Twelve Days of Christmas for Investors

Twelve Days of Christmas for Investors

by | Dec 24, 2014 | Defend & Extend, Disruptions

The Twelve Days of Christmas refers to an ancient festive season which begins on December 25. Colonial Americans modified this a bit by creating wreaths which they hung on neighbors’ doors on December 24 in anticipation of starting the festival of twelve days, which historically included feasts and celebrations.

Better known is the song “The Twelve Days of Christmas” which is believed to  have started as a French folk rhyme, then later published in 1780 England.  The song commemorates the twelve days of Christmas by offering ever grander gifts on each day of the holiday season.

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So, it being Christmas Eve I am stealing this idea completely and offering my list of the 12 gifts investors would like to receive this holiday season from the companies into which they invest:

  1. Stop waxing eloquently about what you did last year or quarter.  Yesterday has come and gone.  Tell me about the future.
  2. Tell me about important trends that are going to impact your business.  Is it demographics, aging population, the ecology movement, digitization, regulatory change, organic foods, mobility, mobile payments, nanotech, biotech… ?  What are the critical trends that will impact your business going forward?
  3. Tell me your future scenarios.  How will these trends change the way your customers and your company will behave?  What are your most likely scenarios (and don’t try to be creative in an effort to preserve the status quo!)
  4. Tell me how the game will change for your industry over the next 1, 3, and 5 years.  How will things be different for the industry, based on the trends and scenarios.  The world is a fast changing place, and I want to know how this will change your industry.
  5. Tell me about the customers you lost last year.  I gain no value from hearing about, or from, your favorite customers that love what currently do.  Instead, bring me info on the customers who are buying alternative products, changing their behaviors, in ways that might impact sales.  Even if these changes are only a small percentage of revenue.
  6. Tell me who the competitors are that are trying to change the game.  Don’t tell me that these companies will fail.  Tell me who the folks are that are really trying to do something new and different.
  7. Tell me about the fringe competitors.  The ones you constantly say do not matter because they are small, or not part of the historical industry, or from some distant location where you don’t now compete.  Tell me about the companies doing the new things which are seen as remote and immaterial, but are nibbling at the edges of the market.
  8. Tell me how you are reacting to potential game changers in your market.  What are your plans to deal with disruptive competitors and disruptive innovations affecting your way of doing business?  Other than working harder, faster, cheaper and planning to do better, what are you planning to do differently?
  9. Tell me how you intend to be a market game changer.  Tell me what you intend to do that aligns with trends and leads the company toward fulfilling future scenarios as a market leader.
  10. Tell me what projects you are undertaking to experiment with new forms of competition, attracting new customers and creating new markets. Tell me about your teams that are working in white space to discover new opportunities.
  11. Tell me how you will disrupt your own organization so the constant effort to enhance the old success formula doesn’t kill any effort to do something new and different.  How will you keep these experimental white space teams from being killed, or simply starved of resources, by the organizational inertia to defend and extend the status quo.
  12. Tell me the goals of these project teams, and how they will be nurtured and supplemented, as well as evaluated, to lead the company in new directions.  Don’t just tell me that you will measure sales or profits, but rather real goals that measure market learning and ability to understand new customer behaviors.

If investors had this transparency, rather than merely reams and reams of historical data, just imagine how much smarter we could all invest.

Happy Holidays!

Value creating CEO – Steve Jobs, Innovation and Apple

by | Nov 5, 2009 | Current Affairs, Disruptions, In the Rapids, Innovation, Leadership, Music, Web/Tech

$150billion.  That's a lot of money.  And that's how much shareholder value has increased at Apple since Steve Jobs returned as CEO.  Can you think of any other CEO that has aided shareholder wealth so much?  Do any of the cost cutting CEOs in manufacturing companies, financial services firms, or media companies see their share prices rising like Apple's? 

Fortune has declared this "The Decade of Steve" in its latest publication at Money.CNN.com.  Such over-the-top statements are by nature intended to sell magazines (or draw page hits).  But the writer makes the valid point that very few leaders impact their industry like Apple has the computer industry, under Jobs leadership (but not under other leaders.)  Yet, under his leadership Apple has also had a dramatic impact on the restructuring of two other industries – music and mobile phones/computing.  And a company Mr. Jobs founded, Pixar, had a major impact on restructuring the movie business (Pixar was sold to Disney, and has played a significant role in the value increase of that company.)  So with Mr. Jobs as leader, no less than 4 industries have been dramatically changed – and huge value created for shareholders.

No cost-cutting CEO, no "focus on the core" CEO, no "execution" CEO can claim to have made the kind of industry changes that have occurred through businesses led by Steve Jobs.  And none of those CEO profiles can say they have created the shareholder value Mr. Jobs has created.  Not even Bill Gates or Steve Ballmer can claim to have added any value this decade – as Microsoft's value is now less than it was when the millenia turned.  Despite the relative size difference between the market for PCs and Macs (about 10 to 1) today Apple has more cash and marketable securities than the entire value of the historically supply-chain driven Dell Corporation.

Mr. Jobs is constantly pushing his organization to focus on the future, about what the markets will want, rather than the past and what the company has made.  It was a decade ago that Apple created its "digital lifestyle" scenario of the future, which opened Apple's organization to being much more than Macs.  Jobs obsesses about competitors and forces his employees to do the same, to make sure Apple doesn't grow complacent  he pushes all products to have leading edge components.  Mr. Jobs embraces Disruption, doesn't fear seeing it in his company, doesn't mind it amongst his people, and works to create it in his markets.  And he makes sure Apple constantly keeps White Space projects open and working to see what works with customers – testing and trying new things all the time in the marketplace.

Following these practices, Apple pulled itself away from the Whirlpool and returned to the Rapids of Growth.  Almost bankrupt, it wasn't financial re-engineering that saved Apple it was launching new products that met emerging needs.  Apple showed any company can turn itself around if it follows the right steps.

As companies are struggling with value, people should look to Apple (and Google).  Value is not created by cost cutting and waiting for the recession to end.  Value is created by seeking innovations and creating an organization that can implement them. Especially Disruptive ones.  Whether he's the CEO of the decade or not I can't answer.  But saying he's one heck of a good role model for what leaders should be doing to create value in their companies is undoubtfully true.