Tag Archives: Strategic management

Clear Headed

I’ve been MIA from this space for a few days (hopefully you’ve noticed). I caught some kind of a bug and it pretty much laid me out for a few days. Body aches, a little congestion, and a foggy brain. I had zero energy and just wanted to sleep. More importantly, I couldn’t really focus my thinking on anything.

This may come as a shock to you but I do put a fair amount of what I hope is clear-headed thought into the screed. While I might have been able to force myself to spend a lot of extra time to write something, I thought it a better course of (in)action just to give it a rest. I’m a big believer in doing nothing when one’s head is foggy and let me explain why.

“Foggy” to me just doesn’t mean the state I’ve been in over the last few days. Foggy is when things are unclear at all. It may be because you’re distracted or it may be because the information you need to make a decision is incomplete, unclear, or inadequate. Jason Day, for example, withdrew from a golf tournament a couple of weeks ago because he was distracted by the fact that his mom was having surgery (she’s fine) and he couldn’t focus. Rather than making bad decisions on the course, he made a great one and left it.

Each of us needs to think along the same lines. Sure, sometimes fuzzy logic is called for because we can’t get enough information. In and of itself, that’s a clear-headed decision you make. Oftentimes, however, anything from a cold to a hangover to a family matter to office politics can reduce or eliminate your ability to focus. Those are the times when we need more time because I don’t concur that a bad decision is always better than no decision.

What do you think?

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Filed under Helpful Hints, Consulting, What's Going On

The Margin Of Error

One bit of my old life as a broadcaster that I seem unable to leave behind is the ratings. TV ratings – and specifically those from Nielsen – are the currency of the TV ad business and billions of dollars of media are bought and sold based on these numbers. What caught my eye this morning was the reporting of last week’s late night ratings and the analysis connected to the report. The writer did a good job dissecting the numbers except that they conveniently failed to mention one thing that should be instructive to any of us in business: the margin of error.

English: Graph showing weekly Nielsen Ratings ...

(Photo credit: Wikipedia)

What the author failed to mention is that there was no statistical significance between the reported audiences in any of the numbers that Nielsen was reporting. Since the numbers discussed in the piece were Adult 18-49 numbers, the reporting is based on a subsample of Nielsen’s panel, meaning that the margin of error is wider than on all the ratings as a whole. While I don’t have a rating book in front of me, I know there always used to be a disclaimer in every book explaining that the numbers it contains are only accurate up to a point. They’re estimates. When we’re looking at number this small (and the late-night numbers are in tenths of a point), it’s just as possible that the network reported in third place could, in fact, have more viewers than the network reported as in first place.

The point here isn’t to denigrate the ratings system (I’ll save that for another screed). The point is to remind each of us that almost every piece of data that we look at needs to be taken in context and with appropriate disclaimers. What I find helpful is to pay attention to trends and not to absolutes. The only numbers without a margin of error are those pertaining to actual money received and actual money spent, and even those are generally only snapshots of a moment in time.

The next time someone comes to you with a data point, ask about the margin of error or about any factors that could affect that data. New visitors to your website are up? What percentage of people routinely delete cookies and, therefore, seem to be new when they’re not. App installs are up? How many people deleted the app last week, was that an increase, and could the new installs, in fact, be reinstalls? See what I mean?

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Filed under Consulting, Helpful Hints

How Do You Know?

There is an old joke about the greatest inventions of all time. The last one mentioned is the thermos, which can keep soup hot on a cold day and water cold on a hot day. When asked why that makes it the greatest invention of all time, the respondent asks “how does it know?”

You probably face that question all the time in your business. How do you know? More specifically, how can you be sure that you’re in touch with what your customers really want? Maybe you think as Steve Jobs did: customers don’t know what they want until you show them. Here’s the unfortunate truth: you’re not Steve. He may have had a wonderfully intuitive gift for understanding what it was that customers wanted (although there are several examples of him being wrong several times along the way) but you probably don’t.

We can’t spend our time in business finding solutions for problems that don’t exist nor can we build products for which there is no demand. You might not have heard of any companies that do that. The reason is that they’re out of business.

We need to listen to our customers and to the market. We don’t need to spend a lot of money to do so. Analytics are a form of listening and the data doesn’t lie. There are numerous free survey tools available. If you have social media presences (and what business doesn’t?), you are getting feedback on a regular basis, as you are if you have commenting turned on for your blog posts. Maybe you have listings on any number of review sites such as Yelp or TripAdvisor. Do you review those for insights into what it is your customers are thinking?

Make stuff people want. Fall in love with your customers and their needs and not with today’s version of what it is you’re offering. Move quickly to get closer to your customers’ ideal product. Ask them about things and listen to the answers. That’s how you know. OK?

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Filed under Consulting, Helpful Hints

Innovating On Top Of Imitating

Let’s start today with something written by someone significantly smarter about business than yours truly:

In spite of the extraordinary outpouring of totally and partially new products and new ways of doing things that we are witnessing today, by far the greatest flow of newness is not innovation at all. Rather, it is imitation. A simple look around us will, I think, quickly show that imitation is not only more abundant than innovation, but actually a much more prevalent road to business growth and profits.

Right? That wasn’t written recently, however. It’s from a piece written in 1966 for The Harvard Business Review by Theodore Levitt. If you’re a businessperson and you don’t know who he is you might want to do a little research. His classic piece Marketing Myopia has been one of the foundations upon which I base my business thinking. It argues that businesses will do better in the end if they concentrate on meeting customers’ needs rather than on selling products. Amen.

That’s not our topic today, however. What caught my eye was a piece about how What’sApp was imitating Snapchat‘s disappearing content feature that lets users share photos, videos, and GIFs that disappear after 24 hours. You might be aware that Instagram – also owned by Facebook – did the same copying last summer with Stories. Facebook itself is doing the same thing. In Snapchat it seems as if we have a company who innovates beautifully but does so in a way that simply blazes a trail that others follow shortly thereafter. Facebook, in this case, is the imitator. Apple is a classic imitator. They will let others innovate and learn from the success or failure of those innovations, refining them and making them better. One could argue that for a while, the entire Japanese manufacturing economy was based on that principle – innovative imitation.

As Professor Levitt wrote, there is nothing wrong with that. While every company needs to do some innovating, “no single company can afford even to try to be first in everything in its field. The costs are too great; and imagination, energy, and management know-how are too evenly distributed within industries.” The question for any of us is when do we need to dig deep and innovate vs. when should we be looking to what others are doing nicely and make it better? You might surprise yourself if you can put your business ego aside and focus on solving customers’ problems better than anyone else can, even if it’s just by doing innovating on top of imitating someone else. Clear?

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Filed under Consulting

It Just Works

I’m old enough and digital enough to have used the first IBM PC and VisiCalc. It wasn’t the easiest thing to use but it pretty much was the only thing. DOS led to other operating systems, primarily Windows, that enabled all of us to work more efficiently. Well, that is, unless we were busy figuring out why we couldn’t print or why we were suddenly deluged with pop-up ads via malware.

English: IBM Personal Computer model 5150 with...

(Photo credit: Wikipedia)

That was always the biggest appeal of Apple products to me. They just worked. My primary computer is a MacBook Air and the thought of going back to a Windows environment, no matter how good the reviews are on Windows 10, is dismaying. I’ve had to help friends with their Win10 issues and it certainly doesn’t “just work.” Then again, neither does my MacBook any longer. Sure, it’s nice that the OS upgrades every year (for free!) but I find myself diagnosing problems constantly now (wifi drops, SD cards being ejected at random, and more!).

My next computer will be a Chromebook; specifically a Chromebook with a touchscreen that can serve as a tablet. Chromebooks do just work. They are malware free. Think about how you work now. Most of it is probably via a web browser and in the cloud – my work certainly is for the most part. And they’re inexpensive – I can buy two decent Chromebooks for the price of a new MacBook or a touchscreen Windows machine. But what does this have to do with your business?

The bulk of customers wants that “it just works” experience no matter what you’re selling. They want their problems solved with the least hassle and for the best value. Notice I didn’t say for the lowest price. Just as there are high-end Chromebooks costing more than some Apple computers, so too is there a segment of buyer that want the high-end product and can afford to pay more if they perceive better quality, better service, or maybe a boost to their self-esteem (think luxury cars). But that’s not everyone.

If you want to brag about your computer’s specs then Chromebooks probably aren’t for you. Honestly, they’re not for everyone – you can’t do serious gaming or Photoshop or video editing. If you’re the type that likes to tweak your settings until they’re just right, you probably want to stick with something else. You need to think about your business in this context too. Are you for some very specialized, narrow audiences or are you for the bulk of the consumer base? If the latter, I’d suggest you focus on the “it just works” experience because history shows that’s how the best businesses succeed. You with me?

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Filed under Helpful Hints, Consulting, Thinking Aloud

There’s A Little Cafe…

Foodie Friday and we’re heading overseas this morning. To Vienna, specifically, where, as The Boss wrote about San Diego, “there’s a little cafe.” Now I don’t know if they “play guitars all night and all day” but I do know one thing they do. They charge customers who plug in their phones or laptops to recharge them. As the Reuters article on this quoted the owner:

Austria, Vienna, Hundertwasserhaus

Hundertwasserhaus (Photo credit: Wikipedia)

“Tourists – always electricity, electricity, electricity. Sorry but who is going to pay me for it?” said Pokorny, owner of the Terrassencafe in Hundertwasserhaus – located inside a colorful patchwork of apartments designed by artist and architect Friedensreich Hundertwasser. Customers who charge up during a 15-minute coffee can still do so for free, she said. An hour, however, is beyond the pale.

On the surface, a reasonable business practice, right? Electricity costs money, and if each of the outlets is in use most of the day incurring costs that aren’t built into the charge for the coffee, it seems reasonable to pass those costs on to the customers who incur them, right? Maybe, except for a couple of things.

First, someone figured out that it costs about $.84 (that’s 84 cents) to charge a smartphone for a year. That’s using an overnight charge but one can assume timewise that’s comparable to an outlet being in use for a full day. This cafe is charging customers 1 Euro (which is about $1.06 at the moment) if they plug in for more than 15 minutes. In other words, this is more of a profit center than the owner is letting on.

Put that aside. It not customer friendly. Cafe culture in Europe is about sitting and enjoying, not about grabbing a coffee to go. This owner knows that – she offers free wifi. Is it not part of the same welcoming, customer-centric mindset to offer free electricity as well? If your customers are sitting and enjoying, is it unreasonable for them to plug in and charge up while using the free wifi you offer?

I wrote earlier this week about misleading statements in marketing materials. Offering free wifi and charging for electricity feels as if it’s the same type of insult to your customer. Unless this cafe’s coffee is a cut above anything else nearby (and there is almost always decent coffee nearby in Europe), they’re being extremely short-sighted. If the coffee is that good, raise the price a few pennies to cover the cost of whatever electricity seems to be used. Don’t insult your customers by sending mixed messages or by nickel and diming them.

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Filed under food, Huh?

Unlimited Gall

You might be aware of the battle going on in the wireless provider space which revolves around “unlimited” service. Yes, I meant to put unlimited in quotes because as it turns out there is no such thing. I’ll explain the details in a second but what this represents is mirrored in other businesses too and is a ridiculous bit of anti-customer behavior in which none of us should engage. Let’s see what you think.

First, the phone war. Verizon and T-Mobile are the primary protagonists. Verizon announced it was bringing back unlimited data so you could stream video on your mobile device to your heart’s content. Of course, as one article reminded us, unlimited is actually not:

“Unlimited” data also continues to be a misnomer. If you use more than 22GB of data, Verizon may throttle your connection. You also only get the $80/month price if you sign up for Autopay. If you don’t, it will cost $85/month. While this includes the $20 fee for adding a line, it doesn’t include your phone’s payment plan, so if you want to pay monthly to buy a phone, it will cost more.

T-Mobile responded with changes to their own so-called unlimited data plan. While the plan was unlimited previously, it added on charges for video quality over 480p (that’s not great). It also charged you extra to use your phone as a high-speed (meaning 3G quality) hotspot. It slowed the data down before. In the new plan, those limits are gone but T-Mobile says subscribers who use more than 28GB of data in a given month may see their speeds reduced due to “prioritization” in congested areas. In short, using the word “unlimited” is crap. There are still limits, and if you’re a consumer you have the right to expect that there really aren’t.

The phone companies (and Sprint and AT&T aren’t much better) aren’t the only businesses that do a form of bait and switch. It’s no secret that what you’re quoted as an airfare is also only part of the story since there are fees for bags, boarding passes, seats, and just about anything else depending on your carrier. The airlines say the fees are optional. Yeah, sure. And pay the fee at the airport and there is a fee to pay the fee!

Ever buy tickets to a show online? Convenience (whose convenience?) fees, printing fees, etc. Ever book a hotel room? Resort fees, safe fees, service fees, and more. My bank charges my business account a monthly admin fee even though they make money off the money I have in the bank. My cable operator charges me for sports channels I can’t refuse to take.

All of this is a long-winded way of saying that businesses need to be upfront about their true costs to consumers or face a backlash when their dishonesty is discovered. I’d much rather know the true cost of something than to feel as if I’d been ripped off later. Wouldn’t you? Isn’t that how we need to treat our customers?

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Filed under Huh?, Reality checks, Thinking Aloud