Raising CEO Longevity

In my youth, CEOs hung around till they retired. Today, the tenure of CEOs continues to drop to a point where their longevity is less than an NFL coach. Show me a company or even a country in trouble, and I'll show you a CEO who is about to be fired. Strategy, vision and mission statements are dependent on the simple premise that you must know where you're going. No one can follow you if you don't know where you’re headed. Many years ago, in a book called The Peter Principle, authors Lawrence Peter and Raymond Hull made this observation: "Most hierarchies are nowadays so cumbered with rules and traditions, and so bound in by public laws, that even high employees do not have to lead anyone anywhere, in the sense of pointing out the direction and setting the pace. They simply follow precedents, obey regulations and move at the head of the crowd. Such employees lead only in the sense that the carved wooden figurehead leads the ship." Perhaps this pessimistic view of leadership skills has led to the explosion of hundreds of books dealing with leadership, most of them being downright silly. There's advice on whom to emulate (Attila the Hun), what to achieve (inner peace), what to study (failure), what to strive for (charisma), whether to delegate (sometimes), whether to collaborate (maybe), Americas secret leaders (women), the personal qualities of leadership (having integrity), how to achieve credibility (be credible), how to be an authentic leader (find the leader within) and the nine natural laws of leadership (don't even ask). In fact, there are 3,098 books in print with the word "leader" in the title. To me, how to be an effective leader isn't worth a whole book. Peter Drucker gets it into a few sentences. "The foundation of effective leadership is thinking through the organization's mission, defining it and establishing it, clearly and visibly. The leader sets the goals, sets the priorities, and sets and maintains the standards."
First, how do you find the proper direction? To become a great strategist, you have to put your mind in the mud of the marketplace. You have to find your inspiration down at the front, in the ebb and flow of the great marketing battles taking place in the mind of the prospect. It's no secret that most of the world’s greatest military strategists started at the bottom. And they maintained their edge by never losing touch with the realities of war. Karl von Clausewitz did not attend the best military schools, did not serve in the field under the best military minds and did not learn his profession from his superiors. Clausewitz learned his military strategy the best way and the hardest way--by serving in the front line at some of the bloodiest and most famous battles of military history. The unpretentious Sam Walton traveled to the front lines of every one of his Wal-Mart stores throughout his life. He even spent time in the middle of the night on the loading docks, talking with the crews. Unlike "Mister Sam," many chief executives tend to lose touch. The bigger the company, the more likely the chief executive has lost touch with the front lines. This might be the single most important factor limiting the growth of a corporation. All other factors favor size. Marketing is war, and the first principle of warfare is the principle of force. The larger army, the larger company, has the advantage. But the larger company gives up some of that advantage if it cannot keep itself focused on the marketing battle that takes place in the mind of the customer. If you're a busy CEO, how do you gather objective information on what is really happening? How do you get around the propensity of middle management to tell you what they think you want to hear? How do you get the bad news as well as the good? If you don’t get the bad news directly, bad ideas can flourish instead of being killed. One possibility of finding out what's really going on is "going in disguise" or poking around announced. This would be especially useful at the distributor or retailer level. In many ways this is analogous to the king who dresses up as a commoner and mingles with his subjects. The reason: to get honest opinions of what's happening. Like kings, chief executives rarely get honest opinions from their ministers. There's just too much intrigue going on at the court. The members of the sales force, if you have one, are a critical element in the equation. The trick is how to get a good, honest evaluation of the competition out of them. The best thing you can do is to praise honest information. Once the word gets around that a CEO prizes honesty and reality, a lot of good information will be forthcoming. Another aspect of the problem is the allocation of your time. Quite often it is taken up with too many activities that keep you from visiting the front. Too many boards, too many committees, too many testimonial dinners. According to one survey, the average CEO spends 30% of his or her time on outside activities--and spends 17 hours a week preparing for meetings. Since the typical top executive works 61 hours a week, that leaves only 20 hours for everything else, including managing the operation and going down to the front. No wonder chief executives delegate the marketing function. But that's a mistake. Marketing is too important to be turned over to an underling. If you delegate anything, you should delegate the chairmanship of the next fund raising drive. David Packard of HP fame once said, "Marketing is too important to be left to the marketing people." Long ago, Drucker advised that since the purpose of a business is to generate customers, only two functions do this: marketing and innovation. All other functions are an expense. He was absolutely correct. If you're a CEO, keeping your job will depend on how good you are at marketing and innovation. - (Branding Strategy, 19 Sep 07)

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Innovate Like Google - Prof. Tom Davenport

An interview with Tom Davenport, Professor of Information Technology & Management, Babson College. While some elements of Google's success as innovator would be very hard to emulate, others can be profitably adopted by almost any business.

Innovation at Procter & Gamble - A.G. Lafley

An interview with A.G. Lafley, Chairman and CEO, Procter & Gamble. Innovation is at the core of P&G's business strategy. See how P&G makes innovation an everyday practice in their organization.

Unexpected Innovations

By Elisa Akiko Mann

In his book Innovation and Entrepreneurship, Peter Drucker writes about several ways that firms can innovate. Among them is the idea of watching for the unexpected, being aware of it, and taking best advantage of what it has to offer. Both unexpected successes and unexpected failures, if analyzed and embraced, can lead to good outcomes.

Management can at times overlook a good trend because it does not fit with the perceived norms of the business. For example, one company leader kept trying to get appliance sales more in line with what he expected the industry averages to be, so that fashion sales, the product the store was more closely aligned with, would be a greater proportion of total sales. Drucker pointed out that he had a good opportunity to increase and encourage the growth of appliance sales instead, meeting the needs of the customers and having more fashion sales as a secondary rather than a primary draw.

A competing store took the opportunity to encourage appliance sales, and did well. The customers who came in found what they needed, and appreciated it.

The first store leader had “a good problem to have,” but saw it as something strange rather than something positive. Drucker kept close to his own mantra of paying attention to what the customer considered of value.

In a home building example, a firm was having difficulty trying to sell small homes to young couples. Expectations had changed among the demographic; people did not expect to stay in one house forever, and felt that they would probably buy a new home. Their first home therefore had to be salable to help them with their dream of a larger home, later.

The house builders took the ideas to heart, and made the kitchens nicer and more inviting. They procured permits so that more building could take place with respect to the small homes – they could be expanded over time. They told prospective new owners that when they moved in, the homes would be comfortable, but that they could grow with their families as the years went by. So instead of buying a small house that could probably not help finance their future dreams, home buyers selected a place that could evolve with them.

Even failure has its place in the world of innovation. Of course, not every idea has wings, and most ideas and most businesses do not make it in the marketplace. Competition can be fierce, resources can be scarce, and even the most well funded of concepts does not always have either good execution or the real consent of the marketplace.

Sometimes, however, failure points to an opportunity that is hidden. It shows where a thought was misguided or where the needs of the marketplace were not understood. This was exactly the case in the home building story above: the first “basic house” that was offered was a failure. It was designed to be an affordable option for people to live in. Yet it was offputting to people because it did not meet their dreams – their sense of their own real needs. Instead of merely blaming customers for not understanding the quality and value of the houses, the company asked them what they wanted, and what was important to them. The result was an expansion of the business from one to seven metropolitan areas in five years.

Drucker notes that innovation comes from sideways, not from the center. It is not exclusively in the high technology arena, although that sector understands the importance of the innovation role. He points out that social innovation can be as important as the technological, and points to examples of social, process and managerial organization in Japan as effective examples.

Drucker also notes that things, whether naturally occurring or socially constructed, are not resources until they are recognized as valuable. Penicillin, for example, was seen as a nuisance until its medically beneficial aspect became clear. Drucker constantly looks for insight, for the match between what is and what meets a human need.

Innovation, whether drawn from success or from thought and research after failure, is a bridge between needs and resources. Drucker suggests systematically allowing for innovation, and keeping eyes and ears open, because it can spring from the most unexpected places. Can we recognize it if we see it?

(The Drucker Society of LA)

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Innovation - the key to success

Winston Adams

Innovation is the cornerstone of opportunity for corporations. With technological advances and a global economy, companies must be more innovative and flexible than ever if they are to thrive.

Fear of change within the corporate culture is the greatest obstacle to innovation and growth in corporations. Change is never easy or painless, but companies that do not innovate stagnate.

Companies that stagnate become tempting targets for current and potential competitors and eventually fail.

A company that avoids stagnation is playing to win. Playing to win requires trust and reward risk-taking and courage. Innovative companies encourage and expect creative thinking and problem solving.

The need for leadership and management of both innovation and people has never been greater.

Companies must be led by developing creative management teams. The first task of the innovative processes is to transform the way organisations operate. They must embrace a more flexible and organic model for organising business operations in order to foster innovation.

There are several methodologies that a company can adapt.

OPEN-BOOK MANAGEMENT

Open-book management is an innovative approach to corporate management. This means that every employee has to focus on helping the company they are working in to make money.

EMPOWERMENT

Historically, companies needed employees who would show up for work every morning and do exactly what they were told.

There has been a paradigm shift since then. Many companies now realise they would be better off if they were to encourage employees to think.

Employers now see the benefits of hiring employees who are concerned about the company's long-term success; not just their own personal financial situation.

Workers are asked to accept additional responsibilities including prioritising and scheduling, problem-solving, in-process quality control and cost containment.

Studies show a statistically significant correlation between employee empowerment, gain sharing, and participation in decision-making and corporate performance.

Open-book management and employee empowerment work well together because they make companies more competitive by getting every employee to think and act like a business owner, rather than simply a hired gun.

These innovative approaches to management help employees to act differently and to think differently. These programmes fundamentally change the link between the employee and the company.

PROCESS RE-ENGINEERING

Another innovative approach to corporate management involves process re-engineering.

No one would argue that re-engineering helps companies control costs, but for many workers re-engineering is thought of as synonymous with downsizing and layoffs.

Thus, an announcement that the company is planning to re-engineer a position is often met with concern among current employees which will have an affect on both morale and productivity.

An innovative approach would be to use process engineering as a tool to drive down costs and improve productivity. In order to encourage the active participation of current employees, management could commit to no forced layoffs as a result of the re-engineering process meaning that anyone displaced would be transferred if possible and retrained if necessary.

Such a programme would focus on eliminating inefficiencies and waste, not cutting head count.

PROFIT SHARING

To encourage workers to think like owners, they should be rewarded like owners. The more certain the link between performance and reward, the more likely it will be that company employees will strive to achieve specific performance goals.

RISK MANAGEMENT

Risks are an unavoidable aspect of being in business. Another innovative approach to corporate management involves accepting the implications of the axiom: The greater the opportunity, the greater the risk.

An innovative company will evaluate and accept some, but certainly not all of the avoidable risks.

HOLISTIC APPROACH

Robert Miles in Leading Corporate Transformation suggests that one innovative approach to corporate management involves a more holistic approach by senior management to the way in which their company is organised.

Miles suggests a total system framework for examining the organisation for weaknesses using this approach:

The process starts by understanding or articulating the vision for the organisation.

The vision must be supported by business strategies.

Strategies in turn are supported by the formal structural elements which define levels of authority.

Infrastructure supports the structural elements. In this context, infrastructure includes control planning, resource allocation systems, communications systems and channels, and the planning function.

The workforce is measured in terms of its ability to support the four elements listed above.

The workforce and everything above it is supported by the firm's core competencies.

The culture of the organisation, including the values and the beliefs shared by most employees should support the decisions made by senior management and the actions taken to accomplish the goals described above.

Miles explains that the purpose of this analysis is to find and fix gaps. The further up the list the gaps are found, the more serious the situation becomes. Once the total system is examined, the task is to see how quickly and how effectively these gaps can be plugged.

These businesses encourage employee growth, and in return, they expect out-of-the-box thinking, creative problem-solving in addition to excellent performance every day from their employee-partners.

(Jamaica Gleaner)

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Learn to innovate the CK Prahalad way!

Professor CK Prahalad has redefine innovation in his book, The New Age Of Innovation, co-authored by MS Krishnan. He distills innovation down to a simple business process and evolution, not a revolution.

Professor CK Prahalad said to innovate companies need to fold the future, not extrapolate the past. “We are not suggesting a revolution, we are taking about a planned, directionally consistent evolution. Therefore, we conserve resources and speed up the process of transformation.”

Excerpts from CNBC-TV18 Menaka Doshi’s interview with Professor CK Prahalad:

Q: When, where, and how, if there is at all such a specification in the life of a business, can this whole process of innovation be inculcated? Does it have to be right from the beginning, or somewhere in the middle? How does one decide whether you are ready to be able to inculcate this and what does it take to inculcate this transformation?

A: The starting point of the transformation is for senior leadership to ask a simple question, not what the world is today but where will our competitive landscape be 10-15 years from now? 10 years from now, 15 years old will be our primary customers. What will be their expectations? How will we fulfill those expectations?

The first principal for me is that you cannot go there from here. We have to start from there. In other words, you have to imagine and must have a point of view. If you have a point of view, then the translation is lot easier. So, they say folding the future is what is required, not extrapolating the past.

Second, you must have a point of view, only then can you say that okay, if this is my point of view, I can audit both the managerial and IT capabilities inside my company. Then, I can start by saying I am going to put one building block at a time and establish a milestone. So, I don’t take a big risk, I build one step at a time, but like a marathoner with speed and directionally correct.

We are not suggesting a revolution, we are taking about a planned, directionally consistent evolution. Therefore, we conserve resources and speed up the process of transformation.

Q: The companies that you cite as examples are companies that were able to recognize the change in the competitive landscape 5-10 years ago. The Googles, and Apples realised that technology is not going to be inaccessible to the poor but it is going to become a commonly accessible resource. The digitization of products, convergence, and social networking were things they were able to understand 5-10 years ago.

A: Everybody can recognize it now. But very few companies are figuring out how it will change their business.

Q: But will it still give you the advantage now? Don’t you have to be ahead of the curve?

A: Absolutely. It will give a tremendous advantage. For instance, I sell tyres and have lots of information about you and you have a lot of information about me. Now, when I come to sell the next round, I don’t have to sell you unique tyres. I can now give you a special deal. I know your drivers are very safe, and you only have long hauls. Therefore, I can give you a special deal. In other words, the switching costs for you has gone up, I can retain you much better. If you are selling only tyres on prices like old ware that was a transaction, now this is a relationship.

Q: But weren’t customer relationship managers doing this anyways for 10-20 years?

A: No, there is no way they could have done it. Customer Relationship Management, or CRM, is fundamentally a company’s view of the consumer and not the consumer’s collaborative dialogue. CRM has never been co-creation. That means you are a joint problem solver. Your involvement is as important to me and we jointly create value. We jointly partnership value. So, there is collaboration between the consumer and the company and there is also competition for value appropriation.

Q: You have mentioned the instance of ITC’s e-choupal network in a big way. You have recognised the gap of information and what it can do to the economic lifestyle of a human being and found a product to deliver to them in this space.

A: Suddenly, you find the so-called illiterate farmers checking the Chicago Board of Trade. That is fascinating for me. It is so empowering.

I also want to think about what co-creation does. If I co-create with you as a consumer, I reduce the risk of product development because you are helping me to define it. Since a lot of people are involved in helping me to figure out what it is, it reduces time and investment. Think about risk, time, and investment reduction. That is how you create value.

Q: Three points -- legacy issues, IT infrastructure and managerial talent -- to make in the Enablers of Transformation as you put it in your book and you have quoted a whole host of examples for each one of these. On legacy issues, you spoke of General Motors in the book. Would you like to take us through some of the work that they have probably done to fit your definition of innovation now?

A: Actually GM is a very interesting case. Look at the sheer size of the company; it is a country by itself and global, through acquisitions, wide variety of independence given to the subsidiaries, European subsidiaries versus US versus the far flung operations. If you look at any one time, there are probably 7,000 applications running on different systems. How they consolidate all that is a fascinating problem by itself.

General Motors is the world’s largest auto-maker with nearly 3,00,000 employees. It has launched a company wide drive to redefine its organizational structure. Roles and responsibilities are being shuffled to assure stronger control and management of critical business processes, breaking stereotypes and managers are being shifted from functional and geographic spans of control to global process-oriented roles to drive standardization. It is a step that has helped GM strike up balance between flexibility and efficiency.

When you have had a huge history under a large company like GM, you have to clean up this legacy before you can do many of the things that they are talking about. There is a big lesson for Indian companies. We are now globalizing and acquiring a large number of companies. We are not only going to get mini-cultures and sub-cultures in terms of managerial work, we are also going to get a large number of legacy systems.

The question is how do we put a price on the integrational legacy system, harmonizing these legacy systems and harmonizing the managerial culture.

Q: Implicit in your entire conversation has been the fact that you have to have world class IT infrastructure. It is something that we cannot get away from in today’s business environment. But that is something that you have stressed on again and again in all the logistics examples that you gave, including FedEx and UPS?

A: It has to be real time, event driven and not just transaction driven. That is where it is critical. It must be resilient and change-oriented. Therefore, the cost of the change must be low. It must be able to use the existing legacy system. You can’t throw away all the legacy assets and so how does it get into the legacy systems and bring an upgrade is an important point.

Q: You seem to see a serious lack of innovation in Indian IT. Are you saying they have lost the ability to innovate?

A: No. It is in the context of the ‘power of the dominant’ logic. IT companies have been extraordinarily successful. They have built a business model and changed their business. The underlying strength of innovation in IT has grown from cost arbitrage to quality arbitrage to quality technology arbitrage. Now, it is cost, quality, technology and in some cases innovation.

Q: Are there any instances in Indian IT where you can see efforts to change things?

A: There are some in HCL where you have embedded software building the entire integrated system. We talk about TCS doing the Ferrari deal. Those are very different value-added kind of activities. But still every large company does it. Infosys does it and so does Wipro. They all understand it. Just because everybody understands that the business model is going to be broken in the future, it does not mean all of them have the capability to change the business model ahead of time by design. It is happening slowly. Everybody is trying to get a little bit of consulting help in the front-end to change the business model. Everybody is trying to negotiate a different way of pricing.

But if you don’t change; the IBMs and Accentures are coming to India. They will get the same advantage. The idea is not to say IT companies in this country have lost their innovation advantage. That is not the message at all. The message is that just because you intellectually understand what needs to be done, does not mean it will automatically get operational. There is a gap between an intellectual understanding and an operational change. That is the gap that companies have to learn to bridge.

Q: In the course of the book, you have frequently mentioned three companies while giving instance of how this whole new age of innovation is going to play itself out. What do you think best exemplifies the innovation that you were talking about in companies like ING, ICICI, and Apple?

A: Apple has a unique way of developing software media solutions. It really understands that manufacturing is key, so is software. This is the stuff that makes Apple. The company is into software not hardware, but hardware is a carrier of the software, so people still need a device. The second thing that they have understood very clearly is that they can't do it themselves, so content has to come from a wide variety of people.

Q: Have you been able to distill a philosophy in the organization that allows them to develop?

A: The philosophy is co-creation.

Q: Have they been able to recognize that way ahead of the curve?

A: They use the term co-creation. The underlying philosophy is very clear. It is co-creation and a very user-friendly interface. If you use the i-pod, you will know how user friendly it is because ordinary people can use it and can download. So, in other words it is a very user-friendly interface.

Look at ICICI Bank and the transformation of the company through IT and business process understanding.

At the core of its business, is innovation and driving innovation is technology. The transformation of ICICI Bank from an institutional operation to a sophisticated, fast moving retail banking powerhouse is an outstanding example in capability building. ICICI Bank’s evolutionary business model is based on continuous innovation to offer world-class services at an affordable cost through technology mediated businesses and analytics. It has changed the face of banking in India. Today, with over 600 branches and 3,000 ATMs reaching over 10 million customers, ICICI’s assets are worth over USD 79 billion and is an example of transformation from within at its best.

They try something, if it works they scale like crazy; if it doesn’t work they kill it and that is very much the kind of thing that we are talking about. There is no one person doing it.

Q: Everyone in the company is responsible for doing this?

A: All the senior managers have to do it and all the middle level mangers have to do it. So, they have created a culture of aggressive, ‘we can do it’ macho approach. That is what people see outside. Internally, there is a method to how this happens.

They can make a mistake. The goal is not to say whether they will make a mistake. They have taken a very traditional institutional company in their vibrant innovative retail bank and they are moving globally very rapidly.

Q: While you were studying the strengths, were there any weaknesses that you thought could potentially be a risk to this entire innovating ability?

A: When you grow that rapidly, there are so many people who have to be trained. Somebody somewhere is not going to be compliant, is going to make mistakes, somewhere the business process is going to be broken. All these are risks. But the interesting question is do we slow down or do we keep going and put checks and balances to make sure that that doesn’t happen.

In other words, the risk is inherent in the rapidity of change and scale, incorporating so many new people into the system and building business processes very rapidly. All of them are potential risks.

Q: What is the message to the manager, to be able to inculcate this newly defined process of innovation in his or her team and across an organisation?

A: The best way to phrase is going back to Gandhi. You must be the change that you want to see. That is an important message there. In his own unique way, Gandhi probably captured the spirit of what this book is all about.

If you want to understand this new world, you must be a part of it. For people who are at senior levels of management, 45 year old and above and are not part of this generation, it is natural. Therefore, we have to reinvest in ourselves. To me, I had to do it myself. So, it is not as if I am asking people to do something that I don’t. You have to reinvest in yourself; you have to use these tools. You have to understand how people are evolving and changing and you must have a point of view.

People underestimate how critical this is. Don’t worry too much about everything that can go wrong. Think big and de-risk the change process. Take small steps, learn rapidly, scale fast and then move on. Taking a big risk is not smart, neither is it prudent and nor is it sustainable. Sometimes you can succeed but sometimes you will fail and you cannot compromise the organisation’s vitality. Lastly, engage all people. I have no interest in satisfied consumers or satisfied employees. I want excited consumers and excited employees. Create the excitement of making something bigger than ourselves.

(Money Control)

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Tom Peters: Innovation is Actually Easy!

Survival and the CEO

Long ago Peter Drucker, the father of business consulting, made a very profound observation that has been lost in the sands of time:
"Because the purpose of business is to create a customer, the business enterprise has two--and only two--basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business."
Today, when top management is surveyed, their priorities in order are: finance, sales, production, management, legal and people. Missing from the list: marketing and innovation. When one considers the trouble that many of our icons have run into in recent years, it is not easy to surmise that Drucker's advice would have perhaps helped management to avoid the problems they face today.

Ironically, David Packard of Hewlett-Packard fame once observed that "marketing is too important to be left to the marketing people." But as the years rolled on, rather than learn about marketing and innovation, executives started to search for role models instead of marketing models.

Tom Peters probably gave this trend a giant boost with the very successful book he co-authored, In Search of Excellence. Excellence, as defined in that book, didn't equal longevity, however, as many of the role models offered there have since foundered. In retrospect, a better title for the book might have been In Search of Strategy.

More recently, the popular method-by-example book has been Built to Last by James Collins and Jerry Porras. In it, they write glowingly about "Big Hairy Audacious Goals" that turned the likes of Boeing, Wal-Mart Stores, General Electric, IBM and others into the successful giants they have become.

The companies that the authors of Built to Last suggest for emulation were founded from 1812 (Citicorp) to 1945 (Wal-Mart). These firms didn't have to deal with the intense competition in today's global economy. While there is much you can learn from their success, they had the luxury of growing up when business life was a lot simpler. As a result, these role models are not very useful for companies today.

There is a growing legion of competitors coming at new businesses from every corner of the globe. Technologies are ever changing. The pace of change is faster. It is increasingly difficult for CEOs to digest the flood of information out there and make the right choices.
But a CEO can have a future.

The trick to surviving out there is not to stare at the balance sheet but simply to know where you must go to find success in a market. That's because no one can follow you (the board, your managers, your employees) if you don't know where you're headed.

How do you find the proper direction? To become a great strategist, you have to put your mind in the mud of the marketplace. You have to find your inspiration down at the front, in the ebb and flow of the great marketing battles taking place in the mind of the prospect. Here is a four-step process to pursue:
Step 1: Make Sense In The Context
Arguments are never made in a vacuum. There are always surrounding competitors trying to make arguments of their own. Your message has to make sense in the context of the category. It has to start with what the marketplace has heard and registered from your competition.
What you really want to get is a quick snapshot of the perceptions that exist in the mind, not deep thoughts.
What you're after are the perceptual strengths and weaknesses of you and your competitors as they exist in the minds of the target group of customers.
Step 2: Find The Differentiating Idea
To be different is to be not the same. To be unique is to be one of its kind.
So you're looking for something that separates you from your competitors. The secret to this is understanding that your differentness does not have to be product related.
Consider a horse. Yes, horses are quickly differentiated by their type. There are racehorses, jumpers, ranch horses, wild horses and on and on. But racehorses can be differentiated by breeding, by performance, by stable, by trainer and so forth.
Step 3: Have The Credentials
There are many ways to set your company or product apart. Let's just say the trick is to find that difference and then use it to set up a benefit for your customer.
To build a logical argument for your difference, you must have the credentials to support your differentiating idea, to make it real and believable.
If you have a product difference, then you should be able to demonstrate that difference. The demonstration, in turn, becomes your credentials. If you have a leak-proof valve, then you should be able to have a direct comparison with valves that can leak.
Claims of difference without proof are really just claims. For example, a “wide-track” Pontiac must be wider than other cars. British Air as the “world’s favorite airline” should fly more people than any other airline. Coca-Cola as the “real thing” has to have invented colas.
You can’t differentiate with smoke and mirrors. Consumers are skeptical. They’re thinking, “Oh yeah, Mr. Advertiser? Prove it!” You must be able to support your argument.
It's not exactly like being in a court of law. It’s more like being in the court of public opinion.
Step 4: Communicate Your Difference
Just as you can’t keep your light under a basket, you can't keep your difference under wraps.
If you build a differentiated product, the world will not automatically beat a path to your door. Better products don't win. Better perceptions tend to be the winners. Truth will not win out unless it has some help along the way.
Every aspect of your communications should reflect your difference. Your advertising. Your brochures. Your Web site. Your sales presentations.
There's a lot of hogwash in corporate America about employee motivation. Brought to you by the "peak performance" crowd, along with their expensive pep rallies.
The folks who report to you don't need mystical answers on "How do I unlock my true potential?" The question they need answered is, "What makes this company different?"
That answer gives them something to latch on to, and run with.

Winners often will bend rules a bit

Whether in business or in sports, the success of a dynasty is the result of vision, talent, aggressiveness and some good fortune. But dynasties also can be ruthless.

A hero is not someone who is 'perfect.' We'd have no heroes if this were our standard. We all make mistakes, but that doesn't invalidate the contributions we make in the course of our lives." -- Anthony Robbins

The New England Patriots were heavily favored to win the Super Bowl on Sunday, although this New York native is celebrating today if the Giants were able to pull off one of the greatest upsets in NFL history.
New England has already won three Super Bowls this decade. They are the first team to win 16 regular-season games. A win Sunday would have made them the equal of any NFL dynasty in history.
Yet an odd scandal marked the beginning of the 2007 season. In September, NFL Commissioner Roger Goodell punished the Patriots after a team employee was caught filming an opposing team's coaches during a game, in an attempt to decipher their signals to players. The Patriots organization was fined $250,000, coach Bill Belichick was personally fined $500,000, and the team will forfeit its 2008 first-round draft pick.
Why would Belichick, already considered an all-time great coach, be driven to take such a petty risk, filming opponents in plain sight? His reputation is already assured. He's proved himself repeatedly as a coach over the past 25 years: first, as the innovative defensive coordinator of the great New York Giant teams of the 1980s, under coach Bill Parcells; then, by winning three Super Bowls in four years with key players injured. He's considered one the greatest game-film analysts and defensive strategists of all time, and created a "value investing" approach to selecting and retaining players, refusing to overpay players in the era of free agency and the salary cap.
Belichick's behavior is not unusual, sadly. Winners, when faced with the prospect of defeat, are often tempted to bend the rules. In sports and in business, dynastic champions eventually run out of steam, when their players or products get older, or when their competitors adjust.
This raises an interesting question: What distinguishes dominating organizations from the merely successful? It is not only ability and opportunity, but a desperate need to prove oneself, regardless of past accomplishments.
The tendency to mythologize winners as heroes runs deep in all cultures. But despite their surface charm, real-life dynasties, in almost any endeavor, are likely to be ruthless and insensitive.
Another example of a long-time winner bending the rules to perpetuate his dynasty was Jack Welch, the retired CEO of General Electric. Welch, named "Manager of the Century" by Fortune magazine in 1999, grew GE's market capitalization in his time as CEO from $15 billion in 1981 to nearly $500 billion in May 2001.
Like Belichick, Welch won through a combination of aggressiveness and innovation, taking an already successful company to new heights. He insisted that all GE divisions excel (No. 1 or No. 2 in their markets) or be sold; that underperforming or unnecessary employees be identified and fired, and he pursued a series of management initiatives in an attempt to grow GE's performance and profitability. Wall Street analysts and investors venerated Welch for his consistent growth of GE's profit, and its stock price rose accordingly.
Welch's successes were substantive and real. But the remarkable consistency of GE's earnings under Welch, quarter after quarter, was a phenomenon unnatural for a large company, and it would be near impossible to achieve today. He accomplished this feat by leveraging two financial tools, which though entirely legal at the time, would be derided as gimmicks today.
First, Welch leveraged GE Capital, the firm's highly profitable financial arm, for "revenue smoothing," to achieve the desired consistency of earning performance. At the time, GE Capital, although GE's single most profitable division, reported earnings as a single unit, a practice changed by current CEO Jeff Immelt in 2002 in response to investor pressure for more transparency. --(StarTribune)

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Put your ideas to work

Innovation is a marriage of creativity and ability. It is putting ideas to work. Ideas are easy and cheap: backing it with action is the challenge. Ideas are useless if they are not implemented. Ideas must be backed with action. With activity. Goethe wisely pointed out: “There’s no growth without activity.” The only ideas we’re interested in presently are the ones that meet rigorous tests of practicality. The ones that involve the right mix of risk and reward. The ones that have an economic value – that have a high potential for generating monetary profits. Innovation is predicted on the fact that life is always advancing. You need to improve, too. That’s why you’re reading this piece. There’s no standing still in life. Either you’re moving forward or you’re sliding backward. If you want to maintain leadership where you are or in what you do, you have to accept the need to continuously and persistently upgrade your standards. Let your drive for excellence permeate every area of your life. Let it permeate every area of your operations if you’re a corporate entity. Anything can be improved or made better. Anything can be made simpler. It could be made faster and cheaper. In business, work is central to success. There’s no substitute to work. The best ideas in the world cannot implement itself; someone has to. So the measure of any good idea is how easily it can be put to work for the benefit of financial reward. Peter Drucker wrote that to make the future happen requires work rather than genius. The knowledge worker is the individual with the know-how, the daring, and staying power to implement ideas. But there’s a catch. Organizations resist change. Organisations favour the status quo. This is not surprising since the purpose of organization is to achieve order – the kind of degree and conformity necessary to do a particular job. Creativity and innovation disturb that order, so that organizations tend to be inhospitable to creativity and innovation. Yet without innovation the organization would eventually perish. What to do? ROUTINIZE innovation! You simply create and sustain a culture of creative innovation from inchoation. You should make it seem as natural as breathing. Now, you ask, how do you innovate? You innovate by: imitation, finding new relationships between people, institutions, things, situations, and concepts, finding new ways of doing things cheaper, faster, more efficiently, and with the minimum conflict or hazard, making changes and using new information. You must innovate for, if otherwise, there shall be no progress. Innovation isn’t a copyright of inventors. You too, from today, can start making a difference where you are. Start by improving the quality of your thinking and feelings. Choose to think only positive, ennobling thoughts. Decide to entertain only those feelings that have the greatest capacity to lift you up. Find a bolder, easier, faster, and cheaper way of doing what you are doing. Make it easier for those that live, work and play with you. How do you as an intellectual, entrepreneur, or investor begin to apply these ideas to your situation. Very simple. If you’re an intellectual, continuously improve your skills. Upgrade your attitude. Find ways of improving your workplace relationships and becoming more valuable to all your publics. Be enthusiastic about yourself, life, and your work. Think in terms of possibilities. Be more positive. If you’re an entrepreneur in this or any other environment, you must become an inverse paranoid. The concept of the inverse paranoid is an attitude of mind in which you see every event, every situation, every circumstance, every person, every turn of event - favorable or unfavorable - as conspiring to help you fulfil your purpose. The scratch of paper on the walkway contains something that might be of interest to you. The failure of your current project is omen of a bigger deal coming along. Newspapers contain useful information you require to solve your current problem. You’re an investor? Learn, learn, learn. Then invest, and learn more. And keep investing. You’re a hero. You’re an innovator. You are successful. You have made it. Put your ideas to work. - (NT, 27 Sep 07)