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Warren Buffett on Time Management: “All You Need Is … Time”

Warren Buffett on Time Management: Warren Buffett once said on time management, “The rich invest in time; the poor invest in money.”

Buffett is currently the fourth richest men in the world. He can buy practically anything he wants to, and more than nearly everyone else could ever dream of.

Nevertheless there’s one thing that even Warren Buffett cannot buy, and that is time.

Here’s a brief transcript from a Charlie Rose interview:

Warren Buffett: I mean I can buy anything I want basically, but I can’t buy time.

Charlie Rose: And so to have time is the most precious thing you can have?

Warren Buffett: Yes, I better be careful with it. There is no way I will be able to buy more time.

Warren Buffett's Interview with Charlie Rose (Time Management) Charlie Rose: And living in Omaha makes that easy?

Warren Buffett: That makes it a lot easier. I, for 50 whatever, well for 54 years I spent five minutes going each way now. Just imagine that was a half an hour each way. You know. I know the words to a lot more songs and that’s about it.

Charlie Rose: It adds up. Doesn’t it?

Warren Buffett: It really adds up. Now if you’re doing an hour a day difference coming and going that’s two and a half percent of the person’s work week. That means 40 years you’re talking about a year.

An undisciplined mind will find every reason to do what should not be done and every excuse not to do what should be done. Warren Buffett once said, “The difference between successful people and very successful people is that very successful people say ‘no’ to almost everything.”

Ira Glass Time Management Technique

This American Life‘s Ira Glass talks with Lifehacker about how he works. When asked what his best time-saving shortcut or life hack was, he responded:

I’ve got nothing. Reading other people’s answers to this question on your website today made me realize I live my life like an ape. I eat the same breakfast and lunch everyday, both at my desk. I employ no time-saving tricks at all.

Though come to think of it, I guess my biggest life hack—and this is the very first time I’ve attempted to use the phrase “life hack” in a sentence—is that my wife and I decided to live just a few blocks from where I work. We did this because of our dog. Since I spend at least an hour every night walking the dog, I didn’t want to spend another 60 or 90 minutes a day commuting. I don’t have the time. Like lots of people, I work long hours.

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Posted in Business and Strategy Philosophy and Wisdom

Tap the Power of Your Viral Customers

Viral Customers are Your Brand Ambassadors

Viral Customers are Your Brand Ambassadors Whether you are aware of it or not, customers are talking about you this very minute. They are offering opinions, trading experiences, and influencing other customers about you—your company, products, services, and reputation.

Welcome to the world of the “viral customer,” the turbocharged version of the word-of-mouth customer. If you’re not aware of your company’s viral customers, you need to be. If you haven’t geared your company to their growing influence, you had better start now. These talkative, influential customers will play a critical role in the future of your marketing schemes, loyalty programs, customer service efforts, public relations outreach, brand management, privacy policies, and bottom line.

The Internet has created a generation of so-called “viral customers.” Viral customers can be champions or destroyers. They can talk trash about you or trumpet your worth. Which route they take depends on you.

  • If customers are happy with their encounters with you, they are likely to tell lots of their friends. In essence, they become viral ambassadors who will rave about your company to others to create a gush of goodwill. These ambassadors can be valuable, low-cost avenues for building existing relationships, recruiting new customers and keeping old customers happy for life.
  • But if customers are not satisfied, watch out. So-called “viral rebels” can destroy your products, brands, and reputation as they share negative experiences. Moreover, at the moment of negative feedback, they’re likely to be in a “switch mode,” ready to find someone else to satisfy them in ways that your company hasn’t or won’t.

Are you paying attention to what your own viral customers are saying and doing? We’ve found that some companies and industries are more “viral” than others. Customers are much more likely to pass along opinions to others about insurance firms, health maintenance companies, utilities, banks, long-distance and wireless telephone companies, mail delivery services, Internet service providers and auto manufacturers.

What’s at stake is more than the lifetime value of a single customer. Everyone in the viral rebel’s sphere of influence is also at stake, because even though the original customer may walk away from you, he or she is not necessarily finished. The bad-mouthing continues. Suddenly, one person’s negative encounter becomes everyone’s shared experience, and you’re left to pick up the pieces, re-establish ties, win confidence, and regain long-term loyalty.

Some Brands and Issues are More Viral Than Others

Some Brands and Issues are More Viral Than Others Certain brands elicit highly viral customer buzz. Billing issues typically fly off the virility chart. Other hot-button issues involve safety among automakers, baggage claim among airlines, customer service at e-commerce sites, hygiene at restaurants, and staff attitude at retail stores.

If you listen to your viral customers, you will know whether your marketing budget is based on the correct assumptions. You’ll be able to apply one-to-one marketing principles to customer feedback, making your customer insight even richer and more robust. You will know which brands are working. You’ll know your company customer service record, because you will have real-time feedback from the customers. You will identify trouble spots or opportunities well in advance, enabling you to take advantage of positive feedback or stop negative feedback before it explodes.

As you analyze the customer insight you receive, you become wiser and more adaptable, smarter and better able to react, respond, and retool. You start giving customers what they want—easy and convenient communication. They want to be heard. They want to help others, and they want a forum that fits their propensity to rant or rave.

In a world governed by customer insight, all feedback is gold and every complaint is a gift. Raw data guides us, but insight that has quality and meaning enlightens us. Anticipation beats perspiration, and the only way to know what is around the next bend is to pay attention to the curve as it develops.

Here’s five things you can do to tap the power of viral customers:

  • Identify them. Viral customers communicate with you frequently by e-mail, letter or phone. They send copies to others, are passionate or emotional about their experiences and are among the first to try new products or services.
  • Make communication easy. Offer as many ways as possible for customers to get in touch with you-a toll-free phone number, Web-site e-mail address, third-party feedback service, street address or special mailing address.
  • Respond quickly. Respond quickly and in the same fashion. Be empathetic.
  • Mine the negative comments. Respond decisively so that the customer decides to remain in your camp. Don’t give a reason to bolt to the competition.
  • Build the relationship. Add communicative customers to a preferred-customer list. Extend special offers, ask their input on new products and services, and ask how you can improve the relationship. The more you integrate the relationship, the stronger it will be.
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Posted in Business and Strategy Management and Leadership

Putting Your Creativity to Work and Improving the Bottom Line

Fostering Creativity at Work

Fostering Creativity at Work When the going gets tough, many companies cut costs, cling to tradition, and stay under radar. Such reaction is short-sighted. There are lessons to be learned from companies like HP, Virgin, Disney, and other innovators who not only stay the course through uncertainty, but excel. The most innovative companies don’t take cover—they get going. They embrace creativity and innovation in both good times and tough times.

Creativity helps us reinvent when faced with opportunity and survive when faced with challenges. Creative people find new solutions and enjoy a timeless advantage.

What characterizes a company? Its people, process, values, size, resources—or maybe it’s an unorthodox approach to business.

Few companies even begin to embrace the power of creativity and reinvention. Yet we see bold possibilities. We see signs of a new era where creativity drives the bottom line—where business escapes tradition and embraces new practices that nurture the cultural creative mindset.

A Time for Unleashing Your Creativity at Work

Rule-breakers tend to be the more nimble upstarts.

Jack Welch, former CEO of General Electric, said: “Today business is about the resiliency of ideas. It’s about rallying people and the ideas of people.” Companies don’t simply want to make a better product; they want to dramatically transform their culture to lead their industry. The best organizations are committing more people, resources, time and money to increasing creativity and innovation. It’s a smart investment.

Look at Eli Lilly. Instead of churning constantly inside the company to generate new ideas, they’ve reinvented scientific research and created a free market of ideas. The company founded Inno-Centive, a web-based community of problem-solvers and solution-seekers. They tap scientific minds worldwide to create solutions for financial reward.

Success can no longer be sustained with incremental improvements; we must find new sources of growth to leap forward in much wider measure.

Why is Creativity Important in the Workplace: Creativity and the Bottom Line

Creativity and the Bottom Line Although it is difficult to measure creativity’s impact on the bottom line, we see that four benchmarks make or break the bottom line:

  1. Profitability. A creative company produces more great ideas that impact the bottom line. Better product = sales; efficient method = savings; better service = more customers. Hanes recognized this when they reinvented the T-shirt. The Hanes Tagless Tee shirt is the first innovation in the industry in 10 years.
  2. Industry leadership. Leading companies innovate for the long-term. They are visionary, looking at the future with a wide lens. Today’s rapid pace of change means companies can no longer deliver the same products and services in the same way for long. As technology services evolved, IBM, Compaq, and Intel all had to transform their business models. Fox News helped reinvent the cable news industry, repositioning itself as a lively, in-your-face opinion page. And it became the number-one cable news outlet. Innovate or get left behind.
  3. Retention. A more creative culture equates to happier employees. Creative companies embrace more humanistic values, like leadership support, risk tolerance, individual expression, and intrinsic motivation. Peter Coy, Business Week columnist, writes: “In the Creative Economy, the most important intellectual property isn’t software or music or movies. It’s the ideas inside employees’ heads. Leaders create an environment that makes the best people want to stay.”
  4. Motivation. When people feel their ideas are valued they contribute more to the company. Creative companies have a people-first approach, embracing attributes like autonomy and personal challenge. Winnebago discovered this with their innovation program. Every Friday, Winnebago CEO Bruce Hertzke hands out dividend-savings checks and has his photo taken with employees who have made revenue or savings suggestions. Over 10,300 ideas have been implemented, and employees have received $500,000 for their ideas. Employee creativity saved the company $5.5 million in the first year alone. Yet people are primarily motivated by intrinsic reward.

Leaders must balance financial rewards with recognition, rewarding work, and enrichment from the culture. Brainstorming is just one technique. It even has variants. Such methods can be useful in creating food for thought. Also has the advantage of including staff and encouraging an innovative thinking environment—if done well.

Finally, let’s not forget basic business survival. Creativity is required to innovate but it’s also necessary to keep the pipeline full and move forward.

Fostering Creativity at Work: The Ultimate Measure of Value

Executives who are committed to increasing creativity and innovation must first accept this universal rule: Creativity requires a new mindset, which is produced only from cultural transformation.

Leaders must accept that development of human capital requires a greater investment than other types of capital—in terms of money, time, and commitment. The ultimate measure of a company’s value is its people. In creativity, everything comes down to people. Dick Brown, CEO of EDS, puts it this way: “Most business leaders are more comfortable with numbers. While I am very numbers-focused, you can’t change a business with numbers. Numbers are the end result. You change a business by changing the behavior of its people.”

Yet it’s not enough to hire a few creative people or hold an off-site meeting in hopes of finding an innovation “quickfix.” Leaders must rebuild the culture, align the systems, and develop the knowledge of the company. Leaders must care for, nurture, and sustain the culture. They must rediscover their child-like imagination, find their passion, surprise people, and be a little unorthodox.

Guiding Strategies for Enhancing Creativity at Work

Strategies for Enhancing Creativity at Work Here are some strategies to guide the creative leader:

  • Nurture creativity from the top down and bottom up by finding champions in the ranks of junior positions and senior executives.
  • Encourage “skinned knees” by developing a risk-tolerant culture that values the mindset of creativity and rewards both behavior and results.
  • Enact intrinsic and extrinsic rewards for creativity that value the balance of knowledge and imagination.
  • Redesign structures to allow for free flow of ideas. Divisions often work differently from one another. Create venture groups, autonomous communities, and flexible innovation processes.
  • Allow employees to venture out and learn about the world they serve. Many innovations fail because people don’t understand the customer.
  • Create new ways of learning and reward it. Jack Welch says, “You raise the collective intellect by learning, sharing learning, and acting on that learning.”
  • Increase accountability and recognition for breakthrough ideas that create new sources of growth.
  • Create a new language for creativity that infuses the culture with fresh, simple, goal-focused vernacular.
  • Walk the talk. Deliver on the vision and promises through committed action. Redesign performance measurement and talent management in line with innovation.
  • Surprise people. Do new things in new ways and be curious, energetic, passionate, and open-minded. Use this research as the basis for highly focused idea-generation sessions.

The most creative companies aren’t always the cutest companies. Creativity does not equal whimsy—or any other idiosyncrasy of the extinct dot-com cultures. Fun is an important part of it; people can’t be inspired when they’re bored in tedium. Yet creativity is so much more. In fact, it’s really hard work. The common thread is that inspiration strikes people in different ways at different, and often unexpected, times.

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Posted in Business and Strategy Leaders and Innovators

Five Criteria by Which Customers Judge Service Quality

Five Criteria by Which Customers Judge Service Quality

  1. Reliability: Consistency in performance dependability. Examples: accuracy in billing, keeping records correctly, performing the service at the designated time.
  2. Tangibles: Physical evidence of the service. Examples: physical features, appearance of personnel, tools used to provide the service.
  3. Responsiveness: employees’willingness or readiness to provide service. Examples: mailing the transaction slip immediately, calling back the customer quickly, giving prompt service.
  4. 'Raving Fans' by Ken Blanchard (ISBN 0688123163) Assurance: employees’ knowledge and ability to convey trust and confidence. Examples: Knowledge and skill of contact personnel, company name or reputation, personal trait or contact personnel
  5. Empathy: caring and individualized attention to customers. Examples: learning customers’ specific requirements, consideration for the customers.

Read this popular book: Raving Fans: A Revolutionary Approach to Customer Service by Ken Blanchard and Sheldon Bowles.

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How to Enfranchise Customers in the E-commerce Era

Putting customers back in the equation

How to Enfranchise Customers in the E-commerce Era The internet has dramatically advanced the ways business can deliver products and services, and meet customer needs. However, while e-business has succeeded at leveraging technology to enhance business productivity, it has done little to enfranchise customers. Countless web sites that aim to provide a seamless shopping experience simply are not designed for the needs of the user. Customers needing support often have to abandon their shopping carts to get their questions answered. Many end up turning to the phone to get the information they need, or they just give up. Most e-businesses lack the human touch.

Customer needs will continue to change as technology plays a greater role in our lives. To be successful in the future, businesses will have to add the customer viewpoint into the equation, and seek to satisfy unmet customer needs. Rather than concentrating on e-business, companies will need to reorganize as c-businesses, orienting their operations around customer need sets across all channels and touch points, from the perspective of all products and services, and for each customer group, whether on the consumer level, small businesses, or large enterprises.

Six Drivers of Change in eCommerce

Let’s examine these emerging customer need sets, the drivers of change, and how certain businesses are prospering in the new c-business age.

  1. Information overload. The Web has unleashed a plethora of information. The result of this easy access to information is that people are seeking knowledge in context. Presenting data in the context of the customer’s needs transforms it and makes it far more valuable. The financial services company USAA doesn’t inundate its clients with sales pitches and junk mail. It takes a highly targeted marketing approach based on major events in them customers’ lives. When you’re about to buy a house, have a baby, or send a child off to college, USAA will contact you with information about products and services tailored for these needs.
  2. Six Drivers of Change in eCommerce More choices. Today, there is a wider variety of goods and services than ever before. This surfeit of choices is leading people to demand more personalized service and customized goods. Look at cars. Henry Ford told his customers they could get a Model T “in any color you want, as long as it’s black.” The computer industry long took the same approach-only this time with beige. Apple changed the landscape with its iMac, providing consumers with true choice. But Mac enthusiasts still have a hard time getting options they want built right into their systems. Dell, on the other hand, customizes virtually every PC it sells to its customers’ specifications. As advances in technology and manufacturing make it easier for firms to tailor their offerings, customers will increasingly expect personalized service.
  3. Automation. It has become possible for businesses to automate nearly every aspect of the customer interaction. This increase in automation leaves most of us with a yen for the human touch. But for corporations to deliver quality, human scale service, customers will need to make concessions in terms of privacy. Smart e-businesses will prove to their customers that these sacrifices will be worth it. Already, enterprises with good “corporate memory” are succeeding. Consider FedEx, which provides a reassuring presence by putting kiosks in the offices of their best customers. FedEx also provides real value through its Web site by letting customers track deliveries.
  4. 'Ecommerce Evolved' by Tanner Larsson (ISBN 1534619348) Pervasiveness. The pervasiveness of information and services is another driver of change. Having the capability to get whatever you want, whenever you want it is driving a need for control and integration. For example, we can get email on wireless handhelds, and order groceries online. However, is anybody helping people remember what’s supposed to be on their grocery shopping list? Webvan has made inroads in this area, but they still must overcome entrenched shopping habits. As these platforms develop, they provide resources essential for national growth and reduce the market inefficiencies that slow the pace of development.
  5. New pricing models. A heightened awareness of value is the direct result of new pricing models and pressures. Customers don’t necessarily look for the best prices, but they do look for value. In the airline industry declines in service and fluid pricing models have made it difficult for people to determine what is and what isn’t a good deal. Companies that can clearly define their value proposition are having more success in meeting customer expectations and needs.
  6. New entrants in the marketplace. New entrants can now establish themselves in the marketplace with relative ease. Barriers to entry are so much lower now that business can expand into new sectors virtually overnight. For customers, this leads to increased choices, but it also raises questions of trust. Customers look for clues that they can rely on their provider, which is why companies need to build trust through their online and offline presences.

Determine How You Can Deliver Better Attention, Choice, and Value in E-commerce

E-business may have radically changed the ways companies and people buy goods and services, but the essential elements of the buyer/seller equation are timeless. Customers want personal attention, they want choice, and they want good value. Solving the marketer’s dilemma will not be easy.

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Customer Feedback Systems to Go Beyond Customer Expectations

Customer Feedback Systems to Go Beyond Customer Expectations

There used to be a sofa in Microsoft’s telephone customer support center called “the Mail Merge couch”—named for a feature in Microsoft’s word-processing program that lets users customize form letters. The early version of Mail Merge was so complicated that whenever a customer called for help, Microsoft’s representative would lie down on the couch, knowing the conversation was likely to take a long time.

Clearly, something was wrong with that feature. Microsoft fixed the problem in the next generation of Word (and eliminated the need for the couch), but the story illustrates just how important customer feedback can be.

Most business managers understand that using customer feedback to guide the development and improvement of products and services is critical to success. However, some companies and individual managers are better than others are at collecting feedback and using it to make strategy decisions.

Nine Customer Feedback Rules for Managers

Managers who want to help their companies be customer-driven might observe the following nine rules.

  1. Create a system for effectively soliciting customer feedback, and then put that system to work. Boeing uses extensive customer involvement when developing new jetliner models. United Airlines influenced the design of both the 767 and the 777, and British Airways and Eastern Airlines participated in developing of the 757. As a result, the airlines were able to tailor the planes to their specific needs and preferences.
  2. Make sure your feedback system provides reliable information from a cross-section of customers. When a company has thousands or millions of customers, it can’t involve many of them in the product design, but it can involve a representative sample of customers.
  3. Make it easy for customers to provide feedback. Some companies offer a customer-feedback phone number. Surveys are another system for gathering feedback, but many people, including me, are not willing to spend much time answering them. Observing customers while they are using existing products and services is habitually the only way to identify hidden frustrations that they may not even be deliberately conscious of.
  4. Microsoft's Nine Customer Feedback Rules for Managers Send e-mail surveys to customers and offer incentives to fill them out and return them. The incentive may be a little digital money or coupons to buy products at a discount. The electronic survey will be immensely efficient for the company, because the survey results will be in electronic form, making results easier to compile and analyze. Some companies already use the Internet in this way. Encyclopedia Britannica recently e-mailed people who had accepted a free seven-day trial of the company’s online reference, offering another free week to those willing to fill out an online survey about their reactions to the product and its price.
  5. Use focus group and customer councils. Getting a few customers together to discuss their reactions to current and new products or services is another good way to collect customer feedback, although these groups and councils, too, have their limitations.
  6. Go beyond what market research tells you. The transition to graphical computing is an example of an instance where Microsoft needed to go beyond what Microsoft’s market research was telling us. Most software customers who were surveyed did not know they would prefer graphical computing because they had not tried it. Microsoft believed that customers would prefer the new way of interacting with their computers, even though Microsoft’s market research was not very positive. Microsoft’s gamble proved right.
  7. Log and evaluate all service requests, customer suggestions, and product complaints. Microsoft logs and evaluates hundreds of thousands of calls made to Microsoft’s support technicians every year. Put yourself in your customers’ shoes. Observe them using products and watch for frustrations they may not even notice.
  8. Require that the software engineers who develop products spend some time listening to calls from customers. These engineers need to get firsthand feedback. To get the attention of Microsoft’s group managers, Microsoft charges their departments for the cost of providing technical support to customers who use their products.
  9. Request, receive, and act on input from your salespeople. Microsoft seeks and use input for the people who are out in the field with customers. In this industry, customers are eager to share their ideas, frustrations, and enthusiasm. Microsoft is also lucky to be in an industry where products are so adaptable. Whereas it might take an automobile company five years to retool a car model to adapt to customer preferences, software companies can—and do—update their products constantly in response to customer input.

Beyond Customer Feedback

Customer feedback is critical to success of a business No system of market research is foolproof, of course. Even companies that do a good job of listening to customers can make mistakes. Business partners are relying on questionable information to make customer-related decisions. Our new understanding of customer-related decision making should be the starting point for a research approach that has impact on a greater proportion of high-value customer-related decisions.

I am a strong believer that heeding customer feedback is critical to success in any business, especially a dynamic, fast-moving industry such as ours. Despite Microsoft’s willingness to look beyond customer input, 80 percent of the improvements in products like Windows result from customer feedback. Experience has taught us that it is also important to trust your instincts, to take risks, and to provide leadership, even when the customer is not demanding that you do so.

Apply these rules to your business and use the feedback to make improvements. Companies often make the blunder of organizing customer feedback systems around one structure—say lines of business or channel—and employee feedback systems around another—say geography or function. In the end, well-designed feedback loops facilitate employees to be more empowered and companies to be more approachable, creating the competitive edge companies need to adapt and thrive.

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GE Capital Aviation Services: A Fantastic Asset for General Electric

GE Capital Aviation Services: A Fantastic Asset for General Electric

Of the 12 firms that constituted the initial Dow Jones Industrial Average in 1896, General Electric Company (GE) is the only one yet on the list. For more than a century, it has been one of the most successful companies in the world, well-liked for its products, culture, and series of dedicated chief executives.

In 2015, GE assertively moved to wind down GE Capital, which was a considerable but volatile driver of earnings. After selling large portions of its financial business over the past few years, General Electric (GE) has finally shed the “too big to fail” designation. This is for the most part completed, and the residual specialty finance segments have understandable ties to the company’s principal industrial business, such as aircraft leasing. Investors should gain from a much smaller, better-capitalized GE Capital over the long run. Barclays analyst Scott Davis calls one remaining piece of GE Capital, GECAS, GE Capital Aviation Services, “a fantastic asset.” Barclays explains,

GECAS is a fantastic asset, making up more than half of the GE Capital verticals’ asset base and almost 3/4 of its profits/cash. Aircraft leasing is a lucrative and relatively stable business with favorable cyclical and secular market dynamics. The market is becoming an oligopoly with increasing concentration amongst a few key players, and GECAS is the clear leader. Large global players benefit from significant advantages, including large discounts to the latest next-gen aircraft and valuable relationships with top-tier airline customers. From a cyclical perspective, air traffic growth remains strong and lower oil has resulted in strong airline customer profitability. There are also secular tailwinds from a growing global middle class, as well as airlines increasingly choosing to lease their fleets.

'General Electric and the Pursuit of Profit' by Thomas F. O'Boyle (ISBN 0375705678) During the Jack Welch tenure, General Electric benefited from the evolution of financial services in the American economy and the growth of GE Capital. That strategy backfired in 2008 with the arrival of the financial crisis. General Electric had no competitive advantage in financial services. If anything, their risk controls were even inferior to those at other large financial institutions.

Barclays also says GECAS is an asset that’s underappreciated by investors: “We estimate that GECAS will help deliver ~$1.3–1.4B in run-rate free cash flow going forward… not an insignificant amount relative to GE’s ~$9B Industrial FCF in 2016.”

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Posted in Airlines and Airliners Business and Strategy

FedEx’s ZapMail Service: Failure to Foresee

Innovation is Not Without Risk

How Federal Express's Zapmail System Works

One of the defining characteristics of great leaders is their knack for seeing into the future.

Innovation is not without risk. There are plenty examples of failures at companies. However, on the other side of the coin, if you’re too cautious and too late—all you have is a dinosaur business. Navigating that fine line between risk and innovation is very important.

FedEx's Zapmail System Case in Point: ZapMail Service was a system that used fax machines at FedEx offices to transmit documents for clients in different cities. After being introduced in 1983, when FedEx was known as Federal Express, the service was soon eclipsed by the rise of fax machines priced cheaply enough that most offices could purchase their own. In addition, ZapMail was based on satellite technology, which needed the space shuttle to work effectively. However, the space shuttle blew up, dealing a body blow to FedEx’s plans. FedEx folded ZapMail in 1986, taking a costly write-off.

No Innovation Without Experimentation

Commenting about FedEx’s ability to integrating new acquisitions into its fold after its purchase of Paul Orfalea’s Kinko’s franchise, journalist Michael Copeland commented in the Autumn-2006 issue of Booz & Company’s Strategy & Leadership magazine:

As with other acquisitions, Fred Smith saw something in Flying Tigers and American Freightways that others didn’t because his point of focus lay far beyond theirs. Mr. Smith doesn’t always get it right when he looks into the future. His expensive and ultimately failed experiment in ZapMail, a dedicated fax network that couldn’t compete in the early 1980s with the new, inexpensive consumer fax machines, is proof. “A guy like Fred Smith doesn’t build a company like FedEx without taking some risks and making some mistakes,” says Mr. Hatfield, the Morgan Keegan analyst, “but clearly the successes far outweigh the failures.”

Federal Express's Zapmail System There can be no innovation without experimentation, and there can be no experimentation without the risk failure. In addition, taking risk goes against the grain of many companies’ cultures. In the corporate world, there are powerful incentives for people to play it safe. However, leaders must work particularly hard to offset these forces and give their teams the consent to fail and the assurance to make their case and go out on a limb. Leaders must not only promote experimentation, but also encourage people to terminate faster on projects that are not working without fear of reprisal. That is to repeat the cliche “fail, but fail as fast as possible” and take the lessons learned to the next experiment.

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Talented People Work for More Than Pay

Reevaluate your compensation and rewards to create a performance culture

Reevaluate your compensation and rewards to create a performance culture Many companies are changing how they pay to keep the people they need. People who want to remain on a fast career track need to monitor what is happening to pay and rewards. Companies no longer just use options to get and keep the best people. And, when they move to cash compensation, this creates tax problems for key people.

  • Options underwater? Don’t hold your breath for re-pricing options. But companies are making major option grants to key people. You may not get options on your company stock at the current price for a long time. So, if you are up for pay negotiations, it may be a time for more options.
  • 'Fearless Salary Negotiation' by Josh Doody (ISBN 0692568689) 2020 incentives sparse? Many incentive plans are based on earnings growth for their dollars. And some companies missed their goals near the end of 2020. It is time to look at the measures your incentive plan has for 2021. Do they start where the missed 2020 goals left off? Do you have financial goals that are realistic and based on what your company can do in 2021?
  • Base pay adjustments? This will probably be a 4 percent budget year for most companies. So you need to focus on variable pay in the form of incentives and stock options. Companies set their plans at the start of the year, and even if things get better, they don’t change their budgeting processes easily.

Paying Smart: Time of Transition

Talented People Work for More Than Pay This year will be a watershed year for pay and rewards. The game is changing fast. Leaders will have some critical decisions to make, as companies are transitioning from a period of economic growth to a time of uncertainty. In recent years, everything we did with pay and rewards seemed to work. Now companies need a powerful business case for everything they do. Pay and rewards must add value to the business—good news for a change. But people need to be agile and adaptable.

Hiring is changing—from recruitment that placed a premium on all skills to a situation where hiring is more selective. Companies should build a performance culture employment model. Rather than designing rewards to attract and keep everyone, now they need rewards that are attractive to people who add value. As businesses offer incentives and equity lower in the workforce ranks, it is important to link rewards to what drives growth. Use rewards as the engine to make the company grow again. We now know that stock options are not the “secret sauce” of financial rewards. This gives us a chance to restart equity-sharing strategies.

You need to know how to deal with a workforce that is more “pay and reward savvy.” We will now see a return to basic design elements, including workforce involvement, alignment with business metrics, win-win for company and people, and simplicity.

'Designing Effective Incentive Compensation Plans' by Sal DiFonzo (ISBN 0692568689) Companies need pay and reward solutions that are more cost justified and based on contribution to the business. Talented people work for more than pay: total rewards in the form of providing a compelling and attractive future; individual growth so people continue to add value and adapt as they grow in economic value; a positive workplace where people want to do well; and total pay comprised of base pay, incentives, recognition, celebration and benefits.

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Posted in Business and Strategy

Marketing Demographics by Age

Marketing Demographics by Age

Companies seeking long-term business growth can find it by emphasizing the earning power of young workers, near-retirees, and women.

We all want to be treated equally and fairly during the buying and service process, regardless of our age. Let’s examine how you, as a service provider, can give exceptional service by understanding the needs and values of each age group.

Marketing to The Veterans

Marketing to The Veterans These people were born before 1943. Their beliefs and values include: Everyone should adhere and conform to the same rules, regulations, and policies. Those who are older or in positions of authority automatically deserve respect. Patience is an important virtue. The bigger the better. Personal pleasure is secondary to job responsibilities and tasks.

To win them over as a lifetime customers, make them feel special by remembering their name. Honor them by calling them Mr. or Mrs. or Sir and Ma’am. Thank them for their patronage with a personal note. Add a personal touch, and show genuine interest in them as a person.

Marketing to The Boomers

Marketing to The Boomers These people were born between 1943 and 1960. Their beliefs include: If it’s not working, either fix it or move on and find something better. They value personal growth, health, and wellness. They are optimistic. They believe they are the star and deserve center stage.

To keep them as lifetime customers, provide service that treats them as individuals, not just clients. Be personable. They value personal relationships that grow with time. Be solution oriented. If you can’t fix something, be honest; and then offer alternatives. Boomers value their time and want solutions now. Don’t tell Boomers what they can do.

Marketing to Generation X

Marketing to Generation X Baby Busters or 20-somethings were born between 1960 and 1980. They have a need to be self-reliant. They value family and friends. They tend to be informal and look for fun in every situation. They treat everyone as an equal regardless of “rank” but tend to be skeptical. They have respect for knowledge and technology.

If you want them to do business with your company, show interest in their family and friends, and admire their children if they are tagging along, or their pictures are prominently displayed on their desk. Treat them as equals. Approach situations in a relaxed and informal manner. Let them ask questions and seek information. Show that you have nothing to hide. Use technology to demonstrate your product and services.

Marketing to The Nexters

Marketing to The Nexters Generation Y or the Internet Generation were born between 1980 and 2000. They tend to be optimistic, street smart and very computer and technology literate. Achievement oriented, they are also strong believers in civic duty. They learn flexibility early since many come from divorced families.

If you want these customers to do business with your company, appeal to their strengths. These young people like to spend money, and they are more likely to purchase your product if your business donates to non-profit organizations. Also, appeal to their technical shrewdness. If it makes life more convenient, easier or is the latest in technology, they will probably want it.

Conclusion: For successful marketing by age-demographics, consider each age group and customize your service

Service providers can give exceptional service by understanding the needs and values of each age group. I give these guidelines to assist you in providing the best possible customer care, but nothing will ever surpass kind and equal treatment to each and every customer you serve.

Learn to present information in a different manner to appeal to core values, which are different for each generation.

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