Tag Archives: Strategic management

April 11, 2013 · 10:09 am

A Riff On Transformation From AI

I’m pretty sure that each of you has a guilty pleasure or two. One of mine is American Idol which, despite its diminished viewership and declining influence, is still the only singing competition that regularly puts out talent making hit recordings. Kelly Clarkson and Carrie Underwood are the two biggest musical names that also won but Jennifer Hudson, Chris Daughtry, and a slew of other musical names have come out of the show.

American Idol logo 2008–2011

(Photo credit: Wikipedia)

One of the things I enjoy most about the program, besides watching unknown singers turning into stars, are the times when a truly memorable performance occurs. Last night we had one and it actually made me think of an important business lesson.

Most of the really great performances on Idol have come when a singer takes a song and remakes it in his or her own style. Over the years, Adam Lambert took a Tears for Fears song (Mad World), slowed it down, and stripped the arrangement to feature his voice. Brilliant, although the fact that he sang it out of the park helped too! The year David Cook won, he transformed a song almost every week to make it his own. Last night, one of the contenders, a young woman named Candice Glover, did the same with The Cure’s “Love Song.” She performed Adele’s re-imagination of the song and took it to another level.  Which is exactly the business point.

While it’s hard to say, as does Ecclesiastes, that there’s nothing new under the sun (not in technology anyway), many of the best new products and services are transformed versions of things that have come before.  In some cases it’s optimizing a service or product for a digital world (for the digital voice, if you will).  In other cases, it’s transforming something altogether to make it better – mp3 players to iPhones are the most obvious examples but there are many others.

The lesson from Idol is that whatever you do, make it yours and make it spectacularly good.  Seems like some excellent business thinking as well.  You agree?

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April 4, 2013 · 11:11 am

Are You A Middleman?

I was having lunch yesterday with a business friend and he remarked on some new eyeglasses I’d recently bought.

eyeglasses

(Photo credit: Lynn Kelley Author)

I told him about the purchase process and how the next time I bought some new specs (these were an emergency purchase due to a misplaced foot) I’d be doing so online. I talked about Warby Parker and how they are selling high quality frames and lenses for under $100. I went on to talk about an article in the Times this week on how there were companies like W/P who are cutting out the middlemen in areas such as bedding (Crane and Canopy), office supplies (Poppin), nail polish (Julep), tech accessories (Monoprice), men’s shoes (Beckett Simonon) and shaving supplies (Harry’s).

As I drove back from lunch I thought about how that process really should raise a question for each of us and every business:  what value are we adding?  The reason the above companies are successful is that they’re offering the same high-quality products at lower prices by cutting several layers out of the business transaction.  Obviously, if the quality of the end-product remains the same, all of those layers were adding nothing of value but were adding to the costs.

Disintermediation is probably the biggest effect the internet has had over the last twenty years.  It’s not just in the retail chain either.  Video on demand services such as Netflix cut out the local video store.  The ability for program creators to access audiences directly has cut out distributors such as TV networks and even cable systems.  The easiest way for any of the middlemen to remain a part of the equation is for them to define the value they bring to the sale and make that value very apparent.  This is true, perhaps even more so, if you’re in a service business.

There is a tendency to think that the technology is simply making things more efficient.  If clarifying the value chain means “efficient” then I guess I agree.  If you are a middleman of any sort, you need to be doing that clarification yourself, both internally and externally.  Does that make sense?

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March 26, 2013 · 11:11 am

What’s Wrong With Small Ball?

We’re getting close to the start of baseball season. It’s always felt like a time of renewal – Spring has arrived (despite snow on opening day from time to time) and that’s a very good thing in my book. I grew up playing the game and it’s always intrigued me how baseball metaphors run throughout life here in the US of A.

Matt Wieters blocks home plate from Derek Jeter.

(Photo credit: Wikipedia)

One of the baseball terms on my mind these days is “small ball.” For those of you who are unfamiliar with the term, it refers to a strategy of getting men on base and advancing them through a series of hits or walks rather than placing an emphasis on home runs or big plays.  To me it’s a great business strategy these days and here is why. Business is filled with what I call “Rob Deers”.

In his prime, Rob Deer weighed about 210 and there were many seasons where he barely hit his weight.  Nevertheless, he was a valuable member of 5 different major league teams because he hit home runs.  A lot.  In fact, he would often appear as a league leader in both home runs and strike outs.  Go big or go home personified, I guess.  A lot of businesses think like Rob Deer.  They’re after the home run and while they might strike out a lot when they connect it’s a big win.  The problem with that is that there are also a lot of lean times in between.

I prefer to do business more like Derek Jeter.  Lead the league in hits and in runs scored.  That’s small ball personified.  Sure, hitting one over the wall is fun and almost everyone does that from time to time.  But unlike baseball, in business one isn’t assured of another game tomorrow if we don’t produce today.  Playing small ball in business isn’t heroic but it can be profitable.  The notion that it’s just as difficult to land a small order as it is to land a big one might be true but I’ve found that there are far fewer opportunities and far more competition as the size of the deal grows.

Don’t think for a minute this is about lowering standards.  It’s hard to play small ball well since it requires team work and a squad of folks who can hit the ball.  Managing that activity well requires someone special.  You?

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