Category: Business Habits - Kevin Minne

Innovation or Crash and Burn?

6/2/2017

Something was missing as Heather walked into the familiar department store but she couldn't quite put her finger on it. What is it, she thought, same store front, the red lettering and logos were everywhere, the cosmetic counter was in the same location and so were the clothing, the kitchen ware and the linens but it was definitely different. The clothing racks were unkempt and the shelves of neatly folded sweaters and designer jeans now had the look of a teenagers bedroom after a sleep over. As she took the escalator up to the kitchen department and began to stroll through the isles it was immediately obvious that the usual knowledgeable and helpful staff was completely absent. It was as if all the staff had gone on break at the same time. Through the years this store had exerted a tremendous amount of energy to create a very specific set of expectations in their customers and that level of service and quality is exactly what Heather had come to expect. Growing in frustration as she looked for someone to help her with a simple question about cookware, she thought: if all the reasons I've been coming here for so long are gone why would I come back?

This fable is an example of one company's effort to innovate out their existing business model in order to cut costs and attract new customers but it might be at the expense of their core customer. The consequences of this type of radical innovation can be catastrophic if it doesn't work!! In this case "loyal" as opposed to "fickle price shopping" customers are some of the most valuable assets a company can have and shouldn't be expected to stay loyal when all they have become accustomed to is no longer there!!

Failure to Implement

3/17/2017

Too often when businesses or products fail it is not a failure to fundamentally change but rather a failure to to consistently implement the fundamentals. Much of business success is not rocket science but rather simple discipline of what you already know. (Unless of course you don't know the fundamentals of your business!) In the brilliant book "Simple Rules" by Donald Sull and Kathleen M. Eisenhardt we learn that the simple rules of the battle field medical triage system is in fact exactly what makes a success of one of the most dynamic and complex environments in the world. It's usually not what you know that matters but what you do with what you know!!! For example: medical triage on the battle front works so well because it identifies the injuries that will benefit the most from immediate medical or surgical attention which enables the expertise to be brought to where it can do the most good.
Unfortunately, there are times that we are gathering the right information (such as determining that a sector of the market is declining) yet not dispersing that information to the right channels where it can bring the most benefit (such as reallocating resources to growth markets, improving the product or processes etc). Just like the medical triage, a simple system of information triage can identify the areas of a business that are in most need of critical information/data to survive and can bring renewed focus on fundamentals, life giving decision making, training and leadership in order to keep that sector of the business healthy.

By: Kevin Minne
InnovationGrowthSystems.com
720-354-0291

Differentiate or Die!

10/28/2016

Trying to break into an entrenched market where customers are already using your competitors product can be extremely difficult!! Research shows that many consumers establish buying habits and unless your product is at least 9 times better that your competitors you will have very little chance of dislodging them. That's right 9 times!! But many a sales or marketing person sees this as only a budget issue, meaning if given enough money and time to lure the customer away it can be done. But what if that money and time that is used to lure customers with elaborate sales promotions were used to make your product truly better. Because unfortunately, all the money spent during a hard fought sale doesn't improve the product one bit.

The question we should be asking is what would make the customer fire your competitors product? If you can answer that question you can go a long way toward getting your product hired.... (unless it’s a mirror image of your competitors product). The biggest advantage of this question of "what would get the product fired" is learning what customer need your competitor's product is not filling and then making sure your product addresses it. In Clayton Christensen's new book "Competing Against Luck" it's not just the the functional aspect of the product but also the emotional and social aspects that need to be fulfilling for the customer! So spend some of your sales and marketing money on “Research and Development” so your product is ready and closer to 9 times better when your competitor's product gets fired.

By: Kevin Minne
InnovationGrowthSystems.com
720-354-0291

Is a bad plan is better than no plan?

10/14/2016

It was sometime ago that I was flying over the Rocky Mountains of Colorado in a single engine airplane at 18,000 feet, in clouds so thick you could barely see the wingtips. With no visual references outside the aircraft I had to trust my aircraft instruments and my training for navigation. Everything was going well for about an hour and a half then suddenly ice begin to accumulate on my wings. (For non-pilots this is an extremely dangerous condition because enough ice on the wings can cause any aircraft to crash!) (So next time you're waiting to be deiced before takeoff at the airport be patient and be thankful!) For me, over the vast rugged landscape of the Rocky Mountains there weren't too many options, but with the help of air traffic control I quickly made a plan. If the ice buildup didn't stop within the next 10 minutes I would turnaround and land at Gunnison Municipal, the closest airport.
I still look back at that plan and even though it really wasn't a great plan and it didn't require a lot of thought, it worked really well. The reason it worked so well was because once I had a strategy it calmed my mind and helped me focus my thoughts on actions and tactics that could make the plan succeed. Once I started to focus on actions and tactics it revealed some of the flaws in the plan that I could then improve and perfect.
Companies survive by making progress, no one remains competitive without changing, so all of us have to make plans and move forward. Unfortunately, sometimes we get paralyzed in the planning stage trying to see every possible flaw before we commit. When in reality we learn the most and get the most done during the implementation stage of the plan, even if it's not the greatest plan. Imagine if I had not had a plan and the ice had continued to build up on the wings of the aircraft! Remember no action can be taken until you commit to a plan and it's the action that eventually wins the day!

By: Kevin Minne
InnovationGrowthSystems.com
720-354-0291

Business Innovator = Focus = Performance

9/23/2016

Focus is to performance what fuel is to fire!

Unfortunately, it's easy to lose focus in business because of the numerous seemingly important distractions that bombard us daily. But remember, anything that divides our attention, weakens our focus and our performance. Focus is singleness of purpose and undivided attention. So, the biggest difficulty in attaining high performance comes from the inability to determine what single element needs the undivided attention of the entire organization. For example, a company wide, top priority, focus on lowering the cost of sales! When a company-wide focus is communicated then everyone, including engineers, accountants, marketing, facilities maintenance, customer service and all others can contribute to that goal. This is the kind of focus that stimulates innovative breakthroughs! And yes, we all have different roles within an organization but we all must be clear on the one thing that matters most at any given time and how we contribute to that goal in our role, otherwise, we will never have a high-performance business!! (Now let me be clear, I'm not talking about an organization's mission. The mission is far more permanent and unchanging, whereas priorities of how we accomplish the mission will change.)

Make no mistake, determining what truly is the top priority and number one focus for a business can be very, very difficult! (Once you lower the cost of sales, the focus may need to change to gathering top quality leads or creating a new product offering or customer service.) There will be times when organizations don't get their top priority right. But singleness of purpose and undivided focus is so powerful that even when the focus is on the second or third priority it will still move the organization much faster and further than if it were unfocused and mired by confused priorities! So, find your focus and break your organizations performance barriers!

By: Kevin Minne
InnovationGrowthSystems.com
720-354-0291

Six ways to identify a”Free" Addict

9/16/2016

Are your products and services competing with the feel-good feeling of free? I don't know about you, but I have to be really careful about giving away free stuff, because free stuff really ain't free! Free stuff always has a cost. Just remember, there are people out there who just love chasing the feeling they get from something free. For them, “free” is not the gateway drug to becoming a paying customer, for them “free” is the product they are looking for!! Free is all they're interested in, and the minute your product or service stops being free they stop being your customer. These are the “free” junkie’s. If you want to get paid for your value, you have to identify and attentively serve those customers who really need and are willing to trade their valuable, hard earned, dollars for the satisfaction value of your product.
Now certainly there is something enticing about free and some little gift can be a great way to entice customers to examine further the value of your product or service. But if you find that all you're doing is giving away the gift and no one is buying your product then you are reaching the wrong customers.
The $64,000 question is how do you tell the difference between a “free” junkie and a real, potential, value buying, customer? Here are six warning signs to help you identify who’s just a “free” junkie and who's not:

A “free” junkie will almost always ask about “free” first!
A "free" junkie will not press for details about the product!
A "free" junkie will not be concerned about outcomes and results!
The problem a "free" junkie is trying to solve with your product, isn't very big!
A “free” junkie rarely has any history buying your type of product or service!
A "free" junkie will never ask about a money back guarantee, because they never plan on giving you any money!

Use these six “free” filters to help you get paid for your value! And remember, part of the satisfaction value your customers will get from your product comes from the work they put into it!

By: Kevin Minne
InnovationGrowthSystems.com
720-354-0291

Hidden from Plain Sight

9/9/2016

Big breakthroughs don't always come from some brand-new and original idea. Sometimes, the big solution is right in front of us in plain sight but we ignore it thinking it's too simple and too obvious. But really, most of the time the answer is not the biggest part of the solution, it’s the disciplined execution that is critical! Things that are easy to do are easy not to do! I for one would prefer a complicated answer with less discipline but dogged, persistence and discipline overtime can accomplish much much more then complicated solutions.

One simple tip to help strengthen your chances of being persistent and disciplined comes from professor Kelly McGonigal’s great book “the Will Power Instinct”. If you want to stay focused don't ask yourself “how well you're doing,” this question prompts your mind to answer in a positive and results in the likelihood we will then back off and take a break. However, if we ask, “how committed am I” to this goal or task we are far more likely to respond with renewed determination to focus and be disciplined. Try it, believe me it works!!

By: Kevin Minne
InnovationGrowthSystems.com
720-354-0291

Trust Building Time Warp

8/12/2016

Jack Welch of General Electric fame says Truth and Trust are the two most important words in business. Mr. Welch has a powerful point, because all business has elements of risk and possibly the biggest risk is in the relationships. Businesses that focus on building trust and truth into their relationships (both within the company and without) will eliminate a large portion of the risks and uncertainty of doing business. So, the question becomes, what can we all do to bring those two words to life in our everyday work?
Considering that we are once again in the heat of a presidential battle to see who will be elected the next president of the United States we should take note. We are hearing lots of promises but one thing we know about politics is that many of the promises made will not be kept (unfortunately, this is also true in business all too often). Still, there is big demand for making promises, we the people like to hear promises even though the chance of follow through might be pretty low. A good promise is the beginning of building trust but unfortunately it is not the end. The completion of a promise is the resulting trust that comes from all the hard work of delivering what’s been promised. You could say that the very purpose of a promise is to build trust!
The promise really is the easy part, it’s just words, but it is still a vital part of building trust. You can’t build the oh-so-valuable trust in business on just the delivery, you must have the two parts to build trust, one the promise and two the delivery. (The ability to make a promise turn into reality is what builds trust and credibility.) Now we have all heard that building trust takes time. But what if it is not the time element that builds trust but rather the actions and events that take place in a period of time that really count? (I’m not likely to trust someone I have just met once every two years). If we could create a star trek like time warp and shorten the time it takes to build trust in a sales or working relationships wouldn’t that be cool and give the would be “trust builder” a huge innovative edge? Well maybe this isn’t science fiction and there actually are ways to do that. Here is the accelerated trust builder solution, since it is the truth in our promises that builds trust, we need to focus on:

Making promises that our customers really care about. (There must be real value that comes from delivering our promises.)
Making only the promises we know we can keep (no matter how tempting it is to tell people what they want to hear, trust comes from truth even when it’s not good news).
Make lots of promises come true! (Quantity builds credibility and they don’t all have to be about your product or service.)
Breaking up our BIG promises into smaller parts. (Again quantity builds momentum and the more ways we give customers to judge us the quicker they will be to trust us.)

Truth and trust are certainly not new in business but they are still the most valuable. Anything we can do to build them into our business relationships will affect the bottom line.

By: Kevin Minne
InnovationGrowthSystems.com
720-354-0291

Home Building Innovation or Motivation?

8/5/2016

Thanks to all of you who gave feedback on the “Housing Identity Crisis” post last week!! The feedback included:

This is good information but doesn’t seem like affordability is a very big problem yet.
The way trades are paid should incentivized them to innovate.
It is the automation that gives auto manufacturing such an enormous advantage.
With all the human pieces from so many different skills it is harder to innovate.

Here is some thoughts to help expand on this feedback.
1. The problem with “not being a big problem yet” is that innovation success is inversely proportional to the urgency (according to Scott D. Anthony, author of “the Little Black Book of Innovation”). Meaning, we think and create better when we are not in a crisis and we may not have the resources available to innovate in a crisis. So, when everything seems to be going well is the best time to try to cannibalize your product or process.

2. Unfortunately, pay incentives have enormous limitations, they have their place but if a person already believes they know the best way to do something or are satisfied with the way things are, they will rarely take a new look. Also, incentives do not create skills, innovation is a learned skill set and unless you have that set of skills on the team the chances of real game changing break throughs are minimal. I am not aware of anyone in the home building industry that is focused on innovation learning and training, especially since builders are depending on the trades to come up with any innovation. Almost all trades are small blue collar contract labor that don’t have an innovation focus or even the ability to produce innovation training. (Whereas Toyota invests heavily in vendor and supplier training.)

3. Certainly automation can and has improved manufacturing productivity but according to Jeffrey K. Liker in his book “the Toyota Way” the biggest improvements have not come from automated machines but from a systematic process of eliminating waste in all aspects of the manufacturing process. Such as, no wasted movements, eliminating defects, minimizing material transport, minimizing inventory, minimizing waiting and maybe most important not wasting worker creativity. We lose time, improvement ideas and learning opportunities when we don’t engage and listen to workers. To my knowledge not one builder has tried to adapt a proven, efficient manufacturing system (such as the Toyota Production System) to building. One successful home builder suggested that some of it might be a matter of more motivation rather than innovation that is needed. He pointed out that shortly after the down turn workers were so hungry that a model home was built in just 6 weeks!!! Wow, that is a 330% improvement in the average cycle time!!! So, it is possible to turn inventory much faster than the average but that was a sprint not a marathon and a sustainable work pace over time is a critical factor. Even an automobile engine can run above red line for a short time with little chance of damage but it isn’t designed to operate safely and effectively at that speed. Motivation is certainly a factor but it might have more to do with managers and builders having the motivation to engage workers, gather valuable ideas and input in order to eliminate waste and design breakthrough products and processes.

4. Innovation is truly a uniquely human capability, machines are incapable of innovation at this time in human history. On the other hand humans are not designed to operate as a machine, with continuous uninterrupted production, we are actually more productive when we stop periodically to create and innovate. Henry Ford learned over a century ago that anything over an eight hour work day brought a decline in productivity and quality, yet very few builders emphasize working hour restraint or encourage family and recreation time.

I would love to hear your ideas on how to solve this problem??? Just click the “comments” right below the “like” or “tweet” icons to add you thoughts.

By: Kevin Minne
InnovationGrowthSystems.com
720-354-0291

Housing Identity Crisis, Can We Afford to Innovate?

7/29/2016

Even though the home building industry is ripe for disruptive innovation (BIG not incremental reductions in cycle times and costs) it might be that the industry cannot afford to innovate.
   The problem with the housing market (one of them) is a confusion of identity. Just like a bank balance sheet where an entry can be both an asset and a liability, a house has the same two opposing identities. For most people their house is their biggest investment (asset) and like any good investor the goal is to buy low and sell high. On the other hand housing is a cost (liability) and it’s always good to keep costs low. In other words when people can afford to buy a house they usually jump in and wait for the price to soar (meanwhile controlling their housing costs) so they can get rich selling to someone else. But in order for home owners to get rich off this legal Ponzi scheme and for prices to go higher there needs to be more buyers than sellers. (Simple stuff so far right?)
   Unfortunately, the higher house prices go the fewer people there are that can afford to buy in and the chances of getting rich from selling your house diminishes. That’s where banks step in with their version of a solution to solve the problem. Banks have a vested interest in higher priced houses (protecting the value of your shared asset) so they facilitate the buy in by loaning more and more money to buyers which drives up prices and makes happy bankers and happy sellers. (It’s all good right?) Only it’s not, because the rising entry prices and falling incomes are eliminating more and more of the desperately needed buyers from being able to qualify for a loan and keep the cycle going. (One recent Gallup poll over a two year period showed a 34% increase in the number of people who gave up hope of ever owing a home.) For a market to be healthy there needs to be lots of participation and when participation drops it might be time to look out below. (Are you with me so far??)
   So, this is where the identity crisis becomes a problem. We need to be able to lower the entry cost of buying a home and simultaneously keep home values high for banks and owners. (When you figure that one out let me know!) But wait, maybe it’s time for a good old fashioned market correction to help make housing costs temporarily cheaper right? Unfortunately, the last time this happened, lending standards tightened and many would be buyers lost their jobs which exacerbated the problem. So, what do you do when the only people who could drive up housing prices can’t afford a house? If we continue to loan money to keep prices up and increase participation we will have to have lower lending standards…. oh, wait we already tried that! Or, we can focus on those really BIG not incremental (say 50% reductions in cycle times and costs and improvements in productivity. But wait… if we cause a big drop in home building costs wouldn’t that lower the value of all homes overnight? Think about what digital cameras did to film or the fax and email did to snail mail or cell phones did to land line phones, etc. etc.
   The real questions are, can our whole “home owner investment philosophy” and our (still on life support) banking system and economy afford that kind of lowered housing price that might come from disruptive innovation? And, how can we avoid another housing calamity if we don’t innovate to lower housing costs?

I would love to hear your ideas on how to solve this problem??? Just click the “comments” right below the “like” or “tweet” icons to add you thoughts.

By: Kevin Minne
InnovationGrowthSystems.com
720-354-0291