Positioning debate

We've got quite the debate going between Tom Asacker, Jon Strande and David Foster in the comments section of my recent post.

Tom says, "Yes I DO think positioning, in general, is a dated concept, especially with regards to brand names..."

Jon counters, "Expectations, isn't that what this is all about? It is what I expect from a brand/product/company?..."

David adds, "I do think it's possible for a company to be known for more than "one thing," but it's tricky and there are limits..."

It's time I tossed in my two cents on this one...

It appears that much of this debate has been centered around products. My view is that products come and go; technologies are invented and become obsolete. A strong brand is not intrinsically tied to a product; rather, the brand transcends it. With regard to positioning, the question is not "what business is the company in," but rather "what is the company known for?" What emotion does the brand evoke? If a company can evoke the same feeling in a different product category, that doesn't mean that its positioning has changed. Look at IBM: a classic example of shifting into new product and service categories over time while still owning the 'safety/security' position in the marketplace. Apple owns 'fun and easy to use;" what other products can it make to expand that position? Porche's Cayenne isn't a departure from its luxury status; the car-maker saw that its customers had a need for a car with more room. Cayenne is a simply a brand extension serving the same customers. I think Jon nailed it: it's all about expectations and reputation.

We also need to look at each company contextually. Microsoft is virtually a monopoly. It doesn't need classic positioning because it wields an enormous amount of power with consumers. Conversely, companies in highly competitive markets like PCs would do well to stake out an ownable position (setting expectations through building a reputation for 'x') like Apple, Dell or IBM.

When companies are thinking about getting into new products or services, I think it's important to look at the existing customer base and ask the following questions: "What is our current customer profile?" "What are their wants and needs?" "What have they grown to expect from our company?" and "Will this new product or service deliver?" It's much easier to add another product or service underneath an existing brand and continue to serve the same (or similar) customer than to reinvent the wheel. The other thing to keep in mind is that customers are aspirational; it's easier for a high-end brand to move downstream (like an affordable BMW or Mercedes) than for a lower-end brand to move upstream. Tom mentions VW's Phaeton... I'll be interested to see whether this car sells. VW is trying to sell a mid-level brand to a high-end customer. Other carmakers like Toyota or Honda created a new brand when moving upstream. Yet VW may be following my point about selling to current customers. VW (especially the Passat) is a trendy, yuppie car; as their 20- to 30-something customers become more successful and earn more disposable income, VW now has an opportunity to keep them as a customer with Phaeton. However, I'm still not convinced this is the right approach; aspirational customers would more likely 'trade up' to a high-end car like Mercedes.

In summary, I don't think positioning is dead. Your brand position is whatever you've staked the company's reputation on. And believe me, every company has a reputation -- good or bad -- whether you've consciously 'managed your brand position' or not.

Ending The Relationship

Great post on Business Evolutionist about Managing the Total Customer Lifetime:

Every customer relationship has a "life" - if I can use that as an analogy... the first exposure or purchase might be thought of as "birth"... but how do you determine "death"? A customer leaving might be beyond your control, regardless of how great the experience is. For instance, consider this quote by Al Ries:

"When a guy gets promoted, he doesn't get a more expensive Chevy, He buys a BMW."

At first, I took that quote at face value. It makes sense. But, just because the person buys a BMW instead of a more expensive Chevy, does that mean that he is no longer a customer of Chevy? Might that guy buy a Chevy for his kid when they're old enough? Perhaps he tells others how much he loved his Chevy?

In other words, where does the customer relationship end? Is the relationship defined by one transaction or multiple transactions? Should the relationship be defined by transactions at all?

Excellent question. Most companies think in terms of transactions, not relationships. They don't consider the initial purchase to be the start of a relationship; it's simply a sale. If it's a subscription-based model like telecom services, the objective is to stop customers from leaving... not to create a strong relationship. I think of good companies like magnets: they automatically attract and keep customers because that's how they're designed. Non-magnetic companies pick up customers and drop them because there's no bond, no stickiness that maintains the connection. When a customer deals with a magnetic company but moves on because of life changes -- like in the example above -- s/he's still quite likely to refer that company to others. It's all a question of what the company is "being" versus "doing."

Shake off this idea virus

Thanks to Seth Godin for comments & link to this CNN story:

Have you ever noticed that whenever people take a Polaroid picture (even professionals), they shake the film a little bit before they peel it?

In fact, I've never seen anyone NOT shake it.

Where did shaking start? How did we learn to shake? How does one person learn about shaking--from someone else?

Anyway, all that was answered today: CNN.com - Polaroid warns buyers not to 'Shake It' - Feb. 17, 2004

Rumsfeld's Fighting Techniques

From Poe News, an amusing visual review of Rumsfeld's fighting techniques.

Axis of Just As Evil

Thought you'd get a kick out of this...

ANGERED BY SNUBBING, LIBYA, CHINA SYRIA FORM AXIS OF JUST AS EVIL

Cuba, Sudan, Serbia Form Axis of Somewhat Evil; Other Nations Start Own Clubs

February 5, 2002: Beijing - Bitter after being snubbed for membership in the "Axis of Evil," Libya, China, and Syria today announced they had formed the "Axis of Just as Evil," which they said would be way eviler than that stupid Iran-Iraq-North Korea axis President Bush warned of in his State of the Union address.

Axis of Evil members, however, immediately dismissed the new axis as having, for starters, a really dumb name.

"Right. They are Just as Evil... in their dreams!" declared North Korean leader Kim Jong-il. "Everybody knows we're the best evils ... best at being evil ... we're the best."

Diplomats from Syria denied they were jealous over being excluded, although they conceded they did ask if they could join the Axis of Evil.

"They told us it was full," said Syrian President Bashar al-Assad.

"An Axis can't have more than three countries," explained Iraqi President Saddam Hussein. "This is not my rule, it's tradition. In World War II you had Germany, Italy, and Japan in the evil Axis. So you can only have three. And a secret handshake. Ours is wicked cool."

Click the link for the rest of the story... it's pretty funny.

Your Focus Group

Discovered this great little tool called Your Focus Group that will allow you to test web sites, collateral and advertising via the web. It's only $500 for a year, which is a great deal, especially if you will end up testing multiple executions. If you're on the client side, ask your agency to buy it; this is a lot cheaper than the traditional ways that they'll recommend testing. (I'm assuming that it works well, BTW, but I haven't actually tried it. I'll let you know when I do.)

Link Friends (updated)

Just a quick thanks to those who have included links to What's Your Brand Mantra in the last couple months (in no particular order). Some good reads in this list; check them out! If I missed anyone, let me know.

Church of the Customer: I'm a host on their Book Tour on March 19!
FC Now: Fast Company's blogroll
re:invention: Business soundbites for women
Small Business Trends: Trends affecting business owners & entrepreneurs
Marketing Tom: Internet marketing
B2B Lead Generation: Great B2B sales blog
Angie McKaig: Design, marketing & business. Beautifully designed blog.
Jeff Jarvis at BuzzMachine: Smart commentary on just about everything
Adverblog: Web and wireless advertising
Cote's Weblog, Drunk & Retired: Business, tech, etc.
The MBA Experience: one guy's journey to get an MBA
Blogopoly: How to make money or get famous while blogging
BrandAutopsy: Insightful branding and marketing blog
Kulworld: Eclectic manifestation of various interests, live from London
The NonBillable Hour: Geared towards lawyers, but lots of good business & marketing thoughts
Abort To Orbit: Tech, sci-fi and other fun & random stuff

AND... thanks to Todd at A Penny For for including Brand Mantra in the Business Blog Book Tour #2 for Creating Customer Evangelists. He hasn't announced the schedule yet, but check his blog in a week or so for the full schedule that starts on March 15.

Analogies

I'm a big fan of analogies; I enjoy making the connection between two seemingly unrelated concepts. My mother calls me the Analogy Queen because I can come up with reasonably good ones on the spur of the moment. Unfortunately they never come when I sit down to think of an analogy; only in conversation. And I never seem to remember them.

Which is why I'm enjoying the marketing analogies that I'm reading this week. First is a great little book by Tom Asacker called Sandbox Wisdom, which is a parable of a disillusioned CEO who learns from a little girl and her grandfather (through some great analogies) how to get back to the basics. More to come on this one.

The other fun analogy is Street Corner Selling, an ongoing commentary at BrandAutopsy on how business is like drug dealing. Pretty funny stuff, but right on the money.
Lesson 1: Street Corner Selling
Lesson 2: The 10 Minute Rule
Lesson 3: Procurement (copping one's supply)

Ok, so we've got kids, sandboxes and drugs. Not a good combo.

Time for me to attempt to remember all the random parallels I've drawn over the years and join in on this analogy party... stay tuned!

A personal touch

In today's ClickZ branding report, Martin Lindstrom echoes my desire to bring communication back from the machine realm to the human realm (at least in part):

When did you last receive a letter? You know, paper folded into an "envelope" with a "stamp" signifying payment for transportation to the destination. A handwritten letter, sent to you, personally. Apart from Christmas greetings, I can't recall the last time I received a real letter. Whenever it was, I'm certain it was the event of the day.

Ironically, technology we've nurtured to enable faster, more effective, cheaper communication is experiencing a backslash. Not long ago, e-mail was hailed as the discovery of the century. Any organization with a modicum of interest in innovation began offering cheap, instant communications. We've been swept along, busily transferring the conventions of traditional letter-writing to e-mail composition.

Stop! Consider: E-mail may no longer be it. While everyone competes for consumer attention with direct e-mail, we don't see the technique may no longer work. I'm willing to bet a campaign aimed at getting people to buy is more effectively conducted offline.

In the long run, you're better off posting a letter. Spend the money making your communication tactile. Perhaps include a real signature or, better yet, write the letter by hand. Your message would be delivered with 1,000 times more potency. The cost would be only marginally higher than an e-mailed version.

This is only part of the story. Aside from selling products, such a tactile approach would build your brand, too. Recipients would remember the letter; they're unlikely to remember one e-mail out of who-knows-how-many per day. Can you name the last five commercial e-mail messages you received? Can you remember even one of them?

I'm not telling you to dispense with e-mail altogether. But think about combining channels more. Be less focused on the short-term attraction of cost savings made possible by the ability to send millions of e-mail messages free of charge. Think about the fact that, although we can send millions of free e-mail messages, hardly any will be opened. There are just too many of them. Many arrive with the perceived risk of a virus. Direct e-mail messages are more likely to be deleted in fear than greeted with cheer.

There's a company here in Dallas that helps companies retain customers by sending hand-written letters and calling just to see how things are going. They don't try to sell the customers anything; the intent is to make human contact. And it's working. Their business is growing and retention rates are increasing dramatically (and if I can find this company's name and URL, I'll repost with that info!). Bottom line, electronic personalization is ok, but the human touch is even better.

An unpolluted sky

I love discovering new blogs. Go surf around Robert Patterson's blog for some interesting and thought-provoking viewpoints on a wide variety of topics. He got me thinking on this one: The Science of Love: Our Forgotten Mammalian Brain. I think it resonated with me for the same reason that my blog posts have tapered off:

Our corporate world is a machine world with machine relationships. No amount of wellness or flex programming will change this unless the core work is to change the machine relationships to human/mammalian/tribal relationships. When we bring the corporate world home and have corporate and functional relationships with our spouses and with our children we are on a course for unhappiness.

I sit at my computer all day long and work, then come home and blog about the same stuff I was working on all day. I live more in the machine world than I care to. I think the Tuscany movie made me a bit melancholy for the outdoors I loved as a kid. Ahh, to be out of this dreary city with its TV and billboards and cement and computers and cell phones... I'm sad that so many kids these days are machine kids; they don't know how awesome it is to build a fort with friends out in the woods, or fly kites, or go digging for fossils (yes, I wanted to be a paleontologist when I was a kid!).

Those of us over 30 should remember a life without machines (or rather, machine-driven relationships). I think of the Matrix Reloaded, when the governor took Neo down to show him the machines that kept Zion running. "We could shut those machines down," said Neo in his point that we control the machines. "Ahh, but without those machines we'd be without air, without light..." replied the governor. So who truly is in control? We cannot go back; we've created a life dependent on machines. I write about the future, about nanotech, about AI... all these things are fascinating. But where will we be without relationships, love, nature and an unpolluted sky?

Under the Tuscan Sun

A completely tangential post from my normal blog fodder... I just finished watching this movie for the second time this week. I laughed, I cried. It's now one of my favorite movies (after The Matrix, of course). I must, I MUST go to Tuscany and the Italian Riviera. I've been to Venice, which is my favorite romantic destination. And, of course, Paris. But the cliffs of Positano overlooking the ocean are absolutely breathtaking. Someday...

Organizational DNA

The Strategy+Business' Resilience Report looks at organizational DNA and identifies the causes of failure or success:

“Execution” has become the new watchword in board rooms around the globe, as CEOs and directors watch sound strategies fail at the hands of organizations that cannot or will not effectively implement them. The ability to execute is not something you can recruit or mandate. It is inherent—embedded in the management processes, relationships, measurements, and beliefs that constitute an organization’s DNA. Like the DNA of living organisms, the DNA of living organizations consists of four building blocks, which combine and recombine to express distinct identities, or personalities. These organizational building blocks—decision rights, information, motivators, and structure—largely determine how a firm looks and behaves, internally and externally. Unlike humans and other organisms, however, organizations have the ability to change their DNA by adjusting and adapting these building blocks.

Booz Allen Hamilton has developed a short, online self-assessment tool called the Org DNA Profiler™ that assesses an organization’s relative strength in each of these four areas based on individual employees’ responses to 19 questions. Survey responses are fed through proprietary software to generate one of seven prototypical organizational profiles. In December 2003, more than 4,000 profiles were completed online at www.orgdna.com.

The Org DNA Profiler tool is still live, so hop on and see how your company fares.

By answering a few short questions on your organization’s structure, decision making, motivators, and information processes, you can learn whether your organization is resilient or passive-aggressive, overmanaged or just-in-time, military or outgrown.

Whatever the result, this assessment will help you better understand your organization, and put you on a path to improved performance.

Dell's Growing Pains

According to a recent article on cnet news.com, Dell's market leadership has come at a price:

Dell continues to win market share and turn out record quarterly profits, but two recent surveys show that the company has slipped, when it comes to a more subjective measurement: customer service.

According to two new reports that rate the satisfaction of PC buyers, Dell's scores have declined in recent months. While statistically, the results are not catastrophic for a company that prides itself on offering superior service, it's a potentially troubling trend Dell executives acknowledge and have taken steps to address...

While all PC companies talk about the importance of customer service, Dell has been particularly vocal for several reasons. By cutting out the middleman, Dell has a closer relationship with customers, thus taking all the praise from happy buyers--and all the blame when things go wrong. In addition, the PC business is becoming increasingly commoditized, marked by similarly equipped machines and price erosion. One way to stand out from the crowd is to pamper buyers by offering better service and support than competitors.

Isn't this the truth for any business that sells directly to customers? Too many options often lead to commoditization, especially when one competitor starts a price war. I've had several clients who discovered -- rather reluctantly -- that they were in a commodity business after we did some customer research. Customers often don't see any meaningful difference between various options, much to the dismay of execs and product managers. (For more on this topic, see my post on "Stop the Madness!")

Do you know whether your business has a meaningful point of difference that customers are willing to pay extra for? If not, you have one of three options: continue battling the price war, differentiate on service, or do something radically innovative that addresses pent-up demand. #1 really isn't an option if you want to stay in business, and #3 isn't a short-term or cheap solution. The future of business, according to The Support Economy, is providing deep support that goes beyond today's shallow definition of customer service. (I'll write up a recap when I'm finished reading it!)

 

An extra whiff of realism

From NewScientist:

A scent-generating device being tested by the UK internet service provider Telewest Broadband could soon allow internet users to transmit aromas of their choice across the internet... The British company suggests that the system could be used to enhance a holiday web site by generating the scent of sun tan lotion and the ocean or liven up a grocery site with fresh bread and fruit smells.

"Our sense of smell is directly connected to our emotions," says Kate Fox, social anthropologist and co-director of the Social Issues Research Centre in Oxford. "Smells trigger very powerful and deep-seated emotional responses, and this additional element to the internet will enhance users’ online experience by adding that crucial third dimension."

Just one more item for the brand/corporate identity manual; one more item in the brand manager's tool kit. Crazy stuff.

Book Tour: Customer Evangelists

On March 19 I'll be the stop on the Business Blog Book Tour for Jackie Huba and Ben McConnell, authors of Creating Customer Evangelists and the Church of the Customer weblog. I had the priviledge of hearing Jackie speak at an IABC luncheon here in Dallas a couple years ago. She's an engaging, high-energy speaker with great information to share. I look forward to evangelizing the book!

Culling Tech's Herd

According to today's McKinsey Quarterly Update, a surprising number of small and midsize software companies survived the downturn. Not all of them should have.

Technology valuations are back up—in some cases, almost to bubble levels. But the revenue picture isn't rosy for all high-tech companies. Slicing the sector by size reveals a discouraging pattern among those with pretax revenues below $50 million: a survey of 2,121 software, hardware, IT services, and semiconductor companies shows that many small and midsize ones are drowning in red ink. The bar graph above suggests that for smaller concerns, a perennial lack of profitability, combined with the growing scale and influence of their largest competitors, is bringing judgment day near. Some companies will have to be acquired; others will try to get bigger by merging with complementary businesses. Still others will find sustainable niches to harvest, often by working within the platform of a larger vendor with better access to customers.

Future Trends: Collapse

Jeff Jarvis at BuzzMachine did such a great job of summarizing and expanding on the Coming Information Collapse that I'm just going to direct you to this link so you can read for yourself. Here's the opening paragraph:

Eli Noam, a Columbia professor, writes a most depressing piece for the Financial Times arguing that we're headed to a market failure in the information economy -- and, he says, that holds ominous implications for the economies of countries dependent upon the information economy (like Finland, with 35 percent of exports and 15 percent of GDP coming from one company, Nokia ... or like America, eh?).
I'm not sure he's right about this -- I think, instead, that we are headed for a fundamental restructuring from hyperbig to hypersmall.

But here's another random one for you: the coming oil collapse. This is a creepy but well-researched and thought-provoking site (thanks to Graham Glass for the link):

The most wildly optimistic estimates indicate 2020 will be the year in which worldwide oil production peaks. Generally, these estimates come from the government.

The energy industry has quietly acknowledged the seriousness of the situation. For instance, the president of Exxon Mobil Exploration Company, Jon Thompson, recently stated: "By 2015, we will need to find, develop and produce a volume of new oil and gas that is equal to eight out of every 10 barrels being produced today. In addition, the cost associated with providing this additional oil and gas is expected to be considerably more than what industry is now spending."

Almost every current human endeavor from transportation, to manufacturing, to electricity to plastics, and especially food and water production is inextricably intertwined with oil and natural gas supplies.

And here's the kicker:

It is estimated that the world's population will contract to 500 million during the Oil Crash. (current world population: 6 billion)....

Dr. David Goodstein, Professor of Physics and Vice Provost of Cal Tech University says:

Worst case: After Hubbert's peak, all efforts to produce, distribute, and consume alternative fuels fast enough to fill the gap between falling supplies and rising demand fail. Runaway inflation and worldwide depression leave many billions of people with no alternative but to burn coal in vast quantities for warmth, cooking, and primitive industry. The change in the greenhouse effect that results eventually tips Earth's climate into a new state hostile to life.

Scary, but I have great faith in our instincts for self-preservation and believe we'll be able to pull off some amazing things to ensure survival of humanity. Seems like we're accelerating quickly on the technology front... nanotech and other innovations should help us combat some of the mega-shifts that we're seeing. (Although with everything I'm reading, those doomsday movies don't appear so fictional...)

Office Romance

The Fast Company blog has a fun post about How to Make Love in the Office (now that's an attention-grabbing title). I've only had one office romance... it was about 7 years ago at a place where interoffice dating was frowned upon by management. In hindsight, the secrecy was nine-tenths of the allure, but I'd never do that again... my productivity went down the tubes. My last serious relationship was with a client; actually, he was a company founder with whom I had no day-to-day interaction. Interesting to think about where to draw the line. Working for myself makes it pretty easy; everything I do is project-based, so even direct clients don't stay in client status for long. It's rare enough to meet someone you really click with; usually a solution can be found to pursue the relationship and still maintain professionalism... switch departments, sub-contract out the day-to-day responsibilities if it's with a client, etc. What do you think? Any good office romance stories out there?

Coffee-breaks sabotage employees' abilities

A recent article in New Scientist shines a negative light on our favorite office brew:

Taking a coffee break at work may actually sabotage employees' ability to do their jobs and undermine teamwork instead of boosting it, suggests new research.

Dosing up on caffeine is particularly unhelpful to men, disrupting their emotions and hampering their ability to do certain tasks, suggests a report by psychologists Lindsay St Claire and Peter Rogers at Bristol University in the UK.

Many people take coffee breaks at work believing this will reduce their feelings of stress. But theories about the effects of caffeine are conflicting. Some studies suggest caffeine can worsen anxiety and trigger stress, while others show it boosts confidence, alertness and sociability, making certain tasks easier.

But this latest report, released by the UK's Economic and Social Research Council on Friday, backs the view that coffee exacerbates stress, especially in men, and makes people less co-operative when working in teams.

"Our research findings suggest that the commonplace tea or coffee break might backfire in business situations, particularly where men are concerned," says St Claire. "Far from reducing stress, it might actually make things worse."

Phew, it's only bad news for men. I can still have my coffee and drink it too.

The accelerating future

I was talking with a client a few weeks ago about innovation. Somehow we got on the subject of nanotechnology, which he pointed out was not as much an invention as, say, the turntable. In other words, just because things are getting smaller doesn't mean there's a paradigm shift. I conceded the point at the time, but have since gotten quite interested in the topic. So I looked up nanotech; Ray Kurtzweil gives the definition as "A body of technology in which products and other objects are created through the manipulation of atoms and molecules." (BTW, Ray's site is my new favorite site... amazing stuff in there).

It seems to me that manipulating atoms and molecules would qualify as a paradigm shift. The first chapter of Engines of Creation outlines the shift this way:

The ancient style of technology that led from flint chips to silicon chips handles atoms and molecules in bulk; call it bulk technology. The new technology will handle individual atoms and molecules with control and precision; call it molecular technology. It will change our world in more ways than we can imagine.

Nanotech is born out of advances in biology, genetic engineering and biochemistry. It will lead to new ways of manufacturing just about anything, pollution-free... and will allow us to manufacture things that haven't even been imagined yet.

Because assemblers (nanomachines) will let us place atoms in almost any reasonable arrangement, they will let us build almost anything that the laws of nature allow to exist. In particular, they will let us build almost anything we can design - including more assemblers. The consequences of this will be profound, because our crude tools have let us explore only a small part of the range of possibilities that natural law permits. Assemblers will open a world of new technologies.

Advances in the technologies of medicine, space, computation, and production - and warfare - all depend on our ability to arrange atoms. With assemblers, we will be able to remake our world or destroy it.

So perhaps nanotech is not as much of an invention as much as an invention facilitator. It’s a bit creepy, if you think about it in conjunction with AI… self-aware, replicating machines… a super killer virus? The Singularity?

I suppose I'm getting ahead of myself... what will nano mean for business in the next 25 years or so? Ray Kurtzweil posits that "because we're doubling the rate of progress every decade, we'll see a century of progress--at today's rate--in only 25 calendar years." This raises an interesting issue, since it so starkly illustrates how short-term most businesses think. How many years in the future do most execs extend their vision? I think a lot of people are going to be taken by surprise by the speed at which 'the future' will be upon us.

It's fun to review an invention timeline, especially everything that was invented in the 1900s alone, and think that the same amount of progress will be made in the next 25 years. Where will you be in 25 years? I'll be 60. Supposedly we'll solve the 'aging problem' when I'm 85... bummer, I hope they can figure out how to not just halt but reverse aging so I won't get stuck in an 85 year-old body!

Women and Profits

Thanks to BusinessPundit for the following link from Fortune:

Ever since we launched FORTUNE's Most Powerful Women list in 1998, we've noticed that many top-performing companies—such as Citigroup, Southwest Airlines, Viacom, and Avon—have an above-average population of women at the top. Now there's some hard evidence that gender diversity and financial performance are linked. A just-released study of FORTUNE 500 companies by Catalyst, the research firm that tracks corporate women, shows that companies with the highest representation of senior women had a 35% higher return on equity and a 34% higher return to shareholders than companies with the fewest women near the top. Catalyst looked at both the management teams and financial performance of 353 FORTUNE 500 companies from 1996 to 2000.

I Googled the topic and found some interesting stats on variances between men's and women's management styles:

More than half of women business owners (53%) emphasize intuitive or "right-brain" thinking. This style stresses creativity, sensitivity and values-based decision making. Seven out of ten (71%) men business owners emphasize logical or "left-brain" thinking. This style stresses analysis, processing information methodically and developing procedures.

Women business owners' decision-making style is more "whole-brained" than their male counterparts, that is, more evenly distributed between right and left brain thinking.

Two-thirds (66%) of women business owners (compared to 56% of men business owners) tend to reflect on decisions, weighing options and outcomes before moving to action. In addition, women are more likely to gather information from business advisors and associates. More men business owners (44% compared to 34% of women business owners) emphasize action and give greater attention to external events and activities than reflection.

What's nice is that there's no right or wrong answer. The different management styles complement each other. When there's a balance between men and women on an executive team, problems are approached more holistically and higher profits would be a logical outcome.

Domain of customer value

Chris Lawer blogs about the necessary mental shift from "company as value-chain component" to "company as player in customer-value network":

Quite often, the first question managers need to address is quite simply, what domain of customer value are we operating in?. This is then closely followed by the second question, how we can adapt to identify, design and deliver mutual value within the new individual-centric customer space?. Unfortunately, many organisations are so risk averse that they never even get to the second stage....

The first question is terrific and absolutely essential. In order to answer it, managers must understand what customers actually value. Most managers make assumptions about what customers value (and we all know what 'assume' means...)

I'll take my telecom client as an example. Management assumed that they were operating in the "saving money" domain of customer value. However, customer research revealed that they should be operating in the domain of "make me feel important." Now with a new tag line of "We hear you," the company is answering the second question and making operational shifts to deliver on this promise.

In what customer-value domain is your company playing? What changes must be made to better align your operations with that domain? What complementary companies are also in the same domain, and is there a way to partner with those companies to deliver even more value?

The ecology of business

I ran across the definition for obliquity today, which led me on a train of thought about the ecology of business:

In philosophy, obliquity is a relatively new theory proposing that the best means of achieving a goal may often be to take an indirect approach rather than a direct one. The theory holds, for example, that individuals whose only concern is their own happiness are rarely happy individuals, and that companies that seek to maximize profits at all costs are unlikely to be the most financially successful. Obliquity has much in common with the principles of chaos theory; both concepts rely on the idea that, in a complex system, the factors involved are too numerous and too intricately connected to be easily understood. Therefore, just as we cannot be sure that long-range weather forecasts won't be affected by some unforeseen influence, we cannot be sure that single-mindedly striving for financial success is most likely to lead to our goal. Rather, financial success could be a by-product of engagement in our work, and a commitment to responsible business practices and our communities.

The concept of obliquity in this sense was introduced by John Kay, an economist and business writer. In his lecture "The Role of Business in Society," Kay explores the value of a holistic approach to business, and the paradoxical success of such an approach over that of a simple focus on maximizing profits. Kay quotes George Merck (founder of the extremely profitable drug company): "We try never to forget that medicine is for the people. It is not for the profits. The profits follow, and if we have remembered that, they have never failed to appear."

John Kay's lecture is a bit long, but here's a snip for you:

Part of the problem is that the claim that business is only about profits has in the past been contrasted with two unconvincing alternatives. One is that the purpose of business is to do good. Those who are in business should shed material preoccupations and we should all work for the benefit of the community. Another is that profit is immoral and, in consequence, all the assets of corporations should be transferred to the state...

I want to test these assertions against a much more powerful contrary position. This is that successful business is not in reality selfish, narrow and instrumental. What makes one a good parent, a fine teacher, a great sportsman, is a combination of talent relevant to that activity and a passion for, and commitment to, parenthood, education, or sport. Similarly, the motives that make for success in business, both for individuals and for corporations, are commitment to, passion for, business: which is not at all the same as love of money.

The defining purpose of business is to build good businesses, as the defining purpose of parenthood is to be a good parent. What we mean by a good business is as multi-dimensional and complex as what we mean by good parenthood, good education, or good sport. But nevertheless, there is widespread agreement on which are indeed good businesses. They are characterised by satisfied customers, motivated employees, well-rewarded investors, and high reputations within their communities. When lists are compiled of the most admired corporations, the same names keep cropping up - Marks and Spencer, Hewlett Packard, Sony. They are admired by everyone: their customers, governments, the financial community, the people who work for them, and other businesses.

This recognition of complexity is much more beneficial than blindly pursuing single objectives like profit, customers or social responsibility. It's important to ask ourselves when pursuing a particular business goal, "At the expense of what?" When executives are blindly pursuing shareholder value, are they doing it at the expense of employee loyalty, which then leads to a declining customer experience, which then impacts profits? This is what I call the 'ecology of business,' which has a lot of parallels with traditional ecology and conservation. The definition of ecology is "the science of the relationships between organisms and their environments." There's another phrase called human ecology, or "the branch of sociology that is concerned with studying the relationships between human groups and their physical and social environments." So business ecology deals with the relationships between stakeholders, corporate decisionmakers, and their environments. Every decision has a ripple effect that impacts multiple stakeholder groups, competitive activities, market dynamics, etc. A good decision-maker will evaluate decisions based on the consequences of those ripple effects.

On that note, John Kay quotes an example of wrong thinking about stakeholders:

"The most ridiculous word you hear in boardrooms these days is ‘stakeholders’. A stakeholder
is anyone with a stake in a company’s well-being. That includes its employees, suppliers, the communities in which it operates, and so on. The current theory is that a CEO has to take all these people into account is making decisions. Stakeholders! Whenever I hear that word, I ask ‘How much did they pay for their stake? Stakeholders don’t pay for their stake. Shareholders do."

This comes from a recent book by Al Dunlap, former Chief Executive of Scott Paper, variously nicknamed ‘Chainsaw Al’ and ‘Rambo in Pinstripes’ for his stewardship of that and other companies.

What a great example of short-term, myopic thinking. How is Dunlap going to provide shareholder value if employees are unhappy? If suppliers get fed up? If the customer experience is short-changed? I've been writing a bit about stakeholder-centric strategies, which directly supports this idea of the ecology of business.

What do you think? Got any examples? Off the top of my head, I'm interested in the ripple effect of Wal-Mart's policies with their suppliers in their quest to provide the lowest price possible (see Fast Company's Dec. cover story on Wal-Mart).