Sep 13, 2023 | Innovation, Marketing, Strategy
Creativity comes from somewhere; the challenge is always to understand and manage the process and the people. This applies equally to every type of creativity, from painting, writing poetry, formulating the mathematical representations of our physical world, to designing a bridge or a house, or imagining something entirely new.
Creativity is never just a Eureka moment under the shower with no pre-work as the catalyst. It requires the frameworks provided by the pre-work to enable the catalyst to emerge.
For the pre-work to be able to provide a solid framework within which the catalyst can emerge requires years of study, experience, and lessons learned from the ideas discarded or failed, on top of the few that might succeed.
Specialise.
This leads to focus, and deep knowledge, and an ability to apply well above commodity pricing. When a service or creative product is in short supply, the price goes up. Creative people seek problems to solve, and ideas to explore, which is great, but counterproductive to finding the price that will optimise your time. Be committed to the niche, and the specialisation this niche requires will open the opportunities for other ideas and new problems to be solved.
Specialisation really only happens with the benefit of experience, which happens over time. Define clearly what are you going to do, and who do you do it for, and being very clear to both yourself and those in the market what you will not do. For SME’s this is always a very difficult series of choices to make.
By specialising, you also end up emasculating competition, as they cannot do what you can. For those who want what you provide, there is no option.
Address questions of money early.
We tend not to talk about money, it makes us uncomfortable, and creativity is very personal, not about money. However, making a living providing a creative product is why you are in business. You must be able to talk about it to make it, and talking about it delivers credibility.
Do not be scared of silence.
Nature abhors a vacuum, so the best way after delivering a ‘price-bomb’ is to embrace silence.
When selling, if you fill the void, you tend to say something that reduces the impact of the bomb.
It is uncomfortable, but you get used to it.
State the number and shut up. You will gain a lot of information from the silence. Often it saves yourself from yourself, while offering an ‘out’ for those potential customers looking for a commodity product and price to remove themselves early, before you invest much of your valuable time.
How to measure value in the conversation.
There is no easy way to measure value in a conversation, but there is no substitute to a conversation that seeks to find ways for people to exchange value, in whatever form that value takes. The answer is to discover sources of irritation, complexity, or desire the client would like to address, and propose ways to achieve that outcome. Therefore, identifying quantitatively the impacts of the problem, and the results of your solution will increase the value of your offer. The larger the problem being faced, the greater the value of the creative process.
Say ‘No’ a lot.
As Warren Buffet notes: the difference between successful people and really successful people is that really successful people say no to almost everything.
We all want more what we do not, or cannot have. Saying No increases the desirability of your offer.
Anchoring against desired guaranteed value.
If I could guarantee you an extra million dollars in profit, would you be prepared to pay half as compensation? This is a closed question, but it is an anchoring question at the high end of the range. You can work backwards from that, in terms of risk and the nature of the guarantee. This strategy is used all the time, often without us noticing. Energy retailers seem to be always guaranteeing savings on your power bills when you buy from them, knowing that few will do the measurement, and it is a hypothetical measurement in any event. This tactic can be used in many ways. For example, usually you cannot guarantee value when selling to a bureaucrat, as they cannot pay for value, they pay for certainty against a budget. Therefore, you can offer guarantees of delivery date, or performance, any factor that is quantitative.
Value is entirely subjective. At the heart of value is the trade, where you are both happy. Your costs have nothing to do with the value. People do not want your time, or your deliverables, they want the solutions to their situation that you can deliver.
To conduct a value conversation, you need to have the right questions, not the answers. Ask the questions, and the answers will evolve.
Header credit: Me. As you can see, graphic art is not part of my creative armoury.
Sep 4, 2023 | Change, Innovation, Strategy
If strategy is all about choice, and I strongly contend that is so, the challenge for responsible management is to imagine first what those choices may be.
This ambiguous mindset requiring choices to be made with less than full information never happens by itself, as it makes people uncomfortable. It must be pushed, being uncomfortable must be made a significant part of the status quo, making change along with its risks and downsides a normal part of the culture.
Ask yourself what could be true in five years?
Chances are you will not get much right, but the process of thinking about and resetting the status quo to a state ready and able to welcome change will be immensely valuable.
In 1985, few predicted that microprocessors would be everywhere, from rockets to fridges, from phones to toys.
In 1995 few predicted the Internet would become ubiquitous, and in 2005 few predicted their kids would get all the news they could consume, and wanted to consume, from social platforms.
Ask yourself what could be true that would alter the shape and dynamics of your industry.
Step forward and embrace the possibility of those changes occurring in the way you manage your business. By so doing irrespective of how accurate you have been, the business will be much better able to respond to and leverage the change.
Aug 28, 2023 | Innovation, Marketing, Small business
Many of the impediments to starting a new business have been removed over the last 20 years.
You no longer have to hire an accountant to register the business, hunt around for premises, hire a bookkeeper, find an advertising agency, build a product prototype, spend days designing the letterhead, understanding the regulations and weaving your way through them, and doing the hundreds of other tasks necessary to start a business.
They can all be done with digital tools from your kitchen table, or outsourced to someone who has the specific expertise necessary, from their kitchen table.
What used to take time, money and most importantly the energy of budding entrepreneurs can no longer be used as an excuse for not moving forward.
The wheat has been sifted from the chaff by the digital winds.
That just leaves the toughest challenge, the one that in most cases motivated the thinking in the first place, the one that separates the dreamers from the ‘doers’.
How do you identify and generate traction with those prepared to part with their money to buy your product or service?
When they have bought from you once, how do you keep them coming back, or better still, turning your product into a subscription service?
This always was the hardest part of the entrepreneurial journey.
It always will be.
However, these days there are far less excuses not to have a go than there were 20 years ago.
Jul 31, 2023 | Innovation, Strategy
Strategy development is driven by the need to make difficult choices with less than complete information. The successful see a problem to solve before anyone else realises there is a problem, and reap the rewards.
When you think you have all the information you need to make a risk-less choice, my advice would be to look again. Either the path you are contemplating is tactical rather than strategic, or you are simply following some orthodoxy that will not lead you anywhere new or different.
The great and unusual skill is in nurturing the capability to generate an insight that makes a difference. It is challenging to see a situation as presenting a problem to be solved that others did not see, until you have solved it. Then they rush to follow, often commoditising your insight in the process. The classic case here is iTunes, a solution to a problem nobody saw until Apple made it obvious there was a goldmine hiding behind the fence. Apple built a first mover advantage, and by not stopping the innovation process, ensured competitors followed without catching up. Competition just added to the breadth and depth of the market Apple continues to dominate.
Every major behaviour changing innovation I can think of has solved a problem that either nobody else saw or had failed to solve. In the latter case, Thomas Edison and the light bulb are the classic case. Many people had been working on solving the problem of the filaments burning out with a flash when a charge was applied, but it was Edison who came out with the solution first, and is therefore remembered as the ‘inventor’ of the light bulb.
Anybody for a faster horse?
Jul 28, 2023 | Change, Innovation, Strategy
So, Elon Musk surprised everyone, again, by killing Twitter and launching X.
Whatever X is.
Everyone in the marketing, strategic and management world generally seems to have had a go, except me, so here goes.
He must be effing crazy!
(Psst.. He is, but is it crazy smart or just crazy?)
Twitter had a range of problems, magnified since Elon sent the previous owners an offer to buy the joint for an absurdly large chunk of change. It was so large that the then board almost killed themselves racing to sign before he changed his mind and halved the offer. This might have been closer to the value, albeit still overly generous.
Having failed to wriggle out of the offer to buy, he then cut staff numbers 80% from the staff of 7500. Meanwhile ad revenue continued to tank, the rate just increased, dramatically.
Surprisingly, twitter still worked.
Estimates of the value of the twitter brand pre-execution vary a lot, but commonly vary between 5 and $6 billion. That is a lot to just flush down the dunney for no apparent reason.
Competitors must be rejoicing, particularly Meta that just launched ‘Threads’ as a twitter competitor, only to find the gorilla in the garden has been turned into a gnome.
Musk, and everyone else in this space has watched what WeChat has achieved in China, and into the Chinese diaspora, and wanted to emulate it. Given the original source of Musk’s wealth was PayPal, he would be in as good a space as anyone to make that happen. That makes sense, but why sacrifice twitter in preference to starting a separate company?
It simply does not make sense.
There are a few other things that do not make sense, until they did.
Re-useable rockets were not possible, until he did it.
Tesla electric cars at volume did not make sense until he did it.
Tesla as a public company would never make it, until it did. (Tesla now has a market value more than all other US manufacturers and Toyota combined, and continues to climb)
Gigabattery factories did not make sense until he did it.
Distributed recharging infrastructure did not make sense until Tesla reached scale and persuaded Detroit to sign up, a fortnight ago.
Based on his history, betting against Musk is a mugs game, no matter how little sense it makes to the rest of us.
Jul 26, 2023 | Change, Innovation
Differentiation has regularly been trotted out as the core of success. In the absence of some sort of differentiation to a target market, all you have is price. It is an argument that I have used for 50 years.
Problem is, it is only half the story.
Differentiation must come from somewhere.
Usually, we tend to stop at some sort of mechanical or electronic additional feature, seeing those as desirable for the customer. If we are to follow Clayton Christianson’s theories, the absence of those same features that just clutter up the product from a different but unrecognised market might be the key.
In either case, there is a missing element in the usual articulation surrounding the development of a differentiator that in some way adds value to a customer.
Insight.
What is it that makes us realise that the current product configuration, business or distribution model, pricing and feature matrix is inadequate?
From somewhere comes an insight: ‘a clear, deep, and sometimes sudden understanding of a complicated problem or situation, or the ability to have such an understanding’.
Fortunately for the few who are thought leaders rather than the followers of the newest model, idea or shiny thing, insight will not come from any of these. It may come from observing the behaviour of the real outliers, and an understanding of the unusual things that drive their behaviour, or it might come from a diverse set of brains coming at a difficult problem from a range of differing perspectives. It may come from connecting a few practises that exist in other places with an unmet need, or opportunity in an unrelated field. The point is, it will not come from an effort to collect and analyse historical data that is presented to a 3-day offsite strategy session as the basis for their strategic discussions, the objective of which is to produce a glossy strategic plan.
Insight. The question remains how do you mould the culture of your enterprise such that it is able to produce this usually hidden key to success?
Header cartoon credit: Dilbert and Scott Adams.
