During my MBA I have taken several classes on strategy, one of my most enjoyable was the strategic simulation course. Teams are pitted against each other in a simulated world and are judged on how well they perform in a particular industry. Two of the key things I took from the Fall 2011 class were:
Focus on the strategy not just on the financials.
Depend on operational excellence
Focus on the Strategy
One of our failings was that when our strategy was going well we were tempted to deviate from our strategy in an effort to capitalize on the strength we had built up in the market. For example at one point with our low cost base we were operating profitably in one market without competition who could undercut us without them losing money. We took advantage of this to drive out competitors. We then decided to raise prices substantially only for a new competitor entered the market and undercut us. We came back into the market with aggressive, but profitable, prices and won back our market share. Later in the game this competitor responded by lowering their prices below cost in an effort to damage us financially. If we had not seceded this market by raising our prices and instead stuck with our strategy I think it would have made the market less attractive to others and prevented some of the aggressive moves that occurred.
One of the keys of our strategy in the game was to invest in quality and operational efficiency. We tried to lead the industry on capacity and so we could leverage our fixed costs and cumulative quality investments over a larger number of products, thus lowering our variable costs per item and keeping a low cost base. Ensuring our operational decisions were always aligned with our strategy allowed us to be really efficient and operate at levels other companies couldn’t approach cost wise.
Some of my favorite adverts are those that are able tap into our emotions in order to effect a change in our behavior. The “Dear 16 year old me” social media advert by the David Cornfield Melanoma Fund is one that I really like. A skillful blend of poignancy and humor delivers a powerful message to it’s target audience with a clear call to action. I also really like that the advice is coming from the “older self”, this reference group is far more influential to the target than an authority figure.
This second advert is again targeting people’s emotions but with a very different style. The Think! campaign aims to change behavior when it comes ot speeding. I like how this advert helps viewers to picture themselves and imagine their emotional response to the situation. This advert certainly grabbed my attention and made me more aware of my driving.
Advertising that connects with us emotionally is more effective than advertising that promotes product features. We tend to make our decisions emotionally and then justify them rationally to ourselves later. Creating an emotional advert is much more difficult than creating a feature or usage based advert and can backfire if the emotions are not consistent with people’s existing perception of a brand. The adverts in this post are relatively easy to tie to our emotions because of the subject matter. My next post on this topic will cover some examples of how business advertising can successfully leverage emotions in its messaging.
As I come to the end of my MBA career figuring and getting ready to potentially move out of Utah the time is coming to find somewhere suitable to live. This post will outline a few tools and communities that have proved useful for research:
Finding a Neighbourhood
So you know where you’ll be working but you don’t know where to live yet? There are often several choices but how do you narrow them down? I have found the city-data.com forums valuable for getting people’s opinions about areas where they live.
Getting people’s opinions is useful but there are a couple of other tools that I’d recommend to narrow down where you want to live. SpotCrime provides an easy way of viewing recent incidents reported to the police in a given area. Knowing that there are clusters of crimes on certain streets can help you to know that you should be avoiding particular areas. Another useful website is greatschools.org. This site lets you know which schools serve the areas you are looking into and how well they rate compared to each other.
Finding a Rental
So now you’ve found a neighborhood you like it’s time to find a place to live. I’m not planning on buying a house so I’ve been looking for somewhere to rent. Everyone already knows about craigslist but one tool I’ve found really useful is padmapper. As a visual thinker being able to view a map of the neighborhood with all the available rentals visible is really useful.
Organizing the Move
After figuring out where you are going it’s time to figure out how you’re going to get there. I’ve not found any good resources that help you to select moving companies to assist with the move. Are there any you would recommend?
One of my favorite adverts from 2011 is the Bold Choice advert for Jim Beam. I was reminded of this advert as I am facing some career choices of my own at the moment. The message that “the choices we make, and the ones we don’t, become you” certainly hits home when contemplating a dramatic change. When making these changes we look to the future and try to see what impact the choices will make on our lives.
One of the questions I have often been asked in interviews and during reviews revolves around this idea of seeing yourself in the future: “where do you see yourself in 5 years?” For me knowing the answer to this question has always been a bit vague, personally I don’t find motivation in considering what destination I may achieve after 5 years but what experiences I’ll gain and what impact I’ll be able to make over the next 5 years.
Why not focus on the journey and not the destination?
I watched a great video today of customer talking about one of the products that I worked on at Mobysoft. One of the things I loved about working at an entrepreneurial company like Mobysoft, and now at a customer-obsessed company like Amazon.com, is delivering products and services that make a real difference for customers. Knowing that I am delivering value to a customer makes all the work worthwhile.
Here’s the video [1 min, 30 seconds] of Matthew Gardiner, Chief Executive of Trafford Housing Trust talking about working with Mobsyoft and the RentSense product.
In closing here’s a quote from Sam Walton, another visionary who understood the importance of serving customers:
There is only one boss. The customer.
And he can fire everybody in the company from the chairman on down,
simply by spending his money somewhere else.
I was interviewed the other day about cloud computing by Joel Tobey at Morning Market Call. This is a daily 5 minute program put on by the Marriott school of Management at BYU. Well the results are available below and although I was quite nervous I think it turned out OK.
As I was reading up on the Chainstore Paradox I came across an interesting point on the economy of decision effort which classified decision making effort into 3 levels
At the Routine level decision making is requires little effort as decisions are typically arrived at by default in this situation. At the Imagination level the decision making requires more effort and the ability to see oneself in the opponents position, it is here that the majority of decision making in business is made due to the additional costs of moving to the next level of decision making, Reasoning. Interestingly moving from the imagination level to the reasoning level may not yield better results, especially if the computational complexity introduced is prone to error or bias.
Determining at what level to make a decision is a real skill. I have read a couple of contrasting books on this subject, Blink by Malcolm Gladwell and Think by Michael LeGault. It is the decision, whether to approach a decision with the intuitive thinking promoted by Gladwell or the critical thinking promoted by LeGault, that is of interest to me. In the end I guess it comes down to situational factors, what is the timeframe for the decision, the relative costs, and ability to change a decision when more information is known.
“If you believe that pleasant interviewing skills, a good handshake or the right outfit are a better predictor of future performance than what the person has actually shipped in the past, I think it’s worth pointing out that you’re nuts.” – Seth Godin
Well interview season is coming up for me as I look for an internship this summer. One thing I’ve learnt from my HR class last semester was that behavioral interviews were one of the most accurate way of assessing future performance. So I’ve been busy practicing to be a good interviewee, it’s a different mindset than I had approaching it from the other side of the table as a hiring manager!
When I was younger I was given some advice about running a business, if someone became indispensable then you should fire them. At the time I thought this sounded counter-intuitive and didn’t understand why someone would advocate such a tactic, it didn’t make sense to me, surely you would want to get the most value from your employees for your business? After reading Seth’s book, Linchpin, I recognized the risk reducing tactic in the stories that are shared of how people fear standing out and avoid risk.
Seth’s book is an interesting read, I’ve read several books that focus on the “tactics” of success but Linchpin is one that explains why we so often fail to implement the great tactics we learn. The book covers a lot of ground but is a really engaging read. Becoming a linchpin carries it’s own risk but for me risk and reward are intertwined, if we aren’t willing to take risks in our life then we become part of the middle ground, unable to make a substantive difference in the world around us. It’s an interesting book with some great insights and interesting stories.