Jan 11, 2011 | Customers, Innovation, Marketing, Social Media, Strategy
If I were managing a business in financial services, I would be asking myself if I had missed the second wave of the “net-boat” that is rapidly becoming a force in financial services.
Banks and other financial institutions have reduced their costs enormously by leveraging the capabilities of the net to receive and process payments electronically in developed countries, but even there, PayPal has carved a growing share of transactions, but more importantly, opened relationships with millions of customers who use the web for shopping. Just as the retailers missed the potential of consumers to use the web to seek the best prices, banks have allowed PayPal to build a customer base to pay for them.
In the developing world, millions are not serviced by the financial infrastructure of the developed world. predictably, alternatives are emerging, powered again by the web, and businesses that have no existing financial services infrastructure to protect, are able to move quickly to provide a cost effective and easy to use service to customers and potential customers not serviced by banks.
It is unlikely in my view that banks will become the recording companies of the early 2000’s and ignore the competitive threat until it is almost too late, but their influence, particularly in the developing world will be substantially diminished from what it could have been.
Jan 1, 2011 | Change, Management, Social Media, Strategy
20th century marketing tools have their place, in the 20th century; they will be progressively less effective as we progress through the 21st. Mass media, mass distribution, superficial differentiation, and all the rest are failing to excite in the 21st.
You need to do more than, not just more of.
Apple has done a great job over 30 years, and particularly the last 10 of engaging consumers, often to the point of illogical connection to and engagement with, the brand, and they have done it again with their “friend store” designed to ensure once you become an Apple user, you do not leave.
Contrast Apple to the boring, sterile, and just plain ordinary marketing executed by their competitors in computing, telephony, and music devices, and the value of “more than” becomes obvious. Apple in fact sells things that do not really fall into these simplistic manufacturing designated categories, they redefine the boundaries of their products, and the way they market by being committed and passionate, as well as different.
As you consider how to attack the challenges of the new year, think “more than” rather than just more of the same.
Dec 21, 2010 | Change, Leadership, Management, Marketing, Operations, Social Media, Strategy
It is that time of year, when we look back and try and understand the forces that have driven our decisions and behavior in the past year, and that will continue to have a potentially disruptive influence in the coming year.
In the spirit of the time, following is my list of the emergent forces that are shaping our world, in no particular order.
- Touchy-feely. Suddenly, the electronic devices we became used to using with keyboards became touchy! The iphone started it, followed by everything “I” and all its imitators. I cannot but wonder if this is an electronic substitute for the human contact, the physicality of it, that we have lost. The fact that it makes all this stuff easier is a side benefit.
- Global retailing becomes more than a cliché. For years we have been talking about the retail revolution driven by the globalisation of retailers, and the “e-retail” phenomenon stated by Amazon, and pushed by E-bay and now thousands of others. Suddenly in this Christmas retail season, the box retailers have woken up to the impact of e-retailing in categories other than music and books, as consumers buy clothing and footwear, electronic devices, furniture, white goods, and huge ranges of knick-knacks over the net, overseas, avoiding the distribution margins and tax collection function of the box retailers. This has all been facilitated by the advances in supply chain management driven by product codes and GPS powered by the net, and increasing confidence in net security and integrity of e-tailers.
- Net advertising rules. Advertising on the net will have overtaken TV as the biggest type of advertising by the middle of 2011. Broadcast advertising replaced by tightly targeted, 2 way communication with the capacity to evolve based on the immediacy of the interaction response and potential to engage on a personal level will continue to profoundly change the way we interact with brands and their marketers.
- Social media comes of age. No longer is social media the province of the under 20’s, it has become mainstream as grandparents connect to face book to see their scattered grandchildren, professionals connect via linked-in, twitter takes over as the first source of news of interest, then goes on to follow where the news leads rather than becoming chip wrapper the following day. Whilst this phenomenon appears to continue to grow exponentially, it does bother me a bit that it appears to be a substitute for the humanity of individual contact for many, and what we surrender in privacy and the richness of relationships with the few in favor of being “friends” with the many we will only know with the benefit of hindsight.
- The cloud rolled in. Over the course of 2010, the newest iteration of web 2.0 in the shape of cloud computing appears to have rolled in. Enterprise computing has suddenly evolved from servers inside a business with all the attendant costs and investment requirements, to having the potential to put all that stuff on the web have somebody else manage the IT whilst you just pay for the service, and improve productivity of those using the applications. I think we are just at the beginning of the revolutions that the cloud will bring.
- Data mining. The huge pools of data that are being accumulated by businesses, organisations and institutions offer the opportunity to be mined for all sorts of information about us, our behavior, frustrations, successes, and locations in ways not previously considered possible. This mining is starting, our ability to understand and predict outcomes across a wide range of situations and simulations of behavior and outcomes are becoming more accurate, based on the huge amounts of data being collected and analysed using emerging applications and technology capabilities.
- Crowdsourcing. Again, web 2.0 has enabled a revolution in the way we go about accumulating and leveraging information to serve an objective. In the past, R&D occurred in the confines of the labs and commercial departments of businesses, but R&D is rapidly being replaced by “E&S “, Experiment and Scale. If you have an idea, a problem, a hypothesis, it can be put to the crowd for comment, ideas and unconsidered alternatives. Linux started the trend, but in the last short period, it has been picked up by many who are seeking to push the boundaries quickly, and worry less about the IP involved, simply because IP is really pretty “sticky” in the sense that it does not necessarily work outside its environment.
- Two speed Australia. It really bothers me that around the traps I see all the symptoms of a recession in the trading activity, whilst the official numbers tell us that not only is all well, but it is booming. The non economist in me says that the cash in the joint is a result of digging up stuff and selling it to China, reaping short term rewards as demand has outstripped supply, surely the economic equivalent of a one trick pony!. Supply of mined commodities will increase dramatically over the next few years from Africa and South America, and then the prices we get will come back to the historical trend line, and meanwhile, we will have pissed away the benefits from mining, and when the crunch comes, when the super-cash injections of mining prosperity are over, it will become nasty indeed, before the official figures suggest to the superannuated pollies and bureaucrats that something in their beloved economic models is stuffed.
- Climate change is a reality, prepare to deal with it. Typically, the political responses will be way behind the commercial ones, so there is both opportunity and risk for all, and the only certainty is increased costs. What is unknown is how much costs will increase, how will that compare to our international competitors, how will they react to the changes, and when .
- All of the above urging re-regulation. Certainty in our lives has been removed by all this new stuff, then along comes the disturbing visions of long term food and water security around the world, followed by the GFC, and suddenly we want some certainty back, so there is a groundswell in favor of re-regulation of the things that delivered us prosperity after their de-regulation in the 70’s and 80’s. When you consider at the same time the economic and social impact of the rise of China and India, the picture gets cloudier. China is not about to de-regulate any time soon, keeping its ability to direct resources without the political concerns of re-election, the huge bureaucracy of India fighting a rear guard action to maintain its power, and we have the elements of some considerable disruption and conflict emerging as the “developed economies” struggle with the debt incurred supporting recurrent expenditure .
To the few dedicated readers of my blog, I wish you a great Christmas, and a prosperous 2011. I hope that my ravings have given you some food for thought, a contrarian view, and an occasional smirk amongst the urge to have me certified. Thanks for your support, feedback, and honesty.
Allen Roberts.
Dec 20, 2010 | Demand chains, Leadership, Lean, OE, Operations, Strategy
The next time you hear an argument that justifies moving Australian manufacturing to a low cost country in order to compete, refer to this post on the Evolving Excellence blog describing the work practices in a Toyota’s Kyushu plant.
Labor is much more than a pair of hands doing a repetitive job, it is an opportunity to improve processes and identify and solve problems before they can impact on the customer, or even the next bay in the production line.
It may be hard to get to this point in Australia, but you will have no chance of making the changes necessary in a contract manufacturers plant in a “low cost” country. The accountants will generate their numbers, which can be pretty persuasive until you recognise that they do not account for the things that make a difference in the market, or count the wasted time, emotion and energy in their “productivity” calculations.
When an abundant country like Australia becomes a net importer of food, we have a real structural and strategic challenges in our demand chains that urgently need to be met, and the sooner we recognise the scale of it, and do a bit more than just mouth platitudes, the better.
Nov 26, 2010 | Change, Collaboration, Communication, Social Media, Strategy
I am indebted to Alan Rustbridger, editor of the Guardian newspaper whose recent Andrew Olle lecture articulated many of the challenges facing traditional media owners as the new social media destroys their business model.
Among the gems in this lecture is a list of 15 uses of Twitter, as Alan says, it is far more than useless information on what Twits are having for breakfast, and should be considered for what it can do that has value, rather than just the nonsense accumulating in some places of its ecosystem, it is a disruption of the first order.
Here is an edited version of the list, with a few bits of my own thrown in, it is a fascinating view of a tool many over 50’s see as just a piece of nonsense our kids play with.
- It is an entirely new form of distribution, it may be 140 characters, but the power is in the linkages it can create
- It happens first. Then contributors to twitter, millions of them, have the power to be in the right place at the right time. News of the London bombings a few years back came in first from social media, predominantly twitter.
- It is a search engine, one that uses the algorithms of Google, and adds human curiosity, ingenuity, on top of the maths
- It is an aggregator of information. Set your tweet deck to a subject, and it will assemble the “wisdom of the crowd” to your device
- It is a reporting tool, that can find and communicate and co-ordinate knowledge, insight, and news, almost instantaneously
- It is a marketing tool of great power. Anyone can put a link to their website, alerting the community of followers, and others looking for info on a subject to the post, or information, and then encourage linkages. It is a tool that both drives traffic to a site, and can engage at the same time, the slam dunk of marketing.
- It is a series of parallel conversations, real conversations where you can agree, disagree, bring more information to the table, express ideas, and have views shaped, and it all happens in almost real time.
- It is a place where diverse voices can be heard, a place where the views of those who previously had no hope of being heard have the potential to find an audience
- It has changed the way the written word works. No longer are we as serious as we were in the days of “proper journalism” now we know much better the impact of pictures, humor, and diversity in the way we write
- It is a level playing field, anyone can be heard, no longer do you have to own a printing press or a TV station to get your message out there
- It has redefined what is and what is not news. No longer do we rely on a few editors curating what we see and hear, there are now thousands, millions out there putting stuff out into the ecosystem, and we can pick and choose which bits we pick up
- Twitter has a long attention span, much longer than a newspaper, whose headline today is wrapping paper tomorrow. Twitter can build, and build as more people become engaged, and bring information to the table for consideration, and as an argument evolves, move in directions and into spaces a 24 hour news cycle would never consider.
- It creates communities around thoughts, ideas, and causes.
- It changes our notion of authority, everyone is equal to start off, and it is the value of an idea or view that attracts authority, not the role played in an organisation that gives authority
- It is an agent of change, harnessing the power of collaboration, at potentially lightening speed.
Pretty good for a tool whose only redeeming feature was that is allowed us to find out what some wannabe celeb was doing right now!!
Nov 24, 2010 | Customers, Innovation, Marketing, Strategy
Most new products fail, and most of these failures are almost predictable, particularly in fast moving consumer markets, where the adage that “you need to be prepared to fail often to succeed sometimes” is regularly taken to irresponsible lengths.
Following is a simple 6 point checklist, developed by trial and error over 35 years in FMCG. Failure on any one parameter should be a “whoa” sign to you.
- Is the market real? Will consumers actually but it, and what will they buy it instead of, are there enough potential consumers to make the product viable?
- Does the product deliver superior value in some way to consumers that is visible to them, and capable of being communicated simply and clearly?
- Can the product be competitive in the market?, are the margins satisfactory? Can you afford the brand and channel expenditures? how will the existing category incumbents react, and what is your response?
- Can your business be competitive? Are the processes and infrastructure in place? Do you have the sales force capable of selling?
- What is the Risk/reward profile of the investment for you?
- Is the product and its service infrastructure aligned with your strategy?
Some effort in answering these questions should yield an increase in the success rate, they constitute a good hurdle in the NPD process before you go far past prototyping stages.
When you need a hand, give someone with the necessary experience a call, preferably me, but if not me, someone else you can trust.
