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Apple & disruptive innovation: 4 questions innovators need to ask before moving forward!

March 20, 2015 Leave a comment

Steve Jobs thought that most people live in a small box. “They think they can’t influence or change things a lot.” Jobs urged his staff to reject that philosophy as untrue.

Disruptive innovation is seen by many companies as a threat to them – but not by Apple who are happy to embrace disruptive technologies.

An interview with Tim Cook, Apple’s CEO, in FastCompany magazine shows that things are not as simple – and this offers lessons for all companies looking at new technology.

The key points are that Apple doesn’t go for every new technology. First they need to understand and have faith in the primary technology behind an innovation. They then consider two questions:

What can Apple add to this – and will it be embraced by society or be seen as something positive. These are interesting questions as a new technology will only be disruptive when people view it as adding to their overall well-being (even if initially people don’t fully understand the innovation – as was the case with first iPad where pundits said “so what” and “why do I need this”). Apple then looks to see if they can be the leader in technology – to own it. If they can’t they leave it to others.

This explains why often Apple isn’t first with something new. For example, they’ve just launched the Apple Watch. It’s too soon to say if this will be a success (although initial signs suggest it will be). Again critics have complained about it. It’s also not the first wearable on the market.

Essentially what’s being said is that to launch a truly disruptive product you need to answer four questions?

1) What is the new technology – and do we understand it?
2) Can we play in this market?
3) Will this innovation / technology / product or service contribute to society i.e. enable people to do things more easily or better than they could before or do things they couldn’t do at all before?
4) Can we be a primary player in this market?

If the answer to any of these 4 questions is no, Apple won’t enter the market. These are great questions that any company should consider before entering a new market. (The third question is perhaps the most interesting in respect of Apple – as what did the iPad offer people that other then existing devices couldn’t do. In retrospect, the answer is obvious but that’s hindsight. Spotting that the iPad, launched in 2010, gave you much more than the iPhone or the Amazon Kindle that predated it by 3 years, and that a laptop wasn’t as transportable, or easy to use was the genius of the device.

Pluralistic Ignorance

May 13, 2013 Leave a comment

How often have you heard something – and not questioned it, as you don’t want to appear stupid, foolish or ignorant?

Too often people accept what they are told and don’t question information. In educational environments this leads to a failure to learn. In business environments, it leads to bad decisions and bad strategy. Received wisdom becomes the operating principle rather than reality – especially when things have changed or are changing.

The reason people don’t question is that they don’t want to look foolish in front of peers, bosses or employees. Rather than highlight something that doesn’t make sense, they prefer to keep quiet so as not to appear stupid. The term for this is “pluralistic ignorance“. It is especially a problem in cultures where “losing face” is an issue. (I wrote about this almost two years ago -see  Competitive Intelligence & Culture). In such cultures, employees find it difficult to question superiors – there is almost a belief that superiors are in their position as they know more and are better.

Pluralistic Ignorance” is a phenomenon that prevents people questioning, when they fail to understand something or when they disagree with an issue, because they feel that they are the only ones not understanding or agreeing. It leads to “group-think” whereby a group of people fail to face up to their lack of knowledge or address false/inaccurate information because they don’t wish to appear foolish by questioning it.

In business it is important to emphasise communication and openness at all levels – and encourage questioning. This is especially key for effective competitive intelligence, but can be just as much a problem in CI as in other corporate areas if CI people aren’t looking out for it. For example, in CI there is the risk that a key piece of intelligence is missed because the person (perhaps a sales rep) doesn’t pass it on. They are sure that the CI team will already know this / that senior management is sure to know this – and so they don’t want to look stupid by passing it on.

The solution appears easy – build a corporate culture that rewards those who share information, even if it is already known. The difficulty is that such openness often contradicts other aspects of the corporation including hierarchical aspects – where one needs to address chains of command to pass on information. This leads to problems where the person at the bottom passes on information to their superior. This person then qualifies the information (exaggerating good news and softening bad news) when they pass it up – and by the time it reaches the actual decision-maker the information has been so transformed as to become meaningless and often false.

An example of how pluralistic ignorance works can be seen in this video of a college lecture. This brief (5 minute) video is the first in a course on behavioural economics. The lecturer, Dan Ariely of Duke University Business School (and TED speaker), is aware of the problem and halfway through this lecture shows how it works.

https://www.youtube.com/watch?v=-9wHttUayMo

Great service leads to growth & profits – for Bettys, it’s a piece of cake!

July 9, 2012 1 comment

I recently visited a friend in Leeds – a major city in the North of England. On the Sunday, a group of us travelled the short distance from Leeds to Harrogate, a few miles away. Harrogate is a spa town – you can walk past the “Royal Pump Room” museum  and still smell the sulphur from the spring below. This is just one of several mineral wells containing iron, sulphur and other chemicals that made the town an attraction in the Victorian and earlier Georgian eras.

As well as the spa, Harrogate also features the first Bettys Tea room.

Bettys Tea Room

Bettys was founded in 1919 and has since grown to include a number of other tea rooms across Yorkshire. The family run company now also includes  Taylors of Harrogate, the tea and coffee merchants with brands including the best-selling Yorkshire Tea.

Our visit to Harrogate included a visit to Bettys for morning tea and cakes. We were amazed at the level of service provided.

One friend asked about the orange juice on the menu. “Was it freshly squeezed?” Instead of just acknowledging that it was, we were told that it had been – but not that day, but on the Friday, as it was squeezed off-site and not at weekends. We asked about the ingredients of one of the cream cakes – was it made with butter or margarine and was it suitable for vegetarians? The waitress wasn’t sure – so said she would check in the ingredient listings. It turned out that it was made using butter and was fully vegetarian.  It tasted superb.

I watched our waitress (on the bill it said her name was Jade) – and others. They smiled, they conversed, were friendly, helpful, and their body language showed a real care and attention to each customer.  They knew their products – and if they weren’t sure they didn’t lie or guess, but went to check. The service was impeccable.

It turns out that the superb service is no accident. I asked whether there was any training provided – and was told that each waitress had one-to-one training before starting, and they were expected to learn the menu and were tested. They had an induction phase where they were watched and it took some time before they could graduate to become a full waitress. This training showed – it wasn’t just in product knowledge but also in the whole interaction with the customer, that made our visit such a pleasure. Bettys even has a dedicated website devoted to working for the company at www.workingforus.co.uk.

The results of this focus on excellence show in Bettys financial results. The company consistently makes a profit – and turnover and net worth has grown impressively over the last 5 years. This is despite one of the worst downturns for decades – showing that Bettys has come up with a strategy that seems recession proof. Although profits have not shown the same growth, they’ve remained stable – perhaps reflecting the value offered by the company, compared to competitors. (We paid more for our sub-standard tea on the self-service motorway café journeying up to Leeds).

Bettys shows how important service is for a business, and how appropriate training can lead to top-quality results, and evident staff satisfaction. (In 2007 Bettys was listed in “the 100 best companies to work for” compiled by The Sunday Times). This focus on quality, in the product as well as the product knowledge, attention to detail and customer focus can translate to the bottom-line result – and lead to turnover growth and profits.
Queue outside Bettys, Harrogate
The queues outside, waiting to get into the Tea room is evidence that Bettys is doing something right. The results – financial and reputational are too. It may look like a piece of cake to achieve this – but the numbers of companies that fail to provide adequate service shows that it isn’t. Maybe they should make a visit to Harrogate part of their own staff training!

Business Plans & the Year of the Dragon

January 23, 2012 1 comment

Water Dragon tiles

2012 is the Chinese year of the water dragon. One guide on what to expect for this year states that water dragons are equipped to step back and re-evaluate situations. They make smart decisions, but only if they do adequate research. Typically dragons are innovative, enterprising and flexible.

These skills are all essential for business planning and the start of the year is always a good time to consider plans for the rest of the year.

Business planning is an often-overlooked part of running a business – especially with small businesses. The cri-de-coeur “We are too busy to waste time on planning” may sound sensible, especially when recession beckons and every sale is required. However this is also a plan – in the sense that “failure to plan is planning to fail”.

My thoughts on business planning were aroused following a meeting with Jane Khedair of Business Plan Services. BPS has a network of advisors throughout the UK and English-Speaking world, who are trained at helping small businesses produce sensible business plans that should help guide them through the predicted rocky times ahead.

Business planning is a bit like going on a journey. You have a starting point, and a desired end-point with a range of routes to take you from the start to the finish. The key first stage in a business plan, of course, is to know exactly where you currently are – and that is where AWARE fits in. Our aim is to help clients understand their markets, competitors and general industry – looking at customers, suppliers, partners, competitors and the overall business environment.

The next stage is knowing where you want to end up – your objectives. That gives a target on which to work – developing approaches that should allow these objectives to be fulfilled. These become your strategies.

Setting objectives and strategies are a bit like route planning. There are multiple ways of travelling between London and Shanghai, China – and selecting  one will depend on the circumstances. Is speed essential, or is cost the key factor? In this example, the objective of travelling to China from a starting point at London should also include expected arrival time, for example.

You may also want to visualise the journey and even think about what you’ll do once you’ve arrived. Business objectives should also be quantifiable, with a target and deadline for when this should be achieved. In addition, it’s always a good idea to think about what the next steps should be once the target has been reached.

The travel options become the strategies. If the aim is to get to China within a day then going by plane may be the only strategy. Conversely if the aim is to see multiple locations on the way, then travelling overland would probably be a better strategy.

Photo by Colleen Curnutte, taken in Shanghai, China.

Welcome to Shanghai

The problem however is knowing when you’ve arrived, and your progress – so you also need to monitor these. In the London-Shanghai example, this may be as simple as noticing miles travelled, and spotting a “Welcome to Shanghai, China” sign on arrival. Effective business plans also set in place signposts so that progress can be monitored. It’s also important to have a contingency in place for if things go wrong – an accident on route, that would cause major delays.

Planning the right route for a journey is essential if you are to get to your destination on time and at a reasonable cost. Business planning should do the same. The difference is that there are no dragons chasing you on a journey, but there are in business – and failing to think about how to beat them may mean that they will win out against you.

Wishing you a great year of the water dragon, 2012. 萬事如意

Telling stories – fairy tales, case-studies & scenarios….

April 14, 2011 5 comments

Telling Stories - At the ICI/Atelis competitive intelligence conference that took place last week (April 6-7, 2011) in Bad Nauheim, Germany there was a panel discussion on story-telling as a method of reporting intelligence. At about the same time, the Association of Independent Information Professionals (AIIP) held their 25th annual conference in Vancouver, Washington in the USA. Mary-Ellen Bates described how stories can help information professionals market themselves by showing how their skills can solve client problems. The fact that both conferences looked at story-telling shows how businesses are adopting the technique as a way of addressing complex issues.

Story telling is an ancient art-form that might seem strange as a business tool. However, often stories will be an excellent approach for solving business questions as they allow people to look at a situation objectively, remove themselves from the scene and take an outside view. The trick is to tell the right story, catching the imagination and making people think. During the ICI / Atelis conference I suggested a framework for when different story styles can be used.

The first story type is the “fairy-tale” – the “Once Upon a Time in a Kingdom Far Away” type of story. Fairy-tales are possibly the most abstract example of a story that can be applicable to business. The danger is that they can be seen as childish and far-removed from real-world business realities. In fact, they can be a powerful way of highlighting deep-seated organisational problems, as management refusal to see such problems can be illustrated with stories. Such stories can help managers recognise their own situation, and so identify the problems and think of possible solutions.

Consider a company where the CEO or other senior management refuse to see that their business has changed.  Often such management grew up in the industry and believe that they know it inside out. Accepting that things have changed is anathema to them. A standard comment given by such managers when asked why things are done in a particular way is “We’ve always done it that way“. Essentially such management suffers from corporate denial – or what Ben Gilad called a business taboo in his book “Business Blindspots“.

Telling such managers a fairy-tale story can help them see the problem (assuming that you can arrange a session they will be willing to attend).

Once upon a time, in a far-away country there was a king who loved to sing. He loved to sing so much that he made laws that all his people were to learn his favourite songs.

Every Sunday, the people were to gather in the town squares and village greens and sing the songs the king loved.  The people were happy as they also loved the music and they prided themselves as being the most musical people in the world.

One day, a travelling minstrel sailed into the the kingdom from across the sea – singing a new song. Soon, children started to sing this new song, followed by their parents, and word reached the king that the people were no longer singing the king’s songs but were singing something different.

The king flew into a rage, and put the minstrel into a deep and dark dungeon. However this didn’t stop the minstrel singing – and soon the guards started to sing the new song. The king then made laws saying the new song lacked harmony, was discordant, and that anybody caught singing it would be severely punished.

Gradually the people became unhappier. They liked the new song and wanted to sing it along with the old songs. Instead they stopped singing – and the king got angrier and angrier that his songs were no longer being sung. He tried to force people to sing, but they just sang out-of-tune. He made new laws that said they had to sing on Sundays and Mondays, but found that lots of people said they’d lost their voices from singing so much and so couldn’t sing on Sundays or Mondays. And so the king also got unhappier as he no longer heard his songs being sung as in the past….

The basic lesson for a story such as this is to accept and embrace change – rejecting change is likely to be self-defeating. There are many companies and industries that fail in this – the music industry being a classic example, that lost out by refusing to recognise the impact of music downloading, Napster, iTunes and peer-to-peer file sharing. A fairy-story can help highlight the problems – although the solution will need to come from full discussion and management acceptance.

The second story-type is the traditional case-study. Case studies should be used where the organisation knows the problem, but not the solution. Finding the solution directly is difficult as management is too close to the situation. The case-study serves as a way of examining the problem dispassionately, by looking at a parallel situation involving a company or organisation, from another industry, or market. The aim is to analyse the problem and work out appropriate strategies to solve the problem and apply them to the real situation. The key for a case-study is to find one that matches the organisation’s problems. There is a vast bank of case-studies for a range of industries, topics and problems at the Case Study Clearing House.

A third story-type are future scenarios, generally generated as part of a scenario-planning exercise. Such stories attempt to answer “what if” questions by looking at external factors and their correlations and impacts, and then considering how these could play out in the future. It is essential that such scenarios are internally consistent and that there is a clear line of development from the current situation to the future scenario. This can then allow for strategies to be put in place that take into account what could happen. Such strategies need to be adaptable to changing situations and allow for organisations to prepare for any eventuality.

As a reporting approach, telling stories is one way of putting across ideas that stimulate the imagination, and so can help organisations develop strategies that lead to success. There is a common theme to all three story types: problem identification, its acceptance and the need for strategies to cope with change. They differ in their perspective on the world. The fairy-tale approach looks at understanding problems and overcoming blindspots that relate to the past imposing on the present; case studies look at solving present problems; scenarios are aimed at preparing organisations for the future.

Delicious humbug and monitoring News stories

December 20, 2010 Leave a comment

Effective competitive intelligence monitoring means keeping up with the news, and where news is likely to impact you, drawing up strategies to take into account changes.

The problem with instant news via twitter, blog posts and various other news feeds is that news updates sometimes happen too quickly, before the snow has even had a chance to settle. That’s fine – just so long as the source for the news is 100% reliable, and the news story itself is also totally accurate. (I’m using snow as a metaphor here – rather than the more normal dust – as outside there is around 15cm of the stuff with more promised during what looks like being the coldest winter in Europe for over 20 years).

Unfortunately, more often than not, one of these two aspects fails: the source may not be reliable, or the story may not be true, or may be only half-true. Typically however people pick up on the story and it spreads like wildfire (so not giving that snow a chance to settle before it gets melted all over the web).

An example of this has been taking place this last week – with numerous posts reporting the demise of the web-bookmarking service Delicious.

Delicious (originally located at http://del.icio.us) was founded in 2003 and acquired by Yahoo! in 2005. By 2008 (according to Wikipedia) it had over 5 million users and 180 million bookmarked URLs. This makes it an important source for web-searching as, unlike with a search engine such as Google or Bing, each URL will be human-validated and valued.

Apparently, during a strategy meeting held by Yahoo! looking at its products, Delicious was named as a “sunset” product.

Slide from Yahoo! strategy presentation - on plans for various products

An image of this slide was tweeted – and after Yahoo! failed to deny that Delicious was to be closed, posts quickly appeared denouncing the company for the decision. Nobody really cared that sites like AltaVista and AlltheWeb were going – as they were to all intents and purposes dead anyway. (Their search features have long been submerged into Yahoo!’s own – although I for one, still miss some of the advanced features these services offered. Alltheweb allowed searching of flash content, and AltaVista had a search option that nobody now offers: the ability to specify lower/upper case searches).

The problem is that many of the sources posting the story are normally extremely accurate and reliable so when they post something, it is reasonable to believe what they say. This then compounds the problem as the news then gets spread even further – and when the story is corrected, the news followers often fail to spot the corrections.

The example of Delicious is not isolated. There are many news stories that develop over time – and when making strategy decisions based on news it is important to take into account changes, but also not rush in, if a news item hasn’t been fully confirmed.

Ideally check the source – and if the source is a press item (or blog post) then look to see if there is a press release or where the original item came from, in case there is a bias, inaccuracy or mis-interpretation. Only when the news has been confirmed (or where there are no contra-indications) should strategy implementation take place (although of course, the planning stage should be considered immediately if the potential impact of the news is high).

In the case of Delicious their blog gives the real story. The slide leaked to twitter was correct – Delicious is viewed as a “Sunset” product. However that doesn’t mean it will be closed down – and Yahoo! states that they plan to sell the service rather than shut it down (although it is noticeable that they don’t promise to keep the service going if they fail to find a buyer).

There is, in fact, another lesson to be learned here, relating to company awareness on the impact of industry blogs and twitter. It is important to not only monitor what is said about your company, but also to anticipate what could be said.  In a world where governments can’t protect secrets being leaked via Wikileaks, it would be surprising if high-impact announcements from companies didn’t also leak out to industry watchers. Some companies constantly face leaks – Apple is notorious in this regard – and part of their strategies involve managing potential leaks before they do harm. In this Yahoo! failed. As a media company that depends on the web for its business this is a further example suggesting how Yahoo! seems to have lost its way. This is not negated by evidence such as the leaked slide mentioning Delicious, showing they are thinking about their future and product/service portfolio.

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