"Blogging innovation and marketing insights for the greater good"
Business Strategy Innovation Consultants

Blogging Innovation

Blogging Innovation Sponsor - Brightidea
Home Services Case Studies News Book List About Us Videos Contact Us Blog

A leading innovation and marketing blog from Braden Kelley of Business Strategy Innovation

Saturday, April 17, 2010

Wal-Mart's (Latest) Identity Crisis

by Steve McKee

Wal-Mart's (Latest) Identity CrisisWal-Mart is a study in contrasts.

Its low prices are awesome. Its shopping experience, not so much. Its positioning is terrific, but its advertising leaves something to be desired. It serves well its paycheck-to-paycheck customers, but panders too much to the politically correct.

Wal-Mart has a rock-solid heritage in founder Sam Walton, but too often loses sight of what makes it special. The latest example came in the form of an announcement last week that the company was cutting prices on some 10,000 items. With any other retailer that would be cause for celebration, but with Wal-Mart it's just disappointing.

Wal-Mart = Low Prices. Period. Not margins. Not promotions. Not rollbacks. If prices are always as low as possible - as Wal-Mart has worked so hard for so long to convince us of - how then can they be cut, especially across such a wide swath of products? In one of its "rollback" TV commercials, Mike the truck driver says, "just by driving smarter routes and making sure our trailers are packed fuller, we save millions of dollars on fuel costs." Does the world's leanest company expect us to believe that it just figured that one out?

In an April 9 story about the price cuts, the Wall Street Journal's Miguel Bustillo and Timothy W. Martin cited a J.P. Morgan analyst whose regular Wal-Mart price survey resulted in a bill 2.3% higher than it was in the previous month. That's a pretty big jump. While it's any company's prerogative to raise or lower its prices, Bustillo and Martin wondered "...whether Wal-Mart is committed to pushing the envelope on pricing as it did in the days of its late founder, Sam Walton, or is it merely hyping promotions as it pursues a more margin-driven approach?"

Judging from what Wal-Mart CMO Stephen Quinn said of the cuts, it appears to be the latter: "We felt we needed to increase the intensity and excitement with our customer, especially the feeling that Wal-Mart has great deals."

Yuck. "Great deals," "hyping promotions" and "a more margin-driven approach" are what you'd expect from Kroger or Macy's, not Wal-Mart. I don't know about you, but I expect the "great deals" at Wal-Mart to be baked into its everyday low prices, not used as underpinnings of a grand promotion.

Like many companies trying to cope with slowing sales, Wal-Mart can be its own worst enemy. Instead of fiddling with margins and flirting with upscale customers, Wal-Mart should aggressively tout its all-the-time, every-day, low-low-lowest prices. Always. It's the one company with the credibility to do so, and promotions like this threaten that very crediblity. Wal-Mart needs its customers to believe that it always - always - gives them the lowest prices it can.

That's what made Wal-Mart, Wal-Mart. It shouldn't mess with success.


Don't miss an article - Subscribe to our RSS feed and join our Continuous Innovation group!
Reblog this post [with Zemanta]



Steve McKeeSteve McKee is a BusinessWeek.com columnist, marketing consultant, and author of "When Growth Stalls: How it Happens, Why You're Stuck, and What To Do About It." Learn more about him at www.WhenGrowthStalls.com and at http://twitter.com/whengrowthstall.

Labels: , , ,

AddThis Feed Button Subscribe to me on FriendFeed

Saturday, April 03, 2010

Creative Destruction In Action

by Steve McKee

Creative Destruction in ActionThis week my hometown is abuzz with the news of a pending layoff of some seven hundred public school employees - administrators, aides, and yes, teachers. The dismal economic situation finally caught up to our school district, leaving it with a $43 million shortfall and precious few options.

It's a tragic situation, but it's where we all find ourselves during this most difficult economic period in recent history. Countless private companies have had to lay off valued employees, and there's no reason we should expect government employees to be unaffected.

As painful as it is in the short term, it also spells opportunity. Those seven hundred people will now energize their interests, talents and creativity in all new ways as they explore their options. Some will even strike out on their own, leveraging the upside of 'creative destruction' to bring to the world something entirely new.

As former U.S. ambassador and author Michael Novak states:


"the distinctive, defining difference of the capitalist economy is enterprise: the habit of employing human wit to invent new goods and services, and to discover new and better ways to bring them to the broadest possible public."


Sometimes there's no way around a tragic situation such as this. But there is a way through, and I'm confident that through creativity and enterprise those affected will find it.


Don't miss an article - Subscribe to our RSS feed and join our Continuous Innovation group!
Reblog this post [with Zemanta]



Steve McKeeSteve McKee is a BusinessWeek.com columnist, marketing consultant, and author of "When Growth Stalls: How it Happens, Why You're Stuck, and What To Do About It." Learn more about him at www.WhenGrowthStalls.com and at http://twitter.com/whengrowthstall.

Labels: , , ,

AddThis Feed Button Subscribe to me on FriendFeed

Saturday, February 20, 2010

Uncertainty of Economic Growth Remains

by Steve McKee

The National Federation of Independent Business (NFIB) says that small business optimism grew slightly in January. Slightly. The NFIB Optimism Index currently sits at 89.3, ten points below where it was prior to the recession.

Commenting on the index, Lawrence Mishel, president of the Economic Policy Institute, said:


"To absorb the over 15 million officially unemployed workers in this country... job openings and hirings must rebound dramatically. This report offers no indication that this is happening."


The NFIB's report is consistent with Decision Analyst's January Economic Index, a survey of several thousand households based on nine different economic measurements. The index remained unchanged for the third month in a row, stuck at 94, well below the 110 which signals an economic expansion. This index tends to lead the U.S. economy by up to a year, suggesting the economy will remain sluggish throughout 2010.

That's what the CEO of Unilever, one of the world's largest consumer product companies, is preparing for. Speaking of the economy, Paul Polman says:


"It's not going to just drastically change in the next 12 to 24 months. We will be in for a long and slow recovery, and that's what we're planning our business on."


Policy makers continue to point the finger at the difficulty of securing business credit. But the indexes above suggest the bigger problem is simply a lack of revenue growth, meaning employers simply don't need to hire. That sentiment is borne out by the fact that fewer than one in ten owners surveyed by the NFIB added employees in January, while more than twice as many cut jobs.

Businesses don't want to borrow money as long as economic uncertainty remains high. What we most need now is normalcy, not big ideas. Let's hope the politicians are paying attention.


Enjoy this post? Subscribe to our RSS feed and join our Continuous Innovation group!
Reblog this post [with Zemanta]



Steve McKeeSteve McKee is a BusinessWeek.com columnist, marketing consultant, and author of "When Growth Stalls: How it Happens, Why You're Stuck, and What To Do About It." Learn more about him at www.WhenGrowthStalls.com and at http://twitter.com/whengrowthstall.

Labels: , ,

AddThis Feed Button Subscribe to me on FriendFeed

Saturday, February 13, 2010

Dear Cable TV Executives,

by Steve McKee

Dear Cable TV ExecutivesI don't want 300 channels. I only want 18 channels. OK, the average person wants 18 channels. I really only want six. Why can't I have just six?

I know, I know, it's the economics of the industry. But industries change, don't they? I mean, look what has happened to the music industry. I used to have to purchase an entire CD just to get the one or two songs I want, but now I can buy and build my own playlists song by song. It's funny, but I'm sure I spend more on music now than I used to.

You should know I just bought an Apple TV box. That's not your fault - since the Blockbuster Video stores near me closed (and RedBox, while cool, doesn't exactly offer a huge selection) I didn't really have a good option for renting movies. So I thought it was worth a try. Now I can select from a huge selection of movies and TV shows, and when I'm not in a buying mood I can use it to watch YouTube on my HDTV. I'm beginning to think of YouTube as the ultimate TV network - there's so much on-demand entertainment there. (Hmm. You might want to make a note of that.)

Speaking of entertainment, I've held off on getting a Kindle because I knew Apple was coming out with a similar device. I'm excited to get my iPad, not only to check my email and surf the web but to download books. I guess Apple is shaking up the book publishing industry just like it did the music industry. "Saving it" is probably a more accurate description; I'm sure my book purchasing behavior will mirror my new music buying habits. I wonder if they're thinking along the same lines when it comes to TV. I guess time will tell.

So if you don't mind, I'd like to subscribe to individual cable channels. For that matter, I wouldn't mind subscribing to individual programs. I know you won't get as hefty of a monthly fee from me, but I'd be willing to pay more per network than you're getting now. And I suspect other people would be too.

Anyway, it's something to think about. But no pressure. If you don't do it, I'm sure I can find other things to do with my time and money.


Editors Note: I'm with you Steve. I've got limited cable because I don't have much time to watch television. When I really want to watch something specific I can get it online. Cable TV is going to face much the same problem that fixed line phone service faces now (declining subscriber #'s). And, if more and more networks develop their own 'apps' for a variety of mobile or IP platforms (Apple TV, iPhone, Blackberry, iPad FloTV, etc.), it's only going to accelerate.


Enjoy this post? Subscribe to our RSS feed and join our Continuous Innovation group!
Reblog this post [with Zemanta]



Steve McKeeSteve McKee is a BusinessWeek.com columnist, marketing consultant, and author of "When Growth Stalls: How it Happens, Why You're Stuck, and What To Do About It." Learn more about him at www.WhenGrowthStalls.com and at http://twitter.com/whengrowthstall.

Labels: , ,

AddThis Feed Button Subscribe to me on FriendFeed

Saturday, February 06, 2010

Speed vs Strategy

by Steve McKee

Speed vs StrategyCristobal Conde is CEO of SunGard, a leading global software and IT company. In an interview with the Wall Street Journal, Conde was asked what has been the best move he's made during the downturn. He answered, "We could have generated more earnings by having more layoffs. We wanted to protect R&D. We wanted products ready to go at the end of the cycle. I saw a huge competitive opportunity to protect programmers when others weren't."

Conde's perspective is smart, but rare. Our research shows that most companies overreact to a downturn and cut not just fat, but muscle. If they go beyond what's absolutely necessary, that can easily compromise their future. Conde turns the fear on its ear by asking his employees "What is it you need to do now so you will remember the crisis as a gift?"

Chilean by birth, Conde has developed a taste for a uniquely American institution: NASCAR. Perhaps it's because he sees in racing similar patterns to those of business. "Going into the crisis is not that different from going into a turn," he says. "You slam on the brakes. In the turn, the most important thing is your position relative to other cars. I've been telling people, 'Focus on our relative market shares rather than overall volumes you can't control. What are we doing to improve our position?' After the turn, you take that better position."

Conde can't guarantee that SunGard will come out of the recession a winner, just as even the best NASCAR drivers don't know when they'll cross the finish line first and when they'll come up short. But races are decided by the strategy of the driver as much as the speed of the car.

Drive smart.


Enjoy this post? Subscribe to our RSS feed and join our Continuous Innovation group!
Reblog this post [with Zemanta]



Steve McKeeSteve McKee is a BusinessWeek.com columnist, marketing consultant, and author of "When Growth Stalls: How it Happens, Why You're Stuck, and What To Do About It." Learn more about him at www.WhenGrowthStalls.com and at http://twitter.com/whengrowthstall.

Labels: ,

AddThis Feed Button Subscribe to me on FriendFeed

Saturday, January 30, 2010

Will Cadbury give Kraft indigestion?

by Steve McKee

Will Cadbury give Kraft indigestion?After months of intrigue, Kraft finally made a successful bid for venerable British candy maker Cadbury, leaving archrival Hershey's on the sidelines.

Kraft management predicts that the $50 billion combined company will be able to save $675 million over three years, but that's not the primary reason for the merger. It's all about global distribution and access to developing markets. Cadbury has it, Kraft wants it. Makes sense on paper.

Most mergers do make sense on paper, yet many become spectacular failures. The reason? A lack of appreciation for just how difficult it is to integrate not only global operations, but two proud and independent workforces.

Kraft is going to face this problem in spades with Cadbury. Todd Stitzer, Cadbury's CEO, said that Hershey's would have been a better cultural and operational fit. The company's Chairman, Roger Carr, took it a step further by saying Kraft is "an unfocused conglomerate" with "unappealing categories" and management that "underdelivers." Carr went on to say, "There is no strategic, operational, managerial or financial reason" for the merger.

Sure, Carr's statement may have been a bit of strategic bluster to raise the value of the offer (which he succeeded in doing), but it sounds pretty categorical to me. And it was telling that not a single Cadbury executive was present on the conference call with analysts to discuss the deal. Hmm.

Kraft estimates it will take $1.3 billion to "integrate Cadbury." I'm not sure exactly what that means or who came up with the number, but I don't know how anybody could forecast the costs associated with the fear, resentment and internal jockeying with which Kraft and Cadbury managers and employees are now having to deal. The fact that Britons consider Cadbury a national treasure that has been overrun by ugly Americans sure won't help.

Let's hope Kraft doesn't end up with a stomachache.


Enjoy this post? Subscribe to our RSS feed and join our Continuous Innovation group!
Reblog this post [with Zemanta]



Steve McKeeSteve McKee is a BusinessWeek.com columnist, marketing consultant, and author of "When Growth Stalls: How it Happens, Why You're Stuck, and What To Do About It." Learn more about him at www.WhenGrowthStalls.com and at http://twitter.com/whengrowthstall.

Labels: , ,

AddThis Feed Button Subscribe to me on FriendFeed

Saturday, January 23, 2010

Innovation vs Commoditization

by Steve McKee

Innovation vs CommoditizationYou can hardly turn around these days without running into some sort of reference to innovation. Dozens of books about the topic line the shelves at Borders and Barnes & Noble, from "The Art of Innovation" to "The Myths of Innovation." Innovation is rapidly becoming the latest business buzzword.

But before you dump 'innovation' into the jargon dustbin along with 'reengineering', 'rightsizing' and 'paradigm shift', consider this: the need for innovation has never been greater than it is today.

Doug Hall is founder and CEO of Eureka! Ranch, an organization that helps companies define, refine and improve their new ideas. In an interview with SmallBiz magazine, Hall defined innovation as that which:


"moves companies and their offerings along a continuum from providing commodity products or services to having a monopoly that is extremely difficult to combat."


Hall's definition is spot-on, and made even more significant by the fact that no company's position along that continuum is static. If you're not actively moving your company away from commoditization, it's destined for it. The extent to which any business proposition or value equation is achieving success in the marketplace is the extent to which it will attract competitors who want what it's got. There's simply no free pass to sustainable success.

If you're making money you're making noise, and competitors are bound to notice. They'll deconstruct your products, mimic your pricing structure, duplicate your distribution system, infiltrate your customer relationships, and do anything else they can to take your margin and market share. In so doing, they'll be creating acceptable substitutes for your products and services, which without intervention will inevitably lead to a price war in which no one wins. Unless you can stay ahead of the game through continuous renewal and change (i.e. innovation), your competitors will commoditize you right out of business.

As frightening as this prospect might be, many companies are intimidated by the concept of innovation. They somehow think it's the purview only of organizations with massive R&D departments funded by equally massive budgets, not the typical small- or medium-sized business. But this reflects an incomplete and unrealistic understanding of what innovation is really all about.

One of the reasons executives think this way is because we tend to associate innovation with breakthrough leaps forward - advances that change the playing field, shift competitive dynamics, make the covers of Forbes and Business Week and end up as business school case studies. Certainly, big innovations can be big news, and for good reason (Doug Hall's research shows that major breakthroughs are worth four times as much as minor innovations). Naturally, they're the ones that get the most press.

But the systematic introduction of even small improvements along the commodity-monopoly continuum can compound to deliver just as much (if not more) impact as a single big breakthrough. Popular Science says of innovations:


"The objects don't necessarily need to be beautiful. They don't have to be eco-friendly. They don't even have to be difficult to build. They just have to push past what we thought was possible just twelve months ago."


To that I would add that they don't have to be big. They just have to be consistent.

If you spend just a few hours critically analyzing your industry from a customer's perspective (perhaps even involving customers themselves), you'll identify dozens of pain points about which somebody ought to do something. Airline seats should be comfortable. Take-out orders shouldn't be wrong. Physician's handwriting should be legible. The better you can anticipate what customers will be wanting/needing/expecting down the road, the more likely you can be the leader that first addresses the issue. No one, as they say, ever asked for a microwave oven. Or even a curved shower rod.

Want to keep commoditization at bay? Focus on innovation. No matter what size, shape or form your company is.


Enjoy this post? Subscribe to our RSS feed and join our Continuous Innovation group!



Steve McKeeSteve McKee is a BusinessWeek.com columnist, marketing consultant, and author of "When Growth Stalls: How it Happens, Why You're Stuck, and What To Do About It." Learn more about him at www.WhenGrowthStalls.com and at http://twitter.com/whengrowthstall.

Labels: , , ,

AddThis Feed Button Subscribe to me on FriendFeed

Saturday, January 16, 2010

A Branding Lesson From Leno

by Steve McKee

A Branding Lesson from Jay LenoThe big news this week in Medialand is NBC's decision to cancel The Jay Leno Show and move the eponymous comedian back to a late-night time slot. About the short-lived experiment, Jeff Gaspin, NBC Universal's Chairman of Television Entertainment, said, "I don't think it's wrong to take chances... Sometimes they work. Sometimes they don't."

Fair enough. But with a little more imagination, NBC might have been able to predict the outcome. The much-hyped decision to launch The Jay Leno Show was made in part based on economics - it's a whole lot cheaper to produce an hour of live TV than an episode of Law & Order. While the show was profitable for NBC, it's not terribly surprising that it would lag its competition in the ratings - especially in its first season, when loyal viewers of competitive offerings were caught up in current storylines.

The Jay Leno Show's low ratings created a "lead-in" problem for NBC affiliates, who rely on audience carryover to provide viewers for their late local news. Michael Fiorile, chairman of NBC's affiliate board, said NBC's Leno strategy "has been devastating for a number of late newscasts around the country."

While that's unfortunate, it also underscores an unhealthy dependency that too often blinds local news providers to their task. And it provides a valuable business lesson for us all.

Most people tend to think of the television industry as something "other" than the product and service sectors that comprise the rest of the economy. But in reality it's no different. Television news is a "product" that consumers "buy" (we pay for free TV with our time), and competitors are called to offer their prospective customers an experience that is unique, relevant, and valuable, just like any other business.

When a local affiliate complains about the network not offering a good enough lead-in for its local news, it's like McDonald's complaining that the Burger King across the street has better access to traffic. While that may be true, it can also serve as an all-too convenient cop-out. McDonald's job is not to complain about the way the street is designed, but to get people to cross it - by offering something intriguing and unique (a task the company has performed quite well in recent years).

That's where TV news falls down. Local news directors too often live in a "be better" bubble. That causes them to overstate the impact of their slogans, overvalue being first on the scene of an accident, and overpromote their handsome/pretty/ smart/honest/capable/talented/sincere news anchors. If they instead applied their intelligence and intensity (the news directors I've met have both in abundance) to seeking new ways to truly differentiate their offerings from the competition, we could see some real innovation in how local news is delivered. I suspect most viewers - and most people in the industry - would agree that there's plenty of room for improvement.

Jay Leno is proven product whose success is in part dependent on how well he's packaged and distributed. Local news is no different, and as Gaspin said, it's not wrong to take chances. If only more news directors would.



Steve McKeeSteve McKee is a BusinessWeek.com columnist, marketing consultant, and author of "When Growth Stalls: How it Happens, Why You're Stuck, and What To Do About It." Learn more about him at www.WhenGrowthStalls.com and at http://twitter.com/whengrowthstall.

Labels: , , ,

AddThis Feed Button Subscribe to me on FriendFeed

Saturday, January 09, 2010

Welcome to 2010 - Now What?

by Steve McKee

Welcome to 2010 - Now What? - Comment BeggarThe best thing about hope is that it springs eternal, especially at the beginning of a new year. 2009 is behind us, 2010 lies ahead and we have to believe that the coming year will be better than the last.

There is, of course, no telling. I recall in late 2008 looking forward to the calendar turning, hoping that with a new year the craziness of that fourth quarter would settle down and enable us to rebuild our economic prospects. Alas, the recession wore on. And on. The downturn has now lasted more than two years, and it simply has to be over. Doesn't it?

Time will tell. In the meantime, those of us who have any say over investment and job creation should go about our business with the intent of bringing about growth. We don't have any other choice, really - nor would we want to do anything else. As bad as last year was, we survived, and most of our companies are leaner and meaner for it. That's the silver lining.

So we get up, we go to work, we look ahead, we make decisions, we take risks. Just as we always have, and just as we always will. As I alluded to in my final FindYourNerve.com post, we are blessed to operate within the most productive, dynamic, and resilient economic system the world has ever seen. As each of us does our part, the whole will take care of itself.

Image Credit: Witness



Steve McKeeSteve McKee is a BusinessWeek.com columnist, marketing consultant, and author of "When Growth Stalls: How it Happens, Why You're Stuck, and What To Do About It." Learn more about him at www.WhenGrowthStalls.com and at http://twitter.com/whengrowthstall.

Labels: , ,

AddThis Feed Button Subscribe to me on FriendFeed

Friday, January 01, 2010

The Worst Decade Ever :-)

by Steve McKee

The Worst Decade EverNow that 2009 is over, I have bad news and I have good news.

First the bad news. According to the Wall Street Journal, stock performance in the decade now ended was the worst ever - worse even than the woeful 1930s. For the past ten years, the value of NYSE-traded stocks has declined by an average of 0.5 percent a year. Compare that to the 1990s, when the average annual increase was an incredible 17.6 percent.

Factor in inflation and it gets even more depressing, with the S&P 500 declining an inflation-adjusted 3.3 percent annually. During the 1930s, stocks showed an inflation-adjusted (deflation, really) annual gain of 1.8 percent. And the decade now ending saw many notable companies fall out of the S&P 500, for reasons of scandal (Countrywide, Enron), excess (Bear Stearns, Merrill Lynch, Lehman Brothers, Wachovia), misfortune (Circuit City, Lucent, Reebok) and just plain changing dynamics (AT&T, Compaq, Dow Jones & Co., Maytag, Wyeth).

Pretty discouraging, when you think about it. But here's the good news. The vast majority of American corporations found a way to move ahead during the turbulent ten years past, and all of them - all of us - are the stronger for it. We face challenges ahead, but having muddled through the most difficult decade in two centuries we'll face little that will surprise us. And those of us who have maintained our focus, kept our nerve and remained consistent throughout should profit all the more.

Here's to 2010, the dawn of a new decade. May the old one rest in peace.

[Note: Today marks the one-year anniversary of this blog. Prior to launching it last December I wondered - and worried - if I would have enough to write about. If there's any silver lining to the year now past, it's that it provided plenty of content for a blog called "When Growth Stalls." Let's hope next year is a little tougher on me.]



Steve McKeeSteve McKee is a BusinessWeek.com columnist, marketing consultant, and author of "When Growth Stalls: How it Happens, Why You're Stuck, and What To Do About It." Learn more about him at www.WhenGrowthStalls.com and at http://twitter.com/whengrowthstall.

Labels:

AddThis Feed Button Subscribe to me on FriendFeed

Saturday, December 26, 2009

Combining Brand Management with Workforce Enablement

by Steve McKee

IBM Brand Management and Workforce EnablementIn my December BusinessWeek.com column, I highlighted the vital need for internal branding, calling it the missing link between perception and reality, promise and delivery, effective marketing and positive outcomes.

Now along comes a speech by Jon Iwata, SVP of communications and marketing at IBM, that makes my argument look like a kiddy pool compared to the depths he's diving. His speech was titled, "Toward a New Profession: Brand, Constituency and Eminence on the Global Commons," but don't let that scare you. He made some insightful points about why IBM has created a new internal discipline that combines brand management and what he calls "workforce enablement," aligning "experts in the workplace and experts in the marketplace."

The reason? Iwata says, "One day soon, every employee, every retiree, every customer, every business partner, every investor and every neighbor associated with every company will be able to share an opinion about that company with everyone in the world, based on firsthand experience. The only way we can be comfortable in that world is if every employee of the company is truly grounded in what their company values and stands for."

In ancitipation, Iwata emphasizes the need to "go from managing outward expressions and manifestations of the company - visual identity, naming conventions, messaging, design and the like - to the behavior and performance of people."

Iwata also addresses the current corporate hand-wringing over social media: "The CFO worries about financial disclosure. The General Counsel fears intellectual property leakage. HR will say we're helping competitors recruit our people. And everyone will be nervous about criticism of management." But instead of mocking these worries, he points out how legitimate they are and that they will need to be - and will be - addressed. The key, he believes, is not just to lay down policies and procedures (although those do have a role), but to "build the eminence of our workforce."

Perhaps this statement sums up the speech best: "For great companies, values are not the work of 'positioning' or messaging or story-telling alone. For great companies, what they value defines who they are - and who they hire, and what they make, and the broader constituency of aspiration they seek to define. And they methodically and intentionally align their operations and cultures to authentically be that."

Iwata is not only smart, his speech demonstrated a humanity and a humility not often found at the highest levels of the biggest corporations. Count me a fan. If you'd like to read the speech in its entirety, it's [here].



Steve McKeeSteve McKee is a BusinessWeek.com columnist, marketing consultant, and author of "When Growth Stalls: How it Happens, Why You're Stuck, and What To Do About It." Learn more about him at www.WhenGrowthStalls.com and at http://twitter.com/whengrowthstall.

Labels: ,

AddThis Feed Button Subscribe to me on FriendFeed

Saturday, December 19, 2009

Now is the Time to Innovate

by Steve McKee

Now is the Time to Innovate - Transparent ToasterHave you given up on innovation? MIT's Michael Schrage says that can be fatal to any company, no matter the industry.

Schrage offers an interesting counterpoint to a famous statement by Columbia Business School's Bruce Greenwald, who said, "In the long run, everything is a toaster." Schrage disagrees, citing the evolution of two-sided toasting (1919), toaster ovens (1950s) and digital toasters (1990s), among other advances.

And Schrage says the opportunity for innovation can be especially ripe in industries that appear to be commoditized. "Price wars for products don't necessarily mean that innovation has reached its limit;" he says, "but the low prices could be a signal that more advances are needed."

Even in the mundane world of toasters, the playing field is continually changing. How are you using innovation to change the dynamics of your industry?



Steve McKeeSteve McKee is a BusinessWeek.com columnist, marketing consultant, and author of "When Growth Stalls: How it Happens, Why You're Stuck, and What To Do About It." Learn more about him at www.WhenGrowthStalls.com and at http://twitter.com/whengrowthstall.

Labels: , ,

AddThis Feed Button Subscribe to me on FriendFeed

Saturday, December 12, 2009

Panera Bread Rising

by Steve McKee

Panera Bread Rising"Most of the world seems to be focused on the Americans who are unemployed. We're focused on the 90% that are still employed."


Those are the words of Ron Shaich, CEO of Panera Bread, the 1,300-unit bakery-cafe that has found a way to thrive in spite of the recession. Its formula? A combination of smart financial management and keen understanding of its core customers, most of whom remain gainfully employed (and ever-more attuned to good value).

Rather than cutting corners, Panera has focused on offering more to its broad range of middle income customers, including free wi-fi access and frequent new menu offerings. According to Shaich:


"In many ways, we're renting space to people and the food is the price of admission,"


Panera COO Rick Vanzura agrees, saying, "A bunch of folks have been cutting quality to cut price to go after the marginal customer. We said a better strategy that addresses a bigger group of people is providing better value."

The strategy is working. In 2008 (a very bad year for most fast-casual restaurants), Panera Bread grew by double digits. In 2009 - the worst economic year in generations - the company managed to keep same store sales from declining, and in the third quarter actually increased them by 3 percent. Food industry analyst Darren Tristano pinpoints why:


"Panera's on-trend with what consumers are asking for: fresh, customizable, convenient, won't break the bank."


Panera Bread has been able maintain its focus because of careful cash management. Rather than using debt to expand, assuming the good times of years past would keep on rolling, the company grew slowly and deliberately over the past decade. That kept it healthy from a cash flow perspective and prevented it from having to cut corners or cut margins (or both) when times got tough. As Shaich says:


"Every chain is cutting something - portion size, quality, hours of labor. The result is that ultimately the customer feels it."


Most players in the restaurant industry - in most industries, for that matter - think the current game is all about price. Panera Bread is an all-too-rare exception, demonstrating that companies that keep their focus, nerve, consensus and consistency can thrive even in bad times. I'm a fan.



Steve McKeeSteve McKee is a BusinessWeek.com columnist, marketing consultant, and author of "When Growth Stalls: How it Happens, Why You're Stuck, and What To Do About It." Learn more about him at www.WhenGrowthStalls.com and at http://twitter.com/whengrowthstall.

Labels: ,

AddThis Feed Button Subscribe to me on FriendFeed

Sunday, December 06, 2009

Some Decisions are Forever

by Steve McKee

No Turning Back Liz ClaiborneEarlier this year I commented on a decision by Panasonic to rein in R&D investment in flat-panel televisions and instead expand its reach into the entry-level market (see "Is Panasonic Kissing Its Future Goodbye?").

The company appeared to be eyeing significant market share opportunities offered up by the 2009 conversion to digital TV in the U.S. It was a bold move, because while it's easy to cash in your brand equity and go down-market, once the decision is made it's nearly impossible to reverse course.

Last month another famous brand made that fateful choice. Liz Claiborne, Inc. agreed to license its namesake brand exclusively to J.C. Penney, ending decades-long relationships with department stores like Macy's, Dillard's and Bon-Ton. The Claiborne brand has long been in decline, and a Macy's spokesperson said the retailer could no longer justify expanding the line because of customer confusion between it and the "Liz & Co." sub-brand that was being sold exclusively at - you guessed it - J.C. Penney.

The Claiborne brain trust may have created their own problem by overextending the brand, a common manifestation of the loss of focus that afflicts many stalled companies. That said, this new decision may work out. It's not the first time J.C. Penney has partnered with respected, high-profile designers (Polo Ralph Lauren and Nicole Miller, to name two), and Penney is doing better than many of its rivals in this tough economy.

As with Panasonic's decision, however, this one will be interesting to watch, and will serve as yet another object lesson for any company struggling with stalled growth. Going downscale - where all the value-conscious buyers are these days--can be extremely tempting. But if you do it, make sure you're extremely comfortable with your decision. There's no turning back.



Steve McKeeSteve McKee is a BusinessWeek.com columnist, marketing consultant, and author of "When Growth Stalls: How it Happens, Why You're Stuck, and What To Do About It." Learn more about him at www.WhenGrowthStalls.com and at http://twitter.com/whengrowthstall.

Labels: , ,

AddThis Feed Button Subscribe to me on FriendFeed

Sunday, November 29, 2009

Has Old Navy Righted its Ship?

by Steve McKee

Old Navy Righting its ShipIt's a classic "When Growth Stalls" scenario: start with a fast-growing and profitable company; add an aggressive new competitor that begins to successfully woo the same customers; watch as the previously flourishing company loses its nerve, its focus, and its consistency, leading to languishing sales and lackluster results.

When Gap, Inc. launched Old Navy in 1993, the spare retail chain sporting affordable merchandise and wacky ads was an immediate hit. Rather than risk losing focus at brand Gap (which was near its zenith atop the retail world), parent company Gap, Inc. used Old Navy as a counterforce to the big discount stores that were trying to ride on Gap's fashion coattails by ripping off its designs.

Within four years Old Navy sailed past the billion-dollar revenue mark, accounting for nearly half of Gap, Inc.'s top line and some 40 percent of its profits. Offbeat commercials featuring has-been celebrities made the chain the talk of the retail industry, as well of teens and young families that comprised its core market.

Enter H&M, the trendy Swedish retailer, which opened its first U.S. store in 2000 offering discount apparel with a more fashionable edge. Fearing that H&M's success marked a sea change in the industry, Old Navy shifted its focus from the basics to more trendy, upscale mechandise. It didn't work. Sales fell by more than a billion dollars between 2006 and 2008, with last year's same store sales sinking an incredible 17 percent.

It was then that Gap, Inc. decided to do something about it. As the Wall Street Journal put it, "Returning Old Navy to its roots was the central theme of Gap's remaking of the brand." The Journal quoted Old Navy's interim president, Tom Wyatt, as he reflected on the brand's original recipe: "We got tired of it. The customer never did."

Eighteen months ago Old Navy recommitted to its original focus and began redesigning more than a thousand stores, hoping to leverage consumers' renewed frugality in this toughest of tough economies. Year-to-date 2009 revenue is up 1 percent, due largely to a third quarter same store sales increase of a healthy 10 percent (the first rise in five long years). Pardon the pun, but Old Navy seems to have righted its ship.

There's no guarantee that, having returned to its former course, Old Navy can count on smooth sailing. The retail industry is too dynamic to let any successful company alone. But Old Navy's experience is one more point of evidence that when even the most successful concept runs into a rough economy, a tough competitor, or some other external threat, destructive internal dynamics can turn it into its own worst enemy.



Steve McKeeSteve McKee is a BusinessWeek.com columnist, marketing consultant, and author of "When Growth Stalls: How it Happens, Why You're Stuck, and What To Do About It." Learn more about him at www.WhenGrowthStalls.com and at http://twitter.com/whengrowthstall.

Labels: ,

AddThis Feed Button Subscribe to me on FriendFeed

Sunday, November 22, 2009

Wake-Up Call for Holiday Inn

by Steve McKee

Dirty Holiday Inn Mattress in Fort LauderdaleWhat do you with a hotel brand that's become outdated, irrelevant, and in some ways a signal to stay away from the properties to which it's attached? If you're InterContinental Hotels Group (IHG), owner of the Holiday Inn franchise, you take a zero-tolerance approach to revitalization.

A November 13 Wall Street Journal story reported that IHG is preparing to pull the Holiday Inn flag from as many as 300 hotels in North America whose franchisees won't spend as much as $250,000 per property to overhaul their lobbies, signage, lighting and bedding, among other things. Said Kevin Kowalski, SVP of brand management for IHG, "On the compliance date, Feb. 1, those hotels will get a failure letter and so will their banks."

Those are tough words, and they back up a tough policy announced back in 2007 - before the recession made financing for such renovations difficult to acquire. But IHG has little choice if it's to keep the damaged brand from sliding into oblivion. It has a responsibility to restore the Holiday Inn brand on behalf of the other 2,400 properties, 1,400 of which were substandard and whose owners have embarked on the required remodeling.

Once one of the nation's leading hotel chains, Holiday Inn milked its half-century of heritage for too long, allowing many of its properties to show (and smell) their age. IHG is doing the best it can to address the brand's long-eroding reputation, having stripped the name from hotels accounting for 125,000 rooms around the globe, according to the Journal. As it does, it continues investing in all-new properties that will aid in revamping the brand's reputation, as well as its Holiday Inn Express sub-brand.

I can't say that Holiday Inn makes list of hotels I might choose for my next vacation or business trip - I've been disappointed (disgusted?) the handful of times when I've had no choice but to stay in one in the past. That said, knowing that IHG is drawing a line in the sand, I'll consider giving the brand another shot. That kind of commitment is worth rewarding.



Steve McKeeSteve McKee is a BusinessWeek.com columnist, marketing consultant, and author of "When Growth Stalls: How it Happens, Why You're Stuck, and What To Do About It." Learn more about him at www.WhenGrowthStalls.com and at http://twitter.com/whengrowthstall.

Labels: ,

AddThis Feed Button Subscribe to me on FriendFeed

Sunday, November 15, 2009

Detroit, D.C.

by Steve McKee

Crysler and GM Perceived QualityNot a day goes by without more news about Detroit's beleaguered automakers. While each new development is notable in and of itself, I find it more telling to take a few steps back and look at the big picture.

Below are a few clips from selected Wall Street Journal articles I've run across over just the last few days. Take a minute and scroll through them. They tell a fascinating tale.

First, GM continues its inability to focus, revealing a growing lack of consensus between management and the board:

"In a dramatic change of course, General Motors Co. backed out of a deal to sell the company's European operations to car-parts supplier Magna International Inc., and now plans to spend billions to restructure the money-losing business itself."

"The decision...was made at a board meeting Tuesday in which the company's directors strayed from the plan of Chief Executive Frederick "Fritz" Henderson, who had spent months negotiating the Magna agreement."

"The Opel deal is the second major transaction to fall apart for Mr. Henderson in little over a month."

"Whereas Mr. Henderson's predecessor, Rick Wagoner, had often won in the boardroom by relying on the support of long-serving directors, Mr. Henderson appears to be tiptoeing through land mines of strong opinions by adjusting his game plan."

"Carl-Peter Forster, who worked for GM for more than nine years, is quitting as chief executive of GM Europe. The decision follows a vote by the company's board of directors on Tuesday to scrap a plan to sell control of the German Opel unit..."

"Despite his dissent of late, Mr. Forster was long viewed as a strong asset on GM's executive roster and his departure serves another blow to Mr. Henderson, who has seen his management bench shorten since the company's exit from bankruptcy."


Across town, Chrysler is making fairy-tale sales and market share predictions to try to convince investors (that means you, taxpayer) that it will repay the $9 billion it owes us by 2014:

"The company said it is counting on a slew of new models to spark a surge in sales over the next five years and drive its revival."

"Chrysler - which has seen its sales plunge by half in the last few years - predicted revenue will rise about 20% a year, from $42.5 billion in 2010 to $67.5 billion in 2014, and said it would break even in 2011."

"To hit its financial targets, Chrysler expects to double its world-wide sales, from 1.3 million cars and trucks in 2009 to 2.8 million in 2014, and predicted its U.S. market share will rise from about 6% in 2009 to 11% in 2014."


Meanwhile, Detroit's only private automotive company, Ford, has gone about regaining its focus, finding its nerve and sticking to its game plan.

"Last week Consumer Reports gave the company quality ratings comparable to those of Honda and Toyota."

"On Monday, Ford reported its second consecutive quarterly profit - and more impressively, a swing from a $7.7 billion cash burn a year earlier to positive cash flow of $1.3 billion in the just-ended third quarter..."

"The company gained a percentage of market share in the first 10 months of this year, no easy feat in an ultra-competitive market."

"The company's turnaround actually began three years ago with decisions that amounted to zagging every time that General Motors zigged, which was remarkable for a company whose strategy for decades was to follow GM."

"While GM kept its unwieldy assortment of eight brands, Ford sold Jaguar and Land Rover, cutting its brand lineup down to a manageable size."

"What's more, shedding brands and shunning the mortgage business has helped Ford focus on quality, where it had slipped badly early in this decade."

"Consumer Reports said last week that 90% of Fords, Mercurys and Lincolns rate average or better in quality, right up there with Honda and Toyota."

"When the economy recovers and car sales increase, Ford could be in great shape."


The automotive business is complex, but it doesn't have to be that hard. Focus, nerve, consistency, consensus - no matter the industry, all tend to diminish when growth stalls. And all are essential to getting it back.

At the moment, Ford is the only one of the Big 3 to be paying attention.



Steve McKeeSteve McKee is a BusinessWeek.com columnist, marketing consultant, and author of "When Growth Stalls: How it Happens, Why You're Stuck, and What To Do About It." Learn more about him at www.WhenGrowthStalls.com and at http://twitter.com/whengrowthstall.

Labels:

AddThis Feed Button Subscribe to me on FriendFeed

Saturday, November 14, 2009

Hello - The Future is Calling

by Steve McKee

Mobile PhonesNinety-eight percent of American households have telephone access. Over the past 130 years, this once-revolutionary device has become so ubiquitous that we don't realize how much of our modern lifestyle has been built around it, from ordering takeout to scheduling doctor appointments, from responding to polls to hanging up on telemarketers. The telephone is something that we - as consumers and as marketers - have always taken for granted.

Not so anymore. Research from the Centers for Disease Control and Prevention now says that for the first time ever, cellphone-only households (20%) outnumber those with landlines alone (17%). And the trend towards wireless is gaining momentum. Nearly one third of 18-24 year olds live in households with no landline whatsoever, and - in a finding that seems odd on the surface - wireless-only households are more likely to include the poor, many of whom made the choice to eliminate their landline bill during the current recession.

This is a radical change with significant implications, not only for pizza makers and Yellow Pages companies, but for all marketers. Among the new dynamics:
  • The telephone is no longer a device tied to a household, but to an individual. That opens up a world of personalization, from packaging (my wife's cell phone cover is pink) to performance (my daughter has a different ring-back tone for the weekend than the one she uses during the week) to pricing (there's a payment plan to suit just about everyone's needs).

  • The telephone (and the telephone number) is no longer a place-based device. Marketers that once relied on area code information to determine the location from where a customer was calling now can't be so sure, as members of our increasingly mobile society take their cell numbers with them wherever they relocate.

  • The telephone is no longer just a telephone. Two-way voice communication has now given way to multiparty, multimedia (and even satellite) access, making the ability to speak to someone on the other end just one rather quaint feature. You may even be reading this blog on your phone.

Most of us are content to let the Apples, AT&Ts, Motorolas and Verizons of the world think about where this once single-purpose device should go next. But as my firm has discovered in working with clients in a variety of non-telecommunications categories, we can't be content to let the future come to us.

With each technological advance comes new obstacles and new opportunities, and brands that pause to consider how they might leverage them are likely to find competitive advantage (and in some cases completely redefine the playing field).

Do you suppose there's an iPhone app for that?



Steve McKeeSteve McKee is a BusinessWeek.com columnist, marketing consultant, and author of "When Growth Stalls: How it Happens, Why You're Stuck, and What To Do About It." Learn more about him at www.WhenGrowthStalls.com and at http://twitter.com/whengrowthstall.

Labels: , ,

AddThis Feed Button Subscribe to me on FriendFeed

Sunday, November 08, 2009

Amazon Gets an 'A' for Innovation

by Steve McKee

Amazon PrimeRetail sales are projected to decline this holiday season for the second year in a row, an occurrence unprecedented in the entire history of the federal government keeping statistics on such things. Online retailers will continue to face stiff pricing pressure, as they have for more than a year. Free shipping has become almost the ante in such a competitive environment.

That's why Amazon's shipping program, Amazon Prime, is so impressive. For a company that ships 100 percent of its products, finding a way to neutralize pressure on shipping costs is no small thing--especially when it's competing with Walmart, which offers its online customers 97 cent shipping on many products, or the option to pick up their orders at a nearby store for free.

Two million people have become members of Amazon Prime, paying $79 for automatic two-day shipping on all of their purchases. Not surprisingly, they tend to be Amazon's most frequent customers, which means they're still getting a pretty good deal. But the program helps ensure they'll turn to Amazon first when they have a new purchase occasion, and the numbers indicate they increase their spending with the company some 20 percent after signing up.

Just goes to show you that innovation isn't the exclusive purview of the R&D department. While many online retailers have thrown in the towel on shipping charges, Amazon found a way offset them while increasing order flow. The company took one of its biggest lemons and turned it into a refreshing beverage.

Makes me wonder about the bitter aspects of my industry and how how my company might do something to sweeten them up. What about yours?



Steve McKeeSteve McKee is a BusinessWeek.com columnist, marketing consultant, and author of "When Growth Stalls: How it Happens, Why You're Stuck, and What To Do About It." Learn more about him at www.WhenGrowthStalls.com and at http://twitter.com/whengrowthstall.

Labels: ,

AddThis Feed Button Subscribe to me on FriendFeed

Friday, November 06, 2009

The Importance of Consistency and Consensus

Interview - Steve McKee of "When Growth Stalls"


Steve McKeeI had the opportunity to interview Steve McKee, the author of "When Growth Stalls" about the challenges companies face when they lose focus, lack consensus, or fail to maintain consistency with their innovation efforts. We also discuss a variety of other innovation topics including: barriers to innovation, education, and metrics.

Steve McKee is president of McKee Wallwork Cleveland, a full service marketing communications firm, is a BusinessWeek.com columnist and has been published or quoted in The New York Times, USA Today, Advertising Age, Adweek, Investor's Business Daily and The Los Angeles Times. He has appeared on CNBC, ESPN2, CNNfn, Bloomberg radio, and network television affiliates across America.

Here is the text from the interview:


1. When it comes to innovation, what is the biggest challenge that you see organizations facing?

The biggest challenge is consistency. People tend to look at innovation as an occasional thing - a lighting bolt of inspiration - rather than the result of a disciplined process. Sure, major innovations don't come along every day, but if you're not steadily on the prowl for them you'll never catch one. And not all innovations need to represent significant breakthroughs. Sometimes a small innovation in a rote process can produce tremendous benefits over time. Innovation efforts shouldn't have an on/off switch. They should be steady state.


2. Of the reasons that cause growth to stall, which is the most damaging to the organization?

They can all be damaging, but the most insidious is a lack of consensus. The reason is simple: until your management team is aligned, none of the other issues can be addressed. It's kind of like a marriage in which a couple is always fighting - about money, chores, in laws, whatever. Those are often not the real issues; the real issues deal with more fundamental things like trust and communication. You have to address the root issues first, and once you do all of the other problems can be addressed in turn.


3. Of the reasons that cause growth to stall, which is most difficult for the organization to recover from?

A loss of focus may be the toughest. If there's a commitment to finding consensus a company can usually get there, and a loss of nerve can be turned around on a dime if the circumstances are right. Inconsistency can only be overcome over time, but with a steady hand it can improve day by day. But when a company loses its focus it can face a great deal of difficulty in overcoming the consequences.

I read about a resort hotel general manager who said, "It takes two minutes to cut your rates and two years to get them back." He's right (and it might take a lot more than two years). In order to overcome a loss of focus a company may have to divest a division, trim staff, reorient its brands, or do a host of other things. It can be expensive, painful and time-consuming.


4. How do you help your organization see that it is time to switch from defense to offense?

Since you used a sports analogy, I'll continue it - you never want to play defense. That doesn't mean you don't have to sometimes, but the cliche is true: the best defense is a good offense. In business there's no reason why you can't be playing offense most of the time. When you drop the ball, recognize it and do everything you can to pick it up again right away.


5. What are some good examples of companies that you feel had their growth stall and then got it restarted?

I have to give Walmart its props. I took the company to task in When Growth Stalls for losing its focus when a few years ago it announced it was going to try to broaden its customer base. Of course, many retail analysts thought it was brilliant. I knew it was a mistake, and I'm happy to say I said so at the time in my BusinessWeek.com column.

Circumstances bore that out, and it didn't take long for Walmart to regain its focus on "people who live paycheck to paycheck." While the recession has been good to Walmart, the company isn't sitting on its hands. It's pouring billions of dollars into additional advertising, store remodels, IT infrastructure enhancements, etc. Walmart will benefit from its renewed focus for a long time to come.


6. What are some of the biggest barriers to innovation that you've seen in organizations?

One barrier is the need in modern business to measure things. Sometimes we get so preoccupied with ROI that we think if you can't measure something it's of no value. I would counter that by asking, "how much do you love your wife?" Love is impossible to quantify, but that doesn't mean it's not there - and in great supply. Anyone can paint by "the numbers," but the best leaders have wisdom and good judgment that goes beyond what can be reduced to a spreadsheet. As someone once said, "no one ever asked for a microwave oven." Or an iPod, for that matter.

Innovation efforts are not unlike venture capital investments (when you think about it, that's exactly what they are) - you're going to have a lot of flops between hits, but you can't know ahead of time when you're going to come up dry and when you're going to find a gusher. The key, as I said above, is consistency. You either believe in innovation (and put your money and time where your mouth is) or you don't.


7. What skills do you believe that managers need to acquire to succeed in an innovation-led organization?

Curiosity, of course. A desire to pioneer and break new ground. Patience. Willingness to fail. And an understanding that activity and productivity are not the same thing. I tell my staff "you gotta look up before you look down." In other words, sometimes you need to gaze at the clouds before you can reduce something to paper or proposal. Take time to think, instead of always "doing", and you'll find that your "doing" is much more productive.


8. If you were to change one thing about our educational system to better prepare students to contribute in the innovation workforce of tomorrow, what would it be?

One word: privatize. What better way to demonstrate the power and value of innovation than by having students experience its benefits in their own educational environment? We're trying to teach kids about the realities of competing in a global economy and the need for innovation, yet we're doing it in a plodding, bureaucratic, unimaginative and restrictive system. Doesn't make sense, and it's hurting the kids.


My book review of "When Growth Stalls" can be found here.



Braden Kelley is the editor of Blogging Innovation and founder of Business Strategy Innovation, a consultancy focusing on innovation and marketing strategy. Braden is also @innovate on Twitter.

Labels: , , , ,

AddThis Feed Button Subscribe to me on FriendFeed

Sunday, November 01, 2009

Does BN Nook Compete with Amazon or Starbucks?

by Steve McKee

BN Nook in Competition with Amazon Kindle or Starbucks?There has been a flurry of news lately about Barnes & Noble's new e-reader, the Nook. It will compete head on with Amazon's Kindle and Sony's Reader, offering additional features such as limited book sharing and newspaper subscriptions. If successful, of course, those features will be matched by the Nook's competitors, just as Barnes & Noble has matched their price points.

It's fascinating to watch these three powerful companies--the dominant bricks-and-mortar bookseller, the dominant online bookseller, and a long-dominate electronic industry player - compete in this new arena. And word is that Apple's e-reader isn't far behind, which will further mix things up (and will be good for us all).
I couldn't help noticing, however, a little aside in a recent Wall Street Journal article about the Nook. The article was talking about how Nook users would be able to receive discounts and other special offers when they walk into the store, a smart use by Barnes & Noble of its one true competitive advantage over Amazon. But the piece went on to say this: "Eventually, the company says, customers will be able to read entire e-books for free inside the physical store."

Read entire e-books for free? Why would Barnes & Noble want to give away content? How's this for a reason: the company may have up its strategic sleeve the idea that it can become the other Third Place.

Starbucks has always been an appealing place to linger, and many people go there to enjoy a good read as they nurse their lattes (most Starbucks locations sell a handful of newspapers and books to encourage just such behavior). While Barnes & Noble has in recent years been adding coffee bars to many of its locations, they have always seemed to be somewhat of an afterthought and secondary to the company's primary purpose of selling books. But by offering free in-store content with the Nook, Barnes & Noble seems to clearly be saying that this is they place they want people to linger. And Since none of us can be in two places at one time, Starbucks and Barnes & Noble may increasingly butt heads.

It's a fascinating world in which we live, where two previously unrelated companies can wake up and find themselves arch-competitors, and it's fun to watch such changing dynamics unfold. Keep your eye on Barnes & Noble as it continues to take advantage of its physical locations (the one thing its current big competitor, Amazon, can't match). In combatting one foe it may have just picked a fight with another.



Steve McKeeSteve McKee is a BusinessWeek.com columnist, marketing consultant, and author of "When Growth Stalls: How it Happens, Why You're Stuck, and What To Do About It." Learn more about him at www.WhenGrowthStalls.com and at http://twitter.com/whengrowthstall.

Labels:

AddThis Feed Button Subscribe to me on FriendFeed

Sunday, October 25, 2009

Nothing Ventured, Nothing Gained

by Steve McKee

Guess who? - Arnold PalmerWho said this:


"Did I behave irresponsibly? Not totally, because I had something in mind I wanted to do. Am I sorry for what I did? Yes, I am. Would I do it differently? Probably not. It's the way I was, and that's something I have to live with today."


Sounds like a corporate creep who got caught with his hand in the till, doesn't it? But it's not. It's Arnold Palmer, one of golf's all-time greats, reflecting on a decision he made in the 1966 U.S. Open. Palmer had a seven-stroke lead on the final day but ended up losing in a playoff. Why? Because he had the opportunity to break the Open scoring record, and he went for it rather than playing it safe.

That day, Arnold Palmer lost. But today he's recognized as a sports icon because he played the game to win. He lost his share, but he was a fierce competitor whose career speaks for itself. Sometimes in business--especially when growth stalls--we play not to lose rather than going for the win. There's evidence of it in every industry, including my own--some big advertisers fear running any ad that hasn't been vetted to the extreme (despite the fact that the "science" of ad pre-testing is unsophisticated and unreliable).

Instead of trying to be sure of everything before we risk anything, how about adopting Palmer's attitude and simply going for it? I'm not talking about being irresponsible--Arnold Palmer was neither unprepared nor foolish; he simply believed that his natural abilities, hours of practice and years of judgment equipped him to take qualified risks.

Allow for the fact that some ideas are going to work better than others. Recognize that the arc of progress is much more important than any point along it. Try stuff. It's a good strategy--in good times and bad.



Steve McKeeSteve McKee is a BusinessWeek.com columnist, marketing consultant, and author of "When Growth Stalls: How it Happens, Why You're Stuck, and What To Do About It." Learn more about him at www.WhenGrowthStalls.com and at http://twitter.com/whengrowthstall.

Labels: , , ,

AddThis Feed Button Subscribe to me on FriendFeed

Site Map Contact us to find out how we can help you.