Reading list!
Must try to read this before the new year. So many business models are being shifted by the sharing economy but I wonder about the impact of a cultural lag.
The End Of Charity
I really enjoyed reading this book. Nic Frances shares his experiences of working for a charity and his own journey that led him to move into business development.
Although the book does not discuss the social enterprise model, it does discuss in detail the role of private companies in delivering social change and social benefits. Nic Frances argues that it is only by encouraging private businesses to develop values and principles that are not directly linked to immediate profit that we can produce sustainable solutions to social problems. The book describes how markets can be used as powerful enablers to deliver a range of benefits for the wider society.
The End Of Charity sets out why a charitable model is not sustainable and proposes a market led alternative which is most interesting. It also gives some practical insights into starting a value led business from someone who has done it.
I have often looked at ways or opportunities to work with the third sector and continue to look for opportunities to give marketing and business support in this area, email me if you think we could work together!
Minority Verdict
Michael Ashcroft writes about the 2010 election. It is a fascinating read from both political and marketing perspectives. Obviously we know the result, a coalition government. What is interesting is how The Conservative Party used clever direct marketing tools, database segmentation, and market segmentation to offer up the best chance of getting an overall majority. It didn’t quite work, but they did come very close and the book explains why. Clever segmentation can often be used to develop disproportionately high gains in market share and this is a great example of it working.
The book also shows the importance of getting the right message, in the right format, at the right time.
This book has inspired me to become more interested in the research aspects of marketing and this is something I hope to develop in 2012.
Serious Play and Open Innovation
I have spent a lot of time in the first half of 2011 looking at innovation and new product development. Two very good books here that I should mention on my blog.
Serious Play is all about proto-typing. It explains the importance of modelling early ideas, both by developing concepts and by developing proto-types that people can touch, explore and become excited by. Serious Play is about how companies can use proto-typing to stimulate ideas within the company and create innovation. Rather than think innovative teams create innovative products, this book suggests that innovative proto-types generate innovative teams and an innovation culture within the organisation.
Open Innovation is a very interesting area which is always developing. Although this book is academically written and therefore at times hard to read, it does offer some interesting models and frame works for creating an open innovation environment. 
Although not specifically about the software industry the book discusses open source software at length and highlights many examples of approaches that can transferred to other industries. The book offers processes for using open innovation to develop solid and effective research, technology, R&D, and demonstrates the opportunity to get economies of scale within these activites.
Two great books for people trying to develop innovation within their businesses.
Blue Ocean Strategy
A great book for anyone who is concerned with Innovation! It is both practical and challenging and has a similar feel to the Jim Collins books I have read. The book makes the central argument that real innovation is not about developing products that compete with competitors, but that real innovation makes the competition irrelevant because there isn’t any. So if your next big idea for business is a new product development launch don’t confuse it with real innovation. In my experience it is surprising how many businesses genuinely do.
The book sets out a framework for analysing where true innovation may come which I think any business could use. It essentially focuses on increasing buyer value whilst at the same time reducing costs to deliver “value innovation”. The book describes several strategy canvassing and definition techniques to help people understand where innovation can be developed these include the value curve, four actions framework, buyer experience cycle, buyer utility map, and blue ocean idea index which helps people to benchmark your innovation.
The book covers six key principals that facilitate this kind of innovation development:-
– Reconstruct market boundaries to find opportunities for innovation
– Focus on the big picture of what customers really want, not the existing numbers found in existing markets
– Reach beyond existing demand to find new customers
– Get the business model right and thing about the customer journey to your innovation
– Overcome key organisational hurdles that typically stifle innovation
– Build execution into strategy – ensure your business can execute
If you like this book, try reading Seizing The White Space as a nice complement.
Brain Rules!
We are amazing! Every single one of us is amazing and if you don’t believe me just read Brain Rules. Even if you forget all the other things we can do as humans our Brains alone are so incredible they make even the fastest computer with the finest most developed software look very very slow indeed.
I don’t think I need to say too much more about the book, but it does seem to me that sometimes perhaps we take our Brains for granted. Here are the 12 principles discussed in the book and what they could mean for your business activities.
1 – Exercise boosts Brain power. If you need to concentrate on stuff, think clearly, remain focused and remember things – the best thing you can do is exercise for 30mins upwards every day.
2 – Our Brains have evolved. Whilst this means they can deal with the world we live in today, they also have a history which can sometimes explain what may appear to be irrational behaviour.
3 – Every Brain is completely different. This is because our Brains configure themselves based on what we are doing. If you want to become a faster reader – read more often – your Brain will do the rest.
4 – The Brain can only focus on one thing at a time. That’s right, there is no multitasking! The Brain looses attention after approximately 10 minutes at which point you must refocus it. Think about Presentations ones you have endured and ones you have delivered.
5 – If you repeat something you increase the chance of remembering it! Reproduce the surroundings where it first entered your Brain to increase the chances of remembering even more. How can you incorporate this into your marketing or into your sales pitches?
6 – To commit something to long term memory introduce the information gradually and at regular intervals adding more detail at each timed interval. What does this mean for your next strategy meeting or presentation?
7 – When you sleep your Brain organises the memories of the day. New information is best digested before sleep rather than after.
8 – If your Brain is stressed it is because it feels not in control. Give yourself or other people choices to reduce stress.
9 – Vision is your strongest sense. Use imagery to increase what you and others can remember. Powerpoint is configured to use text – but it is actually imagery that is more likely to be remembered.
10 – Smell stimulates emotions and memories at the same time for the Brain making it another very powerful sense. How can we use this in marketing, and what does it mean for the smell of your products?
11 – Our Brains our pre-programmed for life long learning and exploration – so never stop being curious!
I am in awe of my Brain and so should you be of yours! Take a look at John Medina’s site for more information – its a great web-site and a great book http://www.brainrules.net/the-rules!
Baby Food and The Art of The Long View
I recently was introduced to the Organix baby food brand. No, I haven’t become a father but I did get to look into a rather exciting opportunity to work with the company. Based in Bournemouth the company is full of bright creative people who are all passionate about their brand and what they do.
Just after I finished talking to the Marketing Director there I also started reading The Art of The Long View. A most interesting book which discusses how one might predict what the future landscape or market conditions might look like for a business. It is not seeking to deal with innovation or long term business planning, merely suggesting that for innovation or business models to be most useful they must surely fit into a future where they are both necessary and compelling as a proposition. To understand what the future might look like I would probably start by looking at some relevant long term trends, but the authors argue that this is not particularly helpful. Instead they argue that one should consider specific, relevant, and clearly possible (however unlikely they may seem now) scenarios and consider how the business would need to respond in that environment. Scenario responses can then be compared to look for commonalities which suggest areas for business focus and investment because they are good bets, but also tracked backwards asking what would have to happen for those scenarios to occur and what is the likely hood of those circumstances happening in the mid to long term.
Upon finishing the book I decided to look at two scenarios way into the future that might change the way Organix operates as a business and brand.
Scenario 1 – “Imagine a UK where most people have become close to being self sufficient or at least neighbourhood sufficient”. In the previous decade Supermarkets have built total dominance of the retail sector, but then a backlash started. One of the main problems was that for many decades Supermarkets had controlled inflation to a certain degree by keeping food prices low. But this had become unsustainable. Strengthening Asian markets, a weakening US market, and a dependence on imports from Europe had all lead to the UK cost of consumer goods becoming very high. At the same time rising fuel costs and a destabilised Middle East meant most people and all but the largest of businesses had to reduce unnecessary travel expenditure. Realising that both government and corporate organisations were unable to affect this, UK citizens simply started to “drop out” of the retail economy and produce their own food growing it locally and cooking at home. At first this seemed like a hippy craze from the 1960’s but something was different. Firstly families were making considered economic judgements about the cost of their cars, transport, and food before investing significant time and money on moving towards self sufficiency. Secondly they were not protesting, they were adapting to preserve the family and celebrate their local community. In this environment everyone grows vegetables in their garden and when they have too much they exchange it with neighbours for something they need. There is a local farm, a local dairy, a flour mill that makes bread and pasta, and a local market where people can buy or exchange goods.
What would Organix look like in this Scenario?
If Organix had managed the brand through this market change it could not be a retail food brand – but perhaps a brand that champions the best food for new born babies. To do this, it may still produce and sell a range of baby foods, but this is now just a small part of its business. Instead it has become an authority of the best nutritional diets and the best food ingredients to raise all kinds of babies. It produces books on this subject, and has a large web-site which for a price provides mothers and fathers with a “how-to” set of teaching guides to source the right ingredients and cook babies the best food that suites them. After partnering with Universities and years of research they have also become an authority on a specific food groups that promote the long term health of new born babies, reducing the likelihood of diabetes and cancer. Finally Organix has produced a completely new business proposition. The Mother and Baby restaurant. This is a franchise business model. A family in a local community buy a franchise and Organix set them up with a small catering unit, relevant equipment, and training. Mothers can “check in” using a web-site and pre-order the meals that they would like and when they would like them. The premises have taken years to develop, and were initially based on the designs for their own offices in Bournemouth. They are comfortable, clever acoustics absorb much of the sounds of babies which reduces discomfort, different colours engage the babies, furniture is practical and attractive, and staff are on-hand to help with feeding and cleaning as soon as is needed. Layouts allow mothers to spend time together and for babies to play after their meals. The business model has won Organix many awards – it has brought them into the heart of the community, it has allowed mothers to connect, it has taken stress way from feeding time and replaced it with an enjoyable social experience that is also very convenient.
Scenario 2 – “A dramatic increase in government regulation”. For many years government and the private retail food industry have battled to find a happy medium between the concerns of governments who wish to ensure that food promotes healthy living, and the commercial concerns of private sector food companies who resist regulation. Over time government intervention has increased. Guideline Daily Amount schemes have been replaced with legal requirements for maximum amounts of fat / salt / sugar in products per 100g’s. Packaging claims have been outlawed unless proven by independent approved laboratory research. But in the last few years governments have realised even this is not working. Cancer rates are still too high, obesity continues to rise, and diabetes has become the number 1 killer in the UK. In response to this, the government has launched its own range of food and drink products that cover ages 0 – 18. Approved by experts, the government acknowledges that these meals do put nutrition before taste. However, all the ingredients are sourced from the UK, all the products are made in the UK, they are “nutritionally best in class” and the government has created legislation meaning that retailers cannot price another product in the same category to be less than 5% more expensive that the government label equivalent. In other words, for other food businesses to compete, products must be nutritionally best in class and secondly have a significant taste improvement to mean customers pay the extra price.
What would Organix look like in this Scenario?
When Organix was born the company’s founder had strong beliefs about Organic food and even then they lobbied the government hard to improve standards. During 2010 – 2020, Organix continued to do this but it went considerably further. It commissioned research into diabetes and the long term impact of food eaten in the first three years of a life. It was brave too, every time it improved a products nutritional profile or added a new ingredient based on research it made the knowledge and sourcing available to the entire industry. On the one hand Organix continued to push the frontiers of diets for babies, yet at the same time it moved to a software open source like business model. Anyone could see the intellectual property driving the products Organics were making and the contracts they had with suppliers were never exclusive. One key business benefit of this was that competitor ranges simply couldn’t keep up! Organix invested so much in being the best and then used transparency to prove it – it was almost too costly for other businesses to try and compete on getting first mover advantage on dietary improvements.
Whilst this “open source” at first appeared to be an industry initiative Organix actually started to reach influential opinion forming customers. Mothers and fathers realised that the brand literally had no secrets – on-line you could see the food being made live in a factory kitchen, you could see where every ingredient came from, and you could listen to talks from researchers in independent laboratories talking about the latest thinking on diets – all for free. By becoming a totally transparent business and at the same time refusing to yield its market leadership position to anyone, Organix continued to outsell any Government sponsored product range.
Back to reality!! Having been through the process, albeit very briefly, it is clear to me how powerful the Scenario planning process can be. It opens the mind to look beyond trends and into realistic yet alternative views of the world. I think it would be very powerful to run a scenario based set of workshops to really consider how brands might need to adapt to meet future needs and market conditions. I thoroughly recommend this book. Oh and the last few pages will probably bring a tear to your eye!
Made to Stick
This book is a nice complement to “Making Ideas Happen”. The book sets out that one of the problems with making ideas happen is that we simply forget them. Whilst some things seem to stick in our minds other things simply do not. Unfortunately often the gem of a good idea, or a suggestion to make something that isn’t working work often just doesn’t get remembered and therefore is never actioned.
The book suggests six characteristics of ideas that are sticky:-
-They are simple – if you cannot explain your idea in three sentences or thirty seconds it probably isn’t clear enough in your mind and therefore won’t be able to resonate in someone else’s.
– They are unexpected – that is not to say Gimmicky and a fad or hype, but they have something that triggers enquiry and interest
– They are tangible – not pie in the sky visions that people instinctively understand probably won’t happen
– They are credible – perhaps through demonstration, perhaps through logic or research, or perhaps through other people’s support, but in some way ideas must have a credibility factor to stick
– They are emotional – ideas that do not appeal to people’s emotional intelligence are unlikely to get a positive response, people just think there is a possibility of more work. You must show your passion and seek it from the audience to make an idea stick
– The idea, the problem, and the solution can all be communicated neatly into one simple story. People remember stories not academic theory or financial formulas. If you want your idea to stick tell it as a story.
I think this is quite a useful checklist. Next time you have an idea and you need other people to help you make it a reality why not try this and see if you can make it sticky!
The New Business Road Test
This is a most useful book for anyone who is contemplating starting their own business. It is a very good compliment to Business Model Generation. The book argues that writing a business plan is not an effective way of creating a business because it is a) too formal and rigid, b) produced in isolation and away from the market forces that the business will be exposed to, c) written with a heavy slant towards writing what an investor or lender would want to hear and d) completed with little customer endorsement or consideration of the practicalities involved in building a business.
One interesting argument in the book is also the recommendation to separate the decision of creating a business from that of the product, market or industry to enter. The book argues that often start-up business fail not because of internal weaknesses, inexperience or capability, but because they have simply entered industries or markets that are not attractive and where the odds are already stacked against them.
The book offers not what I would describe as a business modelling template, but instead a framework for developing a business idea and evaluating the chances of being successful. This is based on seven factors : macro and micro market forces combining to assess the markets attractiveness, macro and micro industry strengths and weaknesses combining to show how sustainable the industry might be and how attractive it might be to operate in, the internal teams propensity for risk and whether this is in equilibrium with business objectives, the connections and influence that the management team have, and the ability of the total team to execute, or ship as Godin would say! I think this is a clever balance between conceptual business or marketing appraisal and the more practical but equally relevant considerations.
My key out take was that successful businesses need to be placed in the right place at the right time but most importantly with the right people on the job. A good enjoyable read!
Seizing The White Space
I really enjoyed reading this book. It is clear to me that the nature of innovation has changed dramatically over the last decade or two. As companies look to grow through building new revenue streams they are increasingly faced with new challenges to bring products to market. Firstly the start-up is able to move quicker than ever, use the internet and other purchasing tools to manage down upfront costs, and communicate with its audience in timely and relevant manor often without cost.
Secondly and perhaps an even bigger challenge is that fact that to fully maximise the potential of innovation, established businesses now often need to adopt radically different business models. This can often cause at best “growing pains” or at worst mean never actually making it to market.
In this book Johnson explains how businesses must think radically about innovation and step far away from the comfort zone of existing markets. In doing this Johnson argues that businesses need to completely reconstruct their business model in order to make the innovation viable and over time maximise the opportunity.
I also liked Johnsons summary of what a business model should look like and I think this is a useful tool for anyone considering a start-up
1) What is the compelling customer proposition. What is it that you can do, that they need to get done, and how do you do it better than anyone else
2) What is the formula for profitability
3) What are the resources and processes that deliver both 1 and 2
The book also defines areas that are rich for innovation and again I think this is useful food for thought for any business
1) Can you transform an existing market by doing something totally different, eg EasyJet
2) Can you create a new market all together, eg Apple iStore and applications for mobile smart phones
3) Can you confront an inevitable industry change, eg Tata Motors
Overall I think this book provides useful material for any CEO or Director who is engaged in trying to develop a start-up business or bring new revenue streams to an existing one.