The end of Blockbusters…

23 09 2010

OK, well it is potentially the end of Blockbuster Inc.  This morning Blockbuster filed for chapter 11 protection.  It is a great example of the Risk of being the market leader.  They owned the market, they were on top of the world.  I am sure during their heyday money was being thrown all over the place.

I would love to hear these questions answered:

The trap of leadership is that you often have to wait and see the result.  You are often not allowed to change your business model until it is too late.  If you change it when you probably need to and a loss occurs, then everyone loses their jobs.  The analysts would quickly call out leadership saying that they lost market share because of the business model shift.  Even it is was a great move that would ultimately save the company, our short term focus is entirely too great.

It is also difficult to understand the nature of the perceived threat.  I am sure there were a couple of times when Management said “what do we do about NetFlix and the changes in the market?”  I would guess that 10% market share did not scare anyone, nor 20%.  Yet, at this point there was too much momentum.

As leaders, when do we act?

If we react too soon, we risk looking prone to panic.  We can always explain it easier after the fact.  Our egos, politics in general, and concern about saving face probably drive more decisions than anyone would ever want to admit.

All to often we push harder on marketing and sales to cover shortfalls in market share.  I would be willing to bet that the company spent more time creating sales spiffs and getting creative in terms of finances, than investing in new business models.  What this leads to is a further entrenchment into the business model, a “we can weather this storm” mentality.

I wonder what would have happened if they would have set hard targets in terms of driving action.  What if they would have said “once our market share slips by 10%, I want a meeting where we come up with 5 new business models”.  We are just not trained to think about creating very specific action.

We ponder and delay (then get out and let someone else handle the mess).

Advertisements




Clients are Impatient

3 01 2010
  • How much time do we spend making the customer experience simple?
  • Is the customer on-boarding process painful, or straight forward?
  • Do customers get lost in our beauracracy, our legal needs?
  • How many customers do we lose in those final steps?

We spend tremendous time developing technology – whether externally for paying customers, or internally for process improvement.  Yet, we often spend very little time planning for the adoption phase.

What do our customers want – stuff just to work the first time, to be easy to use and provide the value they paid for.   If we are spending millions, if not billions on product development, why do we not start with the end in mind (see Jonathan Becher’s – Manage by Walking Around blog)?  Especially in the age of the internet, people need to be able to sign up and get started without complexity, nor mind-numbing data entry.  There is a time and a place for each of those, and it is not necessarily right after “hello”.

One great shiny example is Apple.  Most of their products are far more simple to operate than their competitors.  Think of how easy to use each of their products are, then think about using them as part of a network of parts and it gets even more simple to use.





Analytics Process

23 11 2009

Over the last couple of months I have been writing about a handful of US Economic Indicators.  While I have reviewed these over the last few years of my life, I had not done so on a regular basis.  This inconsistent and let’s call it a casual curiosity lead to never really understanding the implications behind the numbers.  Sure I could talk about them, but I could not leverage them.  While not an expert by any means, I can see a lot more now than I did when I started this blog series.

This is similar to ad-hoc analysis without purpose.  We do something once and create a little hype.  When we don’t have any vehicle to take advantage of the newly found ideas, the idea dies as does the learning.

Think about the process of how you handle ad-hoc analytics within your organization:

  • Do you have the right minds constantly looking for new issues?
  • Or, do you put the right minds on solving issues when they arise?
  • Can you name your best analytical minds?  Are they assigned to thought leadership and problem solving?
  • Do you use your analytical minds to challenge the knowledge levels of others?
  • How do you foster new thinking?

 

Consistency breeds familiarity, and familiarity breeds knowledge





Product Complexity

19 10 2009

Jonathan Becher of the Manage by Walking Around Blog last week wrote about “Less is More.”  While he starts out with an attack on PowerPoint presentations, he then broadens his commentary to software.   His point is spot on and while I can not think about specific example in software, there have been a couple of interesting technology gadgets that could answer his question.

The most obvious to me is the Flip video camera.  They started with the premise that you don’t need all the special effects, and gadgetry that bloats R&D, wastes battery life, and ultimately increases the cost.  They provided just a video camera with a USB connection to download the film.  No more, no less.  And surprisingly (and telling) in the age of endless features that are rarely used it was an immediate hit.

  • In your space, are there customers that are over-served by the functionality of the competitive product suites?  If so, could you use this as a little Blue Ocean styled opportunity to address a new market?
  • How much of your product’s features are truly used?
  • Are the core functions of your product complicated by the rarely used features?
  • Do you run the risk of over complicating your product to its own demise?

I think it will be interesting to watch Flip grow over the next few years.  Will it attempt to morph the product to compete with the more complex video cameras?  Will it lose it’s identity as it does?  Is accessorizing the Flip a step in complexity, or merely a nice personalized touch?

Too Much

If we take Jonathan’s initial question a step in the opposite direction, can you think of a company that got too complex for its own good?

Here I think we can come up with a great many examples.  A clear example is Social Networking.  The initial idea behind LinkedIn was fantastic and it was easy to see why everyone bought in.  Lost former co-workers were easily found, and we could maintain a single repository for our network.  No matter when they changed jobs, everyone updated their profile.  Now, in an attempt to do more, LinkedIn is at risk of losing their audience.  Groups were a great idea, but their were no controls, no rules on how to use them (or not use them).  Now there are groups in every direction and people are using LinkedIn as a database marketing tool for pushing spam.  Facebook is perhaps beginning to fail under a similar complexity.  We all have friends that put their entire lives into Facebook (which may create its own problem) and send out virtual drinks, winks, pokes, games, flair, etc.   I would love to periodically hear what my friends are up to, but I can no longer find that out unless I spend a tremendous amount of time to design and manage the environment.





Wii or not to Wii

22 09 2009

One of the most interesting brand developments in a long time is the Nintendo Wii.  The video game market has been hot for some time now, but the story was the same.  Better graphics, better visuals, better reality and gore filled titles.  How do you break out of the crowd?

Look no further than the Nintendo Wii for a great story.

How about finding a different tact all together?  By starters, let’s take away a barrier to purchase – parents that don’t want their kids just sitting in front of their TV.  Let’s add an element of physical activity into the game.  Then let’s market family styled competition.  This is nothing less than brilliance.

  • What can you do to change the market parameters?
  • When was the last time you had a meeting of your best minds to challenge status quo?
  • Are you playing leap frog with your competition?
  • What would happen if you did something radically different?
  • When was the last time you came up with a brilliant idea and pushed it forward?




Survival of Innovation

31 08 2009

In 1988 Pinnacle Brands broke into the baseball card market.  The market had long been dominated by a couple of players (Topps,  Donruss, and Fleer) and the market was doing fairly well.  It catapulted onto the scene by throwing in new features to the market, more colorful cards, full edge bleeds, more information, etc with their Score brand.  Over time they added in brand variations that were targeted at very specific markets:

  • Score:  Lower price point, more kid friendly
  • Select:  Mid price point, geared for the beginning collector
  • Pinnacle:  Higher price point for the more serious collector

If you followed the baseball card market at that time you will remember it as a rather unique time.  It was perfect example for economists.  The value of each card, pack, box was independently valued by third parties.  Card shops popped up in nearly every neighborhood to trade cards, and serious collectors were following the distribution trucks buying entire cases at a time before they even hit the shelves.  The catch was that you could not make all the cards you wanted.  The more you made the less you sold, and vice versa.

One of the main things that happened was the wrong sales mentality.  What made them successful, new  innovation, also hurt them.  They tried to stack the cards to the ceiling and create a consumer good mentality, not realizing the principal that the card would really only sell if they kept product very limited.

Hindsight being perfect (still a good lesson none the less) they should have kept production runs low, elevating the brand and looked for other ways to extend the brand.  As a last change, they started to get into other types of cards.  I think in the beginning they had the brains to come up with demand creation card games like today’s Pokeman genre.

Upper Deck came along in the same year and appears to be the leader in the field today.  Usually someone is going to survive, are you doing everything you can to make sure it is you?





Mulligan

23 07 2009

If you were given a corporate mulligan, how would you use it? What would stop you from doing it over?

Or think of it a different way…

How would your competition use your product platform, your assets, your customers to take advantage of you?  What happens if you push all of your unprofitable customers over to your competition?  Let them deal with the headache, the loss of time and money.

One of the most interesting thing about this current economic environment is that there is a new entrepreneurial spirit.  With this brings new technologies, new business models, etc.  Would GM and Ford take a mulligan when Toyota entered the US market?  Take a look at Blockbuster.  Did they see Netflix coming?  If they did how could they have reacted?

Can someone do this to you?