Tag Archives: Strategic management

Tribute Bands And Your Business

Over the weekend I saw the Dark Star Orchestra. For those of you unfamiliar with the band, they’re one of the leading tribute bands out there and they play the music of The Grateful Dead. I’ve seen them several times and oddly enough each time I do it reminds me of a few business thoughts.

I played in several bands as I was growing up. We always felt we were a cover band. We were playing someone else’s songs but doing so in our own way. Most tribute bands go beyond that and attempt to recreate the sounds and often the appearance of the original artists. If you’re any sort of fan of The Dead you know that their performances were very hit or miss. The DSO is way more consistent and they sound just like The Dead on a great night each and every time. So what does this have to do with business?

I think imitation is more than just the sincerest form of flattery. I think in many ways it’s better than innovation despite the fact that we often hear of the “first mover advantage.” Innovation is great, but by not being first the flaws in the original product or service become way more clear. The fact that you’re building later lets you correct for those flaws and get beyond the original. That usually is something you can do much more cost-effectively too.

What do I mean? The iPod was not the first music player, just the most successful. Anyone who looks at Instagram knows both that they weren’t the first of their kind and that most of their “new” features these days come right from Snapchat. You could video chat someone long before Skype came around and Amazon was not the first retailer on the web. Each of those companies, and other such as Spotify and eBay, were not first movers. They were imitators – tribute bands if you will, who took the best of the pioneers and made it better.

Is it easier to get funding for a copycat? Probably – the business model has been proven and, therefore, investor risk is reduced. Japan, and now China, built economies on imitating successful products and making them better and/or cheaper. A tribute band has a pre-built fan base. If you’re a Beatles fan or an Oasis fan or a fan of The Band, you have no chance to see the original but you can spend a night with their music. If you’re a business, you don’t have to be the original if you can make the original better and capitalize on their fan base. The DSO do it brilliantly. Can you?

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Filed under Consulting, Music, Thinking Aloud

Dishing On The Holidays

As seems to happen so often after a decade of blogging, I find that a post I wrote some time ago says what I want to say today. Of course, it’s Foodie Friday and it’s also Good Friday, the start of the Easter weekend. This post, originally titled “Tsimmes,” captures the food and business themes. Enjoy the post, enjoy whatever holidays you celebrate, and enjoy the weekend!

This week’s Foodie Friday coincides with the start of Passover. As with most festivals of any religion, certain foods appear for the Seder that rarely show up at other times during the year. One of those is Tsimmis, a combination of sweet potatoes, dried fruit, and carrots. I use a recipe written down by my mother years ago (from her mother) and as with many family recipes it requires some interpretation and local knowledge. It calls for a “large can” of yams (how large exactly?), a box of prunes (which is how many ounces?) and a few other equally vague references. Of course, my inclination as a cook is to use fresh ingredients. Fresh sweet potato instead of canned, fresh carrots in place of the bag of frozen ones called for, etc. I don’t, however, and the reason why I don’t is a good business point too.

If I were to serve the dish made with fresh ingredients my family, who have been eating my mother’s recipe at seders for decades, would notice a difference.  Holidays are built around traditions and those traditions contain expectations.  Would the dish taste better?  Probably.  It would be more healthy as well – canned yams in syrup are not the best thing.  But the folks around that table aren’t looking for healthy or better.  They want the comfort of the familiar.

We often forget that in business as we’re always trying to make or products or services “better.”  History is littered with products that represent good companies making bad decisions by making the very familiar different.  New Coke, the Arch Deluxe burger, and others represent variants on successful products that seemed the same but resulted in an experience that didn’t match consumers’ expectations.  Of course we need to improve but we need to do so in a way that brings our customers along for the ride.  Presenting them with a dish that they expect to be one thing but which is very different probably isn’t going to have a great outcome.

It can be done.  Another Foodie Friday example.  After years of roasting turkeys for Thanksgiving I wanted to switch to frying them (it freed up my ovens, was quicker and they taste better too!).  I didn’t just switch them one year.  I did both and let the family come to their own conclusions.  My mother was able to answer her “darling, won’t they be very greasy?” question by comparing the methods side by side.  Now, we only fry.

As brands, we can cajole, request, and demonstrate.  We can’t impose.  We need to meet expectations with the dishes that live in their memories and for which they keep coming back.

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Filed under food, Thinking Aloud

The Road To Hell

English: McDonalds' sign in Harlem.

(Photo credit: Wikipedia)

Let’s end the week with a Foodie Friday screed about the embodiment of the old saying that “the road to hell is paved with good intentions.” To do so, I’m going to turn to one of our frequent subjects, McDonald’s.

While there are several ways the maxim can be interpreted, I’m focused on the meaning that even good intentions can bring about unintended consequences. That’s what happened when the fast-food king tried to improve things for their customers and, in so doing, made things a lot worse for their employees. As Bloomberg reported, the company is implementing new technology and pushing workers for faster delivery. While the intention is to help customers get in and out of the store quickly, the result is that it is breeding chaos in the stores as well as precipitating higher worker turnover. The unfamiliarity the staff has with the new systems, as well as the higher turnover, means that the food is actually taking longer to get served and drive-through times are increasing.

Another food example. Back in the 1970’s, catfish farmers introduced the Asian Carp into their breeding ponds. The idea was to keep the ponds clear of algae and plankton which would improve the health and quality of the catfish they were breeding. The carp, however, are aggressive and eat voraciously, eating up to 20% of their body weight in a day. They managed to escape the limited areas of the breeding ponds and have found their way to the Great Lakes via the Mississipi and Ohio Rivers where they are decimating native species of fish.

We have to consider even the most remote negative consequences as we put our well-intentioned plans in place. A zero-tolerance policy forbidding teachers from touching students? Great idea until a fight breaks out and teachers can’t step in. Putting a bounty on snakes to eliminate a health hazard? Wonderful, until people begin breeding snakes for the bounty (the Cobra Effect). In McDonald’s case, they had the best of intentions in reducing a friction point for their customers. They didn’t, however, fully consider the other possible consequences and that created a bit of a fail ultimately. Take the time to consider as many outcomes as you can and you’ll increase your chances of staying on the road to places other than hell.

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Filed under Consulting, food, Huh?

Who Are Those Guys?

I don’t know if you remember the classic film “Butch Cassidy And The Sundance Kid,” but I thought of it as I was reading this morning. Paul Newman and Robert Redford play the title characters who spend much of the movie being pursued by a group of men determined to bring them to justice. Every time they think they’re in the clear, the posse turns up again, at which point Newman or Redford asks “who are those guys?”

I suspect that a number of my former colleagues in television have had a similar experience over the last few years. I remember having one back in the 1990’s when ESPN became a major presence in sports. In the late 1980’s, we used to laugh about them at our TV sports sales meetings.  After all, even though the industry, spurred on by the 1984  Cable Act, was wiring the country like crazy, cable was barely in half the homes. Even as late as 1992, Springsteen told us there were 57 channels and nothing on.

Then BOOM. TV ratings started to dive and cable ratings started to climb. The peach baskets the broadcast networks used to stick out the window and fill up with money started to take a lot longer to fill up. Who were those guys? Well, we identified our competition and started to extract payments from cable carriers just as our cable brethren did. Things we different but more stable, and the broadcasters began buying the cable content providers.

Things continued to change. I’ll let the CEO of Turner (as quoted in Digiday) explain what happened next:

All of a sudden, our biggest competitors are no longer Disney, Fox, NBC, CBS and other networks; it’s these “digital companies” that are coming in and taking two-thirds of all digital ad revenues and 85 percent of the marginal growth in digital ad revenues.

Who are those guys? The point that any business can take away from the TV experience is this. Someone is always chasing you. You have something they want, whether it’s customers, market share, technology, data, or just plain attention. Like the posse, they’re going to be relentless. Unlike the posse, it’s never going to be the same guys all the time. You need to be attentive and take countermeasures, hopefully not like Butch and Sundance do by jumping off a cliff.

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Side Dishes

It’s Foodie Friday and today I’m inspired by a friend of mine who loves side dishes. Anytime a meal is discussed, the only question raised is “what are the sides?” Beef Wellington that took hours to prepare? Meh, but what kind of potatoes? You slaved for five hours over a perfect Bolognese Sauce? Interesting, but what veggies are we having?

I suspect that many of us think in an opposite manner. Side dishes are a throw-in – a starch of some sort, maybe some roasted veggies and a salad. When was the last time you just tossed a steak on the grill but worked for hours over perfect Pommes Dauphine? I suspect the next time will be the first since it’s much easier to put a bag of tater tots in the oven. Even when one goes to many restaurants, while the main proteins often have lengthy descriptions of each dish, the side dishes are generally just a listing of the vegetables and starches available.

I’m starting to pay a bit more attention to the sides. As it turns out, many businesses are too. What do I mean? Take the airlines. Originally, “ancillary revenues” such as baggage fees, change fees, advance boarding fees, and all of those horrible nickel and dime items the flying public hates were just side dishes. The main business was in filling seats. Today, airlines make over $80 Billion on these sidelines, and in many ways, they’re the entire profit center for the business. In other cases, what began as a side dish became the business. Groupon used to be an online fundraising site and only sold stuff as a sideline. Nintendo sold playing cards and making video games was a sideline. Twitter was a side project within a podcasting company called Odeo.

When was the last time you thought about the side dishes contained within your business? Maybe there are folks out there who love the sides more than the main and would be willing to skip the main altogether?

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Pay Me Now Or Pay Me Later

One thing that frustrates me is some folks’ inability to understand cost and value. There have been a few times over my last decade of consulting when that inability manifests itself in a particularly bad way. I’ve begun work with clients on more that one occasion where the client has spent a lot (in one case, close to a million dollars) of their seed money to build websites that didn’t accomplish what the client needed them to do. Most of the reason for this was that they hired the lowest-cost option. They failed to see that the value they needed was in their provider understanding the client’s business and delivering a solution that met the business requirements. Instead, they hired someone who made them a beautiful website that was fairly useless from a business perspective. That’s cost vs. value. They saved on cost and failed on value.

Startup companies are notoriously short of funds. Often the founders are working without pay and the thought of paying consultants, lawyers, accountants, and other professionals is anathema to them. That’s a big mistake. I worked with another startup that took intellectual property advice from “a friend who had done this before” instead of a lawyer. I noticed a potential problem with their name immediately but they were happy to go with their friend’s advice despite my asking about a legal opinion. As a result, once they launched their brand, they received a cease and desist letter informing them that they were infringing on another trademark. That resulted in a major depletion of their remaining funds to rebrand and to pay a lawyer to respond to the C&D. Cost vs. value in action.

What’s my point? If you’re venturing onto new grounds, hire some guides before you get lost. You’re going to be paying these professionals at some point and you might as well do so early on. Yes, it’s a cost you don’t think you can afford, but the value you receive can prevent very expensive mistakes and will ultimately save you money in the long run. Had I or any reasonably smart consultant been involved early, we would have talked about what analytics we needed from the website to make actionable business decisions before we worried about anything else. Every dollar spent on the site afterward would advance the business’ goals and not to making art rather than commerce.

Pay us now or pay us later. I think the sooner the better. You?

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New Greens, New Breaks

One of the first things you learn about writing is that you generally want to stick to writing “what you know.” That’s why things around here generally revolve around business, golf, and food. Sometimes those three things intersect (a bad food experience at an obviously failing snack bar on some golf course?) but generally I manage to get two of the three put together, and all the screeds have a business point to make.

Today, as is often the case on Mondays, something occurred to me on the golf course over the weekend. My home course replaced the greens last summer. We went from bent grass greens to Minverde Bermuda greens. I can hear your eyes rolling, but let me explain what that has meant and why it just might be meaningful to you and your business.

One thing with which many businesses are dealing, either directly or indirectly, is climate change. In the case of golf courses here in North Carolina, it’s meant that some strains of grass just can’t take the heat and clubs spend a lot of money trying to prevent them from dying. There are dead spots, root rot and massive fans that are installed near some greens which run up the power bill trying to cool down the grass that can’t take the heat. Our place lost parts of 5 greens two years ago. The takeaway is that you can believe or not believe in climate change but you can’t ignore the effects that whatever is going on is having. I don’t suspect you run a golf course, but you may stock seasonal items or have staffing needs that are weather-dependent and you can’t stick to the calendar as you once knew it.

That, however, isn’t my main point today. One of the other things that happened when they replaced the greens is that everything was different. The speed was different, the way the ball moved on the green was different, and the new greens were very hard, so you couldn’t land the ball where you used to because it would bounce and roll. The breaks (how the ball moved in response to the topography) were completely different, so all of the local knowledge you had was gone. I will tell you that it’s frustrating to have a putt you’ve made many times before suddenly not move as much as it once did. It is also difficult to train yourself to ignore the slope you know is there because you also know the ball isn’t moving the way it used to.

That sort of thing happens in your business. Things change and you can’t operate under your old belief system. I may believe the ball will move three feet left but on the new green, it barely moves. You may think to be on Main Street will assure you of foot traffic but when the new mall opens, your reality will be quite different. You need to do the best you can is reading the new terrain and adjust your thinking. Otherwise, you’re going to be missing the mark quite a bit, sort of like I did this weekend. New greens mean new breaks and that means a new look at everything you do. Make sense?

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Filed under Reality checks, Helpful Hints, Consulting