My community service includes weekend duty as a Coxswain on patrol boats for the U.S. Coast Guard. A fellow auxiliarist, Kelly Brady, prepared this video of a recent helo ops exercise. Winds off the helicopter are hurricane strength. I am the good looking gray-haired fellow. My wife is in command of the boat during this patrol.
The USCG Auxiliary is a very fine organization that provides valuable services including search and rescue, environmental response, homeland security and boater education. Contact me if you are interested to participate. No experience necessary. Excellent training for all skill levels.
A doctor once told me: never worry about a problem that can be solved with money. Probably one of the two or three best pieces of advice I ever received. As we celebrate Thanksgiving, give thanks for your health, the food on the table and that the U.S. is safe. Avoid all those discussions about the economy, the stock market and the 401K. You will feel better and you will not bore the children.
Also, a prayer for the U.S. military personnel in Iraq, Afghanistan, Korea and unnamed places is in order. Enjoy the holiday!
I have been using Twitter for a few months. If you do not know about Twitter, an explanatory video is here. I use it basically to follow a few friends and to get quick news on natural disasters, Miami events, etc. As a breaking news source it is on a par with any television network (without video) but it covers everyone's local news throughout the world through its large number of users.
Twitter is basically IM meets social networking or the logical extension of text messaging and email in a Web 2.0 world. Enterprise versions of Twitter are now emerging with restricted access only to a corporation's employees. Yammer is perhaps the best known example, but a post today on Web Worker Daily references twenty "microsharing" applications.These networks are a substitute for email, which has bogged down under heavy volume and little advance in the related technology.
Enterprise Twitter is of course an excellent example of Web 2.0 crossing over to the corporate side. Another good example of Web 2.0 meets corporate is the new features on LinkedIn, such as a Facebook like "status" and feeds for member's blogs. The most interesting example perhaps comes from Lijit. Tara Anerderson, the head of customer service at Lijit, discusses how she monitors Twitter for customer service issues related to Lijit or any other mention of the company. Tara's monitoring of Twitter is exemplary customer service and a leading indicator of where customer expectations will be in a year or two when it comes to customer dialog with a product or service provider. (Somebody please tell Verizon.)
Of course, we should all start monitoring Twitter for comments on the competition. May prove to be a target rich environment for new customers.
Note: the video link for Twitter came from Tara's blog.
Another part time CFO engagement is ending for me, which got me to thinking.
For companies looking to reduce costs in these difficult times, consider replacing full time positions with more experienced (and efficient) part time workers. Of course, you do not replace sales and product development people or the Controller, but the CFO, CIO, CTO, COO and senior marketing executive are all candidates to be downsized to part time. Target to spend 60 percent of the full time cost for the part time executive. An above average CEO is probably required to make this work and when in doubt do not do it.
Why would I be recommending such an aggressive strategy in tough times:
Most executives are not nearly as efficient as they could be:
Many senior executives could be eliminated if the CEO would do a better job of focusing the company only on what's important (sales, customers, cash flow and strategy)
Laying off hourly employees is the easier less confrontational solution, but cost cutting should start at the top with senior executives taking pay cuts, being let go or being replaced with part time executives.
With the stock market in the dumpster I think a lot of retired executives will be coming out of retirement to make ends meet and a part-time executive position might be attractive to them.
Note: Anybody looking to downsize all of the senior executive positions in their company to a single executive (besides the CEO) or needing one of these executives part time, give me a call.(yes-once I even ran marketing.)
On Harvard Business Publishing today Umair Haque has a post entitled Detroit's 6 Mistakes and How Not to Make Them. In the post Haque states that the business models of the 20th century no longer work and need to be reinvented. He uses the bailout begging auto industry to illustrate his points.
One of Haque's points, Rule 5, appeared to me to be a restatement of my theme in a recent post on Scion. Haque states:
"New rule? Seek difference. Ultimately, the
problem is simple: differentiation is about perception. Difference is about reality.
People in the 21st century aren't the zombified, brain dead consumers
of the 20th century. And so the 21st century demands not
mere differentiation - a bean counters' eye view of the world if ever there was
one - but true difference. True difference is built by making different choices
from the ground up - different in the very essence of the value activities that
make the wheels of production and consumption spin. Porsche and BMW strove for
difference - not mere differentiation - and it is that choice that is at the
heart of their global leadership of the automotive sector."
Basically Haque is saying that product differentiation is not a function of physical product features and functionality but rather about how the customer perceives the value in the product. In many ways the value to the Scion owner is in non-product features such as the ability to express individuality.
Another way to think about the perception of value comes from another blog (can not find the link) that talked about how Nintendo perceives competition. Rather than thinking of Sony and Microsoft as the competition, Nintendo thinks of their product as "something to do in a person's free time". Consequently, competition becomes very wide ranging and not so traditionally defined. Nintendo's competition is reading a book, web surfing, jogging etc. With such a wide ranging view of competition, I think you are naturally led to define your product in terms of customer value and not fall into the trap of thinking only in terms of product features and companies that compete with you. For example, if you compare playing Nintendo with reading a book, high resolution or refresh rates probably do not come into the conversation. Concepts of "challenge" and "multi-player" may be germane. From these concepts we are on the road to understanding how the customer perceives value in Nintendo.
I have to stop blogging for today and go think about all the non-traditional competitors to this blog who may be taking you away from reading this blog and telling your friends about it. [hint].
Back in May I wrote a post entitled Business Plans for 13 Year Olds, which urged writers of such plans to explain their business concept so a 13 year old could understand it. Since that time the post has brought hundreds of readers to this blog through Google searches. My conclusion is not that writing plans for 13 year olds is so important but rather that many people are actually looking for business concepts that their 13 year old children can develop. My thoughts on new business ideas for children follow:
The new business should start as a web business. The technology today is so simple (and cheap) that any interested teen can create a blog, an e-commerce site, a social network or a combination of all three with little programming knowledge or parental assistance. Over time the business can evolve to store fronts, conference speaking appearances, books or other tradional business development activities.
What almost every child has is product knowledge about gadgets, books, video games, toys etc. and a peer network that is naturally interested in their views on such. I think that sites that review products from a 13 year old perspective can be compelling to other youngsters. While some children may read TechCrunch, the great majority rely on their friends. For example, a cell phone review site targeted at children's needs and phone usage could become popular. Where I live every 12 year old has a cell phone and some say in the phone purchased for them.
Another idea would be a travel site for children where they could go to get their peers' views of the proposed family vacation location or city. Of course the children would be encouraged to upload their pictures and videos. The concept of introducing "experts" on certain locations, such as Hawaii, and the ability to email them with specific questions might also be popular. Rating resorts and local attractions might add to the popularity. Sponsorship by MacDonalds might be achieved by putting a store locator on the site for each location.
If you have ideas for child developed businesses, add them in the comments.
The revenue model initially would be advertising on the two ideas above, but I believe that sales of the featured products could be an add-on fairly early in the company's life cycle.
Obviously an adult could develop these ideas and target the younger market, but the youngsters have a more profound understanding of the target customer. Any adult trying to implement these ideas should beware of 4 foot competitors.
I am not a car buff, find cars ads to be some of the most boring on television and could not have an intelligent discussion about how to fix any part of a car except maybe the ash tray. However, I am totally fascinated by the advertising and website for Scion. I am so intrigued by what they are doing that I teach it as part of my entrepreneurship course. My observations follow:
Individuality and the ability to express yourself is becoming increasingly important as a product feature. Web 2.0 makes it so much easier to generate and distribute content, photos, music etc.that we are starting to expect the ability to customize and express our personal views about everything. What Toyota has done with Scion is to encourage the customization of the cars as an expression of individuality and then to promote the individuality of their owners as a way to attract new car buyers. Powerful stuff! (See picture below post.)
Driven by the theme of fostering individuality, Scion provides a website that glorifies the individuality of their owners--uploaded photos of your car, wish lists for your Scion and the ability to custom design your car on the website. While none of these features are novel, the way they enhance your Scion ownership experience has a richness about it that is rare in product websites and especially in the auto industry. Rather than looking like the typical laundry list of Web 2.0 tools, Scion has integrated the site features in a way that the experience rather than the features are what you notice.
Individuality is probably meaningless if you can not express yourself and communicate with others (such as the product manufacturer). The Scion site offers all the various methods--chat, rss feeds, forums and a members section. However the site visitor wants to communicate with other Scion owners or Toyota, the technology is there and, of course, Toyota gets to use all this data.
The website provides a post-sale experience that is an integrated part of the customer value proposition. One of the great features of Web 2.0 is that it makes establishing a post-sale relationship with the customer so easy. Customers are increasingly coming to expect such a post-sale relationship both with product providers and other users.
In summary, I like Scion because it captures the theme of individuality, their website encourages further individuality and the website provides a rich post-sale customer experience. These are all trends that we will see a lot more of over the next five years. The good news is that Scion is such an excellent example.
Over the weekend I did some blog housekeeping. I created a new category on the right hand side which includes all my posts on the financial crisis dating back to August 2007. 18 posts are included.
Much has recently been published about Google's ability to predict flu outbreaks based on the location of the searcher, the search term and the frequency of searches. Now I do not have as much data as Google, but the visitors to this blog in the last two weeks have increased between 100-200% and all the traffic is search-based, from overseas and related to finance--the financial crisis, financing alternatives (factors, mezzanine debt, etc) and financial modeling. My interpretation of the increase in traffic here is that initially foreigners did not anticipate the effect of the U.S. financial crisis on their own businesses but are now very quickly preparing for the fall out.The new business opportunity that I see being developed is to use search data as a predictor of future events, similar to what Google is doing with the flu, but using smaller data sources.
The other new business idea comes from a post on Cache & Carey where Verizon's new agreement with the Disney theme parks is explained. Basically, visitors to the theme parks with Verizon phones will be able to access park specific data on events and appearances and receive personalized messages from Disney characters. I really like this way to make an already great customer experience even richer. Applications of this concept are wide ranging--sports stadiums, concerts, big events, guided tours, etc. However, not everybody has the talent and resources of Disney to provide such content. Selling the infrastructure to enable any event to provide additional content through a cell phone should be a large opportunity. We will call it ECM--event content mangement--which is like web content management systems for large websites
As long time readers of this blog will know, a significant portion of my life revolves around three themes:
Capital raising and financial consulting
University teaching
Blogging
Whenever these themes converge, it is almost always a very rich experience. An email yesterday was such an experience. A Dr. Barett wrote to me after seeing the post referencing Robert H. Jackson. He wrote:
I have now learned that there are 20,000 academics and other students of the law who are interested in RHJ
There is a center devoted to the study of the thoughts and writing of someone I referenced in a blog post
Academic study has been devoted to the particular speech I quoted
If I want to learn more about RHJ, I now have a complete roadmap for how to do it
The ease with which I can study RHJ will encourage me to do so
As I have mentioned before on this blog, the greatest minds in history have almost always been multi-discipline oriented, e.g. Descartes who studied mathematics, ethics and science. One small blog post has now given us all the opportunity to become multi-discipline oriented through the further study of RHJ. Thank you Dr. Barrett for the email, the opportunity to learn more about RHJ and perhaps to become better thinkers.
Robert H. Jackson (1894-1954) lead a very accomplished life, serving as Chief Prosecutor at the Nuremberg Trials, Attorney General of the U.S. and a Justice of the Supreme Court. When he made his first speech as Attorney General to the staff at the Justice Department he said:
"The citizen's safety lies in the prosecutor who tempers zeal with human kindness, who seeks truth and not victims, who serves the law and not factional purposes, and who approaches his task with humility."
While these words were clearly directed to attorneys they appear to me to have equal value as a management philosophy regardless of responsibility. Jackson's focus on human kindness and humility are the concept's that we should be particularly attentive to. We live in an age where greed and self-promotion are much respected and where human kindness and humility get little mention.
"Seeking truth and not victims" should probably be the introductory lecture in any course on organizational behavior or leadership. Much truth is lost because people fear the consequences of sharing bad news (or lack the humility to accept it).
This post was inspired by a story on NPR. After writing this post I saw that Brad Feld recently wrote about the same subject.
Since 1972, when I was first eligible to vote in Presidential elections, only twice have I voted for the winning candidate:
Father Bush (first term)
Bill Clinton (second term)
Last night I maintained my nearly flawless record with the Obama victory.
My wife explains this phenomenon as due to the fact that I am not in the mainstream of America. The data seems to suggest that she is probably correct. Why am I not in the mainstream of America?
I don't vote by party
I don't punish the last administration when selecting the next candidate
I don't believe that the President can create jobs
I believe in monetary policy rather than government spending as the best way to manage the economy
I think we need much less government--not more
While the Obama supporters are euphoric, I am equally euphoric because the Bush administration is ending.
I am a big believer that the private sector will be the leader in
moving the U.S. forward in "green" initiatives and alternative energy.
One of the biggest proponents of such efforts is Wal-Mart, a company
which I admire for a wide variety of reasons. Andrew Winston at HarvardBusiness.org just reported on Wal-Mart'sSustainability Summit--Beijing 2008. The purpose of the event was to explain to Chinese suppliers Wal-Mart's policies on a variety of "social" issues including the environment, to discuss their enforcement of these policies and the consequences of a continued failure to comply.
In the course of Winston's reporting, he quotes Lee Scott, the current CEO:
"A company that cheats on age of labor, dumps chemicals in rivers, or does not
pay taxes will ultimately cheat on the quality of products...that's the same as
cheating on customers and we will not tolerate that at Wal-Mart."
There are three management lesson's to be gleaned from this quote:
Once you start cheating you will continue to need to cheat because you have never addressed the real business issue. People cheat because they do not have the intelligence and expertise to solve their business issues and fall back on further cheating as the problem worsens. (Note: for example, MCI's bad accounting had gone on for three or four years before the company self-destructed.)
Whenever you find a serious problem in a company, such as cheating on taxes, you will always find other serious problems. Bad management is never localized, such as only in tax return preparation, but it permeates throughout a company. (Note: for example, when you are doing due diligence on an acquisition and find one serious issue, there are always other serious issues.)
Consider every management decision first in the context of how it affects the customer. Taking every thing back to how it affects the customer is gospel at Wal-Mart.
I recently saw an explanation of calculus which stated that it is just differentiation, integrals and 1400 pages of applications. I think that new business development is equally misunderstood, with an unwarranted complexity. The new business development process is really just four parts (as shown in the graphic below):
the customer (customer need, value proposition and target customer)
the business model (as explained in a previous post)
the financial model (cash flow)
If you think of business as the conflict between growth and survival, then the first three factors above explain how you are going to allocate resources to increase revenue and profit (growth) and the financial model focuses on cash flow (survival).
Now that we have simplified business to four ideas-customer, industry, business model and cash flow-maybe I'll move on to solving world hunger :) Seriously, the older I get, the simpler my ideas on business and management become. Much of management education and practice over complicates developing a business and misdirects the energy and resources of managers and entrepreneurs. KISS
