With all the noises in the media about the  end of this recession, it’s tempting to think that we are getting back to normal. The light at the end of the tunnel – we’d like to convince ourselves that it is indeed there. While it is natural to hope that a nice and juicy steak awaits us at the end of what has been a bread-and-water period for most businesses, the reality is more sobering. Not only is the recession not over yet, the recovery too comes with its own set of challenges for the economy.

While the scale of the current recession seems unique and frightening, previous recessions do have something to teach us. Contrary to popular perception, Roosevelt’s New Deal did not instantly solve the problems created by the Great Depression. As data from the 1930s shows, recovery was slow and peaked only with the onset of WWII and the increased demand created by it.

As a result, it would seem imprudent to bet your business’ future on the hope of a powerful economic resurgence. It will likely be a later, lower, and slower trajectory than we would hope. Rather than waiting for the market to “return”, the companies that are successful during this time will actively transform the downturn into an “upportunity”. And even when the recession fades, the “new normal” will differ from the ‘good old normal’.

At the bottom, the only way is up

If the economy is going to continue its roller-coaster act, there is no point in wishing for a more even ride. Instead, the only solution is to accept that we are going to be thrown around and recharge ourselves to meet the challenge. That means recharging our internal structures so that teams are poised to identify and grab opportunities. It means re-looking our policies so that employees are empowered to truly innovate, rather than just going through the motions of their jobs. It means being consumer-centric in thought and action so that ‘consumer need’ is not just something to fill up the spaces in the mission statement.

What if the window of opportunity is slammed shut in your face?

If an external crisis is indeed an opportunity to rejuvenate the business, why isn’t every company running for the chance? The truth is that change is always harder to implement than it looks, and nobody wants to change unless they have to. We say that “necessity is the mother of invention”, but she’s also the mother of “implementation”!

There are many instances of businesses that lost great opportunities, simply because there wasn’t a pressing need to change. In 2000, Tony Fadell pitched an idea to RealNetworks, which was doing very well selling various media products online at the time. What was his big idea? A nifty little music player that could also link to music-serving media online. RealNetworks was not interested because they didn’t see why they should invest in a personal music player when their online business was already doing well. By now, you must have realized that this product was the iPod. Tony Fadell contacted Apple which agreed to fund the research and development for the product that eventually changed the way we listen to music today.

Don’t be too harsh on RealNetworks though – mostly, things don’t get done in an organization unless they HAVE TO get done! DeBeers, the diamond marketing company that once controlled 90% of the world’s diamond market, is one company that dramatically changed the way it worked, spurred by events beyond its control – the downturn after the Great Depression. In the 1930s, the company realized that consumers were simply not buying diamonds. Until then, DeBeers was purely a trading company that sold uncut diamonds to wholesalers and retailers. When these middlemen stopped buying diamonds, DeBeers decided that it would have to change the rules of the game rather than just wait for the market to revive. From a trading company, DeBeers became a consumer marketing company that spoke directly and passionately to end consumers about the value of a diamond. Not only did diamond sales pick up, but the company immortalized the ‘Diamonds are Forever’ theme and made diamonds an absolute essential for any couple to be married.

A downturn or a launchpad?

The pressure of the downturn is the perfect way to make change happen in your firm — if you have a catalyst to help guide it and make it happen. As the perception of external threat wanes, the opportunity for change – lasting, meaningful change – will wane at your company, because people think that it’s all going to be ok. Don’t wait for the window of opportunity to be slammed shut in your face.

If you want to act quickly to find and keep that window of opportunity wide open, you will need to harness the urgency of the recession to orchestrate action. An outside catalyst can be helpful in getting people to see and think about things in new ways. It’s also helpful to create an event and timeline around implementing change. Otherwise, we will just suffer through the recession without reaping any positive benefit.

If you want to act quickly to find and keep that window of opportunity wide open, contact Insighting Ideas to learn more about our “Repossibility” planning session that can help you and your team uncover new opportunities and cater to them.

Let’s not ‘turtle’ our way through the recession

Millennia of shared experience and painful years of direct experience have taught us to keep our heads down in times of crisis, lest we draw attention to ourselves. All this conditioning has trained us to think that if we don’t rock the boat, we might get through the storm OK.

From our herd instinct we have learned “there’s safety in numbers”. But marketers know that in order to get heard, this is a death wish. Only by standing out will we remain standing.

Now this does not mean, as some marketing agencies have been disingenuously promoting, that we simply “stay the course” and just keep advertising our way out of the recession. This makes sense only if we believe our prospects have money they could be spending with us, but are not, because they do not sufficiently know or appreciate what we are offering.

But this is not the problem. The problem is that they have less money to spend. So we cannot expect that simply repeating the same message about the same products to the same prospects is going to yield the same response it did before the recession. If we are going to be truly relevant to prospects who are facing new problems we are going to have to do it by innovating to find better ways of meeting those new needs.

everything that Jeff Bezos knows

This summer, Jeff Bezos, the CEO of Amazon, talked about Amazon’s acquisition of popular online shoe store Zappos, in an 8-minute video, a talk that he claimed was about ‘everything he knew.’ In short, what he said was:

1.Obsess over customers.

2. Invent. Invent on behalf of customers.

3. Think long term. Not all inventions will pay off immediately.

4. It’s always Day One. There’s always more to invent.

Excited about acquiring Zappos, he said, “I have seen a lot of companies and I have never seen a company with a culture like theirs. That culture and Zappos brand are huge assets I value very much.”

Clearly, Zappos has something ‘different’ about it that has delighted customers, analysts and now the big daddy of the online shopping space.

the Fanatics @ Zappos

Why should such differentiation matter to businesses? In the case of Zappos, they have an almost fanatical devotion to customer service and will go to lengths that other businesses may consider absurd. For instance, their returns policy allows customers to return footwear up to a year after purchase, with free return shipping. Unlike most online retailers, they delight in taking customer calls. They will even refer you to other stores if they don’t have the product you need.

Suicidal, most retailers would say. And yet, about 75% of purchases at Zappos on any day are from repeat customers, a figure that most brands would give an arm and a leg for. Year on year, their revenues are up 30% — even in a down economy. And that investment of extraordinary customer care paid off in an acquisition price of nearly $1B!

That is the power of differentiation. Zappos is certainly not the only online shoe store. In this economy, it is true that customers are shopping around for the best value. The thing to note is, ‘best value’ does not mean ‘lowest price’ for every consumer. Even with few dollars to spare, customers will still look for other ‘value’ benefits such as durability (can use a product longer), ease of buying (spend more time on that job search instead!) or better service (reduce the risk of being stuck with something faulty). Brands such as Zappos have built themselves by offering that differentiated value.

If such behaviors apply to something as discretionary as another pair of shoes, think of what this means for a considered purchase in a B2B environment!

slow death for copycats

What of the converse? If your company is currently selling undifferentiated commodities, you know how difficult it is to market them without slashing the price. In tough times, customers expect the imitator to offer an even bigger discount to compensate for the implicitly greater sacrifice that continued purchase of your product represents to them. Consider this – purchasing your $100K product out of their present $1M budget requires twice the commitment it did back when they had a $2M budget.

With undifferentiated products, your profit margins get more and more squeezed and you watch your bottomline rapidly turning red. Soon you discover that deep discounting is not sustainable unless you have the scale of a Wal-Mart.

finding what makes you different

Companies don’t become differentiated in one day. As the Zappos example demonstrates, differentiation often stems from a company culture, philosophy or vision. Without total commitment from business owners, differentiation simply becomes another fancy word that never actually gets translated into anything. So, first, there must be a desire to innovate at the highest level.

In addition, business teams must do the hard work of identifying relevant areas where they can make a difference. Sometimes, this may mean that a particular business will take time to pay off. This is where owners’ commitment to fund the business and open up other avenues to keep the cash flow going is critical. Some companies such as 3M and Google empower employees to innovate by allowing them to spend some time on free-thinking, creative work not directly related to their job. For smaller companies, helping employees innovate and find the difference can be a big challenge in itself.

avoid zebra innovations

To a zebra, no two zebras are exactly alike. To the human eye, however, the difference in stripe patterns is so negligible as to be non-existent. Don’t let your innovation fall into that category.

Translating innovation into market relevant products and services is a big challenge but this is also when all the hard work finally begins paying off! This involves understanding the market well so that your hard work isn’t irrelevant to what consumers need or will pay for.

When Apple developed the iPod, customers didn’t pay simply for a smaller device that would let them listen to music on the move. The idea was not to offer a better portable music player. Instead, Apple’s innovation lay in giving consumers an easier way to access the music they liked, in units they wanted, rather than having to buy an entire album in the form of a CD.

Ultimately, the only innovations that work are those which offer customers credible differentiation in some form. Does it help them do more? Can they do more with less money? Does it help them spend their time better? Does it make their lives more enjoyable or less stressful? Innovations that create a difference on these lines are the ones that customers are willing to pay for. Getting from conceptual innovation to concrete differentiation is a process that must address these questions.

Finding your own unique uniqueness

InSighting Ideas helps companies develop customer-centric innovation and then ensure that nothing is lost in the translation from innovation to differentiation. We ground our innovation sessions in a sharp understanding of customer behavior and the “drivers” that motivate that behavior. These come from a contextual understanding of the customer’s purchase and use of your product, including a powerful mix of ethnographic research and creative ideation. As a result, our recommendations are all based on insights about what prospects seek and are not getting from other providers currently. We help tap those pain points which exist, and which too often, companies miss.

If you believe that your team could create stellar differentiation to help your company succeed, our five-step program based on our expertise can help you in uncovering unseen customer insights, creating customer-centric innovation and relevant differentiation. If your company would like to straddle the path from innovation to differentiation, contact InSighting Ideas to ask for a free consulting hour on how we can help you create your own opportunities.

Who knows? Maybe we can create $1B of differentiation for Amazon’s next acquisition!

The Ice Man Cometh… and Stayeth

In the 1880′s a new industry evolved: ice. Folks had these fancy new contraptions dubbed “ice boxes” to prevent their perishable food from spoiling. Milk, eggs, meat – all the foods that contributed to better health needed special preservation. The answer came in the form of the icebox. Its only drawback was the ongoing need for ice blocks.

That gave rise to ice harvesters who spent the winters cutting ice from frozen lakes and storing it for later delivery. No matter where you lived, you could get ice delivered. And no need to struggle with ice preservation. The iceman took care of that.

Ice harvesters continued doing what they always had – cutting, storing and delivering ice. They embraced what they knew. Their only improvements came in the form of sharper saws and better ice delivery methods.

Enterprising ice sellers realized that the advent of commercial refrigeration provided an opportunity for ice manufacturing, allowing them to sell ice year round. With their noses to the proverbial grindstone (or ice block), they continued to provide customers with what they thought customers wanted: ice. But the ice manufacturers failed to realize what customers really wanted – an easy, reliable way to preserve food! The home refrigerator was the real answer.

Five Paths to “Upportunity” in Tough Times

In his best-selling Reality Check, Guy Kawasaki finds “upportunities” even in the economic turmoil of 2009. He identifies five “upportunistic” principles to “challenge the known and embrace the unknown”. The ice harvesters of the 1880’s failed to do this. But we don’t have to…

Jump curves. Depicted visually, change can be viewed as a series of S-curves, and the shortest distance between two points is always a straight line. Ice harvesters failed to look ahead to the next curve – ice automation. Ice factories failed to see the curve ahead of them – home refrigeration. Curves are occurring faster every day due to global hyper-linking. Smart businesses are looking ahead finding new ways to connect with their clients. They’re looking to the next curve: “True innovation occurs when companies jump to the next curve – or better still, invent the next curve.”

Make meaning. Focus on making meaning rather than making money. Products should enable people to do things better, do what they always wanted or do things they didn’t know they wanted to. The ubiquitous iPod is the perfect example of the latter. Listening to music has been around forever. Sony’s Walkman enabled listening on the go, but cumbersomely.

The iPod not only broke that barrier, but also launched another innovation: the podcast. Kawasaki writes, “Entrepreneurs who make meaning and change the world also make money. Nothing is more seductive to a venture capitalist than a company that may have a big impact on the world.” Make meaning and the money follows. The refrigeration inventors made meaning. Their predecessors made… well, ice.

Define purpose. Forego the typical jargon-filled, happy-talk “mission statement”. It sounds good, but it’s pretty useless. Develop a ‘mantra’ instead: three or four words that clearly define your distinctive purpose in the world. For example, eBay brings “online commerce for everyone”. Nike stands for “authentic athletic performance”. Target lets people get “cool stuff cheap.” Replace useless flowery mission statements with a purpose phrase that’s real.

Hire passion. Loving what you do far surpasses all the education and experience in the universe. The real power of purpose is the passion behind it. Motivation and attitude trump skill and knowledge every time. Passionate people serve customers as opposed to being customer service agents. Although semantically similar, the concepts are light years apart.

Create buzz. Innovative products that result from the above sell themselves. No marketing required. It’s exactly what causes some things to go viral. Kawasaki refers to this as using digital means to an analog end. The purpose of innovation is not to create cool products; it’s to make people happy. Although literally “cool,” the end result of the refrigeration innovation was families enjoying safe, fresh, refrigerated food.

What’s Next? Look ahead to your next curve. Find your purpose and define your existence. Challenge your known and embrace the unknown. Hire the people with the passion to make it happen. Are you ready to think outside the icebox?

Learning the ABC’s

In the highly technical fields of information technology and medicine, there’s nothing short of a quagmire of acronyms and complex detail. When the two intersect, the swamp grows exponentially. You might think you’d need a number of advanced degrees to create success, but as it turns out, with a nod to Robert Fulghum, all you really need to know you learned in kindergarten.

Many corporate giants have forgotten that or never saw its applicability in the first place. And many of these same behemoths are struggling in the down-turned economy, now mired in their inabilities to change (or change quickly) and unable to understand what their clients and end-users really want. And the kindergarten lessons remain forgotten.

One such medical device industry giant continued to lose ground and market share. On the other hand was a small but growing competitor who consistently garnered top industry ratings. Goliath needed to learn from David. They wanted to know how to compete as they prepared to develop and launch their next generation system.

Implementation of a new system like this is a large, risky venture for a hospital, and not a decision taken lightly. With our experience in IT as well as healthcare, they asked us to help.

Going Back to School

To find out what hospital clients valued so much about this competitor, we conducted a series of in-depth interviews at hospitals using the competitive system. With such a small share of the market at present, it was a challenge just to find hospitals with this system. When we did, we were prepared to hear about its superior features and extraordinary implementation process. But we were in for a surprise.

The competitor’s system usually was judged adequate, but for some it was disappointing. Still, they gave the company top ratings. The complicated integration process was average, and there were glaring errors at some hospitals. But still they gave the company top ratings.

What The Research Revealed

So what made everyone rave about the company, if the product and process were only satisfactory? Their “people” made all the difference… people who were willing to do whatever it took to make it work.

For example, the vendor’s dedication to the project’s success rose to the surface. One hospital staffer recalled a vendor nurse who stayed overnight at the hospital to ensure that she could personally train all three shifts how to use the system.

And it was the little things that added a personal touch. One rep brought coffee to a group that was working late and another brought candy. Both acts were remembered years later by hospital staffers: “They are exceptionally nice… warm… cordial… comfortable.”

And one hospital client perfectly summed up the importance of people over product saying, “[I don’t directly use the system, so] I can’t tell you if it is good or bad. But I know [the vendor team] goes the extra mile for me. I know they will do whatever it takes.” Going the extra mile… people really are at the heart of the simple, kindergarten lesson.

No matter how much technology, science and information are contained in any product or service, the connection between it and customers will always be your people. The best product and process in the world won’t succeed without empathetic and understanding people who turn them into true solutions.

Insighting Ideas, the customer connection catalysts, are dedicated to helping companies transform a market downturn into an “upportunity”. Our “Upportunity Assessment” identifies new ways companies can deliver distinctive value to customers by tapping into the oft-overlooked passion their employees’ already have but rarely engage.

Extraordinary News for Ordinary Companies

Our research demonstrated that an ordinary product with an ordinary implementation process can yield extraordinary ratings ― the passion and dedication of the people make all the difference. People who work from the client’s perspective rather than the vendor’s perspective and simply do whatever it takes. And in commoditized B2B industries ― or even in highly technical industries like medical devices ― passionate people are the differentiators.

This is extraordinarily good news! It means that your company is not relegated to the competitive scrap heap unless you come up with the “winning” product design. It means that you can become the envy of your industry with the resources you already have ― IF you know how to create a customer-centric culture.

In his best-selling book Reality Check, one of Guy Kawasaki’s top ten principles is to “hire passion” rather than “industry experience”. He believes that loving what you do far surpasses all the education and experience in the universe.

There are countless “upportunities” for companies whose cultures embrace passionate people who want to serve their customers. It’s instructive to see the business benefit of a “soft” quality like passion and purpose clearly demonstrated in this research. Just like we all learned in kindergarten.