I have to ask you some questions at first!
Is your leadership authentic, researcher, learner, developer, implementer, improver, futurist, activist, thought leader, competition and customer intelligence source, networker, agile, problem solver, decision maker, long-termist, systematic innovator, collaborator, globalist, and strategist on business?
Does your leadership have the quality of being open and honest in expression to create trust, influence, operational excellence and agility within the organization?
I like the winning approach of Jack Welch (former CEO of GE) and his definition about lack of candor. "Lack of candor blocks smart ideas, fast action, and good people contributing all the stuff they have got. It is a killer."
Today companies are competing for talents, technologies and market leadership to have continuous growth and profitability. This competition is intensifying every day and it creates a hypercompetitive business world. Therefore the global race for knowledge and talent is accelerating.
When I look at the business world, innovation opportunities in growth and profitability for companies will come from the fields of climate/energy, health/nutrition, mobility, security and communication by using high technologies. These high technologies are biotechnology, nanotechnology, optical technologies, micro- and nanoelectronics, optical technologies, materials technology, services research and development, space technology, microsystems technology, information technology, communication technology, health technology, agro-food technology and production technologies. These key technologies, successful leadership and well education and training in business are the drivers of strategic marketing and innovation and also new products, processes and services in the global business world to have high competition power. Of course service and technological innovations should be linked to create success.
Therefore companies should focus in truly effective leaders, superior talent management, strategic marketing and innovation management, and strong R&D departments. Of course innovation can be achieved through new technologies, innovative services and creating new customer needs and also entering into a global business world which demands new solutions and answers for customers.
Peter Drucker (Management guru) definition is really excellent: "The business has two - and only two - basic functions: marketing and innovation. Marketing and innovation produce results: all the rest are costs."
Ralph Lauren (founder of Polo Ralph Lauren) definition is showing the importance of new products and services within the customers' eyes: "I don't design clothes. I design dreams". This means that you have to bring a value to customers. So that they will feelsuccessful and proud.
I see that the following key issues are crucial for business leaders/managers. They have to take action to create sustainable growth, profitability and competitiveness faster than competitors.
BUSINESS! HOW?
I can define the business as a profit seeking activity that provides products and services that satisfy consumers' needs. Profits are the lifeblood of a company. Business should create productivity and profits as incentives for innovation. If there is no profit, companies won't spend money for research and development (R&D), and they won't invest in producing and marketing new products or services.
Solution:
1-Prepare, develop and implement a business strategy that focuses on helping, supporting and engaging the customers to achieve their goals, what products or services to offer in short and long-term, and how to undertake related business activities efficiently and faster than competitors.
2- Apply long-termism as a business strategy.
3- Define the ways of changing the playing field through an acquisition, a new product, a new service and/or globalization.
4- Hire and work with truly effective leaders/managers. Therefore put the right people to the right jobs to drive operational excellence, organizational agility, and collaborative and competitive innovative culture within an aligned organization.
5- Seek out best practices, processes, technologies, services and execute them on the basis of systematic and continual improvement or reconfiguration.
6- Make competitive intelligence.
7- Make a long-term sector analysis and if necessary make healthy disengagement on time to protect your business from failures.
8- Provide governance, budgeting and resources for innovation separate from business as usual.
9- Train and develop your people in the organization in a continual manner.
10- Create a culture of candor in the organization.
11- Focus on productivity and provide continual increase.Lean the problems and solve them.
12- Take place in international markets before than others and benefit from the globalizing value chains.
13- Don't fail to the trap of competitive advantage. In today's hyper competitive world, there is a transient competitive advantage. Now you can have a competitive advantage but you can fail in 6 months or several years due the changes in technology, new products and services or competitors.
MARKETING! HOW?
I like this Japanese proverb; "Vision without action is a daydream. Action without vision is a nightmare".
The key marketing principle is to create value for its stakeholders by creating superior value for its target customers and collaborators. Therefore marketing activities must create superior value for its customers in a way that benefits the company and its collaborators. The created value by offering for target customers, collaborators, and the company should be greater than the value that created by competitors' offerings. Otherwise this will contribute inefficient marketing exchange and market failure.
There are five key activities to capture value in marketing management such as setting goals, developing a strategy, designing the tactics, defining an implementation plan, and identifying a set of control metrics to measure the success of the proposed action. Marketing strategy should outline the master plan of activities to achieve the company's goal and this is defined by two key decisions: identifying the target market and developing the offering's value proposition.
The question is how we can create superior value for customers, collaborators and company?
Solution:
1- Work with truly effective marketers. They should have strong experience, know-how and good skills (includes high emotional intelligence).
2- Identify target customers and group customers into segments. I see that there are many customer segments in the food industry and some of them don't exist in the Turkish market. This will create superior value for the right entrants on time.
3- Create effective customer value management and develop a value proposition and positioning strategy.
Sam Walton (founder of Walmart) has a perfect definition: "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."
4- Effectively manage the company value creation and achieve a sustainable profit growth. Therefore increase sales revenues through price and/or by increasing sales volume, steal share from competitors, bring new customers, increase sales to existing customers, decrease costs of goods sold, optimize marketing costs, as well as lowering other costs such as administrative, capital, supply, and process.
Profit growth can also be obtained through mergers and acquisitions. Therefore look at external opportunities (local and global).
5- Make competitive intelligence. The organizations should create a competitive intelligence function for surviving because we are living in a hypercompetitive and the digital age.
According to Maria Ioia; (New Rules of Competitive intelligence) Competitive intelligence:
a- Keeps the business at the cutting edge.
b- Provides healthy risk management.
c- Collects information to make better and competitive decisions.
Competitive intelligence will provide all of the necessary information to create a sustainable competitive advantage. Of course you have to reconfigure your actions according to the changes in technology, services, processes, customer needs and living culture.
6- Develop and implement right marketing strategy with tactics. Link your strategy and tactics. Focus on your product, service, brand, price, incentives, communication, and distribution.
7- Apply effective communication management. There are a lot of changes in communication methods due to the developments in technology. Now we have TVs, prints, one-on-one communication, company driven communication, and customer driven social media interactions. Communication is a value-creation process. When you prepare designing the offerings of the communication campaign you have to consider five Cs or customers, competitors, collaborators, company, and context. Finally you have to evaluate communication effectiveness.
8- Effectively manage customers and create customer loyalty.
9- Effectively manage new products, technologies, and services.
10- Apply effective product-line management.
11- Develop and implement an effective marketing plan and reconfigure it regularly. A good marketing plan should include executive summary, situation analysis, goal, strategy, target market, value proposition, tactics, implementation, control and exhibits.
12- Apply effective packaging and color management.
13- Respect regulatory standards and manage well.
14- Effectively manage quality. Don't fail!
15- Your key processes should also be opportunity identification, new product and/or service development, customer attraction, customer retention and royalty building and order fulfillment.
16- Effectively manage mega-retail marketing and demonstrate and document the profits they will make if they carry your products. This is a battle and it will increase. Be careful!
17- Consider social and environmental impacts of your products and services.
INNOVATION! HOW?
Many leaders/managers see the innovation as the new product development and launching. Some others see innovation as a magic. These are not correct. Innovation is a systematic and continuous development and improvement processes that cover all of the business operations in an organization. People from top level to the bottom, everybody should work in highest alignment and improve and also make better their daily operations faster than competitors.
Innovation is a management process. Traditional industries such as manufacturing, retail and agriculture continue to suffer in the current economic climate and the role of innovation is being a key competitive factor for future local and global competitiveness. In order a company to compete on the local and global stage, not just on price but also quality, consistent, fresh and new ideas and their execution are key.
Sergey Brin (Co-founder of Google) definition is really fantastic: "The fact is coming up with an idea is the least important part of creating something great. The execution and delivery are what's key."
Are all of these improvements sufficient for creating competitive advantage? The answer is "no".
Solution:
1- Establish an innovation department, strong R&D and customer immersion lab. Hire and work with well experienced people who have strong know-how and personal skills. Encourage and nurture disruptive individuals also.
2- These people should know the local and global markets, supply, operations, process, regulations, quality, new product development, marketing, sales, power branding, customer needs, finance, talent managing, technology, collaborators, competitors, and last and important one "Innovation Management".
3- Effectively finance innovation activities. For example top 20 spenders for innovation are spending 8.3% (average value) of their annual sales to R&D. Global innovation 1000 companies had $17.7 trillion in sales in 2013.
4- Incorporate CEO ownership. Innovation people should report directly to CEO.
5- Perform a culture of rewarding and celebrating the innovation success.
6- Develop and implement a marketing and innovation strategy. It should contain short and long-term competitive and systematic marketing and innovation development and implementation strategies.
7- Make competitive intelligence.
8- Perform a long-term sector analysis.
9- Go to new markets (local and international), and also bring and create new technologies, new products, new concepts, and new services.
10- Provide a better and continuous communication with customers.
11- Create openness to new ideas from competitors, customers, collaborators, suppliers, other industries and your company.
12- Customize your products to local markets and geographies.
13- Create human behavior change, commitment and a collaborative culture across functions, networks and geographies.
14- Create a passion for and pride in your products and services offered to customers.
15- Strongly identify customer experience and make necessary reconfigurations on time.
16- Always offer advantaged products and services better than competitors.
17- Produce prototypes faster than competitors and test them with real customers.
18- Be faster than competitors.
19- As a leader, develop and implement a culture of innovation that ensures that your chosen innovation strategy is clearly aligned with your overall company strategy.
20- The key finding is that culture is key to innovation success, and its impact onperformance is measurable.
21- Follow and understand emerging technologies and trends and also apply faster than competitors.
22- Generate customer insights and engage with customers effectively.
23- Make a market potential assessment.
24- Make a technical risk assessment.
25- Use internal and external sources (local and global) for excellence in innovation.
26- Innovators should be in every phase of innovation such as ideation, project selection,product or service development and also commercialization.
27- Effectively manage product life-cycle.
28- Innovation success is not easy. Consider different factors, including your company’s openness to new ideas, its ability to manage innovation projects from conception to market launch, to kill projects early on, if necessary, and to tie new product and/or service development tightly to specific your companies' competitive financial, sales and marketing goals.
29- Be close to customers or users. Catch their unmet and unarticulated needs and experiment them.
30- Take calculated risks.
CONCLUSION
If you work with the truly effective leaders/managers or authentic leaders/managers, or winners you can create an organization that looks at business through customers' eyes to create competitive value. Work with the right people who win and create sustainable growth, profitability, competitive advantage and high customer value.
You need to be aware of the Valley of Death! Your people should have true skills and available resources to create a successful business, marketing and product innovations to ensure products do not die in the Valley of Death.
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