Campaigning for Change by: Larry Hirschhorn

1 04 2010

There are times when everyone needs to change in one way or another, but change is always easier said than done.  This is also true for change within the organization.  As a result, “to bring order to the chaos, organize the effort into three coordinated campaigns: political, marketing, and military.”

Political Campaign

Forge Alliances

Politicians form alliances with people to support their campaign, but these relationships vary at different stages in the process.  There will also be variations in business that will cause the organization to change.

For example, Hewlett-Packard’s campaign was to improve service and customize products, but this differentiation tactic was not effective after a time.  HP realized that they had to focus more on the individual needs of customers and needed to change their course of action to this new strategy.

Marketing Campaign

Listen

The executives must communicate the benefits of their change efforts.  It is also important for them to listen to ideas for change that are from the employees.  This will help them feel involved in the process to learn and improve the company to keep the employee’s participation. 

Develop a Theme

Each change initiative needs a clearly articulated theme that employees at all levels of the organization can respond to.  The goal is to build energy behind the process of change to learn and grow together in order to improve the organization.

Military Campaign

Overcome resistance by having a resilient group of committed people working on a project together with the goal of turning resistance into cooperation.

Create a War Room

A war room will create an environment that helps people focus on one topic, but it is also a place that encourages people to consider all the forces that affect that one topic.  This allows constructive conflict to occur in order to make changes that will help with the process of change within the organization.

These three campaigns are inter-related and change can fail when all three do not occur.  No political campaign?  You risk being undermined.  No marketing campaign?  Your leader will be seen as a social engineer that is out of touch with his or her employees.  No military campaign?  The change initiative can stall even after successful projects.





Which Innovation Efforts Will Pay? by: Alexander Kandybin

25 03 2010

“For many companies, developing new products is a hit-or-miss proposition.  Some businesses with successful innovation practices are relying on a new analytic tool to ensure that the hits are much more likely.”

The goal of innovation practices leads to customer engagement and profits.  To reach this goal, some companies spend a fortune on research and development, but studies have shown that there is not a direct correlation to growth.  Other companies also pursue the strategic tactic of benchmarking.  However, companies can be quite different from one to the next, so innovation efforts are not as successful as they could be.

Organizations must form their own innovation practices based on their competencies to identify their short and long-term innovation opportunities.  The “innovation effectiveness curve” is a metric that will help companies achieve this task.  It contains data about every active project to see the overall returns on innovation investments and to help make beneficial changes.  There is much emphasis on improving the curve rather than just increasing the R&D budget.  It is important to not ask how much to spend, but how to spend.

The effectiveness curve allows a company to build on its current innovation approach and identify new capabilities or long-term opportunities that need to be exploited.  “In the past, projects had very rarely been canceled; they limped along for years, consuming scarce resources.”  The company must reallocate resources from areas that are underperforming to more potential areas that will increase returns.

As you can see in this diagram, the company's resources were reallocated to new areas that increase returns.

Company efforts are focused on building a competency of innovation and scout the world for new ideas and technologies that can be adapted to your products and services to achieve strategic goals.





Building Retail Brands

25 03 2010

This article titled, Building Retail Brands, Terilyn A. Henderson and Elizabeth A. Mihas, focuses on differences between retail companies with multibrands versus a retail store with only one brand. The best way to achieve success in retail brands is to have one main brand and focus a stores attention on that brand rather than having multiple brands within one area.

Building Brands:

“The building of a brand starts with a precise definition of the target customer group and its needs” (113).

A Powerful Personality and Multibrand Challenge:

This article bases its focus on creating brands that will stand out to customers and to clearly define the target market. It uses the example of Gap and its creation of the Old Navy brand. They did extensive research and targeted the brand towards the correct segment that would respond the best to the new brand. The response has shown that they were effective, as well as their sales numbers. It also gives the example of Abercrombie and Fitch. They have created an environment within their brand. While they use some questionable ads, they create the atmosphere inside their stores that gives a unique feel. (The smell, the lighting, the furniture, and the décor.)

These are both examples of brands that have one specific brand in the store, with the focus going to their target markets. However, the article explains the challenge that multi-brand stores face. Sears and JC Penny are two examples of department stores that carry multiple brands. They must position not only their store, but also focus on the different brands of merchandise that they carry.

Target was an example of a well-positioned multi-brand company. They have focused on carrying high-design and quality products by famous designers. “In a sign that shoppers understand Target’s brand image, some wryly pronounce the chain’s name with French flair: “tar-ZHAY”” (116). 





What’s Needed Next: A Culture of Candor

18 03 2010

While evaluating businesses by the amount of wealth created for investors is popular, there is a more effective way to measure business performance:the extent to which executives create organizations that are economically, ethically, and socially sustainable.”

Candor improves performance because employees can share information and make better decisions.  With collective intuition, executive teams can have different POV’s and get all the information possible.  Typically, leaders are more likely to make mistakes when they act on too little information than when they wait to learn more.  Employees will typically be less likely to to intervine on a bad decision when they work with leaders who are “decisive” and don’t listen to others’ advice (even if they have critical information that could save the company).

By sharing information, everyone in the company is on the same page and knows where the company is headed.

“The most common metaphor we’ve heard managers use to describe their own cultures is a ‘mushroom farm’ – as in, ‘People around here are kept in the dark and fed manure.”

The problem is that managers sometimes feel that access to information equals power and they believe that they are actually smarter than their followers.  So, they will hoard the information because they feel like they are the only ones who know how to use the info.

Why Transparency is inevitable today

The emergence of the internet, email, blogs, and text messageing prevents companies from keeping any secrets.  It is incredibly difficult for companies to hide information from not only their customers, but also their employees.  So, some companies institute a “no secrets” policy.  They reinforce the trust in the company by asking for cadid feddback from everyone in the company from the bottom up.  If the information is out there on the internet already, why make an attempt to hide it?  Just meet with the employees and ask for their honest opinions.

How to create transparency

(Note:  all these steps require the leader to be the model)

  1. Tell the truth
  2. Encourage people to speak power to truth
  3. Reward contrarians
  4. Practice having unpleasant conversations
  5. Diversify your sources of information
  6. Admit your mistakes
  7. Build and organization architecture that supports candor
  8. Set information free




The Global Entrepreneur

18 03 2010


  • Companies are being born global today.”

Why entrepreneurs are going/ go global?

-They’re hunting for the best manufacturing locations

-Tons of information is at their fingertips

-Scouting for talent

-Searching for investors

-They need to manage operations from a distance

…Two other reasons

Defensive:  Competitive prices and resources can and have to be searched for globally.

Offensive:  A new business opportunity spans more than one country.  Entrepreneurs can use distance to create new products or services. (product extension)

Start-up companies going global face challenges and have needs they must address.

Key Challenges

1) Distance – start-ups don’t have the infrastructure to manage far distances.  Distance also creates time differences that can be challenging.  There’s also the “psychic distance” from such things as culture differences, language, political systems, religion, economic development, and so on.

2) Context – some of the factors above (politics, tax, legal) may affect shareholder returns and ability of a start-up to raise capital.

3) Resources – new ventures lack resources.

Competencies Global Entrepreneurs Need

1) Articulating a global purpose – know why going global is specifically worthwhile (i.e. To gain economies of scale? To be the first to market something somewhere else? Better for manufacturing?  Research and development?  Marketing?)

2) Alliance building – if resources are weak or limited, alliance building can seem like a way to build strength but a start-up may not have a lot of leverage on the terms of these partnerships so…hmmm (???)  problematic?

3) Supply-chain creation – due to costs, finding the best manufacturer’s for costs specifically in labor, fuel, and quality is important.

4) Multinational organization – expands a person’s ability to coordinate, control, and communicate on a grander scale.

  • Going global is a not a “pursuit for the faint-hearted, but even start-ups can thrive by using distance to gain competitive advantage.”




Stop Making Plans, Start Making Decisions

13 03 2010

“In most companies, strategic planning isn’t about making decisions. It’s about documenting choices that have already been made, often haphazardly. Leading firms are rethinking their approach to strategy development so they can make more, better, and faster decisions.”

Recent studies have shown that more and more executives are not effectively using strategic planning. However, strategic planning is needed so that decisions are not made on a whim.

There are two keys that cause for the failing of traditional planning: the timing effect and the business-unit effect.

  • Timing Effect: Strategic planning happens yearly or semi-yearly, but key decisions are made continuously. Strategic plans also take time to develop, but decisions often have to be made quickly.
  • Business-unit Effect: Strategic planning focuses on units as individuals, but actual decisions are based on issues, regardless of how many units are affected.

A new process needs to be created for developing strategy that is different than the traditional process yet still parallel to it. A company’s quantity and quality of decisions can be and most often will be improved when they embrace decision-focused planning. Companies need to take the general ideas of strategic planning and modify it to meet the needs of actual decision-making.

How to create decision-based strategic planning:

  • Separate- but integrate- decision-making and plan making by taking decisions out of the traditional planning process and create a different, parallel process for developing strategy
  • Focus their strategy discussions on a limited number of important issues or themes and move away from a business-by-business planning model
  • Make strategy development continuous. Focus on one issue at a time until a decision is reached and add issues to the agenda as market and competitive conditions change
  • Structure strategy reviews to produce real decisions

“By creating a planning process that enables managers to discover great numbers of hidden strategic issues and make more decisions, companies will open the door to many more opportunities for long-term growth and profitability.”





“Customer Centered Brand Management” Based on the article By: Rust, Roland T., Zeithaml, Valarie A., Lemon, Katherine N.

11 03 2010

Chaco is just one of Wolverine's many shoe brands designed specifically for the "outdoorsy" customer segment

First we must know the difference between customer equity and brand equity (Customer Equity is what’s important.)

“Companies must focus on customer equity (the sum of the lifetime values of all the firm’s customers, across all the firm’s brands) rather than brand equity (the sum of customers assessments of a brand’s intangible qualities, positive or negative.)”

“It is important to remember that acting in the best interests of brand equity isn’t necessarily the same as acting in the best interests of customer equity.”

Next, we need to “Put brands in their place”

  • Brands need to be built around customer segments that are focused on customer needs.
  • Brands need to be created as narrow as possible.
  • Brand managers need to know their customers well enough to tell when it’s time to hand off customers. In extreme cases, a company might even encourage some customers to abandon a brand to which they are loyal if another brand will better cultivate the relationships and increase customer equity.”
  • Change how you measure brand equity.

Finally, “Overcome Your Blind Spot”

  • Customer Centered Brand Management requires the executive team to have a change in perspective.
  • Brands are only a means to an end, and the end is this: to create and cultivate profitable, long-term relationships with customers.”