Why Steve Jobs was the model CEO

"Steve Jobs did what a CEO should: Hired and inspired great people; managed for the long term, not the quarter or the short-term stock price; made big bets and took big risks. He insisted on the highest product quality and on building things to delight and empower actual users, not intermediaries like corporate IT directors or wireless carriers. And he could sell. Man, he could sell."
(Walt Mossberg on Steve Jobs, AllThingsD Oct 5, 2011)

But there is one more thing: He was like a focus group of one, he thought like the ideal Apple customer,  only he was always two years ahead.

All that for a 1$ annual salary.

We will forever wonder what else he could have done.

What Steve Jobs and Michelangelo have in common

According to Fast Company Steve Jobs gave the following business advice to Nike a few years back when they launched the iPod/Nike collaboration: "Get rid of the crappy stuff".

"I expected a little laugh," Nike president and CEO Mark Parker says of the exchange. "But there was a pause and no laugh at the end."

Jobs' comment is akin to one of my favorites, namely Michelangelo's when he was asked how he could create a sculpture as magnificent as David. He said, “I carve away everything that isn’t David.”


(This post was originally published in April, 2010)

The core of strategy

"The core of strategy work is always the same: Discovering the critical factors in a situation and designing a way of co-ordinating and focusing actions to deal with those factors."
From Good Strategy/Bad Strategy by Richard Rumelt. No more, no less. Brilliantly put.

Choose also what not to do

Just read a brilliant article on the essentials of strategy: Ditch the To-Do list and start a Not-To-Do list. Distinguish between To Do and To Die For. We tend to forget that strategy is not only about choosing what to do, but also about choosing what not to do.

The article is written with an innovation perspective but the principle applies to all kinds of strategy. Remember what Michelango answered when asked how he could create a sculpture as magnificent as David: "I carve away everything that isn't David".

It also applies to how we approach our work in general. I've worked with a performance consultant over the years when I was at Levi's and also at Lego, and I'm still inspired by his approach.
One of his principles is that potential - interference = performance. Interference can be many things but often it's dressed as a hell-bent focus on tasks. We buzz around all day at the office busy doing tasky stuff, when what we should be focusing on is the purpose and objectives, the bigger goals.

Stephen Covey and others promote the important/urgent matrix and that's a good tool to create awareness of just how much time we spend on disproportionately time-consuming tasky stuff. But ultimately, it's the mindset that matters. Gerry, the consultant, would always challenge us to get clear on the purpose of our job and the business and whether a given task was aligned with the purpose. If it was not, bye-bye task.

It's really hard to do! It's like taking a leap into the unknown, a leap of faith. What if I don't do this task, what will happen, what might I miss, will the earth stop turning, will the sun still rise?
And it's just as hard to choose what not to do as part of a strategy. But it's among the most important choices we can make. Create a clearing so you can see the forest in there between all the trees. And start chopping.

Read the full article in Business Week here.

Vækstdagen 2011

To my Danish readers: I will be speaking at the annual Vækstdag February 10 in Copenhagen about Brand As Strategy and why Branding is dead while the Brand is very much alive. More info and registration at Vækstdagen 2011. For an immediate view on the topic, pls read the post below.

Branding is dead, long live the brand

Branding is dead, long live the brand. What do I mean by that?

All companies are building their brand(s) every day, it's inevitable. But many don't realize it and have no plan or system for it which can have dire consequences. Perhaps even worse, many think that building the brand has to do with simply raising awareness of it and spending a lot of $$ on campaigns, and much less with delivering value to the customers in a specific and consistent way.

The word 'branding' has come to mean slapping a logo and a cute name on an expensive piece of packaging and then promoting the bejesus out of it. It has come to mean something we do at the end of the product development process, when we are about to launch. It has become superficial, disconnected from the product, the company and the people behind it. This saddens me so, because when approaching the brand this way, we cannot leverage it, we cannot maximise its potential, we cannot serve customers, and we cannot create or develop a business around it.

This is why I say that 'branding' is dead. The brand, however, is very much alive, and in fact more important than ever.
But does brand really matter these days, you might ask, when more and more marketing takes place between people eg on social media networks?

Why yes. Indeed, in a me-too marketplace where everybody has access and can express themselves about any brand any time (and this openness, in my book, is a great thing), the importance of developing and managing a highly differentiated brand - which starts with delivering distinct and superior customer value consistently - is more critical than ever.

We can only do so by putting the brand at the heart of our business strategy. Apart from simplifying the complex, making objectives clear and realistic, and giving direction for everyone in the company, putting the brand at the center ensures that everyone understands the brand promise and works on delivering this to customers every day. And it helps broadening yet clearly specifying the options for business development and growth.

The brand is what people buy. The product, the promise, the experience, and the conviction behind it. Meet and exceed customers' expectations and maximise business potential by putting the brand at the heart of your business strategy.

NB. To my Danish readers: I will be talking about this at the annual Vækstdag February 10 in Copenhagen. More info at Vækstdagen 2011.

Steve Jobs' way of handling customer relations

What other CEO than Steve Jobs has a whole presumably 3rd party website dedicated to divulging and scrutinizing his emails to Apple customers?
Pls find an excellent analysis of Jobs' customer email approach on one of the Harvard Business Review blogs here.

The purpose of companies

The general wisdom contends that the purpose of a company is to create shareholder value. I say it is to create and keep customers. If done well, this helps to increase profits, which then increases shareholder value. Focusing squarely on shareholder value is a short-term perspective, leading to short-term results.
The goal is long-run value - and the customer is the source of that value. So the customer must be the primary focus of any business, not shareholder value. By shifting the focus, you open up a broader range of opportunities that you otherwise just can't see.

The opposing forces of every business

"Every business faces the opposing forces of the pull for more growth against the pull for more profitability; the demand to show profit today against the need to invest in the company’s future; and the call for optimizing the whole against the tendency of individual parts to maximize their own performance. The three performance tensions — growth versus profitability, short term versus long term, and whole versus parts — provide fundamental energy that can be harnessed to deliver superior, sustainable results."
(Ken Favaro and Saj-nicole Joni in "Getting Tensions Right" in Strategy+Business 24 Aug, 2010)

Walk the Talk

Quote of the day: "Advertising is sexy, PR is influential, and design is uplifting; but it's the substance of what you do that matters most" (Nicholas Ind and Majken Schultz in Booz Allen's Strategy+Business, 26 June 2010).

Organizations, you need to get on board with this if you aren't already. Branding is about the whole organization and its stakeholders, not the campaigns and the marketing department.

What companies need to focus on

Fifty years ago, Peter Drucker said that "any business enterprise has two - and only these two - basic functions: Innovation and marketing".

It's unfortunate that so many companies still struggle with both; the good news is that there is so much potential for improvement and progress.

Loosen the reins

"We have to strike the right balance between being in touch and being in control. The irony is, the more in control we are, the more out of touch we become."

A.G. Lafley, Procter & Gamble, on brand management. He actually said this already in 2006 which just makes it all the more true. We had a lot of these discussions at Levi's, my stance being that strong brands only get stronger by facilitating that consumers can talk about it (the brand), rather than constantly saying 'look at me, I'm a great brand and don't you dare say anything different' which, honestly, just comes across as desperate.

Honesty, passion, competence

Honesty, passion, and competence. These were the three values that underpinned the Led Zeppelin, Jimmy Page tells us in the documentary It Might Get Loud about the three guitarists Jimmy Page, The Edge and Jack White. To me, it sounds like many corporations and organisations could learn something.

Thinking man

Last night I watched a program on TV where a sociologist was asked about the characteristics of the 2010's man. She said well-rounded, comfortable with both the 'male' and 'female' sides of himself, sensitive and also not afraid of cutting through whenever necessary. She names Obama as an example of this type of man. I agree.

But I think she's missing a key attribute which Obama possesses in abundance: Intelligence and the ability to think - and being very comfortable with that. And isn't this about time? After all, we're homo sapiens.

Today's links

• Innovation: Why Failing Is OK. Or why 'Fail Fast Forward' should probably be the 6th criteria for successful innovation in organizations as laid out in my post here.

5 criteria for successful innovation in organizations

My old acquaintance Wickie and I met up for coffee the other day, and as we both have an interest in the intersection of organizations and innovation, we discussed our various experiences in this potent field.

At one point she asked me to name the 5 key criteria for successful implementation of innovation projects within an organization.

Many wise books and articles have been written about this and I can only humbly suggest my own perspective which has been shaped by working with 'new stuff' in large corporations the past 15 years.

So here we go, my view on 5 criteria for successful innovation within an organization:

1) Senior management support and advocacy

This is old hat, really, but true nonetheless. If the innovation project hasn't got the support and enjoys active advocacy from upstairs, then forget it.

Be it a new business process, a ground-breaking product, a different set of performance metrics, an untried department structure, a novel view on strategy planning, an unfamiliar business model, a new business unit - it has to be backed by the CEO and his/her management team and explicitly supported and encouraged by them.

If you want to try and go it alone, be my guest - I've done this myself on more than one occasion - but there will be a limit as to far you'll get.

2) The right people

Often, you'll have only few headcounts dedicated to the innovation project so you have to be certain that they're the right people. You can't afford to make hiring mistakes or to lose people in this situation - hiring the wrong person means losing capacity, losing people means losing vital knowledge.

With the right people, you can move at high speed and to high standards, because they create the kind of synergy that make the whole bigger than the sum of the parts.

Not only do people working on innovation projects have to have superior technical/formal skills in more than just their own immediate area. They also have to possess certain personal skills:

• High capacity for learning new stuff and for applying new knowledge, constantly.
• Comfortable with the unknown and with making decisions based on limited information.
• Ability to fly with the eagles and crawl with the ants, meaning keeping the big perspective while getting deep into the engine room.
• Creative thinkers, able to problem-solve and to generate options.
• Driven and with a relatively high level of energy.
• Communication skills, open to and comfortable with a lot of feedback and dialogue.

3) An easily understood plan

Forget complicated, long-winded reports and poetic, flowery vision statements. 'A woolly plan means a woolly idea'.

To get buy-in, the plan needs to be concrete, communicated in basic terms and describe your constituents' role in it. Is it also possible to describe what's in it for them, great, but sometimes there isn't anything in it for them directly, other than a nod from senior management. And actually, that counts for a lot for a lot of people.

4) Stick to the plan

Your plan lays out the goals and how to achieve them. This is worth nothing if you don't stick to it. It's tempting to throw in a new idea that you just heard about from a colleague, your well-meaning boss might have some new thought that would really add a great dimension to the project, the sales guys might want you to please a big customer, and so on and so forth.

Listen to them, take it in, and then tell them why you will stick to the plan. Of course, there might be internal or external developments that force you to take a slight detour or swap the timing of key building blocks, but stick to the overall course and at all times relate everything you do back to the key objectives.

5) Understand where in the innovation process you are

All innovation projects consist of a number of phases that each have certain characteristics, set of activities, focus, and operating mode. Some call it Storming, Forming, Performing, Re-forming. Others call it Proof-of-concept, Proof-of-business, Growth, Scale. Others call it something third, but it all means the same thing, really.

The point is to understand each of these phases, in which phase your innovation project is, and when it needs to shift from one phase to the next. It's not unusual that the project owner or team firmly believes that the project has concluded, say, the proof-of-concept phase and is well into the proof-of-business or even the growth phase. This can be detrimental because focus is on a set of activities that are wrong for the project at that particular time.

For example: A new business unit might assess that it's the right time to start heavily marketing the new service and is overlooking that key business processes are not firmly in place - which would mean that the increased demand would bring the back office to its knees, disappoint customers, and make you unpopular with your supply chain and customer service colleagues.

These criteria, I propose, are the 'high five'. If you have other views on key criteria for successful innovation projects, please don't hesitate to comment on this post or drop me a note.

Celebrating Drucker

Peter Drucker would have been 100 years old today. His ideas are more relevant than ever; such as the idea of the modern corporation as an opportunity for community-building and providing meaning for the people who work in them. More about Drucker's ideas in this Business Week cover story from 2005 when he sadly passed away. Also, check out the November issue of Harvard Business Review which is dedicated to Drucker's ideas in the Drucker Centennial.

Today's links

• Why Marketing Does a Terrible Job of Marketing Itself - and why it's no longer about controlling the brand but about guiding it through its network of users, no longer about managing the marketing budget but about inspiring marketing excellence throughout the organization, and no longer about being a sales enabler but about being a value driver across the enterprise.

What is user-driven innovation - and what is not

Have you noticed the surge in user-driven innovation? Or rather - the surge in companies and consultancies who say that they do user-driven innovation?

Well, I have and it's causing me a great deal of concern. Why, isn't user-driven innovation a good thing, you might ask. Yes, it is. Only most of these companies and consultancies aren't actually doing user-driven innovation. And this is creating problems for the real user-driven innovation, ultimately watering down the concept and its value.

User-driven innovation (UDI) means that a firm involves its users directly in the product creation process ('innovation' could also be innovation in eg processes or eg communication through user-driven content or facilitation of peer2peer communication, but in this post I will refer to UDI as products/services development). There are three main ways of doing that:

1. Co-creation - inviting a number of specific users, often lead users, to create new products with the company's own designers. Example: LEGO Mindstorms.
2. Customization - facilitating that the user can design his own product based on a number of features and material combinations that the company makes available. Example: Nike ID, LEGO Design By Me, Timbuk2.
3. Crowdsourcing - outsourcing product design entirely to the users. Example: Threadless.

There are lots of hybrids of the three categories above but for the sake of simplicity, let's stick with these. The point is that with UDI there are levels of user-involvement - and reversely, levels of brand control - but all involve direct user participation in the product creation.

And certainly, embarking on any of these three requires full understanding of the strategic, operational, and intra-cultural implications and a plan and desire to deal with them.

• For companies born as UDI based companies, like Threadless, this is less of an issue since their entire business is engineered towards facilitation of UDI - it simply is their business model.
• For established companies, like LEGO where I headed up the customization and co-creation business unit for a while, UDI represents issues pertaining to virtually all parts of the company. From sourcing policies, supply chain processes, IT systems, forecasting methodology, product quality standards, legal and IPR matters, corporate culture and HR, success criteria and KPI definition, to brand control policies, marketing principles and so on and so forth.

Simply put, UDI represents a different way of doing business.

But what seems to be happening is that UDI is being reduced to either the upstream research or the technology platforms that enable mass-participation. Let me explain:

Lately, I've run into more and more consultancies and agencies who position themselves as UDI companies. But what they do is research on behalf of a client that involves asking users what they want and coming up with product concepts based on this input.

But that is not UDI. That's market research. 'Oh, but we go out and ask the users in their own environment and study how they use the products and bring back their input', they say. That is not UDI either. That's anthropological market research. Something that most companies ought to do on a regular basis, yes, but UDI it ain't.

Anthropological research does not equal UDI any more than a cat and a dog equal a zoo.

Same thing with the tech platforms. Just because a software firm develops a CMS or a set of apps that enable user participation does not mean that this firm 'makes UDI'. In fact, no agency or consultancy actually 'does' UDI. Only companies whose users are directly involved in the product or service creation can claim that they 'do' UDI.

We have to understand that UDI is a business model and requires a business system and a company culture that underpins it.

We have to understand that it means measuring success differently, designing new processes for the product development, figuring out new reward systems, applying new principles to marketing and branding of the products, changing ERP systems and data flow, aligning the internal interests - and, if we're talking about established companies, perhaps also considering whether UDI should be an integrated part of the company or be developed as a separate entity that operates entirely with its own value chain set-up.

UDI requires sticking one's hands deep into the engine room to understand the operational model that is and the model that needs to be, as well as loosening the grip on the brand and allow its users to bring their interpretation forward. It can seem a bit scary but the better you know your business and the more confident you feel as a brand, the easier it is.

The rewards come in the form of happier users, more loyal users, higher-value users, users that will spread the word. And in the form of ongoing market and user insights, and - if you do it right - more streamlined internal processes, a more agile business operation, and a more change-ready organization.

These rewards, however, only come if we understand that UDI involves the entire value chain and corporate culture, not simply upstream research, as user-centred as it may be, product concepts derived from it and a software platform to facilitate it.

Today's links

• Why the Boss Is a Great Boss - generating loyalty and commitment not so much with use of positional power and formal authority, but with authenticity, integrity, and creativity.
• The Role of the Conceiver in Organizations - they're difficult to deal with but figure it out and the returns will be plenty. Start by earning their respect.