Monthly Archives: February 2016

Innovate Around Your Brand

Innovation

The world is filled with brands and products competing for our attention and our dollars. It can be mind-boggling. That makes breaking through the clutter a never-ending battle. So, how can we stand out and own a share of the consumer’s mind?

The answer is through innovation the constant challenge to the status quo, the relentless, restless search for something new and better. Companies grab market share and reinforce positions with fresh ideas that create fresh profits.

Innovation is the life-blood of any industry. And yet, as the economy cooled off, so did funding for innovation. The focus turned from the “next new thing” to the quarter’s earnings. But we have not turned our back on innovation. In fact, innovation is happening at a fast and furious pace.

Our consumers have always wanted choices, and we have always responded. Today, as consumers’ tastes change and their desire for variety, wellness and convenience grows, we continue to respond. Just look at some of the great examples of innovation in our industry. Whether you’re taking about Red Fusion, Mr. Green, Pepsi Blue, Simply Orange, or Vanilla Coke, we’re giving consumers a rainbow of new choices in colas, flavors, juices, nutritional beverages, waters and sports drinks.

When you add 25,000 other product introductions a year from other industries, you know how many consumers feel bombarded.

This brings me to the question we must ask about innovation, about any new product, package, or service we introduce: What is its value? And is it meaningful? To me, that’s an easy litmus test. Meaningful innovation is sustaining. It stands the test of time because it continues to add value.

The problem with the dot-com companies wasn’t a lack of good ideas. Webvan and pets.com were great ideas. But they didn’t have the right business models to support the innovation and sustain long-term value.

Innovation isn’t all about flash and sizzle. Innovation is very much about substance. And that’s the foundation for our vision for innovation: Innovation must be a “difference engine.” It must make a real difference and drive real growth. And for innovation to be worthy of our investment, it must add value to our brands and create long-term value for everyone touched by our business. When there isn’t meaningful innovation, we lose momentum. When we innovate around trademark Coca-Cola, our growth accelerates.

Through our emphasis on innovation, we’ve learned five key lessons:

Innovation comes from listening and from understanding consumers.

Consumer relevance drives everything. To be relevant, we must be observant and understand what’s important in our consumers’ lives.

That’s how Red Bull did it, starting in the early ’80s, when its founder noticed the popularity of a new beverage while on business in Asia. He brought a few samples back to Austria and created not only a brand, but also a new beverage category—energy drinks.

At Coca-Cola, we used to think about painting the world red. Now, we think about painting the world relevant. Vanilla Coke is turning out to be very relevant. It reminds older consumers of simpler times, when they stopped by the soda fountain after school for a soft drink and some fries. And for younger consumers, it’s giving them a distinctive new taste and new look with its Coca-Cola trademark packaging.

Connection with consumers in relevant ways got us off to a great start with Vanilla Coke. We attracted more than 7 million new drinkers and sold more than 60 million cases; and when we learned that many consumers wanted a diet version, we created Diet Vanilla Coke. If you’re listening, your consumers will tell you where to look for innovation.

Brands, not products, create sustaining value.

And innovation builds brands. Brands are made in hearts and minds because brands provide two things that products can’t—time and trust. Brands deliver both by making choices easier and more reassuring. Great companies create and sustaining great brands through innovation.

  • Harley-Davidson, one of America’s great brands, stirs passion in it riders, dealers, and employees. And it translates that passion into profits. Since going public in 1986, its shares have risen 15,000 percent. Forbes named Harley-Davidson “Company of the Year” last year because in its 100th year of industry leadership, Harley Davidson flexed its innovative muscle—a motorcycle with a liquid-cooled engine that revs the bike higher and hotter in each gear and makes you go faster. It was a giant step for a company that made only air-cooled engines for 100 years. It also helped Harley appeal to the audience it was after—young, urban, hip Americans and Europeans.
  • Another innovation-driving brand is PowerAde. After living in the shadow of a formidable competitor, we gave it a complete makeover—new formula, graphics, advertising, and flavors. Now, it’s a serious contender, driven by an innovative consumer proposition—real power.

You really aren’t committed to innovation unless you’re willing to fail.

Thomas Watson, IBM’s legendary chairman, once said, “The fastest way to succeed is to double your failure rate.” Inventors know that failure is a prerequisite to “eureka” moments, but in business we have a hard time with that.

Does anyone remember New Coke? We sure do. New Coke was a lesson. When consumers turned their backs on New Coke, we were reminded of the deep emotional relationship consumers have with great brands. Brands should cherish those relationships. It’s a lesson we value, and one we’ll never forget.

Our former CEO, Roberto Goizueta, used to say: “You can only stumble if you’re moving.” Innovation is about moving, hopefully forward, but occasionally, a few steps to the rear. Often innovation takes us into uncharted territory, where risk goes up. And that’s good. The key is to keep moving.

Innovation is more than products and packaging

Innovation is more than products and packaging—it’s everything and everyone.

Innovation permeates everything—operating strategies, tactics, systems, supply chains, information technology, distribution, and marketing.

When it comes to marketing, there’s always room for innovation. We found a new opportunity with the series “American Idol.” The innovation was in how we integrated the consumer messaging. In addition to customized advertising, Coca-Cola played a role within the framework of the show—in the Red Room, with the Red Couch, and with product placement. The show became a blockbuster hit, leading to an innovative marketing strategy.

If innovation is all-encompassing, it should be done systematically. In other words, define the problem and solve it. What are the objectives? Who will do the work? How will we measure success? Innovation is everyone’s business. At Delta Air Lines, a menu planner noticed that most people never touched the lettuce leaf under their salads. Her suggestion to eliminate the lettuce leaf saved Delta $1 million. A good idea is a good idea—no matter how small it seems.

In Coca-Cola North America, we’re trying to build a culture that encourages innovation through the same sort of observation and curiosity. Our goal is that every employee starts to think about ways they can do their job better—more efficiently, more productively with greater innovation. In such a culture, companies leverage their people and assets to their fullest. One example is our “good answer” program, created to help our Fountain customers handle their customer calls. Our “good answer” team now receives phone calls, emails and regular mail from consumers on behalf of a growing number of our restaurant customers. In addition to responding to the consumer’s issue, they also provide an analysis of the calls to help the operator make better decisions about their menus, facilities and service.

Coca Cola Brand

We must apply innovation to our social contract with communities.

This lesson is bigger than brands, packages, and marketing campaigns. It’s about our reputation and our image. We’re all under constant scrutiny these days regarding the ways we affect our communities. And the focus is intense in two places—the environment and obesity.

Soft drink packages are already the most environmentally friendly recycled consumer packages. We find creative ways to increase the recycled content we use in packages. During the Salt Lake Olympics, for example, our people created a recyclable, biodegradable cold drink cup from renewable resources.

The obesity issue is complex because it’s not just about what you consume—it includes a healthy and active lifestyle. We recently launched an innovative program called “Step with It” in cooperation with the National Association for Sport and Physical Education to increase physical activity in schools.

Pepsi formed an alliance with respected health, nutrition and exercise experts to educate and encourage Americans to reduce health risks through informed choices and an active lifestyle.

Conclusions

We need to be just as innovative in the ways we protect and sustain our business as we are in the way we market and sell our products. These five lessons are our guiding principles—an imperative to continue to delight our consumers with innovative brands, packages, and business systems that create value. When we’re creating the next great innovations, we’re creating sustainable value, and we’re leaving our businesses, communities, and industry a little better.

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Posted in Business and Strategy Management and Leadership

Confucius’ Indifference Toward Women

Confucius indifference toward women

Confucius is said to have an indifference toward women. Possibly because the atmosphere around him was distinctly masculine.

Confucius had nothing to say of conduct in matrimony, spoke disparagingly of women, had only contempt for a pair of lovers who committed suicide together, and frequently remarked that nothing is so hard to handle as a woman.

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Posted in Philosophy and Wisdom

When Crisis Hits Corporate Culture

When Crisis Hits Corporate Culture

Corporate culture, defined as “how we do things around here,” powerfully influences people.

There are four core cultures: control, collaboration, competence, and cultivation. The “competence” culture creates a perception of distinction by offering one-of-a-kind products and services. They pursue excellence and capitalize on high capability. Filled with high achievers, they are highly competitive, and intensely focused on winning.

The power of culture derives from implementation and identity. With success (perceived or real), “how we do things” becomes the equivalent of “who we are” (identity). Now the motivation to keep doing things the same way subtly shifts to a motivation to preserve identity. Culture grows so powerful precisely because it becomes the identity of the firm and its leaders.

Strengths taken to extremes turn into liabilities. When leaders fail to keep behavior in balance, problems emerge. These loom large because they are, in fact, identity problems. Out-of-balance behaviors unique to competence cultures include: mistrust, secrecy, arrogance, fear of making or revealing mistakes, excessive financial incentives, emphasis on winning, refusing to consider odds of losing, selfishness, and ethics that take a back seat to cashing in quickly.

Leaders must monitor their cultures, the strengths and potential liabilities, keeping both in balance and preventing strengths from running to the extreme. Indeed, when an extreme is allowed to “mature,” the company will have a serious problem borne of its strengths but characterized by great weakness.

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Posted in Business and Strategy Management and Leadership

Confucius on Awareness of Limits and Lao-Tzu

Confucius on Awareness of Limits

The philosophy of Confucius is not a knowledge that regards itself as complete and an underlying feeling that everything can and will be set aright.

Confucius never thought himself in possession of complete knowledge and never thought such knowledge possible. “To represent what you know as knowledge and what you Jo not know as ignorance: that is knowkdge.”

Confucius is aware of the evil in the world. It is rooted in the failure of man. He laments: “That good predispositions are not cultivated, that what men have learned is not effectual, that men know their duty and are not drawn to it, that men have faults and are unable to correct them: these are things that grieve me.”

Sometimes he says he can no longer find a single true man. “It is all over. I have met none able to see his own faults, to look strictly intact. For he does not take the community as an absolute. For him the Encompassing is a background, not a theme to work with; it is the limit and foundation to be co11sidered with awe, not the immediate task.

The essential difference is the difference between Lao-tzu’s direct way to the tao and Confucius’ detour by way of the human order, hence the divergent practical consequences of the same fundamental view.

The tao which Lao-tzu puts before and above everything else is for Confucius the One. But Lao-tzu immerses himself in it, while Confucius lets himself be guided by his awe of the One as he moves among the things of the world. At times Confucius also shows a tendency to shun the world; at the limits he too discloses the notion of acting by inaction and so keeping the world in order. Though the two philosophers look in opposite directions, they stand on the same ground. Their unity has been embodied by great historic figures, not in a philosophy that systematically embraced both sets of teachings, but in the Chinese wisdom of a life illumined by thought.

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Posted in Philosophy and Wisdom

Show Uncommon Commitment in Your Job

Show Uncommon Commitment in Your Job

Some people say that the key lesson of strategy has to do with speed. If you can think and act faster than your competition, you can stay one step ahead. Certainly speed is critical, but why do some firms take over the market after others do the pioneer work?

Other strategists say that the concentration of superior resources at the decisive point drives strategy: if you concentrate your resources, you are sure to win. But if superior resources are key, why do some firms with inferior resources beat stronger ones?

After studying great strategic thinkers, I’m convinced that neither resources nor speed are decisive. Some have abundant resources, others do not. Some companies operate at light speed, and it helps them. But others make it policy of not entering the market first and are still successful.

To discover the key lesson practiced by all great strategists, I interviewed more than 200 combat leaders from the military services and asked them, whatif anything they had learned from leading in combat that they applied successfully in their careers. Almost all included the idea of “uncommon commitment.”

What’s so special about uncommon commitment? People follow a leader with this quality for two reasons:

  1. it proves that the goal is worthwhile and important
  2. it proves that the leader won’t quit.

Extraordinary commitment affects the planning and implementation of strategy.

If you hope to implement your strategy successfully, you need to display uncommon commitment.

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Posted in Education and Career Management and Leadership

CEOs Want Executives Who Look, Act and Sound Like a Leader

A CEO’s job is to keep his people interested in staying, and working, and growing and prospering with this company.

Larry Bossidy, the retired CEO of AlliedSignal took this philosophy a step further and extended it to the people he moved into senior management positions. Bossidy said, “I want to find leaders who are human beings, and who have an interest in being successful for themselves and want to share that success with others. If I can get people like this, they’re easy to lead.”

Bossidy has said that he is looking for the following characteristics when filling up the executive ranks at his company:

  • Positive people, to begin with. CEOs like to see people with smiles on their faces. Business is difficult. It’s so much better to greet the world with a smile on your face. You can’t show me people with great accomplishments who are negative people.
  • CEOs like to see ambitious people who want to get something done.
  • 'Execution' by Larry Bossidy, Ram Charan (ISBN 0609610570) CEOs look to see if they can contain their ego. Do CEOs see a person who can work well with others? Do CEOs see a person who’s shown some interest in others? Are these the people who can share their knowledge with other people and do it gracefully and willingly? Or are they very self-centered, very ambitious, but not necessarily to the benefit of anybody else?

Under Bossidy, AlliedSignal purchased and became Honeywell. Honeywell is a prominent engineering services and aerospace systems company. Before AlliedSignal, Bossidy spent 30 years working his way up the executive ranks at General Electric, where he was a protege of Jack Welch.

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Posted in Education and Career Mental Models and Psychology

Atheism

Atheism is the belief that no God, gods, divine beings, or supernatural phenomena exist.

Atheism can be described as a range of ideas about the non-existence of the divine, deities, or gods. In one sense, atheists are those who do not believe that any gods or divine beings exist, or are those who hold no belief in the supernatural. Atheists may also believe that there are no gods, as opposed to holding no beliefs about such existence.

No single originator is credited with having first identified the notion of atheism. However, the Vedas, the oldest scriptures of Hinduism, produced in India between c. 1500 and c. 500 BCE, make the first known references to the rejection of an idea of gods. In the Western world, the ancient Greek poet and philosopher Diagoras of Melos (fl. fifth century BCE) was widely recognized as being the first outspoken atheist, a belief that resulted in him having to flee Athens. The term “atheist” was also broadly applied to early Christians who did not believe in the pagan pantheon of the Roman Empire. However, widespread and public assertions that there were no gods did not become commonplace until after the French Revolution (1787-99).

Friedrich Nietzsche wrote, “Is a man merely a mistake of God’s? Or is God merely a mistake of man?” Today, atheism is common in many nations, though rates of non-belief are often difficult to determine precisely.

The idea of gods, the divine, or supernatural agents is often closely related to very basic, driving questions. Who created the universe? How did we come to be here7 For the atheist, the answer does not rely upon a supernatural or divine basis. Atheism, though not a uniform set of beliefs or body of doctrine, allows for the possibility that there is no divine, godly answer to our questions.

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Posted in Faith and Religion

Conspicuous Consumption

Conspicuous Consumption

Conspicuous consumption is the purchase of goods and services for the sake of publicly exhibiting wealth or status

The overt display of luxury goods and services by the ruling classes in the late nineteenth century led Thorstein Veblen to formulate his economic theory of conspicuous consumption. He wrote, “Conspicuous consumption of valuable goods is a means of reputability to the gentleman of leisure.”

In his influential book The Theory of the Leisure Class: An Economic Study in the Evolution of Institutions published in 1899, Thorstein Veblen (1857-1929) identified a distinctive feature of the newly established upper class of the late nineteenth century and the rising middle class of the twentieth century: their accumulation of luxury goods and services for the expressed purpose of displaying prestige, wealth, and social status. Veblen, a U.S. economist and social scientist, viewed this phenomenon as a negative symptom of the new rich that would inhibit social adaptation to the necessities of the industrial age.

The intention for exhibition embodied in the idea of conspicuous consumption is in contrast to the securing of goods and services for their intrinsic value or their originally established purpose. Focusing on the “conspicuous” aspect of the term, conspicuous consumption can conceivably occur among members of any socio-economic class, from the richest to the poorest. Acquiring status indicators can happen in any social setting. Focusing on the “consumption” aspect of the term, conspicuous consumption relates to the purchase and display of goods beyond what is necessary, and applies primarily to the middle and upper classes, who then set patterns of social behavior and consumption that are imitated by others. In this respect, it is closely tied to consumerism.

One ramification of Veblen’s insights into conspicuous consumption relates to the idea of a “luxury tax.” Such a tax increases costs on goods and services that primarily serve as declarations of affluence, in order to raise revenue and redistribute wealth with little loss to consumers who purchase for the sake of status and not utility. It may also gradually reduce conspicuous consumption of such “positional goods,” or “Veblen goods,” which bear the namesake because demand for them increases as price increases.

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Posted in Investing and Finance Philosophy and Wisdom

Francis Bacon’s Philosophy of Naturalism

The great English philosopher Francis Bacon introduced the belief that the universe’s workings may be understood by studying natural causes.

Francis Bacon Naturalism is the belief that we can acquire knowledge of how the world works by studying natural phenomena, not supernatural causes. Everything in the universe, from the existence of life to the motions of the planets and interactions between objects, is said to be governed and ruled by natural laws that humanity can investigate and understand. Naturalism is a belief that only natural phenomena exist, both in existence and in how knowledge is obtained.

In Novum Organum Scientiarum (1620,) Francis Bacon wrote:

The subtlety of nature is greater many times over than the subtlety of the senses and understanding; so that all those specious meditations, speculations, and glosses in which men indulge are quite from the purpose, only there is no one by to observe it.

Questions about how the universe came to be, and why events happen as they do, are likely as old as humanity itself. Thinkers such as Thales of Miletus proposed naturalistic solutions to such fundamental questions as early as the sixth century BCE. During the Renaissance (c. 1450-1600), naturalistic explanations became more prominent.

In 1620, English philosopher Francis Bacon (1561-1626) published Novum Organum Scientiarum (New Instrument of Science), in which he proposed a method of learning called inductive reasoning, where conclusions are drawn from observed data, instead of implied from presumed principles. Inductive reasoning, and the investigative method on which it is based, became essential to scientific inquiry.

The natural world is, for the most part, one that is knowable, measurable, quantifiable, and predictable. Naturalism presumes that the world as we see it is what it is. In contrast, belief in supernatural phenomena stands in the way of understanding the world; humanity cannot exert control over supernatural phenomena or influence them, and, even worse, it can provide no explanation or reason for their actions.

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Posted in Faith and Religion Philosophy and Wisdom

10 Commandments for Implementing Lean Business System

10 Commandments for Implementing Lean Business System

Regardless of the approach adopted, the role of the boss always turns out to be of paramount importance during the implementation of both technical and sociological aspects of lean business philosophy.

Having analyzed experience gained from cooperation with different enterprises, conversations with company bosses, the studies of subject matter literature and Internet sources, here’s are some thoughts on this role in ten points, dare we call them commandments:

  1. Have a clear vision and improvement goals for the whole organization. The process of gaining acceptance and preapproval for a proposal by evaluating first the idea and then the plan with management and stakeholders to get input, anticipate resistance, and align the proposed change with other perspectives and priorities in the organization.
  2. Be an engaged boss initiating changes. The boss’s involvement in training his immediate subordinates is also helpful in implementing Lean philosophy. Firstly, it gives an opportunity to get feedback on how the subordinates understand the subject matter and what their attitude to the announced changes is.
  3. Improve processes and the results will come consequently. Process improvement is not a one-day activity but it means continuous improvement. It is also important that the boss makes it clear to his employees Process improvement is not a one-day activity but it means continuous improvement. It is also important that the boss makes it clear to his employees.
  4. Create Obeya-like management centre. What actions have been planned to eliminate these reasons in order to improve the process? How these actions being implemented and what are the effects? How does it affect other processes and results?
  5. Determine indicators and bonuses that show one direction to the managers. The boss needs to be a coordinator of any actions undertaken in the company. He should efficiently lead his subordinates towards one common goal, since only in this way will he be able to ensure optimization of the company operations. Bosses, who evaluate their subordinates on the basis of various, often conflicting departmental objectives, make individual departments oriented on partial optimizations, which are seldom translated into optimization of the whole company operations.
  6. Motivate your people. Going to production floor in order to directly watch the process, talk to employees, confirm data and understand the situation (instead of relying exclusively on computerized data and information from other people). This practice shall be applied by both top management and lower-level management.
  7. Delegate the ownership of processes and places to your employees. Employees performing work, dealing with part of the process have a considerable knowledge of what is going on in this process in reality. Many of them are experienced workers, involved in the process for many years. It must be noticed that job rotation among management members is much higher than among lower level employees. Greater frequency of management members’ replacement accounts for the fact that lower-level employees, not managers, possess significant part of internal knowledge in the company.
  8. Engage everyone in problem solving and continuous improvement. Employees’ engagement in problem solving and continuous improvement results in many refinements which, at company level, bring about a speed of changes greater than that achieved by investment in new machines alone. In Toyota’s plants each employee makes on average from a dozen to several dozen improvement suggestions a year and in some plants over 90% of such suggestions are implemented. This results in productivity increment, fewer mistakes and greater safety at work stations.
  9. Teach your employees to achieve “the impossible.” The thing is to set a goal for people in the organization and make them move towards its achievement by showing proper behavior patterns. It will be a great success if the whole organization starts to think this way, not just a small group of enthusiasts who constantly want to change something (unfortunately, they are scarce in numbers). It can be reached by building good relations with employees. Feeling good in their work environment and having a sense of responsibility for their workstations, they are much eager and willing to use their creativity.
  10. Practice the routine of Gemba Walks every day. Going to production floor in order to directly watch the process, talk to employees, confirm data and understand the situation (instead of relying exclusively on computerized data and information from other people). This practice shall be applied by both top management and lower level management.
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Posted in Business and Strategy Management and Leadership