Create Marketplace Disruption

Adam Hartung’s book Create Marketplace Disruption changed some of my views, and considering that I immediately wanted to read a few ideas to my husband and quote the book during school discussions – it was quite amazing! 

I always thought that marketplace disruption just “happened” because of some rogue invention and businesses need to react on it. The book author shows clearly that the disruptions need to be “setup” within the company, and this internal disruption could lead to the market change.

Adam Hartung writs an interesting blog  promoting “The Phoenix Principle” he advocates in the book.  He is also offering a free e-book The Fall of GM which enticed me to read the book.

My notes from the book:

A typical company goes through business lifecycle, which is described as river:

• Infancy (wellspring)
  Starting of the business, exploration, “finding one customer who will buy the product, and then finding the second,” proving the business idea
• Adolescence (rapids)
  Thriving business, new products and services are introduced, customer value proposition is created, “it is about staying alive by growing faster than everyone else”
• Maturity (flats)
  Growth slowdown, “focus shifts from high growth to greater predictability and the focus on revenue shifts to costs”
• Decline (swamp)
  Limited growth, tools applied to hide low growth (including the concentration on earning per share, acquisitions, and bankruptcy)
• Old age (whirlpool)
  “The company’s product or service is so costly or competitively ineffective that it becomes impossible to maintain a profit”

While in the rapids, companies create their “success formula” (identity, strategies, and tactics), which helps the business to become more efficient. However, business Locks-in on its success formula, what is good initially, but will be detrimental in the future when the market environment changes. The Lock-in is reinforced by company’s institutions and culture.

Defend and Extend Management approach is “defending” existing approach to business (even if the environment and technology changed), and “extending” this approach to different territories, etc. This approach reinforces “lock-in” and prevents the company from finding new approaches.

Solution: The Phoenix Principle (constant internal renewal of the company)

Stop Defend & Extend mentality and behavior

Attack competitors’ Lock-in

Implement Disruptions that overturn Lock-in

Implement White Space to create a new Success Formula

Great book!  Highly recommend!

World Wide Rave

I was lucky to attend a webinar some time ago, where the author introduced the book. The webinar was very interesting and the book exceeded my expectations (even after reading other works of the author). The most inspiring part of the book, I think, is the wealth of examples from different industries, different target audiences, and unique approaches. These examples encourage the reader to think what can be done for the reader’s business… 

My notes from the book: 

World Wide Rave – positive reaction to something related to the company or its product
World Wide Rant – negative reaction to something related to the company or its product

6 Rules of Rave

1. Nobody cares about your product(except you). Do not simply promote products – create something interesting that will spark a conversation online.
2. No coercion required. If you create something worth sharing, people will share it.
3. Lose control.Valuable online information should be free and easy to share.
4. Put down roots.If you want your ideas to spread, you need to be involved in the online communities of people who actively share.
5. Create triggers that encourage people to share. The success of certain content is impossible to predict – create enough “possibilities” for the World Wide Rave – think as venture capitalist
6. Point the world to your (virtual) doorstep.Producing interesting content is better approach to SEO than technically optimizing site with boring content.

Other recommendations:

What slightly subversive (but not illegal or unethical) strategies, like encouraging people to use their mobile phones in a place where it is not normally allowed, can you use to trigger a World wide Rave? 

Never talk about your products and services again. Instead, focus on your buyer personas and how you can solve problems for them.

How can you push the envelope of what’s tried and true in your market?  The sex angle certainly isn’t for everyone, but are there other subjects you could incorporate in your efforts that others are too scared to talk about? 

You’ve got to think in terms of spreading ideas, not generating leads. A World wide Rave gets the world out to thousands or even millions of potential customers. But only if you make your content easy to find and consume.

Every company has something fascinating or unique or funny that can be turned into a video that people will want to share. You do, too. What’s that one thing that everyone who knows you comments about?  Build you video efforts around that.

Facebook applications are all about providing an interesting way for friends to connect and share valuable information. Your business probably lends itself to a entertaining or useful application, too.

Create a team and a process in advance and get internal preapprovals in place so that when a new trend breaks, you can respond very quickly. If you work for a nimble organization, and instant response to something in the news, a reaction to a change in regulations, or a clever piggyback off somebody else’s World wide Rave can be both fun and rewarding.

What proprietary data and metrics do you have that would be valuable to others? Publish them an offer them for free to generate a World Wide Rave.

Take a look at your site and find a link you can flip around. Measure the traffic before and after the switch and see which version works better. Perhaps your site includes a headline like this: “How to increase productivity and drive revenue.” Yawn. How many times have we all read something like that? How about this: “How to destabilize productivity, deter customers, and diminish revenue.” Now that’s likely to get some attention!

Great book!! Highly recommend!!  My guess it is already required in some university…

Groundswell

After finishing the Groundswell book, I felt that I was the last person in the industry who read it… I heard so much about the book and even used POST concept in my own presentations for over a year. Now I can give a proper credit and express my admiration for the ideas in this wonderful work. 

The book has a very interesting classification of Groundswell technologies. I usually classified the technologies on the basis of their functionality (blogs/microblogs, video/images, bookmarking, and combination), I can now see that this classification is “backwards” it is based on the technology. The authors offer classification based on “how people use them and what they mean for you and your company.” 

• People creating: blogs, user-generated content, and podcusts
• People connecting: social networks and virtual worlds
• People collaborating: wikis and open source
• People reaching to each other: forums, ratings, and reviews
• People organizing content: tags
• Accelerating consumption: rss and widgets

However, the attempt to use Groundswell should not start from the technology…

 Evaluating new technology: evaluation should be based on relationships, rather than technology. “A tool that enables new relationships in new ways will catch on faster..”

• Does it enable people to connect with each other in new ways?
• Is it effortless to sign up for it?
• Does it shift power from institutions to people?
• Does the community generates enough content to sustain itself?
• Is it an open platform that invites partnerships?

The social Technographics Profile is a very insightful tool

(the image represents results for my own demographic   )

This is also the book that introduces the POST method that probably became ubiquitous in the industry’s conversations.

Exceptional book that was a pleasure to read!

Think Again – why good Leaders Make Bad Decisions and How to Keep It From Happening to You

This book fundamentally changed my understanding of the decision making. The authors explained that even highly knowledgeable and very experienced decision makers can make obviously bad decisions. Though in some cases the decisions may not look ethical, there is a possibility that the decision maker could be unaware that he or she is not objective.

Based on the research described in the book, human evolution assured that we are equipped with the decision-making system that works well – most of the time. However, there are times, when our nature is working against our own interests. We can learn to identify these “red flag” situations and use “safeguards” to minimize “red flags” influence.

Red Flags

Misleading experiences (our subconscious search for pattern in the past – pattern could be found incorrectly, but the mistake won’t be clear to the conscious mind).
Example: a proposed acquisition looks similar to several successful acquisitions made in the past; however the situation is different, what is not recognized.

Misleading pre-judgments (previous decisions that mislead current decisions).
Example: a decision made several years earlier leads the decision maker to execute the long-planned strategy when he acquires needed power; the situation has changed and the strategy is no longer reasonable.

Inappropriate self-interest (self-interest that may not be recognized consciously by the designs maker as affecting his or her judgment).
Example: an incompetent employee remains in the organization because firing the employee could create short-term difficulties for the manager

Inappropriate attachments (decision makers can be attached to people, places, or things without realizing that this attachment can cloud their judgment).
Example: a business unit leader resists a new logo consistent with the corporate image because he was personally involved into creating the previous logo

Safeguards

Experience, data, analysis
Example: encourage the decision maker to do additional research on the area involved into the decision

Debate and challenge
Example: introduce a person with necessary experience to the decision team who can challenge the decision maker (if the decision maker can be challenged)

Governance
Example: create a process of decision making that would involve other people without a particular bias (however, too much process can stall any decisions – the process needs to be appropriate)

Monitoring
Example: if the wrong decision is made the error should be identified quickly; in some cases people tend not to communicate “bad news” if they know that the leader is partial to the decision – this should be avoided.

Wonderful example of applying a safeguard to counterbalance possible pre-judgments:

In one company, the CEO was concerned that his managers appeared to be anchored to the status quo. So he started the planning process by asking each manager to compose an imaginary article to appear in the Financial Times in ten years’ time describing the adherents of the current management team over the “past” ten years. The goal was to get each individual to generate creative ideas of how the business might be developed, and so provide a good platform for a debate over a wide range of options. After the exercise, one member of the management team commented that the new plan was “the first time we have had a real strategy.”

More resources are available on the book’s web site.

Wonderful book - highly recommend.

Being Strategic

Being Strategic   is a very practical and wonderfully organized book. I followed Chris Brogan’s recommendation   and read it. He noted that the book was “like going through a lesson plan instead of an enjoyable read.”  “Perfect!” I thought, and I was not disappointed   

The author, Erika Andersen,  noted that understanding of the word “strategy” is not always correct and hardly consistent. I could not agree more – on two different jobs I was considered “too strategic” and “not strategic” for asking exactly the same question “what are we trying to achieve?” I still love strategy books   

Being Strategic  – interesting points:

Being strategic means consistently making those core directional choices that will best move you toward your hoped-for future. 

Strategy: core directional choices that will best move you toward your hoped-for future.

Tactics: specific actions that will best implement your strategies.

          Being Strategic
Define the Challenge, then
          Clarify What Is
(An exploration of the current situation and how it came to be.)
          Envision What’s the Hope (How can we…?)
(The hoped-for future: clearly defined, realistic, inspirational.)
          Face What’s in the Way
(An objective understanding of what’s blocking movement from “what is” to the hoped-for future.)
          Determine What’s the Path
(The Plan to overcome obstacles and achieve the hoped-for future.)

          Excellent Tactics
          Arise from strategy
          Are FIT (feasibility, impact, timeliness)
          Define what, who, and when

The book pays specific attention to “being strategic” in a group and facilitation. An absolutely remarkable recommendation on what to do when everybody is arguing solutions without understanding what is the goal:

As soon as I realize that we’re arguing solutions without having defined the challenge, I ask the group’s permission to share an idea. Then, when they say yes (they are generally so surprised that I did not just start lobbying for my own solution that they almost always say yes), I say something like, “I’m not sure we are all trying to solve the same problem. What do we think the problem is?”

Most often, somebody will state his or her version of what the problem is in a kind of isn’t-this-obvious tone of voice and at least a couple of other people in the room will look surprised and disagree. Before they can start a new argument – about what the problem is – I break in and say, “How about if we all just say what we think is the problem and look for overlaps?” … if you can get the group focused on the task of creating a shared picture of what is not working or what needs to be addressed or accomplished (the challenge), you will have gone most of the way toward shifting their attention.

The best explanation of SWOT I ever found (as part of “clarifying of What Is”):

Example for “How can we ensure our after-school program stays fun, safe, and cost-effective?”

Strengths: Strengths of the group relative to the challenge.
Example: Kids like the program, the person in charge has great financial skills, etc.

Weaknesses: Weaknesses or deficits of the group relative to the challenge
Example: we are not clear about what we want to program to provide, we are lax about emergency procedures, etc.

Opportunities: Traditional SWOT can focus on “possible things we could do going forward.” Could be better define as “circumstances around us that support our success.”  Opportunities are considered as strengths – external to the group that are relevant to the challenge.
Example: other schools have figured out how to do this well and their learning is available to us, community is supportive of our success.

Threats: Weaknesses external to the group.
Example: School is not in a very safe neighborhood, expected budget cuts, etc.

SWOT is similar to helpful and unhelpful staff within the group and helpful and unhelpful staff outside the group, relative to the challenge.

Particularly interesting section on facilitation – one person can be a facilitator and if needed offer an opinion.

          Facilitator Skills
          Clarify
          Protect
          Keep on Track

Excellent book!  The book includes a few real examples of clients of Proteus International, Inc. and detailed descriptions of hypothetical examples to clarify the ideas.

Books, books, books…

I just finished listening to the last disk of a very insightful book – Black Swan, The Impact of The Highly Improbable. This surprisingly entertaining book did change my perception about our beloved Bell curve and probably cured me from the attempts to predict the future… and feeling guilty when the prediction is wrong. In a wonderful mix of philosophy, statistics, psychology, and very practical business applications the author demonstrated our favorite fallacies… Long live guilt-free tinkering!

Hm…  I still like Good to Great, but now I have completely different perspective on the business success…

Other books that I recently enjoyed were Necessary But Not Sufficient (yes, The Goal can not be possibly enough for this theory of constraints convert ), Made to Stick (love it!), Speed of Trust (quantifiable measurement of benefit of trust in business setting – very interesting approach), Our Iseberg is Melting and Heart of Change (very inspirational… I must admit I copied a few pages to quote for school papers), Blink (surprisingly useful… I no longer discard my intuition, because I have a sound scientific explanation why it might occasionally work), and Microtrends (not only useful, but highly entertaining and not only for marketers).

Yes, yes, the bookworm…

The Goal

The Goal by Eliyahu M. Goldratt

Oh, I just fell in love with the theory of constraints! 

The book was written over 20 years ago, but, remarkably, it depicts in vivid details our world…  Just change “robots” to “web sites” and the same assumptions will be correct…  We are trying to make robots/web sites “work” by releasing more materials/ad budget, and…  create inventory of parts/clicks that we are not able to utilize… and the inventory becomes obsolete…  While we are missing the goal: the robots/web sites/anything the company uses should ultimately increase the profit…

Ha!  Nobody smokes in the office anymore, but too many companies make the same errors that were so spectacularly described more than 20 years ago… 

I am looking forward reading more about the theory of constraints.

Primal Leadership: Learning to Lead with Emotional Intelligence

Primal Leadership: Learning to Lead with Emotional Intelligence, by by Daniel Goleman, Richard E. Boyatzis, Annie McKee.

Excellent!  The book combines Emotional Intelligence and Leadership into a theory with examples and recommendations…  Wonderful explanation of leadership styles and a humble note that leadership (and certain styles) can be learned.  It was a pleasure…

Meatball Sundae

Meatball Sundae by Seth Godin

Yes, I attended the Webinar where the author described his ideas, and yes, I read the book, and I love these ideas!

Yes, absolutely, marketing must be a part of the business itself rather than afterthought. Big marketing ideas are now reserved for the creation of products and services, rather than promoting existing products to possible consumers. I think I could sense it but could never articulate before…

Seth identifies new marketing trends:

• direct communication and commerce between producers and consumers
• amplification of the voice of the consumer and independent authorities
• the need for the authentic story as the number of sources increases
• extremely short attention span due to clutter
• the long tail
• outsourcing
• Google and the dicing of everything
• infinite channels of communication
• direct communication and commerce between consumers and consumers
• the shift in scarcity and abundance
• the triumph of big ideas
• the shift of “how many” to “who”
• the wealthy are like us
• new gatekeepers, no gatekeepers

Explanation of each is wonderfully vivid and entertaining and usually. 

The only one different thought that I have is the term “new marketing.” I don’t think we should consider these changes “a new marketing.”  We are probably just discovering marketing and what it could be. Customer changed. Business and Marketing should follow.  

Everything makes sense in my favorite definition of marketing is: marketing is just a customer focused business.

Blue Ocean Strategy

Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant by W. Chan Kim and Renée Mauborgne

Finally, I turned the last page of this book.  The book was recommended by a few people, it was #4 on the list of recently read books by marketing executives (according to eMarketer), and it was discussed on the last educational event of Minnesota chapter of American Marketing Association (MN AMA).

The book is worth all the buzz….  

Beside strategy canvases and value curves, it has many very practical suggestions for the companies. These suggestions targeted not only to finding the right strategy, but also to right method of implementation.

One of the most interesting for me parts was The Power of Fair Process. The authors explained that “people care as much about the justice of the process through which an outcome is produced as they do about the outcome itself.” I guess, whatever the company is trying to implement, a grandiose business turn-around or a work group web site, principles described in the book would be very helpful.