by Adam Hartung | May 4, 2010 | Current Affairs, Defend & Extend, In the Rapids, Leadership, Openness, Web/Tech
"What business are you in?" is one of the most common business questions asked. People usually want a simple answer, like "I make widgets" or "I provide widget services." A simple answer allows people to easily cubbyhole the business, and remember what it does. And many think it provides for a well run business – through a simple focus – sort of like the Kentucky Fried Chicken ad "We only do chicken, and we do chicken right." Because the business's Identity is easy to understand employees can focus on Defending that Identity.
But in reality when your Identity is tightly tied to a product or service bad things happen when demand for that item wanes — or demand turns flat while supply is ample (or possibly growing). Competitors start trading punishing blows back and forth, and profits wane as competition intensifies. Business leaders start acting like gladiators trapped in a coliseum pit, undertaking ever more dangerous actions to survive amidst punishing competitiveness. Many don't survive. As results are increasingly threatened, the business's Identity is under attack, and the tendency to Defend that Identity is extremely strong. Such defense usually grows, even as results continue deteriorating.
There is an alternative. Instead of trying to always be what you always were, you can do something different. Think about Hewlett Packard. HP started as an instrumentation company, making electronic tools, such as oscilliscopes, for engineers. But as the market shifted, HP's leaders have moved the company into new business – allowing the company to keep growing.
Source: Business Insider
By entering new businesses, some organically and some via acquisition, HP has been able to continue growing sales and profits. By letting each of these businesses do whatever they need to do to succeed, by giving them permission to do what the market demands and providing these new businesses with resources, HP has been able to compete in old businesses, while developing new businesses toward which the Success Formula can migrate. Thus, HP has become a company with a less simple Identity – but it also has been able to continue years of profitable growth.
Too often, opening these White Space projects for growth causes the traditional business to feel threatened. Those in the old Success Formula will often say that the company is "abandoning its past" and "walking away from a very profitable business." Like the old story of Homer, this is a "siren's song" – very dangerously pulling you toward the rocks which can sink your ship – because each month profitabiilty is becoming more and more threatened. While it might have been a profitable business in the past, as growth slows profitability is less and less likely in the future. As sales growth slows it is important the business do its best to develop a new Success Formula so it can maintain growth.
"Has Apple Forgotten the Mac?" is a recent PCWorld article. The authors point out that as Apple's revenues have transitioned toward new businesses, such as music and now mobile computing/telephony, the Mac business receives less attention and resources. Those who support the Mac business question if Apple should spend more resources on what has recently returned to profitability.
This is the kind of internal threat that can be very risky. While the Mac is a great product, with a loyal following, and regained profitability – we can see that in the future there will be less and less need for such desktop and laptop products. Apple is migrating toward the new mobile future – and as a result it must reduce the resources on the Mac business. Each year, more resource needs to be allocated toward the new, faster growing businesses, and less invested in the slower growing traditional computing products.
Apple's Identity was once all Mac. And that nearly bankrupted the company – as it almost ran out of cash back at the century's turn. Only by overcoming its Identity as a single product company, and rapidly moving into White Space with new products in new markets, was Apple able to regain its profitable growth path.
HP and Apple both show us that an Identity, created early in the lifecycle, is very powerful. But inevitably markets shift, and the results possible from a simple, easy to understand identity will decline. Only by overcoming that original Identity via entering new markets – and using White Space to evolve the Success Formula, can a business hope to have long-term revenue and profit growth.
by Adam Hartung | Apr 20, 2010 | Current Affairs, Defend & Extend, In the Rapids, Innovation, Leadership, Openness, Television, Web/Tech
News Corp. executives (and shareholders) need to be worried. Really worried. While they are busy trying to Defend their newspaper approach, including the planned move to charge everyone a subscription fee to access the Wall Street Journal on-line, there is a competitor ready to eliminate them. Of course, if you've read the WSJ for years you may think this sounds ridiculous. This competitor is vying to do the same to the Financial Times, a newspaper much more popular in Europe than the USA, which already charges for on-line access. But this competitor is serious, and just might pull it off.
According to BusinessInsider.com, "Bloomberg Redesigns Web Site as it Tries to Kill Journal." Hiring an executive from Yahoo, Bloomberg News is "pulling the gloves off" and preparing to take on old-line competitors as it steers a course to being #1. And the odds are looking good for its success.
The market for business news has been shifting for years. Once this market was dominated by two delivery mechanisms. One was very expensive, costing thousands or hundreds of dollars per month, driving information to terminals sitting at desks of traders and brokers. The other was a daily reporting of business news through the traditional business newspapers mentioned above. Both businesses were very profitable.
But today, almost everyone can get almost everything the expensive terminals had simply by scanning the web. And if you can get news real-time, why wait until tomorrow? News Corp. bought Dow Jones and has been trying to Defend the terminal business, in the face of intense Bloomberg competition for traders desks and much lower cost competition for everyone else. In an effort to shore up the P&L at Wall Street Journal the company has announced it will reverse all industry trends and start charging for WSJ content on-line. They still haven't figured out how to effectively take advantage of Marketwatch.com as a viable delivery mechanism for WSJ content. An admission they don't know how to develop a robust advertising model on the web and mobile devices that will support the publication.
Don't forget, News Corp. was early to the on-line world with its acquisition of MySpace.com. But instead of letting the people who run MySpace.com do what they needed to do to become Facebook – or possibly to become the next Marketwatch.com – News Corp. leaders interceded. They helped "manage" MySpace and applied News Corp. Success Formula parameters to it. MySpace was not allowed to operate as a White Space project. Now MySpace is a narrow site mostly for musicians and artists – missing the big opportunities in social media, business/financial news or even traditional news dissemination. Had it been given permission to do whatever it needed to succeed, permission to create a new Success Formula, who knows what MySpace might have become?
Today's marketplace will not produce acceptable returns for the old Success Formula. But the value of good business news is growing, as all investors want to know what traders know as fast as they know it. And that is where Bloomberg.com is headed. It is squarely directed at building a new business that is advertiser supported which will deliver the right news to the right place fast enough to capture those who want business news.
Bloomberg is now running 2 separate businesses. They continue to allow the terminal business to work hard as possible at defending its turf. Simultaneously they have established a White Space project that is designed to eventually obsolete the old business. In the process they will cannibalize the terminal business. But they also will very likely drive less agile competitors Dow Jones and Financial Times out of business. In the process they could capture significant ad dollars while learning how to dominate the mobile device market as well as the traditional web.
When markets shift, nobody can win by trying to Defend the old. Customers move on, and they abandon old solutions. Returns decline. The winner has to use Disruptions to overcome old Lock-ins to do whatever is necessary to profitably grow! (like having a web site that looked like an old terminal screen with amber text on a black background) and establish White Space with permission to do what is necessary to succeed! Even recognizing this may create cannibalization – but in the process learning how to earn high rates of return while crushing competitors.
Kudos to the management at Bloomberg. They are going for the jugular in the business news marketplace, and doing so by moving where the market is headed – while other competitors are trying to Defend & Extend old ways of doing business. It may not take Bloomberg long to create serious damage to the old institutions in business and financial news.
by Adam Hartung | Apr 12, 2010 | Current Affairs, Openness
Amidst the brouhaha over health care legislation, Harvard Business Review has produced a report "Megatrends in Global Health Care." One interesting statistic is that medical tourism – that's when someone leaves the USA to have a procedure like surgery performed in a foreign country – has risen from 750,000 in 2007 (more than you would have guessed, I bet) to about 1.2million. Yep, people are going outside the USA for health care.
While everybody in the USA is asking "what do you want" for health care, there is a marketplace. To recognize this you have to overcome myopia and think bigger than the U.S. Anyone can have health procedures performed in Germany, France, Canada, Japan, Thailand, Mexico, Brazil, India – etc. Of course you have to pay for it. But in medical tourism instances, it is cheaper to have the care provided offshore, often with extensive after-event recovery assistance, rather than in the USA. Even if you have insurance (which may have declined to cover the procedure because it is so expensive domestically).
While everyone is arguing about healthcare, some violently, it will be the marketplace that will determine what health care we get and how much it will cost. People want good service at a good price, and they don't like "middle men" such as insurers or regulators, making the trade-offs for them. They want options, and they want to know likely expectations, and they want to know the actual cost as well as the therapy cost, medicine cost and impact on work, income and life. Then they want to make an informed decision.
The beauty of medical tourism is it provides a marketplace mechanism for those things to happen. America has great health care, but it is wildly expensive. Multiples of the cost in other countries. If you are uninsured, either you don't' get complete health care or you want someone to jump in and bail you out (like a government agency). If you are insured, quite simply your healthcare is subsidized, and it is dictated to you by the terms of the insurance company – not really much different than a government program just a "privatized" bureaucratic group making the decision. You aren't the payor, someone else is, so as much as you want to be the "customer" you really aren't. In America the golden rule of health care applies "he who pays the gold gets to make the rules" and that would be your payor (which is either your insurance company – with guidelines from your employer – or medicare with government guidelines).
But with medical tourism, you are the customer. Nobody between you and the doctor, facility or other provider. You get to hear options, and make decisions. Gee, what an interesting approach. This is now competition for the extremely expensive American health care industry. If you don't like your drugs, go buy them in Mexico or Canada – why let a bureaucrat scare you into paying 5x or 15x more? If you want a procedure, go get it Paris or Peking. If you need extended therapy, do it at a spa in Thailand. And all of this done at a price that is a fraction of doing it in the USA. Smart providers will soon have to start paying attention, and find ways to compete!
A lot of people want to affix blame for the cost of American health care. As long as there's no marketplace, then I guess blame fixing is what people like to do. But if we instead focus on the competition we can see how rapidly things will change. When a hospital is losing customers to Hyderabad, or a facility in Florence, how long will it keep tinkering with an approach that costs too much and is losing customers? Real change happens when people realize that they can fail if they don't change their old Success Formula.
The best thing about medical tourism is it creates a very real option, and very real competition. If you aren't thinking about it, you should. You would be surprised what you can have done, and at what quality, and the cost. While you don't want to run to Damascus to see your doctor for a sinus infection, when it's time for a knee replacement Nice might just be the place to go. Give it some thought, because your behavior will speak a lot louder than your words when it comes to creating real change in American health care provision and cost.
by Adam Hartung | Apr 7, 2010 | Current Affairs, eBooks, In the Rapids, Innovation, Leadership, Openness, Web/Tech
Nancy Munro of Knowledgeshift.com posted a great blog "Technology was Blago's Enemy Again." Although many people watch The Apprentice, I'm not one. Apparently the former governor of Illinois was a contestant, and when he was challenged to lead a project team his lack of technology skills got in the way of effectively doing the job. Although he's a smart lawyer and politician, his tool set had become outdated. A competitive team leader who was very good at texting and other state-of-the-art technologies was able to best Governor Blagojevich's team, and the ex-governor was "fired" by Donald Trump from the show.
On the surface, this is a funny story. But Nancy points out how it reflects the very real issues of using technology when competing. All businesses compete every day. Those that learn to use new technologies are able to get more done, faster and more effectively. Those who fall into a routine of doing things the same way, and don't advance their tool set, run the risk of being knocked out of the competition. Mr. Blagojevich's inability to use modern technology killed his chances of winning the competition.
Will you, or your business, go to any trade shows or conferences this year? Probably. But you'll limit attendance because you're still worried about financial performance. How will you select where you go? Probably by attending the ones most closely associated with your industry or business. But think about it, are those the ones that will be most valuable? You'll probably mostly hear what you already know, and reinforce your existing beliefs about the business. Is that really an effective spend?
Instead, shouldn't you use the funds to learn about what you don't know? Like how to be a world-class social marketer? This is an amazingly fast growing area where early adopters are gaining new sales. For example, Guy Kawasaki and the world's leaders in social marketing will be talking about how to get sales and profits from Twitter and Facebook at something called "The Smartbrief Social Media Success Summit." I'm not a shill for the conference (I'm not even speaking there), but this kind of event offers the very real opportunity of learning something you don't know – rather than reinforcing old Lock-ins and keeping you doing what you've always done.
Have you purchased a Kindle or iPad yet? If not, how do you know what they can or can't do? At SeekingAlpha.com "Thoughts on the iPad" offers one person's reflection on what the iPad does well, and doesn't, and where it might evolve – as well as how it compares to the Kindle. These devices are selling in the millions – so are you and your business thinking about how to use one to help sell more products or make more money? Yahoo and Google are both launching ad models for iPad (see Mediapost.com "Yahoo Readies Launch of Online Advertising Model"). Are you considering using this media to reach new customers? Have you considered how one of these products embedded in what you sell might offer you a competitive advantage? If you and your colleagues haven't tried one, experimented, how would you know?
Our businesses rarely get into trouble from something we know well. It's what we don't know, what we ignore, that gets us in trouble. Like Craigslist.com wiping out newspaper classified ads. The newspapers didn't even see it coming. On the other hand, if they had investigated and used Craigslist they could have prepared, and maybe even developed a competitive on-line product to grow new revenues!
It's incumbent upon us to constantly expand into new markets. We have to constantly keep White Space alive where we use resources to experiment in areas outside traditional permission. It's easy to keep throwing all our resources into what we know, but in the end, it's what we don't know that will knock us out of the game – like poor Blago.
by Adam Hartung | Mar 23, 2010 | Current Affairs, Leadership, Lock-in, Openness, Web/Tech, Weblogs
Let's see, would you rather spend $4million to reach 100 million people once – say via a Super Bowl ad – or spend almost nothing to reach 400million people every day? Seems obvious economics. Yet, how good is your Facebook presence? Because that is the route to all those people who are on-line daily.
Most of today's business leaders grew up in the world of one-way advertising. They watched TV, listened to the radio, read magazines and newspapers. They were taught that to get a message into potential buyer heads, unfiltered by journalists, you had to advertise. And for a long time, that was pretty true. So they Locked-in on advertising and traditional PR as the route to name awareness and brand image. But that was before the market shift which is dampening enthusiasm for traditional media while social media (broadly – including YouTube) is exploding.
Now your customers, and potential customers, are most likely using Twitter, Facebook, Linked-In and other social media every day. And when they search on your products, they get Google responses from social media. If you aren't putting some effort into the media, your image and message could be far removed from your goal!
I remember talking to the CEO of Rolex in 1997. Rolex did not have a web site. His point of view was that as a luxury good, the internet was "below" his company's standards for communicating. If there was to be a web site, he thought Tourneau – the world's largest retailer of luxury watches – would build it. In 10 minutes I demonstrated to him how a simple search on "Rolex" turned up gobs of used dealers, unauthorized dealers, unauthorized repair shops, and outright fakes! Several near the top of the list! He was shocked. His brand was rapidly being marginalized via a channel he had never even considered. His worst fears about how the brand would be stolen, manipulated and value minimized were happening – and he was blithely ignorant. Of course, Rolex got involved quickly to protect its brand.
So when was the last time you reviewed your brand, or image, or message across social media channels? Are you possibly, blithely letting someone else manipulate your image?
At MediaPost.com in "Ensuring A Successful Corporate Facebook Presence" the authors outline a 4 step approach for doing a good job. My biggest fear is that Lock-in to old approaches to sales and marketing mean too few companies are paying even a shred of interest in social media. Over and over I hear marketers of large, established companies saying that social media access is blocked at work – and nothing is being done to leverage the channel! In some instances, I've heard of Chief Marketing Officers making a "command decision" to avoid social media, because they can't "control" it.
Secondly, the competition that is going to ruin your day just might do it via social media! An existing company may have an image, advertising and effective PR. So how would a Disruptive new competitor go after you? Why, using the very low cost channel of social media. We've all heard about disgruntled customers that have used songs, videos and other clever tools to spread extremely negative information like wildfire through a customer base. Yet, by ignoring the channel – by ignoring the opportunity to develop a strong and effective presence that ties to customers – we encourage competitors to use this channel to our detriment.
Don't let Lock-in cause you to ignore this powerful, and shockingly low cost, communication tool. Realize that social media is here to stay, and incorporate it into your future scenarios. Additionally, social media is where your competition – especially fringe competitors – are likely to target you. Why not study them, learn from them, and use the tool to grow instead of being a target? And when it's time to implement, Disrupt your old decision-making and spending patterns so you allocate some resources to build out your social media campaign. Then put together a White Space team with Permission to really go for success using the resources you've now dedicated to the project.
Applying the Phoenix Principle can result in a rapid improvement in social media marketing – and it just might save you a huge amount of spending on your traditional marketing communications plans. While bringing in new customers and markets!
by Adam Hartung | Mar 15, 2010 | Current Affairs, Defend & Extend, General, Innovation, Leadership, Openness, Web/Tech
Did you ever notice how often a large company will introduce a new solution (often a new technology), but then retrench from promoting it? Frequently, the market is developed by an alternate company that captures most of the value. We can see that behavior looking at smartphones.
Source: Silicon Alley Insider
In 2008, three early leaders were Microsoft, RIM and Palm. But Microsoft chose to invest in Defending & Extending its PC software business – with updates to the operating system in Vista and OS 7. As the market has shifted toward mobile computing, Microsoft has been clobbered. But largely because it remained stuck trying to protect its "core" while the market shifted away. Palm also tried to Defend & Extend its early position with updates, but because it did not follow the pathway to greater usage with new applications it also has seen dramatic share decline.
Meanwhile, RIM has promoted new uses within the corporate world for mobility, and thus grown its market share. And Apple has made a huge impact by bringing forward dozens of new mobile applications, closely followed by Google. What we see is a classic example of the early entrant fading largely because they decided to Defend the old market, rather than investing in the new one. Really too bad for shareholders in Microsoft (losing 20 share points) and Palm (losing 10 share points), while good for shareholders of RIM, Apple and Google.
And in Apple's case we can see that the company continues using White Space to grow revenues by expanding the new marketplace. The iPad is off to a very strong start, with tens of thousands of units ordered last week. But of greater importance is how Apple is promoting the shift to mobile devices from traditional PC devices. At SeekingAlpha.com, in "How the iPad, Slates Will Evolve the Next Two Years," the reporter projects how demand for all laptop products will decline as more capability and functionality is added to mobile devices like smartphones and these new slate products.
Microsoft can keep trying to Defend & Extend PC technology, but it won't be long before their efforts largely won't matter. Don't forget that once Cray computers was a rapidly growing super-computer company. But increasing performance from much alternative products eventually made Cray irrelevant. Same for Silicon Graphics and Sun Microsystems.
Today the market capitalization of Microsoft is about $250B, about 4x sales. Apple's market cap is just over $200B, about 6x sales. Google's market cap is about $180B, about 8x sales. All reflect investor expectations about future growth. The D&E company is simply not expected to grow – and in fact is much more likely to disappoint than the companies growing share in growing markets toward which customers are shifting.
And any company can choose to participate in growth, versus Defend & Extend. While Tribune Corporation is trying to find a way out of bankruptcy, and struggling to figure out how to deal with market shifts away from newspapers, Hearst is taking positive action. The Wall Street Journal reports in "Hearst Jumps Into the Apps Business" how the old-line newspaper company has set up a White Space project, complete with dedicated people and its own funding, to begin developing mobile applications for news!
Even when business leaders see a market shift, far too many choose to Defend & Extend the "core." Unfortunately, that leads to disappointments. Keep in mind Microsoft and its rapid loss of Smartphone share as users move increasingly to mobile devices from PCs. To succeed leaders need to drive their organizations in the direction of market shifts, and growth. Like Apple, Google and even Hearst.
by Adam Hartung | Mar 3, 2010 | General, In the Rapids, Leadership, Openness, Web/Tech, Weblogs
Guy Kawasaki contacted me a couple of weeks ago, asking me to write a short piece for him. I was happy to do so, and he published it at the BusinessInsider.com War Room as "10 Ways to Stay Ahead of the Competition." Fortunately for me, the article was also picked up at IBMOpenForum.com with the alternate title "How to Stay Ahead of the Competition." Full explanations of each bullet are at both locations (although the graphics are outstanding at Business Insider so I prefer it.)
- Develop future scenarios
- Obsess about competitors
- Study fringe competitors
- Attack your Lock-ins
- Seek Disruptions
- Don't ask customers for insight
- Avoid Cost Cutting
- Do lots of testing
- Acquire outside input
- Target competitors
Blog followers know that this program has now worked for many companies who want to grow in this recession. The reason it works is because
- You focus on the market, not yourself
- You avoid Lock-in blindness by avoiding an over-focus on existing products, services and customers
- You use outside input, from advisers and competitors to identify market shifts that can really hurt you
- You put a competitive edge into everything you do. Competitors kill your returns, not yourself.
- You use market feedback rather than internal analysis guide resource allocation
Of course this works. How can it not? When you are obsessed about markets and competitors and you let it direct your flow of money and talent you'll constantly be positioned to do what the market values. You'll have your eyes on the horizon, and not the rear view mirror.
The biggest objection is always my comment about "don't ask customers for insight." So many people have been indoctrinated into "always ask the customer" and "the customer is always right" that they can't imagine not asking customers what you ought to do. Even though the evidence is overwhelming that customer feedback is usually wrong, and more likely destructive than beneficial.
Just remember, IBMs best customers (data center managers) told them the PC was a stupid product, and IBM dropped the product line 6 years after inventing the PC business. DEC's customers kept asking for more bells and whistles on their CAD/CAM systems, then dropped DEC altogether for AutoCad ending the company. GM customers kept asking for bigger, faster more comfortable cars – improvements on previous models – then moved to imports with different designs, better gas mileage and better fit/finish. Circuit City customers asked for more in-store assistance, then took the assistance across the street to buy from cheaper Best Buy stores. The stories are legend of failed companies who delivered what the customer wanted, and ended up out of business.
Enjoy the links, and thanks to Guy for publishing this short piece. Follow these 10 steps and any business can stay ahead of the competition.
by Adam Hartung | Feb 28, 2010 | In the Rapids, Openness, Web/Tech
Google keeps on growing. While many companies bemoan revenue losses and poor results in 2008 and 2009, Google keeps new products flowing out the door and revenues continue to increase. New markets are being developed.
This Google revenue growth is powered by use of White Space, as CNN.com reported in "Gmail holds Graduations and Funerals." GMail labs is a White Space team that develops new applications and uses for Gmail. Its operating premise is that it should develop the products rapidly, then push into the market to get feedback. Then the team can determine what to modify and test further, what to push into the market as non-beta and what to kill. As recently demonstrated in the headlined behavior, Google is ready to keep some things and kill others based upon market feedback – not just what the internal people or analysts think.
- "This isn't the first time Gmail Labs has graduated and killed some test
features since Gmail Labs started in June 2008, but the event does
underscore an idea that Google says is key to its success as an
innovative company: Let people create products they'd use themselves,
get those products out to the public as soon as possible, and make
consumers think it's OK for things to break."
- ""At Google, in general, the philosophy is to get things out quickly in
front of our users and not make huge promises," said Ari Leichtberg,
another Google engineer"
Nothing is more accurate than real market feedback, as readers of this blog have heard me say often. Scott Anthony of Innosight recently took up this mantra in a Harvard Business Review blog "How to Kill Innovation: Keep Asking Questions." He relates how a large company with a new idea kept asking "what if" questions about a new idea. Each piece of research led to more "what if" questions. With its massive resources, the company could keep asking and researching forever, never getting real market input and never getting the innovation to market.
In traditional companies, with a new product funnel and stage gate implementation process which can take years to run through, once something moves into the market the internal "champions" are so vested in the innovation they can't stand for it to fail. Far too often, if the innovation were to fail the champions would lose their jobs – or see their careers tank. Too much analysis causes too few ideas to make it to market, and causes the organization to overspend on the innovation that does. After launch market feedback is often ignored, or manipulated, to allow the innovation to be pushed harder and longer on the hopes that with "just a little more time and effort" it will succeed.
What keeps Google growing, and attracting top talent, is its willingness to use White Space. It is willing to develop ideas quickly and obtain real market feedback. Then decide what to keep, and what not to keep. Because it moves quickly, market input shapes the offering. Market input allows the company to see what people really use, and thus worthy of additional investment. Or what people don't use, and thus needs to be dropped before too much is sunk into the idea.
When Microsoft decided to add "clippy" to its products it was a herculean effort to install it across all products. This computerized help tool has had little use, and is often despised by users. Microsoft decided to create this feature based on almost no market input, instead relying on some customer focus groups. After making the enormous investment – in lieu of many other opportunities passed over internally – Microsoft simply became "married" to the innovation. Now "clippy" is still on the applications, but is almost never used. And it gives Microsoft's products no user advantage.
All companies can grow in 2010. You need to act more like Google. Develop early stage products quickly, and get them into White Space projects which will market test them. Don't spend too much time, money and effort "what iff-ing" or doing "market research" trying to predict future customer behavior. Listen carefully for market input, then modify. Have more than one opportunity in White Space, because you don't want to over-invest in any single idea that ran the internal gauntlet. Be ready to move forward quickly with things that work, and abandon those that don't. If you use give yourself permission to test new things in White Space, and resources, you too can grow in 2010 and climb out of this recession.
by Adam Hartung | Feb 10, 2010 | Current Affairs, General, In the Rapids, Innovation, Leadership, Lifecycle, Openness, Web/Tech
Lots of new things are happening with technology. Everyone knows that. We see the emergence of new communication vehicles like Facebook, and new ways to exchange data – like Apple's iPhone and RIM's Blackberry. Skype replaces the telephone and in-person meetings. iTunes replaced CDs. The list is pretty long. But how much of these new technologies do you use regularly, how many do you use in your business, and how many do you use in "mission critical" applications of things you do?
Most of us watch new markets develop. Many even think the smart thing to do is to wait, let things evolve, see what happens. Be a late adopter when technology is "stabilized" and prices are lower. These are spectators to the world of innovation, doing what they've always done and waiting for some future time when it will seem better to switch.
Then there are participants. The participants are learning. While others watch, they actually learn how to get new customers, how to sell more product, how to apply technology to lower cost while improving the solution, how to be more competitive, how to read market shifts (and prepare) – how to make more money. Like Google.
Google just launched Buzz ("Google Betting on Mo Better Buzz" at Mediapost.com. Buzz is a new product that links up to social media sites for a variety of functions – one of which is its ability to deliver ads (imagine that) while also adding benefits to users like location tagging and enhancing email. It does new things, and some things already available via Facebook or Yelp. That it's market position, or even its functional position in the technology environment, isn't clear is not terribly important to Google management. In "A Buzz and A Shrug: Why Should Google Kill Anything?" MediaPost.com goes on to describe that at the launch meeting management went out of its way refusing to declare a specific position, or competitive plan, for Buzz. Google is in the market, trying something, learning and participating – being part of making Disruptions happen and seeing if it can find a way to create sales and profits.
And that's what White Space, and participation, is all about. While spectators watch and get left behind, participants are in the market. Spectators fall off the S-curve, as their capabilities fall away from market needs they become less relevant, sell less and profits fall. Participants use White Space to jump the curve – to move from an old product/market S curve to a new one. They are in the market learning, and adapting, and moving toward that point where the technologies and solutions collide – thus they are ready and able to move to the next new thing. While spectators are stuck, doing the same old thing, falling farther behind.
Being a participant isn't hard, nor is it all that expensive. It requires the willingness to get in the game. To start. To do less "planning" and instead get in there and do it – like the NIke ad recommends. Instead of devoting all your money to defending and extending what you know, take some and invest in the places where growth is rampant. The learning will pay for itself as it allows your business to move into new markets and generate new revenues. You will have to Disrupt your thinking and processes to do this, but the payoff is it could save your company!
Long ago business education started with a lot of focus on industrial engineering. Improving operations to get more stuff out the door. This was augmented by sales and marketing, to help sell stuff so we could get more out the door. And finance was added as a way to understand cash flow and funding in order to get more stuff out the door. All of that was predicated on endless demand for the stuff. But today, it's not about making lots of your stuff and cramming it down customer throats. Instead, winners have to be adaptable to market needs – to be part of creating new solutions that generate more revenues and higher profit rates.
You don't need all the answers. White Space is about having a plan, and goals, based upon scenarios. But then avoiding analytical paralysis and getting into the market. Google is phenomenal at this. Not everything Google launches is a big hit. Google Wave appears to be struggling. But that's OK. If you don't put all your eggs in one basket, because you get into markets earlier and faster, you can afford to have misses. You still get the benefits of market learning – and move forward to possibly jumping the next S curve. Google's Buzz is another stereotypical White Space entry into the market. A product with a lot of possibilities, looking for how to fit into a quickly shifting market, teaching Google more about the marketplace and aiding the company toward maintaining its torrid growth pace.
by Adam Hartung | Feb 5, 2010 | Current Affairs, General, Openness, Television, Web/Tech
I had two more Facebook ignorers this week. First was an old friend who didn't use Facebook, and could not imagine how it would be beneficial to his business. I responded with "that's kind of like the folks who didn't use a telephone saying that they didn't see any value in it for business." When you don't use a tool, it's easy to pretend it isn't valuable. Makes life easy on your competitors who do give it a try.
The second was a business that recruits people under 30. The top marketers at this company are still doing all their efforts with newspapers, radio and typical broadcast forms of media. They said they couldn't use social media to reach their base "because you can't control the message on Facebook." OK, so they don't use social media, and their focus is on message control so they don't intend to use social media. But their target is a population that every month uses less traditional media, and more social media. And these folks are wondering why media costs are up, and their success is way, way down. Uh huh.
At MediaPost.com "Avoiding Social Media Malpractice" Chad Cappellman tells the story of a hospital division that gets more people coming for insight through Facebook than come through the highlighted links on the hospital's own web site! People use Facebook today – a lot. We all would prefer a personal referral when we have a question. Often, a referral is better than 10 Google search hits at pointing you to the service provider or product which really fits your needs. And Facebook is a fast way to generate referrals. As is Twitter. So when you want potential customers referred your way, why wouldn't you try to maximize the use of social media? As the story above discusses, people would rather get info about a hospital (an example) from friends than from about any other source.
As for implementation, social media is part of the more sweeping market shift affecting all businesses. Historically, business people thought in terms of "control." The business had communication walls, internally and externally. More time was spent making sure information wasn't passed around than making sure communication was fluid and accurate. But in another MediaPost.com article "Twitter and Facebook Could Get You Fired" we see that approach simply won't work any more. We live in a "connected" and "networked" world today. There are precious few secrets when everyone has a mobile phone, and most of those have cameras, and texting is ubiquitous, and the vast majority of people under 35 have multiple social network locations.
Today, you can't win by limiting communications. That is a failed approach. Nor is it possible to "control" what is said about your business or its products and services. What you can, and increasingly must, do is monitor the chatter and be part of it. Of course some things will be inaccurate, so its now your role to help move the message in the right direction. Don't think about control, think about helping the message move toward accuracy. And leverage all the chatter to help you sell more stuff!
We live in a fast shifting world. That is not going to change. Slow moving traditional media is gradually dying. No competitor can succeed by avoiding the shifts. Those competitors that win will use scenario planning to help anticipate the shifts, and focus on fringe competitors to learn how to do new things which can create advantage. Success isn't going to come from trying to Defend & Extend the "core" – but rather by rapidly adapting to new market needs even if it means changing your "core." And the best way to stay connected to shifting markets today is through social media. It not only gives great, and timely, feedback but offers everyone the chance to enter into a dialogue with potential new customers at remarkably low cost. And in remarkably powerful ways.
