Category Archives: Strategy

Don’t look for examples, be the example

I have a client who has (so far) the only SaaS payroll management solution for small businesses in Mexico. This is both great and bad. Let me explain…

In our initial meeting I was told they used Workday as an example to follow. Their reasoning was that Workday has a very simple to use and intuitive interface, plus they are the ‘leaders’ in the field. The studied them rigorously and brought the same principles over to their solution.

This hasn’t worked as planned.

Workday has and used a distinct set of capabilities that my client doesn’t have (development experience in new technologies for one). Plus the customer is also different. And Workday’s cluster of capabilities go beyond simple copy and paste design, look and feel.

These cluster of capabilities have to solve the customers problem, make his life easier. Ultimately that’s what matters.

Is subtractive thinking the new normal?

Creativity is subtraction

Apple is on everybody’s minds these days. Yesterday, along with my partner and new team member (@dario_rivera), I was talking to a client about a few observations we had about some processes in their restaurant operation and how we think they are creating bottlenecks.

Our conversation ended up being about how there seems to be a race towards simplicity. It seems us humans are hardwired to keep on adding stuff and quite scared of eliminating.

But when everyone competes on ‘out-featuring’ (adding) the other guy, your best bet is to do the opposite and subtract (reduce/eliminate) features. It’s not that simplicity is the new normal, it always is.

benchmarking against the competition is stupid

Another reason why benchmarking against competitors is stupid

benchmarking against the competition is stupid

One of the problems of measuring an organizations innovativeness is R&D spending. If you ask people: Who’s more innovative between Apple and Microsoft? They’ll say Apple. Yet if we measure them based on patents and R&D spending, most people don’t know what they’re talking about. Microsoft blows Apple out of the water on R&D.

Yet, the reality is that Apple is more innovative than Microsoft.

Spending huge on R&D does not equal innovation.

You can spend all you want on innovation, but you can’t guarantee success. In fact, the most innovative companies are not necessarily the biggest spenders, according to Booz & Company’s recent global innovation study. What matters instead? The ability to build the right innovation capabilities to connect with the overall business strategy and other critical capabilities.

But what the heck does that mean?

These lists make for good conversation, but they also prove to be worthless if not approached with objectivity. Why?

As Jason Cohen points out, organizations (and humans) have an unhealthy fixation to emulate #1:

We tend to fixate on whoever is #1, in business as with sports, tacitly assuming that the contest is mostly skill and therefore the tournament has selected the rightful leader. But I’m not so sure we know that skill/luck proportion. I’m not so sure we can assume the contest (marketing, sales, product) and tournament (the marketplace) picks #1 based on repeatable, codify-able skill-set. Same with #2 or anyone else.

That number #1 is dictated by a system, a market, not people. On top of that, if you give people a list of the most innovative companies; they’ll want to emulate #1. It’s that simple. We’re suckers for it.

No competition = No innovation?

Can there be innovation without competition?

David Armano posited this question on his blog and I thought I add my own thoughts to the question and hopefully incite some useful discussion.

I actually think there is innovation without competition. If we all lived in a perfect world it would be pretty boring. More of the same. Who would want to like in a world like that? Not me.

The type of innovation Armano is talking about is incremental innovation. The type that leads to tit-for-tat. One firm outdoing, outworking the other one. Think line extensions and upgrades.

Both Google and Facebook are incremental innovations. Improvements over the originals. They’re simply better executed ideas than the originals. Head to head competition is never smart, it’s tit-for-tat ego driven BS that leads to predictable outcomes. Red Oceans.

The type of innovation that exists without competition is disruptive. This type of innovation is often driven by external sources, not direct competition. A recent example of what could potentially disrupt the banking industry is BankSimple. The guy who started it is not a banker (equity researcher), he was just pissed off at the complexity that is banking and decided to create an alternative.

Another example of disruptive innovation is the iPod, the Kindle, XM Satellite Radio. We could argue that Groupon is a form of disruption as it makes it possible for people to experience new things when they might not have because of price, while at the same time providing merchants with an infusion of new clients.

We could also argue that Jack Dorsey‘s newest venture, Square, can potentially disrupt the financial services space by enabling any individual or small business to accept credit cards for any product or service at any time in any place for no cost. Very powerful.

An example of a disruptive idea in direct competition (a rarity) is the Nintendo Wii because it made video games accessible to non-consumers (moms, dads).

Put simply, if you see possibilities where no one else does; you can innovate where there is no competition. But the best type of innovation though, is to go where there is no competition and define the terms of competition. To create a Blue Ocean.

What do you think, can there be innovation without competition? Do you agree with my examples? What other examples come to mind?

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Please understand me. I want you to

please understand me

I have a few friends who are looking for a job and have been for a awhile. They use digital means such as Linkedin, Simply Hired, Monster to find jobs as well as network with people. This process takes a lot of time, but the biggest problem is they still live with their parents; and the parents are fed up with it.

They’ve even told me their parents want to take their computers away because they think finding a job through the internet is dumb. They say they should job hunt the old fashioned way by going door to door. Say what?

It’s ironic because recruiters are changing their employee-hunting tactics to focus more on online:

Rather than sift through mounds of online applications, they are going out to hunt for candidates themselves. Many plan to scale back their use of online job boards, which they say generate mostly unqualified leads, and hunt for candidates with a particular expertise on places like LinkedIn Corp.’s professional networking site before they post an opening. As the market gets more competitive again, they are hiring recruiters with expertise in headhunting and networking, rather than those with experience processing paperwork.

I’m not saying the old fashioned way of job hunting is wrong, it’s just that parents fail to understand how the internet is changing how we do most things;  including job hunting. Why this disconnect?

Because of ignorance. They don’t take the time to step into our world and see what we see. This same principle applies to understanding the world of both our customers and employees.

Why is this important?

Step into their world

I recently argued that CEO’s should use social media because they need to get an intimate feel for the tools their customers and employees use to communicate instead of leaving it up to their lieutenants to figure it out. If they don’t experience these tools firsthand, they’ll never get the visceral experience of how these tools are really used in the front lines.

I don’t know about you but I like to experience things first hand and get an intuitive feel for them because it’s the only way I can understand how others might use, react, behave, etc.

Your customers want you to understand them

Point: The only way to understand what customers (our children) are thinking is to put ourselves in their shoes and step into their world. Look at the world from their eyes. We have to close the gap between their world and ours if we are to understand and help solve their problems in a better way.

How do you do that?

Easy.

Observe, notice, ask, listen, repeat.

 

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What business are you really in?

It’s not the most obvious one.

Do you think Zappos is in the online retail business? Not according to Tony Hsieh:

 

Because they’re in ‘the stories & memories business’ they operate differently than traditional retailers. In their eyes they don’t compete with Amazon, they compete with the Ritz Carlton.

The wheel gets reinvented all the time

“Let’s not reinvent the wheel” How many times have you heard that? How many times have you said it?

For practical purposes, people don’t like to reinvent the wheel. It’s better to do, follow, use what is already there because it saves us a lot of time and grief by letting us see blind alleys and lost trails of others who have worked in our area.