Category Archives: Book Reviews

Business Model Generation

Business Model Generation Book Cover

If you’re looking to start a new business or innovate your existing business, read Business Model Generation. The book creates a language to clearly articulate business models and shows how the language can be used to analyze and improve your own business strategy.

The authors assert that every business is comprised of 9 building blocks: customer segments (who you are targeting), value propositions (the problems your company solves), channels (how you communicate with your customers), customer relationships (the style of the communication), revenue streams (how you make money), key resources (what assets you need), key activities (what you must do), key partnerships (who you need to work with), and cost structure (the costs to run your business). With these building blocks (placed into a business model canvas) you can ensure your business model is clearly articulated, and can compare your model to other businesses (including your competition).

But simply classifying and comparing your business strategy components isn’t enough to help you innovate your business. You need to take some breakthrough actions. The authors showcase six different activities (that can be done solo, in small groups, or in a facilitated workshop format): customer insights (using an empathy map – to understand what your audience says, does, and feels), ideation (using the business model canvas and “what if” questions), visual thinking (using images to make ideas and processes tangible), prototyping (instead of talking about doing, do something small and learn from it), storytelling (create a memorable story to ground the “soul” of the business/idea), and scenarios (do actual walk-throughs of the business to debug the processes).

Think of this book more as a class than a casual read. It requires you to sit down and carefully consider the key parts of your business (no more “waving your hands”) to create a blueprint that boils your business down to the essentials. And with these essentials clearly articulated, you’ll have the tools to innovate your business process, pivot your business goals, and ensure you’re well poised against your competition.

What Customers Want

What Customers Want Book Cover

What Customers Want discusses a concrete system to create opportunities in your organization that will affect your bottom-line results. While the usual advice for creating opportunity revolves around “listening to the voice of the customer” or general brainstorming initiatives, neither of these will result in something that’s clear, measurable, and actionable.

1. Identify the specific outcomes that a customer is looking for in achieving their job (using your product or service). An outcome isn’t a specification (tangible product details), nor a need (“cheaper” or “more reliable”), nor even a benefit (“easier to use”) – since in most cases these aren’t measurable nor focused on what really matters. Instead outcomes contain the either words “minimize” or “increase”, as in:

  • Increase the likelihood that the blade will begin cutting precisely on the line
  • Minimize the amount of training required to use
  • Minimize the time between turning it on and being able to use

For most jobs, there are between 50 and 150 desired outcomes. Your first job is to unearth them (by conversations, surveys, and focus groups). These outcomes may be blindingly obvious or hard to tease out. But capturing these outcomes is vital to ensuring your innovation process proceeds with few surprises.

2. Survey your (prospective) customers regarding the outcomes identified, asking them to rate the importance of each of these outcomes (on a scale of 1 to 5, where 5 is critically important and 1 is not important) and also their satisfaction with the product (or services) are using address these outcomes (also on a scale of 1 to 5, where 5 is completely satisfied, and 1 is not satisfied at all). During the survey, don’t forget to also obtain their physical location, job title, and contact information.

3. Calculate your opportunity scores (as well as the scores for your competition’s offering) using the formula: Importance + max(Importance – Satisfaction, 0). Something that’s important but is well-satisfied isn’t an opportunity. A top score would be 9 (critically important but not satisfied). A bottom score would be 1 (not important and completely satisfied).

4. Rank your opportunity scores to identify underserved and overserved markets, and a comparison matrix of your offering versus your competition. This will inform you what your product is missing/surpasses (relative to the competition)(overserved) and also what clearly not being addressed well (underserved).

5. Segment your surveyed responses based on commonalities of job needs (not demographics). Common needs will allow better targeting of your offering and marketing message.

6. Innovate solutions to address the needs. Instead of holding a general “How can we make our product better?” brainstorming meeting, focus the brainstorming goal to the top opportunities (step #4). Add the additional constraint “…without increasing the price” to focus on tangible solutions, rather than blue-sky thinking. Test the ideas based on how well they will change the overall opportunity score, not simply based on how easy it is to do or corporate momentum. The results may challenge normal orthodoxies and therefore create internal friction.

By using a straightforward metric to guide your internal innovation process, you’ll avoid team misunderstandings/miscommunication and increase the likelihood that you’ll have a breakthrough result.

Happy Money

Happy Money Book Cover

Happy Money tells how to bring more joy into your life through your purchases (based on scientific research). It’s not about how to increase your conspicuous consumption. It is about making conscious choices on how to transform your existing spending plans into something that will make you truly happier. And these concepts have appeal for both your personal and your business lives.

The five principles aren’t earth-shattering. In some cases you may have already had a hunch about them, but until now, would be hard-pressed to prove their value.

The five principles described are:

  1. Buy Experiences. Studies have shown that many purchases lead to buyer’s remorse, because the reality of your purchase falls short of the dream. Over time, you get used to your purchase – your short-term happiness doesn’t last. Contrast this with experiential memories – their pleasure increases over time. Experiences also connect us to others, while purchases keep us separate from others. In your business marketing, consider focusing your message on the pleasant experience clients have with your offerings (the happiness benefit) rather than the product/service you provide.
  2. Make It a Treat. If you regularly purchase the same item to bring your pleasure, you’re more likely to take it for granted. The first fresh-baked cookie tastes delicious. The second, is good, but not as amazingly delicious. The tenth, even less so. Too many, and it becomes a chore to eat more. Smaller, less-expensive, novel treats are more likely to bring you long-term happiness than a routine purchase. In your business marketing, consider turning a regular offering into something seasonal – something people will look forward to getting when the time is right.
  3. Buy Time. People tend to underestimate how much time things take, and often try to pack too much in too little time. The end result is much less happiness. Focus your purchases on time-savings opportunities to give you some quality time back into your life. By equating time = money, you enjoy time less, and therefore decrease your happiness quotient. By giving away time (by donating your time) you also create the feeling that you have more time in your life. In your business marketing, focus your message on tangible ways your offering can give people back more time into their busy days.
  4. Pay Now, Consume Later. Our culture encourages us to consume now, and pay later. This practice encourages spontaneous purchases (short-term pleasure) at a cost of increase stress when the bills arrive. As A.A. Milne writes in Winnie-the-Pooh: “Well,” said Pooh, “what I like best,” and then he had to stop and think. “Because although Eating Honey was a very good thing to do, there was a moment just before you began to eat it which was better than when you were, but he didn’t know what it was called.” It is often the anticipation is better than reality. So, to increase your enjoyment, defer a purchase to allow you more time to enjoy the possibilities that the purchase will bring. In fact, if you purchase something now, but wait to receive it, you’ll doubly win: you’ll delay gratification and when you do get the purchase, it’ll feel like a free gift. In your business marketing, consider an offering where people pay up-front for a regular purchase, but receive it a bit later – but with excitement surrounding its arrival.
  5. Invest in Others. Just as donating your time can create a feeling of having more time available, so too does donating money to owners create a feeling of wealth. Even better than simply donating anonymously, is to donate to someone specifically. Such a donation creates connection (see principle #1). In your business marketing, find opportunities to allow your customers to make a difference in their communities – or – provide a way for people to feel connected to others.

Why not invest in your own (business’s) long-term happiness?

 

What Matters Now

What Matters Now Ideas Book Cover

This book isn’t for people who like their management structure, like safety of working in a hierarchical model, or like entrusting their future to others that are wiser than they are. This book is for people who believe that traditional business models are broken and are longing for something better.

Instead of promoting the usual management “feel-good” strategies, Gary Hamel touches on core problems and offers some innovative hope:

  • Why is it that as managers we are perfectly willing to accept the idea of a company dedicated to timeless human values, but are, in general, unwilling to become practical advocates for those values within our own organizations?
  • …if you’re a consultant who helps other folks to innovate, you may be one “spending freeze” away from posting yourself at a busy intersection with a hand-lettered sign that reads, “Will brainstorm for food.”
  • If you want a measure of just how difficult it is to stay innovative, consider this: two-thirds of the businesses on Fast Company‘s 2009 list of the 50 most innovative companies didn’t make it into the 2010 edition.
  • What limits innovation in established companies isn’t a lack of resources or a shortage of human creativity, but a dearth of pro-innovation processes (employees don’t regularly practice innovation).
  • The perceptual habits of successful innovators: unchallenged orthodoxies (“what are our business assumptions?”), under-appreciated trends (“what’s changing now?”), under-leveraged competencies and assets (“what are we really good at?”), and unarticulated needs (“what emotional clues are we missing?”).
  • How can your company duplicate Apple’s success? Be passionate. Lead, don’t follow. Aim to surprise. Be unreasonable. Innovate incessantly and pervasively. Think like an engineer, feel like an artist.
  • Why does excellence die? Gravity wins (big companies are harder to change than smaller), strategies die (planned actions are out-of-sync with real-world results), and success corrupts (defensive mindset).
  • 21% of employees surveyed (from 2007-2008 Global Workforce Summary) were truly engaged in their work, 38% were mostly or entirely disengaged, with the rest in the middle. What’s wrong with business-as-usual?
  • A hierarchy of human capabilities at work: Passion > Creativity > Initiative > Expertise > Diligence > Obedience. The last 3 capabilities are commodity skills.
  • It’s not because work sucks; it’s because management blows.
  • Create human-centered organizations (such as: Gore, Whole Foods Market, Morning Star Company, and HCL Technologies):
    • Decentralize wherever possible
    • Emphasize community over hiearchy
    • Ensure transparency in decision making
    • Make leaders more accountable to the led
    • Align rewards with contribution, rather than with power & position
    • Substitute peer review for top-down review
    • Steadily enlarge the scope of self-determination
  • A Manager’s goal is to maintain status quo. A leader’s goal is to break it.
  • “Moonshots” (audacious goals) for management innovation: mending the soul, unleashing capabilities, fostering renewal, distributing power, seeking harmony, and reshaping minds.

Bonus: Listen to Gary talk about his book at this recent Commonwealth Club event.

 

A Technique For Producing Ideas

Technique For Producing Ideas Book Cover

A Technique For Producing Ideas explains a very simple, very basic, and very important 5-step process for creating ideas. The concepts aren’t earth-shattering, but well time-tested.

Step 1: Gather Raw Material. Instead of waiting for inspiration to solve a problem, start by collecting both specific (depth) and general (breadth) knowledge. Ideas are often born by combining things in a new way.

Step 2: Digest Raw Material. This step is probably the hardest to do when you’ve got a looming deadline. But you need to take the time to ponder the raw material you gathered to become deeply familiar with it. You’re not actively looking for a solution, you’re letting the solution find you magnetically. Find something of interest, and combine it with something else. You’re putting together a puzzle, but don’t know what the final picture will look like yet.

Step 3: Take a Break. After you’ve gathered, and digested, you need to let it ferment mentally. Your mind is expert at juggling the bits to create a whole “in the background”. Instead of staring at the problem and burning yourself out, walk away physically from it, and do something enjoyable. While relaxing (and recharging) your mind is still trying to solve the problem you’ve presented it.

Step 4: Constantly Think About It. Almost magically, you’ll likely have your “Idea” seemingly out of thin air. It’s your subconscious reporting in with the answer you sought. This is what most people think that great idea people do – they magically “get” answers. They do so mostly because they’ve done their mental homework – and prepared to innovate.

Step 5: Test It. Just because you have what you think is the “answer” doesn’t mean that it’s complete or even correct. Patience. Test it in the world – open yourself for criticism or ensure that the idea truly addresses the core problems you’re trying to solve. Your initial idea may simply be the “seed crystal” – the thing that triggers the full solution from a small part.

Generating ideas in a modern, rushed society is hard. Remember, if the solution was easy – it would be obvious. But patiently stalk the idea by understanding, digesting, and fermenting. Then, harvest your ideas and enjoy them.

The Rare Find

The Rare Find Book Cover

The Rare Find is about identifying (and then hiring) people who are exceptional. If you’re an employer looking for a better way to attract and interview “stars”, this is a great read. However, many of the ideas contained are also ideal for marketing your business as well as for your own job application.

Exceptional talent isn’t always obvious. If someone did a similar task for a previous employer, then it’s possible they may be able to repeat their success. However, sometimes the true skill is really an aptitude that isn’t easily taught, and is instead found in related fields (sport competition, military training, improvisational acting, debating, etc.).

Dr. James Weiss (associate dean at Johns Hopkins) seeks to get to the root of a medical school candidate’s character by asking applicants to answer questions about their rewarding experiences, overcoming adversity, areas of pride, and moments of exclusion. These same questions can be asked of your job applicants, but the answers are also great fodder for developing a compelling “About Me” bio for your business.

Champions do three things right: they take a lot of small risks, they make the most of their fortunate hunches, and they let go of mistakes before these become ruinously costly. These same personal qualities can likewise be applied to your business: keep learning and keep evolving. Focus on the question “What can go right?” and not “What can go wrong?”

Resumes of some exceptional talent don’t necessarily look typical. There may be a number of seemingly unrelated jobs and talents. People may leave jobs after a relatively short time because they weren’t challenged. They seem to bounce from thing-to-thing and never “grow up”. But these people are developing a breadth and depth of experience that your typical employee doesn’t have. And the best have “grit” – the ability to persist (and in some cases, thrive) in the face of daunting challenges.

Interviewers tend to also not know how to interview people well. They tend to want to ask “safe questions” and hear about successes. They want their applicants to be clones of others that are already employed (so they’ll fit in easily). Interviews don’t actually test the ability of an applicant to do the job – just the ability to sell them self.

If you’re trying to grow your team (or non-profit), ensure you create big, shared goals. Big goals keep talented people ever-striving. Shared goals keep teams cohesive. Stories about these goals will help instill a deeper culture, and give new team members a way to grasp the depth of the shared values.

If you’re trying to attract new employees (or even clients), consider a contest that’ll attract the right people to enter. Passionate people. Smart people. Under-challenged people. People from across the globe. A contest will create a community of like-minded members for you to communicate with (or hire), and at a fraction of the cost (and time) you would normally take to attract this tribe.

There’s no guarantee that your exceptional talent (or business) will necessarily be highly rewarded by following these ideas. But you’ll be better positioned to be noticed when the time is right.

Reality In Advertising

Reality In Advertising Book Cover

First published in 1960, Rosser Reeves answers to the question “What makes an advertising campaign succeed?” are still relevant – and frequently still ignored.

He defines advertising simply: “Advertising is the art of getting a unique selling proposition into the heads of the most people at the lowest possible cost.”

He contends that you must first establish a baseline measurement of penetration (the number of people who do and don’t remember your advertising). With this knowledge, you can measure the effectiveness (over time) of your advertising (called usage pull).

The author states that if 50% of your audience knows your message, you shouldn’t assume that it’s the same 50% over time. Therefore, by changing your advertising/marketing message to keep it “fresh” is likely to backfire – you’re losing the memory of your message (which is hard fought and easily lost). Be very careful if  your marketing team (or consultant) encourages you to enliven your message – you may cause your previous message to be forgotten.

As in most marketing messages (including talks), your message needs to revolve around a single concept. Easily remembered. Easily recalled. Easily reinforced. While it’s okay to change the “color” of your advertisement, don’t change the single concept.

Your unique selling proposition (USP) must include these three elements (and few campaigns do!):

  1. Your marketing must make a specific claim (“Buy this product, and you will get this specific benefit.”)
  2. Your claim must be unique (either something that is intrinsically unique or a something no one else is saying)
  3. Your claim must sell (pull new customers for your product).

From your USP, you build your brand image by sharing an underlying feeling that reinforces your message. But if your feeling overwhelms your marketing, then it produces a “vampire” effect – people remember the feeling but not the message. As an example, how many people remember what product is being pitched on well-discussed Superbowl commercials?

The bottom line: If you don’t ground your advertising in well-tested principles, do so at your own risk.

Masters of Disaster

Masters of Disaster Book Cover

“In the Information Age, there are two kinds of people, two kinds of institutions, two kinds of organizations: those who have been hit with a crisis and those who haven’t been around very long” – so begins Masters of Disaster (by Christopher Lehane, Mark Fabiani, and Bill Guttentag).

While crises come in all sizes (from public political exposé or a private email goof), your response to a crisis should follow their “10 commandments of damage control”, which can be summarized as: “Don’t try to outsmart anyone. Take blame as appropriate. Show how this won’t happen again.”

No matter  how much we’d like to portray ourselves or our businesses as perfect, the reality is we’ll mess up – whether unintentionally or by less-ethical behaviors. Rather than trying to become a “spin expert”, become a “transparently honest”. You don’t need to reveal all your dirty laundry, just enough to show your target audience the current scope of the issue, and your future strategy to remedy and avoid it.

Commandment I: Full Disclosure
Commandment II: Speak to Your Core Audience
Commandment: III: Don’t Feed the Fire
Commandment: IV: Details Matter
Commandment V: Hold Your Head High
Commandment VI: Be Straight About What You Know, What You Don’t Know ….
Commandment VII: Respond with Overwhelming Force
Commandment VIII: First In, First Out
Commandment IX: No Swiftboating
Commandment X: They Dissemble, You Destroy

 

Bonus: Watch Chris Lehane share the commandments in this Stanford Graduate School of Business video.

Rework

Rework Book Cover

A quirky book that flies in the face of conventional business advice, Rework (by Jason Fried & David Heinemeier Hansson) talks about the bottom-line issues that you need to get your product out the door and your business launched. The writers speak from their experiences launching 37signals (maker of Basecamp) with such thoughts as: Instead of trying to do it “right”, do “something”. Instead of trying to make it “perfect”, just make it “good enough”. Stop talking about doing something and do something, then talk about it.

As a bonus, here’s the chapter about Marketing:

Marketing is not a department

Do you have a marketing department? If not, good. If you do, don’t think these are the only people responsible for marketing. Accounting is a department. Marketing isn’t. Marketing is something everyone in your company is doing 24/7/365.

Just as you cannot communicate, you cannot not market:

  • Every time you answer the phone, it’s marketing.
  • Every time you send an e-mail, it’s marketing.
  • Every time someone uses your product, it’s marketing.
  • Every work you write on your Web site is marketing.
  • If you build software, every error message is marketing.
  • If you’re in the restaurant business, the after-dinner mint is marketing.
  • If you’re in the retail business, the checkout counter is marketing.
  • If you’re in a service business, your invoice is marketing.

Recognize that all of these little things are more important than choosing which piece of swag to throw into a conference goodie bag. Marketing isn’t just a few individual events. It’s the sum total of everything you do.

Check Your List Twice

A marketing checklist

(Photo by Oregon Department of Transportation)

“Those who cannot remember the past are condemned to repeat it.”
George Santayana

Before I send out my monthly newsletter, I run through a set of steps to ensure that my newsletter makes the right first impression. But last month, I took a shortcut, and goofed (again).

First of all, here’s my simple checklist:

  • Send a copy of my newsletter to a few different email addresses I maintain. My goal is to make sure it looks right, and is deliverable.
  • Read every word of the newsletter. Even though I’ve written all of the articles, it’s easy to think I remember what I said. Sometimes, there’s a typo or there are problems with using special symbols in the newsletter that only show up in email programs.
  • Click every link. Ensure that every link in the newsletter works correctly. While this would seem obvious, I missed checking all the links, and had a bad URL in my newsletter.

While making a marketing mistake isn’t life-threatening, it feels embarrassing. On one hand – having my readers point out my gaffes makes me feel dumb – on the other hand – it also lets me know that people want to read everything I write.

Checklists are a time-honored way to ensure you don’t screw up the big or small things. As a private pilot, I was taught my pre-flight checklist well. Walk around the plane, touch everything, look at every gauge, get all current weather conditions, double-check things now (before it truly matters). As you gain experience, the desire to take shortcuts increases. Of course everything works. Of course I know that certain things aren’t that important. Experts know that a checklist is there to save them from their own blindness. Experts depend upon the monotony of a boring list to ensure that they don’t miss anything. Problems will appear, but there’s no good excuse not to deal with avoidable problems.

The Checklist ManifestoThese points are drilled home in The Checklist Manifesto (by Atul Gawande). Atul was inspired to improve surgical problems by developing a safe surgery checklist. Noticing how many details are impossible to remember, he worked with airplane pilots to understand how and why flight checklists were developed and how these checklists resulted in “happy endings”. He then applied the same practices to surgery, refining the checklists until the results were dramatically better.

If you have a system for doing a task, write it down (and test it). If you develop a system for your clients, test it first, then write it down. The bonus for having a written system is that you can easily delegate it to others, and instead focus on the parts of your business that you want to, rather than have to.