The Innovation Song

By Mike Myatt, Chief Strategy Officer, N2growth 

The Innovation Song you ask? That’s right…The above video contains a song performed by a Stanford student which was submitted for his final project for a class entitled: “Innovation and Implementation in Complex Organizations.” The song was intended as a tribute to Gordon MacKenzie’s “Orbiting the Giant Hairball,” a book which puts forth some thoughts on how organizations can better address the issue of innovation. The video is superb, and nails the issues surrounding a lack of innovation better than many more detailed case studies which I have read over the years.  Many a CEO could benefit from downloading this song on their iPod. If this project didn’t get an “A” it should have…

The Counter-Intuitive CEO

By Mike Myatt, Chief Strategy Officer, N2growth 

Great CEOs are counter-intuitive. They don’t subscribe to herd mentality, rather they use their contrarian instincts to exploit opportunities, to create advantage, to build strong leadership teams, to expand market share, and to increase brand equity. A global recession is nothing more than an excuse for poor leaders to assign blame for weak performance elsewhere. The counter-intuitive CEO (Great CEOs) sees an economic downturn as an opportunity to strengthen their organizations and to grow the enterprise. As 2009 draws to a close I want you to invest 10 minutes in watching the video above as it provides a strong validation for what I’ve been espousing to you for quite sometime in posts like: “Recession Proof Your Business” or “Beware the CFO” or “Young CEOs.” I wish you great success in 2009…   

Keeping Your Composure

By Mike Myatt, Chief Strategy Officer, N2growth 

Great leaders understand the value of keeping their composure. The video above, while certainly entertaining, is also a prime example of what can happen when you lose your composure. As a CEO few things are as important as displaying a command presence and demonstrating the ability to maintain control no matter how dire the circumstances. I would recommend going back and reading a prior post entitled “Never Let Them See You Sweat.”

McDonald’s Plays Brand Offense

By Mike Myatt, Chief Strategy Officer, N2growth

McDonald's Plays Brand OffenseIf you wonder what smart companies do to gain market share in down economies just look at McDonald’s…McDonald’s plays brand offense. McDonald’s understands that playing brand offense is exactly what it takes for businesses to thrive in a down economy. In fact, over the last year they have flawlessly executed an aggressive brand assault on Starbucks that has been nothing short of pure genius. In today’s post I’ll contrast the marketing brilliance of McDonald’s vs. the tentative approach of Starbucks…

Before we dive into today’s case study in brand management, I would recommend reading “Recession Proof Your Business” as a backdrop for today’s piece. This prior post provides further support to my position that smart companies play brand offense by increasing their marketing and advertising initiatives, while their more conservative competitors are busy managing risk. Let me be very clear that I am a strong believer in defending brand equity, it’s just that I believe the best way to protect brand equity is to increase it. From my perspective, if you’re not taking market share from your competition, then they are likely taking it from you…it’s just that simple.

If we were to roll back the clock a few years it would be difficult for most brand aficionados to see how the Golden Arches would pose any real threat to the king of retail coffee. After all, Starbucks is an upscale, premium priced, gourmet coffee outlet that caters to an affluent market based upon attitude and environment. Contrast this to McDonald’s who sells fast food at inexpensive price points. The only thing the two brands would have appeared to have in common was that they sold food through retail stores, and that would be about it. Well, somebody forgot to tell McDonald’s…

You see if you look past the Happy Meals and Dollar Menus you’ll find that the hallmarks the McDonald’s brand are built upon are value, speed, and efficiency. This is something Starbucks had obviously overlooked. While Starbucks was resting on their laurels, McDonald’s simply saw a the ability to create a line extension into the gourmet coffee business by bringing value, speed, and efficiency to Starbucks door-step. 

Where did Starbucks go wrong…The economy was slowing, consumers were growing weary of $4 dollar coffees that you have to wait in long lines for, Starbucks service wasn’t what it once was, and at the corporate level, Starbucks was tightening their belt, closing stores, and pulling back on the innovative marketing initiatives that created their category dominant position to begin with. Their business model had become static, and they were out of touch with the market. However Starbucks biggest mistake was not fighting back against the McDonald’s attack. As an old soldier I can assure you that you cannot win a battle you do not fight. While you might delude yourself into thinking you have won the fight by “picking your battles” and fighting on different fronts, full out assaults must be repelled or you’ll be overrun. This is exactly what happened to Starbucks.

Where did McDonald’s go right…they didn’t manage risk, they exploited an opportunity. They didn’t play defense, they played offense. They went on an all out full-frontal marketing and advertising blitz that included among other things placing billboards in close proximity to Starbucks clearly stating their value propositions. They told the consumer that they understood their needs better than Starbucks, and Starbucks didn’t fight back…McDonald’s applied their brand strengths to fill an unmet need in the market…gourmet coffee served faster, cheaper, and according to independent taste tests…better.

The lesson here are simple:

  1. As markets mature service providers must become efficient to prosper;
  2. Business models must remain fluid and adapt to the needs of the consumer.;
  3. Category dominant brands only remain so if they stay on offense;
  4. A true focus on customer centricity trumps trendy ambiance 11 times out of 10, and;
  5. In the food business, taste matters.

 McDonald’s…job well done.

Boosting Personal Productivity

By Mike Myatt, Chief Strategy Officer, N2growth

Boosting ProductivityHas the speed at which business is transacted in the 21st Century completely overwhelmed you? Now that we’re approaching the end of the year, have you been as productive as you’d hoped for? Do you find yourself flirting with disaster by constantly brushing up against deadlines? Are your work hours increasing without a corresponding increase in income or satisfaction? Do you wish you had more time in a day? Boosting personal productivity is virtually the only way for professionals to meet their earnings expectations, keep their sanity by maintaining a balanced life, and meet the ever increasing level of customer expectations. In today’s post I’ll provide some tips for how to manage your day instead of having your day manage you.

Let’s face it, productivity is the standard by which most of us are judged in the business world. Whether you like it or not, in most business environments your destiny is likely to come down to a “what have you done for me lately” type of evaluation. My question to you is this: Are you as productive as you think you are, or even as productive as you used to be, and would your co-workers agree with your assessment? In the text that follows I’ll share my thoughts about the things that adversely affect your ability to produce, as well as some of the key items that can leverage your ability to optimize productivity. 

Even though entrepreneurs and executives are typically bright, talented and motivated people known for being highly productive, studies have shown that most professionals, when objectively assessed, are found to view themselves as being more productive than they really are. This is even true with the classic over-achieving type “A” personalities. So, what separates the productive from the non-productive? In working with countless executives and entrepreneurs it has been my experience that those professionals who like to cover a lot of ground and consider themselves masters of multi-tasking are not nearly as productive as those who have an ability to focus (see previous post entitled “The Power of Focus“).

Okay, let’s examine an all too common scenario: A senior executive has 30 minutes before the beginning of a strategy meeting which he/she is facilitating, and as the executive begins to prepare his/her final thoughts they receive an e-mail from legal asking them to review the latest version of an important contract before they go into the meeting. As they begin to redline the contract the executive receives an IM from the CEO asking for their immediate attention on a key issue. As they start to respond to the CEO their assistant informs them that an important client is on the phone and needs to speak with them immediately. As the executive begins to take the phone call they glance out their window only to see a small line forming outside their office door, and just then their Blackberry goes-off with a 911 from their spouse…

The sad part about the aforementioned illustration is that for many executives this is standard operating procedure. The pressure to become a multi-tasking phenom is in my opinion at the root of a decline in executive productivity. Multi-tasking is choosing to deal with perceived “urgent” matters rather than focusing on truly “important” matters. My father once told me that “part-time efforts yield part-time results” and I have found that with rare exception his premise is correct.

Inbound telephone calls, voicemails, e-mails, instant messages, meetings, drive-bys (unscheduled interruptions), cell phones, social media interruptions, faxes, and any number of other items that compete for your attention will consume your day leaving you wondering where the time went. The reality is that more executives and entrepreneurs are overwhelmed by technology than actually demonstrate an understanding of how to leverage technology to their advantage. The key to boosting productivity can be found by taking the following four steps:

  1. Have a clearly articulated vision: It is absolutely critical to understand what you’re playing for…If you don’t have a well defined vision, then you won’t understand the mission. If you don’t understand the mission then you won’t develop a well conceived strategy. Without a strategy it is unlikely that you’ll set the proper goals, and without accurate goals your tactical execution will be flawed and inefficient. It is the constant alignment and realignment of your actions to your vision that allows you to focus efforts based upon the right prioritization. I often counsel clients that the first step toward failure is ambiguity, while clarity of vision is the first step toward success.
  2. Leverage Down: While you can be lucky, you cannot create sustainable success without understanding the principle of “highest and best use”. Your efforts should be focused on those activities that maximize the leveraging of your time and skill sets leading to the attainment of your goals. Any activities that don’t meet that definition should be delegated to management, staff or outsourced to contractors.
  3. Focus: I have written before on the power of focus. No other single trait leads to a certainty of execution like focus. Those of you who know me have probably personally experienced my “gut-check” strategy which I highly recommend to all my clients. For those of you not familiar this concept it is one of my key pillars of success and it goes like this…Every hour on the hour (no exceptions) I ask myself “Am I doing the most productive thing possible at this point in time pertaining to the achievement of my objectives?” I have been known to terminate meetings, conversations, phone calls etc. based upon conducting this gut check. It keeps me from losing focus and being distracted unless I choose to do so. When in doubt FOCUS!
  4. Order your world: In today’s business world it is impossible to be productive without a well thought out workflow process. You must take yourself out of reaction mode wherever and whenever possible, and focus (there’s that word again) on proactively addressing workflow. The following list is a high level overview of a suggested workflow process:
  •  
    • I am a huge believer in quality administrative support…If you are a senior executive operating without admin, or not effectively using admin, you are cheating yourself and your stakeholders. If you don’t value your time why should anyone else? Leverage Down!
    • Where possible strive for a paperless environment…Paper is little more than inefficient, costly, clutter that is distracting. Virtually anything you can do in hard copy you can accomplish digitally with greater speed and efficiency while lowering your cost and decreasing distractions. Copy, paste, redline and forward is much more preferable than print, photocopy, highlight, and FedEx…
    • Understand how and when to use the right communication channels. Don’t travel when a web conference can accomplish the same or better results. Don’t use the phone if e-mail is more appropriate, and don’t use e-mail if IM is a better solution. I prefer to drive communication rather than respond to it, and when I respond it is based on priorities and not based upon impulse. I tend to use e-mail as my first line of communication using macros and e-mail filtering to reduce the number of incoming e-mails to an acceptable level. I have created a standard file/folder structure and naming conventions and integrate my e-mail with my calendar and task list.

Bottom line…If you’ll adhere to the principles described above you’ll actually have time to get your work done and have a life. With virtually nothing to lose and everything to gain, why not give it a try?

Search Engine Marketing

By Mike Myatt, Chief Strategy Officer, N2growth

Search Engine MarketingSearch Engine Marketing has always played a critical role in managing the visibility of a company’s online brand. However with the Internet becoming what is arguably today’s dominant medium, Search Engine Marketing has also risen to become a key driver in a company’s overall brand strategy. Regrettably the maturity of the products and services that comprise search engine related disciplines come at a time when the industry has never been more complicated and difficult to navigate for the uninitiated. Even though businesses today have many more options with regard to how they execute their search engine initiatives, I find that many marketing executives struggle more today with their online marketing strategies than they did a few years ago. In today’s blog post I’ll share my opinions on the current state of the Search Engine Marketing Industry.

My experience with Search Engine Marketing predates many in the field. I have been active online since the days of ARPANET, co-founded what was at the time the largest web development company in the Pacific Northwest region of the United States, served as Director of Internet Strategy for the world’s largest web-enablement, founded one of the top 50 Interactive Advertising Agencies in the United States prior to its sale, and our fastest growing practice area at N2growth is our social media practice. My purpose in providing the resume excerpt is not to self-promote, but simply to make the point that I have been actively involved in the industry from its conception, watched it struggle through its adolescence of the dot.com boom and bust, and am now watching it thrive again with a rapid proliferation of technology and marketing advances. While the Internet as a medium is far from being mature, it has most certainly evolved, and so have the methods for marketing your brand online.

This last year alone I attended a number of SEO/SEM/SMM conferences, and while the messages communicated at these events made it clear that the industry has shown remarkable growth, made tremendous advances in sophistication, and has increased in the diversity of product/service offerings currently available, I question whether things are getting better or worse for the lay person which accounts for the majority of consumers.

In talking regularly with many senior executives, marketing professionals and entrepreneurs one thing is clear…they are clearly not fluent in the area of search engine marketing. While these professionals understand the potential that search engine marketing affords for their businesses, they do not understand how to capitalize on it. In fact, many of the people I have spoken with are extremely frustrated at the amount of money they have invested in search initiatives without being able to develop an understanding of the medium, such that they have not yet been able to develop a consistent winning strategy in this space. 

The major problems that exist within the search industry are tied to the fact that this is still an embryonic, yet quickly evolving medium. There are only so many ways to promote your brand in more mature mediums like radio, print or television. Contrast this with the numerous options available with digital marketing, and you’ll quickly see the conundum that most businesses face. We regularly have clients ask if they should be on Facebook, Twitter, Lindedin or other social media networks, buy banner ads, purchase sponsorships, work on organic search engine optimization, use pay-per-click ads, focus on online PR, launch a blog, produce articles and/or white papers, create a Podcast, work on link building, start a video marketing campaign, promote webcasts, and the list could go on and on…You can see why so many organizations struggle online. 

The reality is that communication mediums in the early stages of their lifecycle spit out new opportunities faster than you can shake a stick at, and worse yet, this happens with a plethora of inexperienced vendors lined-up to cut their teeth on the advertiser’s nickel. There is rarely a week that passes when I don’t speak to a company who has a horror story to tell about a search marketing company who over-promised and under-delivered and by the time the advertiser figured out what was going-on they had spent thousands of dollars with little to show for it.

Another problem with the search industry is that Google currently controls most of the traffic. Combine Google’s dominant position with the fact that they will share little if any data with advertisers and that they can change the rules of the game at any time and it brings new meaning to the term “Flying Blind.” However the issue of transparency within the search industry is not limited to Google. Most of the search engines play their cards very close to the chest as they try and establish a leg up in the market. Until there is significant competitive pressure brought to bear on Google the odds are stacked against the advertiser. I met with a client last week that was spending 50% of their Pay-Per-Click budget on Yahoo and Bing because it was recommended to them by their search marketing firm. The problem was that given the advertiser’s product line and target market, Yahoo and Bing would produce virtually no return for them…This is a big problem.

The fact is that the Internet is the medium that can deliver the most velocity and biggest return on your marketing dollar. I also believe that this will continue to be the case as the dominance of the Internet medium will only continue to widen the gap over alternate mediums. Companies cannot afford not to allocate a substantial part of their advertising budget to online advertising, but until the medium matures it will behoove of them to make sure that they work with the best vendors who can keep up with the rapid pace of change in the industry.

Good Money After Bad…

By Mike Myatt, Chief Strategy Officer, N2growth

Good Money After Bad...Good money after bad…this is perhaps the most apropos description of the current proposal to bailout the  big three US auto makers. Have we learned nothing? Are we again going to let fear mongering subject us to more flawed decisioning? The lack of management and accountability for the trillion dollar government bailout of the mortgage and finance industry has been nothing short of amazing to me. Do you sincerely believe the appointment of an “auto czar” and the submission of business plans is going to make a difference? I don’t; it’s simply more political gamesmanship, more of the same, and will result in nothing more than throwing good money after bad. In today’s post I’ll share my thoughts on the auto bailout…

Here’s a news flash…when a business becomes insolvent there is already a provision within our legal system that affords a mechanism for protection. It’s called a Chapter 11 Bankruptcy, which oddly enough is often referred to as a “reorganization,” “restructuring,” or “workout.” I don’t know about you, but a workout or restructuring certainly has more appeal to me than another “bailout.” Filing for protection under Chapter 11, a corporation can seek temporary protection from its creditors by submitting a business plan to the court for approval, which if approved, will grant the company sufficient time to restructure itself and work it’s way out of a financial crisis. This is the Bankruptcy Court’s job and falls squarely within the realm of the Judicial Branch of the government. It has nothing to do with the Legislative Branch of government, and Congress should flat out abstain from such an over-reaching and improper use of their authority.

But Mike, what happens if the reorganization doesn’t work? Then the business fails and its assets are liquidated to offset the outstanding debt owed to creditors. This is how business works and the automakers should have no special rights or privileges. If they fail they fail…period end of sentence. 

But Mike, what about all the workers who will lose their jobs if the automakers fail…wouldn’t this throw our country into a depression? First of all, there is no guarantee that they will fail by going through the normal channels of filing for bankruptcy. They may actually survive to be better run companies. However, even if they were to fail, it wouldn’t throw our nation into a depression. If you aggregate all the direct employees of the big three, along with all the indirect (dealers, suppliers, etc.) employees associated with the big three, it doesn’t even come close to the numbers of people employed in small businesses across the country. This wouldn’t be as tough for our country to absorb as the bursting of the dot.com bubble, or other sector rotations that have occurred historically.

So what would happen in a worse case scenario? Three companies that failed to innovate and to sustain their competitive advantages would suffer the just consequences of poor leadership. Some people would suffer the hardship of temporary unemployment while they were recycled back into the workforce, and other new businesses would blossom as a result of new ideas and innovation aided by the law of necessity. By way of example, just look at the logging, mining, and shipping industries. They all went through their boom and bust cycle and our nation survived. We took many unskilled workers thrust into the ranks of the unemployed, retrained them, and redeployed them as better skilled workers. This is the natural order of things, and while certainly not pleasant, it is nothing to be feared.

The moral of this story is that the free market economics of capitalism work best if left alone. Those companies that do the right things prosper, and those companies who don’t keep pace with the competitive forces in the market fail. It’s not a bad thing, it is an unfortunate thing, but it is what it is… 

Innovate or Perish

By Mike Myatt, Chief Strategy Officer, N2growth 

Innovate or PerishInnovate or Perish is a battle cry that I have long espoused to my clients. I can’t think of a better example of what can happen to those companies that fail to innovate than the rumors circulating about the Tribune Co. The Tribune Co., owner of the Chicago Tribune, Los Angeles Times, and other once revered trophy brands is hemorrhaging under the burden of huge debt obligations, insufficient cash flow, and is rumored to be filing for bankruptcy as early as this week. The emergence of better alternative news sources has been hurting the newspaper industry for years now, but when you combine the rapid emergence of new media options with the crushing blow of the recession, it may just be too much for an old media lagger to survive…

When was the last time you actually read a print version of a newspaper? Unless I have a few minutes to kill in an airport or a lobby somewhere I’ll never touch a newspaper. By the time you read something in the newspaper it’s simply old news…If you rely upon the newspaper to keep you informed, here’s a hint…you’re out of touch. However the bigger issue here is not how you choose to receive your media, but rather out of touch company leadership that doesn’t understand the importance of innovation as it relates to corporate sustainability. 

If you’re a CEO reading this post ask yourself this question: How disruptive is your business model? Without a focus on disruptive innovation you are merely building your business model on a “me too” platform of mediocrity. Disruptive business models focus on creating, disintermediating, refining, reengineering or optimizing a product/service, role/function/practice, category, market, sector, or industry.

The most successful companies incorporate disruptive thinking into all of their business and management practices to gain distinctive competitive value propositions. “Me Too” companies fight to eek out market share in an attempt to survive while disruptive companies become category dominant brands insuring sustainability. So why do so many established and often well managed companies struggle with disruptive innovation? Many times it is simply because companies have been doing the same things, in the same ways, and for the same reasons for so long that they struggle with the concept of change.

As a CEO Coach many of my engagements with chief executives focus on helping them to embrace change through disruptive innovation. Why didn’t the railroads innovate? Why didn’t Folgers recognize the retail consumer demand for coffee and develop a “Starbucks” type business model? Why didn’t IBM see Dell and Gateway coming? Why have American auto-makers been relegated to inferior brands when contrasted to their European and Asian counterparts? How did the brick and mortar book stores let Amazon get the jump on them? I could go on-and-on with more examples, but the answer to these questions are quite simple…The established companies become focused on making incremental gains through process improvements and were satisfied with their business models and didn’t even see the innovators coming until it was too late. Their focus shifted from managing opportunities to managing risk, which in turn allowed them to manage themselves into brand decline…

At one end of the spectrum take a look at the companies receiving investment from venture capital and private equity firms, and on the other end of the spectrum observe virtually any category dominant brand and you’ll find companies with a disruptive focus putting the proverbial squeeze on the “me too” firms occupying space in the middle of the spectrum. With the continued rapid development of technology taking the concept of globalization and turning it into hard reality facing businesses of all sizes, it is time for executives and entrepreneurs to examine their current business models from a disruptive perspective. Ask yourself the following questions:

  1. When was the last time your business embraced change and did something innovative?
  2. When was the last time you rolled-out a new product?
  3. When was the last time you entered a new market?
  4. Are any of your executives thought leaders?
  5. When was the last time you sought out a strategic partner to exploit a market opportunity?
  6. Do you settle for just managing your employees or do you inspire them to become innovators?
  7. Has your business embraced social media?
  8. When was the last time your executive team brought in some new blood by recruiting a rock star?
  9. Does anyone on your executive team have a coach or mentor?
  10. Has anyone on your executive team attended a conference on strategy, innovation or disruption in the last year?

If you’re an executive or entrepreneur and you can’t answer yes to the majority of the questions above then your company is likely a market lagger as opposed to a market leader. If you continue to do the same things that you have always done in today’s current market environment you will see your market share erode, your brand go into decline, your talent and customers jump ship, and your potential never be realized. Remember the definition of insanity is continuing to do the same things while expecting different results. Bottom line…change, innovate, disrupt and prosper.

The Next Collapse…

By Mike Myatt, Chief Strategy Officer, N2growth

The Next CollapseIt seems as if the more layers of the onion we peel back on the chaos in the capital markets the worse the news seems to be. I have long been a believer in the axiom “where there’s smoke, there’s fire,” and trust me when I tell you that the fire is far from being under control, much less extinguished. You see while most of the attention in the mainstream media has been focused on the debacle in the real estate and public markets, the next wave of failure is about to rear its ugly head. In today’s post I’ll share what I believe is the next segment of financial collapse set to rock the investment world…

Riddle me this…What conclusion should you draw from the simultaneous occurrence of a bear market, a recession, the virtual collapse of the investment banking industry as we know it, massive government bailouts, and the capital and credit crisis? The answer: Big trouble in the Private Equity markets.  News Flash…private investments are inexorably linked to public markets, and we’re on the brink of watching private equity firms suffer the same fate of their public counterparts. The problem is this…many private equity firms have yet to write down their investments and are still carrying them at book value, which can mean only one thing…they are significantly overvalued.

Think about it…private equity markets were perhaps even more frothy than the public markets the past few years. Massive amounts of deals were being done at very aggressive valuations that just won’t hold-up in today’s economy. Try this analysis on for size…take a random sampling of PE deals closed in 2005 and 2006 and look at their original valuations. Then revalue those some companies by marking them to current market conditions. The big sucking sound that follows is  the painful realization of equity erosion. Does this sound familiar?

The real shame is that the same short-term greed mongering that affected the public markets is about to rear it’s head on the private side of the table. Remember that PE investments are high risk investments, yet the big players in this market are institutional investors who simply got greedy and took on more risk than they should have. Again, does this sound familiar? It only gets worse…not only has the door been slammed on the public exit for many PE investments changing the landscape dramatically, but PE investors are likely going to be hit with big capital calls that can’t or won’t be met. This simply means a sell-off of PE investments at deep discounts is impending.

Even if you can’t connect the dots based upon recent adjustments in valuations in the real estate and public markets, just roll back the clock and revisit the evisceration of the paper wealth that occurred during the dot.com era when the bubble burst on frivolous valuations at that time. The moral of the story is this…don’t be at all surprised when the bottom falls out of the private equity markets…

The Recession…It’s Official

By Mike Myatt, Chief Strategy Officer, N2growth

The Recession...It's Official“The Recession…It’s official.” I don’t know about you, but I’m less than impressed with the experts just now arriving at the conclusion that we’re in a recession when I’ve been talking about it since last summer. Like we really need a government agency confirming after the fact what astute business people have known for quite some time now. The National Bureau of Economic Research issued the following statement today: “The committee determined that a peak in economic activity occurred in the U.S. economy in December 2007. The peak marks the end of the expansion that began in November 2001 and the beginning of a recession. The expansion lasted 73 months; the previous expansion of the 1990s lasted 120 months.” Gee thanks for that useful information…Rather than talk about how bad things are going to get (they will get worse before they get better), I’m simply going to refer you to a previous post written in March of this year entitled “Thriving During A Recession.”