September 23, 2009
I am in NYC participating as a delegate in the Global Creative Leadership Summit led by the Louis Blouin Foundation. Attending are 100 fascinating people ranging from Prime Ministers to business leaders.
Over the course of 3 days there are a number of conversations on topics related to improving the world.
Here are some of the interesting tid bits I picked up over the first day. Everything here is a paraphrase rather than a direct quote. And please forgive any inaccuracies.
- We had a value crisis, not a financial crisis. That is, there was a crisis and values
- Cyber weapons and bio weapons are our biggest threat. Bio weapons could lead to a September 11 type catastrophe every month.
- A problem of our neighbors is our problem
- If you get big bonuses when things go well, you should give money back to the company when things go wrong. We need to increase the level of accountability
Michael Chertoff, Former Secretary of Homeland Security
- Barriers to do damage have dropped
- We need to establish accountabilities (e.g., Libya with the Lockerbie bombing or Somalia with piracy)
- Bio terrorism and cyber terrorism are the greatest threats
- Global response needs to be one step at a time to demonstrate positive outcomes. Tackling things that are too big don’t move us forward.
Luis Moreno-Ocampo – Chief Prosecutor, International Criminal Court
- The challenge is how to improve global governance in places where there is no government.
- Another challenge is that we need global agreements that take into consideration local needs
Pasqual Lamy – Director General, World Trade Organization
- Investing in health care will help global trade in the long run. Because if jobs are lost due to trade, at least people have health coverage.
- There is a clash between the international and domestic agenda (e.g., cotton subsidies)
Dr. Dominique Strauss-Kahn – Managing Director, International Monetary Fund
- Peace and economic stability are intertwined. Peace is needed for growth. And growth is needed for peace.
- Expects economic recovery in 1st half of 2010. Growth will resume. But the social crisis (e.g., lost jobs) will last longer.
- 90 million people went back into poverty due to the economic crisis – mostly from Africa.
- Economic instability could lead to wars. And wars lead to economic disaster. 1 year of civil war costs on average 2.5% of GDP
- Avoiding war is the key to economic stability
Prime Minister of Netherlands Jan Peter Balkenende
- Prosperity at any price and soft living contributed to our current situation
- The crisis can be a catalyst for change if we change the culture. Self interests hurt the system.
- We must end the “get rich quick” theory of life
Stanley Bergman, Chairman of the Board and CEO, Henry Schein
- 13,000 employees participate are involved in an intrapreneurship culture.
- Philanthropy is a big part of the company’s philosophy
John Copelyn, CEO, Hosken Consolidated Investments
- To create innovation, you need a long term vision and a vision beyond your own wallet
Mark Angelson, Chairman, MidOcean Partners
- This was not a depression. It was a deleveraging
- We need to move to more preventative measures such as paying for wellness rather than sickness
- The growth areas are: 1) Healthcare, 2) Clean Tech, 3) Rebuilding infrastructure
Ali Velshi, Chief Business Correspondent, CNN
- He described the cause of the recession to a group of kids as follows… It was caused by consuming less than was made and spending more than was earned.
Lex Fenwick, CEO, Bloomberg Ventures
- New employment will come from new businesses rather than existing businesses
- Employees are afraid to bring new ideas. This stifles innovation.
- He added that “private education” is another growth opportunity area
Ted Turner, CNN Founder and philanthropist
- I read the Economist (and it sounds like that is his primary source of news)
- I drive a Prius
- If I could run CNN and the Cartoon Network at same time, Congress can deal with health care and climate change at same time
Other distinguished guests included:
- H.E. Shaukat Aziz, Former Prime Minister of Pakistan
- President Michelle Bachelet of Chile
For other quotes, go to the GCLS Twitter feed
To learn more about the event, go to the Global Creative Leadership Summit website.
My session is Friday morning…
March 10, 2009
In a previous blog entry on the innovation bell curve, I presented a bimodal distribution curve rather than a bell curve. I did this because I wanted to clearly show the contrast between the existing model and the emerging model. I also did this because I am “graphically challenged” and I could not find a way of illustrating the movements in one chart. However, the changes are more subtle than a total shift to a bimodal curve. After working with a talented graphic designer for the past week, we finally have a more accurate depiction of the movement taking place.
You see the 3 main movements:
- Value brands are increasing their quality (including ease of use) and are moving into the Mid-Market area
- Consumers are increasingly buying value brands (e.g., store brands) as a way of saving money
- Premium brands are reducing prices while also offering different, lower-cost products.
The result is pressure on the Mid-Market brands that is squeezing many of these companies out of business.
Be sure to read all of the articles on the innovation bell curve to get a better understanding of the shifting dynamics.
February 19, 2009
I spend most of my days thinking about the “innovation bell curve.” The concept is simple, yet profound.
Budget brands will continue to prosper as mid-market consumers move left to save money.
Although premium brands may suffer slightly, there will still be strong demand for high-end products and services.
It is the middle of the bell curve, the “mid-market brands” that are getting squished as consumers move toward greater value and premium brands reposition themselves (a bit more) toward the mid-market customer.
I’ve been thinking about this model as it relates to my career – giving speeches about innovation
On the right-hand side of this model are the “celebrity” speakers. These individuals include Harvard Business School Professors (e.g., Clayton Christensen), former CEOs of big companies (e.g., Jack Welch), and major best-selling authors (e.g., Seth Godin). These individuals charge MUCH more than I do. But they are also a draw. For large events, having one of the speakers on the platform will get butts in seats.
On the left-hand side of this model are the “vendor” speakers. These individuals work for large companies who view speaking as great marketing. These speakers are often not only free, sometimes they even pay sponsorship dollars to be on the platform. VPs of Innovation for large consulting firms or presidents of innovation software vendors fall into this category. They have something to sell the audience.
Where does this leave me? It certainly leaves me rethinking my business model. Then again, I am always rethinking my business model.
I am continuing to put more energy into books and products like Innovation Personality Poker®. These move me towards the left-hand side of the model. You can take me home for a fraction of the cost of one of my speeches.
I am also staying focused on the corporate market (rather than large conferences) because there is still great demand here. With group sizes of 50 – 300, celebrity speakers are prohibitively expensive. And given the small event size, the marketing opportunity is not as great for vendor speakers. My business continues to boom in this area.
Finally, I am shooting the pilot for my TV show in April. If all goes well, I may be able to re-position myself in the right-hand side of the chart – a celebrity speaker. But of course, time will tell.
Where are you positioned? Who is squishing you out of business? How can you reposition yourself?
P.S. In a previous blog entry, when discussing the innovation bell curve, I talked about the wisdom of Mr. Miyagi in the Karate Kid. He talks about those in the middle getting “squished like grape.” I thought you might like to see the YouTube video…
February 10, 2009
It was just announced that Starbucks is now selling a coffee and breakfast for under $4. It’s true. According to CNN You can get a 12-ounce coffee with a breakfast sandwich or roll or a 12-ounce latte with either oatmeal or a coffee cake.
According to CNN, “the move may be…targeted to drawing back business lost to more cost efficient retailers like McDonald’s and Dunkin’ Donuts.”
This is another examples of the “squeeze” of the players in the middle of the bell curve. If you are not familiar with it, read my articles on the bell curve of innovation. Dunkin’ Donuts (DD) is a great example of a coffee shop budget brand. As they expanded their offerings, they started to compete (at least in terms of coffee quality) with Starbucks. Although some think of Starbucks as a premium coffee, most real coffee snobs (and I know quite a few of them) turn their noses up at Starbucks. It has always been in the middle of the bell curve. In the past, the middle of the bell curve was a great place to be. No longer.
Last week I did a speech for the beverage division of a large food company. This division is largely comprised of “make at home” coffee products, including instant coffee. Business is booming. They now have easy to use coffee, espresso, and latte machines. These products represent an emerging “budget” entry. For a relatively low cost, these machines produce a high quality, single hot drink with little effort. There are no messy powders (uses simple capsules), no grinding, no cleanup. Accessibility at its best.
I realize that Starbucks is more than coffee, it is an experience. Unfortunately, today, people are less likely to pay for these experiences if other alternatives exist.
Are your products/services getting “squished?” Can you make them more affordable? More accessible? This may be the key to survival in this market.
December 22, 2008
In the Karate Kid, Mr. Miyagi once told his student Daniel, “Walk on road. Walk right side, safe. Walk left side, safe. Walk middle, sooner or later [makes squish gesture] get the squish, just like grape.”
to listen to Miyagi, press play
This fits nicely with my perspectives on innovating in tough times. In my previous blog entries on how to make your products/services more affordable and accessible, I discuss why the middle of the bell curve is a dangerous place to be in these economic times.
I was just speaking with a client of mine and we had the same conversation.
His Fortune 50 company offers a commodity item, but is considered to be a premium brand. They are never first to cut the price of their items (and they rarely cut prices), but they typically lead the charge in price increases. Their brand is associated with high quality and high performance. They are often focused on the right-hand side of the bell curve. They have been doing exceptionally well.
Their competitors fall into two categories.
Some are white label, low price producers. Budget brands. They provide a lower quality product that appeals to those with the least to spend. These companies are in the left-hand side of the bell curve. They seem to be doing particularly well now that people are looking for bargains.
Other competitors are in the middle of the bell curve. They provide good product at a good price. How are they going? These companies are being “squished” by the low cost providers on one side and the premium brands on the other. They are struggling. My client wonders how many of these companies will survive.
The middle of the bell curve is a dangerous place to be these days. If you aren’t careful, you might just get squished like a grape.
December 19, 2008
2008 saw the $4 gallon of gasoline and the start of the current recession. Although car sales are down from last year, millions of vehicles were still sold.
What car do you think was most popular? A hybrid? A fuel efficient car? An ultra-inexpensive car? A reliable import?
Interestingly, the two most popular cars were the Ford F150 (16 MPG) and Chevy Silverado (17MPG) pickup trucks with combined sales of nearly 1 million vehicles.
Why would people buy gas guzzlers when fuel prices are high and economic woes are running rampant?
According to Jeff Bartlett, deputy online editor of autos for Consumer Reports, when times are tough, “Buyers shift from what they want to what they need.” He continues to say that, “Pickups are a solution to a need” because they can be used for towing, off-roading, and cargo-hauling.
This is a fascinating point.
In a previous blog entry, I discussed how making your products/services more affordable and accessible is one way to beat the recession.
Focusing on what is needed versus what is wanted is another; sell the features that solve specific problems rather than the “nice to haves.” In the chart above, you can view the left part as the “needs” and the right part as “wants.”
This also plays nicely into my research on pains versus gains. The premise is that people take massive risks to eliminate their pains/losses yet will play it safe when it comes to increasing their gains. When times are tough, you must solve the pain first before the “extras” will be attractive.
What problem does your product solve? Can you provide a no-frills version of an existing product/service that focuses purely on eliminating a pain? In doing so, can you make it less expensive?
November 20, 2008
Clayton Christensen, in his book The Innovator’s Dilemma, discusses how disruptive technologies will kill incumbent technologies. Basically it is about how the crappy and cheap will eventually take over the sophisticated and expensive.
The well-worn example is in the computing world. The PC (which until recently cost thousands of dollars) killed the dominance of the mini-computer and mainframe (which then cost tens of thousands of dollars). The new $300 netbooks may eventually become the dominant computing platform. Or maybe a $100 mobile phones will eventually replace computers altogether.
The dilemma arises because most companies focus their innovation energies on building faster and more sophisticated technologies: becoming bigger and better. That is, they move towards the right of the graphic above. Unfortunately, the newer, cheaper developments – even if they are lower quality (in the beginning) and don’t perform as well – will ultimately be the winners. Or in other words, the left part of the graphic above.
The US Economy Dilemma
October 24, 2008
Earlier this week, I was on “Riches in Niches” radio with Susan Friedmann. We discussed innovation and business success in today’s economy. The 30 minute interview (split into two parts) covers practical ways to survive this volatile marketplace.
Or, you can visit Susan’s page to access streaming audio or to listen to other interviews.
The basis of our interview was my article on “7 Ways Innovation Can Recession-Proof a Business.”
October 20, 2008
Here’s an excerpt from a magazine I have. The title is: A Gloomy Feeling
Wall Street was baffled. The market’s 18-month slide had brutally bent the Dow-Jones graph, ending with one of the worst one-day drops. The dollar loss on paper was actually three times greater than that of the ’29 crash.
The market’s prolonged drop has reflected a growing conviction that the Administration has not coped with a troubled economy. Recession and increased unemployment has left people with less to spend on everything.
The Dow-Jones average has decreased 36% in stock values. The averages, like the Dow-Jones, tell only part of the story. Since they are based on the prices of the blue chip, they hardly hint at the depth of the crash.
This is a far cry from the from the bull market bedlam of just a few years ago.
What is interesting about this article is not its content, but rather the date of its publication. This is from a Life magazine dated June 5, 1970. At that time, stocks plummeted 36% from 985 to 631.
Markets go in cycles. Since 1970, we have had several other economic downturns. Of course, knowing this does not reduce the pain that so many are feeling now.
Economies are, in many respects, self-fulfilling prophecies. When people feel the economy is bad, they stop spending. They start to pull their money out of the stock market. As a result, company profits decrease. Companies then lay off employees, who in turn start spending even less. And the downward cycle continues.
Unfortunately, with things are bad as they are, people become quite pessimistic.
In troubled times, it is useful therefore to reflect on a study done by Sonja Lyubomirsky, a psychologist at U Cal Riverside. She studied the relationship between happiness and success and observed that, “Happy people were not necessarily happier after their success than they were before, but they tended to be happier than others who were less successful.” She concluded that, “Success is related to happiness – but as a consequence, not a cause.”
In other words, happy people attract success.
I am reminded of an old joke. What is the difference between a pessimist, an optimist, and an entrepreneur? The pessimist sees the glass as half empty. The optimist sees it as half full. The entrepreneur sees the glass as completely full; we just need to get rid of the excess glass. As an aside, a scientist would also say that the glass is completely full; it is half filled with water and half filled with air.
What do people value? It’s not the glass, it’s the water. The size of the glass is irrelevant. In fact, too much glass can be a detriment (as evidenced by the photo left).
Interestingly, I never thought of the stock market as an investment. I always viewed it as a gamble; a casino with (hopefully) better odds than Vegas. I can’t predict which products/services will be successful (neither can anyone else). And I have little say over what companies do with the money I invest.
My best investments are those that impact me directly – investments in my business, my education, my relationships, and my health. Those always pay dividends.
Now is the time to take control. Create your own self-fulfilling prophecy. Stay positive. Get rid of the “excess glass” in your life or business. And make the safest investment you can: invest in yourself.
October 7, 2008
I just got back from over two weeks on the road. I was in and out of five airports. As you go through security, the routine is always the same…
- Take off your shoes
- Take out your liquids
- Take out your computer
Why are we put through these security gymnastics?
On December 22. 2001, Richard Reid was caught with plastic explosives in the soles of his shoes. That’s why we now have to walk barefoot through airports.
On August 9, 2006, two dozen people were arrested in the UK because they were plotting to bring liquid explosives on planes leaving Heathrow airport. Now we have to travel with miniature shampoos, shave creams and toothpastes.
Computers are scanned because, well, that’s the obvious place to look. I guess.
What do these have in common? For the most part, the security scans we now endure were due to cleverness on the part of terrorists. Rarely are we subjected to scans that are due to the cleverness of government agencies.
Are there ways to easily smuggle weapons on planes in spite of our increased security? Of course. Nearly every time I pass through a metal detector, I have metal collar stays in the dress shirt I am wearing. Although the detector never beeps, these could easily have been turned into razor sharp weapons. Does this mean that next week I will have to travel topless through the airport? Good thing I have been working out.
Give me 15 minutes and I could rattle off dozens of other, more sinister ways to smuggle weapons on board.
This is a reactionary approach to business.
The current financial situation also demonstrates a reactionary approach to business. Enron has a meltdown. What should we do? Implement ridiculously stringent rules like the Sarbanes-Oxley act. Our financial institutions start to falter. OK, let’s spend $700 billion of the tax payers’ money to sort out the mess.
I’m not saying that these rules and legislation are good or bad (or ugly). That’s a conversation for another time. But I do find it ironic that the “big ideas” always seem to come in response to some tragedy. They are rarely proactive.
What does this have to do with innovation? Everything.
Most organizations use creativity to help them determine what to do next. They brainstorm ideas, select the best solutions, and then implement the most promising ones. Creativity is used to determine what your company or organization will do next.
But in these rapidly changing times, creativity can be equally (if not more) valuable for determining what the marketplace and your competitors will do next. Or, if you are the government, it may help determine what your banks and terrorists will do next.
When is the last time you had a brainstorming session where you asked the following questions?
- What are we most afraid our competition will do to us?
- Who is not a competitor now, but might be in the future?
- What shift might happen in the buying habits of our customers that may make our product/service less appealing?
- How can the sagging economy help our business?
- What emerging products or services may make our business irrelevant?
The list of outside-in questions can be endless – and valuable.
In your next brainstorming session, try the following:
- Brainstorm your own list of questions, building on mine above.
- Determine which ones you want to tackle first.
- Brainstorm, using a variety of creativity techniques, to identify “possible” outcomes.
- For those which are deemed plausible, brainstorm a list of “triggers” for each. These are market conditions that tell you that the given scenario is moving from “possible” to “plausible.”
- Set up a corporate “radar” system to help monitor external conditions. Have everything in place such that you can implement critical ideas when market conditions dictate.
This approach blends creativity with scenario-based planning . It helps you move from reactive solutions to proactive solutions. And in today’s volatile world, this might just be the key to your long-term survival.
P.S. If you want to see where airport security is heading, visit Ryanair’s website. For adults only.