When I hike a mountain with many paths, I need a map, signposts, or, even better, a guide. Surrounded by too many choices, many leading in the wrong direction, I easily get lost. I need what my talented friend Cricket Redman of Cricket Design Works calls “wayfinding.” Wayfinding solutions like signposts not only help me get to my destination quickly but also avoid all the distractions of paths I don’t want to take. Companies that can help with wayfinding in different areas of our lives are becoming increasingly valuable. All of us, for example, have wasted uncountable time going down digital paths and the opportunities for getting lost grow each second as digital data explodes. It’s no surprise that wayfinding companies like Amazon, Expedia, Netflix and Google have thrived in the digital world. They pull together options and serve as the curator for…
Profiting From Free
Can a free offering and a financially sustainable business model co-exist? Look at the evidence. Wikipedia. National Public Radio. Mozilla’s Firefox browser and the LINUX operating system. Facebook, LinkedIn, Twitter, Instagram, YouTube, Gawker. The Moodle software platform for on-line educational experiences. All free and all appear to be financially sustainable. A free offering and financial success succeed when leadership is thoughtful about how it monetizes the free offering. Let’s explore why an organization may want a free offering and then how the organization can make money in other ways. Why free? First, your target market may not be able to afford to purchase what you want to offer them, the case for most non-profits. UNICEF serves truly poor children around the world. Or you may want to build volume to gain network or economies of scale effects. It is doubtful that Facebook would…
You are shouting so loudly I cannot hear you
A general focuses on the battlefield and where the enemy is coming from, while the soldier in the foxhole keeps his sight within a 10-yard perimeter. In a similar vein, business leaders must understand the lay of a more expansive external environment while others define and execute day-to-day tactics. Leaders supply fresh strategic insights by connecting the dots between things they observe, read or hear about to identify patterns and themes. It’s called conceptual thinking. Let’s see how it works. Three articles caught my eye in one day’s news. In the first article, The Council of Public Relations Firms was reported to be reinventing itself and the PR profession as traditional PR strategies of media relations and placement backfire in an era of consumer-generated social media. The profession made sense when NBC could reach 1/3 of US TV viewers. Now there are thousands…
Move up the food chain to move up the profit curve
Are you losing customer loyalty or competing increasingly on price? Perhaps it’s time to redesign your business model to solve a higher-level problem. I call this strategy “moving up the food chain.” Let’s look at two recent examples in the news. Target is adding solution-focused advice and services for college students to help them answer the stressful yet fun-filled question, “How will I decorate my dorm room?” Like other chains, Target has the products college students need; it even built brands to address small-space needs with on-trend products. Its new additions will reinforce Target’s value promise – enjoy your shopping experience and feel confident about your purchases. A newly produced YouTube series “will provide tips and tricks that college students can use while designing their own dorm or off-campus spaces. YouTube stars Todrick Hall, Mikey Bolts, Tiffany Garcia and Ann Le will each…
Would Checker Cab becoming UBER have been a good thing?
Let’s work backwards. Take Checker Cab, Michigan’s largest cab company and the only one to cover all 147 square miles of Detroit. After a strategic planning retreat, the owners, now calling the company Checkmate, decide to: Replace dispatch units and meters with an internet-based platform that manages fee calculation and customer billing and provides a faster and more consumer-friendly matching of drivers with riders. Change the pricing model to enable the company to earn excessive premiums in peak traffic. Eliminate its extensive driver training focused on defensive driving and driver and passenger safety. Lower its renowned standard for driver background checks. Sell rather than rent its fleet of cabs to drivers, so it no longer needs to pay insurance. Create a process to make sure drivers are insured. Whether individual owners’ insurance covers cars used for commercial purposes is unclear, but hey, that’s…
Business model innovation opportunities in pharmaceuticals
In a recent WSJ article, Joerg Reinhardt, chairman of pharmaceutical giant Novartis AG, shared a fundamental business model innovation insight: “We need to add value – life prolonging or quality-of-life benefits – that are meaningful enough for payers around the world to say, ‘Yes, I’m willing to pay a premium over generic opportunities.’” To create such benefits, Reinhardt is devoting a higher percent of revenue to R&D than most competitors and consolidating researchers into four centers to increase synergies across teams. Reinhardt has business model strategy partially right. Healthcare payers should not pay a premium if that premium does not translate into real benefits. In the past, fear of generic drugs’ quality encouraged many people to favor branded versions. But after decades of safe generic drug production, “assurance” is no longer a differentiator for branded drugs. Unless the branded drug produces significantly better…
Uber: A business model innovation that benefits and exploits
“Is the Uber disruption of local taxi and town-car markets a positive business model innovation for consumers?” a former colleague asked me. Uber, and its competitors Lyft and Sidecar, are disrupting the regulated taxi and limo-service markets by enabling ride-seekers to secure transit in privately owned cars using a mobile app. The entrepreneurs have used technology to both transform what has largely been a local market into a national/global market and dramatically improve customer service (e.g., automated billing, knowing potential drivers’ locations, cleaner cars, customer feedback on specific drivers, etc.). I am not in the least bit surprised about the emergence of Uber and its direct and indirect competitors (like Ridejoy, an on-line car pooling service). These disruptions demonstrate a number of consumer-friendly trends underway in our economy. Technology automates human tasks and makes markets more efficient and effective. Who needs friends–with-friends when…
WTN Fusion 2014: It’s all about disruption of business models and IT
Last week, WTN Media’s Fusion 2014 conference in Madison, WI captured information technology-driven external business challenges and IT leaders’ responses. Small or large, government or private, non-profit or for-profit, the challenges are shared. Here are my take-away thoughts. IT’s Role IT leaders now largely accept a distributed model. “Shadow IT” is here to stay. The shift is correct from my perspective now that insight is one of remaining sources of advantage. Data is abundant and its interpretation must be real-time, predictive and prescriptive. As Greg Pfluger, VP for Information Systems at American Family Insurance, commented, “Marketing … better understands technology than IT people understand marketing. Treat them with respect.” Despite the complicating issues, Software as a Service (SaaS) is a winning business model; the benefits far outweigh the cons for customers and suppliers. A primary IT role is to ensure integration and security…
Prediction: Intuit ad will win the Super Bowl ad competition
Super Bowl XLVIII 2014 advertisements are already generating a lot of buzz in social media and advertising industry media, with more to come during and after this weekend’s game. My pre-game wager for the ad that will have the most impact goes on Intuit. Rather than using millions of dollars to communicate about Intuit, the strategically smart software publisher of QuickBooks and TurboTax is using its investment to help its small business customers. Intuit demonstrates co: collective’s storydoing (versus storytelling) at its best. (Read my earlier review of Ty Montague’s True Story book and storydoing as a strategy.) Intuit ran a contest inviting small businesses to tell their story and get their fan base to vote for them. Businesses were then asked to demonstrate they could handle the bump up in traffic from winning. Twenty companies (out of thousands) made it to the…
You can’t solve a problem without addressing the root cause.
Sarah Ramirez, a Stanford-educated PhD, left her job as an epidemiologist to return to her farming roots so she could help reverse the growing diabetes and obesity crisis she observed in Tulare County. Tulare, profiled in John Steinbeck’s Grapes of Wrath, remains largely populated by farm-workers, many still trapped in poverty She wanted to help combat food insecurity, experienced by over 40% of this California county’s residents, which she observed as contributing to these health problems. In essence, Ramirez and her partners are turning food waste into health improvement gold. With her husband, she started a grass roots organization Be Healthy Tulare in her Pixley, California hometown. Be Healthy Tulare harvests food that would otherwise go to waste in commercial fields because of less-than-perfect appearance or in residential backyards because of too-busy homeowners. In this country, food pantries do a great job of…