Category Archives: Creating purpose

Have our universities lost their purpose and become value extractors?

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It was reported on the BBC this morning that fewer than two in five students think they are getting value for money from their courses. This is based on a survey of 14000 students. The students want more teaching time. They want more contact with the teachers in return for their £9250 a year.

York University - Value Extractors

Graduates outside the university library at York

What is going wrong?  One response was quite alarmingly complacent. The spokesman said that things were getting “better” as 38% of students were satisfied with the value for money vs 35% last year. This is a statement that seems to miss the point about the 62% who are dissatisfied.

This reminded me of my son’s recent experience at York University and his reaction to what he was offered and how the institution related to him. He liked his teachers, he wanted more input from them. He received about 5 hours a week input. But he felt the university was more preoccupied with new buildings and a massive plan to expand the capacity of the university. Today the Universities Minister Sam Gyimah, warned universities about generating courses just to put bums on seats

My son also noticed the very high salaries paid to the top management who remained invisible to students and he felt did not contribute much. (The vice chancellor received £293,000 last year, so it needs 32 students fees cover this alone).

So what is wrong? Why are so many students dissatisfied or frustrated? I wonder if the government and the new professional management has created a whole new breed of value extractors who have lost sight of the purpose of the universities. The focus seems to have shifted from quality research and education to expanding the numbers and generating income to fund the expansion.

I believe the future value of our universities is the research they do and education they provide to students. Both of these are a public good that benefits the whole of society. This is their purpose. The fact the students report dissatisfaction with the education should be a major cause for alarm. The students have pointed to one thing that would raise quality and that is more contact time.

My daughter had a different experience at Cambridge. The students at Oxford and Cambridge are more satisfied as they get double and treble the contact time offered by other universities. This is largely funded by Alumnae grants and donations. But again their higher satisfaction indicates that contact time matters.

My definition of value is based on what value the universities add by what they do, the research and education. This is very different from the value definition provided by ministers and the universities. This is just about the price that students can charge for themselves when they leave. The value is about the higher earnings that the students will enjoy in later life. Interestingly, the Institute for Fiscal studies is going to produce a report on how different courses and universities deliver on this.

This distinction is important.  A value-adding brand or organisation starts by focusing on its purpose which should be based on what it can do to help its customers (in this case teach them well). A value extracting approach just looks at the numbers and says what is the least I need to put in to get the highest price and quickest return.

The problem for the value extractor is that the customers tend to rumble what they are up to and look elsewhere. There were 4% fewer applicants for university places in 2017.  In contrast, a value adder attracts more customers and keeps the ones they have. They create long-term value.

I hope our universities are paying attention, we need them to work for our country.

What is the purpose of business? (part 1)

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What is the purpose of business

Photo by rawpixel on Unsplash

In business “purpose” is initially expressed in terms of making a profit or maximising shareholder value. Business is considered a purely financial entity. Is that right or should a business do more than that?

Maximising shareholder value was the defining objective for many business leaders and became very popular with top business executives in the 80’s and 90’s. Later it was then criticised for making businesses focus just on the short-term results demanded by Wall Street and The City.

There has also been much discussion about businesses having a purpose beyond money. Some people argue that business needs this. Paul Polman of Unilever talks about the idea that businesses must create long-term value. To do this Unilever has a 10-year sustainable living plan focused on environmental impact, removing gender bias, ensuring suppliers are sustainable, caring about public health and nutrition. Even though these initiatives may not maximise short-term returns, they will ensure Unilever creates long-term value. So, in the end, Paul Polman provides a financial justification.

Some brands convey they have a purpose beyond money. Disney defines itself as existing to “Create Happiness” Sony talks about “providing customers with “Kando” (i.e. to move them emotionally – and inspires and fulfils their curiosity). This influences everything they create and do. This kind of mission and purpose is designed to ensure their products and services will attract customers, that they can motivate and attract staff and the business creates real value for customers, staff and shareholders.

There are agencies set up to help brands find their purpose and use it to transform their business and go beyond just profit and financial goals e.g. Purpose, Caffeine, Brand Pie.

My friend Simon Tuckey talked to me yesterday about the fact that the reputation of corporate business with the wider public is at an all-time low. Business leaders need to address this and one way to do that is to demonstrate how the wealth they create and the activities they perform help to the wider community through finding another layer of purpose.  This could be supporting charities or local community initiatives or new business initiatives that are seen to contribute (add value) rather than just take (extract value) from society.

I have struggled with much of this discussion about purpose. On the one hand, having a purpose that is not just financial makes sense and is intuitively attractive. I have long thought that businesses are like people. We all know as individuals, if we purely behave selfishly, we find it harder to achieve what we want. One aspect of this is that people with purpose are usually more attractive and are more likely to attract followers than people who seem to have no purpose and just drift.

For a business entity, similar rules apply, if they solely behave selfishly and purely financially then it defeats the goal to maximise financial returns. Then customers turn away, people do not want to work for them and this means investors find the investment less attractive. As a result all businesses, to differing degrees, invest in their reputation with customers, programmes to attract and reward and care for staff and programmes to manage and enhance their corporate reputation.

But businesses are selfish, financially motivated entities which have to perform financially to survive. So sometimes, this discussion of purpose can get out of control. I believe that businesses should not distract themselves with a purpose that is not connected to its financial purpose, nor one that is unrelated to the core activities.

Business must have a purpose that is financial. Paul Polman alluded to this when he says that he wants to create long-term value

My next post (part 2) will describe why this matters and how this works.

Pensions firms will they attract and educate or just extract?

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Rob Gardner RedingtonRob Gardner of Redington has just thrown down a challenge to the Pensions industry. click here. His quote (below) is in response to the success of Auto Enrolment.  Auto-enrolment is handing a whole new batch of customers to pensions firms.  Will the firms lean forward and seek to help these customers with great products and advice that help them secure their retirement.  Or will they just take this new crowd of customers and work out how much money they can extract from them.

 

 

Rob puts it differently in his article in Pensions Expert

For the first time in decades, we have a captive audience of pension savers. We could do what we have always done and hope some of it sticks. Or we can take up the challenge and recognise that the workforce of today will want to engage in a different way.

We could simply direct employers to the Pensions Regulator website, or we can start to develop communications fit for a world where Siri and Alexa capture the imagination of a new breed of savers. On the whole, the population lacks both the confidence and knowledge necessary for financial security. 2017 must be the year we really start to address this.

Redstart Financial EducationAs well as being a pensions investment consultant and co-founder of Redington, Rob is campaigner for better financial education (Redstart) so we can all create a more secure financial future for ourselves.

Disrupt, produce, fulfil – boosting productivity

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From time to time I go looking for events where I might learn something new and get a different perspective.  I also try to combine going to these events with meeting a friend, so we can discuss the subject.  The LSE provides some great events and attracts interesting speakers.  I try to avoid famous politicians as they tend to only say what we have already heard.  I look out for people with expertise and something to say.  Especially if it is about something I know little about.

Timothy Massad Chairman of CFC

Timothy Massad with President Obama

Last night I went to hear Timothy Massad who has been on the front line of the U.S. effort to combat the financial crisis and reform the international financial regulatory system. He was appointed by President Obama as Chairman of the U.S. Commodity Futures Trading Commission and was formerly as Assistant Secretary for Financial Stability at the U.S. Treasury. However, President-elect Trump will replace him as is customary with a new president.

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Why is it that large institutions dehumanise us?

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I was at an event on Monday, where I got some insights on the role of government and large institutions in defeating poverty.  I left with a strong sense that achieving this task is inhibited by the way large government and business institutions don’t work for people. This article sets out preliminary thoughts.  Answering the question will take longer than is possible here.

This was a Tory conference fringe event organised by Tim Montgomerie of The Good Right.  The event hashtag was #defeatingpoverty.  This featured four government ministers discussing their ideas on how to reduce poverty, increase social mobility and expand opportunity.  This may seem ironic to some, since Michael Gove, Sajid Javid, Ian Duncan Smith and Ruth Davidson are frequently attacked by the left for doing things that achieve the opposite of these aims.  

But I discerned a theme underlying all their ideas.  It is clear they do believe in #defeatingpoverty.  But these four ministers have a distinctive take on how to do it.  They each believe that it is not the government’s job to provide us with everything we need and give us the money to get out of poverty, but their job is to provide us with the tools we need to help ourselves.  The most valuable things the government can do is to provide education, an economy with jobs, healthcare, housing, public transport, infrastructure and essential utilities.

Now, that could easily have been said by many Labour politicians as well. 

Conservatives and Labour have similar goals but believe in very different means

It is interesting that if you listen closely to both left and right-wing politicians and dig into their remarks, the surprising thing is they both seem to want similar outcomes.  What they disagree about is, what is the best and fairest way to get there.

But the media prefer disagreements to agreement.  Agreement does not make good politics and does not make good media.  So what happens in the media debates and interviews is that this common aim is obscured and missed and the discussion concentrates on the means to get there.  These debates tend to focus on how each side has different means to get to the aim rather than revealing the common ground and purpose. 

Labour_1592957cLabour argue that the conservatives do not understand what it is like to be poor and disadvantaged.  The Conservatives just look after their rich friends and the tax and business policies are evidence of how the conservatives are nasty, self-interested and unfair.  Austerity targets the poorest and the rich thrive.

Conservative_logo_2006.svgConservatives argue that Labour ideas are too expensive, we cannot afford them, that they remove the incentive to work, they do not celebrate excellence and suppress individual initiative and enterprise.  Labour policies are prone to create higher tax and spend, reduce our competitiveness and depress growth which creates more poverty.

Now I know that the arguments from each side are more nuanced and go into greater depth than I have done here.  But if you dig deeper into the speeches from each side you will find that there is a commonality of aim but a disagreement about means. 

Because they favour different means, when describing aims, they each use different language.  The Conservatives talk about opportunity, family, jobs, growth, choice, excellence.  Whilst Labour discuss fairness, social justice, jobs, public ownership and control, growth.  Each side emphasises these because they each believe they are the most important means to reduce poverty, increase social mobility and expand opportunity for all not just a privileged few.

The_Good_Right_Cover2So whilst it seemed odd to some people that the Tories should hold an event titled #defeatingpoverty, for me it is not bizarre at all.  The Good Right within the Tories is a subgroup that champions this purpose.  It is great to see this as an aim expressed clearly within the party

But if the both Labour and Conservatives agree about the aim, who has the right answer on the means to achieve the aim?  The Conservatives or the left-wing alternatives?

The left argue that the market punishes the weak and the only way to fix this is through collective action by government and government taxation.  This is the best way to help the weakest and to lift them out of poverty.  The right argues that the dead hand of government suppresses initiative, creativity and enterprise and business is better suited to many tasks.  But in my view both of these arguments misunderstand the nature of large-scale institutions and the way they do and don’t work.

Large institutions are letting us down 

After Thatcher, it was generally accepted that government-run organisations and businesses are not efficient or effective at many tasks and they should leave many things to the private sector.  Business does it better goes the argument.

But in the 21st century we have increasingly seen that it is not just government run organisations that can fail but many badly run, inhuman organisations of all types from business, government and not for profit sectors.  In fact in many areas, the government do things better.  (There are great hospitals, schools and transport services that show this).

We have recently seen a number of dramatic examples of institutions that do not serve the people they exist to serve.  If we want to help people lift themselves out of poverty or help them get anything else done, then we need to address the way our larger institutions are not working for people or to help people.  I would highlight three areas of concern 

1. When people go to work in large institutions of business, government or charity they can lose their humanity and their talent to be people. 

1-compressed-300x200Steve Hilton wrote about this in More Human and analysed it in many different fields   

Something strange happens to people when they cross the portal of their workplace each day.  They lose some of the skills they naturally have at home and with their friends.

I frequently observe that people in their personal lives understand how to flourish and understand how to interact with people, so they connect with others, are active in their lives, take notice of what happens, keep learning and find ways to give.  But as they go to work they feel they are not allowed to do this and they stay within their job descriptions, are constrained by rules and remain in their silos at work.  At its worst they develop a sense of entitlement. 

This is manifest in all levels at work from the customer service handler who cannot help the person on the phone, to the executives at Volkswagen who thought they could cheat the government and the public for 10 years, to the bankers who have lost sight of their purpose to serve customers,  the charities who bamboozled older donors into giving more money.  There are news stories every week and we all have experiences of dealing with institutions and being frustrated, horrified and indignant.

2.  Large institutions and government favour single national solutions.  But single national solutions to do not encourage the development of creative, innovative ideas.  They tend to suppress initiative. 

Even though everyone loves the idea of it, the NHS is now a monster that we cannot control and most worryingly many staff are very disheartened, frustrated and just want to leave even though they love looking after people. 

The history of state-funded education since 1975 has been pretty disastrous under both Labour and Conservative governments.  And again we see that many teachers feel like the NHS staff.  They are disheartened, frustrated and just want to leave even though they love young people and love their subject. 

Large businesses very rarely create great innovation from within.  However, they have come up with a solution.  What they do is wait for smaller businesses to come up with stuff and then acquire the smaller business and apply their investment and systems to scale it and grow it.  But in this solution the innovation and fresh thinking happens elsewhere away from the larger business.  There are a few examples that contradict this, but they usually involve one extraordinary individual (e.g. Steve Jobs, Richard Branson, Larry Page, Bill Gates) who operates like a small business owner but with big business money.

3.  The welfare state focuses on what people are not or don’t have rather than what they can do or might achieve.

Alex-SmithAlex Smith has written about how the welfare state has provided a safety net and done many great things, but there has been an unfortunate side effect.  It addresses what people have not got and what they cannot do.  It treats those it helps as dependents.  It has led many of those who depend on it to become disconnected, inactive, have narrowing horizons, and a sense of entitlement.  It is disempowering them and creating an environment that discourages initiative and self-help.  Whereas people flourish when they connect, are active, take notice, keep learning and find ways to give.

Click here to read more

So my title question was:  Why is it that institutions dehumanise us?

In this article, I have written about why I think this question is important. I have not answered it yet.  I will follow this up later.  I will also go on to discuss why this matters to business when they create products and services that aim to attract more customers.

What priorities were discussed at the event?

I was inspired to write about these issues due to the debate at the Good Right event on Monday.  It is not directly what was discussed, but it was implied in the ideas that we explored.  My takeaway from the event was that I feel that I side with the Good Right in believing it is more important to capture the human spirit and our capacity to innovate than to equalise the outcomes for everyone.  

Something that matters a lot to me is that all politicians should support the aim to defeat poverty, develop social mobility, build social justice and create opportunity

The team last night highlighted five areas that must be the priority for a government that wants to achieve these aims.  These are things that will help us to help ourselves.  These are the priorities for the government institutions

  • Build more houses
  • Provide better education
  • Have effective healthcare
  • Building national infrastructure
  • Have a growing economy

Tim MontgomerieThank you to Tim Montgomerie and the team at The Good Right and the Legatum Institute for provoking me to write about this and providing a lot of the stimulus material.  You can see more by clicking on the links

More Human … its amazing how many people disagree with the idea this is desirable.

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Steve Hilton, More HumanI have just finished reading More Human. This book written by Steve Hilton and published last week. Steve Hilton was an adviser to David Cameron from 2006 to 2012 (and was caricatured as special advisor Stewart Pearson in “The Thick of It”). It is not often I feel compelled to write a blog about a book I just read, so this book has clearly had a big impact. The last time I wrote a blog about a book was when I read Nassim Nicholas Taleb on The Black Swan.

So do get a copy and read it now.

 

Steve Hilton analyses and explains things that have frustrated me for many years about the way business, politics, government, schools, healthcare and many institutions operate against people rather than for people. He shows how institutions and bureaucracy frequently frustrate and damage the people that they set out to help. He discusses how leaders have the very best motives to help people (there is no conspiracy to harm people) but often feel trapped by the way things work and believe they are doing the right thing in the circumstances. He describes how staff in airlines, civil service, social services, schools and many places can end up behaving in ways that are not human, even though they are almost certainly caring and loving with their friends and family.

The central idea is that we have lost touch with what it means to be human. The institutions and bureaucracy we have created do not treat people as human. This has affected everything: the food we eat, the schools our children go to, the growing inequality, the lower engagement with politicians, the hospitals and healthcare services and we use, our inability to eliminate poverty and they ways we bring up our children.

Yet, the world is full of examples of how when people get together to make things happen at a human level, then great things do happen. How is it that we cannot harness this more effectively?

I cannot do his ideas justice in two paragraphs, you have to read it.  At first you may find some of it seems fanciful and impractical. But if you find yourself thinking that then I would urge you to read on. Steve Hilton diagnoses many things that are wrong and the fixes he suggests are radical. The ideas are not classically left-wing or right-wing. Many of the ideas require a change in what we find socially and culturally acceptable, not just a few short-term policy fixes.  It is amazing to me how many people disagree with the idea that being more human is the way forward.  (See tweet from Alan Duncan)

Steve Hilton concludes that to make something happen needs a large number of people who are committed to be being More Human actually in positions of power and leadership . He invites us to join in and have a go and run for office.

Is there anything we can do in business today?

Whilst much of this is in the political arena, this need to be “More Human” also affects business and there are things business can do within the current economy and politics.

I believe that when we set out to help customers solve a problem or satisfy a need rather than just focus on how to extract more money from customers, then we create a better business. And this will be a more human business. By that I mean we enjoy more growth, make more money, are a happier place to work, create more jobs and build sustainable long-term value.

This is the difference between being a value adder and a value extractor. Value adders want to help customers. Value extractors work out how to get the most money from them. The interesting thing is that all big innovations that really transformed industries and markets involved helping customers solve a problem, not just making more money from customers.

So EasyJet challenged the European Airlines like BA who were all value extractors. First Direct and MetroBank challenged the value extractor banks. AirBnB are challenging the hotel chains. All these game changing businesses focused on the people’s real needs and problems and enabling us to do things we wanted to do as people.

There is now a change happening in the food industry. The supermarkets were value adders who provided what people wanted, created wider availability and delivered better value. They have become value extractors driving prices up through pricing, confusing promotions and local dominance. But now they are looking vulnerable to many smaller businesses that help customers in more relevant ways from discounters to local food producers and retailers.

If you are working in a business with a value extractor mindset and you think there is a better way to get growth by helping customers, it is not easy to get people to see it. But there is a way. I explain the thinking and the approach in this paper.

Steve Hilton definitely fits my definition of being an attractive thinker (and doer). I filled out the form in the back of his website under the button “Run for Office”. Looking forward to see what I get back.

Top 10 books that changed the way I do business

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A client (David Edwards from UL) asked me yesterday for some advice on what books he should read to develop his product marketing knowledge.  This prompted me to reflect on which books have had the greatest influence on me.  All these books have had a material effect on my approach to creating growth strategies that everyone is convinced will work.

Product marketing is about more than marketing, it is about attracting more customers.  Over the years I have found very few marketing text books that were really helpful and stimulating.  But many books that have influenced the way I think about marketing and attracting customers.

None of these books give a simple answer straight out of the box.  They are all thought-provoking and will help you to move your thinking forward.  If you want easy answers then look elsewhere, if you like a challenging thought-provoking read, then take a look.

My top 10

The science and laws of marketing

How brands grow

Start with Byron Sharp.  He has taken the pioneering work of the late Andrew Ehrenberg and made it accessible to everyone.  This is about why it is more important of get more customers, not just focus on customer loyalty.  It is about why light buyers matter so much.  It is why the 80:20 rule is wrong.  It is based on years of research into how people actually behave and not anecdotes and armchair thinking about marketing theory and customer loyalty.

 

 

Byron shows us why evidence matters and how to bring science into marketing.  Byron shows you that there are 10 laws of marketing and why you cannot ignore them.
Watch his TEDX Talk here

The Text-Book

marketing byron

This is the only marketing textbook I would recommend.  It takes the laws of marketing as explained in How Brands Grow and tells you how to apply them to the business decisions you need to make to develop a marketing plan that will actually work.

It is written by whole team at the Ehrenberg Bass Institute of Marketing Science and has some good case studies.  It is aimed at university students studying marketing and strategy.

This academic work is known and been adapopted by global brand leaders like P&G, Mars, Unilever, Colgate and Google for some time.  It has only become accessible to everyone else in the past 5 years.

Leadership and innovation

Find your light bulb

Mike Harris shares his experience of creating totally new and game changing brands by taking a radical approach to providing service to customers in conservative industries.

Find Your Lightbulb draws from Mike’s experience of creating game changers in banking (First Direct and Egg) in telecoms with Mercury and in internet security with Garlik.

This book is about leadership and driving extraordinary ideas through your organisation and creating somethign that will attract more customers.

 

Behaviour and psychology

Daniel Kahneman Thinking Fast Thinking Slow

Daniel Kahneman reveals why and how people’s decisions and behaviours are not entirely conscious or rational.  He discovered that we have two systems in our brain,  System 2 is the one we all know about, it is conscious, rational, slow and cautious.  System 1 is actually the driver of many decisions, it is unconscious, instinctive, fast and very importantly, we could not function without it.

This book helps you understand why people buy, why emotion matters, what triggers a purchase and you will think differently about how to attract customers when you have read it.

Advertising and marketing communications strategy

IPA Peter Field Les Binet, The long and short of it

This report analyses the results of 998 marketing campaigns.  These campaigns were all submitted to the IPA Annual Effectiveness Awards.  They were all assessed on the basis of the results and the effectiveness rather than subjective critieria like creativity or design

This report updates an important study called Marketing in the Era of Accountability. It tells you what worked and what did not work so well.

 

 

This highlights and confirms the importance of increasing market penetration (i.e. strategy speak for “getting more customers” ) and the role of share of voice in building market share.  They also discuss and demonstrate why generating emotional response to campaigns is important to get value for money from your marketing

Looking to the future

Black Swan Nassim Nicholas Taleb, Improbable events

Nassim Nicholas Taleb shows us that looking to the future is a bit of a mugs game.  The most likely thing to happen in the future is an improbable vent that you cannot predict.  So stop worrying about it.

His writing is dense and a bit inaccessible, he is a mathematician and ex stock trader with a big brain.  But what he writes about is important and has implications for strategy and practical decisions.  I wrote about what we should do about this in 2008 in this post.

 

 

My conclusion is we should spend less time worrying about the future.  We should spend more time strengthening our ability to withstand unexpected shocks.  Read here

Social Media

Penny Power, Know me, like me, follow me

There is increasing evidence that digital marketing and social media are attracting a disproportionate share of advertising revenue as these new media have become more fashionable “must haves” in your marketing plan.

Penny Power takes a different approach and shows us what social media is really for and how to use it to build a following and create a network that will help you and your business and even how the network will help each other.

Penny’s approach echoes the whole Attractive Thinking ethos.  It is about attracting people not broacasting to them and capturing them.

 

This book is a classic, it may be 7 years old, but it is not out of date.  It reveals some fundamental truths about who we are, how we interact and what that means for your business, brand and marketing plan.

Strategy

Good strategy, Bad strategy, Richard Rumelt,

Richard Rumelt has studied many strategies and the book has loads of examples.  This makes this very practical and well grounded.  Richard invites us to look inside the business for what we can do and what we are good at.

Rumelt dispels popular misconceptions about strategy – such as confusing it with ambitions, visions or financial goals – by very practically showing that a good strategy focuses on the challenges a business faces, and providing an insightful new approach for overcoming them.

 

Remember a strategy is merely a set of actions designed to achieve a particular goal. This book will bring you back to what really matters, so you create a plan that will work

Getting recognition and being recommended

Key Person of Influence, Daniel Priestley

This book together with the KPI programme showed me a whole buch of stuff that is known by entrepreneurs and not so well understood or taught in large corporate environments.

Daniel Priestley highlights five steps that are essential if you and/or your business are to gain recognition and be recommended.  Daniel has talked with thousands of entrepreneurs and gained insight into the problems they have to overcome.  The KPI method is an effective way to overcome them.

If you want to develop your career and be secure in your ability to attract customers or employers, then read this.

He has followed this up with another book called Oversubscribed how to get people queuing up to do business with you.

Avoid being misled by common sense

Common sense, Duncan Watts, Everything is common sense until you know the answer

In the 2001 election, William Hague created the Common Sense campaign for the Tories.  It did not work.

“Why is the Mona Lisa the most famous painting in the world? Why did Facebook succeed when other social networking sites failed? Did the surge in Iraq really lead to less violence? And does higher pay incentivize people to work harder? If you think the answers to these questions are a matter of common sense, think again.

 

Common sense is one of the most dangerous ideas that pervades general thinking and our decision-making.  Yet science nearly always demonstrates that many ideas that were common sense were plain wrong.  (e.g. sun goes round the earth).  Duncan Watts will help you fine tune your antennae to detect common sense ideas that are misleading or just plain wrong.

And another 5 books

Inevitably I found it difficult to nail this list down to 10.  But the list above is my top 10. Here are my next 5.

  1. Viral marketing, The science of sharing.  Shows what goes viral and why
  2. Switch, How to change things when change is hard:  Argues that we need only understand how our minds function to unlock shortcuts to switches in behaviour.
  3. Contagious: How to Build Word of Mouth in the Digital Age:  Does what it says on the tin
  4. Marketing Manifesto:  The booklet from the Marketing Society on what marketing leaders must focus on to increase their effectiveness and impact  download here.  I helped the team to create this book.
  5. The One Thing You Need to Know: This helps you discover the question you need to answer, get the right answer and then get everyone else to agree with you.  You will be better at pitching within a corporate environment.

Tesla is disrupting the power industry using better products not better marketing

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Tesla Powerwall

This is possibly the best example of attractive thinking applied to product innovation that I have ever seen.  It has bigger potential than any project I have contributed to.  This will be “a product that customers love”.

Elon Musk (founder of Tesla cars) launched three new products yesterday.

  • The Powerwall – a home battery linked to solar panels
  • The Powerpack – an industrial battery for commercial and factories
  • The Gigafactory – manufactures the batteries, this is an open source replicable design

Watch this video, Elon Musk explains it better than I can. Look not just at what he says but how clearly and naturally he presents. (BTW I often don’t watch videos as I find they take up too much time to say very little, but this one is worth the time)

What did I learn about creating better product from watching this?

This is not a not a new battery, this is a challenge to the whole power industry. The market opportunity for these batteries is not the size of the battery market. It is the size of the power supply industry.

Power supply companies would never have come up with this idea. It is so far away from their frame of reference and looks like a threat to their established stream of profits.

  1. A great product solves a real problem that customers have. Reducing carbon emissions is one, but the potential to remove all the unpleasant infrastructure associated with power generation and distribution is another hugely attractive feature.  For each of us there an opportunity to save money and detach ourselves from the utility company’s ever increasing charges.
  2. The top attribute of a better product is “It just works”. He uses this phrase several times. It is clear there is a lot of technology under the hood. But it seems that all that technology is about making it easy for the user.  Working overtime on the “it just works” will help us create better products
  3. Design matters, it is a part of the “It just works” The Powerwall will be an attractive feature of the home, it goes on the wall, it takes up no space.  It also looks good, unlike any battery I have ever seen before.  Design is function here.  This picture shows it located next to the car.

Tesla Powerwall

What did I learn about giving a speech from watching this?

  1. Be yourself, Elon Musk stumbles a little, but none of that matters because he is talking about something he believes in, he looks at the audience and he smiles. He has clearly rehearsed every detail, so the presentation is consistent with the product “it just works”
  2. Simple language – he uses no jargon, he use short sentences and short words.
  3. Use Graphics and photos not words in your slides. The images each reinforce a simple point that is hard to solely express in words.

So how much marketing will this product need?

I suspect it will need just two things. The first is simple.  Just create publicity to make sure we know about it. The second is harder.  Create the distribution so we can buy it.

But what this will not need is clever persuasion, or special offers, or loyalty schemes, or other marketing tricks to try to sell products that are not exactly what people need or want.

This is a stunning example of why we need better products not better marketing

This is my new standard to aspire to for creating products people love to buy.

Game Changers Event 29th May

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Game Changers event 29th May

This post is to tell you about our next event which is all about turning your products and services into things people love to buy. This is how to transform your industry as well as your business. I really hope you can come.
We have got great speakers, brand new content and an group of like minds where you can discuss insights, ideas and your experiences.  We are calling the event Game Changers because this is what Game Changers do.

Click on the logo to get more information about the event.

Why should you come?

This Game Changers event is for business leaders who are not content with the status quo and want their business to make a difference. If you are on this email list, it is highly likely this describes you.

The Game Changers event is a chance to explore and discuss how you can do this. You will have the chance to learn from the experience of others in driving for exceptional growth. This is about turning a business from ordinary into game changing. We will explore the characteristics of high growth businesses and draw out a number of critical lessons.

Game Changers turn their products and services into something customers love to buy. This needs not just game changing insights about customers, but also the ability to develop products and services that go beyond what customers want and deliver something they could not imagine today.

Speaker highlights

Mike Harris

The Original Game Changer

Mike Harris

Mike Harris

Mike’s first big play was to transform current account banking when he created First Direct: a bank without branches dedicated to making sure customers felt totally taken care of.

Mike went on to challenge the BT monopoly on fixed line telecoms and turned Mercury Telecoms into a profitable player.
Then he created Egg Internet banking, the first online only banking service. Mike now works with entrepreneurs to help them understand what it takes to be a Game Changer. Mike will tell us the most important things he learned and what makes the difference between business as usual and being a game changer.

click here for Game Changers event details

John Scriven

Game Changing Insights on Customer Behaviour

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John Scriven

John Scriven worked at South Bank University with a cutting edge research and insight team founded by Andrew Ehrenberg and later developed with Byron Sharp. The team’s latest book is called

How Brands Grow – what marketers don’t know.

Andrew Ehrenberg pursued empirical and behavioural studies to establish how consumers behave and uncovered a number of findings that blow away a lot of conventional thinking about customer loyalty and how brands actually get growth. His work is used today by many top global brands like Coca-Cola, Mars, Unilever & P&G. John will come and share the team’s top five insights.

These insights have been uncovered over 40 years of painstaking study and research about how customers actually behave and how markets evolve in response to consumer behaviour.

John will show how this applies to your business whether large medium or small, whether B2B, consumer or services and how you can use these insights to make decisions that will attract more customers and help you get more growth.

When Bruce McColl the global CMO at Mars discovered the Ehrenberg analysis, he described it as “an epiphany”

Here is Byron Sharp discussing some of the insights that John will share with us in a Tedx Talk. It may be 15 minutes, but it is worth it.

Click here for Game Changers event details

I hope you can come. Events are a great chance to catch up and meet some other interesting people. I already know that we have some great people coming, I hope you can join us.

We also managed to get a great venue in Shoreditch. We will be at Campus London. All events at Campus are free, so that makes it even better.

Learning from an entrepreneur who is guided by purpose

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I just read this story on the BBC news magazine.  click here to read it.  I was so inspired that I spent some time studying the story to try and draw out some lessons.

So what can we learn from an entrepreneur whose whole business is guided by purpose and goes on to overcome huge obstacles and then succeeds despite remarkable odds being against him?

Arunachalam Muruganantham

Image from BBC world service

When I read the story of Arunachalam Muruganantham, I was in awe at the 1300 microbusinesses he has helped to create and amazed to learn about the 1 million jobs he has stimulated as well as the health and hygiene benefits he has helped Indian women obtain. It is incredibly inspiring. Possibly also like me; you are slightly in awe of his determination and courage?

Read his story click here

But sometimes perhaps we fail to learn lessons when we read about experiences like this. Especially when the circumstances seem so different from our own situation. So I took a long hard look at Arunachalam’s story.  Here were my five main takeouts.

Lesson one: PINPOINT the problem: Keep on researching until you have not only identified the customer problem but you really understand it.

Arunachalam’s doggedness in trying to understand the womens’ problems and the real reasons for their behaviour during menstruation (which was threatening their health, hygine and lifestyle) is remarkable. What I noticed is that he tried everything in this phase of his work. Despite the immense social and cultural stigmas he tried out prototype products, he talked to women about their worries, he observed their behaviours and finally he put himself in their shoes and experienced the issue as best he could. Funnily enough, he never showed them a concept board and said “would you buy this?”.  He did much of the research himself.

He combined this exploratory work with research into the competitors and their products and sought to understand the home made alternatives that women were using.

He spent 4 years working at this question, which is extraordinary, but probably explains why he came up with something that really works.

Lesson Two: POSITION the product by explaining what it does better than the alternatives. You have to explain how your product solves the problem better than the alternatives that the customer uses.

In some cases for the customer to see your product as a better, you may have to change how the customer see’s what is important. This is very difficult. The customers existing paradigm may not allow you to sell the product without education as to how it helps them.

In Arunachalam’s case, the alternative forms of sanitary protection that were available were either too expensive, unavailable or were unhygienic and ineffective homemade solutions. Apparently, Arunachalam had solved all these problems, so it looked like it would be easy to stand out.

But there was a bigger hurdle. Being private and discreet was overwhelmingly important and seen by women as a bigger issue than staying hygenic.  Homemade protection was an easy way to stay discreet.  Going out to buy pads was not discreet.  This is the barrier he needed to overcome.  As is often the case the reasons why people buy stuff or don;t buy stuff are personal and emotional.  Here was no different.

Arunachalam had to help women understand that being hygienic was more important to them so they would be willing to go and ask for a pad.  His solution was to use word of mouth advocacy and testimonials by the women involved in the local microbusinesses.

Lesson Three: Keep PERFECTing your purpose and your story.  As time goes by do keeep your resolve to do something that really helps customers not just makes money in the short term. It will keep you going and make your products and solutions even better.

Especially in this case where people will keep telling you “That will not work”  or “You must be mad”.

Instead of being put off, Arunachalam used what he learned on his journey to take his purpose to a whole new level. He had started out by trying to make sanitary pads that Indian women could afford. He ended up realising that the best way to do this was for women to make them locally.  He did not manufacture pads and maximise in a big factory for short term profit.  he designed a machine that local women could use to make the pads.  He helped to create 000’s of microbusinesses and millions of jobs which made the whole project even more fulfilling for him and for many small business owners and communities.

Arunachalam Muruganantham Sanitary pads manufacturing machine

Image from BBC world service

He clearly disliked the major branded manufacturers who charged high prices for sanitary protection that women really needed and then sold it to them with dreams of an active lifestyle whilst ignoring the real issues around hygiene. Arunachalam challenged the way that big business approached sales of sanitary protection by going local. He stuck to his guns on affordability and providing a hygienic solution as a result he also created new businesses and new jobs.

The quote from BBC news sums it up for me

He was once asked whether receiving the award from the Indian president was the happiest moment of his life. He said no – his proudest moment came after he installed a machine in a remote village in Uttarakhand, in the foothills of the Himalayas, where for many generations nobody had earned enough to allow children to go to school.

A year later, he received a call from a woman in the village to say that her daughter had started school. “Where Nehru failed,” he says, “one machine succeeded.”

This whole new level of purpose must have powered him forward when he hit obstacles.

Lesson Four: PROMOTE be available and understood: The product has to be available where the customers can buy it and customers need to understand what it is, what it does and where it comes from.

In this case Arunachalam realised that localised small scale production in the hands of a local group was the way to ensure the product was available where it was needed most and that this enabled sales to happen through word of mouth. One woman could explain to another how the product worked and where it came from. This method helped with the education task to reframe the women’s view of sanitary protection and help them see being hygienic was at least as important as being discreet.

Lesson Five: PITCH your story to get help: When you have clarity about purpose and have developed a solution then it may be that there are thousands of people out there who can help you deliver it.

Having a clear PITCH and story is essential to make this happen.  Arunachalam must have put an amazing amount of effort into explaining to women (pitching) why his machines to make sanitary pads would help them improve their lives. He is obviously still doing this today as he speaks with students and young entrepreneurs and shares his experience.

But then I read he is planning to go much bigger.

“My aim was to create one million jobs for poor women – but why not 10 million jobs worldwide?” he asks.

He is expanding to 106 countries across the globe, including Kenya, Nigeria, Mauritius, the Philippines and Bangladesh.

Read his story click here

There are lessons in here for both entrepreneurs and leaders in established larger businesses. There are parallels in your situation. So when you read stories about entrepreneurial success, do try and draw out the lessons for yourself.

Whilst I cannot promise that Differentiate will always help you show the dogged persistence and determination of Arunachalam, the decision points you face are the same as the ones that he describes here.

Each of the five steps in our approach to turning your purpose into products customers love to buy will force you to examine the same questions and apply them to your business.

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