Motorola’s Mobile Problems

WSJ writes:

Motorola’s travails illustrate the risks for a company that rides high with a big consumer hit. Amid its success with the Razr, it fell behind on developing a phone with the next generation of technology. Missing a beat is especially hazardous in cellphones, where it can take two to three years to develop a new line.

Meanwhile, Motorola faced corporate infighting during the transition to a new CEO from outside the industry, which interrupted new-product development. Mr. Zander has also struggled to bring his Silicon Valley ways, developed from years in the computer business, to the cellphone world.

When To Quit

Guy Kawasaki interviews Seth Godin about his new book “The Dip.”

Its time to quit when you secretly realize youve been settling for mediocrity all along. Its time to quit when the things youre measuring arent improving, and you cant find anything better to measure.

Smart quitters understand the idea of opportunity cost. The work youre doing on project X right now is keeping you from pushing through the Dip on project Y. If you fire your worst clients, if you quit your deadest tactics, if you stop working with the people who return the least, then you free up an astounding number of resources. Direct those resources at a Dip worth conquering and your odds of success go way up.

Whats the worst time to quit? When the pain is the greatest. Decisions made during great pain are rarely good decisions.

Marketing Today

Tom Asacker simplifies marketing: “”Marketing is any attempt to influence a current, and/or future, exchange.”

The challenge for every marketer today [is]: How to uniquely orchestrate a bundle or continuum of “value,” infusing it into the product, service, packaging, store front, delivery truck, sales process, blog, shopping experience, advertising, et al, such that customers feel good about their decision to choose you.

And I am not talking about a singular “value proposition,” e.g. “Quality is Job One.” Those simplistic, advertising-as-brainwashing days died soon after Emerson. I’m referring to meaningful value, which actually has a chance at influencing a decision; e.g. entertainment, learning, connection, identity, purpose, etc.

Duct Tape Marketing

Guy Kawasaki writes about ideas from a new book by John Jantsch:

Narrow the market focus. Create a picture of the ideal client: what they look like, how they think, what they value, and where you can find them. Start saying no to non-ideal clients.

Differentiate. Strip everything you know about your product or service down to the simplest core idea. Make sure that the core idea allows you stand out.

Think about strategy first. Take everything youve done in steps one and two and create a strategy to own a word or two in the mind of your ideal client and prospect.

Create information that educates. You are in the information business, so think of your marketing materials, web sites, white papers, marketing kits as information products, not “sales” propoganda.

Product Launch

Chris Gill writes: “Like the tree falling in a forest that no-one hears, if you launch your product on an unsuspecting market and no-one notices, the question is not just has it made any noise, its probably more along the lines of do you have a viable business?
Considering the amount of time, energy, sweat and money startups spend on new product development, Im often amazed at how little thought they put into the product launch In my experience build it and they will come is a recipe for a lot of hanging about, waiting for a customer to come calling, and is unlikely to deliver the meteoric growth required for an acquisition at YouTube levels or timescales.”

The Bloomberg Story

Fortune writes:

There are 250,000 installations of this product around the world, for each of which customers typically pay $1,500 a month. On the floors of large financial institutions, there will usually be seas of Bloombergs, used for trading, research, investment banking, arbitrage, you name it. But they can turn up anywhere: on the desks of attorneys, in the homes of private investors, in the offices.

The Dow Jones vs. Bloomberg saga is a stunner. In 1982, when Bloomberg the company entered the scene as a gnat, Dow Jones was America’s uncontested and proud king of financial information. It had the Journal and the Dow Jones ticker and also a glimmer that the future was technology. So in the late 1980s, Dow Jones bought a leading electronic product, Telerate, for about $1.6 billion. But Telerate simply supplied financial information to its customers – period. As they say at Bloomberg, “Telerate didn’t do anything with the data,” never providing the software that would magnify the usefulness of its information. And in 1998, struggling with both Telerate operating losses and shareholders furious about them, Dow Jones sold the company to Bridge Information Systems for $510 million, more than $1 billion less than it paid.

Product Pricing

WSJ has a fascinating story on how one company prices its product:

In early 2001, shortly after Donald Washkewicz took over as chief executive of Parker Hannifin Corp., he came to an unnerving conclusion. The big industrial-parts maker’s pricing scheme was crazy.

While touring the company’s 225 facilities in 2001, Mr. Washkewicz had an epiphany: Parker had to stop thinking like a widget maker and start thinking like a retailer, determining prices by what a customer is willing to pay rather than what a product costs to make. Such “strategic” pricing schemes are used by many different industries. Airlines know they can get away charging more for a seat to Florida in January than in August. Sports teams raise ticket prices if they’re playing a well-known opponent. Why shouldn’t Parker do the same, Mr. Washkewicz reasoned.

Creativity

Yuvaraj pointed to a December 2002 in The Observer:

Creativity is mainly learnt. And while there is an element of nature involved, it predominantly comes down to nurture – a way of thinking that is picked up from parents or the people around you. Timely encouragement, of course plays, its part, along with finding an area of interest that really gets under your skin.

Creative people do, however, intuitively know the value of alternating the rhythms of work: when to let the mind wander, when to get down to hard work and when to put a problem on the back burner and leave the subconscious to mull it over. This is a crucial flexibility of mind demonstrated by the way creative people, even during periods of intense activity, manage to create little holes for themselves where they will instinctively take the mini breaks they need to let ideas come to them.

Time out feeds the quietness of mind that is essential to creativity.

India Inc’s Acquisitions

The Economist writes:

So far this year Indian firms have announced 34 foreign takeovers worth more than $10.7 billion in all, according to Dealogic, a market-research outfit. Last year’s total was $23 billion, more than five times the previous record and more than the investments made by foreigners in Indian companies. For local industrialists, among the proudest Indians, the buying binge indicates a renaissance, and not only in business. There’s a new India emerging, says Kumar Mangalam Birla, chairman of the Aditya Birla Group, a big conglomerate. This shows the new-found respect that India commands in the global arena.

the tide of foreign acquisitions by Indian companies will continue to rise, with more and bigger deals. How successful they will be is less certain. No big foreign acquisition has failed so fareven though, according to consultants at McKinsey, that is the fate of 60-70% of cross-border takeovers. It’s important for companies to look at the economic rationale, and not get taken to extremes by emotion and ego, says Ranbaxy’s Mr Singh.

Radical Transparency

Wired writes:

Radical forms of transparency are now the norm at startups – and even some Fortune 500 companies. It is a strange and abrupt reversal of corporate values. Not long ago, the only public statements a company ever made were professionally written press releases and the rare, stage-managed speech by the CEO. Now firms spill information in torrents, posting internal memos and strategy goals, letting everyone from the top dog to shop-floor workers blog publicly about what their firm is doing right – and wrong. Jonathan Schwartz, the CEO of Sun Microsystems, dishes company dirt and apologizes to startups he’s accidentally screwed. Venture capitalists now demand that CEOs be fluent in blogspeak. In February, after JetBlue trapped passengers for hours in its storm-grounded planes and canceled 1,100 flights, CEO David Neeleman tried to deflect the blast of bad publicity by using YouTube to air his own blunt mea culpa. Microsoft, once a paragon of buttoned-down control, now posts uncensored internal videos – and encourages its engineers to blog freely about their projects (see page 140). The very process of developing ideas, products, and messages is changing – from musing about it in a room with your top people to throwing it out on the Web and asking the global smartmob for a little help.

Focus on Customers

Stephen Johnston writes:

s people insulate themselves from marketing messages and are influenced more by what their friends say than what expensively produced marketing materials say, the trick for companies to shift their wares is to convert current customers into their evangelists. All very Cluetrain 101. However, what strikes me odd as how badly companies manage their current customers, preferring instead to focus on non customers.

Advertising for new customers is not as effective (depending on product, geography yadayada) as it was, but the simple key proposition to is to manage and delight the current customers. However, the current tools that we’ve got for companies to manage them are pretty minimal. In particular those tools that allow customers to interact with brands using their mobile.

Top Leaders and IT Knowledge

[via Anish] Excerpts from an interview of Cisco’s John Chambers by USA Today:

The great leaders of the future will absolutely know technology. Not from a geeky perspective, but from a practical business approach.

I’m talking about developing the strategy, recruiting and developing the people to implement strategy, developing the culture and communicating all of the above. Those are the four things a CEO does.

The point I’m making is that what gets an executive into technology is not a love for the technology. That’s the exception. It’s understanding what technology can do to achieve personal or business goals. Any CEO who is goodwill grasp what technology can do to enable their business strategy, achieve their productivity goals, their cost savings, enable their movement into new markets. They’ll absolutely use it.

The Effort Effect

Guy Kawasaki writes:

If you manage any people or if you are a parent (which is a form of managing people), drop everything and read The Effort Effect. This is an article about Stanford psychology professor Carol Dweck. It examines her thirty-year study of why some some people excel and others dont. (Hint: the answer is not God-given talent.)

The article postulates that people have two kinds of mindsets: growth or fixed. People with the growth mindset view life as a series of challenges and opportunities for improving. People with a fixed mindset believe that they are set as either good or bad. The issue is that the good ones believe they dont have to work hard, and the bad ones believe that working hard wont change anything.

The Why of Decisions

WSJ writes how understanding the ‘why’ of decisions makes employees more likely to embrace changes:

Management gurus agree that employees are most likely to get on board when they are involved in the decision-making process. In the many cases when that’s not possible, the next-best thing is to make employees feel as if they were involved, consultants say. That means telling workers not only what was decided, but why and how, says Phillip G. Clampitt, a consultant and communications professor at the University of Wisconsin, Green Bay.

In a study last year, Mr. Clampitt found that employees are more likely to support decisions when they are told about the rationale. The study surveyed roughly 300 managers and employees at more than 100 U.S. employers, asking what they knew of decisions and how supportive they were of them. Mr. Clampitt says employees of companies that explained decisions more fully were more than twice as likely to support those decisions as workers who got less information.

Competitive Advantage

Knowledge@Emory writes how defining a firms capabilities, purpose, and niche creates competitive advantage:

Is it so different for the leader of a company to ask, What is this company capable of? than it is for an individual to wonder, Who am I? Not according to at least one presentation given at the third annual Atlanta Competitive Advantage Conference held at Emory Universitys Goizueta Business School.

Joey Reiman, CEO of the ideation company, BrightHouse, and an adjunct professor in marketing at Emorys Goizueta Business School, contends that its not competitive advantage a company should seek, but distinctive advantage. Finding this distinction, like finding the meaning of self, requires going within.

In a panel discussion entitled, Recognizing Distinctive Advantages Within Companies, Reiman told participants he advises company leaders to look inside their firms to find capabilitiesnot outside. The best way to find ones own capabilities is to ponder on themgo deepernot wider, says Reiman, who has advised company leaders at firms like The Coca-Cola Company and The Home Depot.

Customer Value

Nicholas Carr writes:

A recent paper by three business-school professors – Sunil Gupta, Carl Mela, and Jose Vidal-Sanz – offers a new approach for estimating the value of nonpaying, or, as the professors term them, “free,” customers. The authors created a mathematical model of a hypothetical firm, with a business similar to Monster’s, and used it to calculate how much every new buyer joining the company site is worth and how that value changes over time.

Some of the results were fascinating. The professors found, for instance, that the value of each nonpaying customer (buyer) was actually slightly higher than the value of each paying customer (seller) – even though there were far more buyers than sellers in the company’s marketplace.

Strong Opinions, Weakly Held

[via Yuvaraj] Bob Sutton writes:

Perhaps the best description Ive ever seen of how wise people act comes from the amazing folks at Palo Altos Institute for the Future. A couple years ago, I was talking the Institutes Bob Johansen about wisdom, and he explained that to deal with an uncertain future and still move forward they advise people to have strong opinions, which are weakly held. They’ve been giving this advice for years, and I understand that it was first developed by Instituite Director Paul Saffo. Bob explained that weak opinions are problematic because people arent inspired to develop the best arguments possible for them, or to put forth the energy required to test them. Bob explained that it was just as important, however, to not be too attached to what you believe because, otherwise, it undermines your ability to see and hear evidence that clashes with your opinions. This is what psychologists sometimes call the problem of confirmation bias.

Sun at 25

InfoWorld writes:

Sun marks its 25th anniversary this week. To the outside observer, however, there may appear to be little to celebrate. Sun’s stock price languishes in the single digits, not even matching its performance of five years ago. Although the company’s product portfolio is brimming with innovative technologies, it seems unable capitalize on them. Sun stands poised at one of the most critical moments of its history, yet its ability to shape its own future seems doubtful.

There’s no doubt that Sun has superior technology. In the real-world IT market, however, superior technology doesn’t always win out. (Some of Sun’s competitors in the Workstation Wars can testify to that.) But the other card Sun has in its hand, after all, is sheer staying power. And as it marches onward toward its thirties, let’s not think of it as a company approaching middle age. Rather, it’s simply growing into maturity. As long as it carries on the cause of open source and open standards — both in name and in spirit — there will always be a future for it in the market, no matter what its shape.

Advertisers and Brands

Business Week writes: “It’s time to remember that advertising needs brands more than the brands need advertising. A good product creates its own relationships.”

Understanding what the consumers want and bringing solutions that will inspire them is the most powerful way to support any business strategy. Putting consumers and the product at the center of the equation is fundamental to a brand’s success. Design then becomes the message and the advertising, as it’s proof of a company’s commitment to people and to innovation.

A relevant and well-designed product will make its way into the world, will be spun across the blogosphere, will be sought after and endorsed in the most emotional fashion as a reward. Indeed, advertising needs brands more than the brands need advertising. When the commercial becomes more popular than the product, you really have a problemnot least that it doesn’t serve your brand long-term.