The Power of: HOW?

Many articles and books have been written about how helpful, asking  the “Why?” question multiple times in finding the root cause is. My recent experiences have learned me that asking the “How?” question is just as useful in finding the underlying solution and/or reasoning for a certain outcome. Just think of a situation where people in a presentation promise you great results, with nice graphs and statements. Start asking the question “How?” The ones that can continue to answer this question until he/she reaches a really convincing point, has an well underpinned story, but many will fail to convince you during the questioning.

Just imagine you are sitting in a meeting where a team presents with a lot of enthusiasm that they are going to grow your turnover with >10%. Many people in the room like the story and presentation, giving their quiet support, until somebody ask the question: “How?”. The first time the team answers this question, the answer may come very easy and already be in the presentation, e.g. sell more products to certain target group. When on this answer again the question “How?” follows, they have to go already a bit deeper and start talking about certain marketing or sales force improvement actions. If then the question “How?” is posted again at a certain point you come to the real discussion if what is underpinning is sound to reach the result presented in the end.

This does not only work for analyzing business plans and presentations. I am pretty sure that guys at e.g. Toyota are not only asking themselves the question many times on “Why?”they have this brake problem, but that there are many now also concerned about “How?” to improve the public opinion in managing this problem. Again her the first time you answer this question is might seem very obvious, e.g. by improving the communication, but with every time you continue to answer this question, you come one level deeper to concrete solutions. How do we improve the communication, e.g. by: involving media companies that are able to handle such delicate messaging, having a clear communication message & action plan,  …

Each of these results you can than further break down by asking “How?”until you reach a level where you think you are concrete enough.

This all might sound very simple, but that is in the end also the power of “How”

Please let me know if you have good examples yourself of this and if you liked this blog, either here and/or if you are interested to learn and discuss more about Strategy, Marketing & Innovation, please join our Forum at http://www.linkedin.com/groupRegistration?gid=1899487

Why Enterprise Resource Planning (ERP) systems are so important for your Strategy

I must be honest; I have been many years in Strategy functions and until recently I have never considered ERP solutions as part of the strategic considerations. Strategy was in my view, about coming up with better product & service solutions for consumers & customer and outsmarting your competition in the market, but we never considered the role and the importance of information systems in this. I saw all these billboards on airports and other public places with “The best run businesses run SAP”, but I would think “so what”, we do as well. This changed quite fundamentally for me over the past few months.

We all know that the availability of information drives decisions. Therefore it goes without saying that having good information (systems) is crucial for good decision making. This is valid for all processes in the organization, not only Strategy. The strategic element I would like to zoom in on here is the setup of the ERP system and the organisation. When all information is gathered around the axis of Business Units, we will make decisions to optimize the performance of the Business Units. If we would have the same transparency of information across other dimensions, e.g. per market, customer, project,… than decisions also could take better into account the impact of these axis.

To give you an example, in a certain business serving a certain group of customers may be not very profitable, but it might be a highly profitable segment for other business. The businesses could leverage each other, making the less interesting business more cost effective/profitable and also being able to offer the services from another business could possibly increase the chances in the overall bid for projects.

Having a more holistic view on the business will enrich the decision making as well as the identification of opportunities for growth.

This also has impact on the way we can structure and control our organization, as I have tried to address in my previous blog post on multidimensional organization. When we try to describe/setup such an organization it is important that we clearly describe the processes and currently there is no area where process descriptions are done with clear checks of interfaces and interrelations as in the IT environment. Arguably IT backbones are more and more becoming the area where the best descriptions can be found on how the organization effectively works. Therefore, if we want to make structural/strategic changes to your organization, the area of ERP systems should be taken as an important enabler of change.

Last but not least; ERP/IT costs are a significant driver for (reducing) costs, especially for large companies. Cost of organization can be reduced by further automation, ERP/IT costs can be reduced by combining in shared service centers and outsourcing, effectiveness can be increased by standardization & simplification. All these elements will help the organization to be more effective and cost competitive, hence gain competitive advantage.

Although ERP systems have been in many cases a very internal oriented discussion topic, they have far reaching impact on how we can drive our strategy, make decisions, structure the organization and drive competitive advantage.

Let me know if you recognize the above and /or have additions to make. Also you can join my discussions on linked in the Strategy, Marketing & Innovation forum at: http://www.linkedin.com/groupRegistration?gid=1899487

What is a multidimensional organization, why do we need it and what are the implications?

Changing Markets & Customer Behavior

Before trying to describe what a multidimensional organization is, let me first describe some of the changes in the markets which requires us to look at the way we serve them.

In the consumer business we see more and more that consumers buy in a different way than before. They get their information from multiple sources, buy in miscellaneous channels and are trading of various solutions to satisfy their needs.

Also the retail customers are changing. An increasing portion goes to on-line business. Specialist stores are consolidating and looking to expand their revenues. General stores are also increasing their assortment with new categories and service. Furthermore we see the importance of software & services increasing over the traditional hardware business. This makes clear boundaries, which existed in the past disappear in the market.

On the business to business side we see that customers are more and more looking for complete, turn-key solutions and that the service component is becoming a bigger part of the equation. On top of that these solutions become more and more complex because of the opportunities the digital world offers. Information can be easier shared, combined and processed in new ways, to come to better solutions for both the customers and the consumers.

I can spend numerous pages to try to make my point that market & customer behavior has changed in the recent history and that there is a need to look on how we organize ourselves to serve the markets, but that is not the intention of this blog, so I hope the above is enough to make the point.

Changes in the Organization

The most used/successful organizational form of the past decennia was that of business unit management, where units in the organization were responsible for a specific product-market combination. These units have been given the resources and responsibility to optimize the results for their part of the business. This way of organizing has brought us many benefits, but as with every good solution, at a certain moment there comes a new one which is better for the new circumstances.

Taking the before mentioned changes in the market into account; the boundaries & scope of the (business) units are not that clear anymore. Customers are often served by multiple units and the question arises than how to best optimize ourselves for these customers. Also the solutions requested are often a combination of products from different units, enhanced with other (external) solutions as well and combined with services and possibly other offerings (e.g. financing). This requires co-ordination well beyond the scope of the traditional business unit.

Next to that we already see that in companies certain resources are not anymore dedicated towards operational units, but combined in so called “shared service centers” in order create cost benefits, improve service and optimize the sharing of knowledge.  Many examples can already be found of this in the area of F&A, Logistics and HR. with the increasing connectivity and sharing of information we will also see this more and more logical in the areas of service & product/process development.

We will still require units which develop & prepare, based upon consumer insights, the right solutions for the market. However this does not imply anymore a hard coupling with the required resources and owning the customer relationship as well as a single unit.

The multidimensional organization enables us to organize ourselves in a better way to cope with this new reality.

What is a multidimensional organization?

The below definition is derived from Prof.  J. Strikwerda management study “from unit management to multidimensional organizations”. A multidimensional organization is not one concrete organization form and can be a combination of approaches with the following characteristics:

• The responsibility for turnover, profit, market share is being distributed across different dimensions in the organization (making various cross sections of the organization). This can be a category/unit, geographical area, business model or any other axis relevant for the organization.
• The management information on the turnover, cost, profit and market share is being reported and controlled simultaneously on the different dimensions.
• There is only one source of truth, set of management information, which is maintained at concern level and from which on all dimensions can be reported.
• There is no hard coupling anymore between the responsibility for the results and management of all the required resources (e.g. by working with shared services).

What are the benefits of a multidimensional organization?

The multidimensional organization optimizes the results not anymore along one axis (in the past often the business unit), but across multiple axis. This allows for better adaptation to the changing behavior and specific expectations of the consumer & customers in different areas. E.g. account management across multiple business units, realization of complex projects and offerings with combinations of various hardware, software and service solutions can be better supported with a transparent organization/system which shows the business results across the most relevant dimensions.

Also the decoupling between the responsibilities for the results in the market and managing certain resources will bring more focus on the external business environment (business creation) as well as optimizing the synergies between and utilization of resources internally in the organization.

Furthermore looking from the different dimensions at market opportunities will create constructive discussions in which people try to achieve the best result for the business as a whole.

What are the implications of a multidimensional organization?

Information is key! One of the reasons why multidimensional organizations where difficult to build in the past is that the required information to manage an organization across multiple dimensions was costly and difficult to obtain. Often there was an asymmetry of information and therefore the corporations managed the organization as being the sum of the different units.  With the new management information systems we can now get reliable information across multiple cross sections simultaneously and hence also define & pursue organizational objectives along multiple dimensions.

This will allow the board of management to lead the organization in a much more strategic way and also create shared/single business system where needed to achieve customer & market success.

People are key! In a unit organization the identification with a position in a unit and control over the own unit was a strong motivational driver. In the multidimensional resources are often part of shared service centers, accounts are shared and projects are run across units. The direct span control will diminish, whilst the accountability to obtain the best results for the business still remains. This means that people will need to be able to influence others (who are not reporting directly) and be open to support others to get the best results for the organization.

This of course means that also the incentive & reward system needs to change from a unit based performance more towards a higher level/concern based incentive system. People need to become more contribution oriented (what have I achieved) in the organization than status oriented (what is my area of control/responsibility).

Due to my move from Hong Kong back to the Netherlands and the time & effort it takes to get everything settled again,it has been a bit quiet on the blogging front from my side, sorry for that. Triggered by my new role in the organization, where I moved from a unit management function to a role which requires me to look at implementing new ways of working across units, functions and geographies, I have been looking for some guidance in literature as well. This I have found recently in the Management Study of Prof. J. Strikwerda: “van unitmanagement naar multidimensionale organisaties”. This blog contains my take away and interpretation of how the multidimensional organization can help us to cope in a better way with the changes in the market a place as well as the changes required in the internal organization.

For more information on the multidimensional organizations and what the issues with the current business unit organizations are, I encourage the interested readers to pick up professor Strikwerda’s book. I am not sure however if this book is also available in English or in Dutch only.

Personal Branding: Marketing Yourself

Last week I attended a workshop on Personal Branding and although I am into Marketing, I had never thought so much of my own “brand” and marketing myself. Herewith I will share with you some of my take aways of this very interesting experience.

What is meant with a personal brand? Yes certain corporate brands have done a great job on making clear what they want to stand for such as; Coca Cola (refreshing a thirsty world), Disney (using the power of entertainment to educate & enlighten) & McDonalds (world’s the best quick restaurant experience) , but people can also do is. Some of the best current examples are probably Barack Obama (who clearly stands for change; “yes we can”) & Richard Branson (adventurous entrepreneur, going against the establishment).

How do you define and build our personal brand?

The workshop started with looking at ourselves from a number of different angles. We had to select our core values, define what is truly meaningful for us and what the values are that we really do not compromise on. Although the list of words you come up with are still very generic, they already tell some important things about what you want to stand for. This you can further sharpen by defining statements of what you want your brand to be associated with “I am…” and what not “I am not…”. Also making a list of your true passions and things that motivate help.

The next angle to take is the view of others have on you. How do your bosses, colleagues and friends  currently describe you, what are your strengths and which achievements have you been recognise for and what are the important things you have learned along the way? Try to describe the points that make you unique as good as you can.

When you have all this, you can start articulating your brand. First step here can be taken into the direction of describing “I want to be known for…. because….”. Keep in mind that in order to have a believable brand, you of course need to have reasons to believe or in other words, evidence, which convinces people that you live up to your brand.

Before you make your brand description it is important to describe who your target audience is; who do you want to market your brand to (new colleagues, potential clients, your community,..). When writing your Brand description try to make it exciting and keep it simple. Think of the famous 30-sec elevator pitch in which you try to market yourself. In order to  sharpen your story, you should try it out on a few people and check what their take away/feedback is.

I herewith give you my example of the brand description I came up with as an example:

“I am an all-round international business leader, who can change, innovate and grow businesses. My passions are in the areas of strategy, marketing and innovation. I have a very broad experience; having lived and worked in 7 countries (across Europe & Asia), in different businesses (both B2B & B2C) and inside various functional areas (business management/development, up-/downstream marketing, strategy, product planning/management, project/process management & logistics). I can drive and motivate multicultural & geographical dispersed teams to high performance and engagement levels”

This is just one of the many outcomes. There is a lot more  you can get out of the exercises, such as; how describe why people should work with you, who to ask for help with positioning/communicating your brand, etc. More on this you can find in the literature of people who specialise in Personal Branding. For me this was a very good learning experience, it makes communicating/connecting to people a lot more effective (as you can see I am using my brand statement now in the “About” part of my Blog) and also gives you a framework which you can use when making certain decisions. Personal branding makes sense!

Now you are on Twitter: What’s Next? – The Answers.

I have been working for some time now to get my hands around Twitter. In order to get some external feedback as well I posted last week in a number of groups/forums the question; Now you are on Twitter – What’s Next?

Within 24hrs I received more than 50 reactions, showing that many people  – like myself – are busy with this question. Herewith I would like to share with you my answer to the question, enriched with the answers of fellow marketing professionals & twitter users.  Thank you all for your feedback. 

To start; many people confirm that if you are on Twitter to develop your business, you should first be clear about what your (online) marketing goal is and how Twitter can play a role in achieving this.

Twitter (or do I better say Microblogging)  is still young in it’s existence and as some people pointed out, like many new tools will need time to develop it’s full potential. Just think about how websites and e-mail looked at the start. 

One of the strong potentials Twitter has is the connection to mobile products. With the platforms of PCs and mobile devices growing closer and the strong familiarity Twitter has with SMS, it could lead to very strong integrations. None of us likes to type long texts on small devices. 

Also we see now Twitter being integrated more and more in consumer electronics e.g. in TVs. Although I do not see us enterering yet tweets with our current remotes; having access to your tweets also on this platform might be of interest in the years to come (e.g. certain tweets filtered as a ticker text below what you are watching in order to keep your informed of tweets you most care about immediately). 

But before we speculate too much about this, the most important point right now to look at – would be in my view – how to use it to realise your current marketing objectives and build your internet presence. Driving people to the right places in the dot .com/.org/….  environment. There is only so much communication you can do in 140 characters, there fore in many cases these URL shorteners do come in handy. 

When you have defined what you want to communicate and where,  Twitter can be used to keep your audience informed and/or give your follower/your self an alert to take action.

Which dots to connect depends of course very much on what you want to achieve. E.g. do you want to:

–          Build a bigger/more loyal fan base on social media sites like Facebook & MySpace

–          Promote your Blog or Group (one of my personal objectives)

–          Drive more traffic to your website by sending regular updates to your customers/followers

–          Feed the online blogger community that there is interesting news available to blog about

–          Create a mini network or tribe

–          Set up 2 way communication with your most customers/relationships

–          Send messages which hopefully are re-tweeted and spread the word around

Twitter is by far not the only tool to use here. Which ones to use depends on which part of the puzzle to solve (see also my earlier blog on “how to use Twitter better as a marketing tool”). My advice is to not wait for the next better/all-in-one solution to cover all your online needs. Many solutions will come & go and currently Twitter is one of the biggest & fastest growing applications around, with many tools to further improve it’s use. For me it is not about looking at/waiting for what is next; start with what we have now, make the best use of it and be flexible when the landscape changes. This is valid for all tools, not only Twitter.

I look forward to get your feedback on the information above, in this blog or if you are on LinkedIn and interested in discussions on Strategy, Marketing & Innovation please join the forum I have started on LinkedIn – http://www.linkedin.com/groupRegistration?gid=1899487 – where I will keep on posting and encouraging interesting discussions.

This by the way brings me to another important feedback that was given a couple of times: Do your marketing on Twitter (and other social media) in a subtle and relevant way, otherwise people will “unfollow” you very quickly and stop listening/visiting. I hope the message above to share feedback & find out more is relevant and subtle enough.

How to use Twitter better as a Marketing tool?

Let me first start with the plusses and the minusses, as I have observed them, and see if you agree.

On the plus side:

• Twitter is a fast way to update people on certain information.
• It is simple, works on various platforms and many tools are avialable to make it easier for you to tweet.
• The need to keep it short makes people communicate more precise. 

On the negative side:

• When communicating with  a small number of people there are other media to do this in a better way, e.g. (social) networking sites
• When following a large number of people, the interesting tweets get hidden in the large volume of other tweets.
• Big questions I still have about the effectiveness of the tweets – are they being read?

In my view the main issues to work on in order to make Twitter an effective marketing tool will be.

A. Find/recruit the target group you want to communicate with.

I have tried in the past weeks one of these followers building services and learned a lot from that. One of the things is that probably >90% of the people who are following me now, probably are; either trying to figure out how to use Twitter (like I have been  doing myself) and/or not interested in my tweets (just added to build followers themselves).

In the end you want to build a group of followers that are interested in your tweets, therefor you need to recruit them smartly. Some ideas & tips here:

• Use other online media where you know your target group is and highlight the option of following you on twitter and what type of content you will be tweeting (see also next issue on this)
• Look at Twitter exchange sites and try to find out via keywords who are other tweeters/twitterers (still do not know what is the official word for someone on twitter) that could be part of your target group
• Do not be afraid to follow others who you think are your target group, you can always unfollow them when you find out that you are mistaken
• Use the people who are already following you on twitter to help recruit other people who would be interested in your tweets. 

B. Be very consistent in what you Twitter about and how you tweet. 

• Make sure you build an identity on Twitter, so that people know what they can expect in your Tweets. To give an example, my tweets will in 80% of the cases be related to Strategy, Marketing & Innovation and maybe 20% personal information & fun.
• Look at which gap Twitter is filling in your communication. If most of your target group already get’s the same information at the same time, question your self of the benefit of the use of Twitter or the other medium (e.g. RSS feed).
• How often you tweet is also important. Do not try to force yourself in a time slot, tweet as often as you have relevant information.
• Also how do you handle 2 way communications in tweeting? This is very important especially when you want to use the feedback or that it is seen as part of an expected service by the followers.

C. Twitter is only part of the solution 

• Since you are limited on Twitter to 140 characters and often have a lot more to say/explain, make sure you have other online media you can use to communicate the rest of the message.
• Using links to social media, boomarking, blogs and other sites are extremely useful and url shortening services like bit.ly will help you to integrate them easily in your tweets.
• Via Twitter you will probably find some very interesting people with whom you will want to take the communication one step further. Think in advance where and how you want to do this .

 The Future of Twitter

This will very much depend on all of us. There is in my eyes a serious danger that many people try, but can not figure out what the benefit of Twitter is (next to all the other stuff they are already doing online) and stop using it actively or us it wrongly. Another danger is that the number of tweets grows too much to handle both for ourselves and for which ever company wants to run Twitter in the end. In the meatime I will continue to use Twitter, on one side to communicate as an individual about Strategy, Marketing & Innovation and implement for the business I am in, an infrastructure in which we will use Twitter to communicate with our target group relevant updates in our products and services.

I hope you enjoyed reading this blog, I have written it quite generally. When you have more specific questions, do not hesitate to post them below or join the discussion on my LinkedIn forum: http://www.linkedin.com/groupRegistration?gid=1899487

with lot’s of interesting discussions and news on Strategy, Marketing & innovation.

Innovation Marketing or Lateral Marketing

I am currently reading the book “the Marketing Gurus”and in there I found a chapter about “Lateral Marketing” from Philip Kotler & Fernando Trias de Bes. The nice thing for me was that it very well covered the marketing issues I am currently working on and facing in my work.

Lateral Marketing – as described in the book – complements traditional marketing by providing an alternative route to generating fresh new ideas. Whereas vertical marketing helps us find increasingly smaller subgroups for which a product might be developed, lateral marketing lets marketeers develop an entirely new product that finds a much wider audience. Instead of accepting that your product or service will have a small share of a saturated market, you will find yourself the leader in new markets.

A very good example used in the book is about how Hero created a complete new product inbetween the cereal products and candy bars, the cereal bar. Instead of creating the next light/fiber rich/fruity cereal (of which we have enough of choices/subsegments), Hero now is leading a complete new market for people who want a healthy kind of snack or take no time for a sit down breakfast.

Lateral marketing works best for mature markets with no real growth. It creates markets from scratch. It is riskier, requires more resources and time for the consumer to assimilate and understand. It anticipates high volume and may redefine the mission and business focus.

So how does that apply to my business. I am currently working in the home audio business. And although there have been many innovations in the past, from LP, to cassette, to CD, to Docking, the growth has been limited. Unlike the portable business, where the MP3 players (with the iPod + iTunes as lead product) really changed the business and increased the size and type of solutions significantly.

My marketing challenge currently is to market a new type of audio solution where the product does not play anymore back the music from a physical carrier which you insert in it (like CD) or dock into it (like iPod), but a solution where the product directly streams wirelessly your own music collection from your PC/Network, can directly access over 10.000 radio sations from all over the world and allows for music subscription services, with which people have unlimited access to millions of songs via the internet. We call this a network player.

When I read the chapter on Lateral Marketing I really recognised the issues we are/have been struggling with and for me reading the chapter, triggered quite a few ideas and thoughts. These I will not share openly in this blog, since my competition can also read it, but if you are interested follow what Philips will be doing around their Streamium network players.

And for anyone who is working on marketing innovations, I can advice them to take a look at what Kotler and Trias de Bes are saying about vertical and lateral marketing.

Your feedback on my blog, the advice or your personal experiences with marketing innovation, will be very much appreciated.

Innovation in a time of recession

Next to my own ideas, I have also posted “innovation-in-a-recession” related questions in a number of professional forums and there are clearly multiple angles to this subject.

In general people agree that innovations can drive markets out of a recession. They require to address a consumer/ customer need in a new way or address an unmet demand, which actually can be related to the changing buying behaviour during a recession. This buying behaviour will be moving towards products required for day-to-day use, necessary replacements (e.g. in case something breaks down) or new needs because people change their routine.

In most of these cases consumers are now – more than ever – looking at the value being offered. In many cases this will relate to the costs of purchase & ownership. Therefor breakthrough innovation in terms of the cost of the products/ services should get focus, but also the way the products/services are being delivered, plays a major role. Therefor innovative business models which carry the least cost in them – e.g. via the internet – can flourish.

On the side of creating innovation there are a number of viewpoints as well. On one side budgets will be tight, but on the other side, the organisation and employees will be under pressure to come up with new ideas to help safe the business and protect their jobs. Having a strong purpose and direction as a business in these times will definately help. Maybe it is not a very nice example, but very powerful. One of the most breakthorugh innovation rich periods in the 20th century was in Germany around the 2nd world war. People were coming out of a very dark period for their country (after the first WO) and were working very hard on creating a new future. Under this pressure a lot of breakthrough technological, scientific and organisational innovation took place. Possibly in a more constructive and smaller scale this can be applied in our own environments.

With regard to organising and funding innovation within our business environments there are as well a number of viewpoints. Which innovations to focus on is a strategic question. Since this will be different per business, a general answer is difficult, but applying some common sense, we can identify a few directions. First of all the innovation should be addressing a clear consumer need, for which people are willing to spend the related costs. There should be a competitive advantage for the business compared to competition.

Another point to look at is how to bring the innovation to the consumer in a time of recession, especially when it is a real new area. Here we need to look at the value chains that are willing to support this. Some of my personal experience is that for instance traditional retail is at this moment focussing more at surviving by selling items which have already a high rotation. Therefor if you want them to bring something new, you have to give them a good reason to list it. Therefor maybe this is also a good time to look at how to innovate the delivery model to the consumer by looking at lower cost supply chains and new sales channels (e.g. online).

In times of recession strong additional elements to look at in making choices between various options, can be in the direction on the cash flow required and pay back time of the investments. In certain cases the short term benefits are required to sustain the long term future of the business, but when there is a choice between similar options, the one that serves the long term future should be opted for. Also certain innovative areas will become more interesting because of new funding becoming available, e.g. government programs can be an influencer to change the innovative resource allocation in certain industries (just look at what is happening in the car industry).

A number of the discussions I have seen and had, addresses the point that a number of innovative areas will not be impacted that much because of the recession, simply because the need for them remains strong. For example people will continue to look after their health, do not stop caring about the environment and become more energy usage conscious (also because of associated costs).

Since this is my first real post and I have no feeling yet if this is too long or too short, I leave it here and hope to get some feedback on the length and quality of the content – please give your feedback.

Getting started!

After doing some checking on the various blog sites and tools, I have decided to go for WordPress as platform to host my profesional blog. Therefor soon you will see my postings appearing here on the subjects of Strategy, Marketing & Innovation. I am still in the trail & error phase of adding various sources of content to my networking setup, such as twitter & RSS feeds. You already will see a few on this site and if you have experience yourself on how to enrich the content of the blob further, let me know