The table lacked butter and olive oil, purposefully. So began my meal Saturday night in Orlando Florida at Seasons 52, a fresh dining concept from Darden Restaurants, parent company to Olive Garden and other restaurant chains. Nothing on the Seasons 52 menu has over 475 calories, a requirement that leads to guiltless mini-desserts. The upscale menu changes every three months (I ate from the Fall menu), and includes weekly specials that capture a food in its best season. Brussels sprouts – a rare restaurant find except in gourmet restaurants – caught my eye. Attractive presentation, brick ovens and a terrific wine list (including wines “soon to be famous”) added to the dining experience. An inviting stone and wood décor complete with a fireplace and a welcoming piano bar will draw repeat visitors for sure. I’m writing about Seasons 52 as it contains the…
Why Blockbuster failed and World Class will win
“We create shapes,” the written message on the outdoor ad for World Class Fitness Center works strategically, tactically and creatively. Aligning these three elements creates business model victories. Business model strategy. Too often leaders leave the answer to “What business are we in?” to company history, industry practices, management desires or serendipity. What a tragic mistake. Successful business model innovation often starts with rethinking what the business is all about, creating answers that differentiate your business while opening doors to new growth platforms. Health club users show up and sweat for the benefits of a healthier, more attractive body. World Class’s business definition – we create shapes – reflects this. It’s also broad enough to create new growth platforms. In addition to the traditional health club, with its equipment, trainers and classes, this definition could also include nutritional advice, exercise routines and equipment…
Trends That Should Shape Business Model Strategy
In the 1980s I had the privilege of working closely with consultants from McKinsey & Company, strategy partners to many Fortune 1000 firms and global non-profits. McKinsey’s value promise in a nutshell is, “We’ll help you reshape your industry to your advantage.” McKinsey recently released a report on mega-trends that will shape markets. It’s essential reading for leaders of businesses of any size as they evaluate their organization’s business model strategy. In today’s economy, “status quo” is any company’s weakest strategic direction as the world is changing more rapidly and unpredictably. While forecasting the future is impossible, understanding dynamic trends and their implications for your organization’s risks and opportunities is paramount for making solid business model strategy decisions. In McKinsey’s words: “Managers must also gain an understanding of deep external forces and the narrower trends they can unleash. In our experience, if senior…
Apple’s Business Model Lesson
The blogosphere is aflutter with talk on Apple’s recent customer satisfaction issues linked to the new iPhone 4’s antenna design. A quiet whisper turned into thunderous noise once Consumer Reports decided to not recommend the phone because calls are dropped if the antenna is covered while in use (for example, by the user’s hand holding the phone). Much of the on-line conversation centers on public relations lessons and a debate about the sensitivity issues of the iPhone versus competitive products. (For a good assessment of the PR lessons for Apple, see The Leadership Playlist blog.) There is more to this lesson than public relations. I think in terms of business model and strategic leadership, and I believe Jobs ignored Apple’s business model in resolving an internal debate about the antenna, a product design decision that I’m confident Jobs now regrets. Apple’s value promise…
When Is Bigger Better in Business Model Innovation?
I spent the weekend in Scotland, where one cannot escape RBS’s logo, RBS standing for The Royal Bank of Scotland. Its brand imagery stands out exiting the airplane, passing city billboards, and reading or listening to local media. Today, the people of Scotland own close to 70 % of RBS because the former (duly fired) CEO and his board believed that bigger is better. With a small domestic market of 5.2 million residents (about the size of Minnesota) and strong English competitors, RBS acquired what turned out to be a poorly run Dutch bank in order to grow. Thankfully, a strong domestic position will keep the bank in business; but it will be a long time before Scottish taxpayers are repaid for keeping RBS afloat. Small is beautiful. Consider PNC, the regional bank headquartered in my hometown of Pittsburgh compared to Bank of…
Why Capital Bank’s Attributes Fail as a Value Promise
Last week’s post talked about the vital alignment between your brand platform and your value promise. A great example of getting the two concepts of brand and value promise wrong comes in a series of ads that Madison’s Capital Bank presents in the daily Wisconsin State Journal. Each ad contains a picture of one of the bank’s commercial lenders with the words Capital Bank to the left followed by three adjectives. Capital Bank Knowledgeable Resourceful Responsive The three adjectives or attributes may be what differentiates Capital Bank lenders from competitors’ lenders. But these three adjectives are neither a value promise nor are they reflective of a thoughtful brand platform. Before I explain why, let’s look at a winning example. A winning value promise and brand promise example Walmart’s “everyday lowest price” is the company’s value promise, its “True North” that drives all internal…
Are your business model and brand strategies aligned?
A new client asked me a good question today. “You talk Kay about helping us find our value promise, but my communications agency is totally focused on our brand platform. What’s what and why does it matter?” The answer rests in understanding communication challenges. The internal communication challenge Employees need a shared and actionable aim that advances the company’s success. It must be actionable so that employees and teams know how to go about their work. The aim must also be shared or else actions by one part of the organization hurt another part’s success, creating distrust and silo-mentality. (These two requirements are why “Grow profits and revenue” as the only aim fails.) The best internal directive is a value promise. It’s the promise the company makes to its target customers and the basis on which it wants to win business. Internally, it…
Susan Boyle, A Business Model Parable
Susan Boyle, a 47 year-old unemployed woman appeared as anything but a leading candidate for British Idol success. (Blockbuster American Idol and its British spin off are talent shows for amateur singing talents.) Prior to her appearance, Boyle had spent her adult life caring for aging parents in a small Scottish town. No wonder the judges and audience laughed as the overweight, seemingly backward woman walked onto the stage in a frumpy dress, with a 1950ish haircut and challenging accent, claiming she wanted a career as a singer. Boyle’s moving rendition of “I Dreamed a Dream” from the Broadway Tony-award winning musical Les Miserables drew gasps then cheers and then a spontaneous standing ovation from the audience. With a voice which made Julie Andrews, star of Sound of Music and Mary Poppins, sound amateurish, Boyle’s try-out became You-Tube’s most watched video in 2009….
Toyota’s Once Unbeatable Business Model Now Anything But
Milk is bad for children’s bones. Superman became a serial murderer. Shocking, yes? But no less shocking than Toyota, the world-class manufacturing quality expert, recalling millions of cars across its product lines. Three generations after its founder created Toyota on a philosophy that built quality into every step, it turns out that Toyota’s quality has been steadily eroding. Today, Toyota’s quality issues are deep and systemic. After all, the company’s problems: Involve multiple components, vehicles and years of manufacture. Create dangerous safety issues – failing brakes and uncontrollable self-accelerating gas pedals. Were surfaced years ago yet are leading to recalls only under regulatory pressure. May not have had the attention of top management until after all hell broke loose. (Toyota’s CEO just recently committed to creating a senior level “quality committee” to look into the problem.) May not yet be truly resolved. While…
Business Model Strategy Execution Rests in the Details
“You’ll find the style you want at the optometrist store on State Street,” my most stylish girlfriend advised. Sure enough, I walked into rack after rack of brands and styles upon entering the shop. While the amount of choice was reassuring at first glance – surely there is a look here for me – I soon felt frustrated. Already daunted by the prospects of wearing glasses full time, selecting “my best” style felt as confusing and full of potential regrets as selecting a college felt when I was 17. “Can you advise me on a good style for my facial shape?” I asked the elderly clerk ten minutes into my trying styles on. “No. You’re on your own. But I can access the most expensive brands in the locked cases if you want.” Half an hour later, I left. The store’s “best choice”…