Archive for February, 2009

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The Merits of Focus: is your Business and Brand Strategy focused enough?

Friday, February 27th, 2009

Posted By: Sumontro Roy, strategy@perksconsulting.com

In a recent Wall Street Journal article, Toyota’s incoming President Akio Toyoda said about the company founded by his grandfather: It has gotten too fancy for its own good.

Driven by the goal of “…becoming the world’s largest auto maker…” and “high operating-profit objectives”, Toyota presumed that American consumers would be willing to pay a premium pricing for a Toyota – a change from the long-held strategy of pricing cars at a value. Toyota’s recent new features have also occasionally been out of character with the company’s utilitarian roots e.g. a recent solar powered ventilation system designed to keep the interior cool when parked. Such gizmos have pushed the Pricing above its value price-point.

North American dealers recently told Mr. Toyoda that, “premium pricing was the wrong way to go. Toyota had built an image of sturdy affordability, but now they were wrecking it”.

As a result, consider some recent evidence:
• Toyota is expecting its first annual net loss in 59 years
• May shutter factories in Japan and North America
• Might be faced with its first layoffs since 1950

Mr. Toyoda blames more than just the recession: he is sending a message that his “predecessors worsened the problem by straying from Toyota’s core ideas of thrift and efficiency”.

Michael Porter identifies 2 essential sources of Competitive Advantage:

• Differentiation: you offer a product/service with unique attributes that are valued by your customers; you charge a premium for the uniqueness of your offering
• Cost Advantage: you are the leading low-cost producer in your market segment at a given level of quality

Importantly, focusing on either of the above is the mantra to sustainable success – otherwise you are likely stuck in the middle and offer nothing unique to any market segment.

Which brings us to the important question: why do businesses and brands stray from the focus areas of their businesses and operations? That which generates their Core Competency, their Unique Selling Proposition , their Competitive Advantage and their Barriers for Entry?

It seems an easy answer that, if you achieve success doing something, you must continue doing exactly that – and, in doing so, get better at what gives you your sustainable Competitive Advantage, thereby making it a perpetual model.

There are any number of reasons why brands and companies are pressured and tempted to do so, a leading one being to extend their brand equities to larger (and often more diverse) market segments to drive company growth and shareholder profit. Toyota appears to have become muddled with becoming “the worlds largest auto-maker” and “drive record operating-profits.” Nothing wrong with those objectives – however, in trying to achieve that, Toyota tried to shift its brand upwards and, as a result, out of its targeted segment.

But, straying from the original game plan means diluting the formula (your Value Proposition, Customer Segments, Pricing, Communication) that made you successful in the first place. Of course, keeping your ear to the market and staying flexible (especially in today’s global competitive scenario) is equally important – but not at the cost of losing sight, and focus, on the original attributes of your success.

In Toyota’s case, it is already the largest car manufacturer in the world, with deep levels of penetration in global markets. Around now, they do start to look at the Business Objective of increasing Profit-per-Unit sold – and that can often be contradictory to a company’s Brand Objectives. However, those pros and cons and that optimal path forward are part of another discussion. For this article, let’s stay focused on Focus ☺

To illustrate (click on diagram to enlarge):

So, for all you Small-Business-Owners, Inventors and Businesses-Looking-To-Grow: what pointed questions should you ask yourselves to make sure that you’re focusing on the relevant issues? Try these as a start:

• What do I do well? Is that central to my offering?
• Do I do it better than my competitors and the currently available options?
• Can I be copied? Bettered? If yes, what of my existence? If no, what can I do to keep it that way?
• Does my Business Model make sense? Why do I use it? Is it efficient? Sustainable?
• What are the curves ahead? Changes in Market/Customer Needs? New Inventions as options and substitutes? How can I stay relevant?

Have fun answering,
Cheers!

References:
1. Wall Street Journal: A Scion Drives Toyota Back to Basics.
2. Michael Porter, Competitive Advantage: Creating and Sustaining Superior Performance.

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Economic Recovery: Are Small Businesses Being Left Behind?

Wednesday, February 25th, 2009

Although it’s no secret that we are currently in the worst economic situation since the Great Depression,  there has been little talk about where small businesses come into play. With a recovery and stimulus package of epic proportions being distributed, where is the small business piece of the pie?

On February 17, President Obama signed the American Recovery and Reinvestment Act, a huge piece of legislation that is the boost that growing businesses desperately need.  The Act integrates the Small Business Administration (SBA) and its programs, incorporating the SBA into the solution instead of sweeping the administration under the rug.  More specifically, $730 will be provided to the SBA to and, taken directly from the SBA official press release, it will be distributed as follows:
  • $375 million for temporary fee reductions or eliminations on SBA loans and increased SBA guaranteed shares, up to 90 percent for certain loans
  • $255 million for new loan program to help small businesses meet existing debt payments
  • $30 million for expanding SBA’s Microloan program, enough to finance up to $50 million in new lending and $24 million in technical assistance grants to microlenders
  • $20 million for technology systems to streamline SBA’s lending and oversight processes
  • $15 million for expanding SBA’s Surety Bond Guarantee program
  • $25 million for staffing up to meet demands for new programs
  • $10 million for the Office of Inspector General

Other initiatives planned to give small businesses a hand include: equipment expensing, hiring incentives, capital gains, and microloans.  The entire package has one simple goal: create jobs to stimulate the economy. In addition, Karen Gordon Mills has been confirmed as the new SBA Business Administrator. (To find out more about what this appointment means for small business, refer “Remaking America: Karen Gordon Mills, New SBA Administrator,” a previous Perks Consulting blog.)

So, what’s the bottom line for small business? Change is just around the corner and help is, finally, on its way.

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Do the (RED) Thing

Monday, February 23rd, 2009


I planned on blogging today about brainstorm execution and how to take the ideas created in a brainstorm and put them into action. But, as I was going about my research I came across something that captured my attention and truly touched my heart: an open letter from Bono regarding his PRODUCT(RED) campaign published in the latest issue of “Elle” magazine.

For those of you who may be unfamiliar, The PRODUCT(RED) campaign is a cause marketing business model that takes a portion of the proceeds from each sale of a (RED) branded item and contributes to the Global Fund. The Global Fund is an organization that is on the frontline of the battle against AIDS, tuberculosis and malaria in developing countries (primarily in Africa). The Global Fun combats these diseases with community development initiatives. In order to receive aid from the Global Fund, the community must not only demonstrate need, but also a results-driven approach to solving problems within the community. In order to maintain assistance (as grants are given on an annual basis), the community must demonstrate that their model is effectively solving these problems and that Global Fund resources are crucial to the sustainability of their project.


(RED) outlines their business model by using a problem-solution method. Basically, the problem is AIDS in Africa and the lack of resources to educate those at risk and to treat those who have already contracted the disease. The solution lies in our hands, and in our wallets. By purchasing (RED) branded products we are actually making a difference by placing antiretroviral medication (ARV), the lifeline of HIV patients, into the hands of those living with HIV in Africa for about forty cents a day (per patient). Doctors have titled the complete turnaround due to these ARV’s the Lazarus Effect, since the patients often close to death have been given new life.

However, as consumers and good samaritans, we often want to see tangible results or impact of our good deeds. The minds behind PRODUCT(RED) have thought of that and have placed both results pages and success stories on their website.

One of the major setbacks of cause marketing in general is that is requires a lot of trust on the part of the consumer. Consumers must believe that their money is being used responsibly and, unfortunately, every now and then a scandal will come along that will waver our trust in the motivations of these companies. Well, (RED) has solved that problem by explaining on their website the ways in which our money helps those who need it most.

By partnering with well-established brands such as Gap, American Express, Apple, and Starbucks, consumers are able to purchase their favorite products while making a positive contribution to an incredible cause. As father and founder of (RED) and lead singer of U2 Bono says in his Elle magazine letter, times are tight and giving is hard. But, by purchasing the (RED) brand of your favorite products, you can enjoy your favorite items and truly make a positive impact by “doing the (RED) thing.”

To learn more about how you can help, visit: www.joinred.com

Check out these powerful Global Fund photo essays from countries ravaged by AIDS, tuberculosis and malaria at:
http://www.theglobalfund.org/en/accesstolife/

Images provided by: www.joinred.com

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Timberland’s “Earthkeeper’s Collection”

Monday, February 23rd, 2009

Posted By: Sumontro Roy, strategy@perksconsulting.com

Timberland recently launched their Spring 2009 Collection under the
environmentally-friendly title “Earthkeepers Collection”. The TV commercial theme
urges that you “be nice to nature” or “it might just get you back!” It
really is quite funny.

There is a strong and dominant theme about the company using environmentally
conscious, recyclable and renewable resources across its entire range of
operations – and not just being environmentally conscious in one or some
aspects of its operations while ruthlessly beating up the planet across all
others!

Going through the company’s website, the “Climate Impact” section tells you
pragmatically that “…we better make sure the trail is there to hike,
the mountain to climb, the river to traverse, the landscape to inspire…”

The company also clearly mentions all that it is currently doing, and aims
to do, in order to continually reduce – and by 2010 eliminate – its carbon
footprint.

Check out the “Nutritional Label” which seems quite a clear current snapshot. I like the way it says, “your trash is our shoebox”! All shoeboxes are made from 100% recycled material.

The product features of the Earthkeepers Collection has similar detailed
information such as “15% recycled rubber in the durable, low-profile
outsole”.

Red Flag?

Timberland’s Green Index is a measure of the environmental impact of its
products in order to provide consumers with visibility into the footprint
that the company’s business creates.

However, would you rather they had the same thing certified by an outside
accredited agency? Is a homegrown internal index credible enough ?

From the “Green Positioning and Marketing” perspective: Timberland appears
to be on the right track – it is integrating being an environmentally
conscious company within its very DNA and is seeking to eliminate its carbon
footprint across all aspects of its existence.

Through this holistic approach toward its operations, Timberland seems
credibly supported in (claiming) the green element/part of its brand
positioning, and particularly in that of the Earthkeepers Collection.

Images provided by:
www.timberland.com

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Emotional Intelligence: Does it matter for your business success?

Friday, February 20th, 2009

A study initiated in the mid sixties by the Stanford Graduate School of Business reinforced Goleman’s idea about the importance of Emotional Intelligence for success in business. The findings of the 20- year study was attention-grabbing: What the most successful business graduates, -top in title, position and money- had in common was that all of them were in the bottom half of their class in grades and all of them were POPULAR. In other words, relationship skills were more important for success than grades. A different study from Harvard University of graduates in law, medicine and business corroborate the same idea: Scores on exams had zero correlation to real business success.

So, as a business leader you should be probably asking yourself right now: Am I emotionally intelligent? What do I need to learn?

Emotional Intelligence is associated with Personal Competencies, meaning how you manage yourself, your emotions and impact in your daily decisions, how self-aware you are of your strengths, limits and self-confidence. When you display honesty, integrity and trustworthiness it would come easier to meet yourself and be ready to act and seize opportunities with others and in your business at any time.

EI is also related to Social Competence, this relates to how you mange relationships and how socially aware you are. A business leader with low social competencies, can have problems in trusting others to handle important tasks, delegating would make him/her too nervous. And as you might already know this can become a real risk for time management and proper decision-making.

Here are some key tips to start developing your EI skills to get better in managing your business:

- Inspire your partners, your employees and clients with a compelling vision of the project that you are working on. Positive energy sticks like a “virus”.
- Boost others abilities through feedback and guidance.
- Try to sense your clients and employees emotions and treat them as people, as someone you care of. People don’t care how much you know if you don’t show them how much you care.

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Loving the Shoes You’re In

Wednesday, February 18th, 2009

Last evening on the glittering eighth floor of Sak’s Fifth Avenue, motivational speaker and author Lynette Lewis spoke to a captivated group of women about loving the shoes we’re in. Using her book, Climbing the Ladder in Stilettos, as a springboard, Ms. Lewis outlined motivational and inspirational techniques by tying them into this spring’s hottest trends in footwear.

The first shoe in line was a stylish platform by Salvatore Ferragmo, the father of the stiletto. The comeback of platforms embodied Ms. Lewis’ discussion on the importance of building a personal platform. Creating a personal brand boils down to each of us asking ourselves why we’ve chosen the field or career that we have. What are your core values? What is your purpose? Defining your purpose and following through on your personal mission statement, in both your professional and personal life, leads to enlightment, happiness. and success.

A pair of sexy hot pink Christian Louboutin pumps was next in line as Ms. Lewis’ spoke about being an innovator. She explained that being an innovator takes both courage and confidence. Taking risks, even when it’s not advantageous to do so, is part of the climb to the top.

The epitome of risky behavior, Salvatore Ferragamo’s black and white patent leather pumps, were the third shoe on display. Here, Ms. Lewis connected what she calls her “one-one-one” strategy. She says if you take one step once a week toward one of your dreams, you can accomplish anything. One step once a week is manageable enough for the busiest of women, yet it’s still a sure path to results.

The final concept of Ms. Lewis’ speech tied into the growing trend of embellishments on shoes, as seen in this pair of Rene Caovilla bejeweled pumps. Embellishments are all about, as Ms. Lewis put it, “loving the season you’re in so you can enjoy the gifts.” Thinking about the here-and-now instead of worrying about the past or future is the surest way to enjoy all of the personal and professional rewards life has to offer.

After sharing a quick word with Ms. Lewis following her presentation, I learned that the Southern speaker also has a social networking site, the Lynette Lewis Community, where women can join together to share successes and setbacks through blogs and chats. Ms. Lewis’ presentation was inspiring, yet light-hearted and certainly taught me how to love the shoes I’m in… even if they’re not from Sak’s.

Images Provided by Sak’s Fifth Avenue.

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Green Marketing – A quick introduction

Monday, February 16th, 2009

Okay, so unless you’ve lived on Mars for the past decade or so, you couldn’t have escaped this whole beast of “Global Environment Destruction” that is threatening to end our planet and our lives!

Recyclable material, waste re-usage, energy conservation, alternative fuels, nuclear energy for everyday use, climate changes, global warming – these are just some of the terms that we’re all used to hearing on an everyday basis !
Further, from the point of view of businesses and marketers of products and services, we’re also confronted with the business aspect of global climate change i.e. Green Marketing, also referred to as Ecological Marketing or Environment Marketing.
But what exactly is “Green Marketing”? And, specifically, how does it translate into governments, companies and consumers acting together to reduce our global footprint so that we might preserve our planet better and pass on a better world to our future generations?

The American Marketing Association defines “Green Marketing” as the “marketing of products that are presumed to be environmentally safe.“

Thus, Green Marketing incorporates a broad range of activities, and, to use a simple ideal model, begins at the procurement of raw materials stage and carries through to the very end of the business cycle, say, the customer service stage.

However, defining Green Marketing is not an easy task since there are a plethora of meanings, interpretations and contradictions – and each made further ambiguous by personal motives of interested stakeholders!

The objective of this blog is to develop an objective and realistic view of what Green Marketing is, what it should be, what it shouldn’t and, going forward, what it should evolve into – I look forward to hearing your thoughts & suggestions as we go forward…

As a parting line, here’s an article about how the Metropolitan Transportation Authority of New York is setting a great example with it’s Hybrid Buses…now come on, be honest, you didn’t expect us New Yorkers to be the most environmentally conscious folks around did you?!

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CRMs – What in the world are they and do they actually help?

Tuesday, February 10th, 2009

The Introduction to CRMs
CRM – Customer Relation Management – something every company needs, even if they didn’t know it.

The customer is perhaps the most valuable part of any business – without them there would be no business to conduct! So what is the best tool to organize this and optimize this important component for your business? Over my next few posts, I will be talking about my recent experience with CRMs as a newbie to this area of industry. I’d be more than interested in any other perspectives from either people who have experience with CRM or people looking for advice.

Customer relations is important for any business, but perhaps even more crucial for small/growing businesses, who cannot simply ride on the coat-tails of being positioned as a market-monopoly of a particular niche. Neither can they rely on a long-standing loyal clientele. Rather, they are trying to build clients and establish themselves as experts with a product that is worth the client’s time and money. So how do we manage all this information? CRMs have to become a part of everyday business if they are going to work. As George Day mentions in his article “Why some companies succeed at CRM (and many fail)”: “The first approach… is a the market-driven one, which makes CRM a core element of a strategy that focuses on delivering superior customer value through such elements as exceptional service and willingness to cater to individual requirements”.

So who actually uses CRMs in today’s market? Answer – everyone… and those who don’t, should. Every business-person knows that your customers need to keep on that upturning curve of your strategies in order to benefit from them. Through CRMs, this is achievable.

So CRMs are valuable – that much we understand and to be up-to-speed, we need to utilize them. As Barton Goldenberg (the founder of ISM) asks, “are you a dinosaur or are you with us”? But with the market seemingly saturated with options and companies who can provide sites to assist this (usually at a cost), which one do we chose? Are some better than others? And how do we know which one is tailored best to each company’s individual needs?

These are some of the questions I’ll be exploring over the next few posts…

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85 Broads and “The Power of the Story”

Tuesday, February 10th, 2009

This morning, the Perks team started our day with a little bit of coffee and a lot of inspiration at the 85 Broads Power Breakfast. Held at A.J. Maxwell’s, the breakfast featured networking with the wonderful women of 85 Broads, as well as two very powerful speeches given by influential 85 Broads members Alison Levine and Kristin Fox.

First to the podium was Alison Levine. A seasoned mountaineer and founder of Daredevil Strategies, Alison came a few hundred feet shy of the summit of Mount Everest. She has also scaled the peaks of six major continents and has attended expeditions across both the North and South Poles.  Alison used her adventures to share the lessons she learned, and how they apply in today’s rocky business terrain. Spinning tales of teamwork, leadership, and knowing when to cut your losses, Alison held the audience captive with her amazing stories and sharp wit.

Following Ms. Levine was Kristin M. Fox, a fabulous business professional, Director and Founder of 100 Women in Hedge Funds and former Executive Editor of Hedgeworld. Kristin told the audience of her adventures navigating Wall Street and the fascinating world of finance. Raised by what she called the “hedge fund wolves,” Kristin shared stories about the importance of staying true to yourself and of understanding when to play it safe and when to take risks.  The tales of Kristin’s life were shining examples of the “Power of the Story.”

From the perilous peaks of Everest to shining streets of Manhattan and back in time to make it to the office–what a way to start the morning!

Photo 1: 

http://www.daredevilstrategies.com/alison.php

Photo 2: 

http://www.acteva.com/evaxart/evax/art/100%20WIHF%20Logo%20small.jpg

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Brainstorming and Your Team

Monday, February 9th, 2009

Running into problems? Do you feel like you’re hitting the same brick wall over and over again? Try having a brainstorming session. By putting together the creative powers of your entire team, you may end up finding some surprising solutions to the same old problems. How do you motivate your team to get the best ideas in the least amount of time? Read on to find some quick tips about how to best utilize your next brainstorming session.

The term “brainstorm” was first coined by Alex F. Osborn, a prolific advertising manager of the 20th century. A brainstorm, by definition, consists of a panel of 10 to 12 people with a panel leader to keep ideas flowing and a scribe to take notes.

When he created the brainstorming system, Osborn created four basic parameters for brainstorming:

1.Don’t allow criticism
2. Support and encourage even the “craziest” ideas
3. Concern yourself with quantity of ideas; not quality
4. Don’t just focus on creating new ideas, but also on building upon old ones

Although Osborn’s rules for brainstorming have withstood the test of time, they don’t tell the whole story. With new business demands and new technology, it’s time to update these rules. So, here are four fresh tips for modern brainstorming.

Get some alone time.
Use the time before and after a brainstorming session to work individually. Arriving to a brainstorm prepared will increase productivity and hasten the flow of ideas. Giving yourself a few minutes after the brainstorm will help you take in what has just occurred, which may generate new ideas.

Update your recording system
Have the leader of your session use a dry erase board, overhead projector, or Power Point presentation to record everyone’s ideas in central place where everyone can view them. Jot down key words and ideas. Supply everyone on the panel with writing materials or a laptop and let everyone record their own notes instead of having a single designated recorder. This way, each person can leave with a set of notes that follows their particular train of thought.

Utilize a variety of techniques
Everyone’s minds work differently, so, what works well for one does not necessarily work well for all. Try different methods and figure out what works best for your team.

Be supportive of everyone’s ideas and brainstorming styles.
Being supportive could mean giving positive feedback, asking thought-provoking questions or even just making everyone comfortable. Using comfy chairs and providing water during a brainstorming session will encourage everyone to think about the problem at hand and not how thirsty or uncomfortable they are. Anticipate the physical needs of your panel members. Ease the pressure by buying pizza and making the environment one that is open to fun.

So, your brainstorming session has been successful, great! Now what? Stay tuned for more tips and tricks about how to put your ideas into action.

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