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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

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