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.