You know all too well that traditional journalism has changed. We’ve read the Huffington Post and heard about the Google-Murdoch punch up. The journo genie has left the bottle.
So when change has taken place in your industry and the future indicates far more, what are you expected to do? Unsurprisingly Gary Vaynerchuk advocates jumping the sinking ship. What’s new is his push to start a collective of freelancers building a new centre of journalism.
From his inspiring Crush it! “…those who possess that rare combination of fiery entrepreneurial spirit and reporting chops could team up and form a killer online news service without any biz dev partnership at all. They’re going to really win big.”
I completely agree. No, you don’t need to send four people to New York to cover a plane landing on the Hudson. Or send a John Simpson wannabe to a war torn corner of Asia. Instead, save the airfares, expenses, insurance and security costs by running original, insightful and discerning thought pieces, commentary and analysis. Suddenly, a handful of talented ladies and gents are delivering true fidelity.
Thanks to some sharp printers you can even go old school and get a paper run along side your site. The Newspaper Club will print 12 page tabloids in quantities as low as five!
The web has disrupted nearly every vertical on the planet and sent the established incumbents into a spin (obvious example: the Royal Mail). With so many undiscovered opportunities, which will you choose?
You’re having a conversation with a company Big Wig, perhaps an interview, and she asks, “What do you think of this social media phenomenon?”
Well, imagine it’s the 1960s. Horses pull milk floats, colour TV is just around the corner for most households, shillings are in your pocket and the Bay of Pigs has petrified the world. In between watching Steptoe and Son and listening to Elvis or the Beatles, someone asks you, “What do you think about this telephone phenomenon?”
With 20/20 hindsight you could’ve said, “It’s going to be amazing in ways we can’t yet imagine. The infrastructure we and other countries are laying now will be used for revolutions in communications and commerce that sound like science fiction if we talk about them now (think fax and Internet). User take-up will be so overwhelming that the lines will be stretched to breaking point and the ‘phones themselves will become like your watch or wedding ring – always with you. In short, phones will become an integral part of our personal and business lives.
The ‘60s Big Wig would nod sagely, probably with a slight smirk, and take the conversation elsewhere. But the answer to the question if you’re asked tonight at dinner is that, “History will repeat itself here…”
Unless you’ve been on Mars this week, you’ll know all too well that Kraft have now purchased Cadbury.
Well, it now turns out that Goldman Sachs, Morgan Stanley and UBS, hired by Cadbury, are – thanks to the purchase – to be paid more than if they’d successfully defended the hostile takeover.
It’s easy to flow with the anti-bank sentiment at the moment, but throughout the process we were led to believe that Cadbury’s management were hell-bent on seeing off the greedy American and retaining a British jewel. Let’s remember, Kraft is only in buying mood because they think organic growth is unlikely and Cadbury has a bigger future ahead of itself. They sounded like a deer being hounded by a savage tiger. Now it’s apparent that they gave the gatekeepers strong odds to leave the door open!
Nice to see the basic theory of management is still alive and well: what you reward, gets done.
Warren Buffet, Kraft’s largest shareholder, felt their shares were undervalued so instructed 500p in cash make up the 840p offer. That’s around £7 billion in bank debt added to balance sheet.
I guess it’s only fair banks both sides of the pond maxed out, right?
Charging for postage is the perennial debate of e-commerce. I think Amazon’s decision this week to extend its free postage charge trialled before Christmas might favour a good deal more consumers than Amazon serves. I can see other retailers having to follow suit as they look to win a friend and gain a client from their competitors.
You can almost see it as a cost per acquisition – how much would you pay a 3rd party to get you a customer? Is it cheaper than banner ads and affiliate percentages?
Then again, when Amazon can charge $3 billion for a Discovery Channel CD-ROM, maybe taking the hit on their postage bills wont hurt the P&L so much.
I was asked this week, ‘What does a manager really do?’ It was a fairly innocuous, rhetorical, jovial question from a well-paid, senior person.
The graduate switch flicked and I immediately thought, ‘seeing that the company’s goals are met’. After all, it’s the leader’s job to define and create those goals and aims, and it’s management’s job to realise them. Right?
But managing people is rarely a squeaky clean affair. I’m not a huge supporter of lofty job titles as they can often cause internal problems, but anyone claiming to be a ‘Manager’ will find themselves wearing several hats (in no particular order):
go between
consultant (to those above and below)
amateur psychologist
negotiator
dispute resolver
idea instigator
organiser
governor
role model
decision maker (the buck stops and all that)
communications expert (surely THE key to management)
soldier (ever metaphorically fallen on your sword?)
captain
big brother/sister (you need to eat more, drink less, curb spending)
counsellor
teacher
steward
servant
policy pursuer
change agent
supporter (of others, of the different viewpoint – perhaps the weaker voice)
challenger (of the status quo)
It strikes me that a manager who only wants to manage isn’t anywhere near up to the job. The seven-letter title is low-balling the variety of commitment needed in all but the safest of environments.
On the right - Prevent search engines from indexing news content and have readers pay through a variety of subscriptions to recoup lost earnings from physical news sales. People have no right to free journalism and aggregator sites (especially Google News) are to news, what Pirate Bay is to music.
On the left –
If you build it they will come. The internet is an unparalleled open space where the common good is freedom of information without class divides. If providers open their content equally the market will ensure the winners are the cream of crop. Revenue will be made through increased attention and trust.
Further right against ‘Don’t be evil’ - Stop the Google vampire by embracing its largest competitor instead – Microsoft’s Bing.
If Bing courted enough content providers to bed exclusively with them (by paying, say, the world’s top 50 newspapers and top 1,000 magazines) that would be a huge boon. Would it be enough to grab 10 or 15 percent of market share?
Of course it’s all about money for Murdoch, not attention and that’s where he and the digerati are looking at same issue from different ends.
Piano maker Kemble & Co is closing after nearly 100 years producing over 350,000 pianos. They were the UK’s last large scale piano manufacturer.
It’s a reflection of yesteryear when a piano was a central asset in the home. Mum and dad would teach their kids the odd tune in the hope of lighting their musical spark. Much more likely now to see a Playstation and laptop alongside the Sky box. Even if it were still fashionable, I doubt many modern living rooms are large enough to house a piano. I’m sure Kemble is a wonderful manufacturer but they belong to a sunshine industry that is clearly setting.
Another sign of the times is the UK release of Amazon’s e-reader, the Kindle. If I were a newspaper boss I’d be doing everything in my power to have my subscription service available to e-readers and smart phones. If I want eyeballs, I need to be where they are.
So why on earth are only four titles available via Amazon? The Evening Standard and Metro are free in London, but not so here. Hello! Amazon’s profits were up 68% in Q3 with the Kindle now their largest selling item by value and by volume (that’s staggering!). The music industry was far too slow to realise digital was a game changer, you’ve got to ask will the publishing and newspaper guys have learnt their lesson?
I can’t help but think of the Royal Mail strikes in the same (dimming) light. With the CWU seemingly taking glee at delaying some 50 to 60 million items, surely they’re speeding up their own inevitable death march.
Right or wrong as the union’s position may be, letters are in the same ‘sunshine industry’ as pianos and newspapers. No picket line will change that.
Google are the hottest company on the planet and they have well and truly won the war on search. That aint news to you. Fighting them directly is a bit like voting Labour in the next general election – a waste of energy.
You can’t be more of a lion than the lion himself, so throw in the towel. Move on. Fight another battle. Use new rules or change the game (even slightly). Semantic search is the future battleground where the engine understands more of your searching needs and the data it’s mined.
To the untrained eye this looks like the same ball game but it’s a much cleaner slate. Rather like Formula 1 this year where the cars appear the same as previous models but they’re inherently different. The new rules in both fields promise some new victors.
What’s so new about this semantic search?
Data has moved on exponentially since Google’s inception in 1997 (or so). Blogs, microblogs (e.g. Twitter) other social networking sites and book marking services stream and highlight more information than anyone could’ve honestly anticipated in the 90s.
Harnessing this data torrent allows for real time search results. If you’d searched for “Iran election” in June you probably wanted the latest news and insight on the troubles, not a standard bit of Foreign Office research.
Context is also increasingly important. Typing “Jaguar in London” could produce zoo or a car dealership results. Intelligence is needed to distinguish which you needed (known as disambiguation).
Making sense of search based on context and fresh data is the Holy Grail (closely followed by monetising it). Semantic search is craving to do just that.
Who’s playing in the hit-Google-from-another-angle game?
Bing (from Microsoft)
Mahalo (50% original content, 25% search and 25% knowledge exchange)
Aadvark (Vark.com asks your network for answers)
OneRiot (a real time socially-relevant engine)
Kosmix (a web guide with a dashboard)
Hakia (tabs results: web results, credible sites, images and new)
WolframAlpha (type a question, get an answer)
Twine (a bookmarking site on steriods)
Some are more semantic than others but that’s just eight players who are all in their relative infancy. With Yahoo’s open API code, Boss, anyone has access to a huge engine and can adapt from the basic Yahoo chassis. Google may have called game over on search 1.0 but there’s a whole new future out there…
UPDATE: since drafting this in early August, Google have announced a “fundamentally big change” via their Caffeine update.
Clearly, this threatens to put Bing et al back into their corner while Google blazes ahead with market share aplenty and more advertising than MadMen could dream of. We all know that’s not guaranteed though.
A lot has been made of Eric Schmidt resigning from Apple’s board. The short version: he’s also CEO of Google and these two tech giants are really starting to cross swords.
While Google are undoubtedly an increasing ‘problem’ for Apple, I think most reports are in danger of missing the elephant in the room: Nokia. They have a 40% market share of the world’s mobile handset market. They produce a phone every 13 seconds, with around 1.1 billion customers today, and they are well and truly on a charge.
Nokia are unquestionably number one – larger than their top three rivals combined – yet they were accused of being asleep at the wheel when it came to the iPhone. Enter the Nokia N900 Smartbook, launched this week with, “Computer-grade performance in a handset” and Flash support (not yet available on the iPhone).
Microsoft’s mobile version of the Office suite, currently only available on Windows mobile devices, is soon to be available on Nokia handsets. And Microsoft and Nokia plan on developing several mobile apps together.
Apple fans have consumed rumours about Mr Jobs producing a tablet computer for several years but it’s yet to materialise. Enter Nokia’s booklet. Add to this momentum the fact they appear to be teaming up with music rather than dictate to the industry. Dave Stewart (50% of the Eurythmics group) is a change agent and big fettler in the Nokia world of the future.
Nokia are a capable chameleon. They’ve reinvented themselves from a paper and rubber manufacturer to an electronic giant turning over $70 billion. So when they say, “we will quickly be the world’s biggest entertainment media network.” we should really pay attention.
Their aptitude, coupled with some audacious strategic alliances may yet see CEO Olli-Pekka Kallasvuo pull off a Finnish coup d’état.
All businesses want to control their own destiny. Surely, it’s natural. The old-fashioned classic is to cut out the middleman and access the wallet yourself. After all, why go to the trouble of producing a wonderful product, only to pray fickle retailers buy into it and run the gauntlet of the supply chain? It’s sorely tempting to improve margins and go B2C not B2B.
And, as retailers become ever more aware that globalisation is but a mouse click away, why would they pay top dollar for widgets they can source, spec and put on a boat from Taiwan themselves. Again, in the pursuit of margin, it’s tempting to bite the hand that’s fed you.
A couple of recent examples:
Fresh out of bankruptcy, General Motors are showing an eagerness for change and sales by trading on eBay. With no one denying the car dealer network needs napalming, will this be the air raid warning for their atrocious service?
And Which? are looking to raise finance to launch a range of own-brand products and services. This 52-year-old charity organisation is taking the goodwill of 1 million subscribers and completely reengineering their business model.
What’s next, the BBC’s political editor running for Number 10?
They’ve flirted for years. Constant advances were spurned and due diligence seemed wasted but Ballmer’s finally got his gal. Well, sort of. This week has seen a sharing of search revenue, not a sale between Microsoft and Yahoo.
Despite her strong words of rebuilding and turning-the-tanker, we all assumed Carol Bartz’s number one play when she parachuted into Yahoo in January was to negotiate the sell. Is this a toe-in-the-water on the way to a full-blown takeover?
Of course, search is where the rubber meets the road on the Internet and as Steve Ballmer said, “This agreement gives us the scale and resources to create the future of search.”
Not so long ago Yahoo’s search was ‘Powered by Google.’ If only they’d realised they were creating a seesaw of strength: as Google grew, Yahoo shrank. Fatal error.
It’s a ten year partnering, not an acquisition, but Google must be hoping this is a bit like the dog who chases cars and finally catches one. Can the undisputed also-ran in second place actually do anything different? Will the partnership lead to growth or confusion? What about the raft of other questions this throws up?
And, just in case you missed it, Amazon bought the highly respected Zappos earlier this month for about $937 million. I’m thinking the web just got a bit smaller but a couple of big players have sharpened their teeth further.
When a brand gets too big for its boots it can always change them for loafers. That’s what the Seattle behemoth, Starbucks appears to be doing by going all bohemian.
In an apparent throwback to their origins of the 70s, customers can listen to live music and poetry and even buy alcohol. But, more surprisingly, this pilot includes ditching the name at three stores in their hometown for a more neighbourhood “community personality.”
If this is a corporate makeover then it’s a radical one that may well throw the proverbial baby out with the bath water. McDonald’s modernised its restaurants recently but they didn’t dare mess with the brand name. A local focus is unquestionably sensible but with 38 years of growth in the name, are the connotations so negative that you’d want to turn your back on it?
The anti-globalisation consumer is as likely to boycott Starbucks’ 16,000 stores as they are Coke. If this is a play to engage them I suspect it might fail, rather like my three-year-old believing she’s become invisible by covering her eyes. The coffee aficionados of Seattle will be all too aware of the company’s facelift and could arguably shun it with double enthusiasm.
What do you guys think, is this retail smoke and mirrors or is it modern rebranding genius?
WARNING: this is a lengthy diatribe on ecommerce. If online retailing isn’t your thing then run away now. If it does float your boat then grab a coffee, my friend:
Scoble has been posting lately about the future of the Internet, calling it the Web 2010, others are more likely to call it Web 3.0. What will ecommerce websites look like in this future world? Amazon and the other ‘Web Whales’ don’t give us much of a clue what they are rolling out before the next Olympics, so here’s my take on some of it.
ECOMMERCE PROLOGUE
As the amount of data available to us grows exponentially, even the most naive of customers are suddenly morphing into prosumers (professional–consumer). Prosumers scan for information before actually shopping and they’re in your stores already. Armed with spec lists, reviews and price comparisons, they push back your sales team and POS with hard data and raw opinions.
Perversely, more data is seeing customers take longer to make decisions and impulse buys are now filled with doubt – “I should’ve checked the reviews on this.” It could be argued that retailers who engage the longest and build the most trust, will win the most favour (oh yeah, AND the most orders).
BLENDING
Firstly, from a marketer’s perspective, online wont replace offline. More than ever, we’ll see a blending of multichannel operations. Next.co.uk will still produce their very expensive catalogue and their website will outperform other channels, but their property managers will still have a job to perform. Ditto M&S and Tesco, but there is no question that the small and unremarkable of the high street will feel ever-more pressure from those dastardly dot coms.
DELIVERY
Free delivery is largely becoming the de facto choice online. With retailers pushing this, they’ll offer consumers in high street outlets the chance of delivery to home rather than carting it onto the bus. The visa versa of this is already becoming more popular but in-store collection is likely to be incentivised more as it’s a double opportunity for retailers: delivery is less costly as it remains within their own supply chain (they’re transporting from the hub to the high street anyway) and, as you collect, it’s far more likely that you’ll pick up that extra item (cross selling heaven).
MOBILE VALUE
Mobile web access will grow as smart phones continue to take hold but M-Commerce value will start from a low base – think ringtones and iTunes. However, these should see repeat visitors and as trust builds, value should grow. Until then, fears of data breaches and insufficient speed will prevent anything like widespread acceptance.
SEARCH
In-site search will gain intelligence as search engines are forever increasing shoppers’ expectancy of relevance, thanks to their ever-improving accuracy. Typing ‘white 16″ collar double cuff non iron‘ on next.co.uk results in “There were no documents that contained all of the words in your query. These results contain some of the words…” and they proceed to show me 225 products with a white luxury Percale bedset toward the very top. (Yes, they do list shirts with all those keywords.) Partnerships with the search guys are likely as algorithms need to improve.
SEARCH ENGINE PAYMENT
Facebook money and nano-payments are going to become a reality, but how about making your transaction on the search engine itself? If Google, Bing or Yahoo shows you a product you want from a five star retailer, there’s no real reason to jump through to the site at all. You could plug in your payment details right there, completing the transaction (Google checkout really starts making sense now, eh?). This will increase shopping speed where trust already exists.
AUGMENTED REALITY
Augmented reality will take place using your photo library. A plug-in will scan your local machine and online (esp Flikr and Facebook) to find an image that it can use to best display the latest wares from Asos.com and TopShop.co.uk. It will superimpose clothes onto you and put you on an exotic location, not a paid model, in true CSI style.
SIZE AWARE
Zappos, the US shoe mail order giant, budget for a 20% return rate. Size aware sites will pummel that kind of error. Using the augmented reality above, you could see yourself in specific sizes: perhaps the large (your normal size) is a little too loose and viewing the medium shows it to be more correct. Obviously, very accurate pixeling and measurements from the site are a prerequisite. Women will be addicted to this feature; men might well become extinct from the high street.
3D
Why wouldn’t future sites look like merchandised finished stores? We’ve all seen Second Life and other virtual reality sites. Well, imagine you could ‘walk’ the whole store or teleport to the men’s shoe department. The store’s branding could even change to suit your mood – upbeat and funky, or perhaps click to change the ambiance to sedate and sophisticated.
SOCIAL PLUG-INS
This is where the likes of Facebook are betting on the big money. You’ve seen the sonar picture in the Batman movie where Morgan Freeman can view the whole of Gotham thanks to everyone’s mobile phone acting as a radar device. Well, as you ‘walk’ through the 3D reality store and into others in the shopping centre (because they’ll collaborate, as retailers know proximity brings success), you will be aware of your social media contacts – Julie is 50m off to your right, David is in the café upstairs. Virtual geotagging would allow you to meet them/talk/show as busy.
FRIENDLY FOCUS
Social advertisers are of the mindset that if you like snowboarding, heavy rock and fast convertibles, they can serve you ads that will interest you i.e. heavily targeted. They’re also of a mindset that your friends wont be too far off that choice spectrum either. If you’re golf mad then it stands to reason some of your contact book will be fellow golfers, right? Therefore if they can define you, they reckon they can define your group.
If our virtual store knows that ten of your friends bought something from the homeware department, it might well show you an offering from that neck of the woods. If it knows two of your mates browsed a particular shirt and another one bought it, perhaps it might show you the shirt. But wait, you don’t all want to look the same (though you may well want to buy identical music and games) so the store’s intelligence shows you similar styles, but not an identical shirt.
4th DIMENSIONAL WEB
The focus on friends and your group above is referring to the social graph (a modern take on six degrees of separation, if you like). The problem with that graph is that as your social list grows, the trending becomes diluted. Let’s say you ‘friend’ two people you work with: one is into motorbikes and cooking and has married four times; another is a spinster and likes books and knitting – correlation is becoming far more difficult (simple example, but you get the idea).
You ‘friend’ people almost on a daily basis because you’ve touched each other in some way. But it is NOT an indicator of similarity. However, if you and I are connected *and* we’re both members of the Chartered Institute of Marketing and the Institute of Directors and we also list similar books and blogs as of interest, then the algorithm could rightly pair us on the same graph. The trouble is, which graph: perhaps occupation (to serve job ads), but music and clothing? How about sport and movies? Will we both like cricket?
Incorporating the social graph along with real time search is what the master mathematicians are coding right now. It will make the web more than 3D. The intelligence and relevance will mean no serious retailer will have a standard look. Very few visitors landing at the home page will see identical layouts and offerings. The big players will become more relevant and successful because of it.
VOTING RIGHTS Scoble had this down when he said, “So, if someone says “Pluto’s rocks” there should be an aggregator that lets you see how many people talked about Plutos. Obviously only people writing on their iPhones FROM Plutos on University Ave.”
He’s talking about your contacts (friends again) informing you of what’s well regarded, but there’s also the possibility of the wider view from perhaps the whole of Twitter or Friendfeed. I’d say this could split in two, similar to paid ads appearing above the SERPs in a Google search with your closest friends (easily ID’d beause of most interaction) biased toward the top. The intelligence knows that I’m biased to my friends views, but still shows me what the masses think.
MOBILE NETWORKING Jason Calacanis says that the Mobile SNS (social networking services) is up for grabs in the United States. I’ll take his word on that, and I’ll completely agree that social networking will shift from the desktop to your pocket. The phone coupled with geolocation tools will become networking nevada.
BRILLIANT BAR CODES
The cubic generation of bar codes is coming where data matrix squares will replace the traditional lined rectangle. But we’ll also see QR (quick response) codes more frequently in the UK (they’re common in Asia and North America). The QR code can look like art, but when scanned, usually by a mobile phone camera, it reveals data. These can take you to micro sites, or vouchers, or secret passages to hidden info (known as easter eggs) – like game cheats and movie trailers for example.
Gorilla marketers will appear to make these bleeding edge, scattering them around cities and towns, but within a year the Pepsis and Fords of the world will drag them to the mainstream.
CHANNEL CONFLICT
Manufacturers want greater penetration and control and they can achieve both by cutting out the middle man and going direct to the consumer. When your products are as hot as Apple’s you can do as you please. Retailers are still falling over themselves to tout Apple’s wares despite the possibilty of losing a sale to apple.com. However, the majority of brands have their hands tied by the threat of retaliation (i.e. refusal to buy) from their retail partners.
It’s thought that 50-60% of customers looking for a branded product begin their search at the manufacturer’s website. Manufacturers will look for ingenious ways of capturing that consumer rather than just being a megaphone of information. Ship to store is the most obvious route but the marketing steps ahead of that will be ingenious – hooking in TV advertisment widgets for instance.
BRANDS
Own brand products will become even more obligatory. Did you know Amazon has had their own private label line-up for five years? China’s best will also feature far more in Europe as they cash in on the knowledge we’ve given them. It’s bite-the-hand-that’s-fed-you time.
The show, I’m running Sainsbury’s teaches retailers a valuable lesson. Several in fact: it was a great marketing ploy, a very good HR tactic, and it also showed the value of failing.
In seeking new ideas, Sainsbury’s Chief Exec., Justin King (see right), canvassed his entire team for the next big idea – that’s 150,000+ employees. We didn’t get to see how many reached final consideration, but the few Ch4 followed contained failures.
You got the impression from the Sainsbury’s big wigs that this was all part of their proficient DNA. Consider, canvass opinion, prototype, test, roll out slowly, emergency stop if necessary. Understandably, the smallest percentage of ‘big ideas’ mature through this process.
The Kings, Sugars and Bransons of the world would say failure is a necessary evil in businesses big and small. If you launch ten projects then it’s extremely unlikely that all ten will float along successfully. Therefore, for the realists, it becomes a question of how quickly you appreciate it’s a lost cause and just what you do about it.
Michael Jordan said: I have missed more than 9000 shots in my career. I have lost almost 300 games. On 26 occasions I have been entrusted to take the game winning shot… and missed. And I have failed over and over and over again in my life. And that is why… I succeed.
The recent reports of Tesco’s profit show they’ve been outstanding while others have cried ‘recession’. A 53rd week changes the picture somewhat, but lets round off profits at £3 billion. Bravo.
They’re launching a banking arm soon and it’s going to shake the big boys out of plenty of high street business, but what’s next? How about earning customer favour by taking green initiatives to their core business model?
I’m not talking about binning normal light bulbs for more energy efficient ones – arguably making the process counterproductive. Really go green, not create some spammy marketing half-truth, but a bona fide real deal. Court green ideas, embrace things that upset the status quo.
Here’s some examples:
1. Source the best designed solar panel that can be mass produced and put on top of Tesco’s buildings, helping them decouple from the national grid.
2. Offer a £1 million prize to the designing of a system that channels the energy of millions of shoppers pushing millions of trolleys around the stores. Possibly via some sort of dynamo/KERS system that downloads stored energy when in the trolley park (selling the surplus back to the national grid).
3. Train some of this year’s 600,000 school leavers (what percentage are to become unemployed?) to help manufacture the above, becoming the employer of conscience.
4. Find ways of better catching and using the rain water on site from roofs and car parks.
5. Recycle on a new scale altogether helping communities, suppliers, and possibly governments, better understand and practice this haphazard essential.
6. Lead the march on fair trade goods.
7. Employ a better infrastructure to source more local produce.
Note: I’m sure numbers 1, 2 and 4 have already been invented in Japan or by boffins at M.I.T.
The capital expenditure here would be scary but there is a future upside for both a marketing and fiscal tidal wave. Showing the world what an innovative, responsible, thoughtful corporation looks like could arguably see shareholder value fall, but that’s short sighted. Consumers will thank – and reward – Tesco dearly. What could that bring to their share price?
This doesn’t happen overnight, but Tesco could become the world’s poster boy for green retailing – in the same way Zappos is for customer service. Of course this isn’t easy and that’s why it would give them a massive competitive advantage. Or do you think others will beat them to it?
My local Greggs’ bakery is a massively busy shop. So much so its small car park is log jammed from 11am to 3pm EVERY day. From day one I said they could have designed a drive-through system and probably made themselves even more successful (and certainly more efficient).
Well, it seems fast food won’t have the technique to themselves for long as Sears is the latest retailer in the States to test drive-through shopping. It’s a natural evolution from the reserve online, collect in store system pioneered so well in this country by the likes of Argos.
It appears to make perfect sense but others who’ve tested aren’t reporting positively. Personally, I can see out-of-town Argos extras and Tesco extras testing a drive-through system that would really help them at peak Christmas trading.
Plenty of bloggers are spouting New Year’s resolutions. Most are quaint rehashes of being less avaricious, and showing greater care to one’s fellow man and the weighing scales simultaneously.
Forget resolutions, try predictions. J.K. Galbraith said ‘there are two types of forecasters: those who don’t know and those who don’t know they don’t know’, but there’s always Tom Asacker. He hits it right between the eyes with his article, “Nine Predictions for 2009.” As ever, he is articulate, succinct and on the money (at least that’s my prediction).
Here’s your Apprentice moment:
If you had a fruit stall in a town centre market, and assuming your stock had a one day shelf life, toward the close of business, would you:
a) behave exactly as you did at 8am and bin all left over product each day;
b) slash prices hours before closing to sell out; or
c) keep relatively full pricing until reducing in the last hour or two and arrange with some local care charity to give the remnants to the homeless?
Unfortunately this is a common business dilemma and it usually doesn’t have the charitable option available. The classic example is selling ad space towards a print deadline: slash prices (sometimes to zero) or increase copy against advert ratio.
Phoning clients telling of ‘super one-off deals’ makes it incredibly difficult to go back next month with an invigorated rate card. Even though the timeline has changed will the client understand today’s price is 300% more than last month’s offer? All the more so as the clients now believe they’ve done the advertiser a favour and got them out of a jam.
M&S have been playing this card recently with their 20% off days but if they keep repeating this it makes the non-20% days much harder to carry and justify. They’re educating consumers to find bargains.
This is going to be a huge dilemma for many in the Q1 squeeze that’s coming. Then again, with PWC estimating that 82% of retailers discounted goods the weekend before Christmas, are there many retailers who think we’ll get back to full pricing any time soon?
In The Bear and the Dragon, Tom Clancy paints the courageous character of Gennady Iosifovich, a Russian General. Our brave General finds himself the senior man called to defend his country against a warring China, who massively outnumber him. Prior to battle he talks to his aid about soldiers’ universal trio of needs: training, resources and leadership.
Tom Clancy is more than intelligent enough to have created that himself, but I doubt there’s an organisation in the world that could’ve helped him write it any more succinctly. Can you name a workforce – from the factory floor to the football pitch – that doesn’t require training, resources and leadership?
They’re valued in the ballpark of $233 billion (£117 billion). Annual sales of $60 million have grown around 18% for the last six years. Their operating software runs on 90% of the world’s computers. Internet Explorer (their own browser) is employed by three-quarters of Internet users. There are over 1 billion Windows Live ID authentifications per day. Bill Gates’ endowments to the Gates Foundation are over $29 billion. How is it Microsoft gets to be so unloved?
It’s not even a polarising love found often in sport where some people may love football, but hate golf and visa versa. I know plenty in industry who adore Apple, but none that rave on about Vista or Windows. Well Microsoft’s Steve Balmer (Mr Gates’ successor) plans to change that by handing a new $300 million consumer-branding campaign to the Crispin Porter and Bogusky agency.
[Although that’s large it’s significantly less than their last product push for the Windows Vista launch where they spent two years and $500 million - only to bomb.]
Balmer’s choice appears an edgy one, having ousted the incumbent, McCann Worldgroup agency. Bogusky have been creating ‘cool’ for the corporate world for over a decade: the stunts on the Mini Cooper and the ‘King’ of Burger King are just two. Their VW partnership didn’t fare so well with Bogusky resigning the contract (perhaps before being pushed?).
The team’s first video volley above sees Jerry Seinfeld and Bill Gates in a shoe shop. To state the obvious: Microsoft and jokes equals new. With a capital ‘N’.
What isn’t new is the mindset that Microsoft is trying to soften their edges and tell their side of the story instead of coming across as the nerdy, soulless, evil, license grabbing, behemoth.
Back in 2006 artist Hugh MacLeod (now one the blogosphere’s most infamous voices) was employed/contracted by Microsoft to soften them up and to better communicate their ideals. This is Microsoft’s Steve Clayton: For too long, Microsoft has allowed other people- the media, the competition and their detractors, especially- to tell their story on their behalf, instead of doing a better job of it themselves.
We firmly believe that Microsoft must start articulating their story better- what they do, why they do it, and why it matters- if they’re to remain happy and prosperous long-term.
Personally, I’m more concerned about the client side of things rather than the agency side. Can Microsoft really let these guys in so they can draw out what’s true and great about the company and package it in a fresh, intelligent and humorous way? It’s a big ask to take this disliked goliath who wants to be a master of all things – from home computing expert, to cool gamer, to search champion, to business hero – into a young, cool thing.
Sure, ‘loved’ is a tall order and the brand is never going to be edgy, niche or underground, but a persona that’s a little bit cooler and cuddlier should be possible. After all, it couldn’t really get much worse could it? If Bogusky and his team (I’m betting on when, not if) come close to that objective their fee will have been well earned.
Collective wisdom has it that SMEs don’t plan. If they do it’s likely to be more back-of-the-napkin stuff; or perhaps it’s all kept in the grey matter. Even then it’s unlikely that the boss will actually have told anybody and ‘created a vision’.
But large companies often don’t either. Some have large teams dedicated to planning and you’ve got to ask how accurate they’ve been at forecasting their future (think RBS losses for example). Studying for my MBA in 2004 we looked at the over-50s business, Saga, whose pre-tax profits where £48 million at the time. I was certainly surprised that they claimed not to possess a ten, five, three or even a one year plan.
Although a 15,000-word document may have not existed, a vision for their future and a strong company ethos certainly did. Backed by private equity firm Charterhouse, a MBO buyout from the founding de Haan family valued at £1.35 billion went through soon afterward.
Of course, there’s a contradiction to this. It would be easy for start-ups to fall into planning paralysis, stuck in the drawing of a plan and never actually launching into work. Some banks – even seed investors – may initiate the problem and there will be plenty of ‘experts’ who’ll ask for the Business Plan in a low and officious voice. Something is needed then, but what?
As ever, [His Highness] Seth Godin says it more succinctly than anyone:
…do your best to pick a direction (hopefully an unusual one, hopefully one you have resources to complete, hopefully one you can do authentically and hopefully one you enjoy) and then do it. Loudly. With patience and passion. (Loud doesn’t mean boorish. Loud means proud and joyful and with confidence.)
No flitting, no waiting for proof. Just consistent, overwhelming performance in pursuit of a vision you believe in. That’s far more important than which direction you chose in the first place…
Heading off aimlessly on your own (even with your 800 employees) is like building a skyscraper without the architect’s drawings – destined to fail. Pick that direction and tell your stakeholders, every one of them. Tune your message as clear as words allow. Repeat your ‘clear’ message often. Tell them again in a month, and again in another. Clear and often. And so on.
We all know history shows us nothing lasts. The Roman Empire, the Warsaw Pact, the telegram, the Two Ronnies… whatever. You name it and time will show itself to have moved swiftly on. Google had another record month in June performing 7.1 billion searches, but I predict, with a prize-fighter’s confidence, that Google cannot remain the de facto search engine. There, easily said wasn’t it.
Perhaps it’ll be a hostile take over or a merger. Perhaps implosion (though a lack of funds seems very unlikely today). Perhaps huge customer revolt over privacy issues or ‘evil’ infringements. Whatever, but the inventor of the mass-market car couldn’t create a lasting success of things and history will show Sergey and Larry to be no different. However, the guys at Yahoo! aren’t waiting for me to be proven right in 2090. They know they can’t beat Google at their own game so a month ago they started letting others do it for them. Well, that’s one of their strategies to stop the game, set and match scenario they’re staring at today. They’re opening up their search to allow developers to code the final pieces, thus avoiding all the colossal development costs. The Yahoo! blog says:
“our goal with BOSS is to remove as many of the barriers as possible to creating new search products. By providing deep access to Yahoo! Search’s investment in engineering, sciences and core search infrastructure and removing key usage restrictions, we are encouraging a whole new level of innovation in search experiences.”
The more the merrier, eh? Kind of like getting all your friends to help you stand up to the bully in school, but it appears a viable strategy as long as several really do something different from Yahoo! and gain critical mass. I suspect the promotion techniques to come will be far more interesting than the resulting algorithms.
Then there’s Cuil, surely the first of many serious search contenders to come. Serious because its frontline folks are ex-Google, but also serious because it promises different results, not Google regurgitations. They’ve indexed three times more pages than any other engine but “stay on that page and analyze the rest of its content, its concepts, their inter-relationships and the page’s coherency”. Many Google critics cite their heavy reliance on linking as relatively easy to spam (or ‘game’ as it’s known). In a nutshell, Cuil is promising to favour authority over popularity. What will the others promise and will they nibble away enough at Google to actually hurt that dominance? Could it be a death by a thousand engines…?
My economics’ lecturer once told me that if I ever got the chance of a job with strategy in the title to open my arms wide and grab it. We’ve all read and agreed with Michael Porter’s assessment that there are just two generic strategies to choose in business, (a) be cheaper than your competitor, or (b) be different from them. As true as that remains, it’s obviously over-simplistic.
I recently suggested the sportsman’s strategy to someone looking to improve his online ecommerce business. I heard Egg’s founder, Mike Harris, talk about this and its obvious truth still strikes me today. You start at the end. Create your goal and work backwards from there. Sir Clive Woodward’s goal was simple: fly to the 2003 Rugby World Cup seeded #1 and take victory after 80 minutes in the final.
Let’s imagine for a minute that you’re a 100m sprinter who wants to win in the 2012 Olympics. What do you need to be doing, thinking and feeling as the gun goes off in the final? Think about that answer for a second. Now, what about 10 minutes before the start? What about a day before? A week, a month, and six months before? Now that you know that, what do you need to be doing this week, next month and in December? It’s all about gradual improvement toward a peak in performance for that final.
What’s your company’s three, five or 10 year goal and what needs to be happening in August 2011 for that to be achieved? Are you on a path of continual improvement right now?
Suddenly strategy doesn’t strike me as being so easy any longer.
You know all too well that traditional journalism has changed. We’ve read the Huffington Post and heard about the Google-Murdoch punch up. The journo genie has left the bottle.
On the left –
Piano maker Kemble & Co is closing after nearly 100 years producing over 350,000 pianos. They were the UK’s 
And, as retailers become ever more aware that globalisation is but a mouse click away, why would they pay top dollar for widgets they can source, spec and put on a boat from Taiwan themselves. Again, in the pursuit of margin, it’s tempting to bite the hand that’s fed you.
They’ve flirted for years. Constant advances were spurned and due diligence seemed wasted but Ballmer’s finally got his gal. Well, sort of. This week has seen a sharing of search revenue, not a sale between Microsoft and Yahoo.
When a brand gets too big for its boots it can always change them for loafers. That’s what the Seattle behemoth, Starbucks 
In seeking new ideas, Sainsbury’s Chief Exec., Justin King (see right), canvassed his entire team for the next big idea – that’s 150,000+ employees. We didn’t get to see how many reached final consideration, but the few Ch4 followed contained failures.
The recent reports of Tesco’s profit show they’ve been outstanding while others have cried ‘recession’. A 53rd week changes the picture somewhat, but lets round off profits at £3 billion. Bravo.
My local Greggs’ bakery is a massively busy shop. So much so its small car park is log jammed from 11am to 3pm EVERY day. From day one I said they could have designed a drive-through system and probably made themselves even more successful (and certainly more efficient).
