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Don’t let the words “competitive intelligence” intimidate you. First, there’s nothing underhanded about using the resources at your disposal to keep a close eye on your competitors. We’re not talking about sneaking into a competitor’s office to find proprietary information or planting a “mole” to report back to you on the competition’s latest research.

Those over-the-top (and illegal) activities are the stuff of spy novels and big-screen thrillers. Instead, think “information gathering.”

Second, it’s quite likely that you’re already engaged in competitive intelligence, but without assigning this label to your efforts. If so, it’s merely a question of taking these ongoing activities to the next level. But regardless, the bottom line is that the failure to make information gathering on your competition a top priority will create a huge blind spot for your company that will severely constrain success.

The good news is that you can launch an aggressive competitive intelligence program with fairly little of your valuable time and even less cost.

All of the information you need to gather for a robust competitive intelligence program can be found online using free online tools. Here are the steps for getting on track to regularly analyze your market competition.

Develop a list of competitors

You know who your competitors are, of course, but have you built a list?

Create one that includes the address of each competitor’s website, the company’s key leadership and a sample of any articles on your competitors or their key team members that have appeared in the media in the last two years.

Employ free tools such as Google News

Think about what an executive from Coca-Cola might do to find intelligence on Pepsi.

When we went to Google News, we discovered that five of the top 10 results generated would be very useful to Coke. Included were recent articles on new products, class-action lawsuits and sponsorships that Pepsi has undertaken.

Of course, whereas Pepsi and Coke generate daily articles on popular search engines, sometimes even hourly, your competitors may generate news much less frequently.

Nonetheless, set aside time each week for your own effort, and don’t allow a dearth of results — even for several weeks or even months — to deter you from what must be a regular activity to be effective in the long run.

Get specific and narrow the results

Consider narrowing your search to include the name of a top executive or a target area of the business. For example, that same Coke executive might want to stay informed about Pepsi’s CEO, Indra Nooyi. When we performed this test, the results in Google News for “Indra Nooyi” included almost 10 important articles in the first 10 results listings.

Automate the flow of this information

You or someone else in your company may have set up a Google Alert on your company’s name so all mentions in the news are sent to your e-mail inbox. If you haven’t, stop reading this article and go do it quickly.

Now, do the same for the names of all of your competitors.  In addition to Coke and its main competitor, Pepsi, that same Coke executive would likely have created Google Alerts for its other competition, including “Dr Pepper Snapple Group” (use quote marks because you want all the words to appear next to each other).

You could also set up alerts that will snare general industry information as it breaks, just as our Coke executive might establish an alert for “beverage industry” to receive news aligned with this topic.

Delegate — if you wish

After you’ve handled these competitive intelligence tasks for a while, you may decide to turn the effort over to an assistant, an employee at a lower level or even an intern. What’s key is to keep refreshing and growing the search terms you use based on the information you’re netting – as well as to cull from your list of terms those that aren’t pulling in useful intelligence.

The regular flow of information you’ll receive on your competitors, your industry and your market will keep you on top of — and even a few steps ahead of — the competition.

Tony Arnold is founder and principal of Upfront Management, a St. Louis-based management and executive consulting firm. He can be reached at (314) 825-9525 or tony@upfrontmgmt.com.

Published in St. Louis

Andy Mills was confident that Medline Industries Inc. was ready to go live with its new enterprisewide system. After more than two years of preparation, it was going to make everyone’s life easier by organizing orders, inventory and every other business process in the organization.

“Then we hit the switch,” Mills says with a hint of doom in his voice. “The system had been tested, but not with the volume of orders that we had. So although it worked fine when you were throwing a few simple tests in there, it wasn’t stress-tested adequately enough. And it really collapsed the whole company.

“We couldn’t locate our inventory; we couldn’t bill. Customer service calls that normally would take two or three minutes were taking 45 minutes to an hour. We had a disaster on our hands.”

Medline has a long and rich history of manufacturing and distributing health care supplies to customers across the country. But that all seemed so far away now as leaders at the 9,000-employee company scrambled to find a solution.

Fortunately for Mills, he had built some credibility with his team over the years. So he went to them and explained exactly what had happened and what the company was facing.

“We said, ‘Here’s the situation we’re in,’” says Mills, the company’s president. ‘“We’re crippled in many different computer aspects. We think we can come out of this in 12 to 18 months. We’d like you to work Saturdays. We’ll pay you bonuses, but we’d like you to work Saturdays. It’s kind of do-or-die time for us.’”

As much credibility as had been built, this was still a lot to ask of his team, and Mills knew that.

“But a remarkable thing happened,” Mills says. “We had this feeling of all hands on deck and people saying, ‘We’re going to get through this.’ People brought in sleeping bags and were living here for weeks at a time. Morale was not lower but higher than normal. We came out of our problem in four to six months, not 12 to 18 months. It really taught us no matter how big or small the problem is, share it.”

Indeed, Medline overcame this significant hurdle to maintain its spot as the largest privately held medical supplier in the United States with nearly $5 billion in annual sales. Mills says the value of respecting your people was never more evident than it was during those tough times.

Here are some of the things Mills tries to instill in Medline’s culture to make employees feel like a valued part of the team and a willing partner to help the company achieve success.

Trust your people

Mills gets as excited as anyone when he has the opportunity to share good news with his employees. But he, CEO Charlie Mills and COO Jimmy Abrams did not earn the loyalty that saves their butts when problems occur by only delivering good news.

“You have to take a leap of faith and trust people when you share information, even challenges,” Mills says. “Some people are afraid to share dirty laundry. But when you share what challenges you’re facing, you really give people a feeling that they are empowered to be part of the solution. I don’t believe in hiding things, but some people are afraid to admit weaknesses or show anything other than a façade of strength.”

Whether it’s a problem in your company that you had no control over or a situation that came about due to a mistake on your part, you’re better off being upfront with everyone about exactly what happened.

In most cases, you’re going to be asking these people who work for you to step up and do something to fix the problem. So why not give them all the facts going in?

“You can say, ‘Listen, you’re closer to the situation than I am,’” Mills says. ‘“What do you think? Because I’m not sure.’ I wholeheartedly believe the people closest to the situation can help you find the best solution, and I’m not afraid to say that.”

When you talk about problems, or even if you’re talking about good news, frame your comments in a way that leaves people feeling like you’re all part of the same team. Don’t give the impression that you’re asking people to fix a problem in “your company.” It should be their company, too.

“We talk about the company being our company,” Mills says. “People like being associated with a company that’s growing and they take pride in the success. That’s part of the reason we get these kinds of unbelievably devoted employees who want to pitch in and help. They feel like we’ve all built this, and we’ve all been part of the success. That goes from the work on the factory floor to anybody in the organization.”

The closeness that leadership and employees feel at Medline was also evident when the company made an acquisition about seven years ago that included a component that created some uneasiness.

Medline wanted to remove the Canadian market from the deal because leaders didn’t feel they had the expertise to succeed there. But the point wasn’t negotiable so Canada stayed part of the deal.

“But we went into Canada, and it has become one of our biggest success stories,” Mills says. “We went from about $7 million the first year to this year we’ll do about $100 million.”

Once again, communication about the problem at hand was a key to achieving success.

“Open dialogue on some of the challenges we were facing and some of the resources we could bring to bear, I think that really created a culture of trust there that is common throughout the organization,” Mills says. “That turned it around. We had people who got involved and didn’t like the idea that we couldn’t succeed there.”

Reinforce your culture

There are times when, try as you might, you and the person you’re talking to just can’t connect on the topic at hand. This occurred with Mills and an employee who was trying to explain an idea she had to redesign and rename a Medline skin cream product.

“I said, ‘I really don’t get it,’” Mills says. “She went on to explain why she thought it made sense and said, ‘We’re going to change the image from a low-end cream to a more spa-like experience for the product.’ And I said, ‘I still don’t get it. I just don’t believe in it.’”

Mills wasn’t upset, but the employee’s supervisor, who was also in the room, felt that enough time had been spent on the topic. At one point, he interrupted the employee and told her it was time to go.

The employee remained persistent, however, and ultimately sold Mills on doing a field test.

“We picked this small area to field test it and it came back a couple weeks later validating what she had said, and I said, ‘Let’s go with it,’” Mills says. “But even before we got the results back from the test, I said, ‘I really want to congratulate you for standing up for what you believe in and not being afraid to share that with me. I think that makes us a better company.’”

Mills also went to the supervisor and expressed his disappointment in him for not backing up his employee when she clearly had a passion for what she was talking about.

“We want that culture where people have ideas and want to fight for their ideas,” Mills says. “Sometimes I judge the strength of the idea on how hard the person fights.”

Mills works hard to remind his managers on a constant basis to support new ideas and to encourage dialogue. He wants everyone in the company, from the top on down to the lowest levels, to feel comfortable bringing up a suggestion or a concern.

“One of the things we talk about is accidents in the operating room,” Mills says. “You’ll hear a nurse say, ‘I’ve been here for six months but the doctor has been here for 10 years, and I didn’t want to speak up. Who am I to say that?’

“I give that example when I talk to all our sales reps on their first day of joining Medline and either Charlie, Jimmy or I tell that to our new recruits. It’s kind of part of our standard speech to say, ‘No matter how new you are to the organization, you may see things that don’t seem right. If you do, we want you to speak up because you’re coming in here with a different perspective and you may just be right.’ So we try to get that in from day one.”

Reward productivity

Bonuses give employees an opportunity to aim for a goal, meet that goal and be rewarded for their efforts. But as simple as it sounds, there are some corporate environments where it’s not clear what must be done to meet a particular goal.

“You really have to have an understanding of what the individual is working on and what’s controllable,” Mills says. “It’s very important that the individual feels the bonus is tied to something that is within their power to control.

“When you set up a bonus that is too broad and the individual thinks it’s either not measurable or too arbitrary or too broad for them to affect, you lose that engagement. People get excited about controlling their own destiny.”

If you really want to accurately track performance and determine who is being productive and who is not, it will take some effort. But once you have a system, it will be easy to demonstrate what needs to be done and who is doing their part to get it done.

“We know what equipment people are on and we know the size of the product they are picking,” Mills says. “We know the distance from the receiving dock or shipping dock to the slot. We know the hour of the shift and that somebody in their first four hours will be more productive than their second four hours. So we calculate all these things to come up with a standard time.”

Once you look at your business and figure out what metrics to use to track your employee productivity, you’ve got to stick with it.

“You have to make sure if you put it as your core value, that you’re going to walk the talk,” Mills says. “You’ll undermine everything if you don’t.”

If you do it the right way, you’ll create regular opportunities to talk to your employees about what’s happening on the job and what concerns they might have.

“We think making the time from work to bonus as quick as possible is smart,” Mills says. “Every time there is a discussion of the bonus, you look at the pay with the employee and you get them more engaged in what they need to do. If it’s once a year at the end of the year and you’re reviewing 2011 and they made bonus or they didn’t make bonus, you’d be surprised how much more effective it is to do it quarterly. It just reinforces what their target is.”

How to reach: Medline Industries Inc., (800) 633-5463 or www.medline.com

Takeaways:

Be forthright with employees.

Commend people who speak up.

Promote what it takes to achieve a goal.

The Mills File

Born: Chicago

Education: Bachelor of science degree, Tulane University; MBA, J.L. Kellogg School of Management, Northwestern University

What was your very first job?

I went door to door with a bucket and rags and washed people’s cars when I was too young to get a job. You learn the value of hard work. My father and uncle both worked very hard and they would work six days a week. Frequently, they would have employees or customers over for dinner and be with them on the weekends. One of the ways that I got to spend time with my dad was to follow him around on some of these dinners and meetings when I was young. So I kind of grew up in the business.

Who has been the biggest influence on you?

My father and my uncle. If I can have two people, I would say both of them. They have been so supportive in mentoring. They just set an example of how to work together. It’s hard working with three people and not having an ego about things. They were very good about sharing ideas and crediting one another.

[Charlie, Jimmy and I] try to be the same way and we also try to be very supportive and they were always supportive of one another. They’ve been good and they’ve also taught us that nothing goes perfectly straight up. You’re going to hit bumps in the road, but don’t give up and don’t be afraid of hard work.

What person would you most like to meet?

I had a grandmother who had Alzheimer’s most of her life when I knew her, so I really didn’t know her very well. So for me personally, I would like that experience.

Published in Chicago

On Monday morning, the watercooler talk among VF Corp. employees looks more like a Yelp review than the typical weekend replay. Employees chime in about The North Face jackets they wore skiing, the Lucy yoga pants they tested out and the Jansport backpacks they took hiking.

Steve Rendle, vice president of VF Corp. and the group president of its Outdoor and Action Sports Americas division, says this comes with the territory of being part of the world’s largest apparel manufacturer — with $7 billion in revenue and a portfolio of global consumer products brands.

“We choose not to sit in our ivory tower and predict what the consumer wants,” Rendle says. “We’re fortunate that our employees to a great degree are our consumers.”

A 25-year veteran in the outdoor industry, Rendle was president of The North Face for seven years before heading up VF’s Outdoor and Action Sports Americas unit last year. Based in San Francisco, he manages a portfolio of eight, activity-driven brands, including three worth more than $1 billion each — The North Face, Timberland and Vans.

Rendle is tasked with leading the brand strategies that will resonate with VF’s customers over the world. When it comes to front-end operations, he says there are very specific skills sets that help the company cultivate connections between its brands and consumers. The most significant is how the company develops its brand strategies: by making them a lifestyle. The company calls this “the art and science of apparel.”

“It’s that deep immersion into that consumer and understanding the consumer’s needs and expectations of our business that helps us really fine tune how we apply our business initiatives to grow our businesses,” Rendle says.

Here’s how Rendle uses these strategies to develop VF’s fastest-growing division of brands.

Dive deeper

The first step in developing a brand lifestyle is figuring out who the brand’s potential customers are in the marketplace.

“It’s taking an approach of first understanding who the consumers are,” Rendle says. “The ‘who’ aspect is a very important part, and we invest a tremendous amount of money corporately and from our brands to understand our consumers through global segmentation studies.”

While research from focus groups and surveys is beneficial from a targeted point of view, understanding a customer’s lifestyle takes a deeper level of interaction, beyond a phone call or email. You can look at annual research or employee feedback to get ideas about what customers are going to want, but to understand who they are requires a deeper level of knowledge only possible through one-on-one interaction.

“First and foremost, we’re an organization built of passionate consumers,” Rendle says. “But that’s not enough. We want to go into the marketplace. We want to think about our brands globally and do a lot of qualitative and quantitative research to engage with these consumers and understand how they think of our brands. What do they expect from our brands? And more importantly, how would they like us to communicate with them?”

Branded events are one way that Rendle and his team get answers to these questions. Sponsoring fun, action-oriented events that engage consumers allows the company to interact with people in environments that reflect their interests and lifestyles, giving the company a better idea of “who” they are.

“We’re able to engage and understand how they’re thinking about us, how they’re thinking about this particular event and learning about their product needs,” Rendle says.

In addition to the millions of followers that Vans and The North Face have in the digital realm, both brands also generate a tremendous following by putting on popular outdoor events. Rendle frequently travels with the product and sales teams to see how the brands are represented in retail, but also attends the key brand events to learn how they are connecting with consumers.

The North Face hosts its “Endurance Challenge,” a series of endurance races across the globe that attract 1,000 to 3,000 runners per event. These races are a great opportunity to meet runners who fit the brand’s performance market as well as hold mini “expos” for families so that they can interact with the brand, Rendle says.

Similarly, Vans uses its national Vans Warped Tour, a day-long outdoor music and action sports event to connect with some of its key consumer groups, from skateboarders, to musicians and BMXers. With a history as the original skate shoe manufacturer, Vans now focuses on the broader market of men’s and women’s footwear and apparel. So as the partial owner and operator of the summer concert series — the longest running in the U.S. — it draws more than 600,000 people each year and offers a direct line to its youth audience.

“It’s a very impressive music-driven event, but it’s also an event where we’re able to touch the consumers and listen and learn as they interact with the music culture how they’re thinking about the brand, the brand’s products and how the brand is communicating from a marketing standpoint,” Rendle says. “Events are a powerful tool to not only tell the stories of our brands but to interact with those consumers.”

Ask the experts

It’s important to understand not just who your customer is but also what he or she expects from you. Because there is whole host of running footwear and running apparel competitors for The North Face, for example, the brand can’t gain market share just by resonating today’s consumer trends today. It also must stay abreast of the running lifestyle and how it’s changing. To do that, the company uses brand ambassadors.

Each of VF’s Outdoor and Action Sports Americas brands, specifically The North Face and Vans, partners with teams of professional athletes to participate with the brands at a high level, engaging with different products and contributing ideas. The North Face has more than 70 such athletes active around the world.

These brand ambassadors help provide insight into what the brand’s customers want and will want in the future.

“The North Face is the best example, where we have the mantra of ‘athlete-tested, expedition proven’ as that primary input into our product engine,” Rendle says. “We can make sure that we’re building the most authentic and technically relevant products possible that enable our consumers to enjoy their outdoor experience to the greatest degree.”

Tapping brand ambassadors is also useful for brand innovation and product development. Your “experts” in a brand lifestyle can help you identify pain points or product ideas that you may not spot or study based on customer or employee feedback alone.

A prime example is when The North Face runner Kami Semick participated in a high altitude race in the French Alps. After nearly contracting hypothermia from the cold, wet environment, she helped the brand identify a key need for lighter-weight apparel to protect athletes from adverse moisture and weather. Semick worked with the product teams to design a new technology for the brand’s fabrics that eliminates the distraction of moisture when during athletic performance. This year, the company is releasing about 100 new products featuring the FlashDry technology.

“North Face is the brand that provides the ultimate outdoor protection,” Rendle says. “So we bring that thinking and that knowledge base into running apparel.”

Concentrate your efforts

With global brands, you need to do lot of work to identify who your potential customers are. But equally important is figuring out your brand identity. To put it into perspective, brands such as The North Face are trying to capture market share in a $320 billion global market in the outdoor and action sports business, Rendle says.

Figuring out how to position these brands in the marketplace requires Rendle and his team to spend a lot of time looking at the macro-market to size up opportunities.

“That’s building the business strategies using the consumer insights and the market intelligence to help us craft very clearly focused strategies that we execute on five-year basis,” he says. “It’s always the rolling five-year plan and looking very specifically at where those opportunities are to drive our growth.”

Looking at the larger, macro market data, VF applies filters to examine the size of different opportunities:

What is the business doing specifically from a retail standpoint? What are the best ways of communicating to the consumer within those specific segments? Who are the competitors?

In this process, it’s necessary to look at brand competitors from a very critical point of view as far as what are they good at, Rendle says.

“We’re trying to understand what makes them unique — what are their points of difference and what things are more parody,” he says. “Then we look for those white spaces where we know that our brand naturally plays or places that we should be focusing to look for incremental growth.”

The points of difference are unique to your brand, whereas your points of parity are things you need to do just to stay in business — fit of garment, for example.

“It’s not really something that we would own, versus a specific focus or an innovative platform might be a unique point of difference and gives us an emotional connection to the consumer,” Rendle says.

An example is the women’s yoga brand, Lucy. While Lucy was the first brand in the women’s training space, it lost its way before VF acquired it in 2008, giving the Canadian brand Lulu a lead in sales and brand recognition.

“When we look at the difference between those two consumers — the Lulu consumer and the Lucy consumer — we see some very distinct differences in how she thinks, how she acts, how she wants to interact with her brand and honestly how she looks at those activities,” Rendle says.

The company also uses its brands’ leveragable platforms, or things that each brand does well, to position fellow brands stronger in the marketplace. The key is to utilize each brand’s strengths, without losing sight of how each brand consumer — and consumer lifestyle — is different.

“We focus on understanding the brand’s purpose and really understanding what we stand for and what our unique value to our consumer is,” Rendle says.

“It’s making sure I help those brands remain autonomous because it is those specific brand identities and cultures that make these brands successful. At the same time, it’s helping them leverage the VF platforms to scale and access capabilities at a much more effective price.”

After applying these kinds of lenses to see what a brand does well, you can learn how to build “permission” with customers to bring new lines to market where you don’t have established expertise, Rendle says.

The ability to introduce new products to consumers is a critical step in making a brand’s products part of a “lifestyle” the can continue to grow and evolve. Currently, The North Face is trying to do this with the footwear segment — using running apparel to break into running shoes.

“For us to sell footwear it needs to be uniquely different and bring some specific value that other brands are not,” Rendle says. “Where we know we have permission to compete first is in the trail, so really playing off of that outdoor heritage and enabling consumers to run off the road and onto the trail.”

The way the company creates its brand strategies is also changing the way Rendle and his employees think about the business, Rendle says. By creating brand lifestyles that resonate with consumers, the Outdoor and Action Sports Americas division has grown from less than 10 percent of VF’s total sales in 2000 to close to 50 percent.

“It’s helped us understand that this deep connection into the consumer’s lifestyle gives us a unique point of difference, and a unique way of competing against the many number of other choices that consumers have to make in their apparel purchases,” he says.

How to reach: VF Corp., (336) 424-6000 or www.vfc.com

Takeaways:

1. Use events to connect with customers.

2. Create brand ambassadors.

3. Find your points of difference and parity.

The Rendle File

Steve Rendle

vice president and group president, Outdoor and Action Sports Americas

VF Corp.

Born: Spokane, Wash.

Education: Bachelor of science, the University of Washington

What do you like most about your job?

I get to get up every day and come to work and participate in businesses and touch activities that I really love. I grew up skiing. I grew up climbing. I’m a very active outdoor user. I’ve dabbled in surf. I’m not a skater but I absolutely enjoy those people as much as I do those that I’ve grown up with. I get to live and play in a marketplace that I’m just deeply passionate about. To also build that passion of building success, in this case successful businesses that add shareholder value — I may very well have one of the best jobs in our company.

On his transition from president of The North Face to division group president: First you have to immerse yourself in the businesses. I’m fortunate enough that I’ve worked with each of these brand leaders as a peer for many years. But I needed to take a step back, remember that my job is not to only think only of The North Face, but to think about eight specific brands, their contributions to our portfolio and the larger VF. It is just to take a step back and forget about what I loved so much, and begin to understand that I have eight things that I get to love.

How do you regroup after a tough day?

My best tool for sorting out a difficult day is to get outside for some sort of physical activity. My favorite choice is to jump on my road bike and roll out for a long ride. No distractions. Just time to focus on the activity and subconsciously sort out my thoughts.

Published in Northern California
Tuesday, 31 July 2012 20:15

Safeguard your success

It’s the big day. You’ve managed to score a meeting with one of the biggest companies in the world to talk about your brilliant, one-in-a-million business concept. You can’t wait to talk with their executives and share your vision for your ideas — ideas that are guaranteed to change the face of business forever, while earning billions of dollars in the process.

One problem. Unless you’ve been diligent in protecting yourself, you might well find yourself taken advantage of, or even have your ideas stolen altogether.

Sad to say, but there have always been people out there just itching to pick your brain and take your original thoughts without paying for them. Sometimes it’s inadvertent — they may not realize that your ideas have monetary value — and at other times it’s purposeful and with ill-intent. Either way, it’s important to recognize this reality and do everything you can to safeguard yourself.

Earlier in my career, I would often find myself in a meeting, and with my inherent enthusiasm (It’s for real, folks!), I’d elaborate on everything from product concepts to marketing and sales strategies. The next thing you know, the people I was meeting with would all be whipped into frenzy and we would verbally agree to continue the dialogue and develop our business plan in the weeks and months ahead. We’d have numerous phone calls and even some follow-up meetings.

And then suddenly … nothing. When I finally managed to get hold of them again, I’d be told they had changed their minds and were not going through with the project. Yet months later, I’d find they had actually gone ahead with the product without me — and using all the ideas I had given them in our meetings. Think I wasn’t royally peeved?

Because I knew that what I had to say was worth something, after this happened to me one time too many, I decided that I needed to start protecting myself. So here’s what I’ve learned to do now: If I’m coming to someone with an idea for a product I’ve developed, before I take the first meeting, I make sure I protect my ownership. I file for a patent, trademark or copyright — everything and anything that is appropriate for what I’m offering. I also ask the people that I’m meeting with to sign a nondisclosure agreement and make it very clear from the beginning that I’m prepared to protect myself.

This doesn’t necessarily mean that others won’t still try to take my idea without my permission — patents are worked around all the time — but it does mean that I have some leverage. Without it, I’d be dead in the water.

At the moment, I have a product line that I’ve been developing for several years, for which I have four or five patents, eight to 10 trademarks and 10 to 15 copyrights. These protections give my product value for a possible third party sale in the future. When you come right down to it, if I can’t protect the ownership of my product, it has absolutely zero value.

Besides my ideas for an invention or product are the thoughts I have for developing business strategies, which I present in a meeting or conference call. This is a more difficult situation because I can’t patent, trademark or copyright these ideas. Yet, the success or failure of the product or business idea will hinge to a large degree on how it is presented to potential customers.

These days I proceed with much greater caution that I ever did before. If I’m approached by a company that wants to meet with me because of my expertise in an area, I often charge an engagement fee upfront. I won’t share my best ideas until I know we have an agreement that protects me. Half of the money is paid up front with the balance paid out of royalties or perhaps as a straight licensing fee if we decide to go ahead with a product.

You’ll never be able to stop people from trying to take advantage of you. But whether you’re talking about your idea for a new product or the strategy for how to make it a success, keep in mind that what you have to offer carries genuine value, so never let your excitement override good judgment.

Tony Little is the president, CEO and founder of Health International Corp. Known as “America’s personal trainer,” he has been a television icon for more than 20 years. After overcoming a near-fatal car accident that nearly took his life, Tony learned how to turn adversity into victory. Known for his wild enthusiasm, Tony is responsible for revolutionizing direct response marketing and television home shopping. Today his company has sold more than $3 billion dollars in products. Reach him at guestbook@tonylittle.com.

Published in Columnist
Saturday, 30 June 2012 20:21

Art Weinstein: Breaking out

Many companies trace their success to innovation. Whirlpool invested millions of dollars to embed creativity into their business culture and build new offerings. FedEx pioneered computer usage in delivery vehicles, designed sophisticated automation for corporate shipping, and developed package tracking. Southwest Airlines is known for its 25-minute turnaround — developed after benchmarking NASCAR pit crews — and Wal-Mart is renowned for supply chain management practices.

Creativity spawns innovation, creates value, and enhances market performance. When IBM interviewed more than 1,500 global executives in more than 30 industries for its 2010 study, “Capitalizing on Complexity,” they found that creativity is now the most important leadership quality. My recent study of 70 technology firms explored marketing practices. While the companies were successful in innovation — the success rates were 82 percent for product technology, 70 percent for management know-how, 66 percent for innovative culture, and 60 percent for R&D expertise — process technology, ideas embodied in the manufacturing and operations, was the one weak link. It was practiced successfully by only 49 percent of the companies surveyed.

Generally, creativity plummets as people age. We learn what is correct and “accepted” and become obsessed with failure. With groupthink mentality and play-it-safe business cultures dominating, is it really surprising that great ideas are limited? Incredible success stories like Apple, Amazon, and Google are rare exceptions, not the rule.

So, how can companies successfully innovate? A five-step process can be insightful:

Identify the problem or business challenge

For example, ask “How might we improve product X or customer satisfaction?”

Generate ideas.

Brainstorm

Offer many possible ideas or use “what if?” statements as steppingstones to new ideas. Think way outside of the box, but remember that you often have to implement within the box.

Find a tentative solution

Develop decision criteria and select the best option. Consider cost savings or efficiency (doing things right), effectiveness (doing the right thing) and flexibility (how else can we solve customers’ needs?)

Pre-test

Try out the proposed solution on real customers and get feedback for possible improvements.

Go to market and adjust

Roll it out, make necessary changes and profit from it. Creativity is a core business activity within an organization that leads directly to entrepreneurship. One of 3M’s seven pillars of innovation success is to have a broad base of technology. This multidimensional thinking is responsible for the development of many unrelated products, such as durable abrasives, highway signs and golf gloves.

Innovation management can be studied as a process improvement technique across a spectrum of activities, from R&D to design, new product management and cycle time reduction. So if you are unsure of how to make innovation a bigger part of your business, here are four tips to help you:

1. Commit to innovate. Whether your organization is a global giant or a small or medium-sized enterprise, establishing a creative climate is the necessary starting point to generate ideas that become profitable business opportunities. Encourage risk-taking, tolerate failure, reward success, and promote open and collaborative business relationships.

2. Get the customer actively involved in the innovation process through co-creation of value or customer toolkits such as web-based tools.

3. Always be innovating. Service firms are often stretched to capacity servicing existing clients or manufacturers may be pressured, putting out daily fires. Organizations may have little time for innovation. Yet, crises make innovation even more important. For example, the Tylenol poisonings led to the introduction of tamper-proof medicine bottles which resulted in increased customer confidence in Johnson & Johnson.

4. Plan for innovation. Break out of the routine through creativity retreats to re-energize and motivate your people. Consider quarterly brainstorming sessions, occasional dinner meetings or a weekend out-of-the-office experience (get done by noon on Saturday). Also, supplement face-to-face briefings with technology initiatives to stay on track. Be open to change!

Art Weinstein, Ph.D., is a professor of marketing at Nova Southeastern University and author of “Superior Customer Value — Strategies for Winning and Retaining Customers.” Visit his website www.artweinstein.com or reach him at art@huizenga.nova.edu or (954) 262-5097.

Published in Florida

Do you understand the challenges your employees face? If you don’t, you need to. Any work force that has lived through these times of dislocation, reduced disposable income, rising prices for food, gasoline and other necessities and unrelenting worries about the future is, quite understandably, a much-changed group.

The confidence these employees have in their company’s leadership and the engagement they bring to their jobs has diminished considerably. As a result, many employees — including those whose contributions are vital to their companies’ ability to rebound quickly and nimbly — are poised to make a career move with the first signs of stepped-up hiring in their industry.

The companies that will fare the best as the recovery spreads and new opportunities are created for these disaffected workers are those whose leadership has been open, empathic and accessible during these rough times. How did you communicate about the difficult actions you took and why they were necessary?

To drive your organization through hard times, did you grab hold of the reins and issue demands that employees “fix sales” or “cut costs”? Or, did you solicit your employees’ take on the challenges and engage their help in finding a solution – so they felt indispensable, appreciated and at least somewhat in control of their fate?

Regardless of what you did or didn’t do in the past, today is the first day of the rest of your company’s future. The steps you take today to establish the face of leadership in your organization — as well as in the weeks to come as the recovery picks up strength and breadth — will position your company for the post-recovery environment. Here’s what you can do to chart a positive course.

Get behind the numbers

Break out of the routine that includes meetings, presentations, e-mails and metrics to really think about the drivers of success and the limitations that have resulted in your company’s numbers. Experience a day in the life of your organization. Go into departments and travel with sales, technical and service people on routine calls.

Don’t be fooled by success and be cautious of filtered information. Have a dialogue with people about their work instead of just listening to presentations that have been structured, massaged and beautified. Be honest with yourself and your team about the “elephant in the room,” the conditions and state of your markets and your business.

Focus on execution

Get a firm handle on how your organization plans and executes. What motivates your people? Do they have a passion for doing their job? Do they strongly believe in what the company stands for?

Relook at how work gets done and what’s really necessary versus what’s merely become routine. Ask people where and how they spend their time, and how they measure their personal and professional success.

Be visible internally and externally

People should feel they know you and have access.

Have a dialogue with your employees, customers, vendors and other third parties. As you engage with them, dig for truths so you can understand what they do, where they’re feeling stymied and how you can make improvements to enable them to be more successful.

Open communication channels

In one-on-one lunches, town halls and other venues, probe for the reality that your employees face, understand and see every day. Be grateful for the tough questions, and if they’re not asked, raise them yourself. Talk about your people and the commitment they’ve shown through the worst economic downturn since the Great Depression.

Praise the successes of your people. Be open, honest and sincere; and speak with energy and passion, but be yourself. Share your feelings and what you stand for so your employees can understand you and connect with you in ways they’ve never done before. 

It’s a tall order, but it’s doable. A willingness to take a fresh, honest look at your company and to expose your fears and vulnerabilities to internal and external groups is the key. Get started today.

Tony Arnold is founder and principal of Upfront Management, a St. Louis-based management and executive consulting firm. He can be reached at (314) 825-9525 or tony@upfrontmgmt.com.

Published in St. Louis
Thursday, 31 May 2012 20:42

Paul Witkay: The future will be better

Most of what we hear on the news is how the world is going downhill — and quickly. Economic chaos, terrorist and pandemic threats, political stagnation, budget deficits and global warming are only a few of the issues constantly bombarding us.

Fortunately for me, these doomsayers are in direct contrast to the people I work with every day. It’s my privilege to live in the Bay Area, home to Silicon Valley, and work closely with CEOs who believe that they can make a difference in the world — sometimes even create a whole new future.

I suppose that’s why I find the book “Abundance: The Future is Better than You Think” so inspiring. Written by Peter Diamandis, chairman of the X Prize Foundation and a key figure in the development of the personal spaceflight industry, it describes the forces that are transforming our world and the trends that will enable us to address the most challenging issues facing our planet.

Here are a few of Diamandis’ examples that demonstrate how we can innovatively address the massive challenges facing us:

Water

Dean Kamen, the famous inventor of the Segway, portable infusion pumps and kidney dialysis machines, got interested in water and invented the “Slingshot,” a device that can purify 250 gallons of water per day using the same energy as a hair dryer. The power source is a Stirling engine that can run on most anything (even cow dung) and is designed to operate for five years in remote villages without maintenance. Kamen believes it can reduce costs by 90 percent.

Food

Winston Churchill said it was absurd to grow a whole chicken simply to eat its breast and wings. In the 1990s, NASA developed a way to grow meat from stem cells to feed astronauts on long space flights. Although it will take another decade to perfect the process, cultured meat has the promise to provide the protein we need, eliminate farm animal cruelty and restore the 30 percent of Earth’s surface currently used to raise livestock.

Energy

Billions are being invested in developing the capability to produce and distribute clean, renewable, safe and low-cost energy. In addition to exciting developments in solar, biofuels and storage, the potential for next-generation nuclear plants is enormous.

Bill Gates and others have invested in TerraPower, a company that is developing a traveling wave reactor (TWR) described as the “world’s most simplified passive fast breeder reactor.” A TWR can’t melt down and can run safely for 50 years without human intervention.

Education

Learning will be different in the 21st century. With the ability to find information on anything at any time on the Internet, we must develop the ability to ask the right questions. Creativity, critical thinking, collaboration and problem solving skills will be most valued. Although we need to restructure our education systems, the opportunity for personalized learning programs has never been better.

Health care

Medical researchers are pushing the cost of diagnosing disease to almost nothing. mChip, developed by scientists at Columbia University, has already demonetized and dematerialized the HIV testing process. Using a microfluidic optical chip smaller than a credit card, a single drop of blood can be read in 15 minutes at a cost of under $1.

The potential to make low cost, simple and accurate diagnoses for a wide range of diseases via mobile devices has enormous ramifications for improving health.

Freedom

The Arab Spring of 2011 proved the power of today’s communications technologies. One activist reported that they “use Facebook to schedule the protests, Twitter to coordinate, and YouTube to tell the world.”

Freedom is a powerful and irresistible force for change, and technology is making it happen.

Paul Witkay is the founder and CEO of the Alliance of Chief Executives. Based in Northern California, the Alliance of CEOs is a strategically valuable and innovative organization for CEOs. Witkay can be contacted at paulwitkay@allianceofceos.com.

Published in Northern California

Courtney Lyder was curious. He wanted to know how many of his employees at the UCLA School of Nursing had read the most recent 10-year plan that was about to expire. It was more than 20 pages long and Lyder had a pretty good idea what kind of response he was going to get.

“The answer was very few,” says Lyder, who is dean at the 150-employee school. “My rational was if we have a plan that is 20 pages long that no one is going to read, why do we have it?”

Unfortunately for his team, Lyder had a solution.

“So I was convinced that a 20-page plan is something that no one is going to read,” Lyder says. “And 10 years is a very long time in business. So I said I wanted a new plan that was no more than five pages. They said, ‘You’re crazy. It’s not going to happen.’”

So what do you do when you see something that needs to be done and your people don’t believe they can do it? You can start out by giving them reassurance that they can in fact do it, but you then need to move quickly into selling your plan as to how they actually will do it.

“There has to be a sense of trust between the leader and the employees,” Lyder says. “They have to buy into the sales pitch.”

Lyder talked about how important it is for an organization to have direction. People need to know why they are doing what they are doing and what it actually accomplishes.

“For me, if I don’t have a plan, I don’t know what I’m doing,” Lyder says. “If we don’t know what we are aspiring to, then how are we going to look at tomorrow?”

Lyder needed to sell his team on the need for a plan, but he also needed to sell them on a plan to develop that plan.

“Knowing the culture of my organization, I have discovered that we get much more buy-in when people feel part of the decision-making process,” Lyder says.

So Lyder created a task force. He selected the people for the group because he felt like he could construct a team that would work well together and have a good shot at accomplishing his directive. He didn’t want to force anyone to join it and he didn’t want people who would just give each piece of the project a rubber stamp.

“I wanted people who would critically analyze and look at our brand and the previous plan and ask questions,” Lyder says. “How will we reimagine what we do?”

Ideally, you create a task force that has an odd number of people. And it really shouldn’t have more than 15 people if you want it to function effectively.

“If you have more than 15 people on a task force, it just becomes chaos,” Lyder says.

Once the task force was put together and a chairman was appointed to lead it, Lyder backed off and let them do their work.

“The key is if you’re getting regular routine updates on the progress or lack of progress,” Lyder says. “If I saw after two months that one page was written, that’s when I would intervene. That’s why it’s key for me being the leader to be in frequent conversations with the chair to get my finger on the pulse of what’s going on. It’s not that I want to shape what’s going on, but that they are moving. And if they are not moving, what’s the rationale? Maybe I do need to pay a visit.”

By taking a more hands-off approach while at the same time being an encouraging voice of support, Lyder’s team came through and came up with a new plan that looked at the next three to five years and was just two pages long.

“The key is to keep an open mind as to what the final product may be,” Lyder says. “Get the organization to embrace the document and make it a living document. In this particular exercise, the task force did a sterling job.”

How to reach: UCLA School of Nursing, (310) 825-3109 or nursing.ucla.edu

Give people a voice

One of the key aspects of developing a strategic plan is getting the support of everyone in your organization. You need to make everyone feel like they had a voice in its creation.

Courtney Lyder knew there was no way he could put all 150 of his people on a strategic planing task force and expect to get anything other than chaos. But he wanted those people who weren’t on the 11-member task force to feel like they were given a chance to offer their thoughts.

“We all have our biases,” Lyder says. “We all have to recognize that even the leader is biased to some extent. So you give every single employee ample opportunity to critique and to ask questions. Give them a chance to say, ‘This is crazy,’ or whatever.

Then you can go back to the committee and say, ‘We need to think about this perspective.’ Sometimes we might go, ‘That was a great suggestion. Why didn’t we think about that?’ As long as people think the process is transparent and have an opportunity to critique it, that alleviates a lot of the anxiety about the task force.”

Published in Los Angeles

Cultivating Business

Revenue and profit from international sales needs to be part of any strategic growth plan. Growing international sales can be done by developing a distribution model (organic) or through acquisition (inorganic).

As chairman of Clark-Reliance, along with Rick Solon, president and CEO, we have successfully used international sales as part of Clark-Reliance’s overall strategic growth plan.

Develop a distribution model (organic growth)

In order to use organic growth to expand internationally, it is important to seek natural markets for your products beyond the borders of the United States. To do this strategically and successfully, you cannot look at the entire international market, but rather regions or countries that offer a reasonable opportunity for product placement.

For example, if you are looking at one of your first international endeavors, you need to look for opportunities in close proximity to the United States. If you are close to home, you will incur less capital risk and become established more rapidly. Initially, you may want to consider looking at Canada and Mexico. This will allow you to get a flavor for international business, currency exchange rates and overall business risk that will be tolerable for your company.

When entering any new market internationally, there are a few critical first steps:

? Start with a select few countries or one region.

Too many options can cause a loss of force evaluating logistics costs. Import/export duties, laws, regulations and demographics all need to be done thoroughly and can be very time consuming.

? Learn how to do business in that country. 

Seek information from international trade consultants like Chamber of Commerce Trade forums or a specific country’s trade mission and trade shows. A great deal of information and some potentially good contacts can be gathered. The Internet can also be a great way to find organizations that will help you become established properly. Sometimes a local law firm or financial services company can be a great guide. One of the most effective ways to learn is by visiting potential customers and learning what influences their buying decisions. This also will give you an idea of how much support infrastructure you will need to be successful. Make sure you consider time differences, language barriers, foreign exchange issues, letters of credit and local competition.

? Seek adequate representation in these markets.                 

Critically look at distribution channels and determine the best course of action. You can utilize a manufacturer’s agent or a direct sales representative. Using a manufacturer’s agent is generally less expensive (you only pay them if they sell) and is a great way to start building sales. Using a direct sales person is more expensive but may be more effective in technical consultative sales.   Ultimately, a hybrid of both will prove most productive. After getting established, your success rate may warrant a sales office or manufacturing facility in the region to support your efforts.

? Evaluate and prioritize growth markets.

Once you are established in your initial target countries or region, you should look at other countries or regions in the world that have robust markets for your products. In general, the developing countries or non-OECD (Organization for Economic Cooperation and Development) countries like in Southeast Asia and the Middle East offer the best short-term growth prospects.

The hybrid approach

A hybrid approach to organic growth is to look at a partnership or joint venture. Properly chosen and implemented, joint ventures can be a great way for your small business to get in on opportunities and profits that otherwise you would miss out on. By teaming with other people or businesses in a joint venture, you can extend your marketing reach, access needed information and resources, build credibility in a particular target market and access new markets that would be inaccessible without the partner. This is a good option to consider before growing inorganically because it requires less risk and generally less capital.

Inorganic growth

Inorganic growth is often a faster way for a company to grow when compared with organic growth. Through acquisition you can align yourself with an established operation and be up and running relatively quickly.

Any acquisition should be a good “fit” with your strategic plan and complement or expand your product line. The acquired company will know competition, customer preferences, buying habits and the general market.

The expertise in a country or region that can be gained through acquisition should not be minimized. Gaining extensive knowledge of customers and markets is expensive and generally takes many years to gather, so the “speed” of an acquisition can be very beneficial. The drawbacks to this approach beyond a significant cash outlay for the acquisition are a longer and more costly period of due diligence, foreign legal issues and the normal complexities of purchasing any company.

Matthew P. Figgie is chairman of Clark-Reliance, a global, multidivisional manufacturing company with sales in more than 80 countries, serving the power generation petroleum, refining and chemical processing industries. He is also chairman of Figgie Capital and the Figgie Foundation.

Rick Solon is president and CEO of Clark-Reliance and has more than 35 years of experience in manufacturing and operating companies.

Published in Cleveland

When Punit Shah saw that people were no longer paying premiums for completed real estate development projects in 2008, he knew that his company needed to get out of the construction business.

“We saw where the market was going and we had to take reactive measures to make sure that our future was protected and the future of our employees was protected,” says Shah, the president and COO of Liberty Group of Cos., a Clearwater, Fla.-based real estate company with 400 employees.

To keep the company profitable, Shah has implemented a new business strategy to grow through aggressive acquisition of existing properties.

Smart Business spoke with Shah about the keys in investing in growth through acquisitions.

What is your approach to new acquisitions?

Any acquisition that we’re buying has to have a value-add component to it and have a big upside that we can conservatively rely on to have a long-term gain in.

One thing that really makes us different is our ability to analytically look at every piece of information upfront. That makes it a lot easier for us on the back end, because we know what we’re getting into and we know how to proactively deal with whatever is coming our way.

So it’s something that we think may tie up equity or capital for a really long time and then have minimal returns, we usually pass on that deal, because we want to make the most and highest return that we can on our equity. We also want to make sure that it’s a safe investment, because right now is not the time to be making risky investments. Now is the time to be making investments that you are 100 percent confident in and that you’ve got a reasonable return on the money that you are putting at risk.

We’re not forecasting tremendous numbers with a forward-looking basis. We’re buying what we deem to be profitable as-is right now. As the market improves overall, as the economy improves, as our management team goes in there and adds more professionalism in overall management of the asset, we see that all as value-add opportunity.

What criteria do you use to evaluate investments during due diligence?

The most primary thing is location and demand generators. We want to be conservative and consider all different options, whether if there is a terrorist attack, what that would do to the core business of the hotel, during recessions, what happens during peak periods. So we look for diverse demand generators. We look for location of course. Then we look at the physical plans of the hotel or whatever the asset is. We look at the long-term intrinsic value of the asset itself but also the submarket and the overall region. We want to know if this is something that is going to be sustainable and is there going to be a demand generator for this property 10 years from now. As far as my ranking, it would go in that order.

We’re looking just for the best products that we can find, and we’re filtering out anything that doesn’t meet our core criteria. We’ve been very diligent about establishing that criteria upfront and knowing what we’re pursuing.

What mistakes can you make when pursuing acquisition opportunities?

The biggest thing anyone can do if they’re getting involved in what we’re doing is make sure they spend the time, money and resources on the due diligence. It’s almost turning into the height of the market again on a different scale, because people are just buying things sight unseen, guns blazing and not necessarily knowing what the repercussions are because there are a lot of legal complexities when dealing with distressed assets. I’ve seen a lot of people who are just jumping in all at once without understanding the risks involved with those investments. The other thing is real estate and cash-flowing businesses are still businesses and you have to have great management and employees to make those investments profitable. You can’t just buy an assisted living facility or hotel and expect just because you got a good deal on it, it’s going to turn profitable. It’s not like land. There is an inherent business component to it, and a lot of people fail to realize that when they are looking at these types of deals.

How to reach: Liberty Group of Cos., (727) 866-7999 or www.libertyg.com

Published in Florida