socks off in terms of its ability to resonate with deep seated needs. Go do it!

Your Online Content Needs a Strategy

Many of my clients have made the jump into the digital age with their marketing. They know that they need to be involved in social media, but often have never heard of content management. While I do not pretend to be a content expert, I have picked up on some best practices over time and try to apply those to my own firm and the clientele I serve. My email inbox receives regular updates to keep me abreast of what thought leaders have to say about content. Over the weekend, I read about “8 Content Marketing Mistakes to Avoid,” a whitepaper that was very well written. The authors/sources quoted include Heinz Marketing’s Matt Heinz, Marketing Interactions’ Ardath Albee, Babcock & Jenkins’ Carmen Hill, The Funnelholic’s Craig Rosenberg, and The Sales Lion’s Marcus Sheridan. 

Excerpts appear below, followed by my own formatting for emphasis, observation and commentary:

1. Don’t neglect to do the groundwork. Before you start any marketing activity, you have to know why you’re doing it. How does this activity translate to immediate or eventual sales and revenue? (Heinz)

You have to know (to) whom you’re talking, what they need and want to know, and where their interests intersect with yours. (Hill)

2. Don’t focus on yourself—focus on the buyer instead. Think like the end user, not like a business owner. Great content marketing is about education.  To be great at content marketing, the focus has to be about the reader, and not the company/writer. (Sheridan)

Our content needs a lot less “we” and a lot more “you.” (Hill).

3. Don’t pitch your product at every stage. Give the people what they want: interesting content that makes their life better. (Rosenberg)

What are your customer’s issues? What do they need help with, right now? That’s the content that will spread like wildfire for you. (Heinz)

Question words4. Don’t overlook calls to action. Every content asset should have a call to action. Build pathways and tell connected stories that help to build momentum through the pipe. (Albee)

5. Don’t forget that effective content marketing is a two-way street. To really accelerate your audience and impact, you must devote time to responding, commenting, engaging questions and so on. (Heinz)

6. Don’t produce content that lacks substance. Audrey Gray of American Express advised that we put our energy into what we’re making rather than the platform: “Create content that makes you feel smarter, celebrates human artistry, or that has with real-world value.” (Hill)

7. Don’t treat content marketing as an afterthought. Content marketing is a practice that integrates all of your content-driven initiative into a consistent and holistic experience for your target markets. Content marketing is at its best when it’s used to pull everything together so that an experience in one channel makes sense or adds value when the audience switches to another channel. (Albee)

8. Don’t underestimate the power of various formats. Written content may be the core of your content strategy, but don’t forget video. Or podcasts. Or short, embedded slide presentations. Or whatever other formats your audience naturally gravitates toward. (Heinz) 

Marketers will benefit tremendously by embracing the Rule of 5. Take one topic and develop 5 different angles to approach it, creating 5 different formats of content. (Albee)

Sound advice from some stellar content curators and marketers. Incorporate these principles into your own business environment. Become engaging, relevant, and indispensable. Doing so will build a loyal following that can be turned into either revenues or referrals that produce revenues. At the very least, your brand gains equity for your efforts and that is no small feat!

 

Main Street Start-ups Better

 

Sean Ogle, the founder of Location Rebel, once faced the daunting challenge of whether to go the start-up route or begin a lifestyle business. He took the time to examine the two alternatives and feels that lifestyle businesses are a better option for many people. He offers 7 reasons why he thinks this way below:

1. You are not Instagram.

For every startup that sells and makes millions, there are hundreds — if not thousands — that fail or, even worse, continue to just barely make it, sucking the life out of you in the process.

2. Building a startup is building a 9-to-5.

While it’s fun to start up running on nothing but adrenaline and Red Bull, the excitement wanes and the monotony sets in after a few months. Many startup companies turn into really bad 9-to-5 jobs for the founders. For example, Jun Loayza who, after getting over a million in funding and successfully selling two companies, left his current startup to pursue a lifestyle business.

3. You won’t wait years to turn a profit.

When you work for yourself, your overhead is limited. Salaries, office space, benefits? That’s all on you. I started my most recent business with less than $500 and it took me three sales to become profitable. Most startups are lucky to be profitable after three years!

Lifestyle business4. You can work from a beach with a Mai Tai.

You know that dream everyone had after reading “The 4-Hour Workweek” where they’re chillin’ on a beach with a cocktail, working from a laptop? That really is possible. This year I’ve already worked from places like Vail, Playa del Carmen, Cuba, New York, China and Jordan among others — all without skipping a beat in my business.

5. You’ll have more flexibility than Gabby Douglas.

You wanted increased flexibility and control in your life? Fat chance in a startup, especially when you’re playing with someone else’s money. As a lifestyle entrepreneur, you truly have the flexibility to set your own schedule. For many, that’s more time with friends and family; for others, it’s travel and adventure. You get to decide.

6. Stress is minimized.

Thoughts like “How am I going to make payroll this month?” and “Revenues were 30 percent less than projections, what will the investors think?” or “My partners and I have drastically different opinions of where the business should go, what do I do?” are all common issues in a startup. A lifestyle entrepreneur has no one to answer to but themselves, thus reducing the stress that comes with common business problems. 

7. You can become a modern-day Renaissance person.

I can’t focus on just one thing; I’m always all over the place. Being a solopreneur has forced me to learn how to handle all aspects of business — marketing, accounting, sales…you name it, I do it. In this position, you grow your expertise and become a more well-rounded business person, and that will undoubtedly help you in any future endeavors. 

 

Much of what Ogle says has basis. Yet, when I think of a lifestyle business, the image that comes to mind is of a semi-retired person who has enough savings that income needs are very minimal. Solopreneur, a term used under the category of Renaissance leadership, seems more apt. The beauty of not being a sole proprietorship, however, is the opportunity to create jobs, build community, and share life with others. At EntreDot, we often refer to such an enterprise as a “Main Street business.” These types of businesses represent about 35%  of start-ups, where fast growth (often venture or angel-backed) is about 5%, and sole proprietorships about 60%. 

Let’s go create more Main Street businesses that have many of the benefits espoused above, but also help grow the economy for someone other than just ourselves!

 

 

 

Climbing Your Management Everest

Stretching oneself to the maximum can reveal what we are made of. Whether the subject matter is a test of mental strength or physical, it is exhilarating to overcome a daunting obstacle. Sir Edmund Hillary is celebrated for his perseverance in conquering Mount Everest. One of my LinkedIn contacts and an internationally known innovation resource is Gijs van Wulfen. Van Wulfen states that, in the 1950s, the route to Everest was closed by Chinese-controlled Tibet. Nepal allowed one expedition per year.

Sir Edmund Hillary had been part of a British reconnaissance expedition to the mountain  in 1951. The 1953 Everest expedition for which he is now famous consisted of a huge team of over 400 people. Expedition leader Hunt named two assault teams. Hillary and Norgay were the second assault team. The first team only reached the South Col, about 100 meters below the summit. Then Hillary and Norgay got their chance. They reached the 8,848-meter high summit, the highest point on Earth, at 11:30 a.m. on May 29, 1953.Mt Everest

Gijs says the following 10 management lessons came to mind as he read the Hillary accounts:

1. Passion. As a youngster, Hillary was a great dreamer, read many adventure books and walked many miles with his head in the clouds. He was unaware his passion for adventure would make him, together with Tenzing Norgay, the first man to set foot on the highest point on Earth.

2. Urgency. In 1952 the British heard that in 1954 the French had been given permission to attempt Everest. The British wanted more than anything to be first. The expedition just had to succeed.

3. Teamwork. Getting to the summit of Everest is all about teamwork. As Hillary wrote: “John Hunt and D Namgyal’s lift to the depot on the South-East Ridge; George Low, Alf Gregory and Ang Nyima with their superb support at Camp IX; and the pioneer effort by Charles Evans and Tom Bourdillon to the South Summit. Their contribution had enabled us to make such good progress.”

4. Courage. The higher you get on Everest the more courage you need. At 7,800 meters Hillary wrote in his diary: “Even wearing all my down clothing I found the icy breath from outside penetrating through my bones. A terrible sense of fear and loneliness dominated my thoughts. What is the sense of this all? I asked myself.”

5. Test. On the 1951 reconnaissance expedition, team members tested oxygen equipment and did research on high-altitude physiology. The results of both studies were important in determining the right approach for Everest in 1953.

6. Initiative. While in India, Hillary read in a newspaper that the British were taking an expedition to the south side of Mount Everest in 1951. He contacted expedition leader Eric Shipton and suggested that a couple of New Zealanders could make a substantial contribution to the team. And they were invited!

7. Choices. The British Himalayan Committee replaced the 1951 expedition leader Eric Shipton with Colonel John Hunt, a climber. After eight failed attempts on Everest they needed someone to the top first, before the French would have their chance.

8. Overcome setbacks. Along the way there are always major setbacks. After finding a new route up Everest during the reconnaissance expedition of 1951, the British heard that the Swiss had obtained permission for two attempts on Everest the following year. The only thing the British could do was wait and see if the Swiss would succeed.

9. Competition. Hunt proposed that Evans and Bourdillon should use the closed-circuit oxygen equipment to reach the South Summit and Norgay and Hillary would push to the top with the open-circuit oxygen. The competition fueled the eventual success of Hillary’s team.

10. Luck. Hillary, a New Zealander, was lucky to qualify as a British subject and be invited to join the British team. Secondly, in 1952 the Swiss failed to climb Everest on their two attempts. 

How do you view these management lessons in light of your own organization’s efforts to be innovative and competitive?

 

 

Innovation: Spurred By Introverts or Not?

introvert v extrovert

We are all familiar with the stereotypes surrounding introverts. Yet, Stefan Lindegaard at 15inno.com, in a blog post today, while acknowledging that he is an introvert and prefers to be alone, looks at the unique role introverts can play in innovation.  He projects that, in terms of innovation, more innovation will happen in communities either in the b2c form of crowdsourcing or in the b2b form of innovation networks, alliances and challenges. He sees the communities as not just virtual/online, but also in person. Some of Lindegaard’s observations about introversion as it relates to innovation are below (he doesn’t perceive the shift to synchronized collaboration to be one that will exclude introverts from innovation.)

Reflection is an important, but forgotten capability. It is often said that introverts get more energy through reflection and that it dwindles during interaction. Well, we need more reflection. There is too much action in this fast paced world and when it comes to ideas and innovation, the best results seem to come when you take a break and reflect on the problems you are trying to solve.

Organizational structures need to make room for introverts. With the exception of a few pockets such as R&D and accounting most functions within a company seem to be driven with an extrovert-like attitude. But not all people are social. Many are introverts and don’t necessarily want to socialize and focus on external matters. What about them?

Introverts must learn to turn on the switch. Far too many meetings either take too long or should never have taken place at all. The matters could have been dealt with in more effective ways than a meeting. Introvert or not. 

But when I need to interact with others in the physical world, I have trained myself to turn on a switch that allows me to be a good networker (ask questions, focus on the other person) and deliver good talks. I would actually argue that introverts are capable of becoming better networkers than most other people because we are more likely to define a purpose and execute on this before we interact like this.

We need to develop the softer skills. Yes, it is kind of a cliché that soft skills such as networking, communication and “people skills” are really the hard skills, but this does not change the fact that too many companies fail to educate their employees on this. More importantly; they don’t give the employees the time needed to develop these skills. Those who want to succeed in the social era need to change this.

Social media works well for introverts. You can “hide” and still have a strong voice in your community or industry. This is one reason that I spent so much time with social media. It is a great way to communicate and since there is so much input (some call this information overload), it gives you plenty of opportunities to reflect on what is happening and thus build further on your own thoughts and ideas. Social media makes it easier for introverts to become more social. It is a win for everyone.

Introverts can challenge the crowd. Since most introverts shy away from the crowd, they often see the crowd in a different perspective. We need all perspectives when we work with innovation and good innovation leader make an effort to recognize this and thus pay extra attention to listen to the more “quiet” introverts.

 

Lindegaard’s comments should be challenging to traditional organizational development thought. He almost goes so far as to recommend diversity strategies to balance personality types in work groups. Furthermore, he portrays as valuable the tension between thinking and communication, solitary productivity vs group performance. Think about these concepts and your own organization. Consider how you may better organize yourselves to be more innovative.