‘That’s not going to happen here’. This is one of the claims I hear a lot here in Mexico, whatever trends are happening elsewhere are not going to happen here anytime soon.

They talks as if Mexico were isolated from the rest of the trends of society. First of all if you’re in a country where there’s internet access, you’re going to be affected sooner than later. Saying ‘that’s not going to happen’ here is a clear signal that you or your organization has no point of view whatsoever about the future, you have a no-sight trap. You merely react to what happens, and by that time you’re way behind the times. Also by design, all your strategies will be copycats of others because your point of view stands for nothing more of the same. That’s why it’s important to have your own point of view instead of participating in mindless copycatting and doing what the guy next door does.

Another way to look at this is to do what the ‘it’s not going to happen here’ club won’t do, if they think it’s going to take 5 years for a trend to be adopted here then why not start exploiting it before they do?

The only thing stopping you from doing that is your own point of view, so ask yourself: what’s our point of view about this trend and how can we exploit it before others do?

Standing for nothing more than the same has no value in a world where anyone can copycat successful business models in a couple of months. And most successful business models are increasingly exploiting digital technologies to their benefit.

In countries like Mexico, new ways of doing business don’t get adopted until very late in the game (years later!) where the approach has been turned into a winning algorithm by someone else on another part of the world (See Groupon). Being the first to market doesn’t mean you’ll win the game, building a better business model does. And this depends more on a unique insight you found that feeds your point of view and not someone else’s.

Saying that a certain trend won’t affect you is really saying that you and organization don’t care if you become irrelevant. Your role in the future is simply not important. Why not increase the rate of change where you are and force your competitors to adopt to you? Why not shape the ecosystem and position yourself as the apex? Why wait?

Like I told a friend recently, all it takes for things to change is for someone somewhere to start acting differently. If someone has the ‘cojones’ to take on the culture challenge, has a vision (POV) and is committed to progress then you will see a transformation sooner than later. Then again this might not happen either, and the system will remain stuck until someone does something about it. Why wait?

Think about how you can start exploiting trends right now and not wait until someone else figures it out. Build your own point of view, don’t buy it from someone else.

Competition in industries is essentially competition between business models. A recent tweet by @TimKastelle which led to a post about the evolution of the business model concept reminded me of a great creative exercise to help you look at your and other industries dominant business model as a lego kit, which when broken apart can be reconnected like building blocks to create new types of business concepts.

Here’s how it would go:

First you start by thinking about the trends that are happening in the world and how they affect your industry, your business and your customers. You then look at different industries where incumbents are being disrupted (at least trying to!) by startups who are already taking advantage of these trends. Let’s take two trends that are making an impact in several business arenas right now: Crowdsourcing and game mechanics.

Here’s an example how this might look like:

Game Mechanics are being talked about tirelessly right now from a technological and marketing perspective for their ability to create customer engagement, as illustrated by Foursquare and Groupon. As for crowdsourcing, it has become Threadless’s core business strategy by letting their community create t-shirts with their own designs that if become popular, can be sold and they get to make money.

Now that we have to two examples we can start by asking questions:

What if we made game mechanics part of how our business is run instead of treating it like a marketing tactic? What if we made it core to our business strategy? How would we create value? What if our customers had a say at the boardroom table about how our business in run? What if we co-created our business with them? How would value be created and what would it mean for them and for us?

Equipped with curious thoughts it’s now time to go into discovery mode and look for businesses who have designed their business strategy around both trends and are playing by a different set of rules. Take for example 4Food, a NY based restaurant that turns lunch into a social networking game with the use of both game mechanics and crowdsourcing. Here’s how the NY Times explains it:

Customers start by going to 4food.com, where they can build a burger. There’s a list of options to choose from, including the type of burger bun,  a beef, turkey, veggie or salmon patty, condiments and more.

This is also why the burgers are shaped like doughnuts: customers are asked to pick a “scoop,” which goes into the middle of the burger, from options like avocado and chili mango, baked beans or mac and cheese.

Once you place your order, you can give it a name and off you go to pick it up. And this is where the game aspect comes in. 4Food has a leaderboard that shows the most-ordered burger. That turns it into a social networking food game.

Here’s how it works: I create a burger, call it “The Bits Burger” and broadcast it to Twitter or Facebook. Each time someone orders my special creation, I get 25 cents credit in the restaurant and my burger rises up the leaderboard. The more customers order my burger, the higher it goes and the more credits I get, until I’m eating free.

If we were to look at the business model for 4Food it might look something like this:

• Who are our customers?
  Digitally connected individuals who are between 18-35 years old that use Facebook, Twitter and Foursquare on a daily basis.
• What products or services do we sell?
  DIY hamburgers.
• What distribution channels do we use?
  Internet website and any device connected to the internet that has a internet browser.
• What do we charge our customers for?
  Small cost of burger, plus fries and drinks.
• How are we different from competitors?
  A customer can potentially eat for free if his creation gets ordered enough times.

As you can see, 4Food’s business model is entirely different from traditional restaurants. Incumbents will have a hard time trying to replicate it themselves as it requires them to abandon the status quo. This is what happens when different trends converge and an opportunistic entrepreneur sees a connection between them for an interesting new business concept. And that is what this exercise is all about, seeing connections from a holistic point of view.

The above example is fairly simplistic for practical purposes, there’s much more to it than just cherry picking but the basic ideas are:

Look outside your industry

If you look around the web, startups are designing their business models around not just one trend but many that when combined can alter the rules of the game or create a new industry as is the case with Foursquare. When looking to innovate it’s useful to look outside your industry for ideas, that’s why I chose 4Food. Because restaurants are a traditional business and haven’t changed much in decades, 4Food presents an extreme look at what the future might hold for that industry.

Create a new Lego Kit

Now you may be asking but what about me? It’s time to play make believe and take parts of the exemplary businesses business model and apply it to your own. Treat every component of the business model as as separate (for a holistic look use the Business Model Canvas), and create scenarios about how that might look. It’s like looking at other businesses like part of a Lego Set and then taking them apart and combining them in different ways.

Insights, insights, insights

The point of this exercise is to look for insights by asking ‘what works?’ ‘who’s done it?’ and ‘how can we do it?’ and then imagining how it might look.

What do you think? I look forward to hearing your thoughts!

These pictures are from the border crossing between San Ysidro and Tijuana. This is Tijuana a few steps after you cross the border and this building is full of auto import agencies. There’s 18 of them and they all sell the same stuff, advertise the same way, operate the same way and talk the same way. The only recognizable difference between them is the name of their business, the font they use and the colors. Is that all there is?

I imagine anybody who comes through here must think the same thing: Which one do I…what?! To prove my point I sat at a table across the street for a couple of hours and went to work to see how many people ‘cared’ to come in. Afterwards I went in and acted as if I were looking to import my own car, I only visited 6 of them but that was enough: My conclusion is: how are these people in business?

This is a textbook example of having no distinct point of view. When you have the same point of view as everybody else, everything you do and say is going to be like the guy next to you. Sure any of these businesses can try a handful of marketing tactics to get people to walk through their doors but any smart customer will look around and see that the only noticeable difference between the ‘offers’ is price. Hence these businesses are locked-in a lowest bidder businesses. Where’s the real value?

An authentic way to stand out is to have a point of view since most folks stand for nothing more than the same. So if the guy next to you has a ‘boring point of view’ that’s you cue!

Pay attention to this McKinsey Quarterly interview of Richard Rumelt, professor of strategy at UCLA’s Anderson School of Management:

The Quarterly: Last year the Quarterly’s survey on strategic planning found an enormous amount of dissatisfaction among executives. Many of them feel that they are wasting a lot of time on strategic planning. What advice would you give them?

Richard Rumelt: Most corporate strategic plans have little to do with strategy. They are simply three-year or five-year rolling resource budgets and some sort of market share projection. Calling this strategic planning creates false expectations that the exercise will somehow produce a coherent strategy.

Look, plans are essential management tools. Take, for example, a rapidly growing retail chain, which needs a plan to guide property acquisition, construction, training, et cetera. This plan coordinates the deployment of resources—but it’s not strategy. These resource budgets simply cannot deliver what senior managers want: a pathway to substantially higher performance.

There are only two ways to get that. One, you can invent your way to success. Unfortunately, you can’t count on that. The second path is to exploit some change in your environment—in technology, consumer tastes, laws, resource prices, or competitive behavior—and ride that change with quickness and skill. This second path is how most successful companies make it. Changes, however, don’t come along in nice annual packages, so the need for strategy work is episodic, not necessarily annual.

Now, lots of people think the solution to the strategic-planning problem is to inject more strategy into the annual process. But I disagree. I think the annual rolling resource budget should be separate from strategy work. So my basic recommendation is to do two things: avoid the label “strategic plan”—call those budgets “long-term resource plans”—and start a separate, nonannual, opportunity-driven process for strategy work.

The Quarterly: So strategy starts with identifying changes?

Richard Rumelt: Right.

Traditional Strategic planning is dead. The purpose of crafting strategy is not to create a detailed plan for where the company is headed 5-10 years into the future: in today’s fast moving environment, it is impossible to predict that far into the future. The objective of strategy work should be focused around learning by shaping strategy moment by moment, day by day as companies learn from their customers and their competitive environment.

What’s needed is real-time vision, where the strategy cycle starts when someone sees something that others haven’t noticed and quickly translates that insight into action. See how Prof. Rumelt describes what Steve Jobs does:

The Quarterly: So how does a company take a good position?

Richard Rumelt: Well, one big factor is a predatory posture focused on going after changes.

in 1998 I had the chance to talk with Steve Jobs after he’d come back and turned Apple around. I was there to help Telecom Italia try to do a deal with Apple, but after that business was completed I couldn’t help asking a question. “Steve,” I said, “this turnaround at Apple has been impressive. But everything we know about the personal-computer business says that Apple will always have a small niche position. The network externalities are just too strong to upset the de facto “Wintel”³ standard. So what are you trying to do? What’s the longer-term strategy?"

He didn’t agree or disagree with my assessment of the market. He just smiled and said, “I am going to wait for the next big thing."

Jobs didn’t give me a doorknob-polishing answer. He didn’t say, “We’re cutting costs and we’re making alliances.” He was waiting until the right moment for that predatory leap, which for him was Pixar and then, in an even bigger way, the iPod. That very predatory approach of leaping through the window of opportunity and staying focused on those big wins—not on maintenance activities—is what distinguishes a real entrepreneurial strategy.

This sounds a lot like OODA (Observe, Orient, Decide, Act) as the faster you can learn and accumulate new knowledge from your customers and your environment, make sense of that new knowledge, extract insights and then put them into action you’ll be better positioned to outpace competitors.

I left a great portion of the interview out as I just wanted to draw attention to the fact that when we think about strategy, learning as fast as the world is changing is more important than trying to predict it. I encourage you to read the full interview, it’s from 2007 but very much relevant.

The gap between what is right now and where others are become very obvious when you go from one extreme to another. This past week I spent a little time with a friend I’ve known since kindergarten as he just opened a restaurant in Mexico and I went over to see how he was doing. This is his second restaurant venture for him, his first one closed after a year and a half.

While I was there he was telling me how he’d just bought a new restaurant management software homemade in Mexico. The incentive for him was that the top Mexican restaurant chains, such as Sanborn’s, also claimed to use the same software to manage their operation so in his eyes it was good decision to buy. Nonetheless he asked me if I could give it a test drive to see if it was worth the buy…

Before I dig in I just want to say that with any kind of business if you have pitiful customer support you are in a whole lot of trouble no matter how great your product or service is. With that in mind, here we go…

What you see in the picture above is restaurant management software made by Nationalsoft. The software is still delivered in a package, the serial number is taped on the inside (post it note inside the CD) which registers a single computer. The software is less than 15 MB and takes less than a minute to install. Feels like you’re back at the end of the 90’s huh? Wait it gets better!

If a user loses their password (which did happen) they have to call support who then has them create a .dat file which they then have to send back to support by email so they can ‘do something to it’ to unblock it. After support does something to the file, they’ll send it back to the customer so he may add it to a folder and overwrite the previous one. Are you kidding me!? What happened to the ‘forgot password’ link that is not a default setting in any kind software?

If these people were doing business in the US they would be out of business. But wait, it gets even better…you have to pay them to get the software unblocked.

A modern software company not only provides support by phone but also provides customers with online resources such as FAQ, forums or wiki with answers to common problems. Seems Nationalsoft forgot to add this to their checklist because they’re nowhere to be found. Ironically they do have a Twitter account and a Facebook Fan page! None of which are used as customer support touch points. Promote first, serve later right?

There’s more but I think I’ve provided you with enough information to see how frustrated I was when I was seeing this happen before my eyes. The way this software company is designed to operate is to deliberately waste their customers time, not to help them get going as fast as possible.

Signs that you’re behind the curve

Businesses in Mexico still operate by the logic of ‘forcing customers to do what I want them to do’ not ‘I make it easier for my customers to do what they want to do’. The result of operating by this logic is that people who may be interested in your product or service have been programmed to expect ‘below average service’, they expect to be treated like crap. They put more obstacles in place for the customer, never taking into account that the customer is a human and therefore ignoring the fact that humans do make mistakes. In a world where software is as ubiquitous as water, the days of bloated software are over. Today every piece of software (including websites) are designed for humans, not robots. As an example see Facebook’s platform, which now 500 million people use, it epitomizes software designed for making social interaction as simple as possible.

Point: Design your operation so that every interaction your customer has with you helps him do more by making it simple. You’ll not only have happy customers but also angry competitors. Here’s how to do it:

Create barriers to entry not barriers to use

Barriers to entry is what you do to make it difficult for competitors to compete with you (like doing everything in your power to make your customers happy). Barriers to use (such as having weak customer support, no online Q&A, making customers pay because they lost their password) is what you do to impede customers from getting on with it and start using your products, and if all goes well they’ll be very happy and tell their friends about it.

Anticipate human stupidity

Humans make mistakes, in the online world it becomes even more obvious because everything they do online has to be done through a digital interface. As software has evolved from being used exclusively used on the desktop to be used on the web, it’s become important to focus on designing your software to anticipate the fact that humans need things to be spelled out for them just like children, therefore making it easier for them to do what they want to do. For example humans will also forget things, including passwords, so make sure you cover the basics.

Learn how Zappos treats it’s customers

No seriously I’m being honest. If you want to make competitors really angry and therefore put them in a disadvantage, focus your efforts on making your customers really happy by actually giving a damn about them.  That’s Zappos secret weapon 

What do you think, is making customers happy an unconventional strategy?

Here’s my latest post on @Oninnovation: Make your own game 

Enjoy!

The essence of strategy is choosing to perform activities differently than rivals do; and the most vital competitive weapon is not lower price, but new ideas.

Across the border in Mexico, we  have a taco shop in every corner. They all sell the same thing and their business name usually starts with the name of someone plus “tacos.”  It’s safe to say that their businesses all operate very much the same way; the only difference between them is where they get the meat and ingredients.

We live in a world of sameness, and the only way out of it is to innovate.

There are brave souls who choose to question the dominant logic of competition; who chose to do something entirely different. There is one taco shop in Tijuana which doesn’t follow conventional logic; it doesn’t sell tacos, but rather, art. Tacos Salceados created what is known as the “Quesataco,” which starts with flakes of cheese spread across the flat iron stove. Your choice of cuts are then lined down the middle and then ultimately encased in the crisp golden cheese. The stuffed crisp cheese roll is then placed in a fresh thick tortilla, and topped with house dressings and avocado. The Quesataco later spawned other creations, such as shrimp tacos covered in a sweet tasting sauce.

It is this fresh perspective which makes it stand out among the rest of the taco shops.

The thing people forget when they compete, is that you must stand out in some manner. Too many people copy their competition too much. They assume if it is working for the competitor, then it will work for them. Passion for what you are doing, consistency, and a sprinkle of uniqueness is just the start. Sticking with it and always looking for that unique tweak is key.

Here are 4 ways to help you think about defeating sameness:

Purpose matters

Conventional logic says that businesses exist to make money. Why not exist to deliver meaning? The difference between you and competitors is nothing more than how you answer the ‘why’ of your intentions: Why are you doing this? Online retailer Zappos knows why they are in business; not to sell a lot of shoes, but rather to deliver the best customer service in a meaningful way.

Reset expectations

Your customers have interacted with your competitors, as well as with other businesses, and have an idea of what to expect. These same expectations will be put into play when they interact with you, and if you deliver the “same,” then you’ll be easily ignored. You must reset those expectations by going above and beyond the normal, delivering equal or more value in a faster, more convenient, easier and meaningful way.

Define yourself by what you know not what you do

Over the time your business has existed you have accumulated a portfolio of abilities and strengths. Think about these bundle of skills that you have accumulated over time, things that you are good at and that when combined provide new value to your customers. Stop looking at your company as a provider of specific products or services for specific markets, and start seeing it as a reservoir of skills and assets that can be exploited in different ways or different contexts to create new value.

Be something your competitors are not

In order to compete businesses follow the logic that they have to target the middle of the market, the mainstream consumers. This also means they configure their business just like competitors who are already ahead of them. The problem is that everyone else is going after the same market and with so many choices, so many brands, so much noise it isn’t enough to be good at everything. You have to be the most at something. What are you the most at? Are you the fastest? The most responsive? The most innovative? The most transparent? Look up field or downfield, go to the edges, to the extremes where you can be the most at something.

Key Takeaway: Compete differently and play the game you know you can win.

What do you think?

A few days ago I wrote about how Zappos has broken the rule that a business exists purely to make profits. They’ve designed their business model around the concept of ‘happiness’ and have made it clear that the customer IS their business. The idea is driven that by making their employees happy it further drives customer happiness. It’s common sense but we, as consumers, can’t really say that other businesses look after our well being.

But what about pre-Zappos, is there another business that does business to deliver happiness?

Enter hotelier Chip Conley. In the video above he talks about how he designed his business model based on happiness. He talks about how he was inspired, to question the truth that businesses were made to profit, by a vietnamese woman named Vivian whom he met after he bought the motel where she worked as a maid. After noticing that Vivian did her work with joy, he began to question: How can someone find joy in brushing toilets for a living?

Because of her attitude towards service. She felt her job was to make not only guests happy but also her fellow employees. Sound familiar?

Like I mentioned on my previous post:

The universal truth is that no brand really cares about YOU, they care about your buying power. With such a dominant assumption (rule) why is it that businesses don’t choose to break it?

Well as you can see from the above talk, Zappos isn’t a one time phenomenon and business can be driven by ‘happiness’. What’s needed is a change in mindset, that profit is result of two forces:

Happy employees + Happy customers = profitable business

Let me know what you think.

“For things to change, somebody somewhere has to start acting differently.” – From the book Switch: How to change things when change is hard.

I was watching the above video from Trendwatching’s trend video report from earlier this year and it got me thinking about which brands I love and which I think care about me. Personally I can’t say that any brand really cares about me but I can tell you which one’s I love and they probably don’t even know I do: Amazon, Apple, Jordan, Nike, Evernote, Firefox, Porsche, Heineken, Jack Daniels, Antivir, Dropbox among others.

The universal truth is that no brand really cares about YOU, they care about your buying power. With such a dominant assumption (rule) why is it that businesses don’t choose to break it?

It’s hard? It can’t be done?

The Customer IS their business

There’s a crazy (in a good way!) company called Zappos that is Delivering Happiness 24/7 for 365 days a year to it’s customers and is proving that the rule can be broken. Zappos has proven that making people happy as a was of doing business is a competitive advantage by essentially deciding to act differently than every other business by making employee and customer happiness their focus.

They’ve made it clear that the customer IS their business. It’s such a powerful idea that Zappos decided to turn it into an online management consulting business to spread their gospel further (everyone will be better off). To deliver happiness requires a shift in mindset, to question the dominant assumption that business is all about profit. It requires that you do a little ‘shaking up’ and decide to act differently, to go above and beyond the normal.  They broke the pattern!

So what’s to learn about the great Zappos?

A way of showing that you care is by acting human with customers by being aware of what’s happening in their world. For example earlier this year I ate at a restaurant where they instituted a NO TIP policy because they would much rather have customers come back and eat than have ‘give more money away’. I later found out that this business was aware of Zappos and was implementing some out of ordinary tactics which I clearly can tell because almost everyone I’ve taken there to eat have made some remark about their attention to the customer.

Another way is by creating permanent mechanisms that reinforce the human aspect such as Zappos customer service oriented culture and their ability to go beyond the normal such as sending flowers to customers, thank you notes, etc to customers. It also must be mentioned that these mechanisms were not planned beforehand, they were just a natural evolution of the powerful ‘awe the customer’ culture they have (listen to Tony Hsieh’s interview about the culture).

On the flipside Zappos is also a Happy place to work at, which only reinforces how they treat their customers. So here then is the new formula: Happy employees + Happy customers = profitable business

Which brands do you love and also care about you?

I wrote an article for On Innovation a few weeks ago and it was published yesterday: Finding your crayons: Innovation inspiration from the young. Initially I wanted the the article to be titled ‘A young mind is a healthy mind’ but I guess that didn’t say much, but here then is what I mean in a nutshell:

To be strategic is to be unconventional

The unconventional is the province of the young who are not comfortable with conventions and take great pleasure in flouting them. The danger is that as we age, we need more comfort and predictability and lose our taste for the unorthodox. This is how one of the finest strategist in the history of our world, Napoleon, declined as a strategist: he came to rely more on the size of his army and on its superiority in weapons than on novel strategies and fluid maneuvers. He lost his taste for the spirit of strategy and succumbed to the growing weight of his accumulating years.

You must fight the psychological aging process even more than the physical one, for a mind full of stratagems, tricks, and fluid maneuvers will keep you young. Make a point of breaking the habits you have developed, of acting in a way that is contrary to how you have operated in the past; practice a kind of unconventional warfare on your own mind.

Keep the wheels in your mind churning against the soil of precedent so that it doesn’t settle on the conventional.

“For things to change, somebody somewhere has to start acting differently.” – From the book Switch: How to change things when change is hard.

If you want your team to do things differently just send them an email right?

Just merely saying ‘let’s be different’, ‘let’s innovate’ in an email is not going to cut it. If you don’t like the present situation and see no end in sight, don’t wait for your boss to give you permission to do things differently. You already have the tools, all you have to do is take off your ‘it’s not my job hat’ and do something about it.

There are rahrah! people who will try to pump people up and then go and hide in their caves thinking they’ve just inspired even the company mascot and that all will be taken care of, and then there are the quiet ones who just make things happen. Which one are you?

Take an opposite approach to everyone else’s behavior and make it your responsibility to fight ‘sameness’, you’ll piss people off but that’s what it takes to do things differently.