Nov 23, 2009 | Innovation, Marketing, Strategy
The evolution of the commercial and legal frameworks within which we live has left us with the notion of the firm as a legal entity, responsible for its debts, its own destiny, and to its owners for a return on the capital risked to fund activities.
In all those capacities, a firm is like a person, but unlike a person, who has an existence as a result of its parents, a firm does not live in the abstract without a value proposition to customers.
Firms grow and prosper only while their products are in some way superior to those of their competitors, and when the products become stale, so do their prospects of success.
This simple fact of life should drive the innovation efforts in all businesses. As the guru Peter Drucker once said, “the only competitive advantage that is sustainable is the ability to out-innovate competitors”
Nov 8, 2009 | Leadership, Management, Strategy
Various expressions of the basis for an organsations existence, Vision, Mission, Purpose, and others, all have different meanings, and certainly different meanings to different people, and have all been misused for years.
Some time ago running an agricultural industry workshop, very early in the proceedings, a bloke down the back piped up & said ” If I have to hear another vision, or mission, I will puke”(or words to that effect). Stopped the conversation cold for a bit, but the comment reflected the simple fact that these expressions have become clichés.
Having an unambiguous expression of why you are here, and the purpose of the business, gives a context to decisions all stake holders make about what they can expect, what is important and why, and what they have to learn, and do better, or more of. It provides a connection between all of the competing agendas and priorities with the simple question: “how will this assist to achieve the purpose of the business?”
Answering that apparently simple question ” why are we here” can be very difficult, but it is worth the effort.
Nov 5, 2009 | Demand chains, Leadership, Strategy
Suddenly, post GFC, transparency has become a buzz-word.
Regulators are calling for “transparency” in financial products, shareholders (and regulators supposedly on their behalf) are calling for “transparency” in executive remuneration schemes, and so on.
Those of us who have been building demand chains know that transparency is a fundamental building block, not because it is just a feel good, but because it reduces transaction costs, exposed arbitrage profits, and enables the needs of the end customer to be the driver in the chain.
From the noise coming from newly enthused regulators, you would think they have discovered something new, rather than just catching up with the practices of a small but growing part of the commercial community that has recognised the contribution transparency can make to their economic and competitive sustainability.
Oct 29, 2009 | Branding, Marketing, Strategy
Politicians on both sides of Australian politics are calling for a “narrative” to describe the values that the electorate should hold dear, particularly advocating a set of values that happen to be consistent with theirs, and their particular brand of politics.
What they appear to mean is that their political “brand” has run out of petrol, and they need something to give it some substance, now!.
Unfortunately, they do not understand that a brand is an expression of values, behaviors, and performance over a long period, and however hard they might try, putting lipstick on a bulldog does not give you a poodle, just a bulldog with lipstick, unlikely to be a pretty sight.
Much better to define what they stand for, take the knocks that will come from those who disagree, but consistently articulate a set of values through which they see the world and its vagaries. Only by that means, over a reasonable time, will they stand for something that the voting punters feel they can rely on. That then becomes their “narrative”, no different to building a commercial brand, and just as hard, except that they are not using their own money to do it, which perhaps is the reason they are so poor at it.
Oct 26, 2009 | Leadership, Management, Marketing, Strategy
Remember your history teachers, one who just had you remembering the dates of events, hard work remembering, and why bother anyway, but what about the one who told you about the people, and engaged you with the stories around the dates and events? It became easy to remember the details because you had the human stuff that went with it.
Building brands is the same thing, don’t just give out the facts, provide the stories that go with the facts, the human dimension.
Businesses have the same challenge when they set out to build a culture, it does not happen overnight, but when the stories that reinforce the culture are told, and celebrated, the behavior becomes embedded over time.
Building a brand, or a corporate culture takes persistence and consistency, and is a task that is never completed, just a work in progress.
Oct 8, 2009 | Management, Small business, Strategy
As we appear to be coming out of the worst of the downturn, as highlighted by the .25% increase in the prime rate day before yesterday, it would be a mistake to think that the good times are back without trying to learn from the pain of the last 18 months.
Across my little group of clients, a number of things are clear:
- Cash is king, and will remain so for some time. If you have it, great opportunities will arise, if you do not have it, life is very difficult indeed.
- Customers buy on price unless there is a compelling, relevant, and engaging value story attached to your product. Where that story exists, price is not an issue. The middle ground appears to have been significantly eroded, never was branding so important, and at the other end of the spectrum, without a brand, you need to be the lowest cost supplier to survive, and there is always someone who is about to supplant you as the lowest cost supplier.
- It is uncertain how the government stimulus package will impact over the coming months. Confidence appears to be pretty fragile, and looming are the political difficulties inherent in pulling back on announced initiatives, alongside the difficulties of a ballooning deficit. Do not rely on the public stimulus as anything more than a transient, one-off cash generator.
- Information moves at the speed of the mouse, and is totally insensitive to your situation. Spin is easily recognised for what it is, and attracts the cynical response we all think it deserves, and good news or bad, your opportunity to manage it is greatly reduced, so you better be under-promising & over-delivering, or you will find yourself left on the shelf.
- Creativity and innovation were never more important, being like everyone else is a recipe for a slow commercial suffocation.
- Focus on fewer things, and make sure they are strategically the key items. Focus makes everything you need to do easier to execute, but it is very hard to stop being attracted by the siren song of expediency. Resist the temptation, remembering the old adage that if it sounds too good to be true, it probably is.
