Archive for the ‘Strategy’ category

CVS’ $2 Billion Marketing Gamble

February 18th, 2014

'Cigarette Packets - Chesterfield, Peter Stuyvesant Extra Mile, Dunhill Superior Mild, Lambert & Butler Special Mild, Dunhill,  Royal Standard, Embassy Number 1 King Size' photo (c) 2011, Sludge G - license: http://creativecommons.org/licenses/by-sa/2.0/ I was amazed to learn about CVS’ $2 billion tobacco gamble. Is it financial gain or financial ruin?

CVS will no longer carry cigarettes and other tobacco products effective October 1, 2014. Analysts have estimated that the loss of revenue will be $1.5 Billion in tobacco products plus $500 million in impulse sales from smokers choosing other tobacco outlets.

Is the Decision Good or Bad?

Let’s take the decision in the proper light of day. $2 Billion represents about 3% of retail pharmacy sales. And retail pharmacy sales are less than 50% of CVS Caremark annual revenue. Call it 1.5% of overall revenue.

  • For all intents and purposes CVS Caremark is a healthcare company. Is selling tobacco is contrary to good health?
  • There is a definite halo effect. The free publicity must be worth tens of millions of dollars.
  • CVS can redesign how the area behind the cash registers appears, especially compared with other pharmacy chains.
  • About 18% of adults now smoke, down drastically over the last 30 years.

On balance, I applaud the CVS move. The Surgeon General has told us since the 1960’s that cigarettes cause cancer. Raising taxes has helped diminish the sale of cigarettes. Could CVS start a trend toward limited availability of cigarettes?

If I was a marketing executive at CVS I would be jumping for joy at the news.  Stay tuned to see how it ends.

The Takeaway

Bold marketing decisions can be nerve wracking. Big risks lead to big rewards.

Those are my thoughts. Over to you. Please comment below.

1. Do you think other pharmacies like Walgreens and Rite Aid will follow suit?

2. Is CVS really improving its corporate image with this change?

3. If you were a CVS executive, would you have made the same decision?

If you would like to contact me, you may do so by visiting my LinkedIn page, following me on Twitter,  or e-mailing me at rcberman2 (at) yahoo (dot) com.

Building a Culture and Climate of Innovation

October 29th, 2013

'Haenam: Where nature meets history, culture' photo (c) 2010, USAG- Humphreys - license: http://creativecommons.org/licenses/by/2.0/ Jatin Desai, the author of the book Innovation Engine – Driving Execution for Breakthrough Results shared with me thoughts on Building a Culture and Climate of Innovation.  Read my post about Jatin’s observations on Building Your Own Innovation Engine here.  You can read my review of the book here.

1.     How can a company build culture of innovation? (in other words, how can they foster innovation?)

Great question, but very tough to answer in a few sentences. In order to build appropriate culture, one must understand underlying elements that created the current culture. Typically, these elements are: leadership style, style of decision making, organizational structure (span of control for managers), regulatory environment, current customer base, current use of technology and automation, current depth of knowledge and expertise, and organizational orthodoxies (invisible rules). All of these elements have to be fine-tuned for innovation. In fact, there are 15 such elements and 45 factors all together that have to be adjusted to build a culture of innovation.

2.     What does a company need to do to build strong leaders for innovation?

Strong leaders for innovation requires four important elements:

  • Current leaders at the top must role model what other leaders below should do regarding innovation. Leaders cannot ‘demand innovation’ from others. They must demonstrate how to drive innovation through their own personal stories.
  • Leaders at the top must identify huge challenges that must be solved by their best people. This will create excitement for the best employees to volunteer for such difficult challenges.
  • Provide freedom to experiment and learn. Leaders must create a safe environment for internal entrepreneurs (intrapreneurs) to succeed.
  • Provide appropriate levels of resources for discovering new innovations. In the first few years, don’t ask P&L owners to innovate using their own current budget and then penalize them if they exceed it.

3.     How does a company teach innovation and coach others?

Once an organization has developed an innovation strategy and linked it to business strategy, they must build internal capability for innovation processes, tools, and methods.

One ideal step is to develop dedicated resources for innovation – at the corporate level or at the business unit level. Innovation must be treated as a program at the start. After a few years, once innovation as a competency is programmed into the business systems, it does not need to be managed as a program.

When starting an innovation program, we highly recommend developing innovation green belts and black belts. These ranks can be achieved through an internal certification process, or an innovation college, like the education program my firm, DeSai Group, (link) offers.  Promote green belts to black belts when these certified individuals help deliver new innovations to the market numerous times.

4.     How does a firm promote and build innovation teams, especially across silos?

The best way to accomplish the task is to create a daunting challenge that needs a solution. Bring the (cross-functional) team members together to work on the challenge.  Assign a professional innovation expert to design and facilitate the meetings. A good innovation expert will facilitate a focused outcome but will also teach team members what it takes to achieve extraordinary results. The team will have to achieve ‘break-down’ before they will achieve ‘breakthrough.

5.     How do you make innovation a daily habit for everyone at all levels in a company?

Anything can become a habit if practiced repeatedly. In order to make innovation a daily habit, one must come up with new ideas daily. We have identified 11 practical methods for anyone and everyone to help find new ideas everyday:

a)    Think when you are not thinking. For example, going on a run or a walk, cooking at home, cleaning the house, doing the yard work, etc.  Ask questions to stimulate curiosity and creativity.

Who? (Actor or Agent)

What? (Act)

When? (Time or Timing)

Where? (Scene or Source)

Why? (Purpose)

How? (Agency or Method)

b)    Listen to Classical music. Recent studies revealed a molecular basis for the “Mozart Effect”, but not any other music. Mozart, can relieve stress, improve communication and increase efficiency. Creativity scores soar when listening to Mozart.

c)     Read Periodicals you would not typically read – a scientific magazine, for example, if you are more interested in business; or books outside your typical genre. These activities generate “Diverse Thinking” which has proven to be a critical competency in the creative process.

d)    Attend a conference or a meeting outside your field. The knowledge eventually helps you to connect to other ‘dots’ in your life. Being ‘away’ from your daily routine is a sure bet to help find creative solutions to your existing challenges.

e)    Surround yourself with creative thinkers.  So, find some creative thinkers who are comfortable looking at things through a different lens, or are not afraid to challenge assumptions, or who naturally love to explore ‘newness’ in everything.  Find people who love to doodle, draw often, or who are exceptional storytellers.

f)     Immerse yourself in a ‘real’ problem. Ask the right questions, investigate possible outcomes. Write the current challenge; in an open-ended question format. Restate the question in as many different ways as you can.  At the end of the process you can experience much greater clarity of your ‘problem statement’ than before. Once the problem is clear and concise, then dive in.

g)    Keep an idea journal. An idea journal is accomplished when we take the time to commit our ideas to paper or electronic note pad. Throughout the course of any given day countless ideas come and go our way – even though many of them may appear to be unrealistic to us at the time. For most of us, we simply discard them as a passing thought. The problem with that approach is that what we previously believed to be unachievable can change drastically as our minds are expanded with each new success that comes our way.

h)    Take a course to learn a new language or some other skills outside your expertise.  These build confidence and provide the lead over others in the global multicultural working environment.

i)     Be curious and experiment. Leaders value people who display a never-ending curiosity for the many facets of the business. Similarly, successful employees such as intrapreneurs display a never-ending curiosity that emerges as “passion” in a meeting room filled with people. Be curious about everything with everyone, and in every part of your life.

j)      Articulate your idea, seek feedback from co-creatives or other people you trust. Real innovation ideas are those that solve an unmet need in the market. So, it is not about having a new idea or not, but it is about getting them out there first and fast. If you have an idea, quickly test it within your network, with customers or with people who are not current customers.

k)    Create a Greenhouse for your ideas. The four primary negative forces designed to kill your ideas immediately are: time, money, people around you and yourself. For each force identify how to reduce the negative influence on the fresh ideas that desperately need ‘Greenhousing.’  Greenhousing means keeping the ideas safe, then growing them naturally by being more curious, researching the elements and finding possibilities for impact.

The Takeaway

Your organization can build a culture and climate of innovation through a concerted effort to break down silos, teach innovation skills and coach intrapreneurs.

Over to you.  That is the interview. Please comment below.

  1. How does your organization build a culture and climate of innovation?
  2.  How does your organization identify employees to teach and learn about innovation?
  3. How do you find your break through ideas?

If you would like to contact me, you may do so by visiting my LinkedIn page, following me on Twitter,  or e-mailing me at rcberman2 (at) yahoo (dot) com.

6 More Techniques to Repurpose Customer Success Stories

September 24th, 2013

'Customers are the key to everything' photo (c) 2011, Dave Gray - license: http://creativecommons.org/licenses/by-nd/2.0/ Prospective clients want to conduct business with successful companies. How do you prove your worth? CUSTOMER SUCCESS STORIES.

My prior post on this subject 6 Techniques to Repurpose Customer Success Stories generated requests for more techniques. Here are another half-dozen for you.

  1. Direct Marketing: Highlight a customer’s success in a mailer to prospects and customers.
  2. Webinars: Feature a successful customer on a webinar for prospects or customers.
  3. Live events: Invite customers to tell their stories at industry conferences or other events.
  4. Training sales reps: Integrate customer successes into sales training to educate reps. That way you are demonstrating the value that your company’s products and services deliver for customers.
  5. Sales conversations: Engage prospects with a relevant example of a successful customer.
  6. New-employee orientation:  Educate new employees about the organization’s value to its customers.

Bonus Techniques

I have written 4 other posts on Customer Success Stories. Click below to read them.

The Takeaway

Your best advocates are satisfied customers. Utilize their excellent results to obtain new clients.

Over to you.  What are your thoughts? Please comment below

  1. Have you successfully utilized any of these techniques?
  2. What other techniques would you add to the list?
  3. Are your customers interested in success stories as part of your sales process?

If you would like to contact me, you may do so by visiting my LinkedIn page, following me on Twitter,  or e-mailing me at rcberman2 (at) yahoo (dot) com.

Failing Customer Expectations

September 17th, 2013

'Spoon Me - Green Tea Frozen Yogurt with Coconut and Chocolate chips' photo (c) 2011, Calgary Reviews - license: http://creativecommons.org/licenses/by/2.0/ Folks in business like to talk about exceeding customer expectations.  Enter the search  term, “exceeding customer expectations”  into Bing or Google and you will receive thousands of hits.

So why would businesses want to set customer expectations  and then fail them?  Let’s look at an example.

Kiwiburst Frozen Yogurt

I stopped into this Yogurt Shop before a client meeting.  I never had heard of them before.  The particular location was only open a couple of weeks.  The name sounded enticing to me.  Coincidentally, I had just finished listening to a book that featured a kiwi character –a New Zealander.  So, I went in.

What did I expect to find?

  • Signs with “G’Day mate” on them.
  • New Zealand flags or at least the colors of the flag.
  • A cute story about the origins of the name.

What did I actually find?

  • No New Zealand anything
  • No “Kiwi” flavor yogurt
  • A rather sad looking bin of cut up kiwi fruit in a back corner of the toppings section.

Vive La Difference!

The yogurt was no different than anywhere else.  I was disappointed in the interior.  With so many yogurt and ice cream stores around, why would I patronize the chain or this location in particular?

The Takeaway

If your company is setting customer expectations, then you must meet and hopefully, exceed them.

Over to you.  What do you think?  Please comment below.

  1. How often do you exceed customer expectations?
  2. How do you measure customer satisfaction?
  3. Does your company mission statement address meeting or exceeding customer expectations?

If you would like to contact me, you may do so by visiting my LinkedIn page, following me on Twitter,  or e-mailing me at rcberman2 (at) yahoo (dot) com.

6 Tips That Make Product Development Work

April 19th, 2011

Deer Hand Puppet ~ 2 of 6 photosphoto © 2010 Mary Anne Enriquez | more info (via: Wylio)
Any product introduction is only as successful as the planning and execution of the various stages prior to introduction. Consider these six tips for your next product development project.

1. Define what success looks like.

What metrics like sales, profit, market share, image in the marketplace will “prove” success?

2. Incentivize your product launch team.

The team needs to be properly motivated to succeed. Agree on techniques and processes that reward team members for breaking down traditional silos and bureaucracy that can hold back projects.

3. Team leaders need to lead, not be the most knowledgeable about products or technology.

Making your top sales representative the Sales Manager often does not work out because the skill sets are different.  The same is true with leading teams.  Appoint the leader who can manage people and process.

4. Agree early on about product positioning and targeting.

A great technique is to create a one-page talking points sheet.  Have each team member draft one.  Package all of them together and share them with the team.  Look for points of disagreement.  Discuss why they exist.  Solve them and move forward.

5. Have a detailed project plan and launch schedule.

Use whatever program or method that works for you to develop, track and share the plan.  Hold all parties responsible for their tasks and flag them when they fall behind.  Celebrate milestones together.

6. Plan for contingencies.

Stuff happens.  There might be regulatory, legal, manufacturing, shipping or many other types of delays.  Contingency plan for each of them.

The Takeaway

Successful product development requires planning, perseverance, and leadership.  An ounce of prevention is worth a pound of cure.

Those are the ideas.  What do you think?  Please comment below.

1.      What other tips and tricks do you have for successful product development?

2.      What would you add or change about the points above?

3.      What characteristics are displayed by a successful product development leader?

If you would like to contact me, you may do so by visiting my LinkedIn page, following me on Twitter,  or e-mailing me at rcberman2 (at) yahoo (dot) com.

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