In the history of business, Procter and Gamble will be remembered for many things- its products, its branding acumen, and its memos.
Memos? Those boring treatises that no one reads, you ask.
Wrong.
An account executive who worked closely with P&G had this to say about the importance of the memo at the company:
“P&G seems to have figured out that if you structure information certain ways, people will readily understand it, good ideas will emerge, and bad ideas will be exposed. I really think that is what has made them so successful. They make fewer mistakes because they find mistakes before they happen.”
In a book which is still relevant today – Winning With the P&G 99
Think about how effective this is. In most companies, the quality of communications depends on the writer. Every department, every individual speaks and writes in their own language. At P&G, the language and style is the same everywhere. What is original is the idea in the memo.
Dr. Andrew Abela tells us (on his blog) that when he joined P&G twenty years ago, the one page memo discipline was in full force. He shows us the format:
1.The Idea. What are you proposing? This is typically one sentence.
2. Background. What conditions have arisen that led you to this recommendation? Only include information that everyone agrees upon in the Background – this is the basis for discussion, so it needs to be non-debatable.
3. How it Works. The details. In addition to How, also What, Who, When, Where.
4. Key Benefits. This is the “Why?” There are usually three benefits: the recommended action is on strategy, already proven (e.g. in test market or in another business unit), and will be profitable. You can think of these three in terms of the old Total Quality mantra of “doing right things right.” The first (on strategy) means you’re doing the right thing. The second and third mean you’re doing things the right way, because you’re being effective (proven to work) and efficient (profitable).
5. Next Steps. Who has to do what and by when for this to happen?
Simple enough. So why don’t you adopt this for your company? And better still, why not use this format for all your company meetings as well.
Looking back, it’s easy to see that P&G made memo writing a critical knowledge management process, or even more importantly, a decision-making process.
The process itself has created a framework for critical thinking, for decision-making and ultimately for strategic advantage.
The Business Value of Bedtime Stories
Once upon a time, my pet lion (who lived in the attic) started practicing customer-driven innovation. But then he began to challenge his assumptions and now he won’t listen to anything I say.
My 8-year old daughter told me this story last night before she fell asleep.
I’ve really got to start going down to the office when I take those work calls…
Gary Hamel: Moonlight Madness or Management Moonshots?
Gary Hamel‘s at it again.
This time he’s got 25 moonshots for management:
1. Ensure that management’s work serves a higher purpose. Management, both in theory and practice, must orient itself to the achievement of noble, socially significant goals.
2. Fully embed the ideas of community and citizenship in management systems. There’s a need for processes and practices that reflect the interdependence of all stakeholder groups.
3. Reconstruct management’s philosophical foundations. To build organizations that are more than merely efficient, we will need to draw lessons from such fields as biology and theology, and from such concepts as democracies and markets.
4. Eliminate the pathologies of formal hierarchy. There are advantages to natural hierarchies, where power flows up from the bottom and leaders emerge instead of being appointed.
5. Reduce fear and increase trust. Mistrust and fear are toxic to innovation and engagement and must be wrung out of tomorrow’s management systems.
6. Reinvent the means of control. To transcend the discipline-versus-freedom trade-off, control systems will have to encourage control from within rather than constraints from without.
7. Redefine the work of leadership. The notion of the leader as a heroic decision maker is untenable. Leaders must be recast as social-systems architects who enable innovation and collaboration.
8. Expand and exploit diversity. We must create a management system that values diversity, disagreement, and divergence as much as conformance, consensus, and cohesion.
9. Reinvent strategy-making as an emergent process. In a turbulent world, strategy making must reflect the biological principles of variety, selection, and retention.
10. De-structure and disaggregate the organization. To become more adaptable and innovative, large entities must be disaggregated into smaller, more malleable units.
11. Dramatically reduce the pull of the past. Existing management systems often mindlessly reinforce the status quo. In the future, they must facilitate innovation and change.
12. Share the work of setting direction. To engender commitment, the responsibility for goal setting must be distributed through a process where share of voice is a function of insight, not power.
13. Develop holistic performance measures. Existing performance metrics must be recast, since they give inadequate attention to the critical human capabilities that drive success in the creative economy.
14. Stretch executive time frames and perspectives. Discover alternatives to compensation and reward systems that encourage managers to sacrifice long-term goals for short-term gains.
15. Create a democracy of information. Companies need holographic information systems that equip every employee to act in the interests of the entire enterprise.
16. Empower the renegades and disarm the reactionaries. Management systems must give more power to employees whose emotional equity is invested in the future rather than in the past.
17. Expand the scope of employee autonomy. Management systems must be redesigned to facilitate grassroots initiatives and local experimentation.
18. Create internal markets for ideas, talent, and resources. Markets are better than hierarchies at allocating resources, and companies’ resource allocation processes need to reflect this fact.
19. Depoliticize decision-making. Decision processes must be free of positional biases and should exploit the collective wisdom of the entire organization.
20. Better optimize trade-offs. Management systems tend to force either-or choices. What’s needed are hybrid systems that subtly optimize key trade-offs.
21. Further unleash human imagination. Much is known about what engenders human creativity. This knowledge must be better applied in the design of management systems.
22. Enable communities of passion. To maximize employee engagement, management systems must facilitate the formation of self-defining communities of passion.
23. Retool management for an open world. Value-creating networks often transcend the company’s boundaries and render traditional power-based management tools ineffective. New management tools are needed for building complex ecosystems.
24. Humanize the language and practice of business. Tomorrow’s management systems must give as much credence to such timeless human ideals as beauty, justice and community as they do to the traditional goals of efficiency, advantage, and profit.
25. Retrain managerial minds. Managers’ traditional deductive and analytical skills must be complemented by conceptual and systems-thinking skills.
Fine. I think I get it. The real question is how many of our bail-out CEOs will get this Capitalism 2.0?
Ted Sorensen on The Power of Words
Take notes, everybody:
Part 1:
Part 2:
Part 3:
Part 4:
Rosabeth Moss Kanter on Simplicity
Rosabeth Moss Kanter is one of my favorite business gurus, the “female Peter Drucker,” as I tell people when I recommend they read her book Confidence: How Winning Streaks and Losing Streaks Begin and End
In her latest blog post at HBR, she tells us that the next big trend is simple: to simplify.
Among her observations:
“Companies sow the seeds of their own decline in adding too many things — product variations, business units, independent subsidiaries — without integrating them. They create complexity, which makes costs increase faster than the potential gains from the new parts.
“Just why did General Motors need 47 brands of cars? Was that responsible for its top-heavy load of managers? Or for cannibalization within the company?”
and this brilliant line:
“When everyone else suffers from over-complexity, there is a market for products and services that simplify life.”
More here >>
Business Models for Short Attention Spans
I wrote once on another blog, that no one has time to read Harvard Business Review, or listen to an entire music CD, or watch the whole movie.
Our attention span is somewhere between 3 to 5 minutes. And that’s the size your idea-bite has to be if you’re going get heard at all. See Twitter, YouTube, CNN, et. al. We’re getting dumber second by second by second.
How do you build a business model for short attention spans? I think this is the key challenge for online publications – from newspapers, to blogs, to forums. Perhaps the key is enticing readers to return over and over – let’s say twenty times a day! So online journals must be updated very often (compare HuffPost with the NYTimes) with corresponding micro-blogging on the same topics.
And the revenue will come not for selling ads, but selling products and services. And sometimes, you may just sell them the longer version of your story.
Indian Innovation: Distributed R&D
The points raised by Anil Gupta and Haiyan Wang in their book – Getting China and India Right: Strategies for Leveraging the World’s Fastest Growing Economies for Global Advantage are echoed in this BusinessWeek article by Gunjan Bagla and Atul Goel.
So are things slowing down with the global recession? Here’s what they say:
We believe there may be a temporary hiccup in R&D globalization, caused primarily by companies freezing in their tracks as they reassess the new financial realities. But as soon as they rebuild their product road maps, nimble companies will actually accelerate their globalization efforts, pushed harder by tight budgets and the realization that the old ways can be disastrous.
Next up: What’s up with Dubai?
Newsweek: Shrinking to Survive?
Will Newsweek be able to compete against the Economist?
That’s what they’re betting on, apparently.
The goal is to turn Newsweek into an opinion-based “thought leader” with branded journalists like Fareed Zakaria, Christopher Hitchens, and that fossil of a conservative, George Will. So we’ll see lots more trash-talking and provocation.
While this is a step in the right direction, I think they’ll really have to worry about low-cost, online disruptors like HuffPost, DailyKos, and The Week, as well as established institutions like The Atlantic and The New Yorker.
The makeover is supposed to gain them mindshare and, ahem, walletshare. Where have we heard that before?
What they’re missing is a daily view of their ecosystem. I’ll get into that in a separate entry on ecosystemwatch.com. And as I tell my clients, thought-leaders do dominate in ecosystem competition, so the Newsweek strategy does make sense.
What I don’t see any mention of is value-co-creation with its readers. And their revenue model is still based on advertising. Even the Economist knows that to make money you’ve got to sell those country reports, the surveys, books, and conferences.
Finally, I hope they’ve thought about video – online video – as another key ingredient which makes online news attention-worthy.
A Design Guide for Recessionary Times
I think we’ve finally hit the wall in terms of design.
Whether you’re designing a product, a service, or a website, the designer has to make their work relevant to the buyer in ways they may not have considered before this recession. Here’s what I mean. Your offering is no longer competing for attention or even price. It is competing on usefulness and time to value.
The question you have to answer is this: Why will this product/service help me now, and how fast can I see results?
And, two – “How can I justify spending any money on this at all?”
Three: “What’s the risk for me (and my money)?”
Got it?
Pretty simple, but your survival as a company may just depend on answering those three questions properly.
So Hyundai designs a car which says, buy it, use it, and we’ll take it back – if you can’t pay because you lost your job. The policy allows people to return vehicles in the first 12 months if they can’t make payments due to job loss and Hyundai covers depreciation. In essence, Hyundai is eliminating your risk.
Consider a small business in today’s economy. Why would they spend money on anything but the essentials? So who needs MS Office when you can use Google Docs? Who needs a Mac when a netbook will help you get by? Who needs office space when you can work from home? Who needs to fly when you can Skype it in? Who needs to buy when you can rent? It’s not about how much the website costs, rather, it’s about how fast will I make money from the website? Why do press releases when you can blog?
It’s value time, period. Show me, don’t tell me.
One last thing, why should I trust you? Are you trustworthy? Is your product/service trustworthy? Maybe trust goes beyond the product/service. It lies in the concrete actions you take to actually help your customer. Have you ever thought of helping someone out who is not your customer?
Hyper-Disruption: India’s $10 Laptop
Here comes the next wave of hyper-disruption: the $10 laptop.
Are your ready Dell, HP, Apple? Are you ready Microsoft?
As we saw in Getting India and China Right, by Anil Gupta and Haiyan Wang, China and India are not going to be content simply filling out orders for low-cost products. They are also going to be springboards for innovation and disruptive products and services.
When I was growing up in India, there was a rule of thumb we followed which said that anything made in India should sell for 10 times the amount in the West and vice-versa. Looks like that rule still applies!
I’m still somewhat skeptical, but hey, it’s coming. If not tomorrow, then soon.
The point is this: every assumption we have about price limits and barriers needs to be challenged. If we don’t challenge them, Chindia will.
Susan Solomon: “Global Warming is Irreversible”
Now what?
Our carbon drain is clogged, and we’re going to drown in our own bathtub.
Here’s the bad news:
“People have imagined that if we stopped emitting carbon dioxide that the climate would go back to normal in 100 years or 200 years. What we’re showing here is that’s not right. It’s essentially an irreversible change that will last for more than a thousand years,” says Susan Solomon on NPR
Are you ready for long droughts and rising seas? While some environmentalists are worried about the extinction of polar bears and emperor penguins, or the dying oceans, I’m thinking about human extinction. As usual, the poor will be hit the hardest.
Poor Al Gore keeps trying to wake us up:
This is a national security issue which makes Al-Qaeda look like the Peanuts.
Meanwhile, the Republicans, led by Rush Limbaugh and Ann Coulter are still on their “global warming is a hoax” bandwagon.
Here Comes the Tech Greenwave: Asus’ Bamboo PC
The Asus Bamboo PC
Asus is advertising it, even linking to Amazon, where it seems like they’re not quite ready for it.
My cynical side sees this is the latest in the greenwashing movement in the high-tech industry. If they’re serious, however, I applaud them.
Here’s how ASUS puts it:
ASUS has created a strategy dubbed the “4 Green Home Runs” to deliver greener products for the consumer. The “Green Home Runs” are Green Design, Green Manufacturing, Green Procurement and Green Service and Marketing.
OK, let’s do it – a green value-chain! I just hope we don’t learn later that they’re clearing Giant Panda habitat to make PC covers.
Geek info: ASUS U6V-V1-Bamboo 12.1-Inch Laptop (2.53 GHz Intel T9400 Processor, 4 GB RAM, 320 GB Hard Drive, Nvidia 9300M GS Graphics, Vista Business)
BTW, Bamboo is pretty nifty and is definitely one of those “sustainable products for our future.”
The Two Sides of Google
Even as Jeff Jarvis‘ What Would Google Do?
Michael Arrington has posted a thread from former-Google employees talking about why they left. Sure, disgruntled employees are not always fair and balanced, but it’s interesting to learn that Google does have issues with management, bureaucracy, low pay, poor mentoring, and all the other foibles of corporate stupidity.
So what will Google do about it? Let’s watch.
War as a Catalyst for Innovation
One of the spin-offs from war is technology which leads to new products in the private sector. This is not a new phenomenon, simply the way it is.
For example, “a scientific method that has been used to track the source of illegal drugs, explosives, counterfeit bills and biological warfare agents may have some new uses: detecting rapidly growing cancers and studying obesity and eating disorders.” See story >>
But this story stopped me in my tracks.
The future of war is R2RC – Robot to Robot Combat.
Are you ready for this?
The result? War becomes even more abstracted, more marketable, and more tempting.
What’s Ginx?
Pierre “eBay” Omidyar’s new startup.
“Ginx is a Twitter client that aims to provide Twitter users with a rich experience for sharing and discussing links. Ginx was created to enable people to become more actively engaged in the news and topics they care about.”
Read Omidyar’s press release >>
Get well soon, Jobs
It’s a sad day, really. He’s human.
Don’t give Apple another thought, Steve Jobs!
I hope and pray he recovers.
He is, as the BBC says, a national treasure.
The Green Bible: What would Jesus Do to Save the Planet?
“When you drink of clear water, must you foul the rest with your feet?”
– Ezekiel 34:18
Better late than never: The Green Bible
Dis ya version a no King James version.
I wonder if the Pope will read it? And weep?
More info >>
10 Questions (not Predictions) for 2009
1. Will Obama fix the mess?
2. Who will replace Steve Jobs?
3. Will someone fix Yahoo?
4. Will anyone find/catch bin-Laden?
5. How many Bush regulations will be repealed?
6. Will Richard Branson start a Virgin Auto Company?
7. Will Google buy Twitter? Squidoo?
8. Netbooks! The $100 netbook is coming to disrupt the PC market… will it be from Google? or a Nokia?
9. How soon will we see a commercial mortgage collapse?
10. Will real unemployment hit 25%? 30%?
Rebooting America
A similar tune from both Friedman and Krugman at the NYTimes…
Here’s Friedman:
My fellow Americans, we can’t continue in this mode of “Dumb as we wanna be.” We’ve indulged ourselves for too long with tax cuts that we can’t afford, bailouts of auto companies that have become giant wealth-destruction machines, energy prices that do not encourage investment in 21st-century renewable power systems or efficient cars, public schools with no national standards to prevent illiterates from graduating and immigration policies that have our colleges educating the world’s best scientists and engineers and then, when these foreigners graduate, instead of stapling green cards to their diplomas, we order them to go home and start companies to compete against ours.
To top it off, we’ve fallen into a trend of diverting and rewarding the best of our collective I.Q. to people doing financial engineering rather than real engineering. These rocket scientists and engineers were designing complex financial instruments to make money out of money — rather than designing cars, phones, computers, teaching tools, Internet programs and medical equipment that could improve the lives and productivity of millions.
For all these reasons, our present crisis is not just a financial meltdown crying out for a cash injection. We are in much deeper trouble. In fact, we as a country have become General Motors — as a result of our national drift. Look in the mirror: G.M. is us.
and Krugman:
So what are the lessons for the Obama team?
First, the administration of the economic recovery plan has to be squeaky clean. Purely economic considerations might suggest cutting a few corners in the interest of getting stimulus moving quickly, but the politics of the situation dictates great care in how money is spent. And enforcement is crucial: inspectors general have to be strong and independent, and whistle-blowers have to be rewarded, not punished as they were in the Bush years.
Second, the plan has to be really, truly pork-free. Vice President-elect Joseph Biden recently promised that the plan “will not become a Christmas tree”; the new administration needs to deliver on that promise.
Finally, the Obama administration and Democrats in general need to do everything they can to build an F.D.R.-like bond with the public. Never mind Mr. Obama’s current high standing in the polls based on public hopes that he’ll succeed. He needs a solid base of support that will remain even when things aren’t going well.
Go Barack, Barack!
Neuro-Selling: Mind Control in the Grocery Store?
The science of shopping?
The article should’ve been called mind control in your local supermarket.
I agree with this: “despite all the new technology, simply talking to consumers remains one of the most effective ways to improve the ‘customer experience’.”
Too bad we can’t spend the same kind of money on research figuring out the best way to teach Johnny how to read, write and do arithmetic…
Here’s “Mind Control” from Stephen Marley:
John Seely Brown: “I am what I create”
I just posted this on YouTube for JSB:
A.G. Lafley on Innovation
Mark Anderson: 10 Technology Predictions for 2009
1.) It will be a big year for applications that can play on big screens.
2.) The big news in the mobile world will be smart phone applications.
3.) The blush is off the China rose.
4.) Flash-based computing will really take off.
5.) Wall computing gets traction.
6.) Carry-along computers will be hot.
7.) LTE (Long Term Evolution) will be the preferred technology for 4G.
8.) The less developed world will finally see widespread availability of broadband.
9.) Voice recognition will finally work right.
10.) The Internet Assistant will be born.
Don’t ask me, I’m simply reporting what Mark Anderson’s saying.
The one I’m certain about is the “carry-along” computer. I want real laptop computing in the size of a Penguin paperback. Are you listening, Apple?
Warren Buffet to Auto CEOs: Put Your Own Money in the Game
I wonder if Obama will get the fat-cats to put their own hides on the line…
More Dying Sounds from Newspapers
Beyond HR: Where Does Talent have the Biggest Impact?
Very interesting:
The book: Beyond HR: The New Science of Human Capital
Maybe we need to think about good old Pareto: What 20% of talent delivers 80% of the profits?
In my experience, the real problem with most companies is that HR is not viewed as a strategic function. And their most valuable assets are anything but…
Online Advertising in a Recession
The Economist:
“online advertising will continue to expand in the recession—just not as quickly as previously expected…”
Online advertising is 100% accountable, period. And what’s more, campaigns can be optimized in real-time.
That said, there are ways to escape the tyranny of search. All it takes is ecosystem intelligence.
How to Think Inside the Box
Accenture: How To Create A Culture Of High Performance
Accenture is advertising How To Create A Culture Of High Performance.
I agree with them that “the central attribute of a successful leader is the ability to change the way people think.”
But I completely disagree when they say that “Successful leaders get everyone to share the same mindsets.”
I think the opposite is true: successful leaders bring together diverse points of view to challenge each other and present different alternatives, thus helping the leader make informed, effective decisions.
What Accenture is calling “mindsets” is really groupthink. Groupthink is a recipe for disaster, not high performance.
In the course of a two-year investigation, Accenture determined five “mindsets” which matter most in improving business performance:
Mindset 1: Maintain the Right Balance Between Market-Making and Disciplined Execution by Avoiding False Trade-offs and Committing to a Dual Focus on Present and Future.
Mindset 2: Identify and Multiply Talent by Investing a Disproportionate Amount of Time in Recruiting and Developing People.
Mindset 3: Use A Selective Scorecard to Measure Business Performance By Relying on a Simple, Memorable Way of Measuring Success and Using Every Occasion to Share Success Stories Throughout the Organization.
Mindset 4: Recognize Technology as a Strategic Asset by Investing in Technologies that Demonstrably Lead to Better Business Performance.
Mindset 5: Emphasize Continuous Renewal by Ensuring the Organization Understands What to Preserve and What to Jettison.
Seth Godin teaches the New York Times How to Compete
In my line work (consulting) I run into all kinds of executive mindsets. In the publishing world, however, these mindsets tend to be rather stodgy at best, reptilian at worst.
Publishers don’t understand the web. And Seth Godin takes the New York Times to task, pointing out so many obvious misses and near-misses, that you have to ask why. Why don’t publishers get it? Why do they insist on playing it safe, even as their ship sinks below them?
Godin’s answer is right on target: “organizations are run by people who want to protect the old business, not develop the new one.”
This is what VG talks about as well.
In just about any large company, the people running the show are great at yesterday’s business, not tomorrow’s.
Please read Godin’s post >>
More Obama Lessons for Business
Bill George (yes, Medtronic’s Bill George) gives us a few more lessons learned from the Obama victory:
• Obama created a grassroots movement by building an ever-expanding organization of empowered leaders, who in turn engaged people from their social networks like Facebook.
• The entire organization was aligned around a single goal—electing Obama as President—and operated with common values (“Offer messages of hope, don’t denigrate our opponents, refuse to make deals”).
• Campaign leaders subordinated their egos and personal ambitions to the greater goal. Those who deviated quickly exited.
• Obama set a clear, consistent tone from the top (“No Drama Obama”), and never wavered, even when things weren’t going well.
• Obama’s greater mission transcended internal goals, such as fund-raising, endorsements, and campaign events, but each of these areas had goals tied to the greater mission.
• The campaign team used the most modern Internet tools to communicate, motivate, and inspire people and to guide their actions. Each day, 5 million people received personal messages from campaign headquarters or even Obama himself. This organization collaborated across a wide range of geographies and campaign functions, all tightly integrated nationally and executed locally.
Finally, just in case you missed the other business lessons, here you go >>
Shoshana Zuboff: Obama’s Victory is Capitalism 2.0
Writes Zuboff in BusinessWeek:
“This column is dedicated to the top managers of American business whose policies and practices helped ensure Barack Obama’s victory. The mandate for change that sounded across this country is not limited to our new President and Congress. That bell also tolls for you. Obama’s triumph was ignited in part by your failure to understand and respect your own consumers, customers, employees, and end users. The despair that fueled America’s yearning for change and hope grew to maturity in your garden.”
Years ago I remember reading Zuboff’s In the Age of the Smart Machine and thinking that no one in corporate management really wants real transparency… and that the information value-chain she described was doomed to failure.
Luckily, I was wrong. Now Obama will bring process transparency to government and business.
Asks Zuboff:
“…can we invent a business model in which advocacy, support, authenticity, trust, relationship, and profit are linked?”
“Yes, we must,” she concludes.
Read the article >>
And read her book: The Support Economy: Why Corporations Are Failing Individuals and the Next Episode of Capitalism
>>
Business Lessons Learned from President-Elect Barack Obama
What should the new President’s priorities be? Here are some views from a few CEOs interviewed by BusinessWeek:
It’s a cliche, but big business fears Democratic leaders. Turns out that Democratic presidents are better for the economy than Republicans! Details, details…
Jack Welch has his own take on why Obama succeeded: a clear vision, clean execution, and friends in high places.
A far more insightful piece comes from HBR blogger Umair Haque: Obama’s Seven Lessons for Radical Innovators. I don’t agree with all of his points (Obama did not “minimize strategy,” he minimized tactics!) but I do commend Haque for his insights (see this post, for example, on why Obama is the Google of Politics.)
Bill Taylor has a fun post titled: How Obama Became CEO of the USA — and What It Means for CEOs Everywhere
in which he argues that “being different makes all the difference.”
John Quelch says it’s all about better marketing.
Barbara Kellerman argues that Obama is a superior manager.
Gill Corkindale calls Obama The World’s First 21st Century Leader
For Stew Friedman, it’s authenticity.
My own view is that Obama is a true leader. And what we witnessed was the birth of Politics 2.0.
And in the end, it’s still about results, and to that end, Obama has already taken the first step.
Go Barack!
Scott Anthony: How to be a Disruptive Innovator
Invest a little, learn a lot.
India Joins the Asian Space Race
I’m happy to see the Indians go for the moon, joining their Chinese and Japanese counterparts as they jockey for prestige and bragging rights.
Is it science or technonationalism? Both of the above, but somehow the politics outweighs the science.
Now let’s all compete (or collaborate) to build green energy power generation projects!
Shaping Strategy in a World of Constant Disruption: How to Manage Your Business Ecosystem
In this month’s Harvard Business Review, authors John Hagel III, John Seely Brown and Lang Davison provide a road map for the daunting task of shaping strategy as technology-driven infrastructures constantly change.
The article is called: “Shaping Strategy in a World of Constant Disruption” and you can download it here (thanks Deloitte Consulting!) >>
In my view this is a very timely piece of thinking from my heroes JH3 and JSB (and Lang Davison). I’ll dig into it later this month on ecosystemwatch.com…
Wait, there’s more. Check out the podcast >>
Online Selling: Procter & Gamble Goes Direct to Fight Private Labels?
Don’t look now, but P&G is trying some direct selling online.
From the Financial Times:
Procter & Gamble is testing its ability to use the internet to sell its toothpaste, household cleaners and nappies directly to US households, in a potential long-term strategic challenge to its retail partners.
…The move brings P&G into direct brand competition with its retailers, underlining the extent to which e-commerce is contributing to changes in the way the two sides have traditionally worked with each other.
OK. The site is called theEssentials.com, but so far it looks like they have very little traffic.
Is this how they intend to fight the private label war? I’ll talk about them later this month on ecosystemwatch.com
What Would Peter Drucker Do?
Looks like Rupert Murdoch’s WSJ is thinking along the same lines we are (for a few seconds at least).
They’ve gone an dug up an old article Peter Drucker wrote for them: Planning for Uncertainty.
Here are some of the key questions:
– …traditional planning asks, “What is most likely to happen?” Planning for uncertainty asks, instead, “What has already happened that will create the future?”
– “What do these accomplished facts mean for our business? What opportunities do they create? What threats? What changes do they demand — in the way the business is organized and run, in our goals, in our products, in our services, in our policies? And what changes do they make possible and likely to be advantageous?”
– “What changes in industry and market structure, in basic values (e.g., the emphasis on the environment), and in science and technology have already occurred but have yet to have full impact?”
– “What are the trends in economic and societal structure? And how do they affect our business?”
– “What is this company good at? What does it do well? What strengths, in other words, give it a competitive edge? Applied to what?”
He ends with a serious warning for the bean-counters:
There is, however, one condition: that the business create the resources of knowledge and of people to respond when opportunity knocks. This means developing a separate futures budget.
The 10% or 12% of annual expenditures needed to create and maintain the resources for the future — in research and technology, in market standing and service, in people and their development — must be put into a constant budget maintained in good years and bad. These are investments, even though accountants and tax collectors consider them operating expenses. They enable a business to make its future — and that, in the last analysis, is what planning for uncertainty means.
And don’t forget his advice for retail strategy >>
5 Questions about Strategy and Business Design
Now is a good time to ask yourself these five business design questions (ht to Oliver Wyman):
1. Who is the customer and what do we offer? Which customer segments should we serve, and what is our value proposition for each segment?
2. What is our profit model for each of our offerings?
3. What do we perform in-house and what do we outsource?
4. How do we build in strategic control? Is there a way to create sustainable differentiation?
5. How should we organize ourselves to make it happen? What is the right organizational architecture to execute the business for each segment?
You can download the business blueprint (registration required): level-one flowcharts of how to run a profitable, sustainable, online business.
1) Offer development process
2) Offer creation process
3) Sales process
4) Marketing process
5) Order fulfillment & support process
6) Financial process
7) Licensee certification process
8) Licensee business development process
9) Events process
10) Archival process