And Again With The Power of Focus

crocsIt never ceases to amaze me how many companies chasing top line growth (perhaps to appease Wall Street) diversify into mediocrity … or worse. The latest example is Crocs. Full disclosure, I have worn Crocs for years, much to the dismay of my kids. I even have a pair of Raiders Crocs, which need to be replaced but apparently Crocs has not made a new deal with the NFL so I have to wait until they do, if ever. Meanwhile, they were off expanding into “… product categories including golf and fashion leather boots …” Seriously? Who thought that was a good, or even a viable idea? Have they been fired yet? Apparently yes since a new CEO was installed in January. And his decision can best be summed up by the headline of this article: “Crocs seeks to refashion itself by going back to what it’s known for.” Who let’s this dumb stuff keep happening? Boards that don’t know any better? Companies that need an aggressive top line to appease Wall Street? Maybe the game from the CEO’s perspective is:

  1. The company’s current strategy won’t achieve high growth goals, so our stock will languish
  2. There is no clear strategy to achieve growth within anything that remotely resembles our core market
  3. I am going to get fired if I don’t come up with something
  4. Buy or expand into adjacent markets I can pretend are synergistic
  5. If I get lucky and it works, I keep my job and look great. If not the results are the same: I get fired, get a parachute and look for the next company I can fool into hiring me.

Focus works, it just may not be sexy. Mitch P.S. For more on focus, check out the category on the right. I have written several posts on focus.

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Blaming The Weather And Other Excuses

snowinthecityRetailers have blamed the weather for their poor performance for several months now. In fact, many companies have used the weather as their excuse for sub-par performance. Could be, but…

Macy’s just reported Q1 sales for 2015 down from 2014. They blamed the weather. I doubt it. My wife and one of her good friends have been avid Macy’s customers for years. They have noted a definite decline in store cleanliness and selection for a while now. It reached the point they have both decided they are done shopping there. Two good customers not at all affected by the weather. A single data point or reality? I think, reality. But it is easier to blame the weather.

JC Penney reported a sales increase in Q1 over last year (its customers were affected by the same weather so…) touting the success of their turnaround. One big problem. These #s are lower than before they decided to change strategies and hire Ron Johnson, who they then fired. As I have noted in several posts on Penney’s (just do a search of the blog and you can find them) this is a company that is inept at best. But if you lower the bar and then use the new lowered bar as your benchmark, you can make yourself look good. Delusions?

I noted in a recent post that brick and mortar department stores are continuing to shoot themselves in not just the foot. Get a clue folks? Amazon and Wal-Mart may be adding to the pressure, but your actions are certainly helping them kill you off.

What are you doing with your business that you are blaming on external factors?

Mitch

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Changing Innovation Archetypes … Successfully

Apple-logoShortly after Steve Job’s death, I wrote about the challenge facing Apple to continue its innovation excellence given the archetype they were using was based on the Visionary Leader approach. One of the problems with the Visionary Leader archetype is replacing that person when they leave.

In the case of a planned retirement, a succession plan can be put into place to find and transition to the replacement. In an alternative, one can simply sell the company to a larger entity as George Lucas did with Lucas Film’s sale to Disney upon his “retirement.” Disney’s interest lay within the library and their own innovation archetype will either produce market accepting “sequels” or it won’t. Star Wars trailer anyone?

My concern over Apple was rooted in the untimely death of Steve Jobs and the clear lack of a successor. I further noted that changing archetypes (most likely to a Systematic archetype) would likely be extremely difficult and result in performance setbacks.

Steve had a transition plan in place, of which I was not aware. (He did not seem to feel the need to keep me in the loop.) Perhaps knowing his health was failing (or would), in 2008 Steve set about to create a Systematic archetype that would replicate his thinking as best he could. He hired Joel Podolny from Yale to create Apple University.

The goal of Apple U isn’t to try to replicate Steve, but rather to reproduce his process and approach. Will it work: don’t know, can’t tell, hard to say. But I commend him for recognizing the need well before his untimely death.

I, for one, am more optimistic that Apple can transition archetypes (which they were going to have to make happen) without the crisis I was previously concerned might need to occur.

Mitch

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Over-Promise And Under-Deliver Is Not A Good Strategy

united-airlines-logo1While the headline is true, if everyone in your industry does it, you can get away with it longer than is reasonable. Today’s examples are airline related (where else can you find such easy examples of this).

I made the mistake of flying United on a transcontinental non-stop again this week. For reasons that make no sense to me, but likely focused on ease of operations, United consistently flies transcontinental non-stops from SFO to NYC, EWR (Newark) and Boston using planes without wi-fi, seat power or any other modern amenity one might now expect; especially on a 5 hour flight.

However to add insult to injury before the flight without wi-fi, seat power, or seat back entertainment takes off, you are provided with a video developed by a clueless marketing communications group touting the outstanding in-cabin wi-fi, seat power and seat back systems they are deploying across their entire fleet. Of course I understand that it takes time to deploy, but who in their customer-focused, right mind would deploy un-equipped airplanes on transcontinental flights, while then bragging about how “modern” they are?

jetblueTo get “even” I flew back on Jet Blue. Don’t fly them much, used to be a big fan because the CEO practiced what I preached, which is to get out with customers. He got fired after a couple of ice storm incidents at JFK, and my perception was that Jet Blue was becoming like most other airlines. Some told me that was not true. Well, I am writing this blog post from my Even More Space Jet Blue seat, so you can assume wi-fi works, which it does, and it’s free. So kudos to them for that.

Kudos also to the captain who walked the entire gate area shaking hands with the passengers and introducing himself. And more kudos to him for talking to all of us by standing in the aisle and not from behind the security door in the cabin. Nice gestures, but not what really matters. Had they executed on what really matters, that would be icing on the cake. But they failed at what matters. To wit:

  1. It was obvious we were going to leave late when the inbound plane was not even at the gate 30 minutes before take off. However, when queried the gate agent insisted we would leave on time, or at least close and would arrive on time. We left 30 minutes late.
  2. Since he would never admit we were going to leave late, I did not leave the gate area to get food for the flight (6 hours). But I wasn’t really worried as most airlines (Southwest the notable exception) have in-flight sandwiches and salads on longer flights.
  3. At my seat I found the food choices selection and was pleased to see two good options. When the flight attendant came by I asked if I could order a sandwich. She said no they did not offer them on this flight. I, (being snarky) said, “oh too short of a flight.” She smiled and said no, that they found little demand for food on this flight so they stopped having the sandwiches. Ok, I get it, but a pre-flight announcement would have been handy.
  4. Fortunately they had my favorite standby snack, the fruit and cheese plate. I ordered it for a bit more money than the other airlines charge, but hey it’s Jet Blue it should be better than average. Bad assumption on my part. It sucked. It was sparse and tasteless. Why?
  5. We are going to land 30 minutes late and while the flight attendants are nice and the cabin is comfortable and the wi-fi is free, they are nothing special, and in fact are pretty much like all the other majors.

This simply re-enforces my belief that the airlines have a secret meeting each year to discuss how much lower they can set the bar and not get in trouble. Of course Southwest is not invited.

Make sure you deliver as promised and don’t substitute fluff for a failure to deliver on the basics.

Mitch

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Business Model Innovation

Innovating your business model can bring greater rewards than many other innovations. Consider Amazon.com as a simple example. Bookstore business model innovation that has continued to morph.

A recent article in Chief Executive suggests that mid-market companies need to reconsider the way they do business to grow faster. We agree.

We offer this free paper to help you better understand business model innovation.

Mitch

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Just Because It’s Easy, Doesn’t Mean You Can’t Make A Big Deal About It

chipotlelogoThe ongoing anxiety over GMO foods is a marketing opportunity for many companies. Chipotle recently announced, with great fanfare, the end of GMOs at their restaurants. I ate at a Chipotle for the first time in a while on the day they announced it was “game over” for GMOs. In looking at their menu I was trying to figure out exactly what GMOs they had removed.

Far and away the majority of GMO crops in the US are corn and soy beans. Chipotle did not offer corn tortillas at the store I was in, and soy beans were nowhere to be found.

Chipotle states they removed GMOs because they want to make their products better and GMOs don’t do that. (They were quite circumspect in not maligning them either). If you visit their website page dedicated to discussing GMOs, and you scroll a LONG way down, you will finally find that they have removed GMO corn from their flour tortillas and GMO soy from the same items plus their cooking oils. Congrats to them, but it was likely not that hard to make the change given the minor usage they are making.

They do note that their beef is likely from cattle that may be fed GMO feed, but they are “working hard on this challenge, and have made substantial progress: for example, the 100% grass-fed beef served in many Chipotle restaurants was not fed GMO grain—or any grain, for that matter.” Again commendations.

And as I noted in the headline, just because the effort is not that great, which in this case I suspect the decision to do it was more complicated than the execution, doesn’t mean you can’t bang the drum loudly, as they did.

Mitch

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Why Not Why?

whyIn my book, The Secret To Selling More, I focus on the key question: What? What are customers buying from you they can’t buy, or don’t believe they can buy, anywhere else? This is fundamentally different from the popular thinking on competitive advantage or differentiation, which, tend to focus on what you do that is different. Frankly, I don’t actually care, and generally neither does the customer. They want to know WIIFM (what’s in it for me).

Since the book first came out, I have been asked why I don’t focus on why people buy from a company. A few years back when Simon Sinek’s popular TED Talk about Why came out, the frequency of that question to me increased. (This despite the fact that his talk was about leadership and getting people to follow you based on why you were in business, not why people buy.)

I have always said, I do not believe people actually know why they do what they do. And if they do know, getting them to tell you is REALLY hard. Vindication comes in this article from Advertising Age: “Marketers Stop Asking Consumers ‘Why?‘”

Knowing What they are buying and How they want to buy is the best proxy for Why I know and it is much easier to discern.

Mitch

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