Tag Archives: innovation

What is the kryptonite for disruptors?

Established businesses everywhere are under attack. The headlines are full of stories of business disruption. Entrepreneurs everywhere are building companies to unseat the entrenched firms.

While many think the answer is to invest in more technology, lobby government or follow their competitors actually the answer is right in front of them.

Our team in Sydney recently had the chance to sit down with Luke Jecks, the Global CEO of Naked Wines for his perspective. Listen to Luke talk about what he describes as the Kryptonite for disruptors, its a great lesson for anyone in business today:

So what’s the Kryptonite for disruptors? A Customer Culture or as Luke puts it:

“Love your customers”

If you spend time understanding and acting on your customers needs you will create loyalty that will keep you as immune as you can be to disruption.

So how did Naked Wines disrupt the wine industry?

Before Luke setup Naked Wines four years ago he was looking for an industry where customers felt disenfranchised. He found it in the Australian wine industry – a market dominated by two large retail chains owned by Coles and Woolworths that between them shared almost 70% of wine sales nationally. Not only did he find wine lovers who felt little connection with the vast array of brands but also boutique vineyards that were being squeezed out of the market by ever narrowing margins and an inability to finance the next vintage.

Luke knew that if he could create a personal connection between wine growers and consumers and a financial model that could provide more stability and certainty for wine growers he could build a new business.

He realized that he needed wine consumers as repeat customers and he came up with the idea of “angels’ – that is consumers as angel investors who would pay $40 per month and build up a credit in their account to be used to buy the boutique wines of their choice.

Four years after launch Naked Wines in Australia has more than 50,000 sustained angels, more than 35 boutique winery suppliers with an online communication and ordering system that connects them.

Annual Australian revenue of $30 million and more than $200 million globally is testament to the fact that the whole Naked Wines team have a culture that enables them to “love” their customers.

Isn’t it time to create a customerculture in your business and build up your disruptor defenses?

If you are interested in creating this type of culture in your organization why not attend one of our MRI Accreditation Workshops held all around the world!

 

Can technology retailers survive? Not without a customer focused culture and some new ideas.

Retail Survival? The Amazon online model continues to apply pressure to the traditional bricks and mortar retail stores. Now with the addition of an app that allows shoppers to check prices on the amazon site while in Best Buy or similar technology retailers they continue to squeeze retailer margins. At the other end is Apple that has invested heavily in expanding its retail presence. Add to this a the multitude of small online technology retailers and the rate of change in technology retailing is going through the roof. So what should the traditional technology retailers do?

Their strength is the in store retail experience, many products consumers still prefer to see in person. Best Buy does a great job of merchandising and displaying the latest in technology. The key is how do they close business in store? Creating a customer focused culture that recognizes the options available to consumers and works to innovate on ways to still win by providing the right value at the right time is a key part of the answer.

For example many consumers still prefer to purchase in store but perceive they might pay too much. Other consumers are price shoppers they are just looking and plan to buy online. It is these two groups of customers where there are opportunities to provide different value. For the first group providing expert advise and education during the sales process is valuable even to those will high levels of technology knowledge. Some customers are prepared to pay a small premium for this type of value added interaction.

For the second group of price shoppers, the task is more challenging and many of these customers will want to purchase online. Why not try differential pricing, here is your price in-store (with the margin necessary to sustain the costs of running the store), versus your online store price (lower factoring in the lower cost model). This recognizes that providing an in store retail experience is expensive and only those consumers that really value this should get that experience. Online shoppers would get pricing that is better than Amazon’s in recognition that the customer made the effort to come into the retailer’s store.

Is anyone doing this? Could this work? I don’t know but it would be an interesting idea to test.

I am not saying this is easy, it’s not easy, but the retailers must change and adapt to the new realities and develop alternative value propositions if they are to be as relevant in the future. They must leverage the knowledge and experience of all of their employees to solve these competitive challenges.

“A market culture is what great companies develop to deal with exactly these types of business challenges”

What innovative new techniques have you seen from the traditional retailers? What else can they be doing to compete?

Having the best and the brightest employees is not enough: Lessons from Microsoft

http://www.flickr.com/photos/28674126@N02/ Image thanks to Seth

I read an interesting article today written by a former Microsoft senior leader describing some of the challenges he observed while at Microsoft and that appear to still exist today.

Microsoft, without doubt is one of the great success stories of the last 25 years, they have a ubiquitous platform and have attracted some incredibly talented and hard working employees. It seems strange then, almost paradoxical, that it has not been able to really innovate since its early days.

Dick explains in his article that Microsoft struggles from significant internal competition that simply slows it down and kills internal innovation.

Ultimately this is a cultural issue, they simply are no longer as market-driven as they once were. The heads of existing businesses simply kill off any internal threats that arise by pulling funding or refusing to support them. Dick sites the example of ClearType a new font that would allow users to more clearly read text on screen and the fact it was not supported by much of the internal leaders despite its clear customer value. The result was it took 10 years to finally get to market…..

If companies like Microsoft want to compete in the future they are going to have to change this culture to allow internal innovation to flourish. Buying small innovative companies won’t work as they will ultimately get eaten up by the Microsoft culture. As we have seen with Apple you can’t buy innovation you need to create the environment for it to happen.

Microsoft its time to become market-driven again!

Finally a breakthrough tool to measure your level of market orientation

Breakthrough MarketCulture Innovation

Breakthrough MarketCulture Innovation

Finally there is a way to measure something we have been working with clients on for the last 30 years. It is what we call market culture or in research circles is referred to as market orientation. This goes beyond the notion of customer centricity although the terms are related. It really is about bringing the outside in and avoiding the pitfalls of working with primarily an internal focus. It is not just about customers but about the external environment, the competitive landscape and how intelligence is distributed and used within the business to create more value.

Why is it important? Because it is a proven driver of business performance, companies that have built a strong market culture have built businesses that are more innovative, profitable and grow faster than their competitors.

Our team is really excited as we have finally completed the development of a new survey tool that will validly and reliably measure market orientation (what we call market culture), connect it to business performance and benchmark our clients against a database of companies from around the world.

For more information see our press release here. We have also set-up a new page on our site dedicated to this new product, we are calling the MarketCulture Benchmark (TM) here.

How should companies’ innovate?

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I read an interesting post by Scott Anthony on the Harvard Business Publishing site today called “Better through whose eyes?”

He makes the point that innovation needs to be seen through the customers lens. I couldn’t agree more, in fact if it isn’t adding value to the customer then in my view it is not innovation to begin with….

The second criteria should be whether the business can do it cost effectively, as an innvoation should add customer value but also add profitablity to the company.

Scott provided the example of the new feature on Bank of Amercia ATMs that allows customers to scan checks, he proposed the idea that it was really just saving BoA money and inconveniencing customers but it was interesting to see that the comments were fairly evenly split on this one with many actually believing it saved them time and was easy to use. So one could conclude that it was innovative for some customers but not others?

This leads to the question of segmentation and how to introduce new benefits that only some customers will value. Perhaps BoA could have provided the old method of banking checks as well as the new scanning method, watched customer behavior and phased out the older method over time?

Green Building in China

 

This post is a slight diversion from what most of this blog will cover, but I feel it’s important. And, in so far as this site is about innovative ideas about meeting stated and unstated needs, this idea is right on the mark.

Today I attended a small showing for a video entitled Green Dragon. The premise was centered around the massive amounts of new buildings going up in China, the great migration of their population to urban zones and their impact on the worldwide environment. (Did you know around 25% of the smog over LA is from particles produced in the Middle Kingdom?) More importantly, however, the film spoke about the great opportunities there are to make this process “green.”

In many ways China is already more green than the United States. Nearly all lightbulbs in their urban centers are compact flourescent. (I’m only about halfway in my own house. The whole city of Shanghai has me beat.) They have an extremely effecient privatized recycling system in which private citizens peddle around neighborhoods buying recyclable trash and bringing it to processing centers. And they’re building the first carbon-neutral city in the world. Developer’s site. Consulatant’s site. Here’s a BBC excerpt on the city. The senior architect is one of the folks interviewed for this video.

In many more ways, however, China lags far behind the rest of the world in environmental awareness and activity. Rivers run brown, forests are cut down for chopsticks and nearly every urban center is surrounded in thick, horrible smog. The opportunity to do significant good exists there, and the people, government and builders are smart, educated of the problem and willing to be part of the solution — that was a major takeaway for me from this film.

This project was done by a friend of mine, Max Perelman (bio), with Caroline Campbell (bio) and River Lu (bio) both of whom I’ve also had the great pleasure of meeting. Cool cats. The video is currently being shopped to various distributors but I’ve been promised that a YouTube trailer would be available soon. I’ll be sure to make that available once I have access to it.