Hal Conick wrote an enlightening and useful article, How Marketing Can Make Mergers and Acquisitions Easy, in which he referenced the AOL / Time Warner merger.  According to Conick, Time Warner executive Ted Turner said the transaction was “better than sex.” We now know, of course, that this particular merger was not successful.

Marketing topics might not rise to the top of the list of issues entrepreneurs typically think of when negotiating acquisition terms. But discussing these topics before you sign on the dotted line increases your chances of a successful acquisition.

Branding and Product Portfolio

• Which brands should you keep as stand-alone brands? Which should you rebrand, or absorb into the acquiring company’s brands? What is the basis for this decision?
• What process should you follow to ensure an orderly transition? This needs to be driven by what prospects, customers and other stakeholders require.
• Which trademarks should you keep, sell or abandon?

Marketing Strategy and Planning

• What role will the acquired company play in the overall marketing strategy of the acquiring company?
• Will the acquired company continue to operate separately, or will it be integrated into the business operations of the acquiring company? If the latter, what will this transition look like?
• Who approves final strategy? What initiatives should you continue, reexamine and change, or stop? What is the approval process for individual initiatives?
• Who controls the marketing budget going forward?

Strategic Partnerships

• Which partners should you continue to pursue under the new ownership? Do any conflict with the acquiring company’s partnerships? And if so, how should you handle the situation?
• Which relationships will change, and in what way? How can you strengthen them?
• Who owns each relationship?

Marketing Team

• Who should you keep on after the acquisition, who will need to be managed out and what would be the fairest way to do this?
• How will you need to change the roles of the remaining marketers? What possibilities are there for them to grow professionally within the new company?  And what will be necessary to retain them?
• Which outside consultants and agencies should you keep?  How should their roles change? And which should be transitioned, when and how?

Announcing the Acquisition

• Who should you notify, and what is the right process?
• What messages must you communicate to all stakeholders, including employees, customers, partners, and investors? What’s in it for them?
• What tangible actions should the company take right away to show how the acquisition delivers value?

This is a partial list based on my experience working with startups and enterprises undergoing mergers and acquisitions. The main point is to have these marketing conversations up front, to improve your chances of a successful acquisition.

Look forward to your thoughts.

This post was originally published by the American Marketing Executive Circle.

(Main photo source: Unsplash.com)

According to the organizers, FuckUp Nights is the fastest growing global movement of entrepreneurial people who come together to publicly share failure stories. Thousands of people attend FuckUp Nights each month in 200+ cities worldwide. Esquire Magazine says it’s “like TED talks with more booze and less pomp.”

When our bosses/companies/investors/society/insertyourowngrouphere ask us to be 100% successful all it does is to force us to stop taking risks and instead work to appear 100% successful. It’s unrealistic. It’s unhealthy. And it’s unproductive.

So I was tickled to see entrepreneurs come out of the closet and admit, hey, we screw up!

Why is f*cking up so important to innovation? We try more things. And we learn more.

Why Frito-Lay embraced failure

Leo Kiely, VP of Marketing at Frito-Lay in the ‘80s, used to walk around the office with a baseball bat late at night when we were all feverishly working away on our marketing projects.

He wasn’t there to beat us up. (We did that to ourselves, thank you very much.)

He was there to silently remind us that it was important to take a batting average mentality to our work. If we weren’t swinging and missing, we weren’t taking enough chances. As long as we learned from our mistakes and didn’t repeat them, we were good. To innovate, we needed to embrace mistakes as part of the process.

We celebrated our mistakes in public. When a marketer made Director, there was a mini ceremony where that person’s failures were paraded in front of the whole group for us to enjoy. The point was clear: you made Director in part because you took chances and occasionally fell flat on your face.

Frito-Lay was and is one of the most high-performance cultures in the US, and has consistently shown high financial returns – so they are doing something right.

Embracing failure is just one way to cultivate an innovation mindset – but it’s one of the most powerful.

More reading to inspire you to f*uck up

• Why Failure is the Foundation of Innovation Inc.com
• The Miracle of Making Mistakes Harvard Business Review
• How Warren Buffet taught this legendary investor the value of making mistakes CNBC

I’m going to the event in Seattle, and looking forward to making my next mistakes.

Look forward to your thoughts.

This post was originally published by the American Marketing Executive Circle.

Medify basically collects these databases in one place and allows people to search on the exact criteria they are looking for.

Source: Medify

Streat decided to go after the consumer market as a B2C play – the need was clearly there for patients and their caregivers. At that point the question became which medical conditions to focus on – such as Alzheimer’s, asthma, autism, breast cancer, kidney disease, leukemia and lymphoma – so they could build out their databases accordingly. Their VC was strongly encouraging them to focus on one of these segments as an initial target audience.

Startups have a particularly urgent need to get the target right for their innovation, because it affects how they build out their product or service, and they have to show results before they run out of money.

But sometimes its hard to evaluate which target is the most viable. There are often many to choose from.

A framework for thinking about targets

Here is a framework I developed with my various clients over the years to help startups assess the attractiveness of possible targets.

The high level criteria required for a viable target are straightforward:

The real power in the framework is that it allows you to build out each of these four buckets with further qualifying criteria to suit your business situation, as in this example.

When you find you have two or more equally viable targets, consider what the tie-breaker criteria should be. For startups, it’s often how quickly you can get to market. If you are concerned about showing traction to your investors, a medium-sized target that is willing to buy now is more attractive than a large target that requires a lengthy sales process.

In Medify’s case, once we spoke with the physicians, hospitals, insurers, drug manufacturers and advocacy groups who made up the health care ecosystem, and aligned our findings against this framework, it became clear which conditions – and therefore which target segment – had the most potential for their innovation.  Once they landed on this, they could solidify their value proposition and build out their product offering.

I look forward to hearing your thoughts.

This post was originally published by the American Marketing Executive Circle.

Macro trends are big social and economic shifts – technology, consumer demographics, culture, or historical turnings – that can reshape markets and create big new opportunities. When you pay attention to the horizon, you can see macro trends coming your way and have time to prepare for and capitalize on them.

In the natural world, scientists are making it easier than ever to tell if a tornado will hit.  The National Weather Service has an experimental strategy, Warn on Forecast, which allows forecasters to issue warnings before storms form, based on high-resolution satellite imagery, radar data and surface observations. This data is fed into a very high-resolution weather model that is run every 15 minutes for a period of time on storms of interest or for areas that could produce storms. The net benefit is that citizens have a lot longer time to respond.

But we don’t have early warning systems in the business world (at least, not this accurate).  And not every macro trend we see in the business world requires a full-out corporate response.  As marketers we need to evaluate trends and decide what to do about them.

An approach I have found helpful is inspired by how communities respond to real tornadoes:  spot the trend, describe it, understand it, predict its impact, and act.

Ten questions to assess macro trends

1. Where do trends ultimately affecting my business tend to start? (spot)

If you track back previous trends that have had an impact on your business, you can to identify some of the sources of these trends.  What past trends can you trace back to their beginnings?  Is there a pattern?

2. What are the warning signs? (spot)

Consider what early signs you could look for and how to measure them, to get further ahead of what’s happening.  For example, if you want to know what’s coming to your grocery store in the next year or two you might want to attend the Aspen Food & Wine Magazine Classic.

3. What trend do we see on the horizon? (describe)

How would you describe the trend?  It might be expressed as a new interest, an emerging concern, or a major shift in consumer attitudes or behaviors.

4. What are the roots of this trend? (understand)

Consider the history of the trend and its causes or inspirations.  Is this trend sparked by a single event, or is it part of a major historical cycle?

5. How fast is it developing / gaining in popularity? (understand)

Are opinion leaders embracing this trend?  Does the trend appear “sticky”?

Diffusion of Innovations theory tells us that when about 16% of the population adopts a new innovation, it reaches a tipping point where people think “everyone is doing it” and adoption accelerates.

6. Who or what will be affected?  (understand)

Consider who, and how many, will be affected.  Will this trend impact your core customers?  What other important constituencies, such as strategic partners, will be affected?

7. What will happen – good or bad – when the trend does take hold? (predict)

Role play what would happen to those affected if the trend takes hold.  What’s the initial impact likely to be?  What follow-on impacts will this cause, in turn?  What scenarios can you envision?

8. What are the likely consequences? (predict)

What are the benefits or how serious will the negative consequences be if the trend takes hold on a large scale?  If they are significant and long lasting, the trend requires a response.

9. What to do about it?  (act)

There are four main strategies for responding to trends:  embrace, counter, deflect, or ignore.  If you believe the trend will stick, and your company is likely to benefit, consider associating with the trend and building products or services to further capitalize on it.  If the trend is likely to threaten your business you can argue against it (counter) or try to change the conversation (deflect).  But if your most important constituencies aren’t affected, consider masterly inaction (ignore).

10. How shall we do it? (act)

Once you decide on your overall strategy, now you have the task of forming a specific plan and assigning people and resources.  Even if you have decided to ignore at trend, you’ll still need to communicate your reasoning to your constituencies.

______________________________________

In the natural world, when a tornado hits, your range of actions is pretty limited:  hope it doesn’t touch your neighborhood, try to out run it, or retreat to your underground bunker.

In business, we have more options, as long as we take a careful look at the trends coming our way.  I hope the questions above will help you evaluate and respond more effectively.

What’s your process for evaluating macro trends?  I’d love to hear.

This post was originally published by the American Marketing Executive Circle. 

(Main photo source: https://weather.com/news/weather/news/experimental-model-weather-tornado-warn-on-forecast)

Amazon has been in the news a lot lately, and rightly so. It’s fascinating to be sitting in their back yard where I get to see some of these innovations for myself.

In early 2017 they announced an experiment with Amazon Go, a cashier-less store of the future which hasn’t opened yet due to technical issues.

(Source: Recode.net)

They are also experimenting with formats that allow customers to buy their items online, schedule time slots to pick them up, and drive to the pickup location where employees will deliver orders to their cars.

(Source: Seattle Times)

And in June Amazon introduced their Dash Wand with Alexa which lets you scan the bar codes for the items in your fridge, or just call them out – mushrooms! – to save to your shopping cart. It even helps you figure out what to do with the food you already have.

And when Amazon announced they would acquire Whole Foods for nearly $14B it sparked a whole lotta news.

Amazon’s latest acquisition of Whole Foods: a few industry perspectives

Local high tech publisher GeekWire’s story by Todd Bishop speaks to how the Amazon acquisition of Whole Foods grocery chain dramatically expands their physical retail footprint.

Felix Richter’s article in Statista speaks to the opportunity for Amazon to use Whole Foods’ distribution and procurement network to boost its online grocery offerings, to further penetrate the U.S. online grocery market – currently the ecommerce market for fast-moving consumer goods (FMCG) sales in the U.S. is only 1.4%, compared with 16.6% for South Korea.

A recent NYT article by Claire Cain Miller speaks to the acquisition signaling the end of the line for many cashiers.

And the Harvard Business Review article by Bill Taylor on Amazon, Whole Foods, and the Future of the (Old) New Economy offers a very thoughtful look at what the deal says about the future of an approach to business, branding, and organizational culture that Whole Foods and Amazon have come to represent.

I think all of these perspectives are valuable, but so far I have not seen anyone comment on what all of this means for the customer experience. As marketers I imagine we are all thinking about this question. So here is my take, and I welcome your thoughts:

4 marketing strategies Amazon seems to be following: a consumer perspective

The Amazon mission statement makes it clear what drives them – it’s serving consumers:

“Our vision is to be earth’s most customer-centric company; to build a place where people can come to find and discover anything they might want to buy online.”

I’m seeing this mission statement brought to life in a few ways:

1. Making Prime more valuable so more people sign up

Just as Gillette once priced their razors low so they could make money on razorblades, Amazon is looking to drive penetration of Prime membership so they can make money on what customers order. Part of the way Amazon markets Prime is by making this membership simple to get. But they are also working to make Prime more valuable, for example, if you sign up for Prime you’re the first group to get access to just about every new device or service they offer.

This includes getting Whole Foods products delivered to your doorstep.

Grocery is not in itself an attractive category – the margins are terrible. But offering grocery as a new category for home delivery increases delivery frequency, and once customers are ordering groceries regularly they’re also throwing in other products, which is attractive.

2. Lowering costs to consumers

When Amazon got into the e-book business they dropped the price to such a low level it put at least one publisher out of business.

Some analysts are already talking about the possibility of Amazon doing this for Whole Foods products.

3. Eliminating friction from the buying process

Consider everything Amazon has pioneered or pursued to make it as easy as possible to buy something from them online: low prices, one-click shopping, easy checkout, easy returns, free shipping.

In store they are experimenting with skipping the cash register entirely. With the Amazon Go app you’ll no longer need your wallet.

With the Dash Wand with Alexa you don’t need to write down your shopping list.

It wouldn’t surprise me if Amazon closes deals with smart refrigerators using Internet of Things (IOT) to automatically reorder your groceries for you, through Amazon of course.

What this eventually all adds up to …

4. Eliminating thinking altogether?

Every marketer works hard to build top of mind awareness and strives to get into the considered set. Amazon is working hard to become the only company you think of when you buy anything.

As a Prime Member, I now default to Amazon when it comes to buying online. After all, I have already paid my $99 for “free” shipping. No matter that this is a sunk cost: psychologically, I’m still trying to get more return from that investment. Amazon is happy because I’m finding new things to buy. I once used my Prime Membership to buy potting soil.

Yes, Amazon sent me dirt.

If you’re not at the table, you’re on the table 

So what does this mean for marketers? Here are 3 resources to help you understand Amazon and what it might mean for your business:

1. John Rossman’s blog is a great place to get a former insider’s perspective on Amazon’s strategy. In talking to him my sense is that he still has a great finger on the pulse of how this company thinks.
2. To stay on top of what Amazon is doing, a great resource is GeekWire.
3. To see what Amazon is about to do, a great resource is CB Insights, which uses their patents search engine to track Amazon’s intellectual property efforts.

While every situation is different, here are 3 strategies to consider if your company lies in the path of Amazon:

1. Hunker down. Prepare for the long haul. Right now Nordstrom, after taking a beating from Amazon, is talking about going private. My guess is, they expect a battle and don’t want to be distracted by pressure to make their quarterly numbers.
2. Double down. Amazon can sell a lot of things to a lot of people, but they can’t sell everything to everyone, much as they would like to. What is it your company does better than anyone else, for a particular audience? How can you become the top of mind choice for this group?
3. Reconsider your options. What business are you really in? Look at this not from the perspective of what you’re selling (buggy whips: product – oriented) but from the perspective what people are buying (transportation: customer – oriented). Ted Levitt’s famous Marketing Myopia article is even more relevant today.

I look forward to hearing how you will be responding!

This post was originally published by the American Marketing Executive Circle.

(Main photo source: Geekwire)

If you work at a large organization you may have anthropologists on staff, or you may engage outside firms to conduct ethnographic research, as in this excellent Atlantic article. And if you can observe these experts in action, that’s ideal.

But there’s also value in doing it yourself, practicing on “friends and family” who use your product or service. The better you understand your customers’ problems and aspirations, not only on an analytical level but on a gut level, the better your innovations will be.

Come on in, the water’s warm

I’m the first to admit, it’s hard to clear my calendar to actually spend quality time with customers.

But every time I do I learn something I never expected. And I come back inspired with fresh inspirations.

The idea is to observe, listen and understand as much as possible. Avoid the temptation to “help” (at least not initially). Take notes and ask open-ended questions to understand customers’ jobs, pains and gains.

3 DIY immersion Ideas

Here are 3 simple DIY immersion ideas to consider.

1. Go to where your consumers live (literally).

In the case of fashion, you might ask people to show you their closets to better understand how you could meet more of their wardrobe needs.

Examples of questions: What are their go-to outfits, and why? What haven’t they worn in five years, and why are they keeping it? What’s missing from their closet, and why?

In the case of food, you might ask people to show you their kitchens to understand the role various products play in their lives. What’s in their pantries and their refrigerators? How did it get there? What occasion is it for? Who prepares this? Who eats this? Why is this out of date item still here?

2. “Shop along” with your consumers.

It’s fascinating to go shopping with your customers to understand what makes their shopping experience enjoyable and productive (or not).

If you’re a retailer, for example, you might investigate questions like: Where in your store do your customers go? What path do they follow? What do they pick up or avoid? How long do they spend in the store? What do they buy, or not buy? You can also ask them to give voice to their inner monologue as they shop.

If you’re a manufacturer, you might investigate questions like: Did they actually see your product on the shelf? Did they consider your product or not? What else did they consider? How did they decide?

3. Ask your customers to show you exactly how they use your product or service.

If you’re selling auto accessories, you might ride along with your customers for a day.

If you’re selling software as a service, you might join them at their mobile phone, tablet or computer to watch them go about their business using your service.

For online shopping sites you can conduct “surfalongs.”

What tasks do they need to accomplish? Where do they run into problems? What do they gain by completing their task? What solutions do they use today and how well do they work? How can you help?

When to conduct customer immersions

If your quality or satisfaction ratings are slipping, you sense your customer experience isn’t resonating, or your customer base is changing, or you just want to refresh your understanding, these are ideal times to use a DIY customer immersion (and perhaps engage an outside expert).

Inquiries can also be undertaken when you want to refocus your team on the consumer. If you are in a business that regularly refreshes its products or services, you can time this activity to fit your product development process. You can also integrate this practice into your annual planning.

I can’t wait to hear what fresh innovations this inspires.

This post was originally published by the American Marketing Executive Circle.

(Main photo source: http://acquandastanford.com/anthropology/)

This time I thought it would be useful to talk about a best practice you can use when you do have a chance to step away from your daily routine.

I call it Tornado Sighting. Otherwise called: keeping your eye on macro trends.

Macro trends are big social and economic shifts – technology, consumer demographics, culture, or historical turnings – that can reshape markets and create big new opportunities.

When you watch the horizon, you can see trends coming your way and have time to prepare for and capitalize on them. Understanding macro trends can also prevent you from being sideswiped by something you didn’t see coming.

Three ways to use macro trends to innovate more successfully

1. Research trends that could affect your business

Several years ago, the New England Journal of Medicine published a study on the Atkins Diet that showed people could lose weight by shifting their dietary intake from carbohydrates to protein. This was reported widely by the media, sparking consumer interest that quickly developed into a craze. The newly appointed U.S. retail president of Sara Lee wanted to understand how this trend would affect the company, which makes both Jimmy Dean sausages and other meat products (Atkins-friendly proteins) as well as pound cakes (evil carbohydrates).

We researched the literature and interviewed a variety of experts: the medical community, scientists, influential chefs, food trend researchers, manufacturers, media and consumers.

It became clear that the Atkins Diet would soon lose popularity, and that the much bigger issue would be obesity, which was not yet getting much press. Sara Lee was able to develop products and marketing plans that addressed the true long-term trend and avoid the distraction of launching short-lived products tied to what ultimately proved a diet fad.

Ask your team to search for information on a continuous basis, and report back on what trends might be coming your way. You can start with global macro trends from sources like Euromonitor for inspiration. Once you have a handle on which trends you want to pay most attention to, assign individual members of your team to each issue, to set them up as internal experts.

2. Identify and learn from your expert network

Of course, you can’t become an expert on everything, and the good news is that you don’t have to. There are plenty of people out there to learn from.

If your target audience is millennials, for example, find out who understands them well. Experts could include other companies marketing to the same target, psychologists, intergenerational consultants, even a panel of Millennials themselves. Follow their work; potentially enlist their active help.

If your company is incorporating virtual reality (VR) as part of your customer experience, for example, find out what companies are pushing the boundaries on VR and related technologies, what reporters and analysts are covering them, and follow them. CB Insights, a publication that serves the venture capital community, covers emerging startups and is a good place to hear about new technologies.

Conferences are a great way to immerse your team. This is also a great time to bring in your agency, as they are in the business of understanding different target audiences, technologies and cultural trends.

3. Build macro trends into your annual strategic planning process

At Nordstrom, in preparation for a Board meeting, we were once asked to investigate “What’s the future of service?” This was an interesting question coming from Nordstrom, as they are considered by many to represent the ultimate in service. But Nordstrom is humble enough to realize that they had to continue to earn that reputation every day.

We conducted secondary and primary research, including online anthropology, to understand how people talked about service, what companies they associated with great service, and why. One of the key findings was that service didn’t have to involve people – wow. The Board and executive team immediately saw the implications for Nordstrom’s brick-and-mortar stores and online business. As we see the rise of Amazon in fashion today, it’s obvious that they have begun a major competitor. Nordstrom will continue to evolve to serve their customers better.

It’s good discipline to look at macro trends as part of your strategic planning process. Make this its own section. Report on macro trends you see on the horizon and the strategic implications for your company. You can own this yourself, but it’s even more effective if you can invite your counterparts from other departments to contribute their thinking as well.

Now what?

It’s not enough to simply become aware of what’s going on, obviously. You’ll need to decide what should you do more of, less or, or change. to stay competitive.

What macro trends should you be paying attention to? I’d love to hear. 

This post was originally published by the American Marketing Executive Circle.

(Main photo source: http://www.csmonitor.com/Science/2011/0418/Can-you-outsmart-a-tornado-Take-our-quiz/warning)

As someone who built my early career at PepsiCo I always gravitated to the unknown, and – let’s face it – I enjoyed disrupting the status quo. I had to find ways to innovate on big brands and convince the company to back those efforts (my bosses helped a lot with the latter!). At the time I thought of it as deliciously subversive behavior but looking back on it I now understand that PepsiCo fully supported its employees to innovate. I was fortunate to have worked there.

Today I wanted to share some best practices that helped me rise above the day-to-day work to innovate more successfully. I’ll call them “Periscopes.”

Three “Periscope” innovation best practices

1. Look for “Eureka Moments”

Eureka moments are insights that cause you to see something new, different and profound about your consumers. Often they turn conventional wisdom on its head and reveal big untapped opportunities.

Ask provocative, naïve questions.

What would it take for our product to be 10 times as good as it is today? What would it take to be known as the best service provider in America? CEOs and new employees tend to be good at this. So are outside thought partners.

Questioning can happen as part of a formal process or opportunistically, but there needs to be a process to ensure the best ideas get developed and tested.

Question your most deeply held assumptions.

Sacred cows are a great place to start.

At Frito Lay, back in the days when mom was the main grocery shopper, we traditionally targeted female head of households for Fritos, because we believed moms were buying corn chips for their kids’ lunches. Then we asked a different question – who is actually eating Fritos? It turned out that dads were the real heavy users, so we changed our marketing to target them.

Ask questions like: Do we have the right target audience? Is there a new audience that we have not thought about? Has the value proposition changed in some way? Is there a different benefit we haven’t considered?

Search outside your industry.

Someone somewhere has solved your problem before.

King County Library System wanted to make it easier for patrons to find materials on their own, without having to ask a librarian or search a catalogue.

We interviewed Disney on how they managed way-finding at their theme parks. We looked at how the British Museum helped visitors from all over the world find the highlights of their collection. We looked at how hospitals channeled people to the emergency room when they needed urgent care in a crisis. Those insights led to best practices that KCLS used in designing their new libraries. 

2. Set your thinking free

People often become too anchored to how their company operates in the present day, which can make it difficult to envision breakthrough possibilities for the future. To free your team from this trap, create structured ways for them to break out of their day-to-day mindsets.

Your competitors will take your future from you if you don’t seize it for yourself.

Imagine your success far into the future.

I worked with the division of a technology company whose leader wanted to get her team thinking in more strategic and longitudinal ways.

To prepare for a strategic planning session, I asked team members to gather and synthesize facts that would be important for the discussion. They came to the session primed to contribute.

We started the session with this question: “It’s 20 years from now. You’re about to give a talk and your company is being recognized for a major achievement. Where are you – being interviewed by Fortune? On stage at TED? Accepting a Nobel Prize? What did your company do and why was it so special?”

At the meeting, we talked about their various visions of success.

That exercise opened up a more robust discussion about what goals would make sense for the division longer term, and what strategies would be required to achieve them. They weren’t constrained by what they thought they could or couldn’t do. Their leader was able to use this discussion to set the division’s future direction with the team engaged and fully prepared to act.

Alternatively, return to the past.

What was the passionate spark, the core purpose that got your company started? Have your employees lost that narrative?

Starbucks at one point considered going into furniture – that business didn’t leverage their core equities. CEO Howard Schultz brought them back to their roots, saying, “We are about the coffeehouse experience – about community, a place for people to get together and exchange ideas.” They changed their mission statement to:

“To inspire and nurture the human spirit – one person, one cup, and one neighborhood at a time.”

This statement is far more inspiring than “Let’s go for five more share points.”

On a practical note, when you engage your team around the bigger purpose your company or brand serves, they can make better strategic decisions and it will help them decide what belongs and what doesn’t belong on their priority lists.

Ask questions that force you out of your normal point of view.

For example: Imagine you are a startup company in your market. What would you do to disrupt your industry?

Or, pretend you are your most hated or feared competitor. What could that rival do to take your company down?

Or, pretend you are a market leader from another country, entering your market. How might they approach the opportunity?

Then ask what might that imply for what you can do differently.

3. Invite focused play into your office

Offer opportunities for focused play, to create a climate for your employees to attack your most pressing business problems in unstructured, untraditional ways.

The 2010 Nobel Prize for physics went to Andre Geim and Konstantin Novoselov for their work on graphene, a material which is expected to revolutionize the electronics industry.

Their lab had a Friday afternoon tradition of doing crazy experiments, and that’s where their breakthrough began. The Nobel committee cited the scientists’ playfulness when they awarded the prize.

Neuroscience shows our brains work better when they are relaxed. Companies need ways to encourage creativity and help employees make unexpected connections that lead to big ideas and solutions.

Conduct special work events to tackle an important problem.

Curaspan Health Group organized a weekend hackathon where employees created apps to deliver better health care. The winning project was funded and the winners got the opportunity to lead the project.

Once a year, or even once a quarter, you might consider setting aside a day to form teams and solve a particular problem. Offer a prize to the one with the most usefulness. Or consider an employee choice award. Either way, make sure the solution is acted upon and the right people are rewarded.

Incorporate play on a small scale during brainstorming sessions.

Time brainstorming sessions for when your team is kicking off a project or when they have hit the wall on a particular problem.

Create exercises that purposefully invite exaggeration to make people comfortable sharing their closer-in ideas, for example. Set the climate for everyone to feel comfortable, particularly introverts who need time to process their ideas on their own before discussing them.

The beauty of these practices

They don’t cost much. Just a mind shift.

I’d love to hear what other practices you find helpful. 

This post was originally published by the American Marketing Executive Circle.

(Main photo source: http://www.vpdm.ca/periscope-marketing-strategy/)

Their Idea to Plan innovation workshop is geared towards UW researchers who want to commercialize their work. It focuses on the problem to be solved, the customer segment, the market reach, and the value proposition of each teams’ innovation. The final session concludes with the development of a business pitch. Throughout the process each team is supported by Entrepreneur In Residence mentors.

I’d presented on value propositions at CoMotion before, as part of their Fundamentals for Startups series. In preparing for that session I wanted to understand what different frameworks were in use, as I have found nobody seems to agree on exactly what they should include. I went through my personal files, conducted a literature search, checked out previous UW presentations and found some great examples:

You have almost certainly heard of the framework articulated by Geoffrey Moore in Crossing the Chasm:

For (target customer – beachhead segment only)

Who are dissatisfied with (the current market alternative)

Our product is a (new product category)

That provides (key problem solving capability).

Unlike (the product alternative)

We have assembled (key whole product features for your specific application).

Michael Skok, Partner at _Underscore.VC, and Entrepreneur In Residence at Harvard Business School, builds on Moore’s framework and extends the discussion on value propositions in an excellent article in Forbes. His version is a little shorter:

For (target customers)

Who are dissatisfied with (the current alternative)

Our product is a (new product)

That provides (key problem-solving capability)

Unlike (the product alternative).

Steve Blank, Silicon Valley serial-entrepreneur and academician and launcher of the Lean Canvas movement, uses an elegantly simple sentence:

“We help X do Y doing Z.”

All these frameworks are useful, but one of the things that surprised me was what many value propositions didn’t include.

What about emotional benefits? What about costs?

When I worked for PepsiCo we were trained to express our value propositions in terms of emotional benefits, and how those in turn could tap into fundamental need states. One example is Pepsi tapping into teens’ desires to forge their own identity by positioning Pepsi as the soft drink of choice, thus repositioning Coke as the default drink for adults. The science is beginning to show that all decision makers are influenced by emotional and often unconscious factors, so it makes sense that all companies consider this.

We were also taught that a value proposition answered the consumer’s question “What I get versus what I pay” – this price can be time, money, perceived risk, potential loss of face, etc.

Think about the last time you bought a car, for example.

Did you say to yourself, Wow, this car drives like a dream, I’ll take it.

Or did you think, Boy I love this car but it’s going to require a lot of maintenance and my spouse will kill me if we have to bring it in all the time. Is this a smart decision?

Neither emotional benefits nor “price” was reflected in the value proposition statements I was seeing. So I developed a version that did:

For (target customers who have a problem – include their emotional struggle)

We offer a (category you compete in/with)

That delivers (benefit – emotional or functional)

Because (reasons why they should believe you – specific proof points that differentiate you).

All that’s required is (what the customer pays in price, time investment, risk, etc.).

As you develop that one, crisp value proposition statement that will galvanize your organization and help you attract investors, you’ll want to choose the framework makes the most sense. If your audience is wedded to a particular framework by all means use it.

But don’t let that stop you from innovating and create a framework of your own, even if you have to do it in the privacy of your own office.

Six questions to consider

1. What are the emotional and even subconscious benefits of your product or service? What fundamental need states can you tap into?
2. What is the mental and emotional price you’re asking your target audience to pay, and is their internal ROI high enough for them to take action?
3. How does your value proposition vary for different target market segments?
4. What are the value propositions for your purchasers, end users, channel partners, and any other stakeholder groups you need to satisfy?
5. What’s the value proposition for the individuals who need to say yes – your Sales team is certainly thinking about this. Are they heroes at budget time? Do they risk losing their jobs if they buy your product or service and it doesn’t deliver as expected?
6. How does your value proposition change as people buy and use your product over time? Buying a gym membership is a lot different than going to the gym. Just sayin’ …

Anyone who would like to see my value proposition presentation, feel free to download it from my website. I would love to hear from any of you who are exploring this question.

This post was originally published by the American Marketing Executive Circle.