As the clock turns from 11:59:59 PM to 12:00:00 AM, we pass from one date to another. Two sides of midnight, as I like to say. The two times have different spaces on a calendar, but they are almost precisely the same time. I’ve been thinking a lot about two sides of the same thing as I listen to the debate around impeachment and share notes with my friend Jonathan Barry, a brilliant Republican. He regularly has a different reaction than my own to an op-ed column about impeachment. “Uneducated,” “hypnotized by Fox News,” “ignorant,” and other words Democrats use to dismiss Republicans cannot be used with Jonathan (or many other Republican friends and colleagues). Both the GOP and the Democrats have said in public, “The facts speak for themselves.” Yet both sides have reached very different conclusions. How do our political…
Define your niche to create a winning business model
Competition is a drag on earnings. Darn, but welcome to life. The key to success comes from reducing or eliminating competition legally. Some companies eliminate competition by being the very lowest cost to meet requirements to be considered by a customer group. High-end bed linen and mattresses are pursuing this strategy with a direct-to-consumer business model, displacing high-end brands sold through retail stores. An approach beyond competing on price is to offer something no one else can do as well. You may be more expensive, but you are worth it. Think of a plastic surgeon with the best reputation in a city. Build loyalty with the customer base you target and then get them to buy more things from you. Independent bookstores have taken this approach in light of Amazon, with Barnes and Noble stuck in an unattractive middle, especially as Amazon opens…
Six best practices for shaping organizational culture
With the New Year approaching, it’s time to rethink your organization’s culture and not just its goals. Here are best practices for leveraging your culture to create business success. Winnow your list of values Across the street from my house sits a welcoming red-tile-roofed Catholic grade school campus with bright white adobe walls. The children wear navy blue uniforms, and the well-kept Catholic Church at its center has the charm only decades can bestow. School leaders recently placed banners naming the school’s values on the wire-fenced wall enclosing the playground: Sharing Stewardship Respect Service Gratitude Empathy Cooperation Celebration Building peace The school has too many values! What is the essence of the culture the school is trying to create? I understand the fine-tuning the administrators sought to articulate – empathy is different than gratitude – but what is at the school’s core? What…
The danger of turning opinions into facts
One of the hardest challenges facing leaders is making decisions in the face of uncertainties. To deal with the discomfort of uncertainty, some leaders turn their assumptions and beliefs into “facts” in their mind. That’s unfortunate. Stick blindly to ill-informed thinking, as some prominent leaders have done, and you’ve doomed your company to decline. Let’s look at some examples. Ironically, it was a Kodak engineer (Steve Sasson) who invented one of the first digital cameras in 1975. Three decades later, Kodak’s leaders made decisions seemingly based on a belief that digital photography would have a slow uptake, even though by that time digital cameras dominated the marketplace. Why? Digital technology made saving and sharing photos effortless. Blockbuster believed stores offered the most convenient video rental and purchasing experience. Its CEO turned down an opportunity to purchase Netflix in 2000. “Netflix doesn’t do anything…
The power of teamwork. The peril of presumptuousness.
Excuse me for wanting to stretch Wisconsin’s glorious victory over Kentucky in the NCAA Basketball Final Four into another day. But I can’t resist. There are business leadership lessons for us to learn. Kentucky is mostly a one-and-done school when it comes to basketball. Coach Calipari recruits young men ready for the pros to spend their requisite waiting-year in college. According to the coach’s website, “Since the 2008 draft, 24 of Coach Cal’s players have been taken in the NBA Draft, including 17 first-rounders.” For seven straight drafts, he’s produced a top-10 pick, something no other school has accomplished. Bo Ryan, the coach of the Wisconsin Badgers, has had some future pro players but for the most part grooms the less talented in whom he sees terrific potential and a willingness to play Badger basketball. As a freshman, Frank Kaminsky looked nothing like…
50 ways to lose your customers
Singer-composer Paul Simon’s classic song “50 Ways To Leave Your Lover” is about an emotionally torn man who “struggles to be free” of his wife. He learns, from his mistress, “The answer is easy if you take it logically.” Her advice? “You just slip out the back, Jack. Make a new plan, Stan. You don’t need to be coy, Roy. Just get yourself free.” Companies usually don’t want to slip out the back, leaving their customers feeling dumped. But companies can unconsciously induce their customers to say goodbye to the company’s brands – in ways as swift and sure as the song’s recommendations. I won’t bore you with fifty ways, but here are seven sure-fire mistakes leaders make that lead their customers to “slip out the back” or “make a new plan.” 1. Placing profits before people and customer experiences. Financial outcomes are…
Acquisition PacMan weakens the business model
The developers of Pac-Man built an arcade game so esteemed that it resides in the US Smithsonian Institution and New York’s Museum of Modern Art. Millions of players have moved their rounded Pac-Man figure through a maze – eating small dots and earning points – while trying to avoid getting eaten by the four monsters in hot pursuit. The game is a great analogy for the economy’s industry consolidation since Pac-Man’s debut in the early 1980s. The legal industry is a recent example of companies “eating” other companies. For years, large law practices have acquired smaller firms to both build broader geographic reach. Now the large law firms are in potential merger talks with each other. What’s driving these talks? By leveraging overhead costs, mergers enable partners to improve profits and protect their bonuses in the face of falling revenue. The revenue shortfall…
Business model success demands strategic leadership, societal consciousness and civil cultures
I wonder if the editors of the January-February, 2013 issue of Harvard Business Review connected the dots among their articles. As a reader I did. “The 100 Best CEOs in the World” is the cover story for an issue that also includes the article “Strategic Leadership: The Essential Skills.” Too many CEOs and their C-Suite teams invest too much of their time in operational management. They fail in the role only they can perform: designing a winning portfolio of business models and the hard-to-copy company capabilities, processes, culture, and ecosystems that they leverage. Strategic leadership is all about this work. I am not saying that operational work is unimportant. Indeed, it is vital. No customer will pay your business for inefficiency or quality issues, and competitors will likely use them to seize advantage. But the leadership team’s role is to establish the measurements,…
Best practices from mid-size gazelles with winning business models
Four fast-growing mid-size company CEOs shared success drivers at the recent Milwaukee Biz-Tech Conference-Expo. With rapid growth rates and distinctive business models, their advice is worth heeding. The panelists Mary Isbister, President of GenMet, a custom metal fabricator Mike Malatesta, founder and president of Advanced Waste Services, Inc. a customized service provider that reduces customers’ risks and waste. Sue Marks, founder and CEO of Pinstripe, Inc. a talent sourcing solution Craig Schiefelbein, president and CEO of PDS. PDS architects, supplies and implements IT solutions for mid-size companies. (See my PDS blog.) Their advice Never waste a downturn. Pinstripe invested in self-service infrastructure during the downturn that will speed throughput of candidates and allow its employees to do more work and higher-level work as the economy recovers. According to Harvard Business Review, market shares shift significantly during a downturn, a lesson Pinstripe capitalized upon….
Brown goes green with a smart business model strategy
I have long admired UPS for its continuous improvements in customer value. With a mission to “synchronize the world of commerce by developing business solutions that create value and competitive advantages for our customers,” the world’s largest package deliver company has emerged as a leader in supply chain management services and less-than-full truckload shipping. These additions enable even the smallest of companies to compete with the big boys without distribution issues precluding ever being considered. Indeed, UPS is one of the reasons barriers to entry have fallen in many industries. UPS argues that logistics (the planning and control of the flow of goods) is intricately linked to sustainability, as the goal of logistics is to use the least resources to transport items from one place to another. In a one-page advertising spread in last week’s Wall Street Journal UPS touts its efforts…