Lesson In New Economy Marketing

New economy marketing and marketing in general is a huge interest area of mine these days, and I have been on a quest to learn as much as possible over the past year. During this discovery process I found Seth Godin and his blog. A marketing guy with not only good information but an interesting perspective in his area of authority. So after reading his blog for a while, I bought his most recent book (my first book from him) ‘small is the new big'.

Unfortunately, this book is difficult to summarize, since it is a compilation of his thoughts, but I highly recommend it because it is much more than a marketing book. For me it was a book about entrepreneurial thinking, and motivation. I bought the audio version to listen in the car and actually found myself frustrated listening it. The content was great because it spurred so many thoughts in my head. Unfortunately, just as I would try to expand on one thought, Seth would be on to his next riff, and my mind would be forced to shift also. (Aside: It would be great if my iPod could be paused and take voice notes which I could tag to a bookmarked location in an audio book). I finished it yesterday on the way into work and it is likely that I will buy the print version, so I can go back and tag pages and rethink about the ideas that were flowing when I listened. In addition to this book, I have also downloaded some of his e-books and, and recently sent him an email about a riff I had. (Which he responded to within a few hours)

What I realized is that I just participated in my own lesson on the topic I have been researching.

• I got a reference to Seth through some blog post (I can even remember where)
• I read his self generated/free blog content that is updated regularly, and sold me on his topic authority
• I decided to buy a book (that is really just a collection of his free blog posts)
• I have read it and recommended it to others
• I have downloaded his e-books, and will likely buy other books
• I sent him an email and got an got an actual (non automated) response.

He has built an authentic relationship with a customer who didn’t even know of him a year ago. He generated a few dollars from a book sale, but the real value downstream revenues from word of mouth marketing. Marketing cost to him = just his time, and passion.

Stimulating as Black Coffee

I came across this quote this morning:


"Good communication is as stimulating as black coffee and just as hard to sleep after."
--Anne Morrow Lindbergh, aviation pioneer, writer


This exemplifies why new media options used to create meaningful two-way conversations with your customers (eg. Blogs) are powerful marketing tools. One-way marketing puts your customers to sleep, two-way marketing gets them engaged.

Agile Learning

A while back I blogged about creating innovative education. Kathy Sierra, recently wrote a great post about the current state of math/science in the US.

If you studied math, science, or engineering at a four-year college in the US, much of what you learned is useless, forgotten, or obsolete. All that money, all that time, all that wasted talent. If all we lost were a few years, no big deal. But the really scary part is that we never learned what matters most to true experts in math, science, and engineering. We never really learned how to DO math, science, and engineering....

Our educational institutions--at every level--need drastic changes or we're all screwed. The generation of students we're turning out today need skills nobody really cared about 50, 40, even 20 years ago. Where we used to prepare students for a "job for life", now we must prepare students to be jobless. We must prepare them to think fast, learn faster, and unlearn even faster ....The Waterfall Model of education is failing like never before. We need Agile Learning.

Some additional thoughts on this topic:

• In the realm of software development Agile is more about a state of mind, than a set of skills & methods, and one of the keys to Agile success is having experiences and training to allow help practitioners how to make the write decisions. How do we then teach agile learning without experience - by teaching through experience showing students how to fail quickly, and learn from mistakes.
• Agile learning should be facilitated through learning frameworks instead of the current model of "checklists" learning. Again, like Agile software development - quality and a great end product is not ensured with a checklist - it is about embedding quality and adaptability into the process.
• Education is about building up a tool belt to equip the student when they go out into the real world. Today we teach the theory behind a hammer, and the mechanics of swinging a hammer, but less about keeping the nail straight, when to use a screw (and screwdriver) instead, or how to select a different tool if conditions change.

I once had a case interview for a large financial services company. I was presented with a simple business problem that was dealt with in the business. Although this was a new industry segment for me, I could solve this problem by using math or business tools from my tool belt. Then as soon as i finished problem, a 'twist' was thrown in (more information, changing conditions), where I had to re-think my response. Once I finished, another twist was added. This continued in fairly rapid-fire succession. By the end of the interview, my brain was fried, and I thought I had failed miserably, but I got the job. The interview was about my ability to think creatively, react to changing conditions, and thinking on the fly, and less about whether I gave the exact right response. This to me, is the essence of business in the new economy today, what agile learning is about, and unfortunately not what we teach.

Porter: Bermuda Triangle Strategy

Michael Porter recently spoke at Wharton on the topic of "Why do Good Managers set Bad Strategies". In this discussion porter starts out by saying that most strategic errors are not caused by external factors, but come from within. He goes on to discuss what strategy isn't. Here is a particularly good excerpt:

"'Strategy' is a word that gets used in so many ways with so many meanings that" it can end up being meaningless. Often corporate executives will confuse strategy with aspiration. For example, a company that proclaims its strategy is to become a technological leader or to consolidate the industry has not described a strategy, but a goal. "Strategy has to do with what will make you unique," Porter noted. Companies also make the mistake of confusing strategy with an action, such as a merger or outsourcing. "Is that a strategy? No. It doesn't tell what unique position you will occupy."

In this article he introduces the concept of the Bermuda Triangle of Strategy, which is the confusion over economic value and shareholder performance.

"We have had this horrendous decade where people thought the goal of a company is shareholder value. Shareholder value is a result. Shareholder value comes from creating superior economic performance."

Some key points I pulled from the remaining discussion:

• To think that stock price on any one day, or at any one minute, is an accurate reflection of true economic value is dangerous.
• Corporate strategy cannot be done without strong quantitative analysis.
• Companies hoping to build a successful strategy need to define the right industry and the right products and services. Bad strategy often flows from a bad definition of the business.
• Confusing operational effectiveness with strategy - Good operations can drive good performance, but its hard to sustain. If its a good practice everyone will do it.
• You have to keep up with best practices while solidifying, clarifying and enhancing your unique positions.
• Don't let incremental improvements in operations crowd out the larger strategy of building a unique business that will retain its competitive advantage - keep competitive strategy in mind at all times.
• The key principles of strategic positioning, is a unique value proposition, a tailored value chain, clear trade offs in choosing what not to do, and strategic continuation, or ongoing improvement. The underpinnings of strategy are "activities that fit together and reinvigorate each other.
• Continuity is critical to successful strategy - If you don't do it often, it's not strategy
  A capital market bias can be a barrier to strategy - when equity compensation is tied to share price people become overly attentive to financial market tactics (eg. mergers, acquisitions), and can make poor decisions.
• Importance of Leadership on strategy: Strategy is challenged every day, and only a strong leader can remain on course when confronted with well-intentioned ideas that would deviate from the company's strategy.
• Corp strategy should not be kept a secret. Openness and clarity of strategy will help everyone in the organization understand the strategy and align everything they do with that strategy every day.

The more I read today about capital markets, and the downsides to having to answer to a group of shareholders that often know little to nothing about the business you are in, too focused on short term financial returns, and rapid growth at all costs, bodes with the concept of staying small and agile, to have the 'appropriate mix' of shareholders, who align with your strategy. Small does not mean less profitable in the new economy.

The Starbucks Test - Long Format

You may have heard about the widely blogged 'Starbucks Test' by Bob Sutton. He calls it the Asshole metric. If you haven't here it is:

The more complicated the Starbucks order, the bigger the asshole. If you walk into a Starbucks and someone orders a "decaf grande half-soy, half-low fat, iced vanilla, double-shot, gingerbread cappuccino, extra dry, light ice, with one Sweet-n'-Low and one NutraSweet," you are in the presence of an asshole.

Now before you get all flustered with the use of this term, you have to admit that you know exactly what it means in the context of business, and something that everyone has dealt with. Now Bob has a new book coming out called "The No Asshole Rule: Building a Civilized workplace, and surviving one that isn't". Its not available yet, but Guy Kawasaki, gives a thorough review of the book.

It might be a refreshing change from the typical, dry 'stuff shirt' business books often written, and based on this review, I think its probably worth a read. Plus, being an analytical guy I am interested in find out more about a topic in his book called TCA (Total Cost of Assholes).

Creating Rifts in a Flat World

If you have read Thomas Friedman's "The World Is Flat" you know all about this concept, and how you need to think about these concepts as you move your business forward in the new economy. Jim Carroll points out however that once people, companies or even countries get this concept, they have spent so much time focused on cost and efficiencies of the flat world they they often don't know where to go next...when flat becomes the status-quo. He suggests that this is exactly the time to put a ripple in the flat world with innovation. He then suggests some ways to ways to go about this:

• Focus on brand
• Go big on quality
• Get Religious on time-to-market
• Go deep with market knowledge
• Increase value
• Focus on agility
• Seek partners
• Go upside down
• Stay motivated

The interesting thing is that for the most part, this is exactly what start-ups do innately. That is precisely why they are coming into existing markets, transforming them with new ideas and often crushing existing players. While the existing players are still trying to figure out how to play in a flat world, the new players already there, and purely focused on innovation, because that is all they really have to compete with. As Seth Godin preaches 'small is the new big'. Act small - think big.

New Economy IT Department Transition

As IT shops are being forced to become more accountable for their spend and to prove value-add, it still surprises me the trouble that some shops are having at making this transition. The interesting thing is that most of it is about attitude, and not about a lack of skills or technical knowledge. Earlier this year I wrote down a list of successful tacktics to complete this transition and here are a few of them:

Connect IT to Business Strategy: If your technology strategy is not connected and driven by the business strategy, it is unlikely that you will achieve the highest value-add potential. In addition, develop an IT balanced scorecard as part of this strategy, that includes items that are pain points with the business. Adding items that you score well on but don't particularly matter to the business strategy is enticing to some, but not particularly useful. Support this with an ongoing IT Steering committee with Senior business leaders so that IT direction can be proactively managed.

Shift the IT Culture to that of a Consultancy: It is important for everyone in IT to understand that they are a cost center. Most shops already have felt or understand the idea that the business has choice in this area. Think like a consultant - remember who is paying your 'rates', be polite, be flexible, and deliver value added services. So what value added services can differentiate an internal shop from outside competition. The best way to do this is deep knowledge of the business domain, used to deliver the right products based on customer needs in an efficient manner. This can also be helped by hiring technical people that care about the business. Avoid technical people who just care about the next new software app they can put on their resume (unless software is your business).

Create Shared Ownership: Try to move away from segregation between IT and 'the business'. Bringing the groups together can go a long way to creating synergies. Try creating oversight groups in areas that there is obvious cross over. Business Intelligence/Data Management and Process Management are two good examples. Another option is to develop a model where cross functional action teams are created to address business/IT issues. There is usually some component of both, and this puts everyone in the same boat for resolution instead of finger pointing.

Create an Environment of Mutual Respect: It is important for both members of the IT department and the business customers respect that value that each brings to the table. This will increase trust and thereby increase speed and reduce costs. The IT department should work to find and nurture business champions for IT. Just like client referrals, appropriate business champions from successful initiatives can go a long way building better relationships. Bring business personnel into IT process improvement initiatives. They will get a better understanding for IT processes and bring a unique perspective. Bring IT personnel into business process improvement initiatives. IT personnel often have a cross functional view of the org. that business silos do not. IT should make special effort to try and better understand the business, and really reach out to understand customer needs. An great example of a 'respect builder' in one place I worked there was a program called 'keeping in touch', where all professional staff (both business and IT) sat with call center personal for minimally an hour a month to listen to customer calls, see how they used IT systems to do their job. Sitting directly with true end users can bring amazing clarity.

Noun to Verb

Web 2.0 is one of those hotly debated new Internet terms. Was the web always meant to be 2.0 - we are just getting there now? It is a state of technology or a state of mind/thinking? Regardless, it is important for all business's to keep on eye on it, and understand how it is and will change their business for better or for worse.

Joi Ito recently joined in on the topic with this very interesting piece discussing YouTube and its place in Web 2.0-land. It also references back to a great general description from Tim O'Reilly a little over a year ago, discussing the difference between 1.0 and 2.0 apps. Debates now are mostly around nuances, that mostly matter to technical people.

The best way to think about it is that Web 2.0 turns the web from a being a noun to a verb. Simple, but I think tells the story. Users now are getting the tools to be truly in the driver seat.

Timeless Management Thinking

Leadership and management guru, Tom Peters recently posted a interesting list of management ideas from his experience over the past 30 years. All are thought provoking - here are 3 to wet your appetite:

• failure = normal = good. ("Reward Excellent failure. Punish mediocre success." "Fail Faster. Succeed sooner." "Fail.Forward.Fast")
• Survival = PSF/Professional Services Firm "mindset". Goal#1: Enable clients to become successful beyond their dreams!
• The "right thing" is the profitable thing

Not sure if they all apply in every situation, in the new economy, but nonetheless they will make you think about their application in your organization, and likely also about your current company culture. Have a conversation about how they are applicable in your business and whether you agree or disagree - in the end, they still stimulate a conversation, and therefor worthwhile.

The Trust Factor

We all know the importance of trust in business, and especially in leadership, but have you ever thought about much impact there is when it's not there? Last week I went to the first event for the new Boise Young Professionals Association, and Stephen M.R. Covey spoke for close to 2 hours on the topic of trust, based on his new book "The Speed of Trust". I found it to be an engaging discussion on a topic that most would consider obvious, but as is often the case, the more obvious the topic, the less stellar we all are at it.

Stephen talks about how the trust can actually be quantified in terms of speed and cost. When trust goes up, speed goes up and cost goes down. When trust goes down, speed goes down and cost goes up. Think about your organizations. There are many not-so-obvious signs of low trust... beurocracy, red-tape, office politics are all examples of mistrust.

So what can we do about it? He has come up with what he calls the 5 waves of trust (think about the ripple effect metaphor) starting from the center and moving outwards, that we all have the power to influence. Self Trust > Relationship Trust > Organizational Trust > Market Trust > Societal trust.

His talk focused primarily on Self Trust. Stephen breaks this into the 4 cores of credibility: Integrity, Intent, Capability, Results. The first two deal with a persons character and the second two deal with competence, but the important point is that all 4 are required. Think about people you work with - ones that you trust and ones that you don't. For example, I worked with someone once that was very competent, had integrity, but failed in the 'intent' department. People perceived that he had personal motives and agenda, and this simple fact overwhelmed all of the integrity, capability and results that he had to offer. Unfortunately mistrust in personal character is also the hardest to change. Competence and results can be improved with training and mentoring, and people are often very willing to help a person in this area, but if someone doesn't have integrity and or good intentions it doesn't really matter what else they bring to the table, and it can stay with them for a long time. Often in business it is character trust that has the highest costs in an organization.

This concept of trust really intrigued me, and so I bought the book to read further (effective, authentic marketing at work!). I have also become much more cognizant of this in the organizations that I deal with or ones I read/hear about, and the frustrations that others have with a lack of trust. Look at this post and this post recently by Seth Godin, both on the same day!

The great think about trust though is that it starts with us. Make these principals part of your life (both business and personal), and business will shift with it. Re-think how important trust is to the success of your business - its big.