Tag Archives: Strategic management

Playing The Long Game

One of my favorite movies is The Sting. It’s the story of how two men run a long con. That, as defined by The Urban Dictionary, is:

A con-job that requires a certain amount of effort and as a namesake, is usually in it for the long haul. Gaining someone’s trust for a number of months and then when the stake is in your court and you have their complete trust–taking advantage of it. Usually denotes relationship status or high-level business partnerships.

In less evil terms, the protagonists are playing the long game. They are less focused on short term success as they keep their eyes on the rich reward gained over the long term. I’m a big believer in playing the long game, both in business and in life. Let’s address the business part here.

English: Marshmallows

(Photo credit: Wikipedia)

The folks at MIT‘/Sloane did a study about the digital maturity of various businesses. One thing that they found to be true of digitally mature organizations was:

Their strategic planning horizons are consistently longer than those of less digitally mature organizations, with nearly 30% looking out five years or more versus only 13% for the least digitally mature organizations. Their digital strategies focus on both technology and core business capabilities.

I’m always surprised at how many organizations have a short-term focus and which then wonder why they’re not gaining on their long-term goals. I’m not advocating spending time creating a 10-year plan or even a 5-year plan. I think seeing that far over the horizon is pretty much impossible in these times of rapid change. But I do think every business needs to have some long-term goals and a focus on meeting them while ignoring some of the short-term things that might cloud your vision.

Maybe you’ve heard of The Marshmallow Experiment. A researcher put young children in a room with a marshmallow for 15 minutes, telling the kids that they would get a second marshmallow if the first was still there when the researcher returned. What’s interesting about this is that the researcher did follow up studies with the kids over the next 40 years. He found that the kids who chose to delay gratification (and get a second marshmallow!) did better in life. They had higher SAT scores, lower obesity, better social skills, and lower levels of substance abuse. They were playing the long game, even at 5. Are you?

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Filed under Helpful Hints, Consulting

Eclipsing Our Sun

By now you’ve probably heard that there will be a total solar eclipse in two weeks (August 21).  This will be the first total solar eclipse (when the moon moves directly between Earth and the sun) visible in the United States in nearly four decades.

English: Total Solar eclipse 1999 in France. *...

(Wikipedia)

During the eclipse, the 70-mile-wide shadow cast by the moon will darken the skies from Oregon to South Carolina, according to Space.com. What makes this eclipse notable is how accessible it will be to many people since the path of most total eclipses falls over water or unpopulated regions of the planet. This event will go down as the first total solar eclipse whose path of totality stays completely in the United States since 1776. Too bad it didn’t happen on July 4!

Total solar eclipses supposedly have happened at notable times in history. Jesus’ crucifixion, Mohammed‘s birth, and King Henry I‘s death all coincided with a total eclipse. I’m not here to speculate on why those or other events happened simultaneously with a disruption in the Sun’s presence. Instead, I want to focus on a business thought that came to me as I thought about other effects an eclipse has.

When we fall into the moon’s shadow, birds think it’s night and stop chirping, the temperature falls, and things not usually visible become clear. The Sun’s corona, which is the Sun’s upper atmosphere, is clearly visible, as are many stars and planets often obscured at night by moonlight or all the lights turned on automatically on the ground. If you look around you, you might even see a 360-degree sunset as well. What does this have to do with business?

We all have our business “sun.” It might be our process, it might be our boss or coworkers, it might be the favorite customers that illuminate our days, provide warmth, and make survival possible, Every once in a while, however, it’s not a bad idea to precipitate an eclipse of some sort. As with the upcoming event, doing so will often make things visible that your business sun obscures. Maybe your reliance on that sun or suns is stopping you from seeing things about them or opportunities beyond them. What do you think?

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Filed under Thinking Aloud, What's Going On

Nobody Knows Anything

I’m going to start the week by running the risk of bumming you out. At least we’ll have the rest of the week to recover, right? I was looking at some analytics data this morning and as I looked at it, I realized that much of it is wrong. So is a lot of the other information this client is using to make decisions. Yours is too, by the way. I’ll explain why but along with the realization came an insight that I think will be helpful to your business.

When I began in digital we used server logs to track traffic. They were pretty accurate although pretty limited as well. Web analytics came along and the quantity and quality of the information we got about who was coming to our web sites, how they got there, and what they were doing improved quite a bit. As business people, we were able to make content and marketing decisions based on the data we were getting.

Things have grown quite a bit more complex over the last 20 years and that complexity has obscured much of the good, useful information. Anyone who knows analytics will tell you that much of the referral data you see (where traffic comes from) is wrong. “Direct” traffic is way overstated. “Referred” traffic is encumbered by referrer spam. A lot of so called direct traffic is really dark social traffic (I send you a link). Transfers from HTTPS to HTTP sites report as direct as well. Keyword data is “not available.”

I’m not trying to make your head hurt nor to get really wonky. The point is that if you’re relying on that data to make decisions, you’re really just guessing. It’s the same with much of your ad data. I’ve written before about the lack of transparency in the programmatic ad markets and that opaqueness obscures the validity of the data as well.

I can add search data, email data, and more to the list of what probably isn’t what you think it is, but all of this fostered a thought: what do we really know that’s truly actionable?

I can answer that. We can know how our products and services are really differentiated and how much better we are at solving peoples’ problems. We can know (yay review sites!) how good our customer service is. We can know how our revenues and costs and changing and we can ask why.

I’m the last guy to say we should ignore that large and growing amount of data every business gets each minute. But maybe the time has come to act on what we KNOW and less on what we really don’t. What do you think?

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Filed under Consulting, Helpful Hints, Huh?, Reality checks

All Kitted Out

There is a relatively recent phenomenon in the food world which is our topic this Foodie Friday. I’m talking about the explosion of companies offering food kits. Blue Apron, Plated, Hello Fresh, and others have been joined by Amazon in offering up boxes of already measured and portioned ingredients along with the recipes that tell the cook how to combine and cook everything to create a meal. For busy people, not having to shop for ingredients or to research and think about recipes is a godsend. That said, there are several things I find wrong with meal kits and they just might be helpful as you think about your business as well.

I’ve tried Blue Apron. The food was pretty good and the quality of the ingredients was better than I expected. Not having to shop or to think about what I was making (once I’d chosen the meal from the website) saved time. That said, a less experienced cook wouldn’t really have been able to save much time. You still need to chop vegetables (although I know some kits have them pre-chopped – not great for flavor or texture!). You still need to be able to interpret the recipe and follow the instructions (which contain cooking terms inexperienced people might not quite grasp). And they’re not cheap: $10 per meal per person is generally a lot more than most people spend per portion on home-cooked meals.

The real issue I have is that you’re trying to change habits. How so? Many people dread going to the supermarket but most of the better cooks I know relish shopping. I know that many supermarkets now offer a service where you can shop online and the store will fill your order either for pickup or delivery. I’ve never used them because I’m picky about produce and I’m always looking for opportunistic specials to plan a menu around. That experience is taken away with these kits. You can’t keep them either. Like many folks, I’ll buy ingredients and when my plans change, I can freeze the proteins for later. That doesn’t really work here.

The people who don’t cook don’t do so because they either don’t know how or they don’t like it. They find recipes with more than three steps complicated (these kits often are a lot more). They’re slow – I can chop an onion in under 30 seconds. It might take an inexperienced cook a few minutes. They don’t have tools that make the jobs easier: sharp knives, the right pots and pans, a decent stove, etc. Meal kits don’t solve any of those things as they try to change people’s habits.

Pay more, save time shopping, and worry less doesn’t solve the basic problem: people don’t like to cook and this is an expensive program that doesn’t solve that problem. In addition, you’re adding another issue: managing the subscription online. And customers seem to be finding that as well. Blue Apron reported that customer retention is their number one issue. Business Insider reported that:

According to a new poll by Morning Consult and Money Magazine, 49% of respondents who canceled a meal kit service cited the cost as the biggest reason for their cancellation…Not liking the recipes (13%) and unavailability in their area (15%) were the second biggest factors for those who canceled their service and those who have never tried a meal kit service.

As we try to solve consumer’s problems we need to be sure we’re actually doing so, and doing so in a way that doesn’t create other problems. I’m not sure that meal kits meet that test. You?

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Filed under Consulting, food

Death By 1,000 Cuts

When I was in the TV business, the most sought-after demographic was always young adults. While they often weren’t the key to the heaviest volume of product sales, it’s when we’re young that we build consumption habits and establish brand loyalty. Let’s keep that in mind as we look at some recent trends in media.

You’re probably not surprised to hear that cord-cutting – consumers ditching their cable or satellite TV subscription in favor of streaming and.or over the air services – has continued to accelerate. As the Techdirt blog reported:

MoffettNathanson analyst Craig Moffett has noted that 2016’s 1.7% decline in traditional cable TV viewers was the biggest cord cutting acceleration on record. SNL Kagan agrees, noting that traditional pay-TV providers lost around 1.9 million traditional cable subscribers. That was notably worse than the 1.1 million net subscriber loss seen last year.

They also noted that those numbers don’t tell the entire – and much worse – story. Those numbers report those who canceled an existing subscription. When you take into account the youngsters moving out of their parents’ houses or graduating from college and forming their own household for the first time, there are around another million “cord nevers” who are missed sales by the traditional cable and satellite providers. It really doesn’t matter what business you’re in. When you stop attracting younger consumers, you have a problem.

Why is this happening and how can we learn from it in any business? Techcrunch, reporting on a TiVo study, said that:

The majority of consumers in the U.S. and Canada are no longer interested in hefty pay TV packages filled with channels they don’t watch. According to a new study from TiVo out this morning, 77.3 percent now want “a la carte” TV service – meaning, they want to only pay for the channels they actually watch. And they’re not willing to pay too much for this so-called “skinny bundle,” TiVo found. The average price a U.S. consumer will pay for access to the top 20 channels is $28.31 – a figure that’s dropped by 14 percent over the past two quarters.

There is also the matter of convenience and personalization. Netflix, Amazon, and other streaming services do a great job in making recommendations and offering you programming based on your viewing habits. Has your cable operator done that for you lately?

We can learn from this. Cable operators who focus on broadband and “throw in” the TV offerings aren’t doing much better than those who don’t, since the overall out of pocket is sullied by broadband caps and other, often hidden, price increases that help the bottom line but only prolong the inevitable. It also just makes it easier for a lower-priced competitor to enter the market. I know enough about how the TV business works to recognize the issues with skinny bundles (it’s hard to offer channels on an ala carte basis due to contractual restrictions). We’re seeing more and more offerings that bundle channels outside of the traditional providers and that’s going to exacerbate the aforementioned trends as well.

What’s needed is a rethinking of the business model. Getting local governments to preclude more broadband competition isn’t a long-term solution (look at the wireless business!) nor it is the “free and open market” to which most businesspeople pay homage. Listen to your consumers and give them what they want, especially the young ones. Cord cutting isn’t some far off fantasy that naysayers have dreamt up. It’s here, and it’s killing you by 1,000 cuts. The rest of us can learn from this and, hopefully, not make some of the same mistakes. You agree?

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Filed under digital media, Reality checks

Learning From The Apocalypse

While you’re probably aware of the loss of jobs in the coal mining sector, you might not have been paying attention to what’s going on in retail. Department stores alone have lost 18 times the number of jobs when compared with coal miners since 2001. That doesn’t include all the smaller players that have gone out of business nor the number of jobs lost among those who are support people at shopping malls – cleaners, etc. The term you see most often as you begin to research this topic is “apocalypse.” If you’re in the media business, the music business, or many others, you might think of it as just another incidence of disruption.

Inside an abandoned mall in Allen, Texas. The ...

(Photo credit: Wikipedia)

One of the most disturbing things I’ve read recently was as study by GetApp, which reported that

Two out of three business owners who currently run both an online and physical store believe that they will close their physical store’s doors within ten years and operate their business solely online, according to new research conducted by GetApp.

In fact, there were over 3,500 store closings from Macy’s, JCPenney, K-Mart, and others this year. It’s happening because of technology and globalization. Ask yourself when the last time you went to the mall to go shopping. The only times I’ve been have been when I needed something in my hands immediately, and even that reason is being addressed by Amazon and others. It’s not going to get better, either.

So what do you do if you’ve invested millions of dollars building malls or other large retail spaces? That’s really the situation many businesses find themselves in. Not with respect to owning physical space but in having to expand their thinking. Landlords who thought of themselves as containers for retail are now having to think about servicing a different clientele. Churches, movie theaters, medical offices, gyms, and other tenants can move in while others move out. I drove through what used to be an outlet mall this weekend, and while it was pretty deserted (and kind of depressing), there appeared to be a couple of small start-up companies who had leased space. I’m wondering if the space was less expensive than comparable space in one of the many start-up hotels that have popped up seemingly everywhere. Of course, servicing these other tenants will require a different set of services and skills but that’s what disruption breeds, isn’t it?

The retail apocalypse is just one manifestation of what’s been happening for the last 25 years. Every business is ripe for disruption and it’s really a case of how far along it is in the process. The real question is how prepared are you as it’s happening?

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Filed under Thinking Aloud, What's Going On

It’s Time For Brunch!

It’s Foodie Friday and the topic this week is brunch. You might not have noticed, but having breakfast late is a thing. In fact, many restaurants are adding a specific brunch menu while all-day breakfast has contributed mightily to McDonald’s improved financial results. Consumer research shows the growth of brunch service in restaurants around the country as customers enjoy breakfast foods all day and night long.

Mid-City New Orleans: Brunch at the Ruby Slipp...

(Photo credit: Wikipedia)

According to its 2017 MenuTrends report, Datassential reveals brunch was available at 4.9 percent of all chain and independent restaurants in the United States in 2016, compared to 2.0 percent of restaurants ten years prior. Over the past four years (2012-2016), brunch service in U.S. restaurants increased by 43.5 percent.

In other words, restaurants are catering (pun intended) to the desires of their customers for breakfast foods around the clock. I’m willing to bet your local diner has always served breakfast all day so this isn’t exactly a surprise or huge innovation. What is an interesting development is how many places have responded and added a brunch or all day breakfast menu.

Contrast this with a place I know that opened as a casual lunch business, got great reviews, but not enough business. The owner didn’t want to change his business hours to include early supper to take advantage of the increased foot traffic in the neighborhood after 5. He wasn’t able to make a go of it. The flaw wasn’t the food or the service or even the location. It was in not responding to the realities of the market and the opportunities those realities presented.

Your business might be making similar mistakes. What are your customers telling you? What are market trends showing? It may be overly simplistic, but if customers are enjoying breakfast foods all day long, your job, if you’re in the breakfast business at least part of the day, is to serve them all day as well. You can fight your competitors but you can’t fight your customers’ tastes! Make sense?

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Filed under food, Helpful Hints