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Wal-Mart is experimenting with not only delivering your groceries to your door, but with actually coming in your door, entering your kitchen, and stocking your fridge and pantry with your groceries. Seriously. I’m not making this up. You can read all the details for yourself here.

To be fair, this is a good idea not so much because of the specific approach they’re testing, but because of the thinking that Wal-Mart seems to be demonstrating in desperate response to the big chunk of their business they are losing to Amazon and the like. Kudos to them for asking how they can differentiate themselves by offering additional value for their customers.

It’s a bad idea because not only are there way too many moving parts in this approach, and not only because I predict it’s highly unlikely that there will be a big enough target market who will trust Wal-Mart with the “keys to their home”, but because they are getting too far outside what they know they can do well. Their core competencies if you prefer the fancy schmancy MBA term.

On the grocery side, Wal-Mart does a super job of using their buying power and the efficiency of how they operate to offer the consumer a vast selection and a remarkably low price. Bravo, Wal-Mart. Expanding the services they offer in that vein to include online ordering and curbside pickup makes excellent sense. Grocery delivery seems like a bit of a stretch and a gamble, but operationally that isn’t terribly far fetched, so that’s an idea worth a look. But to think that Wal-Mart will be able to cost-effectively field a team of competent delivery staff who their customers deem trustworthy enough to let into their homes I think will prove to be a promise they’ll have a hard time delivering on.

Whenever you chase after another target segment, chances are you’ll chase away your original customer. Whatever you do, you should not get greedy but stay true to your product type, your attribute, or your segment.” – Jack Trout and Steve Rivken, Differentiate or Die

 

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If there is an opportunity to get in front of an audience, you can bet marketers will find it. The picture to the left illustrates one such example.

The good folks at Coca Cola determined that those concrete poles that serve as safety/security barriers to the entrance to such places as Wal-Mart were not being used to their full potential. So they came up with a cardboard overlay that featured their latest promotion. Hard to miss as you walk through the main entrance, and I offer them a tip of my marketing hat for their creativity.

A while back we talked about how Amazon did something similar.

A good idea is to look for “underutlized real estate” where you might be able to get your message out there. The more unique, and the more clever, the better.

Doing business without advertising is like winking in the dark. You know what you are doing, but nobody else does.” – Unknown

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I grabbed this article from BizJournals.com. It originally appeared last year, and here’s a direct link if you’d like to read the original post. Good article and a good site!

Harvey Mackay: 10 valuable business lessons from Santa

Santa brings merriment to the season, but he also teaches us many valuable business lessons.

No matter how you celebrate the holidays, or even which holidays you celebrate, chances are you know about Santa Claus.

The jolly old elf brings merriment to the season, but he also teaches us many valuable lessons.

Here are 10 worth considering:

1. The value of giving

Aside from milk and cookies, Santa doesn’t get anything in return for all the gifts he shares with others. That is the real spirit of giving: not expecting anything in return. The joy of giving is reward enough.

2. Marketing and public relations

Santa’s image is everywhere, and I’m pretty sure he doesn’t pay a dime for the exposure. He attracts crowds wherever he goes. Businesses put him front and center in ads, decorations, even in big comfy chairs in prime locations in shopping malls. They practically beg him to show up!

3. He hasn’t changed his basic look

More people can identify Santa than the president. His distinctive style of dress will never get him on a best-dressed list. But he doesn’t concern himself with that. His message has remained the same: a simple “Ho, ho, ho.” He doesn’t drive the latest model car. He is who he is and is content with that. What he does is more important than fad or fashion.

4. His attitude is contagious

He is always positive, reminding young and old alike to be good for goodness’ sake. How he keeps track of who is naughty or nice doesn’t really matter — he encourages people to be their best. He rewards good behavior. And who doesn’t like to be recognized for trying?

5. Santa respects deadlines

He knows from one December 25th to the next that he has customers to satisfy. He is beholden to the calendar. It wouldn’t work to try to stretch it into January or February. Reliability is an important trait.

6. Santa understands the value of tradition

Most of us have family or cultural traditions that bind us together. Businesses have traditions that customers anticipate. But have you ever noticed what happens when someone tries to change a long-held tradition? Santa knows better.

7. Customer service is high on his priority list

He aims to please, and he rarely disappoints. I’m guessing he reads every letter written in a childish scrawl before he makes his list. If you happen to overhear a conversation between Santa and a child asking for the hottest toy of the year, you will likely hear a promise to do his best, but he has some other great ideas, too. He won’t promise what he can’t deliver.

8. Teamwork is central to his operation

The demands on him are enormous. He understands that he can’t do it alone. A workshop full of elves and a team of nine little reindeer help him accomplish an impossible task year after year. I’ve heard there is magic involved, but I have no evidence to support it.

9. He epitomizes leadership

He leads his team, but he also guides the rest of believers toward the right path. He is consistent with his values. He is patient. He works hard. He is forgiving of mistakes and loves what he does. And that brings me to my next point.

10. He lives the wisdom of “love what you do and you’ll never work a day in your life”

There can be no question that this guy wouldn’t want to do anything else. Santa couldn’t do what he has done for centuries without real enthusiasm for his efforts. Santa takes his work very seriously, but he doesn’t take himself seriously. He loves to laugh, make people happy, bring surprises, and spread good cheer. Santa understands that fun is good. a world full of serious problems, bringing a little happiness is a welcome relief. We can all do something to brighten someone else’s day.

Here is a shameless plug for getting on Santa’s “nice” list: This month, I will once again be donning a Santa hat and taking a shift ringing bells for the Salvation Army. For 12 years I have had this pleasure, and I hope to continue this tradition for many more holiday seasons. I encourage you to toss a few coins or dollars into the red kettle, or help whatever charity you can. Even if Santa doesn’t see you, you can be sure you have embodied his spirit.

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A systems approach in the design of any organization, big, small, for profit, not-for-profit, governmental, whatever, is a good idea. When you systematize the process, you have the opportunity to powerfully replicate what works and potentially avoid what causes inefficiencies. If you want to revisit some of the reasons why a systems approach will help you, you can do that here.

We also talk a lot about how you should change a strategy only when it stops optimally performing.

Systems are the tools to help execute strategy, and the same rules apply. Change them only when they stop optimally performing. Think about changing constantly, but actually change them only when they stop consistently producing the results you’re after.

And this is pretty much true from industry to industry. Consider Murphy’s Law of Computing:

A complex system that does not work is invariably found to have evolved from a simpler system that worked just fine.

 

 

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Arguably the smartest business word ever uttered, and adopted into the business vocabulary, is “contingency.”

The dictionary defines contingency as “A future event or circumstance that is possible but cannot be predicted with certainty.”

Doesn’t that apply to just about every aspect of strategy in any sector?

Nothing can be predicted with certainty and nothing is guaranteed. For that matter, nothing is impossible, either. Leaders, then, have to plan accordingly. Hence the importance – and value – of contingency planning. Plan for contingencies, structure for contingencies, embrace contingencies.

And this includes every aspect of how the organization is structured. As Jim Collins stated in How the Mighty Fall,

There is no organizational utopia. All organizational structures have trade-offs, and every type of organization has inefficiencies. We have no evidence from our research that any one structure is ideal in all situations, and no form of reorganization can make risk and peril melt away.”

 

Contingency planning means considering what could happen, and having potential actions in place if it does.  

 

 

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McDonald’s has gone through its share of ups and downs in its history that now spans nearly 80 years. They always seem to weather whatever storm they face, and as a shareholder, I’ve got faith that they’ll eventually get back on track.

And I don’t just feel confident about their stock price because my kid is still in “that stage” where he loves to eat there. You’ll note the happy picture of him to the left, and you’ll also note that his appetite alone should help keep their stock price stable!

My optimism about the future of McDonald’s resides in how they are doing one simple thing: They are simplifying. Again!

Here’s what I mean.

The McDonald brothers opened their first restaurant in 1937, and their hard work and customer focus helped them achieve impressive success in a short while. They found their business became even more lucrative when they simplified the menu down to just a few items that could be cooked and served assembly-line style in a rapid fashion. Their approach also helped them maintain consistent quality. Ray Kroc later bought the franchise rights to McDonald’s and systematized their simplified approach so that it could be replicated, consistently, worldwide.  The rest is, as they say, history.

Over time, in an effort to get their existing customers to spend more money with them (share-of-customer), McDonald’s has tried a lot of things to give its customers more reasons to spend more of their dining-out dollars there. Most recently this has included growing the size of their menus to add all kinds of choices. Some of this I think is a good idea. Offering wraps and other healthier options for customers to choose from. But they also added a bunch of choices within each category. Multiple burger options, multiple dessert choices, etc., etc.

The net effect is that it takes longer to train the employees in the scope of the menu. It requires them to learn more about the larger menu so they can answer questions customers have as they attempt to decide what to order. More menu items complicates the order fulfillment process. Complication may lead to errors in customer orders, which can obviously lead to customer frustration, which can ultimately lead to dissatisfaction, which can in turn lead to the customer simply deciding not to return and sharing that frustration with those in their spheres of influence. Net result: Some ugly effects on the bottom line.

Fortunately, their current CEO has flatly proclaimed that McDonald’s future is going to resemble its past in terms of its back-to-the basics approach to serving its customers. The menu is being scaled back to its most-demanded items and they are working to streamline operations and fix as many customer-reported inefficiencies as possible.

Critics say they’ve still got many threats to face, not the least of which is the mounting numbers of tough competitors. I don’t argue with that, ’cause that’s what the free market is all about, after all!

But something else I’ve learned not to argue with is the power of simplification when it comes to any system.

A successful business has to be at least competent in a good many knowledge areas in addition to being excellent in one. But to have real knowledge of the kind for which the market offers economic reward requires concentration on doing a few things superbly well.” – Peter F. Druker

 

 

 

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BlueprintA lot of folks dream about owning their own business so that they’ll have the freedom to do the things they most want to do. Unfortunately, once they get into the business, they find that rather than owning the business the business owns them far worse than the job they left ever did. What I’m about to suggest isn’t necessarily a cure-all for that, but it is something worth considering as you think about starting your business.

Don’t start with the design of the business. Start first with what kind of LIFE you want that business to give you. Do you want to travel? Or never have to travel? Spend more time as a family?

If thinking about “the kind of life you want” seems to broad, ask yourself, “What would the ideal DAY look like?” Would you get up early and only work half a day? Would you be able to sleep late? Would you be able to work when you want and take off when you want? Who would you spend your time with? What would you do during a typical day that would make you feel like you accomplished something? Simply envision what you want, or don’t want, for your typical day and then you can start to work designing a business that helps you get there.

True, there are a lot more specific questions you’ll have to answer along the way, but beginning with your ideal day in mind will help you make a lot of decisions about what business, and what business model, is best for you. The next step is designing the systems to make all this possible.

By the way, getting to correspond with YOU like this every week is a something I enjoy a great deal about my business. A formal THANK YOU greeting will arrive next week, but consider this an early expression of my gratitude and that of my family!

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Ready…FIRE…aim?

By Dr. Burt Smith September 30th, 2014

Ready..fire…aim isn’t such a bad approach to strategy. Sometimes you simply don’t know if something’s going to work or not unless you try it. Trying, then, gives you FEEDBACK you can use to adjust the PLAN and get better next time.

Remember, it’s a process: Plan, Organize, Implement, and Control.

For some, the really hard part is the implementation. That fear of “launching” before everything is perfect, which often means not launching at all. For others, the hard part is objectively going back and examining the outcomes so the lessons derived can be used to get better next time. What simply can’t be stated strongly enough is that it is a PROCESS!

Make a point of embracing that and I think you’ll be amazed at how much sooner you make forward progress, and how much faster you get the ultimate, longer-term RESULTS you’re looking for.

A good plan today is better than a perfect plan tomorrow.” – Wag the Dog (Movie)

 

 

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Put it in writing, please?

By Dr. Burt Smith September 17th, 2014

For most business communication, I’ve always preferred e-mail. The main reason I like it is because it offers you a “digital trail” if you ever need it. Plus, the process of putting things in writing is just good for bringing clarity to your own ideas and position in some cases.

Forbes author Jayson DeMers takes it a step further by offering 10 reasons why e-mail should not only trump phone calls, but why phone calls are essentially a waste of time!

You can check out why he says that here.

Even if you don’t “Amen” what he suggests, it’s still worth a look.

There is nothing like writing to force you to think and get your thoughts straight.” – Warren Buffett

 

 

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Amazon is using its packing tape to promote its new product! (Click to enlarge)

Amazon does a lot of things right when it comes to delivering value.

Just as a full disclaimer, as I’ve noted here before, I’m a satisfied customer to such a degree that I don’t mind being an ambassador for their brand.

Their new venture into the Kindle Fire phone will be interesting to watch, but what’s already caught my eye is one of the many ways they’ve chosen to promote it. Take a look to the left and you’ll see how  they’re using packing tape as a promotional tool.  Not too shabby.

No sense letting that valuable marketing real estate go to waste, I reckon!

Reminds me of this quote:

Why pay a dollar for a bookmark? Why not use the dollar for the bookmark?” – Steven Spielberg