Maybe This Explains Some of General Motor’s Issues

Dr. Michael Arena is the Chief Talent Officer at General Motors. He is an expert and authority on talent, and has focused on how to get talent to innovate. He identifies three types of talent involved in the innovation process:

  1. Brokers: These are the people who come up with the new ideas. He correctly notes that while these people generate ideas, that is not enough, as an unimplemented idea is useless.
  2. Energizers: He describes these people as those that generate interest in the idea and advance it in the organization.
  3. Connectors: He describes these people as the ones who get the idea implemented.

As readers may know, we have worked with the Team Dimensions Profile for 20 years as it applies to innovation. Each of the three roles Dr. Arena describes are perfectly aligned with the profile’s ability to identify people’s natural tendency towards a role. The names, as you might expect, are different.

What Dr. Arena calls Brokers are called Creators. What he calls Energizers are called Advancers; and Connectors are referred to as Executors. Unfortunately, Dr. Arena has left out a critical fourth profile and process step in his analogy, which may explain some of GM’s problems.

He left out Refiners. Those people are what we call the “Yes but…” people. The ones who don’t belong in a brainstorming meeting (where people act as if there are no bad ideas), but must be heavily involved in design reviews or similar to make sure the idea has been completely thought out. Refiners are critical and his failure to acknowledge their importance my help explain issues GM has with some (many) of their new products and processes.

If you’d like to read more about Managing for Innovation, download our free white paper.

Mitch

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Improving Customer Experience

deltaairlineslogoI rarely check luggage so my recent experience may be old news for some of you. It may also not be limited to Delta Airlines, but then again, maybe they are pioneering a valuable customer experience.

I criticize the airlines regularly because I fly a lot and they’re easy targets given their limited to non-existent focus on passengers. When they do a good job, I believe I owe it to them to report it as well, and this one is quite good.

I flew on Delta last week to JFK with my wife and we checked a bag. What a shock when, while sitting on the plane waiting to back away from the gate, I got a text saying that our bag was now actually on the plane. Pretty slick (and I assumed true). When we landed, we got a text telling us that our bag was coming to the bag claim area. We had just picked it up, but still, pretty slick.

Great use of technology and customer focus. Now, at least in SFO, if they could just get bags to baggage claim a little faster….

How are you using information and mobile to improve your customer experience?

Mitch

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Differentiation By Customer Experience

37576225 - christmas shopping - purchasing is satisfaction and happiness

You can’t out Walmart Walmart. You can’t out Amazon Amazon. And most retailers have to contend with one or both of them, or their equivalents. They may be direct competitors or indirect competitors. If you want to successfully compete with them you have to offer what they can’t. And that isn’t usually merchandise, so it has to be customer experience.

This holiday season (when about 40%+ of retail sales will be made for the year) about 40 or so malls in the US are creating a customer experience that Walmart and Amazon and other online sites can’t copy. For some of us the efficiency of online shopping is a plus. We don’t want to fight the crowds or look for a parking place that may get us a lot of steps, but not necessarily the way we’d like to get them.

However, for many there is an opportunity for a real shopping experience you can’t get online. What these malls are doing is adding holiday specific experiences for the shoppers and their kids beyond the typical “mall Santa.” Some are using technology to create unique live experiences. Others create a really special Santa visit effect. They even have Naughty or Nice meters.

Much has been written about the power of customer experience in today’s world, and it is not limited to B2C or just the holiday season. If you want to out-perform your competition, create an experience that matters.

Mitch

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Thank Goodness McDonald’s Wasn’t Like JC Penney

This is a picture of Ray Kroc's first McDonald's restaurant in Des Plaines IL USA - now a museum.I have previously noted how JC Penney hired Ron Johnson to create a growth strategy for the company. He implemented a new strategy, and as anyone would likely realize, sales went down. Why, as I wrote in the prior post, is because existing customers see the change, and don’t like it in many cases before new customers can be attracted to it. Since JC Penney is a public company, their Board could not accept a sales reduction and they eventually fired Mr. Johnson so they could return to a previously unacceptable strategy, which appeared to look better after the sales loss due to the change.

How does this tie to McDonald’s? Most people are unaware of the history of McDonald’s. It was at one time a BBQ restaurant using what we have come to call the “drive in” with carhops business model. They were an early pioneer of this concept and were very successful. Even though the concept had its downside (loitering teenagers, less than wholesome food, etc.) the overall growth continued. However, the McDonald brothers were not sure it was sustainable.

They took the bold and risky move of thinking about reinventing their business. The result was the McDonald’s of fame, hamburgers, cheeseburgers, etc. A very limited menu based on efficiency of operations, and all that meant. They focused on limited choice and lower prices. The initial results were as one might expect … dismal.

Their current customers, for the most part, did not like the new approach and left. New customers did not replace them quickly. However, since they were not beholden to a disconnected Board of Directors, they were able to stick to their convictions. Roughly four months after the shift, sales began to rise and rise and…

As we all know, the brothers eventually sold their concept to Ray Kroc who turned it into a mega-business. But that never would have happened if the McDonald brothers didn’t realize they needed a different strategy to grow and would take the hit to make that happen. Too bad folks like the McDonald brothers weren’t on the Board of a company like JC Penney.

Mitch

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Working With A Target On Your Back

54938190 - businessman get success with red arrow on target at the back of his suit on dark background, business concept

We have noted for years in this blog that the CMO position has a high turnover rate. We even suggested in one post that this is because when things go bad, the CEO needs to fire someone visible and by firing the CMO they do that without really messing anything up because, “what does the CMO do anyway.” The CMO position continues to be one of the most ill-defined positions in the corporate structure.

A recent article in Advertising Age suggests that while the argument has changed, the CMO is still the #1 C-level exec with a target on their back if growth goals aren’t met. The article reports on a study done by Accenture of companies with over $1B in revenue and notes that the CEOs of those companies place their CMO as the #1 target for termination if growth goals are not met since they are allegedly responsible for “disruptive growth.” Seriously? Fire them if you like but spare me the delusion that the CMO is the Chief Disruptive Growth Officer (yet another title for the CMO).

While I will concede there may be a few CMOs with that kind of “power,” the majority are brand focused, which is a euphemism for advertising. Since advertising is simply one mechanism by which branding is accomplished, it is brand building that gets the focus. However, what CMOs have any authority over customer experience? They may create the video I watch where the various airlines tell me how important I am to them; but they have no authority over the employees on that same flight proving exactly the opposite in real-time. And that is just a simple example.

Do you really think the CMO at Intel (as a high-tech example) is focused on disruptive innovation? I doubt it. That is being done in R&D or within the product/business divisions.

I submit that most CEOs have no idea what to do with their CMO, who is really only responsible for the “back-end’ of Marketing. Given that Kottler and others have noted that the real leverage in Marketing is at the front-end, why have your “chief disruption officer” focused where the least leverage exists?

Again, I submit it is more about having a sacrificial lamb then about disruption.

Mitch

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Perception Is Everything

united-airlines-logoUnited Airlines announced Economy Basic fares last week. What an utter disaster it’s been. The perception of most people appears to be that United is taking away even more services from the beleaguered coach traveler. Scrooge.

The truth is far different and it doesn’t matter because perception is what matters. The perception is that United announced cuts in their economy fare offering including only being able to bring one bag on board. Last boarding status, etc. Jerks.

The reality is much different. United has offered two classes of economy fares for some time (not including refundable fares). Economy and Economy Plus. For the non-frequent traveler you could purchase a seat in the Economy Plus section (more leg room) for a fee if you so desired. Otherwise you were treated like everyone else on the plane. That is, with equal disdain and uncaring attitudes for the most part, despite videos to the contrary.

The announcement was actually about a THIRD class of Economy to be called Economy Basic. For an even lower fare, one could opt out of a preassigned seat and be limited to only one carry on, plus last group boarding. This was a bare bones fare to compete with bare bones airlines. The theory being you could get the extra value of flying on United (unclear what that actually is, but that is another conversation) while paying the bare bones fare of the lower cost airlines.

Not a bad strategy (delusional in terms of the value add they think they offer, but at least the passenger would have another low-cost option). Horrid announcement. But then if you don’t see yourself remotely through your customers’ eyes, it is easy to make such a simple mistake.

The biggest problem with communication is the illusion it occurs. Focus on how your customer and potential customer will view it, not how you or your C-Suite will view it.

Mitch

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A Modern Version of the Mafia Protection Racket

I had heard from people that Yelp’s reviews could be bought, which disappointed me greatly. I have come to believe, based on conversations with merchants, that it is materially worse than that. Yelp appears, in my opinion, to be holding retailers and small service suppliers hostage.

A recent example is from a nail salon my wife frequents that has had good ratings on Yelp. Yelp suggested to them that they should pay Yelp to help assure their good ratings were seen. As a small business owner the salon owner declined. Recently she has noticed several negative ratings on her Yelp page from people she cannot identify. When she asked Yelp for help they told her help would be $600 per month to push down the negative ratings and they could not tell her anything about who posted the negative ratings.

Seems suspicious to me that a business with effectively no negative ratings, turns Yelp down to pay them and suddenly she has negative ratings from unknown sources that can only be “pushed down” for a fee … monthly.

Sounds like a protection racket to me. Shame on Yelp, and I hope this kind of business practice on their part causes them to go away as a business.

Mitch

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