Help Wanted

By THOMAS L. FRIEDMAN

Published: December 17, 2011

http://www.nytimes.com/2011/12/18/opinion/sunday/friedman-help-wanted.html?_r=1&ref=opinion

I rarely mix politics with business in our blog but I think this editorial opinion from Thomas Friedman of the New York Times articulates a critical trend that impacts both. I am not making a political statement but a business one.

HAPPY HOLIDAYS TO ALL OUR FRIENDS AROUND THE WORLD. REGARDLESS OF YOUR BACKGROUND, THIS MUST BE A TIME OF REFLECTION AND PEACE. I EXPERIENCED A LIFE EVENT THIS YEAR THAT I HOPE WILL ALWAYS PUT THINGS IN THE PROPER PERSPECTIVE FOR ME GOING FORWARD.

THE historian Walter Russell Mead recently noted that after the 1990s revolution that collapsed the Soviet Union, Russians had a saying that seems particularly apt today: “It’s easier to turn an aquarium into fish soup than to turn fish soup into an aquarium.” Indeed, from Europe to the Middle East, and maybe soon even to Russia and Asia, a lot of aquariums are being turned into fish soup all at once. But turning them back into stable societies and communities will be one of the great challenges of our time.We are present again at one of those great unravelings — just like after World War I, World War II and the cold war. But this time there was no war. All of these states have been pulled down from within — without warning. Why?The main driver, I believe, is the merger of globalization and the Information Technology revolution. Both of them achieved a critical mass in the first decade of the 21st century that has resulted in the democratization — all at once — of so many things that neither weak states nor weak companies can stand up against. We’ve seen the democratization of information, where everyone is now a publisher; the democratization of war-fighting, where individuals became superempowered (enough so, in the case of Al Qaeda, to take on a superpower); the democratization of innovation, wherein start-ups using free open-source software and “the cloud” can challenge global companies.And, finally, we’ve seen what Mark Mykleby, a retired Marine colonel and former adviser to the chairman of the Joint Chiefs of Staff, calls “the democratization of expectations” — the expectation that all individuals should be able to participate in shaping their own career, citizenship and future, and not be constricted.I’ve been struck by how similar the remarks by Russians about Prime Minister Vladimir Putin, who just basically reappointed himself president, are to those I heard from Egyptians about Hosni Mubarak, who kept reappointing himself president. The Egyptian writer Alaa al-Aswany said to me that Egyptians resented the idea that Mubarak would just hand power to his son Gamal as if the Egyptian people “were chickens,” who could be passed by a leader to his son. Last Sunday, a New York Times article from Moscow quoted the popular, imprisoned Russian blogger Aleksei Navalny as saying: “We are not cattle or slaves. We have voices and votes and the power to uphold them.”“The days of leading countries or companies via a one-way conversation are over,” says Dov Seidman, the C.E.O. of LRN and the author of the book “How.” “The old system of ‘command and control’ — using carrots and sticks — to exert power over people is fast being replaced by ‘connect and collaborate’ — to generate power through people.” Leaders and managers cannot just impose their will, adds Seidman. “Now you have to have a two-way conversation that connects deeply with your citizens or customers or employees.”Netflix had a one-way conversation about raising prices with its customers, who instantly self-organized; some 800,000 bolted, and the stock plunged. Bank of America had a one-way conversation about charging a $5 fee on debit cards, and its customers forced the global bank to reverse itself and apologize. Putin thought he had power over his people and could impose whatever he wanted and is now being forced into a conversation to justify staying in power. Coca-Cola repackaged its flagship soft drink in white cans for the holidays. But an outcry of “blasphemy” from consumers forced Coke to switch back from white cans to red cans in a week. Last year, Gap ditched its new logo after a week of online backlash by customers.A lot of C.E.O.’s will tell you that this shift has taken them by surprise, and they are finding it hard to adjust to the new power relationships with customers and employees.“As power shifts to individuals,” argues Seidman, “leadership itself must shift with it — from coercive or motivational leadership that uses sticks or carrots to extract performance and allegiance out of people to inspirational leadership that inspires commitment and innovation and hope in people.”The role of the leader now is to get the best of what is coming up from below and then meld it with a vision from above. Are you listening, Mr. Putin?This kind of leadership is especially critical today, adds Seidman, “when people are creating a lot of ‘freedom from’ things — freedom from oppression or whatever system is in their way — but have not yet scaled the values and built the institutional frameworks that enable ‘freedom to’ — freedom to build a career, a business or a meaningful life.”One can see this vividly in Egypt, where the bottom-up democracy movement was strong enough to oust Mubarak but now faces the long, arduous process of building new institutions and writing a new social contract from a democracy coalition that encompass Muslim Brothers, Christian liberals, Muslim liberals, the army and ultraconservative Muslim Salafis.Getting all those fish back and swimming together in one aquarium will be no small task — one that will take a very courageous and special leader. Help wanted.

Fade or Flourish?

Rethinking the role of life science companies in the healthcare ecosystem

http://www-935.ibm.com/services/us/gbs/thoughtleadership/ibv-lifesciences-fade-flourish.html

Although this article deals with the life science industry, the lessons are profound and germane to all change marketplaces. The idea of innovating across business designs is the underpinning of our MDG process and our class at Kellogg (http://www.kellogg.northwestern.edu/execed/Programs/ORGGROW.aspx).

The life sciences industry stands at a crossroads. Its business model is broken, and the surrounding healthcare ecosystem is changing dramatically. In addition, the industry’s scientific and commercial productivity has declined, the blockbusters on which it has long relied for much of its financial prosperity have come off patent, sales forces are shrinking as physician access is restricted, and payers are increasing price pressures. Economic, social and technological forces are simultaneously reshaping the world in which the industry operates.

 It’s clearly time for change. In today’s increasingly complex and fast-changing environment, business model innovation is critical to success. Yet few understand when to make a change or – more important – how to execute one. And the life sciences industry as a whole has generally resisted developing new business models. Life sciences companies could resist change and stick to the current course: consolidating, cutting costs, tinkering with adjacent market spaces, reorganizing the existing sales force and investing ever more money in searching for new medicines in crowded therapeutic areas. Or they could completely rethink how they engage with the healthcare ecosystem – i.e., all the entities, be they individuals, governments, healthcare providers, insurers or other life sciences companies, that help keep people healthy.  

Those companies that resist change could face the very real possibility of fading into irrelevance or disappearing altogether. However, those that choose to rethink and reform their business model will likely flourish. They will potentially be very different entities than they are today, as they join in setting the agenda, enhancing healthcare and radically redefining the industry.Life sciences executives face a "moment of truth." How will they effectively transform in today’s rapidly changing environment? Global business leaders are expressing a view that the speed, immediacy, unpredictability and viral nature of change mean they can no longer expect to manage through this environment. Rather, success will depend on their ability to innovate through it. In essence, there is more than one way to successfully navigate today’s challenges, and each company will choose its own path. The direction of this path will determine whether it will fade or flourish.

People Are Not Your Greatest Asset

11:45 AM Tuesday December 6, 2011
by Anthony J. Bradley and Mark P. McDonald 

http://blogs.hbr.org/cs/2011/12/people_are_not_your_greatest_a.html

This article really hit my belief stricter really hard until I read the full article. Very  provocative.

Many of us in business have heard the popular aphorism, "People are your greatest asset." Some of us may even believe it. But is this sentiment reflected in our corporate cultures and the way our leaders lead? For the most part, no — and there's a reason for that.People are not your greatest asset. Even great people are not your greatest asset. In fact, great people can be your greatest liability. If Enron wasn't enough evidence of this, the 2008 financial crisis has now given us plenty more. What about Lehman Brothers, AIG and Countrywide? Arguably, these companies employed some of the smartest business people not only in the room but in the world, and yet those same folks took their firms to ruin (or near it) and came close to causing a collapse of the U.S. economySo if it's not people, what is your greatest asset?It's how you empower your people. Think about it. What is the primary purpose of a business organization? To assemble a group of people, who previously may have had no association, and empower them to accomplish productive work toward the organization's objectives. More effective empowerment typically equals more productive work. As leaders and managers, we are familiar with empowering people. We organize them into divisions, units, groups and teams. We provide goals and incentives to motivate them. And we enable them with authority, tools, resources and processes….…we studied hundreds of social media implementations and identified a set of key mass collaboration behaviors. :

Collective Intelligence Collective intelligence is the meaningful assembly of relatively small and incremental community contributions into a larger and coherent accumulation of knowledge.

Expertise Location Expertise location involves seeking and finding specific expertise in the masses of people and the often-staggering amount of available content

Emergent Structures Emergent structures are structures such as processes, content categorization, organizational networks and hidden virtual teams that are unknown or unplanned prior to social interactions, but that form naturally as activity progresses

.Interest CultivationInterest cultivation is the forming of communities around a shared interest, with the goal of indirectly deriving enterprise value. Social media facilitates the mass sharing of interests like never before

Flash CoordinationFlash coordination involves rapidly organizing the activities of a large number of people through fast and short mass-messaging, often spread virally

Relationship Leverage Relationship leverage is the practice of effectively managing and deriving value from a prodigious number of relationships

Twelve Consumer Trends for 2012

http://trendwatching.com/briefing/

 

Interesting stuff!!

Red Carpet

In 2012, department stores, airlines, hotels, theme parks, museums, if not entire cities and nations around the world will roll out the red carpet for the new emperors, showering Chinese visitors and customers with tailored services and perks, and in general, lavish attention and respect.

DIY Health

Expect to see consumers take advantage of new technologies and apps to discreetly and continuously track, manage and be alerted to, any changes in their personal health.

Dealer-Chic

In 2012, not only will consumers continue to hunt for deals and discounts, but they will do so with relish if not pride. Deals are now about more than just saving money: it’s the thrill, the pursuit, the control, and the perceived smartness, and thus a source of status too.

Eco-Cycology

Brands will increasingly take back all of their products for recycling (sometimes forced by new legislation), and recycle them responsibly and innovatively.

Cash-less

Will coins and notes completely disappear in 2012? No. But a cashless future is (finally) upon us, as major players such as MasterCard and Google work to build a whole new eco-system of payments, rewards and offers around new mobile technologies

Bottom of the Urban Pyramid

The majority of consumers live in cities, yet in much of the world city life is chaotic, cramped and often none too pleasant. However at the same time, the creativity and vibrancy of these aspiring consumers, means that the global opportunities for brands which cater to the hundreds of millions of lower-income CITYSUMERS are unprecedented.

Idle Sourcing

Anything that makes it downright simple- if not completely effortless- for consumers to contribute to something will be more popular than ever in 2012. Unlocked by the spread of ever smarter sensors in mobile phones, people will not only be able but increasingly willing, to broadcast information about where and what they are doing, to help improve products and services.

Flawsome

Why to consumers, brands that behave more humanly, including exposing their flaws, will be awesome.

Screen Culture

Thanks to the continued explosion of touchscreen smartphones, tablets, and the 'cloud', 2012 will see a SCREEN CULTURE that is not only more pervasive, but more personal, more immersive and more interactive than ever.

Recommerce

It’s never been easier for savvy consumers to resell or trade in past purchases, and unlock the value in their current possessions. In 2012, ‘trading in’ is the new buying.

Emerging Maturalism

While cultural differences will continue to shape consumer desires, middle-class and/or younger consumers in almost everymarket will embrace brands that push the boundaries. Expect frank, risqué or non-corporate products, services and campaigns from emerging markets to be on the rise in 2012.

Point and know

Consumers are used to being able to find out just about anything that’s online or text-based, but 2012 will see instant visualinformation gratification brought into the real and visual world with objects and even people.

Making Customer Segmentation Deliver

As the ability to gather sophisticated data grows, here’s a four-step process for making segmentation drive improved performance.

by Corey Yulinsky

http://www.strategy-business.com/article/11401?pg=all

Segmentation is a critical marketing tool for both B2C and B2B businesses. I think this is a very insightful article and highly recommend reading the full text

"Few phrases have as much currency in today’s business-to-consumer (B2C) companies as the customer-centric organization. Although the particulars vary widely, most companies pursuing customer-centricity rely on some form of market segmentation. Segmentation provides insight into customer behavior, habits, and preferences, increasing the odds of success in marketing and experience management campaigns, and driving brand positioning and product development…. 

……This paradox — that companies with the most data about their customers find it most difficult to use it — is likely to become more widespread as the digital transformation continues. Too often, companies develop segmentations that are based on conflicting business objectives, are not broadly understood or shared, or cannot be readily acted upon. Top managers must realize that a segment-based model requires rigorous execution. It will succeed only if it is embedded in the company’s overall strategy, crosses the boundaries of all business units and functional departments, and produces clear and actionable guidance…. 

….We advise companies to take a four-step approach to segmentation: define the objectives of segmentation clearly, design the segmentation around those objectives, prepare a blueprint of the effects of the segmentation across the entire company’s decision processes, and carefully manage the necessary changes that segmentation will demand of the organization. The goal is to ensure that segmentation leads to well-defined processes and actions that improve performance.: 

Define the objectives clearly. The most important question for each company to ask: What is the purpose of segmentation? Understanding the purpose will enable decision makers to determine whether the segmentation effort is strategic, tactical, or bothDesign around the objectives. The key to effective design is working back from the business decisions that need to be made. Once the objectives have been determined, the segmentation research itself must be rigorously designed to reflect them, and to ensure that the results will be insightful (they will tell us things we do not already know about customer behavior and needs), actionable(they will identify levers that will move behavior), and identifiable (they will be able to tag individual customers in the database with reliable segment membership). This implies that multiple dimensions — behaviors, attitudes, demographics, channel use and preferences, and profitability — must be incorporated to develop a full picture.Prepare a blueprint to operationalize the segmentation. Begin to map out the decision processes by considering these questions: How is segmentation going to be used to influence the major value levers in your business? Will it underpin a redesign of the brand and the value proposition or of frontline sales and service? Will it ultimately result in more tailored and dynamic online and direct marketing? How are the business and functional units responsible going to access the information and use it on a day-to-day basis?. Manage the implementation process. Making segmentation deliver is ultimately more of a change management challenge than a technical or marketing challenge, but this point tends to be overlooked.

 Finding the right place to start change

When implementing an organization-wide transformation, focus your efforts on the most connected employees to help generate momentum and accelerate impact.

NOVEMBER 2011 • Marco Gardini, Giovanni Giuliani, and Marco Marricchi

https://www.mckinseyquarterly.com/Organization/Change_Management/Finding_the_right_place_to_start_change_2890

A very insightful article to a major challenge—how to change an organization of any size in the direction the leaders want.

Changing an entire large organization is never easy; only about a third of all such transformations succeed. One problem many organizations run into as they implement a change program is faltering momentum because employees just don’t change the way they work. Sometimes they don’t want to, and sometimes the reason is a poorly structured plan that makes change harder. Our recent experience at a European retail bank shows the benefits of starting to implement change by focusing on the employees who have the most influence over the daily work that needs to change. This approach can ensure that a successful transformation happens faster and that employees remain engaged in the long term…..
….Who were those people? ….. look at three criteria:
 ·         Which roles have a direct, substantial impact on the desired business results?
·         Which roles are connected with a large number of different subgroups in the organization?
·         Which roles can decide how people get the relevant things done?

                                

Winning, Losing, and Collaboration

10:18 AM Monday June 13, 2011
by Teresa Amabile and Steve Kramer | Comments (19)

http://blogs.hbr.org/hbsfaculty/2011/06/winning-losing-and-collaborati.html

Extremely insightful!!!

"...how does performance affect collaboration? In sports, it is a truism that winning can temporarily overcome various problems between teammates. For instance, the relationship between Kobe Bryant and Shaquille O'Neal was strained while they were teammates with the Los Angeles Lakers, even during their three consecutive NBA championship seasons. However, when the team was winning, the tension dissipated and the pair got along better — at least when they were working together on the court. In fact, during the 2000 championship series, Shaq referred to Kobe as "The Big Little Brother" when Kobe led the team to a win after Shaq had fouled out.
But when the Lakers were losing, the animosity between the two superstars mushroomed. They lost trust in each other, and before long, the whole team was infected with suspicion. Without trust, the team was unable to work together and win another championship.........All the bad things, the warts, are much more apparent in a losing streak or a bad streak and the flaws are not as apparent when you're winning a few games...
....Breakdowns in performance can lead to diminished collaboration inside business organizations, too. We have found that setbacks in the work can have a profoundly negative impact on inner work life — the continuous stream of emotions, perceptions, and motivations that occur during the work day. Perceptions are especially relevant here, since they include how people judge their work, their colleagues, and the organization. Especially in close collaborative situations, setbacks can lead workers to see their colleagues as incompetent or untrustworthy. When this happens, they will become less supportive of those colleagues, less openly communicative, and less likely to coordinate smoothly; collaboration will begin to break down.So, not only is collaboration critical to high performance, but maintaining high performance can be important to keeping collaboration going. Previously, we have talked about the importance of small wins — modest but meaningful successes along the pathway to achieving a major goal — in maintaining high performance and subjective well-being. They can also help workers maintain effective collaboration. When organizations support and celebrate small wins, employees feel like winners; the mistrust and conflict that can accompany losing will be avoided. Without those interpersonal problems, it will be much easier to achieve consistent and effective collaboration. "

Remapping your strategic mind-set

Pankaj Ghemawat

McKinsey Quarterly, 2011 Number 3

This is an extremely interesting perspective on creating global strategies.

Executives can shake up their thinking, identify hidden opportunities, and spot lurking threats by looking at a novel type of map that depicts the world from the perspective of a particular country, industry, or company.Senior executives need better mental maps to navigate our unevenly globalized world. Although a wide variety of metrics show that just 10 to 25 percent of economic activity is truly global, executives disproportionately embrace visions of unbounded opportunities in a borderless world, where distances and differences no longer matter....
...I want to focus on the potential for a special kind of map—one I call a “rooted map”—to help leaders enhance their intuition about the opportunities and threats inherent in our semiglobalized world.Rooted maps correct a misperception reinforced by conventional ones: that the world looks the same regardless of the viewer’s vantage point or purpose. In the real world, though, geographic distance and differences in culture and policy matter. To better reflect this reality, rooted maps depict the world from a specific perspective and with a particular purpose in mind....
....depiction of the world as seen from New York City¹ is a humorous example, but more data-driven versions—particularly those drawn at the industry or company levels—have serious business applications.

Apple Fights On Without Its Muse

By DON CLARK and  IAN SHERR

http://online.wsj.com/article/SB10001424052970204294504576615353634776110.html

In our work with MDG, we define the Business Design as:

Most companies tend to spend most of their time on deciding who the target customers are and what Value Propositions they want to create for these customers to establish competitive separation. Companies tend to spend less time on defining how they capture value as a competitive tool.

The essence of this article is understanding the potential  power of clearly defining how you capture value on the  impact on establishing competitive separation.

…."IPhone is the number one smartphone in the world and continues to be number one in customer satisfaction," an Apple spokeswoman said in response to questions about the competition. As for the Kindle Fire, she noted others have introduced tablets with seven-inch screens and a limited number of apps, and "none of them have gained significant traction against iPad's incredible momentum.".... 
...Amazon and Google pose particular problems for Apple because of their sharply different (Value Capture) strategies. Apple makes most of its money from hardware. Google gives away its software in hopes of reaping profits from search advertising. Amazon expects to benefit from sales of digital content; its chief, Jeff Bezos, even characterized the Kindle Fire as more of a service than a device….

Coke Bottle Lights Up Filipino's Lives - It is just Amazing WOW!!!!

http://www.youtube.com/watch?v=Q0_4qFrxw_4

This is a must watch video on innovation.  Steve Jobs and his work at Apple are synonymous with innovation. Here is an example of innovation at the other extreme of the technology spectrum.

It would be great to share with us your learning’s from this video on what innovation means.

Inorganic Growth

This is a great summary of the banking  industry consolidation over the past 20 years. It is a classic example of inorganic growth for the banks that were the consolidators. Four key questions:

1. Was the overall size of the market/pie increased by this activity?

2. Was the competitive separation of the consolidating banks increased by their actions?

3. If the answer to 2 was no, how can the short term growth in earnings from the consolidation be sustained?

4. Is this overall strategy sustainable?

Old Ketchup Packet Heads for Trash

Heinz 'Dip and Squeeze' Container Aims to Conquer a Major Frustration of Chowing Down in Transi

By SARAH NASSAUER

http://online.wsj.com/article/SB10001424053111904194604576578691502178606.html?mod=WSJ_hpp_MIDDLE_Video_second#printMode

This is a simple but a potentially powerful outcome from gaining a deep customer insight from observing the user which we believe is the essential starting point in offering development

Some people rip off the corner of the packet with their teeth. Others, while driving, squirt the ketchup directly into their mouth, then add fries. Some forgo fries at the drive-through all together to keep from creating a mess in the car.After observing these and other "compensating behaviors," H. J. Heinz Co. says it spent three years developing a better ketchup packet....

.

...As the name promises, "Dip and Squeeze" ketchup can be squeezed out through one end or the lid can be peeled back for dipping. The red, bottle-shaped packets hold three times the ketchup as traditional packets. The new containers are more expensive than the old sleeves, but Heinz hopes customers learn not to grab more than one or two.......Heinz believes traditional ketchup packets are so annoying that they stop people from ordering fries at drive-thrus. "Fry inclusion orders" at drive-thrus "have been going down for years," says John Bennett, vice president of food-service ketchup, condiments and sauces for Heinz.

 

The Brand Story

Lynda Resnick, Vice Chairman of Roll Global (a relatively little known, $3B consumer company driven by brand strategies), describes what it takes to lead global brands such as POM Wonderful, Teleflora, and FIJI Water - and how important a "brand story" is to the success of your business.

This is a worthwhile 14 minute video with powerful insights on creating strong brands and strong leadership.

http://www.anderson.ucla.edu/leaders.xml

IBM at 100: How to Outlast Depression, War, and Competition

12:25 PM Monday August 8, 2011
by Nancy Koehn

http://blogs.hbr.org/hbsfaculty/2011/08/ibm-at-100-how-to-outlast-depr.html

It is hard to ignore a century of success particularly after returning from a near death experience in the early 90’s

 At its 100-year milestone, IBM shows us what it takes to outlast depression, war, and intense competition in order to remain a market leader in the midst of ongoing technological innovation. Here are several lessons worth sharing.

Be nimble and quick to adapt in a world of disruptive change(some early history) When the Social Security Act of 1935 created a huge demand for record keeping, IBM was ready, landing an enormous government contract to keep employment records on 26 million people. World War II then brought additional information-processing needs, as the U.S. military began using IBM cards to keep track of supplies, personnel and casualties. During this period, company sales grew from $40 million in 1939 to $142 million in 1945

Know your customers intimately Newly appointed CEO Lou Gerstner logged thousands of hours visiting customers, industry experts and analysts. He then set about transforming the company to rekindle IBM's historic commitment to customer intimacy, to make the organization much more integrated, and to streamline operations. The overarching strategic goal was to create an enterprise that could understand its customers wide-ranging IT needs (in some cases before they did on their own) and to deliver on these demands more effectively than any rivals. By 2000, IBM's Global Services had become the world's largest IT consulting and web services organization, providing almost 30% of the company's revenue. Nine years later, IT services accounted for 42% of IBM's $95 billion in sales.

Cultivate collective responsibility based on "systems knowledge"From IBM's early days, Thomas Watson Sr. believed you had to take good care of consumers by learning to think as they did

Stay committed to your core values, no matter whatDespite IBM's ability to adapt and change, the company's core values have remained at the center of what the organization does (and is). Shaping IBM's values and forward-facing vision, Thomas Watson, Sr. baked his driving ambition, respect for his people, faith in effective sales and distribution methods, commitment to customer intimacy and appetite for ongoing reinvention into the company's DNA