Monday, July 28, 2014

Don't commoditize your brand

A brand is the external reflection of a company’s inside culture and core values. In order for a brand to stay relevant, be different and unique, it must reinvent itself continuously. If a company’s products or services don’t change the game regularly, they suddenly become a commodity, as unique and innovative they could have been at some point. EVERY product and service becomes sooner than later a commodity. What’s critical is for the company to keep its brand relevant by innovating and bringing to life new game-changing products or services.

Many companies struggle here, however, with development portfolios that are anemic. Take a look at the breakdown of projects in the typical firm’s development pipeline today versus the 1990s. Today’s portfolio features a far higher proportion of improvements and modifications, but new-to-the-market projects have dropped in half. This only reinforces the commoditization of products.

On the path of commoditization…

In today’s world, you either choose to commoditize, or to innovate.

Think of Apple. In its early years, Apple represented the anti-system, anti-PC world. If you were mainstream, you were a PC user. If you were different (Apple’s “think different”) or artsy, you were a Mac user. After Steve Jobs came back to Apple and made what Apple is today, suddenly the brand became mainstream, to the point of alienating early Mac adopters. Apple products went from being in a niche to being adopted by the masses. Although they changed the industry (and literally our lives) introducing i-Pod, i-Phone, i-Pad, the Apple products have been become mainstream and fully commoditized. 
Samsung introduced their smart watch before Apple, although the i-watch had been the talk for years. Google introduced the smart glasses first...
Apple went from being the industry’s #1 brand and disrupter to being second-to-market trying to catch up with the competition.

As products and services are easily commoditized, the unique differentiator comes with the brand experience a company creates for its customers or users.

To stay with the Apple example, Apple still has some edge there, although competitors are catching up.

It is much harder to plagiarize a unique brand experience than it is to plagiarize a product or a service.

It is critical for a company to adopt a mindset of innovation and seize every opportunity to make its brand different, beyond the products. The brand experience is a vital differentiator. 
Now, more and more experience strategists seem to be focused on customer retention, and sometimes acquisition. With more and more companies employing the exact same approach to customer journey work, the concern is that all experience begins to look the same. And this again commoditizes the product.

It is easy to create a brand and a “promise”. What is hard to achieve is to deliver on the brand promise over and over again. As innovative as the brand promise may be at some point, other brands will follow and suddenly your promise will become commoditized, again.

McDonaldization of Starbucks…

When Howard Schultz left Starbucks in 2000, his successor Jim Donald decided to automate and time the Starbucks service, from time required to grind coffee, to mix ingredients, to minimal interaction with customers. In other word, Jim Donald mcdonaldized Starbucks. When Schultz returned as CEO in 2008 appalled by the dilution of the Starbucks experience he had brought to life, he decided to revive the brand promise. He closed all stores worldwide to (re)train managers and employees on the true customer experience, leaving on the counter $7M that day. He brought the brand promise back to its origin, and has continued to deliver on the promise ever since.

Signs that you are on the path of commoditization... and how you must remedy...

You must find a way to be different. Sure, you can position your brand differently but that’s not enough. If you promise something different and then give everyone the same experience they know, chances are you’ll compete on price only. If you don’t do something different, you’re merely a commodity.

1. DON’T use the exact same metrics as everyone else in your industry. If everyone measures the exact same thing, eventually everyone begins changing their product in ways that do the exact same thing.
DO set metrics based on your brand and business objectives (in short, your strategy) and what the customer wantsCreate metrics that challenge you to continuously improve and innovate, in a way that is uniquely yours. Compare your company to your ideal, not industry standards.

2. DON’T focus on the exact same customer touch points as your competitors. If you are focused on the exact same moments of truth that your competitors are (and you measure the same thing), those moments will begin to look very, very similar.
DO focus on genuine original key touch points. Immerse yourself in your customers’ natural environment and lives to REALLY understand what they want. Uncovering the unmet needs is what will differentiate you from the pack.

3. DON’T have the exact same target audience as everyone else in your industry. You know your company is behaving like a flock of sheep when you have the same touch points, same metrics… and you are going after the same audience as your competitors. How can you be the black sheep to drive the flock in another direction?
DO look at what people want and less at who people are. The same people want different things from experiences depending upon the situation they find themselves in. Know the situations; know what they want in those situations and target those things.

4. DON’T settle for being an er-brand. Your tactics are focused on being better at the same things that your competitors do. Red flags go up whenever I hear a pitch that explains how a new offering is just like another but is small-er, bigg-er, thinn-er, light-er, fast-er, sexi-er, whatev-er. Hearing “we’re just like X brand but we’re…” sets off warning signals about breakthrough ability and long-term viability. An -er position is a dangerous one to adopt. It relegates your brand to subordinate status compared to the brand used as your reference point – and it tells customers that your brand possesses only comparative value, rather than having its own inherent value. It also puts your brand under constant pressure to introduce new products on Brand X’s time line, because now your brand value is tied to Brand X’s product. You have little basis for achieving meaningful and sustained differentiation.
DO find a unique brand personality that translates into a unique customer experience, enabling your brand to rise above competitive comparison. Using brand personality in this way is not simply about developing creative communications; it’s about infusing every aspect of your operations with your unique character.

Take away…

Customer experience is a great strategic framework for getting people to want to spend time with your brand. It is the right concept, but don’t settle for sameness or for an –er brand. Be original and you won’t become a commodity. 

Monday, July 21, 2014

Indiana on all fronts of Innovation

Last year's acquisition of Indianapolis' ExactTarget by Salesforce for $2.5 billion helped Indiana get national attention, credibility and capital as becoming a center for innovation.

From the stock options gains generated by the acquisition, "many current and former ExactTarget staffers have turned into investors, employees and advisors for a bevy of other local startups, lending experience and wealth to help the next generation of tech successes grow", says Mike Langellier, CEO of TechPoint. The Indy tech scene now draws interest from investors and talent outside the state.

To support this effort, TechPoint, Indiana's technology growth initiative, unveiled in November 2013 the pilot of a first-of-its kind talent recruiting program called IndyX aimed at attracting and retaining skilled individuals by connecting them to the Indianapolis community and thousands of open jobs in tech companies.

The summer coolness in the Midwest does not affect the heat on innovation. Indianapolis has been surfing on the wave of innovation, with many initiatives: Mira Awards, the Innovation Showcase, the Day of Innovation conference...

On May 4, the Mira Awards recognized among others Interactive Intelligence as the Tech Company of the Year, and DoubleMap as the Tech Startup of the Year. The number of applications (record of 170) was an increase of 40% from last year.

On July 10, the Innovation Showcase attracted 850 attendees including entrepreneurs, investors and community supporters. Investor eduction sessions, pitches and exhibits by Midwest startups, panel discussions were the highlight of the event. The winner, Cearna Aesthetics, received the largest ever prize which included $128,000 in investment and professional services. 

On August 28, Centric, an Indianapolis innovation networking group, will host the Day of Innovation conference with local and national innovation thought leaders, with the mission to elevate Indianapolis as a center of innovation. It will also recognize innovative Hoosier companies with the Indiana Innovation Awards.

On January 22, Lt. Governor Sue Ellspermann announced that the Indiana Small Business Development Center (ISBDC) was partnering with Launch Fishers to establish the Launch Indiana SBDC (“Launch Indiana”). Launch Indiana connects Indiana’s innovation-driven entrepreneurs with mentorship, education, and assistance from successful entrepreneurs. It serves entrepreneurs statewide with a sharp focus on high potential companies known as, what Launch Fishers founder Wechsler calls, “Innovation Driven Enterprises.”

Indiana may never be the new Silicon Valley, but it can become a major player on the national innovation scene. The more we educate, inspire, motivate and support local entrepreneurs, the more ExactTargets there will be...

Monday, July 14, 2014

(My) innovation lessons from the World Cup...

Goooaaaaaal!!!!!!! The 2014 fútbol World Cup was a success in many ways. Highest goal average per game, German striker Klose beating the record of goals scored over several world cups, highest average number of passes per game, record score in a semi-final (7-1)...

However, like in any competitive environment, successes come along with failures and tragedies. 

What can you take away from the 2014 World Cup and apply to your business to bolster your innovation efforts?

  • Your leader on the field must take responsibility and be accountable. Thiago Silva from Brazil - allegedly the world’s best defender before the world cup - failed miserably. From refusing to be part of the penalty shootout in the quarter-final game against Chile because he could not handle the pressure, to receiving a second yellow card on a stupid foul that kept him out of the tragic and pathetic semi-final match against Germany, Silva showed that if you don’t take your responsibilities and live up to your promises as a leader, repercussions on the team can be disastrous.
  • You cannot just hope for the best and wait for (good) things to happen. Many allegedly inferior teams played too defensively thinking they couldn’t challenge their opponent during regular time, waiting for the penalty shootouts to (hopefully) qualify. Even The Netherlands, in their semi-final match against Argentina, played very passively while they had been a striking force in the previous games. Penalty shootouts are always a lottery. Take your destiny in your hands and make it happen, don’t wait for the lottery.
  • Be disciplined yet opportunistic. Germany’s DNA is about organization, discipline, yet efficiency and opportunism. Against France, Germany did not have many scoring opportunities, but they seized one opening to score the unique goal of the game. Against Brazil, they seized all opportunities to score 4 goals in 6 minutes to kill the game after 20 minutes only. The mannschaft showed that discipline, strong organization, with the ability to be opportunistic when needed, helps you win.
  • You have to rejuvenate a talented and winning team and disrupt the starters to challenge the establishment. For 4-5 years, Spain dominated the world of soccer. The golden generation was unchallenged from the 2008 European Championship, through the 2010 World Cup to the 2012 European Championship. The error in 2014 was to rely (again) too much on their (aging) golden generation and not bring new talents to the team.
  • You must evolve as the game evolves. Brazil has been the poster child of soccer for decades, the winning 1970 team being the ultimate reference what what soccer should (idealistically) be. The problem is that soccer has been Europeanized in the last decade, becoming more tactical, disciplined, organized rather than relying purely on raw individual talent with a few game-changing players. Brazil failed in that category, wanting to play the same way they’ve always had.
  • If you want to beat the best, you must compete with the best every single day. The US team had a fantastic run, their players defying the odds in the “group of death”, playing with their hearts out to qualify ahead of Portugal and Ghana. However, their run was cut short against Germany in the last group game and eventually against Belgium in the round of 16. What the American players lacked? The highest level of competition day after day in the top European leagues. The MLS is very far in terms of level from the top leagues on the other side on the pond. Most US players play for MLS teams, missing the opportunity to challenge the world’s best players in Europe day after day. This is no mistake why the best African, Central/South American players play in Europe. Why the US players wouldn’t?
  • The team always surpasses individual talents. Ronaldo, Messi, Neymar, Silva, Hazard?  Individuals talents may make your team win one or two games occasionally, but over a month-long competition, individual talents cannot challenge organized, disciplined, unified teams. Portugal? Columbia? Belgium?... or Germany?
  • If you want to win, you have to be aggressive. Conservatism means death (or in our case - elimination). If you look at the US team’s journey in this World Cup, they had their best results by playing aggressive (Portugal and Ghana). They rumbled when they played more conservative (Germany and Belgium). Why? The US team did not have anything to lose in the first two games, they were the underdogs. Suddenly after two games, they were playing for the group’s first place vs. Germany, and a qualification to the quarter-finals vs. Belgium. When there was more at stake, they played conservative. Big mistake!
  • Taking risks is rewarding. Luis Van Gaal made a very bold move when he took out his starter goalkeeper in the last minutes of the extra-time period of the Dutch team’s game vs. Costa Rica to replace him by a substitute goalie. The reason? The substitute goalie was allegedly better at stopping penalty kicks. Very risky, but it paid off. For several reasons, Van Gaal could not do it vs. Argentina in the semi-final game, and The Netherlands lost.
  • Innovative products can be the simplest and come from the most unexpected places. FIFA introduced the vanishing spray paint in this year’s World Cup to solve one of the most annoying bad habits of soccer players that would disturb any game. Before the spray paint, the kicker would move the ball a few yards to get closer to the cage, the opposing players forming the “wall” would move closer to the kicker, both sides cheating the 9-meter distance rule. A simple product as the spray paint fixed the 3-decade lingering issue. Cherry on the cake: it came from the oddest place, the “soccer” countries (USA and Canada), not the pure “football” countries. Blasphemy!
  • “This is the way we’ve always done it” sucks! FIFA finally agreed to use the goal-line technology this year, to avoid many scandals from past tournaments when a referee would mistakenly validate (or not) a goal. With the video now, you can’t go wrong. Strangely enough, UEFA refuses (for now) to implement the technology for the 2016 European Championship, because this goes “against the pure nature” of the game. Major other sports use this technology, even the very-steeped-in-tradition international tennis association!
  • Cultural transformation is critical in order to survive. After several failures in the 90s, Germany went through a complete cultural transformation in the early 2000s (started with Juergen Klinsmann with his assistant Joachim Low, respectively now head coach of US team and German team). Increased collaboration with between the Bundesliga clubs and the national team, development of the training centers for young talents, more movement, more rapid and technical play on the ground, no “star player” but a cohesion of complementary players (from starters to bench)... They reached at least the semi-finals in the last 4 World Cups, and final won yesterday.

What have YOU learned from the World Cup?

Monday, July 7, 2014

Don’t be afraid of change.

C’est comme ça. Early this year, Monday January 24’s violent attacks by striking cab drivers on Uber cars in Paris — with protesters shattering windows, smashing mirrors and slashing tires — were the perfect illustration of change resistance from an industry which has championed the status quo for decades.
Cab drivers said Uber and apps like it, which allow customers to hitch rides nearly instantly from their smartphones, created unfair competition and undermined the traditional cab-hailing business.
It is the opposite: Uber is merely an enhancement of a taxi service, using mobile technology, paired with a lower pricing strategy, convenience, responsiveness, and customer care, not an unfair competition. If you have ridden in a Parisian cab (it could be applied to New York cabs as well), it is a nightmare (dirty, smelly cards, rude drives who rip you off driving all around the peripherique instead of going straight to your destination, and so on).
Instead of embracing the change that Uber brings as an opportunity to improve their operations model, pricing strategy, and (horrible) customer care, French cab drivers did it the French way: destroy, then discuss and negotiate to maintain the status quo, or higher fees. C’est comme
ça (that’s the way it is), say the French.

Change happens. It doesn't care whether you like it or not. Change doesn't need your permission. Change is the one constant in business. What you decide to do with change is up to you.

Why don’t people like change?

Heidi Grant Halvorson, PhD, says that it's not just that people fear change, though they undoubtedly do. It's also that they genuinely believe (often on an unconscious level) that when you've been doing something a particular way for some time, it must be a good way to do things. And the longer you've been doing it that way, the better it is.

Rosabeth Moss Kanter, in a HBR blog, reveals the 10 most common reasons why people don’t like change, such as:

- Loss of control
- Excess uncertainty
- Dislike of surprises
- Doing something differently creates confusion
- Concerns about competence
- More work

Embrace change

We should not be afraid of change, we should embrace it. For individuals, change is the path to both personal and professional growth, the path to a happier life.
For businesses, change is the drive to more opportunities, to increase in market shares, to the development of new products…

Now, take the time to think… How would your company be different:
-if your staff were inspired about change, rather than paralyzed by it?
-if your leaders could raise performances to meet the oncoming changes, and innovate their way into the future?
-if you knew which trends were impacting your industry today and how to position your thinking favorably for the future?

In today's competitive market place, you need to stay relevant to survive. The Council on Global Competitiveness's March 2005 landmark report stated that "innovation will be the single most important factor in determining America's success through the 21st century (...). The past 50 years we have optimized our organizations for efficiency and quality. But the next 50 years we must optimize ourselves for innovation." Innovation is about changing the game.

In a complex and ever-changing economic environment, innovation is critical for companies to survive. Roland Moreno, the French inventor of the chip on your VISA or MASTERCARD promoted what he called "permanent chaos": a permanent state of mind that employees must have to foster innovation.

Many people think innovation is primarily a R&D function. But innovation should be understood to include the entire value chain: from R&D to engineering, manufacturing, distribution, sales, marketing, and even facility utilization and investment strategy. Only a few innovations will be blockbusters. Some will result in incremental changes, but that doesn't make them any less important.

One of Zappos’ core values is to embrace and drive change. “We are ever evolving. If we want to continue to stay ahead of our competition, we must continually change and keep them guessing. They can copy our images, our shipping, and the overall look of our web site, but they cannot copy our people, our culture, or our service. As long as embracing constant change is a part of our culture, they will not be able to evolve as fast as we can.”

Let be change part of your 2014 goals. The more you welcome change, the more opportunities will arise.

What are you doing to embrace change? How does your company master change?