Sunday, November 17, 2013

Black Friday: turning into Grey Thursday (and my top 8 alternatives to minimize the drama)

I just heard in the radio that Wal-Mart, Best Buy and Target among others will be opening their stores at 6pm on Thanksgiving day following an annual trend of opening earlier than the previous year.  We all know how this will end right?  Well, I do: Red Wednesday!  Yes, retailers will eventually open their stores on Wednesday with all discounts we used to have on Friday and now Thursday.  That way you can celebrate your Thanksgiving with all the electronics, clothes and other stuff that apparently are more fun than spending time with your family.  After all, we have the whole year to be with family but just one day we can buy the super ultra mega thin 80" TV.

I could feel the discontentment in the voices of the radio hosts about the fact some retailers are really destroying the Holiday.  As if people had no option but flock the stores and fight for stuff.  However, no matter how upset people get the point is people do have an option.  If someone waits for a whole year to buy something chances are they don't really need it.  Chances are if they decide to still go after a year of waiting, that thing is really more important than celebrating the holiday with family.  Chances are most could likely save enough money during that year to buy the stuff at regular price with minimum change in their on-going finances.

So don't blame retailers.  If they keep doing it is because people want it and respond to it.  And for many this is actually what Thanksgiving is all about.

Here are my top 8 list of alternatives to minimize the problem:

  1. Red Wednesday - then stores can close on Thursday and reopen on Friday and Thanksgiving go back being what it was.
  2. Serve turkey and gravy at the store - VIP package you can have Thanksgiving with your family at the store and priority to shop before it opens to general public.  This is my favorite.  Imagine you dining at the store looking all the hungry and cold people outside.  Prepare for a riot.
  3. Change tradition to Thanksgiving early breakfast - by the time stores open you're good to go.
  4. Pass a law forbidding commercial activity on Thursday - it will never happen.
  5. Go meditate instead - if you let go of the temptation of buying something that day you'll likely realize you really didn't need it.
  6. Downgrade - instead of the 80" TV you will have to cut the walls of the living room to fit in, buy the 50" at regular price later.  When I was growing up TV sets were about 10" black and white, and I still had fun.
  7. Organize annual shopping schedule assignments with neighbors - get your neighbors, 3 of them to be precise, and assign a year each to shop for all.  Give them the list and go enjoy your Thanksgiving dinner.  In that case you will only need to shop every 3 years, which is pretty acceptable, isn't it?
  8. (bonus). Accept shopping is more fun than being with your family, embrace it and  enjoy.

Any other you'd recommend?

Wednesday, November 13, 2013

Branding: A Brand is a Promise

Many business leaders and professionals will say the phrase "we have to develop our brand, market it, make it powerful and recognized". Unfortunately, most of them are thinking about the physical image of it and not what it stands for.

A powerful brand is the reflection of general recognition of a consistently delivered relevant promise.

As a leader of a business or someone trying to create a personal brand those are the terms under which you have to think about branding. A great logo, trademark, a nice picture, a great bio, or creative catch phrase will just take you so far. Without a consistent delivery of a relevant promise all of that will fail in regrettable loss.

If you are in the process of creating a strong brand for your business, department or personal, let's break the concept down to ensure the key messages are addressed.

The end state of a successful brand is general recognition and desire. How you achieve that is by first defining your relevant promise followed by relentless consistent delivery.

What is your promise?

Whether you think in terms of a product, service or individual is irrelevant. The concept remains the same. What does your [thing] promise? Here are some examples of successful brands promises (this is how they resonate with me, not necessarily what you find in the companies' website):

Oreo - indulgent, familiar, comfort treat
Apple - ahead of time, innovative, simple and exclusive
Starbucks - relax, slow down and enjoy life in a nice place
Google - clean, fast access to all knowledge
McDonald's - fast and cheap

Are these promises relevant?Well, ask the millions of people who use these products and services every day. So, what is your product's or your personal promise? Is that relevant to your clients, customers or consumers?

Note quality is not in any of the promises listed above. Quality isn't something you promise, it's something you deliver. Quality is expected. It's also subjective to your promise. So let's talk about consistently delivering it. What would happen if you had to wait 15 minutes for a Big Mac once? How about twice in a row and in different stores? What if the next 2 iDevice generations deliver only new case colors and new sizes (this sounds familiar)?

The most fundamental way to keep a promise and creating general recognition is to delivery it consistently every time. There is not much to be said here. Start lagging and your brand will fall apart. Deliver consistently every time and word will spread. It's that simple!

As companies grow there is a constant battle for that consistency. The more people you depend on to do it the more difficult it is. It all goes back to the people you have. Hire the right people and train them well otherwise you will kill your brand as fast as you can say "I killed my brand". But that's a whole new subject.

It's ok for companies or professionals to adjust their promise over time for some of them become irrelevant or a commodity, but some of the brands won't survive that. It may be just as easy to develop a new one.

Some new brands may have the same promise as yours, and they will take over general recognition and desire because of better delivery execution. A good recent example is Blockbuster and Netflix. New brands have the advantage of starting from where you currently are and focus on making it better. That's why smart companies and professionals keep innovation top of mind. You can't rest of past success for too long. Actually, not at all.

Are you delivering a relevant promise, and consistently? Yes! Keep doing it and innovate. No! Go back to the drawing board.

Monday, November 11, 2013

Futurology: The real Superman is coming

Let's take a look into the future.  If the image you think of when someone mentions Superman is the muscular body with a yellow and red diamond shaped crest in the chest, red Speedo, boots and cape over a tight blue suit, perfect hairdo and angel face, you may be disappointed.  The real Superman that will be around us soon will be everything but that, at least in most cases.  In fact, you will likely be part of the new Supermen and Superwomen army coming up.

Don’t expect a being from outer space either, who was lucky to land in a place where his natural power became super in comparison to normal humans.  The new Supermen will be technology made.  Driven by the human impatience with the lagging interaction with technology caused by an unfit “middleman”.  This middleman which is completely inadequate to handle the speed demanded by the virtual, lightning fast world is, well, your body!  Have you noticed lately that the devices we carry today are capable of unimaginable things and that the biggest issue we have making them more effective is the fact we still need to touch or talk to them to make something happen?

Did you ever remember you had to send a message or needed some information while in the middle of something else, let’s say driving or taking a shower or in a business meeting?  You had to make the unacceptable decision to give up and let the opportunity pass.  In some other cases you tried to reach to the phone while driving to eventually decide it was not a good idea after almost hitting the car in front of you?  Well, you are ready to become Superman and accept the implications.

If our body is not fit to what is required in this new world, what is the rational decision to make?  You may say retire the body, which as we saw in the movie Matrix it is a possible concept that may be developed overtime.  However, I believe there will be a short-term solution that will bridge us to that future.  Connecting the device directly to our brain.  Bypassing and upgrading the human body instead of retiring it will be the intermediate stage.

You will become our 21st century version of the Man of Steel.  Not as colorful and romantic.  Instead, a more realistic version of the comic books.  You will be able to multitask without the annoying interruption of reaching to a device.  Think and it happens!  Need to instant message during the meeting to get the latest update?  Done.  Need to make a calculation that would be impossible without a calculator?  Done.  Need to call or text someone while driving without losing sight of the road?  Done.  Research the internet for knowledge, play an interactive game, read a book, send a message, order pizza, get the latest football scores?  Done, done, done.  Nothing else needed other than to think about it.

Along with that there will come the interface with bionic arms, legs, exo-skeletons, etc.  You have become Superman.  However, anywhere there is one, there is also kryptonite.  In our case our internet bills.  Don’t pay them and you’ll get dumb and weak, and you may find yourself frozen in the middle of the street trapped in your shiny Superman suit begging for help.

This transformation will open all sorts of business possibilities.  Imagine the possibility of marketing on the spot directly to someone’s brain!  How about all the data that can be collected.  Today’s Big Data concept will pale in comparison to what is coming, so much so we should call it Not Really that Big of a Data.  But this is content enough for a whole new blog!

Saturday, November 2, 2013

Federation or Integration? The Dilemma of Executives during Acquisitions

This week I had the opportunity to attend a great executive workshop called The Art of M&A Integration hosted by M&A Leadership Council where we discussed a topic that most C-level executives and Sr. leaders of organizations will debate this year.

As many of us heard before, over 70% of mergers and acquisitions fail to deliver value committed during the public announcement. More concerning is that many deliver value erosion with very negative consequences ranging from complete disappearance of the acquired company to millions of dollars in write-off in later divestiture.

As we discussed examples it has become apparent that the most critical issues are (1) lack of clear definition/alignment of the business objective for the acquisition and (2) lack of professional M&A leadership in the business, or both.

So, if you don’t read any further keep in mind if your company is acquiring and planning to integrate another business make sure you address upfront both of these issues:

  • What/why are we acquiring this for? IP, geographic expansion, supply chain execution, etc. “The answer must be crystal clear, documented and agreed at leadership level because it will serve as the guiding principle for all other decisions coming up” Jack Prouty – President, M&A Leadership Council
  • Assign a professional M&A team to deliver according to the objective. No cutting corners are allowed here. You must have people who understand the business and possess superior leadership skills. “This is not for the faint of heart, unprepared or for the people available at the time” Mark Herndon – President, M&A Partners

There are other critical steps after that but to address all of them I recommend attending the 3-day executive workshop, especially if you’re in any leadership position of M&A. I’ll concentrate on the dilemma of what to integrate.

Getting to the answer is not easy but the principle is simple: integration objectives must be fully aligned and supportive of delivering the acquisition objectives, the ones I mentioned above, which in turn must be clear and aligned across M&A leadership team.

Example: a large company which product has slowly become a commodity and revenue is lagging year over year has decided to acquire a small innovative company with the objective of transforming its business and return to innovation, product differentiation and scale up sales for the target company.

Integration objectives: retain target Co. talent at all cost (it may very well be a condition for closing), incubate and protect their innovative spirit as opposed to integrate or consolidate, integrate back office in the short term, cautiously integrate sales in the medium to long-term.

Not to do: absorb organization. It’s common companies will lose sight of their acquisition objective and will make decisions that will destroy or erode value of the acquired company. Great ideas when looked at the micro level of integration, such as “why don’t we integrate our R&D teams and we will save $1M in lab and organization costs”, have proven to be value eroding or killers of great acquisitions. In this case the company would lose all the talent and end up with a product which it can’t sell or develop. That means a major loss of the acquisition investment and high probability of not being able to turn the situation around. Company would have to eventually ingest the loss.

In conclusion, to answer the question about the right approach for integration you must first align on the objective of the acquisition and then assign a strong leader who will be capable of delivering accordingly. Fail to do either and you’ll have to prepare for disaster recovery.

Please share your thoughts, comments and experiences with our community.

I want to express my deepest appreciation to Jack Prouty, Mark HerndonJim JeffriesMelanie Endert, the entire M&A Leadership Council, and fellow Coaches and Alumni of The Art of M&A Executive Workshop from whom I learned so much this week. Thank you.