The Illusion of Communication

The Feds just cut the interest rate again today; second time in a week. In case anyone’s interested, there’s an interesting article at BusinessWeek about recession-proofing your business. A high-level view of their recommendations:

• Don’t be caught off guard if the slowdown hits your company. Prepare for the next 12 months by articulating what you’ll need to do and when under specific scenarios. It’s best to think about such things now as opposed to when the pressure is really on.
• To keep your company lean, you should set and measure inventory targets and keep in daily or weekly communication with your sales and operations staffs. Look at your existing processes and see if there is any way that you can make them more efficient. This will likely result in change, which many people will be uncomfortable with, but this is about making the company more profitable and competitive in the long run. Another place that may need investigating is the company’s value network (or value chain).
• To keep from losing business, keep in close touch with your customers. The best place to grow (or stabilize) revenue is with sales to existing customers; it has been documented that it is 5% to 15% less expensive to close sales from within than to get new customers.
• Develop strategies to land more customers. Still, new customers are important, and you should continue to look for ways to land new clients.
• Spend on hiring. This is a great time to find talent that may have been laid off from the competition.
• Continue to get the word out about your business. The odd thing about many advertising strategies is that they tend to be initiated when revenues are good, then pulled back when revenues are down. Think about that. If this is what your cycle looks like, then you either don’t have clear objectives for your advertising, or you can’t measure what your advertising is doing (hint: it’s not directly related to sales), or both.
• Entrepreneurs must keep their personal credit ratings high, since business borrowing often depends on personal credit in the small business universe. With the interest rates going down, this is a great time to think about (or even executing) a business loan.

Posted by Matthew under Business Strategy | No Comments »

The word “innovation” is thrown around a lot, implying change and creative endeavors. It’s frequently looked at as a lofty goal unto itself—a highly prized goal—one that should be aspired to, but is rarely achieved.

I recently had lunch with someone who was describing his business to me. Innovation is key to their growth, he told me. Furthermore, they really wanted to do “x,” which could be an exciting initiative, but they lacked the resources to pull it off. Many people were over-extended and burdening them with this new, somewhat risky endeavor would spell disaster for the new initiative, not to mention what it would do to current activities.

It has been my experience that companies that have too much work and not enough resources are in this state because of a lack of planning. As it turns out, most resources are allocated on an ad-hoc basis. An issue pops up and someone is assigned to put out the fire. Only it takes a lot longer to put out the fire than anyone anticipated. And then there’s another fire, and another. Eventually, everyone is swamped with work and it is impossible to make any headway into new, innovative areas.

To further complicate matters, those assigned to put out a particular fire aren’t reassigned once the fire is out. More than likely, there will be ongoing maintenance and there’s also a fear that the fire will break out just as before. The work, therefore, is recognized as important. Yet, the question should be: Is it valuable? By valuable, I mean: Is it in support with someone else’s work—is everyone rowing together in the same direction?

By having a clear, concise understanding of what the company wants to achieve, it then becomes much easier to understand which fires can be allowed to burn without undermining the ability to achieve the main objective, and can therefore be sacrificed, if only in the short term.

And this, dear reader, is the first step in being able to innovate. You must have a well-defined goal. Without a goal, it is hard to say that you actually lack resources or that the resources on hand are inadequate for the job.

With a defined goal, you can more easily prioritize resources, decide just how risky it is, and what the reward would be. Assuming the risk is worth taking, it is then possible to reconfigure existing resources in innovative ways to ensure achieving the goal. Just as we wanted to make sure that everyone was rowing together earlier, the important question to ask before allocating resources is: does the risky, innovative endeavor work with (or against) the corporate strategy?

Posted by Matthew under Innovation & Marketing Strategy & Business Strategy | No Comments »

This morning I learned on NPR that Gordon Hinckley, the president of the Church of Jesus Christ of the Latter-day Saints, had died. To be sure, I have little understanding of religion and even less of this particular faith. But upon hearing a little bit about this man’s life and his accomplishments, I began to see correlations between growing a faith and marketing business offerings.

Before Hinckley’s term as leader of the Mormon Church, the faith was largely viewed as a peculiar sect (at best)—even as a cult. Yet, Hinckley was able to grow the church dramatically—from about 50 temples when he became president to over 120 upon his death, a period of about 12 years. This growth was not accomplished by changing what was considered a fringe message or re-creating the “product” (i.e., the core values of the faith) for mass consumption. Rather, he did it by repositioning the church, allowing others to recognize there were many commonalities with other Christian faiths.

Part of Hinckley’s campaign was to become more media friendly; he would interact with the press and even joke with them. This was in stark contrast to previous “press conferences,” where nothing more than a statement was read from a pulpit; no questions were allowed. Furthermore, he rebranded the offering, which helped move it from a fringe religion to a faith that was recognized along side other main-stream religions. Although the church was widely known as the Mormon Church,

Hinckley launched an effort to stamp out that phrase. He asked news media to use the formal name, “The Church of Jesus Christ of Latter-day Saints.” And, in case anyone missed the point, he changed the official Mormon logo so that the name “Jesus Christ” appeared in oversized letters.”

So, how can business people use this as an example for their success? Many entrepreneurs, executives, product managers, and others responsible with creating and delivering an offering to a marketplace have a strong belief that if you build a good enough product people will recognize it as superior (i.e., will understand the intrinsic value of the offering) and the offering will eventually sell itself.

Truly, if ever there was something that should sell itself, it should be religion. You either get the intrinsic value of the offering, or you don’t. Simply changing the packaging shouldn’t draw more people into the faith if the core values and basic belief structure aren’t compatible, right? Perhaps, but Hinckley is at least one example of how it is possible to take a fringe faith—it was largely viewed as a cult that promoted polygamy—to a faith that was more public and popular than ever before in its history. As NPR points out:

More and more Mormons sought, and were elected to, prominent political offices. Nevada Sen. Harry Reid (D) became the Senate majority leader, and former Massachusetts Gov. Mitt Romney (R) is a viable Republican candidate for president.”

The lesson? Understand what your goals are, understand who it is that you want to attract, and make sure your message resonates with them. If you don’t, you will likely have a fringe offering, even if the offering has a strong intrinsic value.

Posted by Matthew under Communication & Marketing Strategy & Business Strategy | No Comments »