14.03.2017
David Friedman
1 Comments
I attended a roundtable discussion sponsored by Susan Howington, CEO of Power Connections, the other day. Susan holds these meetings with senior executives regularly and we discuss topics of interest. The topic we discussed revolved around whether a strong leader is not afraid to change his/her mind and under what circumstances they should be flexible in changing course. It appears that many leaders, in order to look strong, set a course of action, and don’t want to change for fear of looking weak and flighty. There were several people in the discussion today including Peter DeAngelis (CEO, TechCoastAngels), Ron Davis (CEO and GM), John Theron (former CEO and current software consultant), Patrick Flynn (PE CEO and former aerospace exec) and Cindi Mullane (CEO and operations executive in the fashion industry.) This was an excellent complement of people. The initial discussion centered on the need for clearly setting goals and objectives, continuity of strategy, becoming agile in one’s thinking, recognizing challenges and preparing your team to meet the uncertainty of these challenges, and keeping options open, e.g. predesigning flexibility into your decisions. Many years ago, I coined the term StreetSavvy℠ as applied to many executive functions. When I worked for founding CEO of US Cellular Don Nelson, Don and I coined the phrase fast, fluid and flexible as we were trying to grow in the young but growing wireless market. I have used that concept over the past many years of my career. This was the start of thinking about the characteristics of what StreetSavvy Leadership is about. Additionally, I have also talked about fast failure in getting products to market. More recently I wrote a blog and did a talk on managing a business. The two words are Focus and PODFU (plan, organize, delegate and follow-up). After participating in this discussion group, I found myself seeing how all these components now come together in what I call the 5F Factors in StreetSavvy Leadership. These are the five factors I believe that can make leaders stronger and their companies grow. 1.  Focus. Business executives are constantly bombarded with many different product opportunities, decisions, strategies and the like.  If everything is a priority, nothing is a priority.  Therefore, the first characteristic for a StreetSavvy executive is to be laser focused.  Don’t try to do more than two or three major initiatives at the same time.  You have to have clear priorities because you need to have dedicated resources to be successful.  As Sun Tzu said: concentrate your resources at the competitors’ weakness at the point of attack.  This is the business correlate. 2.  Fast Afoot. Fast doesn’t mean reckless. Most executives believe they have to make a decision and do it with speed. Then once a decision is made you execute relentlessly. This is basically true. As executives we need to have information and facts upon which to base decisions. Unfortunately, in business, information and facts are never complete and there is a point at which more facts give you limited additional utility in making a decision. Because an executive never has complete information, decisions are always uncertain and it is a matter of how likely the decision will be correct and how potentially damaging uncertainty becomes. 3.  Fluid. Things change. Water conforms to the changing landscape to reach its destination. The destination or goal may still exist but there may be impediments along the way and obstacles to overcome. Fluidity means dealing with these changes, mostly tactically without changing the strategy or the end game. StreetSavvy Leaders continually scan the environment absorbing new facts and information. They figure out a way to maneuver through the changes that take place. Scanning the market through customer panels, tactics like mystery shopping or Undercover Boss, assigning people or teams to track a competitor – both direct and indirect – are critical to get new information and upon that new information to make informed decisions which might change the tactics of the strategy or to a lesser degree the strategy itself. 4.Flexible. Opportunity knocks and changes in tactics may occur. Tactics and strategies must be consistent with goals and objectives which are much longer term. Andy Grove, former Chairman and CEO of Intel wrote that only the paranoid survive. To me, paranoia in business is good in order not to be complacent. Executives have to look at opportunities as they arise and address them. Should an opportunity exist executives might need to change course. I recall working for one company which had negotiated a large contract with a supplier many years before. The technology shifted and over time that technology was neither as robust nor cost effective as a newer technology invented by an Israeli company. Our company chose to stay with the older technology and that was perhaps one reason why our company was not as successful as we could have been. It happens all the time. Culture has to be set to enable this flexibility as changes to a plan are not normally welcomed by the highest levels of leadership due to economic or political concerns. 5.  Fast Failure. Making a decision is one thing. Staying with a decision that becomes a losing one can cause irreparable harm to a company with potentially serious side effects like going out of business or having to lay off people. As one of the participants stated: bad new does not get better with age. I recall when I was at one of the Baby Bells and we were trying to grow our business by focusing on new product development. Unfortunately, one of the products on which we spent significant resources was not going to be a winner. The right decision was to terminate the project yet the project lead who worked for me did not want the stigma of failure on his shoulders. The culture was to “punish” failure. In this specific case it was a slow failure. In retrospect, the life support on this project should have been pulled years before. In this case with a little prompting, the project lead terminated the project and I gave him a reward for making the right decision. The culture had to be established for fast failure. Just think of Google and how many projects they have in the works at any one time. Or even 3M. They know that some projects will fail and executives are ok with that. Similar to stock trading you have to let your winners run and cut your losers quickly. How many of you are willing to do that? How does the StreetSavvy Leader manage to implement these 5 F Factors? The primary need is to communicate and have an open dialog with your team and others lower in the chain of command. It is critical for the leader to walk the talk and become Pattonesque in their leadership style. Be on the front lines with your troops. Be visible and be communicative. Ask questions and listen and know that your obligation to your company is to new and even divergent information so you have the best chance of building a successful company. Glad to have other viewpoints.
As the third and final installment on tools that the StreetSavvy℠ Business executive can use, these four tools focus on ones that can help manage growth while ensuring the right resources are dedicated to the initiatives and risk impact is managed. The tools that follow include: The Ansoff Matrix, Ishikawa Diagrams, Risk/Impact Analysis, and RACI. Ansoff Matrix The Ansoff Matrix is used to help companies determine which products are to be developed and which markets are to be pursued.   Some of the tools we shared in  a prior blog e.g. the analytical hierarchical process, can be used to set priorities relative to budget constraints. We love the Ansoff matrix because it is a very easy model to understand the product portfolio.  The diagram above is a modification of the Ansoff Matrix which was developed by H. Igor Ansoff and first published in the Harvard Business Review in 1957 (Harvard Business Review, 35 (5) 1957, pp.113-124), in an article entitled Strategy and Diversification.   It provides a great framework for considering paths to growth and the associated risks of attaining that growth.   Yet, it is sometimes difficult to use because it required solid analysis and planning. The idea is that, each time you move into a new quadrant (horizontally or vertically), risk increases.  These are called adjacencies and moving to an adjacency is less risky than moving along a diagonal toward the “diversify” box.  If one uses the Ansoff matrix, we would like to see companies use the following risk/impact model as a complement. RACI RACI is a cool tool that is also called a responsibility matrix.   It lays out a project or a task and shows the intersection of that project or task with those people and/or functions that have a part in the decision.    R stands for responsible part and is the person who actually carries out the process or assignment.  There can be several R’s on a project.    A stands for accountable and is the person who has the ultimate accountability and leadership of a task or project.   C means that people or functions who are not directly involved with carrying out the task or project yet are consulted prior to the task being completed.  This person could be a subject matter expert or other stakeholder.  I stands for those who are informed of the decision as they may have a part in receiving the output of the work.  For example, customer service may be informed of the decision on a new price or promotion that the marketing department conceives for a new product. Ishikawa (Fishbone) diagram Fishbone or Ishikawa diagrams enable an individual or preferably a group of individuals todetermine the cause and effect of a specific action.   The goal is to ask questions several times in different ways to fill out the “fishbones” and come to a common root cause.  Therefore, if you say that revenues are low, you might want to fill out the “fish bones” by listing 3 main causes such as 1) Lack of Channel Partners, 2) Price too high, and 3) Product not correct fit.  Then for each main cause you delve deeper into the reasons why for each perception in order to determine that there is a root cause.  I recall doing this for one of my tech companies and the answer came out that the training for our sales reps and the channels was incorrect.  So after adjusting the training and requiring that the sales people became certified by their managers, revenues improved dramatically. Risk/Impact Analysis    In many ways, risk impact analysis seems simple and something everyone should do.  But it isn’t performed on a regular basis.  At many companies risk impact analysis is performed on major projects and by so doing the analysis StreetSavvy business executives prevent surprises. Here’s an example of the risk impact matrix on the left coded in terms of RED (high risk and impact), YELLOW (medium risk and impact) and GREEN (low risk and impact.    On the right side of the figure, the executive and/or team specify the risk, the initial placement on the chart, and then plan to move it to less risk or less impact by a combination of strategies and tactics.   The information shown is an actual assessment for a client but is cloaked to protect the confidentiality of the work. We would be glad to talk about how these tools can be used in your business.  Feel free to contact me at dfriedman@clevelpartners.net to see if you qualify for a complementary one hour analysis.  
In my last blog we shared some power tools that StreetSavvy Business Executives can use to help find the path for profitable revenue growth. I used this information in a talk I gave at UCI Applied Innovation to 100 plus budding entrepreneurs and sitting executives. Now, I want to provide 4 additional tools to help with the direction and management of strategic initiatives which will help StreetSavvy Business Executives find their true north and set the stage for executing their plans. Scenario Planning and Visioning Scenario planning and visioning is a tool that has less structure than some of the other tools in this compendium. Yet is a powerful tool to be used by executives, department heads, and teams to construct the vision of where that organization is heading and the outcomes to be achieved. I started using this tool in the 90s when I was heading marketing at a wireless company. Given the competition that was coming about due to changing regulations and changing technology and due to the increasing use of the internet, it was time to think about where we needed to be heading. Our visioning exercise was used to determine not only where we wanted to go, but also to ensure there was alignment among the executives in carrying out the strategic and business plans. To do this correctly, each executive or team member has to address different questions including some of the following questions. They do this by visualizing a future state as if they walked in the shoes of their customers, their board, or other constituents. What does the company look like in the next five or 10 years? What kind of products will it sell and how will they be sold? What will the customers look like? What competencies will you need to put in place? Who will the competition be? What messages would you want to get across to the board of directors, to an investment group and to your customers? Scenario planning and visioning is a tool that has less structure than some of the other tools in this compendium. Yet is a powerful tool to be used by executives, department heads, and teams to construct the vision of where that organization is heading and the outcomes to be achieved. I started using this tool in the 90s when I was heading marketing at a wireless company. Given the competition that was coming about due to changing regulations and changing technology and due to the increasing use of the Internet, it was time to think about where we needed to be heading. Our visioning exercise was used to determine not only where we wanted to go, but also to ensure there was alignment among the executives in carrying out the strategic and business plans. To do this correctly, each executive or team member has to address different questions including some of the following questions. They do this by visualizing a future state as if they walked in the shoes of their customers, their board, or other constituents. The best parts of this exercise are listening to the answers, debating the vision, and then coming to a singular purpose and vision. Product Innovation Charter A product innovation charter is a format used by companies to determine the company’s (or team’s) product management or development strategy. What risks and returns do they want to take? What type of innovation will they consider- a new-to-the-world product will have substantially more risk than a line extension. It is used for products, not processes and sets the charter, i.e. the conditions under which the company or team will operate in making decisions. The format of the charter is straightforward and simple, yet the end result is very powerful.                                               Product Innovation Charter Background: What the reason for this charter? What problems are you trying to address? Goals: What are the specific goals that can be met? SMART Goals: specific, measurable, actionable, responsible party, and time frame should be defined. Objectives: What is the overall objective of the charter? Is it to increase dominance in one area or to play catchup? Is the goal to develop breakthrough products or provide a specified risk/return ratio? Guidelines: How does this charter fit into the corporate strategy? How much money is funded by this charter? What are the decision making capabilities of the leaders of this charter? Boundaries: What are the rules of implementing the charter? For example, is this an entirely internal team approach or should partners be considered? Are there certain companies that are off limits to partnerships? Is this for consumption in the US or the entire world? Balanced Scorecard The Balanced Scorecard can be construed as a complete management system as originally conceived by Kaplan and Norton in the mid 1990’s.   The original structure of the balanced scorecard pointed to four elements as shown in the following diagram where each of the elements supported the vision and strategy of the company.  Over time, the balanced scorecard has evolved and in our interpretation it provides a structure for companies to use and modify according to the priorities and needs of the company. In some companies, there is less “learning” and more growth oriented actions. In other companies, especially in the Internet world, the focus may be on replicable processes, or maintaining a specialized workforce, or even implementing strategic initiatives to maintain an edge in the market. Such thinking doesn’t detract from the structure and use of the tool, yet the tool can to be modified to accommodate different companies. Analytic Hierarchical Process The analytic hierarchy process (AHP) was developed by Thomas Saaty, a professor at the University of Pittsburgh in the 1970s at which time, as a mathematician and engineer I fell in love with the methodology and have adapted it to fit my needs in corporate America and in our consulting practice. It is a structured technique for organizing and analyzing complex decisions such as funding different product development efforts, selecting a leader of a cross-functional team, or determining which investment or partnership makes the most sense. The “most sense” is based on a combination of mathematics and beliefs – some supported by data – of different people and teams evaluating several options. What I like about it is the fact that by expressing answers in mathematical terms, you almost take out the emotion of decisions and can better evaluate disparate options. For example, you can use it for the classic guns v. butter decisions. The strength of the process is that it helps decision makers find solutions that best suit their goal and their understanding of the problem. It provides a rational framework for structuring a decision problem, for representing and quantifying its elements, for relating those elements to overall goals, and for evaluating alternative solutions. The users of the AHP first decide on the elements upon which decisions are based and the comparative weights of those elements. That would be a one-tier hierarchy. But the power of the system extends when each of the primary elements has a subordinate structure. Let’s say financials was one criteria and that weight was 25% as shown below. A second level hierarchy could be developed based on cash flow, capital and margin. To us, the important part of the exercise is to give the different team members or decision makers the opportunity to debate and determine the correct elements, the hierarchy and the weights. Then, once complete, each case can be analyzed and an ordinal ranking can be determined based on a score. It still enables flexibility by the team to make final adjustments. What it prevents, though, is one dominant player swaying the votes of the others. Sometimes, in organizations, that is easier said than done. Here’s what a two level system looks like for a company that was analyzing different product development opportunities. It can be applied in any business or industry or functional area. With these tools, the executive can determine the direction of the company, ensure the executive team is in alignment, determine priorities and execute the plan. Of course, we at C-Level Partners are glad to help. Call me at 949 4394503 or write to me at dfriedman@clevelpartners.net to see if you qualify for a complementary one hour discussion of your business issues.
I just read an article in CBInsights regarding a post mortem of more than 200 companies that failed.  It made me think if there is a way to prevent failure or provide insight into potential failures and errors that could be prevented and corrected a priori.  To that end, we have developed a series of 20 tools that can be used by the StreetSavvy Business Executive that can help diagnose problems and provide data upon which better decisions can be made.   Over the next several weeks, I will share 5 tools per week for our readers’ use.  Let me reiterate the definition of a StreetSavvy Business Executive.  It is a person in charge, normally in the executive suite, that has responsibility for a program or function or department, and who doesn’t follow the crowd.  Their goal is to find opportunities- call them blue ocean or impulse events- which prevent their business entity from regressing to the mean of mediocrity.  Following the crowd is not in their DNA.  They want to create their own path to success and by so doing, distance themselves from the crowd. There are many tools, constructs, and paradigms we, at C-Level Partners, use to find solutions to complex problems.  We are glad to share those with our readers in our blogs, seminars and other media.  To that end, we put together this collection of tools and a brief description that we use to help companies.  Here are the first five tools. Feel free to provide comments and “like” them and share with whomever you believe can use them.  And feel free to contact me at dfriedman@clevelpartners.net or call at 949 439-4503. PRASE℠      This is C-Level Partners basic way we analyze problems. It is like a super gap and it is a very disciplined approach to solving complex problems. This methodology is applicable in any situation where value creation is inhibited. Problem definition (description of) the current state and why it is insufficient Root cause identification (what is causing the problem or constraint to achieving the goal) Analysis of the desired future state (what it will look like when a problem is fixed or constraint lifted) Steps needed to develop specific prescriptions and priorities to get from “here” to “there” (people, process, technology and governance) Engage in an action plan based on priorities, organization, delegation, and follow up to achieve your goal state)   Side-by-Side Matrix.  Market research comes in many forms, shapes and sizes.  There is one tool that can be utilized more in market research and that is the side by side matrix.  This enables the business executive to collect data on two or more dimensions to get a broader view of attributes important to a constituent.  Not all survey vehicles offer this type of system yet Survey Monkey to a degree and QuestionPro offer very good templates and tools for use in conducting this research.   When coupled with the Quad Maps (because they visually depict answers in two dimensions, the results can be very powerful.  From Question Pro (www.questionpro.com ) here’s the construct of the side-by-side matrix. While these questions may be easy to frame, think about categorizing questions.  For example, we categorized questions as customer service and support, retail experience, web experience, product breadth, sales reps, and other categories.  Within each category we subdivided the questions to get some more granularity.   Using this tool and plotting it on a “quad map” is ideal to visual what you can leverage and what strategic initiatives need to be put into place. For one wireless company using this research, the company was able to realign its strategy and marketing budget.  The results showed the company what was important and for those activities that they performed well, the marketing plan was able to leverage those positive attributes.  For other activities that the customer deemed not important, the company reduced expenditures.  And for those activities that the customers said were important but where the company fell short, initiatives and corrective actions were put in place.   The system worked well and the implementation of the results helped put the company on a new path to growth and propel the company to market leader position.  Quad Mapping A quad map is a simple tool to determine what to leverage, where to focus, what to watch and what to ignore or spend fewer dollars on.  We normally couple the Quad Maps with information attained through the side-by-side market research. Business executives can break down questions into functional areas such as customer service, product breadth, store design, pricing and other categories.  Customers, suppliers and even company employees can answer the questions of importance and performance using the side-by-side matrix mentioned above.   Those areas that are important and for which performance is poor can be thought of as potential strategic imperatives that the company or entity needs to undertake to correct.  Those attributes that are important and for which the entity performs well should be leveraged and emphasized.  Those items that are not important for which companies perform well. Spider Diagram Another simple yet powerful tool for use in positioning and competitive analysis is called the Spider diagram, because when you look at the graphical plot it looks like a spider web. Attributes are indicated on the spokes and the length of the spoke reflects the scale e.g. from 0-10 (highest)   A critical assessment of your brand, in this case, vs. the competitive brands can provide information on where to focus because your brand is better and where you might need improvement. It was interesting to see this system used in the 2016 NFL draft as positional players were compared by using spider diagrams.    SWOT Analysis SWOT stands for Strengths, Weaknesses, Opportunities and Threats. A SWOT analysis is a tool that can be used to help the business person make better strategic decisions and develop plans that will be effective against the competition.  It can be used as a complement to Spider Diagrams. Normally Strengths and Weaknesses focus on internal attributes of the company e.g. competencies, resources, reputation, brand, customer service and similar items.  Opportunities and Threats normally focus on the external world although many companies can conceivably find both threats and opportunities internally.  Threats include competition, regulation, and social changes, changing workforces, governmental policies and similar items.  Opportunities are noted where the company can make inroads e.g. a new market, or where new competencies, alliances and technologies can be obtained to provide an advantage in the current markets, expand product lines or increase sales.  Most SWOT analyses are broken down into a two-by-two matrix, with one box for each of the four components but can be extended to include a SWOT comparison for multiple competitors.  Here are two templates that can be used.  This first one is for the company itself and the second one is for a company relative to its competition.  Note that competition should be considered as existing competition i.e. direct competitors as well as indirect competitors and potential competitors.   We hope these five tools are good additions to your toolkit and will help you get data upon which to make decisions and to make the complex problems a little easier to dissect and address.
My business partner, Brian Newton, and I were talking about resource for business executives.  Since I host a segment of a business cable TV Show called EYE on Business (Time Warner/Spectrum) and my section focuses on StreetSavvy Business (from my days growing up on the streets of New York, hence the image to the left), we decided to develop a "Nifty 50" list of those sites and resources that would be ideal for the StreetSavvy Business Executive.   StreetSavvy Business is aimed at finding solutions to complex business problems and by so doing executives are leading their companies in new thoughts, directions, and opportunities.   StreetSavvy Business is a way to prevent companies from regressing to the mean - and worse, mediocrity. There more than 750 million URLs for websites in the US and around 200 million that are “active.” There are certain sites because of their breadth, content or unique perspective that can help entrepreneurs and executives alike in understanding the business environment, changing behaviors of different segments of the population, the economic environment, and the political environment. C-Level Partners put together a selection of sites that they have found to be useful to business leaders of all kinds. We divided these sites into categories but clearly there is overlap among the websites. Based on the collective wisdom of C-Level Partners and its advisory group of more than 60 C-Level Executives, these are the sites that are used time after time by those queried. Much of the information is free while there are premium services or subscription services. Even if there is a fee for premium services, signing up for the blogs or free newsletters will help the executive get and stay ahead. A word of caution: A website is only as good as the information that it provides for an intended purpose. General Business www.businessweek.com Originally called Businessweek and now called Bloomberg Businessweek, this magazine provides information and opinions on what is happening in the business world. It focuses on issues shaping markets, technology and politics, and provides options on developments which affect the business world. www.ceo.com CEO.com is a resource for executives seeking out the latest in business news and leadership strategy. Our editors probe the web and handpick the most relevant content for the site that will help you become a more effective business leader. www.cfo.com Targeting corporate financial executives this site offers information on Accounting & Tax, Banking & Capital Markets, Risk & Compliance, Strategy and Technology. Their content includes articles on current topics, white papers and links to other relevant content. www.cio.com For this site’s content the “i” means “Information” so much of the content is related to technology topics. When visiting the site in January 2017 I noticed a piece on European privacy regulation which, having lived in London for 14 years, can be a minefield. Given the current state of flux in these regulations, a firm with activities linked to Europe would be well-served to remain compliant. Of course, there were many technology related items on this site which has extensive content. www.forbes.com Published bi-weekly, Forbes features original articles on finance, industry, investing and marketing topics. Forbes also reports on related subjects such as technology, communications, science and law. www.fortune.com Fortune Magazine competes with Forbes and Bloomberg Businessweek in the national business magazine category and distinguishes itself with long, in-depth feature articles.[2]  The magazine is best known for the Fortune 500, a ranking of companies by revenue that it has published annually since 1955. Economic/Financial/Political/Technical www.ft.com The Financial Times is the cornerstone of international business news, analysis, market data and company information. It provides perspective on global business issues and provides clarity in a complex business world. Also, as it is UK based, the points of view presented are less US-centric than many other publications in this list.  www.money.cnn.com Purportedly the largest business website, CNN Money provides information on business, markets, technology, media, luxury, personal finance and a section on small business. www.theeconomist.com The commentary makes it a requisite for any business professional. You need to stay up to date on all news to cultivate partnerships and understand the new realities of both the political and economic climate to be successful whether you are an entrepreneur or a corporate executive. Like the FT mentioned above, The Economist is UK-based and the point of view is less US-centric and thus useful for US executives to better understand communications with overseas partners or customers. www.reuters.com Reuters.com brings you the latest news from around the world, covering breaking news in business, politics, entertainment, technology, video and pictures. www.research.stlouisfed.org.  The St Louis Fed offers an outstanding range of publications and data on economic, financial and policy issues. Their FRED service is the data service and they make available an Excel Add-in that allows you to download historical data including thousands of series covering the entire world. www.gartner.com, www.forrester.com, www.idc.com We lump all these together and you can add others as well. These sites provide market research, analysis and advisory services on a range of technology and Information Technology that is critical for the Chief Information Officer, Marketer and even other executives to understand. Investment/New Technology www.yahoofinance.com Yahoo Finance provides one of the most complete sites for business, finance and stock market news including quotes on stocks, options, and portfolio management. www.investors.com One of my favorite sites with news and information that moves the markets and a complete tool for analyzing stocks and financial markets. It has a new America section which focuses on technology trends and companies that will change the economy. www.motleyfool.com This is Dave and Tom Gardner’s site which became famous for its investment insight, and analysis of stocks. You can also find out which stocks and industries will make the most changes to our economy during the coming years. www.marketwatch.com MarketWatch operates a financial information website that provides business news, analysis, and stock market data. It is a subsidiary of Dow Jones & Company, a property of News Corp. www.seekingalpha.com Seeking Alpha is a crowd-sourced content service for financial markets. Articles and research cover a broad range of stocks, asset classes, ETFs and investment strategies. Leadership/Management www.bain.com Bain is a top management consulting firm that advises companies on strategy, marketing, organization, operations, IT and just about every aspect of business. They have a tab called Insights which is their blog that can help executives find new ideas that generate results. www.mckinsey.com In the same vein as Bain, McKinsey and Company is a global management consulting firm that serves leading businesses, governments, non-government organizations and non-profits and helps them realize their performance goals. Their blog provides stories about people and research which might be useful to find and implement new ideas. www.strategy-business.com Business strategy news articles for CEOs, corporate executives, and decision makers who influence international business management.  Their prime focus is to highlight the complex choices that leaders face — in strategy, marketing, operations, human capital, governance and other domains — and the impact of their decisions. www.enpinstitute.com Executive Next Practices Institute is a research, collaboration, and thought leader forum composed of several thousand C-Level executives from Fortune 5000 companies, including those from C-Level Partners. Their focus is on first look innovations, beyond the current best practices. www.cebglobal.com CEB (formerly known as the Corporate Executive Board) is a best practice insight company with several subspecialties in HR, IT/Operations, Marketing and other functional areas. It develops its programs in partnership with leading organizations around the globe and shares solutions to drive corporate performance and to effectively manage talent, customers and operations. www.hbr.org Harvard Business Review is one of the cornerstone magazines for new ideas and classic advice on strategy, innovation, leadership, technology and marketing from the world’s best management and business thinkers. www.linkedin.com Everyone should be on LinkedIn, the largest professional database. You can find people, new opportunities, and through groups engage in dialogs on trends, technology, marketing, business, economics and almost everything else. By participating in posting articles or sharing information you will also encourage others to find you and that can lead to business deals. Everyone likely knows that Microsoft bought LinkedIn in 2016. www.edgar-online.com EDGAR Online is a leader in helping professionals uncover intelligence from financial disclosures. EDGAR Online offers distribution of company data and public filings for equities, mutual funds and other publicly traded assets. Check out the 10k filings of publicly traded companies to get a good understanding of the business climate and insight into their business strategy. www.marshallgoldsmith.com Marshall Goldsmith is a leadership coach with some of the key corporate, public and non-profit leaders of the world. His books include What Got You Here Won’t Get Your There are insightful and offer many useful suggestions for motivating and energizing your teams. Also, his subscription service provides weekly 3- to 5-minute videos which offer useful suggestions for better handling challenging, or even very obvious, situations. Innovation and Entrepreneurship www.cbinsights.com This venture and start-up website contains a private company financing and angel investment database. It also provides excellent infographics on technology trends and shares eco-systems of market categories. www.slideshare.net Authors, writers, and companies share their information through presentations, infographics, and documents. Owned by LinkedIn, you can now link your presentations to your LinkedIn account. www.techcrunch.com. TechCrunch is a leading technology media property, dedicated obsessively to profiling startups, reviewing new Internet products, and breaking tech news. Check out its companion site, www.crunchbase.com, which provide an excellent database on innovative companies, their funding, and the people behind them. www.ted.com TED Talks are inspiring and revealing. While the site talks about new ideas and trends, it is more than a site for entrepreneurs as it has a strong community. Information from these talks is beneficial to both entrepreneurs and successful corporate business people. Check out www.mashable.com as well, as these two are nice complements to each other. www.fastcompany.com Fast Company provides a breath of fresh air as it inspires new innovative and creative thought leaders who are inventing the future of business. While aimed at the younger generation and start-ups, Fast Company provides good information on leadership and management that is applicable to the corporate executive as well giving them an edge in business. http://www.eofire.com This is a platform and podcast for entrepreneurs and marketers. Founder, John Lee Dumas, interviews inspiring Entrepreneurs. www.quora.com Leaders and entrepreneurs in the tech industry share their information and answer questions from the reader base. www.entrepreneur.com This site provides the latest in news and advice for the startup entrepreneur. And the information is also useful for those in the corporate world who delve into innovation. www.inc.com Find out the latest in tips, news, management, leadership and other resources for entrepreneurs from one of the most reputable magazines in the industry. Marketing www.chiefmarketer.com Chief Marketer serves marketing professionals at consumer and business-to-business brands, as well as their agencies, with rich, detailed information on measurable marketing strategies, tactics and techniques. Marketing executives discuss marketing and technology challenges, how to understand the relationships, and how to determine which tools are most effective, and the role of data and content. www.hoovers.com Hoovers has one of the largest databases for use by business people, sales people, marketers and others and which provides in-depth information on more than 85 million companies. You can use this for targeted mailing lists and depending on the subscription you choose, you can get industry information and competitive information as well. www.advertisingage.com Advertising Age has been around for a very long time and this website helps marketers understand advertising as part of the overall marketing mix. Many marketers still are behind in digital marketing knowledge and this site can help by sharing ideas on what others are doing. As part of Advertising Age, www.btobonline.com provides specific information for the B2B marketer including news, advice, trends and technology. www.avention.com Avention is the new name for OneSource, a database of companies that marketers can use to find information on companies in their industry, competitors and even use it as a lead source for direct marketing campaigns. www.marketingtoday.com Marketing Today is a combination marketing magazine and blog covering such topics as general marketing, digital marketing, social media, advertising and public relations. www.marketo.com Marketo is basically a marketing automation site and a good one at that. It provides through its webinars, events and blogs a host of useful information that marketers can use to generate sales and partners. www.hubspot.com Hubspot has a fantastic blog covering a range of sales and marketing topics, including A/B testing, content marketing and e-mail marketing. www.econsultancy.com Econsultancy shares the latest digital marketing and ecommerce insight from a team of analysts and experts. www.kissmetrics.com The KISSmetrics blog aims to help you track, analyze and optimize your digital marketing. Miscellaneous/ Specialty www.apple.com/education/itunes-u The iTunes U app gives you access to complete courses from leading universities and other schools — plus the world's largest digital catalog of free education content — right on your iPad, iPhone or iPod touch. www.businessinsider.com This site has spent the past few years providing free articles and reports on a wide range of business, technology and policy issues. Quite recently they have begun to charge fees for many of their reports, which are, in fact, well researched. However, whether they’ll be considered value-for-money has yet to be determined. www.instantcheckmate.com This is a relatively new yet interesting site which claims to have the ability to find out background information on most people. You can use it to verify people you want to hire or partner with. www.lynda.com This site contains over 2,000 video courses on a wide range of topics which are led by industry recognized instructors. For an introduction to a new area of interest, or to dig deeper on a topic than you already are, this site likely has courses to meet your needs. This is available for a small registration fee and offers a 12-week free trial so you can assess whether this is right for you. www.mashable.com Mashable is a global, multi-platform media and entertainment company with a focus on the intersection of technology and culture. Check out its YouTube channel as well. www.wired.com Wired probably needs no explanation. Everyone is connected in some way to something or someone. The content is current, often leading edge material that typically is reliable. If you are unfamiliar with it, check it out. Likely you’ll be impressed and use it going forward. If you are interested in becoming a StreetSavvy Business Executive, call me or Brian to find out how you can qualify for a complimentary 45 minute appraisal.   My telephone is 949 4394503 and email is dfriedman@clevelpartners.net.  Brian's email is bnewton@clevelpartners.net.  
It is said that if you know your enemies and know yourself, you will not be imperiled in a hundred battles; if you do not know your enemies but do know yourself, you will win one and lose one; if you do not know your enemies nor yourself, you will be imperiled in every single battle.                                     Sun Tzu- The Art of War I am a believer in the Art of War, especially applied to business and marketing. When I talk to groups on business and marketing subjects I use this quote and it has guided me in the way I approach building businesses and helping companies grow. I have listened to numerous investment pitches at TechCoastAngels screenings (a real Shark Tank) and have heard too many times that the entrepreneur believes there is NO competition. There is always competition, i.e. another way to solve a problem or provide a service. Even when a company realizes that there is some semblance of competition, many executives believe they have more attributes, a better business model, and a stronger brand than reality leads them to accept. Sadly, this problem extends way beyond the start up world. In 2008, Jim Keyes, CEO of Blockbuster said: “Neither Redbox nor Netflix are even on the radar screen in terms of competition.” While Redbox had its glory days and has now faded, Netflix continues to soar as they are able to take advantage of streaming media and they have evolved their business model. Blockbuster and its ubiquitous blue and yellow stores have faded into oblivion after ceasing operations in 2013. When I was at RCA (when it existed as a standalone company) one of the execs in the tube division beat his plan but unfortunately failed to recognize competition from semiconductors. He was fired. And let’s not forget other companies such as Digital Equipment Corporation, Wang, Motorola and Nokia in the tech field. Not only did they fail to understand the competition, their business strategies did not evolve. We are now seeing consumer companies such as Macy’s and Kohl’s which failed to recognize the competitive environment fast enough (can you say Amazon and online shopping) and are now closing many of their stores. There is hope though, for most companies as they consider their competition, the environment and the competencies they need to put in place to execute a new business strategy. To that end, here are the six steps companies must take to gain and/or retain a competitive edge. 1. The first step to beat the competition is to recognize that there is competition! Competition comes from direct competitors, i.e. those offering the same type of product or service; indirect competitors; and even the do-it-yourselfers. Even if a competitor is small today, should technology or macroeconomic trends change, a small new company can become dominant. That is what happened to Blockbuster. Competition doesn’t have to come from the same players in the industry. Who would have thought Google and Apple, both, would be developing an autonomous car or at one time a smart phone. As we celebrate the 10th anniversary of the iPhone, there was a time when dominant companies in the market such as Nokia and Motorola did not consider Apple a threat and frankly, they did not believe companies like LG and Samsung were threats either. Both Nokia and Motorola have lost their luster. Keep alert and be paranoid. Use user panels talk to “lead users” who are early innovators of new products, set up Google Alerts on companies that are current competitors as well as those which have the right competencies to become competitors. Your product might be better and that message needs to be conveyed to your target audience. You can recognize the competition through the use of user panels, discussions with “lead users’ and even setting up Google Alerts. 2. The second step is to know the competition. A couple of months ago, I was watching a classic war movie called Patton. Patton was reading the works and biography of Rommel, his nemesis, competition and enemy. Rommel in turn was trying to learn through books and other sources, how Patton thinks and how he would fight. It’s classic Sun Tzu! Even without teams of analysts and staff there are a few tips in understanding and knowing your competition. Executives can become the equivalent of Undercover Boss. When I was the top marketing executive for US Cellular, I personally visited both my stores and those of my competitors. It’s easy to do even in a business to business environment. Other tools that can be used include Customer Advisory Boards, user panels, cross-functional teams that meet regularly to discuss competition and the environment. At ATX Group (now Sirius Connected Car), every other Friday morning I hosted a cross functional group of executives to discuss new technology and competition. Certain execs were tasked with following specific competitors and sharing that information in Microsoft Exchange folders for our sales, marketing and technologists to use. Other tools include Spider diagrams, focus groups and market research including subscribing to the industry analysts that cover your industry. In the tech field those industry analysts include Gartner, Forrester, IDC and Ovum among others. If a public company is a competitor, read their 10-Ks; it’s amazing how much information is available in that document. 3. The third step is to know yourself. Some of the same tools used to understand the competition can be used to understand your own company. Spider diagrams, side by side market research matrices that can highlight those attributes that are important to your customers and for which you perform well or poorly can help set your company’s strategic imperatives. I am a huge fan of developing a SWOT analysis which covers strengths, weaknesses, opportunities and threats. To do SWOT well companies should seek out key thought leaders in their company, regardless of level and even use newly recruited employees who have a different perspective because of their recent outside experience. Doing mystery shopping even in a business to business company is also relatively easy. At a telecom company in New Jersey, one of my marketing managers set up a false company called The Fred Racciopi Cement Shoe Company of Central New Jersey (obviously we set this up tongue and cheek) and became a customer of each competitor and well as our own company. It’s amazing what we learned and through those learnings we adjusted our training program, branding, positioning and marketing material. 4. The fourth step is to develop and explain the factors that make you different. Customers buy from companies that provide a unique value for their needs. If the value is significant, relevant to the customer, sustainable and credible, the company will have a differentiable advantage. This enables executives to create a “moat” around their company and its products, protecting the company from competitive incursions. The strength of your differentiation is akin to the size of the moat. Even commodities have moats. Think about salt or rice, two very basic commodities. Do you believe that Morton’s salt is better than other salt and worth a 15% price premium? Or how about Mahatma rice vs Kroger-branded rice? What about chicken? What company said: It takes a tough man to make a tender chicken?” (The answer is Purdue Chicken.) If you can differentiate these commodities, you can differentiate any company and its products. There are several ways upon which to differentiate. Intellectual property (IP) or Patents is an obvious one. Even IP may not be sustainable or even relevant to your target market. Other ways to differentiate are based on what Adrian Slywotsky, author of Profit Zone, calls strategic control points which are defined as some type of unique advantage for a company based on competency or partner relationship. All companies can find at least one. These could include their brand, their business partners, distribution partners, unique processes, innovation, low cost of manufacture, unique customer knowledge, access to certain resources be they commodities or people and similar items. A company has to find those strategic control points that are relevant to their markets and be consistent and credible in delivering on those elements. 5. The fifth step is to develop plans: Developing and executing a plan is critical to success. A written plan should include specific elements. By target market, a goal needs to be defined, a strategy clearly enunciated, and tactics developed with specific milestones, costs, and a person responsible for delivering the tactics. Our opinion is that a plan should have one specific leader who is accountable for the entire result. Individuals who report to this leader need to be designated for each tactic and milestone. C-Level Partners also believes that these plans need not be long winded and in fact the best plans have focus and clarity and might even be codified on one or two pages at maximum. I personally am in favor of one page plans with specific deliverables. I like using a method called RACI (responsible, accountable, consultative and informed) to ensure that the right people in a company are involved in the development and execution of the plan. 6. The sixth and final step is to monitor, measure, modify.  Each plan developed in step 6 should have a complementary set of metrics to track the success of the plan. Metrics vary depending on the plan and some of the metrics can include: average revenue per sale, total sales, return on investment, market share, win/loss ratio of business, aided and unaided awareness, average order quantity, SEO, the timeliness of performing the tactic, and other operational, business or product criteria. Each month these metrics should be added to a scorecard – preferably balanced – and reviewed with the operational or executive team. If a metric is not on target, then the executive responsible for the metric has to provide a corrective action plan. If the metric is very critical to the business strategy or to the overall goals of the plan, then a separate deep dive should be performed where the elements of the plan can be discussed in detail. As an executive it is sometimes hard to see the competitor when you are mired in the day to day operations. You can always look to outsource part of these six steps or recruit internally some of the best and brightest less tenured people in the company. Successful companies couple strategy with competitive analysis to create and maintain an advantage. When I first converted from an engineer to a marketer, I cut my teeth on competitive analysis. It was the perfect start to figure out how to gain an advantage for the new products I was developing for my customers. I was fortunate to have the opportunity to help drive the strategic vision of my company at the same time. That integration is, in my opinion, critical to a company’s success. Once you gain a competitive advantage, you have to stay ahead of the competition. That is a subject for a future blog, yet we at C-Level Partners believe that maintaining a competitive edge means companies have to continue to innovate, with technology, with their people, and through their processes. They must maintain contact with customers and open their ears and even seek out criticism. And they must strive for not only incremental improvements but also stretch for what we call the “art of the possible.” As a technologist and business executive, I always keep in mind the title from Andy Grove’s book, “Only the Paranoid Survive.” Yet with discipline and a plan as outlined in these six steps we believe that companies will be able to develop a competitive edge and flourish in this hyper competitive environment.   If you have comments or would like to see if you qualify for a complementary appraisal contact me at dfriedman@clevelpartners.net or call me on 949 4394503.
13.12.2016
David Friedman
No comments
Do You Have What it takes to be a Visionary? Visionary. (noun). A person with original ideas about what the future will or could be like.  These visionaries will change the world for the better over time. Who are those visionaries around you?  Do you – or they – have what it takes to be a visionary? Visionaries come from different walks of life and professions. But generally, they are activists, artists, scientists, engineers, entrepreneurs, and in, general, non-conformists. All have a different view of the problems they face. All have changed the world. We know who visionaries were in the past. Here’s a short selection of some of my favorites: Thomas Edison, Henry Ford, Albert Einstein, Gandhi, Walt Disney, John F Kennedy, Martin Luther King, Steve Jobs, and Elon Musk. I decided to give my perspective on the characteristics of a visionary. This is not a well-researched statistical piece; it is based on what I have read and observed in my 30+ years of business and worldly experiences. Open-mindedness. This refers to one’s ability to keep an eye open for new thinking and not be closed to new ideas just because they are different. In fact, actively seeking out new ideas would be ideal. Values diversity of thought. Sometimes surrounding yourself with people from the same background provides a very narrow focus and homogeneous solutions to the problem. I like diversity of people and diversity of thought. That is how I like to construct cross-functional and matrixed teams and I find it amazing to see the robustness of decisions and options. Action oriented.  There is a difference between a dreamer who thinks about a different world and a visionary who sees the different world and puts a plan in action to get to that point. If Martin Luther King’s Dream Speech just shared the dream of one world with all people created equal change would not have occurred or occurred as fast. Rather, he put into place activities that began to implement his dream. Conviction.  If you are a visionary, you might be treading on existing ideas and values. Many people don’t like change. So visionaries have to have a firm conviction that they are right in seeing a new world even when many shun those new ideas. Persistence. Coupled with conviction is the characteristic of persistence. Being visionary challenges prevailing wisdom and the road to change is fraught with difficulty, roadblocks, and potential legal and regulatory restrictions.  A visionary accepts those challenges and preseveres. A significant amount of energy comes from the visionary’s followers. Inspiration.  We all know of inspirational and charismatic leaders. I used to think that inspirational leaders were vocal and can get a crowd excited by rhetoric. I was wrong. To be inspirational the visionary needs to deliver clarity in the new world order and be articulate in explaining the benefits. Clarity. A fuzzy vision doesn’t work because with change, people must “see” and believe in an end result. Think about JFK’s speech on Sept 12, 1962 to 35000 people in Rice Stadium in Texas wherein he said “We choose to go to the Moon! .. We choose to go to the Moon in this decade and do the other things, not because they are easy, but because they are hard; because that goal will serve to organize and measure the best of our energies and skills, because that challenge is one that we are willing to accept, one we are unwilling to postpone, and one we intend to win..”  This was not a fuzzy vision of space travel but a clear goal and vision of space exploration taken with first steps to land a man on the moon in a specific time frame. And, of course, in 1969 I watched as we landed a man on the moon. Boldness.  Along with clarity, the vision should be bold, something that is not just an incremental improvement but a major change, a major shift in the way things are done. Sometimes we call this a BHAG – a big hairy audacious goal. Boldness with conviction is critical because it rouses the energies within people to achieve success. Risk-tolerance. Along with risk tolerance is the lack of fear of failure. Thomas Edison said that “I have not failed. I've just found 10,000 ways that won't work.”   He framed his end product in such a way as to give him the will to succeed. By positive thinking that he is closer to an end result, he was able to maintain his work ethic and develop the electric light bulb. Are you born with these characteristics or can you learn them?  My personal belief is that there is some internal encoding of these characteristics in your DNA but that family and environment coupled with some good mentors and influencers will solidify these characteristics.  Reading biographies and auto biographies can also help understand the thinking of visionaries. There may be other characteristics of a visionary and you can certainly add to this list.  When you attend entrepreneur events and innovation conferences think about how these apply to the people who present and the people whom you meet.  Then imagine you, the reader, having these characteristics and the opportunity to change the world. C-Level Partners is dedicated to helping companies achieve value creation through revenue growth and margin improvement.  We can also help with your innovation plans, advisory services and helping establish a framework for innovation (see our blog on this subject at http://clevelpartners.blogspot.com/2016/10/how-to-institutionalize-innovation.html).  Or feel free to call me at 949 4394503 for a complimentary analysis.
17.11.2016
David Friedman
No comments
Today, as part of TechCoastAngels (TCA), I participate in pre-screens and screenings (shark tanks), mentoring teams who have new ideas they want to pitch, and judging fast pitch competitions. Before I became an angel investor I worked in the corporate world as an intrapreneur. It is quite different in many ways but similar in other ways. I have found that what I learned in both the corporate world and the angel world can be shared with future innovators and visionaries and these ideas and templates can potentially help them to get funded and be more successful. I put some of these learnings into the following checklist. Many entrepreneurs, especially those more technical, are sometimes ill-prepared to make a pitch. They get enamored with new technology. It’s interesting to note that many in the corporate world, too, have that same fixation. So, when I developed pointers for entrepreneurs as they pitch TCA, I believe that basically the same type of checklist can be used in the corporate setting as well. Whether a business model canvas is used or an opportunity template is developed, the same questions appearing on this checklist would need to be considered. In the end, the checklist is used to tell the story of why the opportunity, start-up idea, new product/service concept or new business model makes sense as an investment to be funded by third party investors, or internal corporate resources. While this checklist presents a sequence that might work for some, I understand that each entrepreneur or intrapreneur may want to tell the story of the business or service or product in a way that fits their style and personality. Therefore, it is ok to sequence the presentation story in a different manner. For example, some intrapreneurs or entrepreneurs with a very strong background, having done similar ventures before, or those with exceptionally strong teams, may want to lead with the team structure. Realistically though, in the first few minutes of the presentation, the entrepreneur or must state the problem that is being solved so that the “investors” listening to the pitch “get it.”   Recognize that not all the points below will be answered in detail and some may not be answered at all. Yet, each of the 10 elements must be covered in some manner to tell a solid story of why the product/service or business is unique, sustainable, and a good investment with the potential to increase revenue and value for the investor or company if it is internally funded. 1. Summary of what problem is being solved and why your company/product/service is different ·         Problem customers face. Maybe there is a lead user (a potential customer that kludges a solution that can serve as the initial customer). ·         Short simple 15-30 second pitch on what the product/company/service is and why you are different from the competition (and there is always some form of competition, be it direct or indirect). ·         What you do relative to alternatives and why your solution is better.  ·         The entrepreneur or intrapreneur can state the vision for a product/company/service which may be much broader but he or she must specify the initial target. 2. Market Size (Answering the questions of what is the market, its size and growth potential) ·         Your specific target market in the short term. ·         Some mechanism to determine the size of the market. ·         What does that market look like? I.e. what is the “ideal” customer and how do you find them?  ·         Can you leverage existing partners, channels, relationships? 3. The company/product/service (Answers the question of how do you make the product/service or put the business together) ·         What is the technology to be used? o   Patented or licensed? ·         What is the “architecture“ of the company and the product/service? ·         How do the pieces fit together? ·         What is the IP behind the company or the product?  ·         Is this an execution play, i.e. land grab or land and expand? ·         What is the unique differentiation of the product? o   What is the brand promise? o   How do you create a moat around your business or product? ·         What are the strategic control points, i.e. where do you have strength and why in distribution, unique customers, brand, IP? ·         Is the product scalable and to what markets and with what resources? 4. The Team (Answers the question of who will be responsible for execution of the plan if approved) ·         Executive team and past experiences and accomplishments. ·         Advisory or BoD that supplements exec team and how you can use the team to help your business get off the ground or grow. ·         Setting up the RACI (responsible, accountable, consulted and informed) of how you will get information, make decisions, and share those decisions with your constituents. 5. The Financial plan. (Answers the question relative to the goodness of the product/service or business and whether you can make money and have adequate margin.) ·         Growth path, i.e. product plan, partnership plan, channel plan over time. ·         Business model including pricing for different markets. o   Growth plans and sequencing of new products, services, alliances, partnerships. ·         Metrics for determining success (Some examples follow yet may be unique to the industry). o   Cost per acquisition o   Time to close sales o   Churn rate o   Inventory turns ·         5-year revenue growth path, EBITDA. ·         Different revenue paths over a five year planning horizon. o   Routes to revenue and business model for each. ·         Risk impact and contingency plans. (See our earlier post by Brian Newton on risk impact analysis.) o   Risk includes technical, market, regulatory, key personnel, development, operations, resources, supply chain and manufacturing risks among other categories. 6. Competitive analysis ·         What is the brand and can you sustain the brand? o   Part of an existing family or new product/service family? ·         The basis for your idea being different. ·         Feature differences. o   Use “Harvey balls” for making comparisons of features and benefits ·         Sustaining the differences. o   R&D o   Marketing o   Partnerships o   Acquisitions 7. The Deal (if it is an externally funded deal) ·         Pre-money or current valuation if known. ·         Convertible note v. equity. ·         Prior investments/ cap table. ·         Capital and expense requirements (Required even if internally funded). o   How long will the money last? o   Will you need additional funding and if so when? o   Organization growth plan 8. Use of Funds (What will you use the money for and over what period of time) ·         How will you spend the money and on each of the following categories. o   Sales and marketing plan  o   Operational plan o   Distribution plan o   Partnership plan o   Development plan ·         What milestones will you achieve with the funding gained? ·         Will you need more funding, how much and in what time frame? 9. The Exit or Integration ·         What is your plan going forward? o   Will this be a separate business? Product line? Merged with another entity? ·         Will you sell and to whom? o   Why would they buy the company? 10. Summary ·         The five major take-aways from the pitch and a recap of why this makes sense to pursue. These questions make sense and are easy to ask. Yet it takes significant strategic and tactical thinking to build an executable plan. Let me know your thoughts on this and how you think it integrates with other templates such as the business model canvas. Our belief is that if you can at least address these 10 questions, whether you are an intrapreneur or entrepreneur, you will have a better chance at success. If you want to chat further, feel free to contact me at dfriedman@clevelpartners.net or call me at 949 439-4503.
13.10.2016
David Friedman
No comments
I am an innovator by nature. I am always trying to do something more, to try something different, and for the companies for which I worked, to move them ahead of the competition. And I have been at the forefront of innovation thinking for quite some time through my associations with the Product Development and Management Association in the past, an angel investor with TechCoastAngels, and an Entrepreneur in Residence at UCI’s Applied Innovation. I have been asked by clients and start-ups if a company can institutionalize innovation. The answer is simple: You bet. And you have to have a culture and management that supports innovation.Let’s step back for a moment. First, do you know the difference between creativity and innovation? Creativity is defined as the spark generating a new idea. Innovation takes the idea to a new level and the essence of innovation is implementation through execution. Now with that out of the way, can companies figure out a way to create innovation in their company? To me the answer is clearly YES! How do you do that? What are the categories of innovation? Here’s one list that I put together and depending on the company and their goals, there may be other categories. For innovation to take place, it should be put in the context of the company’s strategic and business plans. New products and services, ranging from line extensions, to new-to-the-company products, to new-to-the-world products. New ventures putting companies together in different ways to solve a problem. New market development such as paint companies introducing anti-bacterial paint for hospitals and children’s rooms. (Also can be classified as a new product.) New business models – for example the SaaS model replacing ownership of resources. New partnerships such as GM and Lyft or Apple and McLaren for autonomous vehicles. New business practices like Home Depot implementing Velexo’s one button installation for new technology and equipment. There are several models that can be used to define the architecture of innovation for a company but let’s take a simplistic approach. For each of these categories, I believe we can define five different ways the categories can be analyzed and the driver of innovation can be investigated. These areas include: customer, competition, competencies, technologies, and processes. Customer. Think about how you can develop new ideas. One concept is to make sure marketers and developers talk to customers on a regular basis. In Japan, engineers routinely visit customers to understand how they work with their current products and ask questions on what else is needed. Another thought for integrating customers into a company’s product development cycle is to include customers on internal development teams as we did when I was at Connexion by Boeing. Or set up a living lab where customers can play with new concepts and ideas as I believe Ford has done in the past as it designed new cars and continues to do with their new designs. Competition. Looking at the competition can give insights into what is possible. Perhaps you can build off of what the competitor is doing and does it better, faster, cheaper by using new technology or developing new processes. Tools such as Spider Diagrams and SWOT analysis can provide perspective and focus. Competencies. I like what Intel does and how they go about innovating. They are not afraid to make their current products obsolete and in fact, they are always thinking two steps ahead. Their competence is engineering skills. But even Intel misses the mark and has left opportunities for others in the mobile chip area such as AVAGO/Broadcom, NXPI (in the process of being acquired by Qualcomm), Skyworks and others. Companies can focus on building their competencies in various ways such as partnerships with schools/universities, labs, and even smaller, more nimble companies. An attendant benefit which we often see is that the larger company buys the smaller company because of the smaller company’s unique competencies. Technologies. This, to me, is the kingpin for growth. I am probably biased as I am a technologist by training who converted to marketing and to being a business executive. Technology, above all, provides corporations the opportunity to think about the Art of the Possible. Technology can be developed internally as it used to be at Bell Labs or IBM, or can be acquired through licensing deals with universities, individuals, or start-ups. Processes. Companies can look at new processes as a way to innovate. Think about ways to do self-service support for various products and services. What if a car dealer set up a few bays to enable customers to do their own repairs using their equipment and their parts? Think about Sears which has a fleet of service vans and can set a new process such that when a customer orders a washer/dryer the customer can push one button to have it installed. This is process change enabled by new technology, e.g. Velexo, which benefits both the customer and the company. What are we missing from this model? The key requirement for innovation in a company is when senior management drives innovation and sets a standard and goal for innovation to take place. This includes the reward and recognition system that encourages innovation and makes heroes out of the innovators. Companies like 3M encourage people to spend 10% of their time developing new products. Think about the classic story of Art Fry innovating not only a product but a market based on glue that did not bond well i.e. post-it notes! Or think about how Google encourages self-directed teams to form to develop new products and services. They recognize that most of these new ideas will not be commercialized although there will be substantial winners along the way.And let’s not forget how companies can set a metric for the number of new products that should be developed and the revenue obtained from those new products so they can sustain growth. Can anyone say Newell Rubbermaid a formidable product developing Fortune 1000 company whose brands such as Lenox, Sharpie, Sunbeam, Dymo, Oster and a slew of others?Finally, let’s look at a few ways companies can execute their innovation program: Here are just a few ways that we have seen in the past and have participated in over the years. New product advisory boards to generate new ideas on features and products. New channel management advisory committees where companies can leverage their channels view of their customers and work with the channels to develop unique products and services using a common platform. Appointment of a new product czar or growth leader to be the focal point for new ideas. In one of my prior assignments I formed a small organization called Ideation and Feasibility (IF) with the goal of “adopting” ideas from outside the industry to our industry. Product/service roundtables that meet once every few weeks, but certainly on a recurring and regular timetable and that would include cross-functional members from technology, marketing, account management, IT, and perhaps other groups as needed. Each member will have specific roles and even track specific competitors. Think about using Dropbox or some other common storage area for posting what the competitor is doing. Better yet, how about a “war room” where the group can track what customers and competitors are doing? Participation directly or through Corporate VC or business development functions in entrepreneurial activities such as the angel investment groups like TechCoastAngels and venues such as UC Irvine’s Applied Innovation where the corporation can invest in or participate in other ways in new start ups. This might be particularly true of innovations in the life sciences and cyber security areas. In a future blog I will cover how to evaluate such opportunities in order to drive profitable revenue growth. In the meantime, if you want to discuss this topic feel free to reach me at dfriedman@clevelpartners.net.
I get the question all the time of “how do we meet regulatory requirements” and that question comes from different industry segments. Many times, we think meeting these requirements is extremely difficult and onerous. Yet, I have a very simple approach and a checklist to share that can ease the burden of meeting these requirements. Here are my six steps:  Deliver a quality product or service. Set standards for your industry and your company but most importantly get feedback from your customers on whether they perceive the product or service is of high quality. There are many tools that can help you do this. Do this reliably and repetitively Staff must have appropriate education and/or experience Staff must engage in an appropriate training process An independent function must monitor the business to ensure proper operation  Ensure your activities are auditable Company must have appropriate policies and procedures in place and understood Documentation should be kept up to date Reports from monitoring activities must be directed to and read by senior management Perform audits at an appropriate frequency, but at least annually Results from these audits should be reported to and read by management. In fact, including the results as part of normal operational reviews would be ideal. Management should use these reports to guide decision making. Ensure the staff understands that exceptions must be reported to management promptly When an exception occurs the correct staff can be engaged and the appropriate corrective action can be performed quickly. Exceptions will occur. These present opportunities for improvement – be it better documentation, better or more frequent training, and improved monitoring among other things. Disclose all relevant information to your customers Open book management is preferred as customers appreciate being kept informed. Additionally, by so doing, customers are able to make informed decisions on whether the product or service is right for them. Thinking about these steps leads me to believe this is simply an articulation of the best long-term business strategy. Of course, most people will agree that the goal is to produce a quality product! And to ensure that the quality is delivered consistently! Who wouldn’t follow these steps? It makes so much sense. Ah yes, it seems obvious, but one needs to consider why companies fail to do this. Let’s look at a recent, high profile case in the news relating to Wells Fargo. Why didn’t Wells Fargo ensure that accounts being opened by some of the 5,300 staff that were terminated were in fact requested and authorized by their clients? How could over 2% of the total staff be fired and this not raise questions from senior management, in particular the Audit Committee of the Board? Many things have been cited as contributing to this untoward outcome, in particular, unrealistic sales targets for retail bank employees that were part of the business culture. The culture of the bank was not as described in the Code of Conduct. While profits did grow and senior managers were rewarded for achieving that growth, clearly reporting of problems to senior management either was non-existent or ignored by senior managers. Neither bodes well. But let’s think about a completely different regulatory environment – that of the FDA. These same six steps have to be part of the business model so that FDA inspections do not result in product recalls, FORM 483s or even Warning Letters. All three of these events entail reputational damage for the business. Not having these, or at worst only on a very exceptional basis, would indicate to the market that the business is indeed following an appropriate business model. In this case, the market perceives that the business produces quality products, and discloses in its labeling all relevant facts so that medical professionals and their patients can make informed decisions about their products. And this applies to the food industry as well. Consider the damage to Chipotle’s reputation and the impact this has had on their revenues. So we again come to those few salient questions. Why wouldn’t a business deliver a quality product or service? And why would they not choose to do so consistently? The answer is really quite simple. Consistently delivering a quality product or service is not free. Doing so requires overheads such as maintaining documentation, continuing staff training, monitoring of business activities, and consistently reporting to management so their decision making is consistent with business performance. Ah yes, and those audits really are necessary to ensure there are no gaps and the business is consistently delivering quality to its customers. We believe that you inspect to get the expected! Over the long term, a firm’s reputation strengthens as customers trust that the firm delivers quality in its current and new product offerings. This leads to more effective product introductions and quicker adoption by the target market. The net effect is that doing the right thing will, in the long term, increase the firm’s profitability which no doubt is in the interest of all stakeholders. But short term profits might suffer and that is the rub in this myopic financial world, especially for publicly traded companies. Oh yes, those overheads mentioned above. They reduce the near-term bottom line and therefore the bonus potential, i.e. bonuses of the current management. Cutting some of those overhead expenses means current management can participate in a larger bonus pool in the short term. And as tenure in managerial roles has reduced over time, what’s to worry about if it hits the fan three or four years down the road? The probabilities are that management change will have occurred and the new managers will have to clean up the mess – likely at greater expense than the cost savings chosen by the previous management – and the firm’s reputation will be damaged. Repairing reputational damage is always expensive, if it is even possible. What happened at Wells? The head of the retail division that was responsible for opening over 2 million unauthorized accounts to meet sales targets retired in July with a package worth $125 million. This executive was lauded by the CEO as the embodiment of the firm’s culture and a champion for customers. When asked by the Senate Banking Committee if her past bonuses would be clawed back, not to mention his own, the CEO said he couldn’t comment on that as it would be determined by the Board. Time will tell whether the CEO survives and whether any bonuses are clawed back by the Board. Needless to say the reputational damage is perceived by investors who have marked down the bank’s shares. That, in addition to the $185 million fine are the costs being born by shareholders. Arguably all for increased short-term bonuses to management. In my practice area, Risk and Crisis Management, we help companies understand the various risks of managing a public or a private business. We can then affect the right plans and help the executives reduce their business, marketing and regulatory risks. Feel free to contact me at bnewton@clevelpartners.net and I will be glad to share some additional thoughts with you.

I was thinking back to my days in the mid-80s as an executive with a communications company where I had responsibility for both strategy and execution. Their logic for combining the two functions was because they felt that a hand off between two people – one leading strategy and the other leading execution – was a problem because of “interpretation” of what the strategy meant. And in some way, this corporation was prescient because strategy and execution are the yin and yang or two sides of the same coin. In fact, to me, strategy and execution have to intersect.

In the 80s – for those of us who are historians – companies had chief strategy officers who developed all the grand corporate strategies. Now ask yourself today: How many companies have strategy officers? I believe that very few do other than maybe the mega companies in corporate America.

 

How are strategies set? Imagine a football team. (I like sports analogies). Let’s say that the head coach looks at his players and the other teams in the league and says, “Our strategy is to run the ball because of a, b, c and d. He deduced (call this a DEDUCTIVE STRATEGY) because he used facts about players and experience in games to derive a conclusion. Now, imagine the first game of the year where the opponent studies this team and stacks players against the run. The strategy might have been fine, but execution failed. Or the strategy needs to be reconsidered. Let’s say that feedback from the players on the field and the other coaches indicate a weakness in the secondary of the opponent. The strategy now shifts to one where passing becomes the norm and, by so doing, the game is won.

Execution as the NOW Strategy

Did the fundamental strategy of the team shift? Or did it become opportunistic? What happens if the same process repeats itself in the next game and the game after that? The coaches may now shift entirely because success was due to an effective execution of a different strategy. In fact, in this case, by reason of INDUCTIVE STRATEGY, the team becomes a passing team and goes on to win the superbowl!!! (OK, I am dreaming that the New York Giants do this, but I am a long suffering fan!!)

 

It really doesn’t matter what is the initial strategy. What matters is that there is an initial direction and initial concept of the “why and how” of winning. Yet based on results or creating the plan and executing on that plan, the team uses that information and results and adjusts. I call this contextual strategy. Think about this. Todays’ world is based on AGILE – agile development, agile (responsive) web, and agile personnel who can perform in multiple areas. In essence, execution and the results achieved either support the initial strategy or adjustments to the initial strategy must be made so you can win the business game. That is the most critical part. As Don Nelson, my former boss and mentor at US Cellular said: “You have to be fast, fluid and flexible.” So true. We are not abandoning strategic thinking, but rather moving it to a new level.

 

Using the football analogy, that is why many coaches script the first 20 plays of the game and make adjustments during the game and again at half-time. Their strategies change – to a degree – and hopefully their results improve.

 

I want to share a short checklist that is necessary to implement execution as a strategy and to start a robust dialog on whether you agree or disagree with this assertion.

 

1. Develop a baseline strategy. An initial strategy is a stake in the sand. Strategies may include an overall corporate strategy, sales strategy, R&D strategy, marketing strategy, brand strategy, operations strategy, people strategy, and I am sure others specific to certain industries.

2. Focus on Results. Do you focus on quantifiable results that are specific, measurable and achievable and within a logical time period? Is there one person responsible for a specific result? How are results shared with the rest of the team, company or other interested constituents?

3. Align executives. Do all executives buy into the strategies and understand the interrelationships? For one company, the strategy seemed very clear. Yet when we asked what that meant and how that strategy would be implemented by them, we had a clear case of misalignment.This detracted from results.Based on some serious discussions at a “strategic offsite” the overarching strategy was changed and each executive understood their role and the effect on the strategy and execution. Executive buy-in and commitment are critical for success.

4. Engage executives in development of the strategy. This is a correlate to number 3. It is also human nature to own those things in which you take part. By having all the executives participate and contribute, and even challenge the strategy and how it would be executed, the chances of success increase. In fact the key is to sketch out the actual execution plan – or at least the first few “plays.”

5. Define a dashboard. Every company needs a measure of success. Let’s not get bogged down by so many metrics that people get lost in numbers. Normally, though, we can develop 6-10 metrics that can be used to judge success. Should one of them break down, those responsible can peel back the onion – do a deep dive – into the subordinate and supporting metrics to find the root cause and then fix it. Yet everyone should be privy to those things important to the success of the company.

6. Obtain the right tools and support. You can have a brilliant strategy to develop a low cost item. However, if you don’t have the equipment to produce the products or the people to run the machinery, or the customer service systems to support customers with problems, or a good quality process, the business is doomed to failure, or at least wasted energy.

 

Lewis Carroll said: if you don’t know where you are going any road will take you there. Companies have to set a course, a direction and have clarity in their destination. Yet as new ideas surface, new competition, new customer demands, or changes to the economic environment occur, companies need to be agile. They need to adapt their strategies based on the results they are achieving and as measured in their dashboard. By so doing, execution becomes the strategy.

 

We would be glad to hear your points of view and continue this dialog. Please contact me David Friedman, at dfriedman@clevelpartners.com.    

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