Archive for November, 2009

Treasure MapI’ve had the fortune of creating strategy documents for some of the most exciting and innovative companies in the world. Using a plethora of strategy tools that are communicated in many formats, these strategic roadmaps aim to define a differentiated market position that gives promise for improved ROI and sustainable results.

If successful, these roadmaps generate the enthusiasm to move an initiative forward with key stakeholders all in agreement. I wish I could say that is all that is needed to realize the expectations that have been set forth; however, there are a few key ingredients often left out that one should consider keys to success.

Transformative leadership starts with having purpose. It sounds easy, but knowing precisely what kind of company you want down the road is often not clear. Although financial objectives are great measurement tools for evaluating investments and progress, don’t forget that real value creation in the marketplace has nothing to do with making your numbers. Without a clear purpose behind your business, it is impossible to link proposed investments to the long-term strategic position of the company.

Nothing works without a clear identity. Once you have a purpose, you need to take stock of the core competencies in your company. These are the things that are difficult for your competition to imitate and they are what differentiate your brand. Most importantly, they aren’t your end products; rather, they are what make your products desirable. Are you the best at design? Are you the most efficient at manufacturing? Make sure you know what you do best and retain those capabilities no matter what unexpected challenges arise as you move your initiative forward.

The world isn’t a static place. As you execute your strategy, macro economic conditions change and your competition reacts. This all happens while your customer’s expectations and needs evolve. The roadmap that once seemed clear and logical may not have the accuracy it once had. It is now time to learn from your experiences and adapt your strategy as needed – even if it means discarding a piece of your once perfect roadmap.


* This blog entry was inspired by the following Harvard Business Review articles:

Cynthia A. Montgomery. “Putting Leadership Back into Strategy”

C.K. Prahalad and Gary Hamel. “The Core Competence of the Corporation”


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Aerial view of Disney Hong KongThe Wall Street Journal reported on July 1st that Disney is making a $452 million dollar investment to expand Disney Hong Kong with three new lands. This is being done to address subpar attendance, citing a “… lack of attractions that appeal to its key target market of mainland Chinese tourists, who are often unfamiliar with Disney stories and characters.”

It is easy to draw the parallel between Disney’s need to add these new attractions, and expanding a company’s localized Web site content and functionality in order to meet local user needs.  Although I expect a company like Disney to be highly successful in this expansion, it still surprises me that even the largest global brands don’t always know what to expect when expanding internationally.  The parallel ends here, however.  Unlike adding new attractions to an amusement park, when you have to add unexpected content to a local Web site, it is very difficult to do so in a way that preserves the intended user experience.  Moreover, unplanned expansion on a site typically breaks an efficient publishing model, which layers on new costs.

At LEVEL, I’ve been pondering this challenge for some time and found that there are ways to build global ready solutions. If you are starting a project where the assumption is that time constraints, budget availability and/or stakeholder support is lacking for a global ready solution, here are some thoughts to consider.  With help from LEVEL:

  • Internationalization can just happen. As a full service agency, LEVEL builds everything global ready from the start. How do we do this? Simple. A firm that is founded with deep technical capabilities knows what it takes to ensure that what is being developed doesn’t have to be reworked later when the need to expand into new markets arises. This happens because our Strategists, Information Architects and Creatives are working directly with the team that builds what is being designed.
  • Localization doesn’t have to slow you down. Typically, budget and timeline concerns exist when considering the extension of a corporate-centric solution globally from the start. LEVEL has established key relationships in the localization industry to rapidly prototype and test solutions in just about any market, even when we are in the early design phase of a project. This results in a cost effective and efficient localization process.
  • Learning now, leads to flexibility later. Disney was lucky they had the funds and space to buy more land. Unfortunately, a poorly designed Web site cannot expand as easily. Once you break a well thought out user experience strategy, there is typically no going back. Obtaining local requirements in the discovery phase of a project can avoid costly redesign efforts due to inflexible design templates and infrastructure components, even if you don’t offer localized sites or content to start. What’s great is that you’ll be ready to respond to the need for global expansion when it arises.

With a little extra planning and the right experience by your side, you can have a global ready solution that maximizes your brand impact in new markets.

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Free and Freemium go-to-market strategies are here to stay because anyone can do it and it a great way to establish a community of enthusiastic users. And if you are really savvy, you create a network effect such as eBay, Craigslist and Monster.com achieved in their respective spaces.

Freemium can come at a cost though. Customer expectations are set by the industry as a whole, not just your company. If users are used to free, it is hard to shift them to a different mindset. This is particularly true because incentives to keep the community are often very weak in these models and there are competitors at each turn waiting to introduce an innovative feature that your community can’t live without.

Aaron Leevie, the CEO and co-founder of Box.net, recently stated that he loses more deals in a sales cycle to his own company than he does to competitors because people don’t see why they should start paying. My interpretation of that statement is that you have to go to market with a clear value proposition that is supported by a business model that can achieve solvency. What’s the ROI? Watch out for companies that defer the profitability discussion until later because they just might not figure it out.

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The other day, I had two products malfunction that I can’t live without – my electric shaver and my iPhone.

I first called customer support for my high-end, three year old shaver. The first time I attempted to go through the phone directory, it gave me some recorded information and hung up on me. Agitated with myself for not hitting the traditional 8 or 0 buttons to be immediately connected to a live human being, I was not to be fooled the second time.  The customer service representative I spoke with next may as well have been a recorded voice, since she was reading a script and couldn’t deviate from it even when I had already given her the information in a previous response. It turned into a interrogation as she wanted to know the serial number and proof of purchase to make sure they did not sign up for fixing a product that was out of warranty. I felt the need to lie and say that I purchased it more recently since I did not want to be hung up on. It was to no avail, she made it clear that no one can trick them because of the serial number engraved on the shaver. Should I file it off like a thief filing away their fingerprints, I thought to myself? After all was said and done, she made it clear I would have to deal with the problem myself.  It turns out it will take about 2 weeks to simply replace the battery and it will cost about 40% of the original purchase price – yikes and no thanks!

I now had to take my iPhone over to the Apple Store. Nervous after my experience with the shaver, I sheepishly walked up to one the many representatives available at the door. I told him that the microphone on my hands-free set was no longer picking up my voice. He said he’d take it back and replace the jack if it had failed. He quickly grabbed it from me and was off to the backroom. I feared he was going to put in a nominal part and charge me big service bucks for every second he held the phone. Only minutes later, he returned, handing me a perfectly working iPhone. All he found was a small amount of pocket lint blocking the contact between the hands-free set and the jack.  As I was ready to fill out whatever forms he needed, he walked away. I called back to him, asking what was next.  He said, “that’s it.” After my miserable first experience with the electric shaver, a tear of joy welled in my eyes, and a feeling of guilt emerged – did I really deserve this level of service?

Upon reflection, I’ve decided that I won’t buy another electric shaver – razor blades will work just fine. Of course, my feelings regarding the Apple brand are positive, and I wouldn’t hesitate to make another purchase in the future because I can trust any company that will deal with my pocket lint. As a consumer, I feel empowered by the ability to make these types of choices. I’m always surprised when a company worries more about the short-term impact of a defective good to their bottom line, than they do about the lifetime value of a satisfied and loyal customer.

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Beatles Abbey Road Album CoverI was dusting off the last of my CDs last night—my cherished Beatles collection—and digitizing them. I came across one of my favorite covers, Abbey Road, and observed how each of the Beatles was walking in uniform manner, yet each subtly showed his strong independent personality such as Paul’s bare feet. What was so great about this band is that they perfected their sound and style early in their career, yet most importantly, they constantly looked for ways to remain relevant through innovation.

A common challenge I help my clients face, particularly in this challenging economic climate, is helping them to sustain a competitive advantage in their core business through both operational efficiency and incremental technology improvements. While I thrive on finding ways to keep an organization successful and improve the bottom line, I’m ever attentive to the possibility that an organization can become myopic with respect to understanding where the next disruptive innovation will sprout up.  So often, we see big companies miss a change in market direction that is addressed by a niche competitor. What excites me the most about my job is the opportunity to help a client sustain its competitive advantage while also finding ways to be the leader in bringing the next big innovation into being – as the Beatles continually did.

Here are a few of my thoughts:

Continuous Improvement

The Beatles always knew what made them special and built upon it. Continuously improving processes and delivering competitive products in established markets means you know what you are good at, presumably your core business, and vigorously defend your position. At LEVEL, we look at our client’s go-to-market strategy, internal culture, competitive position and key performance indicators to establish a snapshot of the company’s position and trajectory. The key is to have a baseline that includes a composite view of all the Key Performance Indicators and priorities, so that measurements can be continuously taken long after the project is completed to ensure that our client is defending their core market and making relevant decisions that lead to increased market share and operating margins over time.

Building a culture of innovation

A company creates additional value when it is continually improving its market position. This value can translate to a surplus of time and revenue beyond what your competitors can afford that can be used to perform valuable market research. Unfortunately, management’s incentives are often much more tied to growing existing markets that are familiar to the company, which makes it difficult to explore technologies that utilize disruptive technologies. This is logical because new markets are often much smaller and don’t shine with the generous operating margins and volumes the company is used to with mature products. We suggest to clients that they establish a culture of innovation. There is an array of ways this can be achieved, such as creating an independent organization that allows for the incubation of new ideas. By incubating and insulating these new products, it allows them to grow more slowly, while the market recognizes and adopts the innovation.

Enabling continuous improvement and building a culture of innovation are at the heart of organizations with exceptional financial performance, somewhat like what the he Beatles did with rock and roll so many years ago.

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Old ClassroomI work in the Strategy practice at LEVEL Studios which focuses on globalization, organizational design and product management. Lesser known is that I moonlight as an adjunct faculty member at Santa Clara University’s Leavey School of Business. I find it tremendously inspiring to bring my corporate skills to students in academia and in turn bring my experience in academia back to Corporate America. The challenges I face teaching aren’t so different from the challenges my clients face when establishing a good online strategy. First impressions are key: just like students size you up in the first 5 minutes of class, website visitors size up the value of a site in seconds. Here are two other classroom challenges I’ve faced that translate well into tactics I use for helping my clients achieve their online goals.

There are many of them and only one of you, yet a personal connection counts.

I have outgoing students, busy athletes, international students and just about every other type of student imaginable. I have to speak to the group, but I also have to connect with each of them individually at the same time. First, I have found that students value honesty above all. They don’t want marketing spin, and they can see right through it. Second, I use a combination of mediums in my classroom, including lectures, guest speakers and videos, to keep everyone interested in a way that works for them personally. Third, I have to meet their expectations or deal with failure in multiples. For instance, if I communicate the requirements of an assignment poorly, I have to deal with 30 mistakes, not just one. Most important, these factors impact my reputation, which can spread online and affect interest and enrollment in future classes I teach.

Change isn’t easy, but consistency is just as tough.

Although I vigorously prepare my lecture notes, what I end up saying often varies from plan. This is due, in part, to the unexpected questions from students during lectures (a great thing because this is how true learning happens). To counter this diversion from the key points I planned to discuss, I make sure that these points are reinforced through my syllabus, weekly emails and homework. Another challenge I face is how to continually innovate while still delivering a consistent message to my audience. I find that students want to learn about virtually any topic I raise in class; but if I ask them in advance, I don’t always get an enthusiastic response. These are times when I simply need the confidence to go for it when I think I’ve come up with a new way of teaching a topic. Lastly, I need to know if I’m achieving my long-term goals. Ultimately, I want students engaged at a level that ensures they walk away with key lessons that will stick for years to come. Midway through the class, I survey students to understand their concerns, and I can make any corrections necessary. I also stay in touch with a handful of students from each class through LinkedIn, often inviting them back to my class years later as guest speakers.

How does this relate to a good online strategy? Sometimes all you need is a good analogy to help you see your projects and problems from a new perspective.

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