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Is your Innovation disciplined or are you simply dreaming up new ideas?

10 Things to Think about before you try to Innovate

What is Innovation? Does a new idea qualify as an innovation?  Not in my mind. Does in it quality as innovation in your customer’s mind?  Not if it does not create economic value for your business or your customers.  An idea might be creativity but the rubber hits the road when you make real changes to the value chain that creates economic value for your customers and your business.  We shared more about how to use upfront thinking and strategic tools and proven idea-to-innovation processes to innovate and create real economic value for you and your packaged goods customers at the Flexible Packaging & Label Makers Association – Changing the Landscape – Conference on 10th & 11th November 2016.

For a link or reference to that keynote presentation go to:

Many people confuse creativity and the generation of ideas for innovation which is economic value creation.  There are many great examples of innovation in the marketplace we can all point our fingers at and they each hold one commonality – they create value in the eyes of the end customer who pays money for the innovative good or service.  These innovations remove cost in the value chain from inputs to end user or create value in the value chain generating an improved product or service that a customer is willing to pay a premium for due to a higher perceived value offering.

Many people in the consumer packaged goods and packaging industry get bogged down in the gross misunderstanding that innovation is all about new products and fancy packaging – wrong again!  The lowest return on investment for your innovation effort is Product Performance (new or existing) and yet an alarming 90% of innovation effort is focused on this one of ten types of Innovation (Keeley, et al, 2013).  Innovation is a discipline, not a creative activity. Dreaming up new products or features, in isolation, “provides the lowest return on investment and the least competitive advantage” (Keely, 2015).  Why? Simply because the easiest thing to copy is a product – new or existing!  Think about the health of the Australian Flexible Packaging & Label Industry today?  Who is your greatest threat to your own competitive advantage?  Is it lower cost flexible packaging and label manufacturers in Asia?  Are they capable of copying your new packaging innovation? Yes! To make a truly transformational and sustainable innovation that creates value not only for you and your business but your customers you need to innovate across multiple types of innovation.

10 Types of Innovation

Only through strategic upfront thinking and use of a disciplined idea-to-innovation process like Stage-Gate® or Lean® and through Agile® planning and project management processes can you begin to start directing your scarce resources – $/people/time in the right direction.  How can you innovate in the right direction if you have not taken aim at what you are trying to achieve?  You might choose to disrupt the incumbents in your industry but how to do that will rest on a deep understanding of your customers, based on deep insights into what they value today and what you perceive they will value tomorrow.  They can’t tell you what they will value tomorrow because they don’t know the future.  Neither do you!  If Henry Ford had asked people in the early 1900s what they wanted in the way of improved transport options they would have replied “a faster horse!”.

Image result for henry ford faster horses

You will still find there is a lot of aim, fire and adjust going on as you pivot and turn and kill off small bests and invest in bigger bets that are taking your business in the right direction.  Where is that direction?  What data sources big and small, quantitative and qualitative do you have to start to build a better tomorrow picture for you to take your fast, agile, lean and innovative company.  Be sure when you are out and about spending valuable time with your customers you are tuning into their problems, NOT yours!  Try to take a step back before you try and sell them your latest greatest flexible packaging or shiny new label that in all reality they probably don’t need or want. Start with a simple question next time you face your customers – old and new and prospects, and dig deep from there.  What is keeping you awake at night? What is your biggest headache or problem in your business right now? Start wide and only then narrow in on their packaging and labelling issues.  You may well uncover an insight or see or hear an opportunity to innovate far beyond a new product or packaging type to one or two or three or four or five different types of innovation that can help you transform your business and your customers.  Once you have more than 4 types of innovation in your new to market launch you are already differentiating yourself from the pack – pardon the pun!  Get up over 5 to 6 or 7 and you will truly transform and disrupt your industry and create a sustainable (profitable) competitive advantage for your business.

Do not underestimate the amount of effort, upfront thinking and discipline that is required to make this happen.  If Innovation was easy everyone would be doing it wouldn’t they? Clearly they are not.  90% of innovation effort is still focused on the easiest to copy “Product Performance” type. Step outside the pack – think outside the box and start innovating on the other 9 types of innovation.

The article above was published in FLEXO November 2016 Issue: p.6 ahead of the Flexible Packaging & Label Makers Association – Changing the Landscape – Conference on 10th & 11th November 2016.

Dermott Dowling is Managing Director @Creatovate, Innovation & International Business consultancy. Creatovate help businesses create, innovate and growth through innovation and international business development.

If you are interested to get Dermott to talk to your team, business or conference about creating value for consumers and customers in consumer packaged goods you might like to reach out to him for a chat over a cup of well brewed coffee. Contact dermott@creatovate.com.au or jump onto the Creatovate website and complete the contact form so we understand your needs and can tailor a bespoke consultancy solution to your challenge.

Bibliography & References:

Larry Keeley, Ryan Pikkel, Brian Quinn & Helen Waters (2013) Ten Types of Innovation – The Discipline of Building Breakthroughs John Wiley & Sons, Inc., Hoboken, New Jersey.

http://blog.deloitte.com.au/strategy/not-all-innovation-is-equal/#.V_cPZOB96M8 viewed on 7/10/2016

https://hbr.org/2011/08/henry-ford-never-said-the-fast viewed on 7/10/2016

 


Take your business off the Road to Nowhere into Lands of Opportunity

Road to Nowhere
How to use Upfront Strategic Thinking to Drive Profitable International Business Growth

Authors: Dermott Dowling @Creatovate & Kevin O’Reilly @Radar Insight

Five Factors to consider with your head, before following your heart into international markets.

International Business market choice is often based on ‘gut instinct’ decision making, retrofitted later with logic that backs up your initial assumptions. This can lead to costly mistakes and valuable scarce resource waste when wrong choices are made.
How do most businesses find themselves offshore? In one word: Dragged, and usually the result of a direct approach from either existing customers or a potential overseas trade partner. We believe one of the 3 keys to successful international business is use of deliberate, upfront rigorous strategic thinking, planning and risk analysis before deciding “Where to Go” first, second or third as you take your business offshore.
We know that any business growth journey starts with defining the challenge and mapping a journey before you set sail. That is why we are championing a new approach to driving profitable expansion into international markets. Following the 5 key factors outlined in this report have helped and will continue to help our clients use ‘more head and a little less heart’ initially in their market choice decision making.
This report outlines the data and decisions required to understand the five factors at play. We were able to build the Creatovate Market Opportunity Index© decision tool through our work with our clients, and wanted to share our learning with the business community.

Partnering with a consumer goods client, we undertook the challenge to help facilitate their Asian export strategy in terms of decision making “Where to go? First, Second, Third, etc” using a pure data approach, before we facilitated and encouraged the overlay of their own subjective lens and ‘gut instinct’. This mix of slow and fast thinking is vital to getting a balanced and aligned strategic choice on ‘Where to go?’ Our goal was to rank countries analysed based on their performance across 5 key factors (each broken into client specific indicators or markers. Using independent research data, extrapolated across attractiveness rating scales we were able to compare and contrast the opportunity presented by targeting China (huge population, low average wage, less international brands on shelf) to that of Singapore (geographically closer, smaller population, higher disposable income, free trade, etc).
This report will walk you through that thinking process, step by step. We hope you will see similarities to your own international business challenge and see opportunity to utilise or adapt the learning to your own context and International Business growth challenge.

Factor 1: Market Attractiveness

country attractiveness

The most common starting ground for any business looking at which overseas country to sell their products and services is going to be the usual market research sourced through global data services providers like Euromonitor, Marketline, Nielsen, Canadean, etc. You could populate the indicators under Market Attractiveness with literally dozens of sub indicators but in the interests of clarity and not confusion we picked 5 key sub indicators to give us a sense of absolute size of market opportunity and attractiveness in terms of market growth. It has been noted before you are often better to enter a small but fast growing market as opposed to a large and static one.
I. Volume – what is the absolute volume of your business products/services sold in the country?
II. Value – what is the absolute value of the market in terms of retail sales for category?
III. $/Kg or $/L – this is an important measure for a consumer goods product especially for Australian consumer goods manufacturers. In our case our lenses were focus on Asia and it was important we identified markets that had high enough retail prices per Kg or L of product sold to justify a high cost of goods Australian made food so there is sufficient margin in the value chain for all participants.
IV. Consumption per capita – are we looking at a market with a ready and available appetite for your food or beverage or a market that is currently no/low consumption and will require education as to the products benefits from consumption?
V. CAGR or cumulative aggregate growth rates – in our case we took a CAGR average of the past 4 years market value growth rate to determine if there was a rising tide that would float all boats including new market entrants or a static or even worse in decline market opportunity.

Factor 2: Sociodemographics

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Population and demographic information is vitally important in your decision making on which markets to focus on when considering international business. China might be a great market opportunity from a first glance at the absolute population and yet further probing and understanding of sub-indicator factors like the one child policy and an aging population vs. say India by comparison might suggest it is more attractive to the cruise line business than say children’s food products. In our case we were conscious to also look at ability to pay and buy premium imported foods in our markets under study. For this reason we included other sub indicators to give a more rounded view on the absolute numbers of mouths and pockets that can afford our clients products.
I. Population – absolute numbers are hard to ignore but feel free to use filters over the core consumer target age group for your business products or services.
II. PPP per capita – widely regarded as a better and fairer indicator or relative wealth by a nation than the more tradition GDP per capita this is again a fast indicator for overall wealth.
III. Disposable income per capita – we were fortunate to be working with a data set that included this level of detail which helps in the sense of what available funds do consumers in the country have to spend outside their daily necessities to live?
IV. Food expenditure per capita – a key indicator in our client project as they are selling food is the amount spent per household or able to be spent on weekly food purchases. This sub-indicator could be adapted to your own business category of products or services.

Factor 3: Open to trade

international_trade

Our client first consideration was immediate opportunity to export/import their products into the region of study. As such a key factor for us was the local markets or countries openness and willingness to trade with the country of origin – in our case Australia. Our focus needed to search and discover data from international and domestic data sources on volumes of international trade and imports in the food category (open to trade), volumes of the category currently exported into the region and to what countries (follow the leader) and last but not least any visible or unforeseen barriers to entry. This factor became complex rather quickly requiring a mix of sub indicators that contributed to an overall factor score in terms of attractiveness.
I. Volume of Imports – MT, $/Kg and $m – this was the sub-indicator of the country openness and scale of trade both in absolute volume, value and $ per weight/volume measure.
II. Volume of Exports – sourcing data from the local industry association we were able to determine the absolute volume of the client’s category of products exported to each country in the region. This is a ready sub-indicator to open to Austrade in the sense open acceptance of imported goods from Australia in those countries.
III. Barriers to Entry – a mix of quantitative and qualitative judgements or indicators we utilise the apparent barriers like Tariffs, Quota restrictions, and some ‘behind the border’ barriers like Product registration requirements and estimated time to register or local labelling laws.

Factor 4: Dispersion

dispersion

Working in the Fast Moving Consumer Packaged Goods industry where the majority of products sold are through retailers and increasing modern retailers like supermarkets, hypermarkets and convenience stores it was important we believed to include some country analysis and understanding on concentration of power of buyers (retailers), suppliers (local manufacturers) and penetration of private label products in that country. For this reason we used 3 key sub-indicators to get a sense of dispersion in the country which would suggest competition is less intense and more room for a new entrant vs. highly concentrated and difficult to penetrate the new market.
I. Concentration of Retailers – what is the combined market share of the top 5 retailers? In markets like Australia where we have a highly concentrated retail landscape with two retailers dominating 70% of available market share the trading terms and margin requirements with those retailers is understandably high relative to a highly dispersed retail market.
II. Private Label Penetration – if Private Label has penetrated the category and to a high % of total category share the correlating thinking is that there will be less willingness by customers to range new lines/brands/products in the category as they concentrate on incumbent market leaders and building their own exclusive or private label brands.
III. Concentration of Manufacturers – what is the combined market share of the top 5 local food manufacturers in the category you have entered? If that market share is high there will be higher profitability with those manufacturers and a willingness to go above and beyond to stop new entrants getting a food hold in their category.

Factor 5: Innovation Intensity

innovation intensity

Factor number 5 we wanted to check was the relative level of innovation intensity in the country and category under examination. Whilst a higher level of innovation intensity would indicate consumer and customer willingness to trial new products and brands it might also suggest a higher level of competitive intensity and greater need for our client to continuously refresh their product offer both at home and off-shore. We selected three sub-indicators here to give us an overall sense and impression of which markets are open to new ideas, products, allow functional or nutritional health claims for foods and what % of total turnover in their country and category is from New Products launched in the past 3 years.
I. New Products launched in the past 3 years as a % of total value of sales in the category
II. Claims permissible – in your category space. Are the claims you can make on your products at home where they are successful allowed in the new country you are about to enter?
III. Health claims premium – if you are selling products that make beneficial health or functional claims how much of a price premium are similarly claiming products getting in the market under study?
Working through the above 5 factors and their 3-5 sub indicators across a mix of independent data sources enabled us and our clients to take a step back unbiased independent look at the region and rank the markets. We also developed a subjective scorecard that could be used to align key leaders in the client business around discussing which markets will be a focus for entry in the short, medium and longer term horizons so that preparation, planning and time critical steps could be taken across the board to manage a phased approach to international business growth. Heart is good and if the Head matches up with the heart or the slow thinking matches the fast thinking gut reaction you know you are onto a winner and ready to take that next step forward to answer our next question: “How to enter?” the new market and what market entry model to use? More on that front in our next post. We trust this critical thinking approach to the Where? Question will give you some data and knowledge to think about in your context and the ability to turn that learning into wisdom. Please do not hesitate to get in touch with us if you would like to do something similar or different relevant to your context and challenge as you create, innovate and grow your business internationally.

About the Authors:

Dermott Dowling is founding Director @Creatovate, Innovation & International Business consultancy. Creatovate help businesses create innovate and grow through innovation and spreading their wings outside their home base. Contact Dermott if you and your business needs help improving your innovation processes or expanding your business internationally.

Kevin O’Reilly launched Radar Insight after seeing too many products launch without the insight or clarity required to be successful. Contact Kevin to hear how consumer research & product evaluation can help tailor your product to your target market.

 


http://ow.ly/nHkx6 Winter CreatoNews sli

http://ow.ly/nHkx6 Winter CreatoNews slideshares, audiocasts, blog posts and discount codes on MindGenius v5.


What is your ‘no skirt’ Start-Up Smart story?

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Amanda Gome, founder and former CEO of Private Media had a bad start to a brilliant day.  Getting up pre-dawn to fly to Sydney on the red eye to sell sell sell all day in back to back meetings, she pulled up her tights, grabbed a warm jacket and headed out the door to the waiting taxi only to get out at Tullamarine Airport in Melbourne and think ‘it’s a cold day today’!  Oh, no! I forgot my skirt!!!  Never mind, push on, the plane is about to leave and the shops will be open in Sydney at 8am won’t they? Oh, no, nevermnd, first meeting at 8:30am – Sell! Sell! Sell! And so she did all day in fishnet tights, a short jacket and without her skirt, and her ‘no skirt’ start-up story lives on…do you have your own start up story?

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Gome at age 45, had interviewed plenty of successful business people and entrepreneurs in her life as editor of BRW but when she put down the phone after talking to Matt Rockman, co-founder of Seek, she thought ‘it’s time’.  Now years down the track with a host of successful online media titles established under the Private Media umbrella including Smart Company, Crikey, Property Observer, The Power Index, Leading Company, Start Up Smart, Tech Company and Women’s Agenda, Amanda Gome found some time to share her insights on starting up smart with the VECCI HR breakfast in Melbourne.

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Seek had a better product for job seekers and recruiters and Gome acknowledged that to Rockman.  Gome was not going to give Seek a profile in BRW, a Fairfax publication no less, until it had a couple of key clients and some runs on the board but when she put the phone back down and sat back in her chair it was blatantly apparent to her that advertising dollars were about to walk out the door and it was time to jump in and get her feet wet in digital media.

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Tip #1 – Don’t miss an opportunity

Having spent plenty of time towelling business leaders for missing the Internet revolution, making mistakes or missing opportunity, Gome knew it was time to get out from behind the comfort of the keyboard and plunge into her own start up.  A few calls and $400K fundraising later and Private Media was up and running.

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Tip #2 – Trust your gut

The early signs were there that media would migrate from print to online but the data and facts had not caught up with the trends.  Gome insisted it was time and knew it in her gut to get out there and have a go at a new business media model.

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Tip #3 – Don’t stuff up your message – stories matter in start-ups!

Having interviewed countless founders before Gome noticed how they used the power of ‘storytelling’ constantly to answer questions, during interviews and made sure they were there to interview new starters and share their founder(s) stories.

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Tip #4 – Recruit on attitude

Ever been to an interview where the founder(s) pre-empt the interview with a preliminary chat?  Then proceed to share stories, ask about family (probe for loyalty), check in if you have failed before and how you bounced back (resilience & learning) and then proceeded or not proceeded with the more formal ‘interview’?  Given you are going to be a part of a small team, experience failure, learn and need to be resilient the attitude you bring to the start-up is important.

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Tip #5 – Recruit for diversity – sex, age and race

Balance is important in the workplace and so is diversity for creativity.  Too many men and its ‘blokey’.  Too many ladies and its ‘bitchy’.  Young workers can bring lots of technology and attitude, older workers can bring a lot of wisdom and knowledge – combine all these things together and you create a powerful combination to create and innovate.

Bonus tips:

Get a board of mentors – start-ups are lonely for the founders and odds are someone has been there before you and can help give you some advice to help you navigate the tough decisions.  Gome used past contacts to sound out and bounce and build her thoughts as she went through the inevitable crisis’s of growth and leadership all founders face to help her make up her mind what to do in difficult situations.

You’re a tech company first, a media or XYZ company second.  Bring IT in house and make IT’s mission training everyone how to use the latest technology to perform their work more effectively and more efficiently.  Don’t hate the nerds – embrace them and make it their mission to bring everyone forward with them including your older employees.

Stay on focus and innovate.  Sounds easy to say but when everything is going on and there is more to do than time to do it you need to constantly delegate to spend time on strategy.   You also need to protect your business models by building moats around them e.g. Leading Company & Start-up Smart are moats to protect the mainstay of Smart Company. 

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There are always opportunities and ideas so keep your ears and eyes open next time you take a call or have a conversation with someone in your industry that makes you sit back and think afterwards – Wow! That is going to disrupt me and my industry.  It might just be the opportunity you do not want to miss for your Smart Start-Up!

Dermott Dowling is founding Director of @Creatovate, an Innovation & International Business Consultancy.


Opportunity Knocks for Postman Pat & You?

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Australia Post is innovating to realise its vision ‘that connects the digital economy and the physical world’

 

The iPhone 5 launch last year was not the only thing happening in the global digital economy and being talked about last year.  At a VECCI luncheon on 9-11-12, Ahmed Fahour, Managing Director & CEO at Australia Post shared a few innovations from Australia’s own Postman Pat and his hologram friend in the digital economy who we are going to get a lot more familiar with in years to come.  Ahmed shared a few statistics that made me go “Wow” like that 400 billion emails are sent per annum, 98% of which are spam.  It’s hard to fathom that the iPhone was only released 4 years ago in 2008 and already 6 out of 10 adult Aussies have a smart phone, or that the iPad was released only 2 years ago in 2010 and yet by the end of this year one in three Aussie households will have one.

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Not to mention that over the past four years, Facebook has gone from 90 million accounts to 900 million, and ‘tweets’ sent, each day, have grown from just 1.1 million to 140 million.  Digital technology has already transformed the music industry, book publishing, and the photographic industry and news organisations and is clearly changing the nature of retailing.  Australians might have been slow to pick up on things like online retail by global standards but they are catching up fast and its having a dramatic effect on how Postman Pat delivers the mail.

Australian Post mail volumes reached an all-time peak in 2008 of 5 billion items and have fallen by almost 20 per cent in the past 4 years.  This year Post will deliver the same amount of letters as they did back in the mid-1990s.  However, it’s not all ‘down down’ in the mail business with parcel volumes growing by around 8-10% a year driven by online shopping and 70% of those parcels are now generated by an online transaction.  All the research is predicting double-digit growth in Australian online spending through to 2020.  Of that online retail 70–80% is generated by Australian e-tailing sites and it’s really the new breed of online retailers (e.g. Catch of the Day, Ozsales, Deals Direct and Greys Online) that are dominating the market.  A recent study released by nab showed that over 70% of sales transactions are on Australian websites and that less 2% of total sales value is from off shore retailers.

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Australian Post is innovating to catch up and realised their vision of ‘connecting the digital economy with the real world’.  Two recent examples are the postcard app which is free in the app store taking pictures from your iPhone or library and turning them into a physical postcard – and then delivering it within Australian for $1.99.  Post has also been installing Smart Parcel lockers around the country that are accessible 24/7 enabling customers to collect parcels when it suits them – day or night.  Customers simply register online and when their parcel is ready for collection Post send them a text message or email.  Trials at several sites around the country have received an overwhelming response with ambitious roll out plans to be announced later this year.

Another example of how parcel service is changing is ‘Delivery Choice’ where Post is working with online retailers to offer their customers the ability to nominate a day, time or an alternative location for delivery of the items that they have bought online.  They can even re-direct their parcel while it’s in transit.  Catch of the Day, Crazy Sales, ePharmacy and Chemist Warehouse where the first online retailers to integrate “Delivery Choice” into their website giving their customers real control over when their items are delivered.

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Another big digital service innovation Post is developing is the Digital MailBox.  The Digital MailBox will be a free service that’s available to all adult Australians.  You will be able to use it to receive and store important documents (like bills and statements) and make payments.  Your own secure online vault with one-touch log-in with one password accessible anywhere anytime on any internet enabled device.  If you are thinking of equivalents in the physical world, this is effectively your letterbox, your filing cabinet and your payments card or bank account – but seamlessly combined in a secure, online environment.  No spam, no clutter, no junk mail and it will help businesses to cut the cost of delivering their essential communications by up to 70 per cent. Telstra, AMP and Westpac are on board already and government agencies and businesses will be announced in October. Australians can trust that their information is safe, stored securely in an Australian based cloud, provided by Telstra.

The Australia Post Digital MailBox will allow Australians to:

• Connect with service providers they have a relationship with – such as banks, utilities and government entities.

• Receive statements and bills, set reminders and make payments online, using any PC or mobile device, anywhere, anytime.

• Use the Australia Post Digital MailBox as a personal digital vault to upload and easily find important documents.

For businesses the system offers:

• A flexible range of integration options to help businesses connect securely to their customers through the Australia Post Digital MailBox.

• A secure digital delivery service to consumers and a range of payment options.

• Better value for money than any other singular service.

Australians can register for an Australia Post Digital MailBox at www.auspost.com.au/digital-post

In closing Ahmed noted that these kinds of innovation are not new to Australia Post who have been early adopters of both transport and communication technologies.  They have been around long before the telegraph, the car, the telephone, the aeroplane or the fax machine.  It was the colonial postal services – for instance – that built the telegraph in the 1870s that connected Victoria to other Australian colonies and the world, slashing the time it took to send a message from Melbourne to London from months to just minutes.

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You might be sitting back and thinking how does this affect me as a business owner or entrepreneur or someone planning my own start up?  It’s yet another demonstrable example of how the digital economy is integrating with the real world to make online business models easier to reach mass market Australians.  With the trust and support of Australian Post the floodgates of eCommerce and eTailing businesses are about to open if in fact they are not already experiencing a torrent of transactions already washing over their spillways from the physical world.

 

Rest assured, if you are fearful your local Postman Pat will not round the corner on his trusty push bike or Honda, Ahmed assured reporters afterwards that you will get your mail every day on his watch.  Of course in the future who is not to say Postman Pat might be in a completely different delivery vehicle and you might be receiving a whole lot more than a couple of letters or bills. 

 

Time to sign up for your free digital mailbox www.auspost.com.au/digital-post

 

Dermott Dowling @Creatovate is an Innovation & International Business Consultant with a passion for building great brands, businesses and teams with extensive experience and achievements across cultures, countries and companies.


Why come back to work in the New Year?

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Why come back to work after the holidays?

At this time of the year we often look back and reflect on the year that was and then sit back over the holidays and think about plans for the coming New Year.  Here is some learning from a morning spent with the Wizard of WoW! Why? & WooW…Paul Dunn earlier in the year that might be worth pondering over your happy holidays.

Connect before you communicate

Business needs less communication and more connection

e.g. http://www.Zappos.com founder Tony Hsieh says, “1st connect with ourselves, 2nd with our team, 3rd with our customers”

WOW! Add speed

e.g. the iPhone box impresses you before you open the box and find the phone.

“We are in the age of acceleration of everything” Google MD, Asia

BBC World ‘digital goldfish’ everyone has 9 seconds to impress online and our online behaviour has transferred offline into the same expectation.

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Digital Goldfish

WHY? Add purpose!

People will do amazing things if they understand the why and believe in what you believe in (Simon Sinek)

Focus on the Limbic brain and work your way out from WHY? to HOW? to WHAT? rather than the other way around

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Simon Sinek: Start with Why?

WooW…Change Lives!

e.g. Bill Gates 2007 Harvard Graduation speech “I hope you will judge yourselves not on your professional accomplishments alone, but also on how well you have addressed the world’s deepest inequities, on how well you treated people a world away who have nothing in common with you but their humanity.”

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Bill Gates Harvard Address: Have a purpose

e.g. Make giving a part of your business values https://www.b1g1.com/

Bonus learning: Q: What is your most important decision you make when you start your business? A: the NAME!

e.g. Robert Stephens & “the Geek Squad” from 1 man and a bicycle in 1994 to 24,000 people and $1.5b revenue in 2011 “Advertising is the fee you pay for being Unremarkable”.

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The Geek Squad: Be remarkable!

Do you have a Wow! Why? & Woow…for your business?

Take some time to think about it over the festive season and build them into your business plans for 2013.  Happy New Year!

 


Are you a winner or a loser?

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Here are some lessons learned from time spent listening to and talking to @RosabethKanter @ #ACBC12.  For those readers who have not heard of Rosabeth Kanter, she a renowned Harvard Business Professor who has inspired cutting-edge innovation, strategy, leadership and culture. She has worked a broad spectrum of for-profit and non-profit industries, including celebrated corporations like IBM, Proctor & Gamble and Verizon. I spent some time interviewing Rosabeth at #ACBC12 on behalf of Anthill Magazine and here is a summary of here are 5 key lessons learned from Kanter.

Her advice is equally applicable for new businesses as it is to established businesses.

Lesson # 1) Good moods, stickiness & parties!

When people in business are winning they are in a good mood and its contagious infecting others with more energy, there is less absenteeism, and people turn up even when they do not have to and take initiative rather than waiting for instruction.  Winners get invited to the best parties and thus, the opportunity to network with more successful organisations. Losers are left out.  Networks are vital and why many small companies flourish and grow.

Winner tip: Act bigger than you are if you are small and network with successful companies. Start-ups that dominate their industries usually had better partners early in their start up life.

Lesson #2) Warning! Winning can be boring! It’s hard work.

Just like an Olympian you need to practice every day and not become complacent.The people who make up teams in winning organisations may change but, the culture that perpetrates the organisation keeps the team winning.

Likewise, the complete opposite can occur for losers. There’s a U.S. college football team that lost every game of for nine years! The members of the football team changed, but the culture and attitude didn’t, so the team kept losing.

Winners monitor and measure their performance. They live by the saying ‘what gets measured gets done’

Winner tip: Use key success indicators with precision meticulously, to get things done.

Lesson #3) Winners are leaders who take responsibility.

Winners are leaders who take responsibility. Winning companies are run by people who are not afraid to say the three hardest words to say in business: ‘I was wrong.’

Losers love cover ups and do not say these words.

Winning businesses have a strong set of values and core purpose. P&G, founded in 1837, codified its values 20 years ago when it acquired Richardson Vicks.

P&G created its PVP (Purpose, Values, and Principles) to guide and unify the company with a common cause. It helped to create the company’s growth strategy of ‘improving more consumers’ lives in small but, meaningful ways, each day’. The PVP inspires P&G people to make a positive contribution every day.

These lessons are highly applicable to start ups, many of which are now writing and codifying values and purpose. Kanter pointed out a growing recognition that people cannot share in something they do not create. A PVP is a core part of a business, any business, that can be created by the whole team, not just the Founder.

Winner tip: Know what you stand for. Make sure your team does, too.

Lesson #4) Winners think small as well as big

Winners focus on small wins and one step at a time.  They get right back to work the day after a success.  If all you have is a big vision for your business then you will get demotivated  This is because the gap between the now and the vision, is too big.  Toyota changed from five year plans to five week plans. If you have a five year plan you will only start working on it in the 11th month of the 4th year!

Winners use open brainstorming, their initiative and feel everyone can make a difference to the business.  Losers go it alone, set unreasonable goals and, think no one else has valuable input.

Kanter’s advice is to focus on ‘small wins’, especially in tough times. Winning companies will provide teams with tasks and goals they can achieve.

Winner tip: Break it down; project by project. Focus on achievable components to build on success.

Lesson #5) the real difference is how winners handle losing

Winners like to get together with other winners, and share their experience. They are more likely to share mistakes and take on board feedback and, tips to improve.  Losing becomes an opportunity to learn for a winner.

Losers, by contrast, need to improve but, are less likely to heed conversations about losing. Nor do they take on board feedback to improve.

All winners have bad patches, or products or services that do not go well. They make changes, learn and stay focused and resilient.

Businesses that are resilient can always come back. McKinsey & Company gave free consulting to U.S. businesses post the GFC in the knowledge those companies would bounce back and appreciate their help in tough times. Then, when the opportunity arose for the company to engage a consultancy, McKinsey would be at the top of the list.

Winner tip: Remember Kanter’s law: Everything can look like a failure in the middle. Refocus, redirect and you can become a winner.

So, those are the five key lessons to help you and your company, be a winner and not a loser.

But wait! There’s more!

Bonus Tip #1: Innovation – be courageous but not stupid!

Kanter recalled how businesses often call her asking how they can be more innovative and immediately follow up with: ‘what are other businesses doing?’

It takes an innovator with courage to bring out something radically different and, not just something incremental. I mean, really, how many different varieties of toothpaste do we need? Do something different!

Incremental strategies reach a peak. In order to get more success, you need to have more failures. You need to try more ideas, more often, before you find the one that works.

Bonus Tip #2: Values matter! Your business is bigger than you!

Kanter points to a greater need today for openness in organisations today.  Founder-led companies can fall into bad habits because the founders can think they know everything. However, an autocracy cannot flourish.

Founders need to be surrounded by great teams. They also need to accept that they may not stay on as the CEO forever.

Bonus Tip #3: Partnering skills matter most!

Business alliances come and go and, they are really difficult to do well. Take Verizon and Google, for example. These two huge companies partnered to create the Android phone but, that alliance no longer stands.

The best alliances have a very specific outcome and an end. It needs to be recognised that the interests of the companies in the alliance can, and will, change.

What every start-up needs is the skills and knowledge to identify and make alliances with the best, and most suitable, partners.

If you are interested to read more on the differences between winners and losers, go to Kanter’s blog.

This article was published on http://anthillonline.com/are-you-a-winner-or-a-loser/ on 14 Sep 2012.

Dermott Dowling is an Innovation & International Business Consultant with a passion for building great brands, businesses and teams. He is the founding Director @Creatovate.


Aim, Fire! Adjust :-) Lead, Learn & Innovate like an entrepreneurial startup

You don’t have to be a start-up to learn, lead and innovate like one…

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1. Entrepreneurs are built, not born 

By correlation we can imply all businesses have innovative capacity and building that capability can be through strategy, resource allocation, process, culture and leadership.  Most importantly having a go!  After all is not the best form of learning the practical as opposed to the theory.

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2. Start-ups are unique

They are not small versions of large companies and hence traditional business thinking tends to stifle the start-up.  Likewise if a large organisation is looking to innovate and ‘learn by doing’, they need to be open to start up ways of working, managing, funding.  Less ruling by command & control and more by seeking, solving, encouraging and seed funding.

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3. The Search for a Business Model

Under lean start up models the founders search for repeatable and scalable business models, rather than settling on one when the venture is launched.  For larger corporates they tend to apply new ways of doing things through existing business models more often than not as the ‘status quo’ police of middle management apply traditional ways of reaching customers and consumers.  Instead a healthy start point might be a small venture team based diverse group of individuals starting with a blank sheet of paper literally and saying ‘without constraint’ what is the best way we can create value from this idea/insight/trend/unmet need and take our product or service to customers and consumers in new and innovative ways.  Senior leadership should give encouragement for the venture teams to take this approach and be open to growing some babies or children outside the corporate home or traditional business model.

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4. Run Fast

Successful start ups observe when their business model is struggling, respond to new facts, decide which parts of the business model require urgent change, and act.  Less time on detailed business planning and more time on testing in market with real live tests.  How often do you sit in board rooms with your peers either a) presenting or b) picking apart detailed business cases on products or services with 5 year business revenue and profit projections that could be better spent on inquisitive questioning like “how can we test this for small dollars to get large learning”.  What are some creative entrepreneurial ways we can find out if this is going to work before we scale it and go full blown national launch for example?

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5. Pivot and Turn

Pivoting is about iteration, testing and validation, and can be as simple as realising you have priced a product or service incorrectly.  Start up founders realise that several pivots maybe required in the early years to reinvent the venture.  They ensure the culture and staff are flexible enough to turn on a dime if required.  By correlation in many corporate cultures its often launch and leave or launch and run in case things don’t go well.  Culture is an integral part here of creating a testing, learning and adaptive team based culture where the venture teams are kept together post product/service launch and report back in frequently with learning and recommendation to pivot, stop, start again, push harder, invest more/less, etc.  Some large businesses realise that traditional leadership structures or meetings and forums do not allow for this type of learning and iterative process and set up incubators, skunk works, or get senior grey haired veterans to run these entrepreneurial business units.  Cell based structures may also be appropriate and leaders will need to work out how and when the satellite businesses are brought back into the mother ship or scaled and grown by the battalion as opposed to continuing to operate like the special forces.

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6. Lean and Learn 

True learning comes from testing aspects of the business model and market hypothesis early and quickly. Rather than spending months researching start ups get their minimum viable product (MVP) to market quickly and let their customers inform them.  Speed is the imperative and their most precious asset.  In the age of ‘accelerate everything’ where we live by the mantra ‘I want it now!” and I can find it in 7 seconds or less on Google this is a very potent message to large corporations.  Research is often done to reassure internal stakeholders and appease layers of management the homework has been done before the big artillery of $$$ of Advertising and Promotion are spent in the market to support this new product or service.  More thinking can and should be devoted to how multiple controlled live tests can be launched simultaneously for e.g. 7 different products in 7 different states and review and learn after 6 months which 1 or 2 continue and we invest redevelop and roll out.

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7. Feedback Loops 

Start up entrepreneurs create feedback loops to measure customers response to new products, at least at the very start, to decide whether to ‘pivot or perserve’ with their business model.  They constantly source customer feedback and let it  shape their business model.  With the advent of social media this process of continuous feedback loops should arguably be much easier for the larger corporates than the start ups.  They have the millions of likes on Facebook constantly feedback criticism or favourites on new products and prototypes.  Corporates often have very sophisticated customer engagement models and survey tools as well through third party providers.  Turning these tools towards active engagement on product and service beta development, controlled market tests and post launch analysis with equally prompt redesign and redelivery will increase customer and consumer engagement and arguably make the large corporates a more nimble and liked business by their customers.  The challenge is on the big to be ‘small & nimble’ far more so than the other way around in the modern age of instant gratification, response and listening.

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8. The Critical Formula 

Under lean entrepreneurship thinking, chaos + speed + pivots = success.  Start ups  realise they need to operate in environments of extreme unpredictability (chaos), use great skill to change quickly as circumstances dictate (speed) and reinvent aspects of their business model (pivot) to respond to threats and opportunity.  This seemingly choatic, manic, back flipping or zig zagging appearance will not sit well inside many corporations where the mandate is often 10% topline and 10% bottom line growth year on year.  However, entrepreneurship be that corporate or start up is never 10% steady year on year growth and its up to senior leaders to create ‘gambling funds’, set aside intrapreneurial seed capital and manage their own intracompany adventuring like a venture capitalist.  Not all bets come off and provided the company accepts that some bets and teams are like the house money in the casino but that it could be the next one or the next one that comes off they are on the road to learning and the more they learn by doing the more that appearance of fast, pivoting, chaos will start to feel like the new normal around here and that will be a demonstration that culture has come to match the business innovation strategy, they have succeeded in allocating scarce resources to new ventures and they have a process that is producing results.

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9.  Entrepreneurship is Management 

While it may not sit well with many strong minded entrepreneurs or creative innovators, Ries notes entrepreneurship is essentially another form of management.  The start up management style recognises the uncertainty of entrepreneurship with its increased risk and reward profile and the need to adapt and develop a stream of constant innovation.   For many large corporates like conglomerates who operate across different industries, geographies or have multiple business units they are already a great example of using multiple business models and management styles.  To them entrepreneurship may not be new and maybe something we have been doing for years without the name tag e.g. Wesfarmers, Tata, China Resources Enterprise to name a few.  For other large corporates who have not yet tackled this head on or are thinking about tackling it head on I can recommend a couple of immediate things to do.  Step 1 Pick up a copy of Lean Start Up and note down everything as you read that is interesting and new, anything you learn and lastly but most importanly, what you can take and apply to your own context.  Step 2 immerse yourself in the learning process.  Go and see some start ups in action in your industry or adjacent industries.  Go and seek to understand how large conglomerates can operate with multiple entities and entrepreneurial divisions inside a large business structure.  Step 3 and the most important step.  Get the strategy out, make sure it has an innovation strategy component and invest some ‘gambling chips’ into starting some ventures.  Back those ventures and applaud their bravery across the business until what seems unnerving, unnatural and unreal becomes the new ‘way we do things around here’

It might take a lot of guts, determination and persistence but then again so does starting your own business as any entrepreneur out there will tell you over a coffee or cold beer or glass of wine.

Create Innovate Grow 

Dermott Dowling @Creatovate


7 Steps to Conquer the Web like a Giant Spider Killer!

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In a year where Fairfax announces 1,900 redundancies and News Ltd announces restructures and right sizes (read redundancies) James Tuckerman (founder of anthillonline.com) hosted a series of seminars on conquering the Web with a guest list of Giant Spider Killer entrepreneurs.  Here are their 7 secret steps of web marketing I learned in a day:

1)       Remember the Commanders Intent! (Your Mission Statement)

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Just like when a platoon tries to take an enemy position your business needs a mission statement to guide you when you hit the marketplace and bullets fly in all directions?  In the internet the commander’s intent in the top right box of your mind must always be:

  1. Make it Measurable (if it can’t be measured don’t do it, it’s that simple)
  2. Findable (otherwise your wasting your time)
  3. Shareable (maximise the value of word of mouth and social media)
  4. Manageable (use tools and systems to reduce the workload and focus on value creating activity vs. ‘rinse and repeat’ tasks that can be outsourced)

2)       What’s your Pitch and does it make sense to your 15 year old nephew?

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Anthony Gaddie shared his wisdom on breaking down your business value proposition into simple, easy to understand language your 15 year old nephew understands and your target market.

  • Who is your target market?
  • What we do…
  • Benefits (to target market)
  • Feelings
  • Problems

When you verbalised your ‘elevator pitch’ it should come across like:

You know how…target market & problem

What we do…benefits & feeling

In fact…evidence from past work or client experience (NB: In 30 seconds or less – jargon removed)

Then, Part 2: Set Measurable Goals e.g.

1) Get qualified sales leads

2) Sign up for my blog

3) Click and download a shareable piece of knowledge (Product for Prospects) e.g. YouTube video

3)       Who is Wang Xing? He’s China’s Mark Zuckenberg and here is what he wants to tell us?

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Xing says, “Too many entrepreneurs sell vitamins instead of selling headaches. “  What does he mean? Put simply, what is your customers’ pain point? It’s no good selling them benefits when they are healthy.  Be there when they have a migraine with your aspirin (value proposition).  Be top of mind when they type ‘“help me” into Google.  Do this by giving them relevant small doses of business information in advance of the migraine.  For example which of the following two offers is more effective?

1)       20% off Folate Web Ad or,

2)       Ten Things a Pregnant Mother should not eat with a tear off coupon on the bottom (for 20% off Folate)

Market to the ‘headaches’ of your target market and remember the 7 deadly sins or Maslow hierarchy of needs in understanding their migraine points.

4)       Your Website is Your Home Planet – bring them home!

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What is your website purpose? If it’s not one of the four below you are wasting your resources:

I.        Sales

II.        Pre-qualified leads

III.        Coupons

IV.        Out-going clicks (advertising)

Use Measurement tools to measure your website effectiveness, for example.  They are widely available and many are FREE! Examples include:

  • Google analytics
  • Crazy Egg
  • Unbounce

5)       Don’t try and bed your customer on the first date.  Charm him/her slowly, Barry White style.  It’s a funnel not a tunnel on the Internet.

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  • 1000 visits =>
  • 100 email registrations =>
  • 40 surveys =>
  • 10 sales

6)       Even Dummies can do Search Engine Optimisation (SEO)

Hire the celebrity chefs and not the lawyers of SEO and by that, they mean do not be fooled by the mystery and mastery of the 142 secret steps you need to get a Google #1 ranking.  Hire the celebrity chefs and pay for their implementation.  Understand how search engines work.

It’s the number of links and the quality of links on your website.

Understand how ‘spiders’ & ‘bots’ work and how they like the size of the site and ease of navigation, plus SPEED & RECENCY count.  Don’t forget Keywords.   Update ‘title tags’ on your page

  • Home page
  • Permanent pages
  • Posts

Use “about 60 characters”, and lead with the Noun for title tags and if you use a Content Management Systems utilise the headings under the paragraph drop down to maximum effect.  Last but not least, create measurable shareable content i.e. ‘retweetable’ headlines that are interesting and sharable.

7)       Facebook: Like us like Lorna Jane and play by the rules.

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It’s a virtuous cycle and it goes like this: Acquire => Engage => Convert => Engage => Acquire…

Some Facebook tips for newbies from Sam Zivot @LornaJane that will help you on your way include:

  • Learn by doing (there are no experts out there, we are all learning social media)
  • One thought per post (reduce redundancy & duplicated links, etc.)
  • Aim for >1% engagement ratings (comments over likes over fans)
  •  People don’t read Facebook posts, they skim, make your post clear, simple and stand-out from the crowd
  • Only 11-23% of your fans on Facebook will actually see your post
  • Use authorised 3rd party apps for competitions or risk being banned from Facebook
  •  Use simple multi-choice options e.g. like A or B or like or dislike this prototype.  Do not ask open ended questions
  • Follow the leaders to learn e.g. George Takei


Bonus Step & Guiding Principle: Consumers only care about themselves and content relevant to them self

Marketing has changed…from… rent the eyeballs…to….own the eyeballs e.g. twitter

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How often do we spend all our time trying to convince other people and our customers what we have is of value to them?  When if we step back and think what they care about, what is relevant to them and how can our knowledge and the freely and widely available tools and systems at our disposal enable us to put that aspirin within reach so when their migraine hits and they stay calm and Google it, our business comes up trumps!  Thanks James, Anthony, Sam and Pete for sharing your 7 secrets to personal mastery of the tinternet!  This Luddite is convinced it’s time to start practising what I’ve learned.

Dermott Dowling

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