becoming a master...
(class notes)
function of marketing:
strategy: planning and using resources of most efficient and effective use to bring about a desired future, as achievement of a goal or solution to a problem.
the scope of marketing
ama’s formal definition: marketing is the activity, set of institutions, and processes for creating, communicating, delivering and exchanging offerings
marketing management:
art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering and communicating customer value
the aim of marketing is to make selling unnecessary
key customer markets:
demand states:
create values for the customer:
advertising is mostly focused on our aspirational needs
core marketing concepts:
different kinds of needs:
unique positioning statement
3 kinds of marketing channels
media types
impressions: when consumers view your communication
engagement: extent of a customer’s attention and active involvement with a communication
value: a combo of quality, service and price (asp: the customer value triad)
marketing environments:
new consumer capabilities:
new company capabilities:
“we don’t have a marketing department; we have a customer department.” -Herb Kelleher
holistic marketing connects all of the following:
marketing mangement tasts:
- revenue maker
- marketing identified unfulfilled needs and desired
- defines, measures and quantifies the size of the identified market
- designs and promotes brands’ products and services
- the distinguishing unique function of the business
- everything is marketing
strategy: planning and using resources of most efficient and effective use to bring about a desired future, as achievement of a goal or solution to a problem.
- from the Greek word for generalship or leading an army
- customer engagement
the scope of marketing
ama’s formal definition: marketing is the activity, set of institutions, and processes for creating, communicating, delivering and exchanging offerings
marketing management:
art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering and communicating customer value
the aim of marketing is to make selling unnecessary
key customer markets:
- consumer
- business (buyer to buyer)
- global
- nonprofit and governmental markets
demand states:
- negative demand
- nonexistent demand
- latent demand
- declining demand
- irregular demand
- full demand
- overfull demand
- unwholesome demand
create values for the customer:
- understand the marketplace, customer, needs and wants
- design a customer-driven marketing strategy
- construct and integrated marketing program
- build profitable relationships and create delight
- capture value from customers to create profit and customer equity
advertising is mostly focused on our aspirational needs
core marketing concepts:
- needs (willing to pay for authenticity that cover basic needs)
- wants
- demands
- segmentation
- target markets
- positioning
- value proposition
- offerings
- brands
different kinds of needs:
- stated (customer wants an inexpensive car)
- real (customer wants a car whose operating cost, not initial price, is low)
- unstated needs (customer expects good service from dealer)
- delight needs (if dealer adds free GPS system for customer)
- secret needs (wants friends to seem him/her as a savvy customer)
unique positioning statement
- value proposition with respect to: target market, benefits offered, price range
3 kinds of marketing channels
- communication channels
- distribution channels
- service channels
media types
- paid media
- owned media
- earned media
impressions: when consumers view your communication
engagement: extent of a customer’s attention and active involvement with a communication
value: a combo of quality, service and price (asp: the customer value triad)
marketing environments:
- task environment- the actors engaged in product, distributing and promoting the offering
- broad environment - demographic environment, economic environment, social-cultural environment, natural environment, technological environment, and political-legal environment
new consumer capabilities:
- more info at fingertips (internet, social media)
- can search, communicate and purchase on the move
- can tap into social media to share opinions and express loyalty
- can actively interact with companies
- can reject marketing they find inappropriate
new company capabilities:
- can use internet as a powerful info and sales change
- can collect fuller and richer info about markets, customers, prospects, and competitors
- can reach customers quickly and efficiently via social media and mobile marketing, sending targeted ads, coupons, and information
“we don’t have a marketing department; we have a customer department.” -Herb Kelleher
holistic marketing connects all of the following:
- internal markering
- integrated marketing
- performance marketing
- relationship marketing
marketing mangement tasts:
- creating value
- communicating value
- delivering value
- creating successful long-term growth
- marketing myopia - decline due to a product-focus as opposed to a customer-focus
- solution advertising: appears when and where people are receptive to receiving it, not intrusive but helpful, and meets “survival needs”
- the maytag store: allows potential buyers to test out washer/dryers before purchasing by bringing laundry to their stores
- ritz carlton/mercedes collab: let the higher priced bookings at ritz use a property owned mercedes throughout their stay
strategy hierarchy - see diagram in folder
marketing plan should contain:
objectives focus on:
well developed strategy:
segmentation: subdividing a marketing to homogeneous subset of customers, where any subset may conceivably be selected as a market segment to be reached with a distinct marketing mix
market segment
clarita provides personalities to go with zip codes to help id target markets
segmentation criteria:
product lifecycle:
at what point do you want to jump in?
how to use tools based on progression through the lifecycle (intro, growth, maturity, decline
challenges of the intro stage:
challenges of the growth stage:
challenges of the maturity stage:
challenges of the decline stage:
pricing strategies include the following:
stages in the adoption process:
marketing plan should contain:
- mission statement
- financial summary
- brief market overview
- key segments + SWOT
- summary of all principle external factors
- assumptions about key determinants of marketing success
- overall marketing objectives and strategies
- programs containing details of timing, responsibilities and costs with sales, forecasts, and budgets
objectives focus on:
- existing products in existing markets
- new products for existing markets
- existing products for new markets
- new products for new markets
well developed strategy:
- scope
- goals and objectives
- resource allocation
- identification of sustainable competitive advantage
- synergy
segmentation: subdividing a marketing to homogeneous subset of customers, where any subset may conceivably be selected as a market segment to be reached with a distinct marketing mix
market segment
- geographic
- demographic
- psychographic
- behavioral
clarita provides personalities to go with zip codes to help id target markets
segmentation criteria:
- measurable
- substantial
- accessible
- differentiable
- actionable
product lifecycle:
at what point do you want to jump in?
how to use tools based on progression through the lifecycle (intro, growth, maturity, decline
challenges of the intro stage:
- small or no market
- sales will be low
- time and effort before most products achieved momentum
- high costs
- very few products are created without some r&d
- need to invest in marketing and promotion
- about demand and establishing the market
- losses, not profits
- costs of getting a new product to market, most companies will see negative profits
- limited competition
- first to market can capture larger audience
- high price of the intro stage:
- prices that significantly above average market price
challenges of the growth stage:
- increasing competition
- new manufacturers look to benefit from a new, developing market
- lower prices
- different marketing approach
- beyond buzz and hype of a new product
- often necessary to reinvest some of those profits in marketing and promotional activity to help guarantee continued growth and reduce the threat from the competition
- costs are reduced
- can be the most profitable part of the cycle for a manufacturer
- production increases to meet demand
- manufacturers able to reduce their costs through economies of scale
- greater consumer awareness
- more consumers aware of the new product
- size of market should increase (as demand increases)
- sharp increase in sales
- increase in profits
- lower costs and increase in sales
- increase profit margin on each product sold
challenges of the maturity stage:
- sales volumes peak
- saturation fewer new customers
- majority of the consumers going to purchase, have
- decreasing market share
- large volume of manufacturers competing for a share
- profits start to decrease
- people begin to compete on price now that there are more options
- continued reduction in costs
- increased market share through differentiation
- this is the time to start thinking about the next generation of the product
challenges of the decline stage:
- market in decline
- falling sales and profits
- product withdrawal
- cheaper production
- cheaper markets
pricing strategies include the following:
- cost-plus pricing (simply calculate your costs and adding a mark-up)
- competitive pricing (setting a price based on what the competition charges)
- price skimming (setting a high price and lowering it as the market evolves)
- penetration pricing (setting a price low to enter a competitive market and raising it later)
- price bundling (combining products and/or services to increase value, and therefore price)
- intensive distribution - distribute low priced products or impulse purchases
- exclusive distribution - to a single outlet
- selective distribution - a small number of retail outlets
stages in the adoption process:
- awareness - consumer is aware of product, but lacks info
- interest - consumer seeks info about new product
- evaluation - consumer considers trying a new product
- trial - consumer tries new product on a small scale
- adoption - consumer decides to make regular use of the product
- ingredient branding - example: the westin has started to sell their “heavenly” bed and bath products
- daniel h. pink - the scientific secrets of perfect timing
- we think timing is an art but it’s really a science
- early in the day and immediately after breaks people are more likely to override the default “no”
- betty crocker example: coupons in box for future grocery purchases - i would consider this product design as it occurs post-purchase. however, prof. says that product design is an entity of marketing
ip law
IP breaks into:
copyright
trademark
patent
federal register: government sanctioned monopoly
ip is covered by:
state law
right of publicity: benefit commercially from name, likeness, image to benefit commercially
registration and creation are two different processes
trade secrets you do not register - bypass monopoly in favor of privacy secrecy
copyright:
not protected by copyright:
copyright needs to be:
duration:
recorded music:
two sets of copyright- composition and recording
purpose of creators: protect creators and encourage future creations
bundle of rights:
registration:
infringement:
dmca:
license:
fair use:
fair use examples:
factor test for fair use:
four factors:
if the use of the original is transformative it could create something new that is copyrightable itself - this is a subjective analysis
creative commons offers a variety of uses (little to no restrictions)
copyrights get derivative benefits, trademarks do not
trademark:
rule to make something trademarked
why trademark law?
as long as trademark stays in-use and there are maintenance check-ins, it can last forever
patent: must be able to make, use or sell
provisional application: cheaper and allows you to file an invention. gives you a date a year out to refile
copyright
trademark
patent
federal register: government sanctioned monopoly
ip is covered by:
state law
right of publicity: benefit commercially from name, likeness, image to benefit commercially
registration and creation are two different processes
trade secrets you do not register - bypass monopoly in favor of privacy secrecy
copyright:
- poetry
- music
- books
- photos
- writing
- movies
- paintings
- choreography
- architectural plans
- software
not protected by copyright:
- fashion design
- ideas
- facts
copyright needs to be:
- fixed in a tangible medium of expression
- original (origination from my brain)
- creative - non-functional, doesn’t need technical function
duration:
- for a person- life + 70 years
- for a company- 95 years from publication or 120 years from creation
- after- goes into public domain
recorded music:
two sets of copyright- composition and recording
purpose of creators: protect creators and encourage future creations
bundle of rights:
- make copies/reproduce
- publicly perform
- publicly display
- create derivative works
- distribute
- prevent/monitor others’ use of my work
registration:
- copyright office is run through library of congress
- register and form is reviewed for administrative errors
- no one is vetting unique nature of work
- do not need to register at moment of creation
- resister to get a certificate of copyright
infringement:
- happens at the moment of taking
- in order to prove infringement, have to prove access
- doesn’t matter if infringement is unintentional
dmca:
- digital millennium copyright act
- start working with online platforms
- safe harbor provisions
license:
- exclusive vs. non-exclusive
- non-exclusive less expensive
fair use:
- exception to copyright
- fair use is a legal defense
fair use examples:
- news reporting
- commentary/criticism
- education
- parody
factor test for fair use:
- developed by supreme court
- all factors need to be weighed equally
- test is not that great because there are an even number of factors so can often result in a tie
four factors:
- nature of the original work (published or unpublished)
- type of use (new work) (commercially or noncommercial)
- how much of the original work is used (a lot or a little)
- (negative) effect on the market for the original (yes or no)
if the use of the original is transformative it could create something new that is copyrightable itself - this is a subjective analysis
creative commons offers a variety of uses (little to no restrictions)
copyrights get derivative benefits, trademarks do not
trademark:
- logo
- brand name
- color palette
- slogans/taglines
- product name
- sound
- scent
- anything that is a brand identifier
rule to make something trademarked
- must be in commerce
- can finish developing and get trademark and then have put into commerce within one year
- must be unique (not more than one)
- arbitrary or fanciful
- not descriptive or generic
why trademark law?
- prevent consumer confusion
- secondary- protect companies
as long as trademark stays in-use and there are maintenance check-ins, it can last forever
patent: must be able to make, use or sell
provisional application: cheaper and allows you to file an invention. gives you a date a year out to refile
business law
Precedent (contract law) vs. Statute (recorded law - UCC, IP- copyright, trademark, patent, business entity)
State vs. Federal:
State- contracts where you are based, where the action is happening, the most advantageous
Federal- UCC (same across the board - same commercial code for people doing business in different areas)
Choice of Law is a Negotiating Point
Benefits of being a Sole Proprietor:
control your own job
all profit
decision maker
easy entrance and exit
liability
insurance
Benefits of a General Partnership:
default equal
split of assets
split of liabilities
partnership agreement
file a DBA (doing business as)
Benefits of a Limited Partnership:
1 general partner
2 no day to day management by LP
LP filing with state
LLC:
limited liability company
baby of legal entity structures
step up from limited partnership
hybrid structure
mix of limited partnership and corporation
owners are called members
treat profit as individual income
doesn’t have to file its own taxes like a corporation
can sue and be sued
must have separate bank account (not personal)
certificate of formation (received from state to form LLC)
LLC to Corporation is easier than going from Corporation to LLC
operating agreement (good to have if audited)
maximum flexibility (don’t need income at all months)
flowed through taxation as personal income
Corporation:
owners = shareholders
every state has minimum # of shares
certificate/articles of incorporation (formal filing doc)
purpose of corporation is to maximize profit for shareholders
S-Corp:
files return on the profit it has made but taxes are better than a standard corporation
100 shareholders max
citizenship requirement
only one class of stock
greater deductibility than llc
taxed like llc but still max deduction benefit of corp
need continuous operation and minimum 1 employee
can be expensive because of complicated tax filing/accounting
B-Corp:
benefit corp is a new concept
standards are governed by non-profit
30-something states
Non-Profit:
corporations
no shareholders
no taxes
must have at least 3 board members (a volunteer position)
public charity or private foundation
public charity generally provides programming (gov. funding, grants)
private foundation (a for-profit’s philanthropic foundation formed to get a tax benefit, or a private family’s foundation)
State vs. Federal:
State- contracts where you are based, where the action is happening, the most advantageous
Federal- UCC (same across the board - same commercial code for people doing business in different areas)
Choice of Law is a Negotiating Point
Benefits of being a Sole Proprietor:
control your own job
all profit
decision maker
easy entrance and exit
liability
insurance
Benefits of a General Partnership:
default equal
split of assets
split of liabilities
partnership agreement
file a DBA (doing business as)
Benefits of a Limited Partnership:
1 general partner
2 no day to day management by LP
LP filing with state
LLC:
limited liability company
baby of legal entity structures
step up from limited partnership
hybrid structure
mix of limited partnership and corporation
owners are called members
treat profit as individual income
doesn’t have to file its own taxes like a corporation
can sue and be sued
must have separate bank account (not personal)
certificate of formation (received from state to form LLC)
LLC to Corporation is easier than going from Corporation to LLC
operating agreement (good to have if audited)
maximum flexibility (don’t need income at all months)
flowed through taxation as personal income
Corporation:
owners = shareholders
every state has minimum # of shares
certificate/articles of incorporation (formal filing doc)
purpose of corporation is to maximize profit for shareholders
S-Corp:
files return on the profit it has made but taxes are better than a standard corporation
100 shareholders max
citizenship requirement
only one class of stock
greater deductibility than llc
taxed like llc but still max deduction benefit of corp
need continuous operation and minimum 1 employee
can be expensive because of complicated tax filing/accounting
B-Corp:
benefit corp is a new concept
standards are governed by non-profit
30-something states
Non-Profit:
corporations
no shareholders
no taxes
must have at least 3 board members (a volunteer position)
public charity or private foundation
public charity generally provides programming (gov. funding, grants)
private foundation (a for-profit’s philanthropic foundation formed to get a tax benefit, or a private family’s foundation)
financing companies and new ventures |
Budget Types:
Capital Budget
Cash Budget
Operating Budget
Investors look for… (4 R’s):
Return
Risk
Rights
Rate of Growth
1.) ID Risk
2.) Quantifiy Risk
3.) Accept / Reject / Mitigate
Sources of Funding:
Friends, Family, Fools
Personal Savings
Bootstrap Financing
Customers
Venture Capital
Angel Investors
Bank Loans
Financial Companies
Crowd Funding
Suppliers
Small Business Administration
Economic Development Programs
Leasing
Credit Cards
Grants
ICO
Borrowing $ Allows…
control
plan/cap interest
end date
interest deduction
tax deduction
credit
ROE
Equity Allows…
Support
Industry info
More investors
Distribute risk
Only distribute with cash/earnings (cash distribution)
Capital Budget
Cash Budget
Operating Budget
Investors look for… (4 R’s):
Return
Risk
Rights
Rate of Growth
1.) ID Risk
2.) Quantifiy Risk
3.) Accept / Reject / Mitigate
Sources of Funding:
Friends, Family, Fools
Personal Savings
Bootstrap Financing
Customers
Venture Capital
Angel Investors
Bank Loans
Financial Companies
Crowd Funding
Suppliers
Small Business Administration
Economic Development Programs
Leasing
Credit Cards
Grants
ICO
Borrowing $ Allows…
control
plan/cap interest
end date
interest deduction
tax deduction
credit
ROE
Equity Allows…
Support
Industry info
More investors
Distribute risk
Only distribute with cash/earnings (cash distribution)
negotiation
- BATNA - Best Alternative To a Negotiated Agreement
You should never take a deal that’s worse than your BATNA - Distributive - Single Issue - Buyer and deller disagree so meet in the middle - One of Possible Agreement
(ZOPA aka Trading Zone) - Interests = What you need
- Position = What you want
- Joint Gane = Reframe, Reposition, Repackage
- Don’t reach an agreement that is so good for you that the other person is not going to be able to follow through with the plan
elevator pitch
- Know exactly where you want to go
- Bullet point it
- Tell them a story
- Eliminate jargon
- Invite conversation
- Time yourself
- Record yourself
- Pitch to friends and colleagues
money & markets
- In the short run, the numbers of jobs rises and falls with the business cycle
- Unemployment is a signpost of economic health
- Pay usually tracks productivity
- High inflation destabilization: 1% to 3% is okay
- Inflation is more likely to rise if people expect it
- Trade barriers, rising affluence, lower costs -> globalization (free trade is not popular)
- Global markets let investors diversify portoflios (diversity reduces risk without reducing return)
- Borrow cross curency
- Presidents don't control economy, but they do try
- Influence through appointments
- Fed stands alone
- Political accountability
- Private independence
- Mega-wave - Global Economy
operational expenses
Methodologies and Frameworks:
Operational Efficiency:
Considerations for Improvement:
The process - the Scope - the Type- the Resources
Process Improvement Steps:
Determine the Cause of the Problem:
Generating Solutions to the Problem:
Prioritize Possible Solutions:
Financial Planning:
Small Business Control Strategies:
- 4D
- TQM: total quality management
- Six Sigma: better results, small changes in systems, seldom reached saturation, requires training
- Lean: value, value stream, flow, pull, perfection
- Agile Manifesto: 1-12 principles (further breaks down)
Operational Efficiency:
- Most cost effective manner possible while maintaining high quality
- Achieved by streamlining company's core allowing to more effectively responses to ever-changing market
Considerations for Improvement:
The process - the Scope - the Type- the Resources
Process Improvement Steps:
- Document the current process
- Qualify these/Prioritize
- Determine the causes
- Generate solutions
- Prioritize solutions
- Decide on improvement process
- Develop/implement change
- Evaluate the effects of changes
Determine the Cause of the Problem:
- The 5 Why's:
- Helps determine route cause
- Pushes investigation beyond the obvious
- Make sure the why answers are in the form of what and never who
- Rephrase your answers in the follow up why
Generating Solutions to the Problem:
- Simplify the process and reduce steps
- Standardize similar designs and processes
- Use common parts and steps
- Mistake-proof processes
- Automate processes
Prioritize Possible Solutions:
- Impact-Effort Matrix
- Criteria matrix (weight is determined by priorities)
- Fishbone Diagrams:
- Fishbone Diagram 7Ms
- Fishbone Diagram 4Ps
- Fishbone Diagram 4Ss
Financial Planning:
- Expenses:
- Fixed
- Semi-fixed
- Variable
- Profit
- Cash flow management
- Collect fast
- Disperse slowly
Small Business Control Strategies:
- Controls on expenses
- Money saving strategies
projections on investments
Key Terms:
Cost of Capital - interest rate you pay to borrow/have someone buy stock in the company
Real Rate of Return - interest rates
Expected Inflation- small amount is good for a company/healthy
Risk free $ - government because they can print more
The higher the risk, the higher the return.
Risks:
3 Components that Drive Projections
Blended interest weight is the weighted average
Time Money Calculation:
Starts with Simple Interest vs. Compound Interest (higher because interest on the interest)
(Zero = Now)
Annuity: constant dollar amount equally spaced in time (several payments), starts at time 1
Annuity Due: same but first payment is at time 0
You can be given a list of the 4 variables - solve for any 1 using the other 3
When deciding whether or not to invest in a product/project, look at net present value - what does it cost to borrow money
Cost of Capital - interest rate you pay to borrow/have someone buy stock in the company
Real Rate of Return - interest rates
Expected Inflation- small amount is good for a company/healthy
Risk free $ - government because they can print more
The higher the risk, the higher the return.
Risks:
- Identify the risk
- Quantify
- Decide what to do (accept or transfer or mitigate)
3 Components that Drive Projections
- Cash flows
- When flows occur
- Interest rate - Compound
Blended interest weight is the weighted average
Time Money Calculation:
Starts with Simple Interest vs. Compound Interest (higher because interest on the interest)
(Zero = Now)
Annuity: constant dollar amount equally spaced in time (several payments), starts at time 1
Annuity Due: same but first payment is at time 0
You can be given a list of the 4 variables - solve for any 1 using the other 3
When deciding whether or not to invest in a product/project, look at net present value - what does it cost to borrow money
personal branding
- Brands are constructs created by people to have meaning.
- Either people believe in them or they don't.
- If people want to be brands, they are willing to be manufactured.
- Brands should be prescribed and deliberate, a fixed entity.
- People have a "maker" gene. It is innately in you and drives design.
- Synergy comes out of opposition mixed with similarities and reads authentically.
- Longing bigger than fear = pursuit
- The ability to work across multiple disciplines is by going back to core values and maintaining a sense of mutual respect.
- What does it mean to build an organization that is flat so that people can jump in at different levels?
- Always ask if there is anything more? The worst thing they can so is no and you get the original amount.
implementing sustainability goals
Sustainable Vision
Material Issues
Set up the Right Organizations
Board of Directors - Executives - Marketing/R&D/Product/HR
- Common Goal
- Alignment from Top to Bottom
- First Step of Strategy
- Brings Sustainability into Business
Material Issues
- Long Term Focus
- Bridges Profit with Sustainability
- Four Categories: Ethical, Economical, Environmental, Philanthropic
Set up the Right Organizations
Board of Directors - Executives - Marketing/R&D/Product/HR
market structure
Small Characteristic
# of Firms in Industry
Size
Barriers to Entry
Differentiation of Product
Elasticity of Demand
Perfect Competition
Many
Small
None
None
Perfect Elasticity - Sell as much or little as they want at the market price
Monopolistic Competition
Many
Few
Some
Oligopoly
Few
Big
High
Various
Monopoly
One
Huge
No Entry Possible
None
Inelastic
# of Firms in Industry
Size
Barriers to Entry
Differentiation of Product
Elasticity of Demand
Perfect Competition
Many
Small
None
None
Perfect Elasticity - Sell as much or little as they want at the market price
Monopolistic Competition
Many
Few
Some
Oligopoly
Few
Big
High
Various
Monopoly
One
Huge
No Entry Possible
None
Inelastic
determinants of supply
- Cost of Production
- Number of Producers/Sellers
- Price
- Availability of Resources
- Expectations
- Technology
determinants of demand
- Population
- Alternatives
- Price
- Technology
- Availability
- Trends/Tastes
- Income
- Expectations of Future
economics concepts
- Macroeconomics vs. Microeconomics
- Opportunity Cost
- Supply and Demand
- Comparative Advantage
- Diminishing Marginal Utility
- Economic Growth and GDP
- Externalities
- Inflation and Deflation
- Internet Rates
- Fiscal Policy
- Monetary Policy
- Business Cycles
operations management
What is Operations Management?
The direction and control of the processes that transform inputs into outputs for customers - finished goods or services.
History Overview
Starts before 1750: (pre-industrial revolution, cottage industry - local/informally organized)
1750-1890: Industrial Revolution - machine tools, capitalism, extreme living conditions
1890-1950: Scientific Management - professional societies, scientific laws control, human productivity
1940-Current: Human Relations - motivation, self-actualization, hierarchy of needs
1970-Now: Total Quality Management
1980-Current: Technology - personal computing
Functions in Design Operations Management
Planning: Strategic, Tactical, Operational
Directing: Supervising, Ordering, Facilitating
Organizing: Structuring Systems, Organizing and Reorganizing, Flexibility, Realignment
Staffing: Job Requirements/Descriptions, Recruiting, Screening, Training
Motivating: Coaching, Mentoring, Inspiring
Controlling: Efficiency, Costs, People, Quality
Operations Management Systems
Input (up for modification) - Process (up for modification) - Output (evaluate) - Goal
The direction and control of the processes that transform inputs into outputs for customers - finished goods or services.
History Overview
Starts before 1750: (pre-industrial revolution, cottage industry - local/informally organized)
1750-1890: Industrial Revolution - machine tools, capitalism, extreme living conditions
1890-1950: Scientific Management - professional societies, scientific laws control, human productivity
1940-Current: Human Relations - motivation, self-actualization, hierarchy of needs
1970-Now: Total Quality Management
1980-Current: Technology - personal computing
Functions in Design Operations Management
Planning: Strategic, Tactical, Operational
Directing: Supervising, Ordering, Facilitating
Organizing: Structuring Systems, Organizing and Reorganizing, Flexibility, Realignment
Staffing: Job Requirements/Descriptions, Recruiting, Screening, Training
Motivating: Coaching, Mentoring, Inspiring
Controlling: Efficiency, Costs, People, Quality
Operations Management Systems
Input (up for modification) - Process (up for modification) - Output (evaluate) - Goal
productivity cycle
production system
cirque du soleil—the high-wire act of building sustainable partnerships
Lamarre had devised a new organizational structure based on independent creative cells for the development of every new show:
Lamarre had established criteria for all new developments:
“In show business,” Lamarre said, “show comes before business.”
- Four executive producers reported directly to him, with each producer in charge of a set of creative cells.
- The new structure ensured increased accountability and scalability.
- “Each cell member eats and breathes their show 24/7. They’re not bothered by anyone else and can be fully dedicated to their show.”
Lamarre had established criteria for all new developments:
- Is there a creative challenge?
- Can the partnership be sustainable in the long run?
- Is there a good return to be made?
- Will the partner adhere to Cirque’s social responsibility parameters?
“In show business,” Lamarre said, “show comes before business.”
mapping leadership cultures
being the boss in brussels, boston, and beijing - if you want to succeed,
you’ll need to adapt
- How much attention do we pay to the rank or status of a person, and how much respect and deference do we pay to that status? On this dimension, the Japanese are clearly more hierarchical than Americans.
- Who calls the shots, and how? Does the boss decide, or does the team decide collectively? On this dimension, which is often overlooked, the Japanese are more consensual than Americans.
- Approaches to authority and decision making are not the only ways in which cultures differ, but they are arguably the most important in the leadership context.
- Over the past century, the biggest leadership trend in the U.S. and parts of Western Europe has been the abandoning of hierarchical management processes for a more facilitative, egalitarian approach.
- Understanding this disconnect is important. In general, the greatest business opportunities lie in the big emerging economies, which include Bangladesh, China, India, Indonesia, Russia, and Turkey.
THE WESTERN MANAGEMENT ORTHODOXY OF PUSHING AUTHORITY DOWN IN THE ORGANIZATION DOES NOT FIT EASILY INTO THE EMERGING-MARKET CONTEXT.
- The management orthodoxy of pushing authority down in the organization does not fit easily into the emerging-market context and often trips up Western companies on their first ventures abroad.
- Yet on a worldwide scale, we find that hierarchies and decision-making methods are not always correlated.
- American business culture has become more and more egalitarian over recent decades, but consensual decision making is clearly not the norm.
- American companies favor quick and flexible decisions, so decision-making power is vested in the individual (usually the boss).
- With a disdain for “analysis paralysis” and a belief that “any decision is better than no decision,” the American manager may solicit input from his or her team but ultimately is the one to make the final determination.
- The U.S. can thus be described as an egalitarian culture where decisions are made top-down.
- In top-down decision-making cultures (India, Italy, Mexico, Morocco, and Russia are other examples), decisions are made quickly, but they are subject to change as new input or arguments arise.
- A lot of people seem to be involved in the decision-making process, and it takes a long time to negotiate group agreement. However, once a decision gets made, implementation is surprisingly quick, because details and stakeholders were aligned while consensus was being reached (Germany, Japan, the Netherlands, and Sweden).
- Either system can work well, and both have their advantages. Small “d” top-down decision making is particularly suited to industries where the pace of change is fast and speed to market trumps product perfection. Big “D” consensual cultures are great for industries where development timelines are long and perfection of the product is essential.
Two words define this consensual process:
- nemawashi— the practice of speaking with each individual stakeholder before a meeting in order to shape the group decision and develop agreement in advance
- ringi— involves passing a proposal around level by level, starting at the bottom and then working through the layers of middle and senior management before arriving at the top
If you’re managing the collaboration of two groups with different systems for reaching decisions:
- Being flexible and adapting your individual style are not enough.
- You must also be explicit about the process of decision making.
- Define whether decisions will be made by consensus or by the boss.
- Establish whether 100% agreement is needed.
- Clarify whether a deadline for the decision is necessary and, if one is set, how much flexibility there will be for changes afterward.
Attitudes toward decision making can range along a continuum from strongly top-down to strongly consensual; attitudes toward authority can vary from extremely egalitarian to extremely hierarchical.
The Four Cultures of Leadership:
- Consensual and egalitarian - Denmark, Netherlands, Norway, Sweden: Expect the decision making to take longer and to involve more meetings and correspondence. Do your best to demonstrate patience and commit-ment throughout the process, even when diverging opinions lead to lengthy ongoing discussions. Don’t expect the boss to jump in and decide for the group. The boss is a facilitator, not the decider. Resist the temptation to push for a quick resolution. Take the time to ensure that the decision you make is the best one possible, because it will be difficult to change later.
- Consensual and hierarchical - Belgium, Germany, Japan: If you’re the boss, your team will defer to your decision, yet desire and expect to be part of the decision- making process. Make a point of soliciting opinions and input from your staff. Be patient and thorough. Invest the time necessary to get each stakeholder on board. Once a group decision begins to form, take special care to listen to those with dissenting opinions. Focus on the quality and completeness of information gathered and the soundness of the reasoning process. Remember that in this quadrant, decisions are commitments that are not easily altered.
- Top-down and hierarchical - Brazil, China, France, India, Indonesia, Mexico, Russia, Saudi Arabia: Remember that the boss is the director, not a facilitator. If you’re the boss, you will be deferred to in public and probably in private too. Don’t be shy about telling your team how best to show you respect. Be clear about your expectations. If you want your staff to present three ideas to you before asking your opinion, or to give you input before you make a decision, tell them. Old habits die hard for all of us, so reinforce—with clarity and specificity—the behavior you are looking for. Be careful what you say. You may find that an offthe-cuff comment is interpreted as a decision—and suddenly everyone is building that factory or reorganizing that department, when you thought you were just introducing an idea to explore.
- Top-down and egalitarian - Australia, Canada, United Kingdom, United States: Before the decision has been made, speak up—no matter what your status is. You might not be asked explicitly to contribute, but demonstrate initiative and self-confidence by making your voice heard. Politely yet clearly provide your viewpoint even when it diverges from what the boss seems to be thinking. Once the matter has been resolved, align quickly with the boss and support the decision even if it conflicts with the opinion you previously expressed. At this stage, if you show disagreement— especially in front of others—you may be viewed as difficult to work with. After the decision is made, remain flexible. Decisions in this quadrant are rarely set in stone; most can later be adjusted or revisited if necessary.
corporate sustainability at a crossroads - progress toward our common future in uncertain times
In one direction, corporate leaders in sustainability remain a minority, and are unevenly distributed across geographies and industries. In the other direction, a handful of standout companies are demonstrating that sustainability can be a driver of innovation, efficiency, and lasting business value.
Eight Evidence Based Factors:
(that drive sustainable business practices, regardless of industry or region)
Key Lessons
Key Lesson #1: Set your sustainability vision and ambition: 90%
of executives see sustainability as important, but only 60% of
companies have a sustainability strategy.
Key Lesson #2: Focus on material issues: Companies that focus on
material issues report up to 50% added profit from sustainability.
Those that don’t focus on their material issues struggle to add value
from their sustainability activities.
Key Lesson #3: Set up the right organization to achieve your
ambition: Building sustainability into business units doubles an
organization’s chance of profiting from its sustainability activities.
Key Lesson #4: Explore business model innovation
opportunities: Nearly 50% of companies have changed their
business models as a result of sustainability opportunities.
Key Lesson #5: Develop a clear business case for sustainability:
While 60% of companies have a sustainability strategy, only 25%
have developed a clear business case for their sustainability efforts.
Key Lesson #6: Get the board of directors on board: 86% of
respondents agreed that boards should play a strong role in their
company’s sustainability efforts, but only 48% say their CEOs are
engaged, and fewer (30%) agreed that their sustainability efforts had
strong board-level oversight.
Key Lesson #7: Develop a compelling sustainability value-
creation story for investors: 75% of executives in investment
companies think sustainability performance should be considered in
investment decisions, but only 60% of corporate executives think
investors care about sustainability performance.
Key Lesson #8: Collaborate with a variety of stakeholders to
drive strategic change: 90% of executives believe collaboration is
essential to sustainability success, but only 47% say their companies
collaborate strategically.
“development that meets the needs of the present without compromising the ability of future generations to meet their own needs” was diplomatic sleight-of-hand, cleverly satisfying both economic and environmental ministers but offering no guidance on how such a vision might be implemented.
Proactive action from the private sector is now recognized as fundamental to realizing a sustainable future.
Seventy-four percent of surveyed investors agreed that sustainability performance matters more than it did three years ago. Investors care more about sustainability than many managers believe.
Notably, social media and other technology platforms have become effective mechanisms for heightening awareness of crises
and corporate misbehavior, exerting increased pressure on companies to respond.
With populist and anti-regulatory leaders on the rise, trust in government institutions reaching a low point, and some political leaders denying the reality of climate change, the potential for corporate sustainability to lose momentum or backslide is all too real.
What can corporations do to hasten their sustainability efforts?
A first step is to better understand the progress corporate sustainability has already made, and then build on those lessons.
How to Report Environment, Social, and Governance
(ESG) metrics
Our (MITSloan) research indicates that companies struggle to find a payoff from sustainability until they develop a true sustainability strategy and build a solid business case.
Conditional Variances
“You check the boxes by recycling and composting to reduce harm; however, you change the game when you redefine success and build your business operations to meet new measurements of value."
It was the combination of innovation in the value chain and target segments that provided the strongest link. Companies that innovate in both “target segments” and “value chain processes” add the most profit from sustainability-related activities.
Companies that have a well-thought-out sustainability strategy and can identify business model opportunities are more likely to build a solid foundation for their sustainability initiatives.
Successful innovators focus on:
Our data shows that the most common sustainability opportunity is to develop supply chain efficiencies.
If executives believe that their investors prioritize short-term profits, they will tend to organize sales, cost management, and research and development activities to maximize near-term gains rather than long-term investments.
As stewards of the company, the board of directors can occupy a central role in supporting sustainability strategies, but they often don’t.
Getting the Board on Board
Companies that have sustainability on their top management agenda are 55% more likely to have a profitable business case for their sustainability practices — but these companies are in the minority.
Eight Evidence Based Factors:
(that drive sustainable business practices, regardless of industry or region)
- Articulate a practical sustainability vision and ambition that lays the foundation for new business practices.
- Identify and prioritize material issues to focus resources.
- Embed sustainability organizationally through cross-functional teams, clear targets, and key performance indicators (KPIs).
- Innovate on multiple dimensions of your business model.
- Develop a clear business case.
- Get the board of directors on board.
- Communicate a sustainability value-creation story to your shareholders.
- Collaborate with a variety of stakeholders to drive strategic change
Key Lessons
Key Lesson #1: Set your sustainability vision and ambition: 90%
of executives see sustainability as important, but only 60% of
companies have a sustainability strategy.
Key Lesson #2: Focus on material issues: Companies that focus on
material issues report up to 50% added profit from sustainability.
Those that don’t focus on their material issues struggle to add value
from their sustainability activities.
Key Lesson #3: Set up the right organization to achieve your
ambition: Building sustainability into business units doubles an
organization’s chance of profiting from its sustainability activities.
Key Lesson #4: Explore business model innovation
opportunities: Nearly 50% of companies have changed their
business models as a result of sustainability opportunities.
Key Lesson #5: Develop a clear business case for sustainability:
While 60% of companies have a sustainability strategy, only 25%
have developed a clear business case for their sustainability efforts.
Key Lesson #6: Get the board of directors on board: 86% of
respondents agreed that boards should play a strong role in their
company’s sustainability efforts, but only 48% say their CEOs are
engaged, and fewer (30%) agreed that their sustainability efforts had
strong board-level oversight.
Key Lesson #7: Develop a compelling sustainability value-
creation story for investors: 75% of executives in investment
companies think sustainability performance should be considered in
investment decisions, but only 60% of corporate executives think
investors care about sustainability performance.
Key Lesson #8: Collaborate with a variety of stakeholders to
drive strategic change: 90% of executives believe collaboration is
essential to sustainability success, but only 47% say their companies
collaborate strategically.
“development that meets the needs of the present without compromising the ability of future generations to meet their own needs” was diplomatic sleight-of-hand, cleverly satisfying both economic and environmental ministers but offering no guidance on how such a vision might be implemented.
Proactive action from the private sector is now recognized as fundamental to realizing a sustainable future.
Seventy-four percent of surveyed investors agreed that sustainability performance matters more than it did three years ago. Investors care more about sustainability than many managers believe.
Notably, social media and other technology platforms have become effective mechanisms for heightening awareness of crises
and corporate misbehavior, exerting increased pressure on companies to respond.
With populist and anti-regulatory leaders on the rise, trust in government institutions reaching a low point, and some political leaders denying the reality of climate change, the potential for corporate sustainability to lose momentum or backslide is all too real.
What can corporations do to hasten their sustainability efforts?
A first step is to better understand the progress corporate sustainability has already made, and then build on those lessons.
How to Report Environment, Social, and Governance
(ESG) metrics
- The United Nations-supported Principles for Responsible Investment (UN PRI) state that an “economically efficient, sustainable global financial system is a necessity for long-term value creation” and will reward long-term responsible investment.
- In the U.S., the Sustainability Accounting Standards Board (SASB) is working to develop rules governing public disclosure of financially material corporate sustainability information.
- The UN’s Sustainable Stock Exchange Initiative, established in 2009, works with stock exchanges to develop more sustainable capital markets.
Our (MITSloan) research indicates that companies struggle to find a payoff from sustainability until they develop a true sustainability strategy and build a solid business case.
Conditional Variances
- Companies in both North and Latin America are less likely to view sustainability-oriented strategies as necessary to be competitive.
- Highly regulated industries such as energy and utilities are most likely to have a sustainability strategy.
- The largest companies in our database (100,000 or more employees) have consistently been the best performers across a range of metrics. “The big organizations are not only good at problem-solving but also at scaling up sustainability solutions,”
- For example: Unilever executives realized that the company’s future growth would come from emerging markets that had significant sustainability issues in areas like deforestation, poor sanitation, and water scarcity.
- A major constraint for those organizations is that their leadership tends to view ESG factors as necessary issues to address, rather than as sources of business opportunity.
“You check the boxes by recycling and composting to reduce harm; however, you change the game when you redefine success and build your business operations to meet new measurements of value."
It was the combination of innovation in the value chain and target segments that provided the strongest link. Companies that innovate in both “target segments” and “value chain processes” add the most profit from sustainability-related activities.
Companies that have a well-thought-out sustainability strategy and can identify business model opportunities are more likely to build a solid foundation for their sustainability initiatives.
Successful innovators focus on:
- opportunity creation
- looking at market share
- potential efficiencies
- competitive advantages
- innovation rather than risk, reputation, and regulatory compliance
Our data shows that the most common sustainability opportunity is to develop supply chain efficiencies.
If executives believe that their investors prioritize short-term profits, they will tend to organize sales, cost management, and research and development activities to maximize near-term gains rather than long-term investments.
As stewards of the company, the board of directors can occupy a central role in supporting sustainability strategies, but they often don’t.
Getting the Board on Board
- Improving directors’ expertise can be accomplished through training (in part!), new appointments to the board, or accessing external expertise through external/independent advisory boards.
- ESG considerations can be integrated with director responsibilities, either by forming new committees dedicated to sustainability or by instilling ESG duties within committees.
- There is no clearer written expression of the importance of a company’s stakeholders than a statement to that effect signed by the chairman of the board.
Companies that have sustainability on their top management agenda are 55% more likely to have a profitable business case for their sustainability practices — but these companies are in the minority.
intro to economics
Information Should Be...
- From Reliable Sources
- Relevant
- Timely
- Independent
- Completeness
- Accuracy
- Limited resources result in tradeoffs and choice-making
- Culture determines what is important
- Human behavior deals with gratification time and the ability to weigh options
- Externalities in economics (ie: companies not charged for dumping pollution into the water, refers to common shared/free resources with lack of regulations)
- More recently, regulations have stepped up to externalities and then in regards to standard practices like insider trading, etc.
- Population, Capital ($ that can be invested), Ideas, AI, Internet of Things
- Law of Diminishing Returns - used to refer to a point at which the level of profits or benefits gained is less than the amount of money or energy invested.
- Division of Labor - way of increasing productivity
- Human Capital - economists consider it a resource - human labor as a resource
- The Rule of Law - regulations - ownership rights and enforcement of these rights is important for an economy to work well
teamwork resource matrix
how do we rethink the norms of business?
Innovation = Disruption
Ideas can be hacked... ie. turning disability until ability
Distribution of content across all platforms makes for a better engagement experience:
How to tell story in different way across all platforms
How to create content experiences that allow customers to engage in a way that is relevant
Have a clear vision - with strong backup plans
Understand context - and leverage your strenthgs
Build on connections - but also venture out
Be ready to do more - for little or no pay
Prepare for a marathon - not a race
Ideas can be hacked... ie. turning disability until ability
Distribution of content across all platforms makes for a better engagement experience:
How to tell story in different way across all platforms
How to create content experiences that allow customers to engage in a way that is relevant
Have a clear vision - with strong backup plans
Understand context - and leverage your strenthgs
Build on connections - but also venture out
Be ready to do more - for little or no pay
Prepare for a marathon - not a race
the design squiggle
healthy patterns of innovation
Directional Alignment
The Critical Shift
Creative Tensions
Strategic Verbiage Selection
Spiraling
- Goal Setting: Autonomy of an Effective Goal: (MAST) Meaningful, Audacious, Specific, Time-bound
- Finding the Right Champions
- Diverge- Begin with a Clear Intent
- Dive Deep into the Human Experience
- Converge- Begin Synthesizing the Learning and Coalescing around a New Idea or Decision
The Critical Shift
- Define the Problem Space
- Keep Problem Definition Before the Solution
Creative Tensions
- Leverage the Poles
- Minimize Resistance by Design
- Build Ownership Instead of Buy-in
Strategic Verbiage Selection
- Foster 'Yes and', Not 'Yes but'
- The Verbiage ‘Have You Considered’ Diffuses Tension of Opinions by Putting the Matter back in the Hands of the Other Person
Spiraling
- Learn your way into Innovation
factors affecting diffusion; individual and network characteristics; consequences of innovation
Diagnostic Process
Unfreeze (Prep employees for the change) - Change (Execute the change) - Refreeze (Ensure that the change becomes permanent)
Harold Leavitt's Organizational Systems Model
- Genetic data (description of the organization, its history, and reasons for the intervention)
- Structure data (formal organization, plant and equipment, finances, personal demographics, policies and procedures, time cycles)
- Process data (communications and information sharing)
- Interpretative data (how the organization understand itself and its environment; emotional atmosphere; attitudes and relationships toward stakeholders, toward things and ideas, toward power)
Unfreeze (Prep employees for the change) - Change (Execute the change) - Refreeze (Ensure that the change becomes permanent)
Harold Leavitt's Organizational Systems Model
- People: carry out the tasks
- Technology: tools - computers, drill presses, etc
- Structure: systems of communication, authority, and work flow
- Task: the organization's reason for being, what it does
Weisbord's Six-Box Model
- How big a gap is there between formal and informal systems? (the fit between individual and organiation)
- How much discrepancy is there between "What is" and "What ought to be?" (the fit between organization and environment)
The McKinsey Seven S Framework
- The way the model is presented below depicts the interdependency of the elements and indicates how a change in one affects all the others.
- "Hard" elements are easier to define or identify and management can directly influence them: These are strategy statements; organization charts and reporting lines; and formal processes and IT systems.
- "Soft" elements, on the other hand, can be more difficult to describe, and are less tangible and more influenced by culture. However, these soft elements are as important as the hard elements if the organization is going to be successful.
- "Hard" elements: strategy, structure, systems
- "Soft" elements: shared values, skills, style, staff
The Two Theories of Change
Theory E - the hard side of change - is about economic value, maximizing shareholder value, manage from the top down, increasing shareholder value (cash flow, stock price), related to addressing financial crisis, may involve using performance incentives
Theory O - the soft side of change - is about an organizational capability: positive corporate culture, participation, commitment, attitude, overcoming resistance to change, building employee commitment, high levels of employee involvement, organic and flatter structure, people are the most important aspect
Kotter’s 8 step Model of Change
Theory E - the hard side of change - is about economic value, maximizing shareholder value, manage from the top down, increasing shareholder value (cash flow, stock price), related to addressing financial crisis, may involve using performance incentives
Theory O - the soft side of change - is about an organizational capability: positive corporate culture, participation, commitment, attitude, overcoming resistance to change, building employee commitment, high levels of employee involvement, organic and flatter structure, people are the most important aspect
Kotter’s 8 step Model of Change
Dealing with Resistance to Change
- Education and Communication
- Participation and Involvement
- Facilitation and Support (Empathy)
- Negotiation and Agreement (Offer Incentives to those Resisting Change)
- Manipulation and Co-Option
multi-sided platform business models
- Google, Facebook, Alibaba, Uber and Airbnb all are multi-sided platform businesses (making the this business model the holy grail)
- Multi-sided platforms are technologies, products or services that create value primarily by enabling direct interactions between two or more customer or participant groups
- Android uses more than two sides (phone manufacturers, app store, developers, users)
- The more participants there are, the higher the value of the platform
- Framework:
- Asset Builders- Extract, Manufacture and Distribute or Sell Physical Goods or Access to Them
- Service Providers- Hire and Train Skilled Employees and Sell Their Services
- Technology Creators- Develop and Protect Intellectual Capital - Often Intangible Products with Low Marginal Costs of Growth, Such as Software
- Network Orchestrators- Create and Maintain Networks of People, Things and Information, Facilitating Interactions and Transactions Between Them (Examples Include eBay, Red Hat, and Visa, Uber, Tripadvisor, and Alibaba)
- Most companies operate as Asset Builders and Service Providers
- Currently, Network Orchestrators (Less than 1% of all Companies) are doing the best (Visa, Google, etc.)
- However, the Technology Creator and Network Orchestrator models offer more growth, profitability and valuation
- Technology Creators and Network Orchestrators have become the highest market caps
- What do you need to be successful? (As a hypothetical travel magazine transitioning into Tripadvisor)
- Management: Digital Marketing Team (both builder and marketer of this new product) within umbrella Marketing Department, Need Coder/Web-Engineer to join the IT Team, have HR research salaries of positions we would like to add and have Finance Department reallocate budget to accommodate these salaries
- Success KPIs: The # of users/participants, # of views, social media followers, # of advertisers/sources of income, truthful content (curate to relieve bias)
- 'We are creating a self-service database of customer reviews to best inform your trip planning'
- Investment and Resource Allocation
- Others
what to include in a strategic design brief
- Background Information on the Company, Product or Service
- Insight into the Target Audience
- Macroeconomic landscape
- Competitive Landscape
- Brand Attributes, Promise and Mission
- Business Objectives
- Compelling Offer
- Call to Action
- Metrics for Measuring Success
- Supporting Data
- Functional Specifications (If Applicable)
- Approval Process
- Timeliness
- Budget
Make the above decisions while keeping in mind the social, technological, environmental, ecological, political, legal/regulatory, educational and deeply held values/culture of the company/product/service.
strategic drift
Organization unconsciously drifts from their original plan. The sooner you realize this drift is occurring, the better.
The sense of urgency shared when a change is launched is hard to maintain over the time of execution.
Organizational Change Management - (OCM) is a framework for managing the effect of new business processes, changes in organizational structure or cultural changes with an enterprise.
OCM addresses the people side of change management.
Kubler-Ross 5 Stage Model
Only about one-third of organizational change initiatives survive beyond the initial implementation. Two-thirds of change initiatives fail.
Change Models
Why: Driving Forces
How: Stages, Scale, Timing, Process
What: Outcomes and Measures
Phases of Crisis
HBR: Six Drivers of Successful Organizational Change
The sense of urgency shared when a change is launched is hard to maintain over the time of execution.
Organizational Change Management - (OCM) is a framework for managing the effect of new business processes, changes in organizational structure or cultural changes with an enterprise.
OCM addresses the people side of change management.
Kubler-Ross 5 Stage Model
- Shock or Denial
- Anger
- Bargaining
- Depression
- Acceptance
Only about one-third of organizational change initiatives survive beyond the initial implementation. Two-thirds of change initiatives fail.
Change Models
Why: Driving Forces
How: Stages, Scale, Timing, Process
What: Outcomes and Measures
Phases of Crisis
- Creativity - Crisis of Leadership
- Direction - Crisis of Autonomy
- Delegation - Crisis of Control
- Coordination and Monitoring - Crisis of Red Tape
- Collaboration - Crisis of Internal Growth
- Alliances - Crisis of Identity
HBR: Six Drivers of Successful Organizational Change
- The need for a crisis or some kind of "burning platform" to motivate transformational change
- A clear vision and strategy... that allows room for iteration
- A recognition that transformation is a multi-year journey
- A need to put the customer or consumer in the center of the transformation equation
- The critical importance of demonstrating skeptics that different actions can lead to different results
- The need to over-communicate to employees, customers, stakeholders, and shareholders
globalization
"...the widening, deepening and speeding up of worldwide interconnectedness in all aspects of contemporary social life, from the cultural to the criminal, the financial to the spiritual."
The linkages created by globalization cause economies and societies to become
Globalization touches all areas of society.
We are all connected in the terms of ideas. These ideas now travel faster thanks to the internet. There are no longer boundaries on ideas, culture, etc.
People are now traveling and cross-migrating more which also leads to this cultural blending.
Reasons for Foreign Direct Investment
Firms Invest Abroad:
World Trade Report 2017
Benefits & Challenges for Businesses
Benefits
Globalization Impact
GDP Per Capita and PPP Conversion Factor (GDP) to Market Exchange Rate Ratio can be Extracted from Google Public Data
(Helps to Figure Out Pricing Internationally)
Thematic Global Issues
Sustainable Development Goals
Use the World Economic Forum as Reference Throughout the Semester
The linkages created by globalization cause economies and societies to become
- More closely integrated
- More interdependent
Globalization touches all areas of society.
We are all connected in the terms of ideas. These ideas now travel faster thanks to the internet. There are no longer boundaries on ideas, culture, etc.
People are now traveling and cross-migrating more which also leads to this cultural blending.
Reasons for Foreign Direct Investment
Firms Invest Abroad:
- As response to large and growing international demand for their products. (Coke in India)
- To secure access to mineral or raw material supplies. (China in Africa) *#1 Reason*
- To access markets with high tariff or non-tariff barriers: "get behind the tariff wall". (US in Europe)
- In countries with relative low wages. (US in China)
- As means of risk diversification against economies - diversify
World Trade Report 2017
- Unprecedented economic growth over the last quarter of a century has necessarily been accompanied by
unprecedented economic change. - Technological progress and openness to trade - the two most important drivers of economic advances and change
today - are also inextricably linked. - The scale and pace of recent global economic change is unprecedented but the process is not new.
- Continued economic progress hinges on the ability of societies to adjust, adapt and encourage inclusiveness.
Benefits & Challenges for Businesses
Benefits
- Access to Markets
- Faster Growth
- Increased Revenues
- Access to Cheaper Supplies
- Lower Costs
- Access to Natural Resources
- Increased Competition
- Falling Revenues
- Riskier Environment
- More Complex Environment
- Regulatory Bodies
- Security
Globalization Impact
- Reduced Absolute Poverty and Increased Wealth Inequality
- Increased Lifespans and Increasing Rates of Suicide and Homicide
- Increased Conflict and Increased Cross Culture Proliferation
- Increased Costs of Policing and Security
- Increased Environmental Degradation
- Increased Rate of Economic Growth
- Increased Income Inequality
GDP Per Capita and PPP Conversion Factor (GDP) to Market Exchange Rate Ratio can be Extracted from Google Public Data
(Helps to Figure Out Pricing Internationally)
Thematic Global Issues
- Environment and Natural Resources
- Human Development Issues
- Global Economy
- Peace and Security
- Global Governance
Sustainable Development Goals
- No Poverty
- No Hunger
- Good Health
- Quality Education
- Gender Equality
- Clean Water and Sanitation
- Renewable Energy
- Good Jobs and Economic Growth
- Innovation and Infrastructure
- Reduced Inequalities
- Sustainable Cities and Communities
- Responsible Consumption
- Cultivate Action
- Life Below Water
- Life on Land
- Peace and Justice
- Partnerships for the Goals
Use the World Economic Forum as Reference Throughout the Semester
the 12 pillars of competitiveness
(the global competitiveness report 2015-2016)
innovation
Innovation: a Definition
"A new way of doing things that is commercialized. The process of innovation cannot be separated from a firm's strategic and competitive context." -Michael Porter
"Change that creates a new dimension of performance." -Peter Drucker
It is invention + commercialization.
Simply a better way of doing things.
Process Innovation
Process innovation is achieved through the creation of a new means of producing, selling, and/or distributing an existing product.
Levels of Innovation
Administrative Innovation
Administrative innovation is the creation of a new organization design which better supports the creation, production and delivery of services or product.
Example: Virtual Teams - Any task-focused group that meets without all members being in the same room or even working at the same time.
Innovation Diffusion
Theory that every market has groups of customers who differ in their readiness and willingness to adopt a new product; the process of easing this transition.
Stages of Adoption
Five Factors that Govern Innovation
Faster Adoption
Innovations that are perceived by individuals as having greater relative advantage, compatibility, trialability, observability, and less complexity will be adopted more rapidly than other innovations.
"A new way of doing things that is commercialized. The process of innovation cannot be separated from a firm's strategic and competitive context." -Michael Porter
"Change that creates a new dimension of performance." -Peter Drucker
It is invention + commercialization.
Simply a better way of doing things.
Process Innovation
Process innovation is achieved through the creation of a new means of producing, selling, and/or distributing an existing product.
Levels of Innovation
- Improve
- Evolve
- Invent
- Transform
Administrative Innovation
Administrative innovation is the creation of a new organization design which better supports the creation, production and delivery of services or product.
Example: Virtual Teams - Any task-focused group that meets without all members being in the same room or even working at the same time.
Innovation Diffusion
Theory that every market has groups of customers who differ in their readiness and willingness to adopt a new product; the process of easing this transition.
Stages of Adoption
- Awareness
- Interest
- Evaluation
- Trial
- Adoption
Five Factors that Govern Innovation
- Relative Advantage - Degree to which a product is better than the product it replaces
- Compatibility - Degree to which an innovation is consistent with existing values and experiences (perception can get in the way of innovation)
- Complexity - Degree to which an innovation is difficult to understand and use
- Trialability - Degree to which an innovation can be experimented with on a limited basis
- Observability - Degree to which the results of an innovation are visible to others
Faster Adoption
Innovations that are perceived by individuals as having greater relative advantage, compatibility, trialability, observability, and less complexity will be adopted more rapidly than other innovations.
seo / sem
Players
Google
Types
Organic
Drivers
Paid
Paid - How to Get Rankings
Paid - What You Want
CTR x CPC x Conversion Rate x $ Per Sale = Your Profits
What Drives CTR
What Drives Conversion Rate x $ Per Sale
Paid - Amalgamators
Solution
What You Can Do
Multiplatform Advertising
TV Ads can be geared based on what you are searching on your mobile or laptop
This is possible because providers are often shared.
- Bigger
- Better Search
- Better Audiences
Types
- Paid - SEM (Marked with 'Ad')
- Organic - SEO
- Google Network
Organic
- 70% of Search Volume
- Free
- Hard to Impact
- Slow to Impact
- Complex Algorithms
- Trying to Out Smart Google? (Not Going to Happen)
Drivers
- Content (On Topic, Good, Current)
- Technical Content (H1, H2, Page Titles, URLs, Index, Bot-Readable)
- Backlinks / Traffic
- Mobile Friendly / Mobile First
- HTTPS
- Site Quality (Bounce Rate, Pages/Titles)
- Punishes Efforts to Game the System (Single Pixel Files, Linkfarms)
Paid
- Near or at the Top or Don't Bother
- Rankings are Key to Click Through Rate
Paid - How to Get Rankings
- Designed to Optimize Google's Income:
- Click Through Rate (CTR) x CPC = Google Profits
Paid - What You Want
CTR x CPC x Conversion Rate x $ Per Sale = Your Profits
What Drives CTR
- Ad Quality
- Ranking
- Audience
- Brand
What Drives Conversion Rate x $ Per Sale
- Audience (Quality, Narrowed Audience Who are Ready to Buy)
- Site
- Product
Paid - Amalgamators
- One Paid Click
- Divided by 2+ Leads
- Drives Price ABOVE Breaks Even for Individual Brands
Solution
- Gettin the Basics Done (Better Than Everyone Else)
- Thinking Outside the Box
What You Can Do
- Better Ads - Mirror Question / Long Trail
- Look for Pockets of Opportunity
- Localized Ads (If Searching for Dog Walker, Local is More Appropriate)
- Audience / Key Word Selection
- Set Up Google Ads for $1 Just for an Account to Get Deeper Analytics and Mock Campaigns
- Look at Purchase Funnels & Circular Journey
- Find Side Doors
- Audience Retargeting (Usually More Valuable, People Don't usually Buy on First Site Visit)
- Test and Optimize
- Audience > Offer > Creative
- One Variable at a Time (Multiple Variables Can Confuse Results)
- Statistical Relevance (AB Test Calculators)
- Vs. What Criteria
- More and More Often Automated
- Dynamically Generated Content - Need a lot of Volume, High Upfront Costs, Sometimes Helpful, Sometimes Goofy, Optimize On...
- Google Ad Network (It's Not Search... It's an Ad Buy) - Good for Recontacting
- Site Based (NYT)
- Google Networks - Any place where your terms are mentioned
- Programmatic - Find target audience wherever they are
Multiplatform Advertising
TV Ads can be geared based on what you are searching on your mobile or laptop
This is possible because providers are often shared.
social media
Social media are web-based communication tools that enable people to interact with each other by both sharing and consuming information.
Active Users: Monthly Active User = MAU (Measures unique visitors on a monthly basis)
Social Networks: Business benefits: Market research, brand awareness, lead generation, relationship building, customer service, etc. These networks have for all intents and purposes have become central in nearly every aspect of life from news - fake or otherwise - to create something for the social good to building a brand to showing off your cat.
Media Sharing Networks: For finding and sharing photos, videos, live video and other media online.
Business benefits: as with social networks, brand awareness, lead generation, audience engagement, etc. The difference between Social Networks and Media Sharing Networks are getting smaller, e.g. sharing.
Discussion Forums: For finding, sharing, and discussing news information, advice and opinions. Business benefits: Good sources for market research, and like most social media they can be used as advertising formats.
Bookmarking and content curation networks: For discovering, saving, sharing and discussing new and trending content and media. Business benefits: Drive brand awareness, customer engagement and website traffic.
Consumer Review Networks: For finding, reviewing and sharing information about brands, products, services travel destinations, restaurants, etc.
How to respond to negative reviews: Think before you respond but always respond. Look into complaints and find out what could be done about it. Apologize publicly and let people know what you're going to do to fix the problem. If possible, continue the conversation privately. Look for patterns to find truths.
Blogging and Publishing Networks: Helps increase awareness of your business and helps generate more content for your other social channels. Gives you the opportunity to become a thought leader in your category. Also encourages linking.
But beware, people join social networks to connect with one another and with what is going on in the world. Their main purpose for being there is not to view your ad. Therefore, you want to join in the conversation as a brand by being entertaining, interesting, useful and therefore shared. Instead of thinking how can I sell to these people, think what can I do for them.
Analogies:
Facebook is like a backyard neighborhood party.
Twitter is a noisy cocktail party.
LinkedIn is a huge group of co-workers after hours.
Snapchat is a stage where you perform for your tribe.
The central idea remains the same amongst all platforms but in a different way of portraying.
Try...
1/3 your posts celebrating what others have done
1/3 borrowed content from other sources that may be interesting to your audience
1/3 your own brags
Build your community. Then, pay attention them. This upkeep is crucial.
Reward your fans with recognition, sneak peaks and swag!
Embrace the medium you are working with (Use Snapchat's disappear feature to add meaning, etc.)
Once you get the 'single-minded' idea, let it be driven by the medium and the ways people use that medium.
Stock is always there (about section, long-term sections). Flow comes and goes (posts, ever-changing sections).
Changing content not only helps you maintain relevance and keep customers happy, it also keeps your website on the top of the list/first page of a Google search.
Think Mobile First - Design for the phone first then for the desktop.
Active Users: Monthly Active User = MAU (Measures unique visitors on a monthly basis)
Social Networks: Business benefits: Market research, brand awareness, lead generation, relationship building, customer service, etc. These networks have for all intents and purposes have become central in nearly every aspect of life from news - fake or otherwise - to create something for the social good to building a brand to showing off your cat.
Media Sharing Networks: For finding and sharing photos, videos, live video and other media online.
Business benefits: as with social networks, brand awareness, lead generation, audience engagement, etc. The difference between Social Networks and Media Sharing Networks are getting smaller, e.g. sharing.
Discussion Forums: For finding, sharing, and discussing news information, advice and opinions. Business benefits: Good sources for market research, and like most social media they can be used as advertising formats.
Bookmarking and content curation networks: For discovering, saving, sharing and discussing new and trending content and media. Business benefits: Drive brand awareness, customer engagement and website traffic.
Consumer Review Networks: For finding, reviewing and sharing information about brands, products, services travel destinations, restaurants, etc.
How to respond to negative reviews: Think before you respond but always respond. Look into complaints and find out what could be done about it. Apologize publicly and let people know what you're going to do to fix the problem. If possible, continue the conversation privately. Look for patterns to find truths.
Blogging and Publishing Networks: Helps increase awareness of your business and helps generate more content for your other social channels. Gives you the opportunity to become a thought leader in your category. Also encourages linking.
But beware, people join social networks to connect with one another and with what is going on in the world. Their main purpose for being there is not to view your ad. Therefore, you want to join in the conversation as a brand by being entertaining, interesting, useful and therefore shared. Instead of thinking how can I sell to these people, think what can I do for them.
Analogies:
Facebook is like a backyard neighborhood party.
Twitter is a noisy cocktail party.
LinkedIn is a huge group of co-workers after hours.
Snapchat is a stage where you perform for your tribe.
The central idea remains the same amongst all platforms but in a different way of portraying.
Try...
1/3 your posts celebrating what others have done
1/3 borrowed content from other sources that may be interesting to your audience
1/3 your own brags
Build your community. Then, pay attention them. This upkeep is crucial.
Reward your fans with recognition, sneak peaks and swag!
Embrace the medium you are working with (Use Snapchat's disappear feature to add meaning, etc.)
Once you get the 'single-minded' idea, let it be driven by the medium and the ways people use that medium.
Stock is always there (about section, long-term sections). Flow comes and goes (posts, ever-changing sections).
Changing content not only helps you maintain relevance and keep customers happy, it also keeps your website on the top of the list/first page of a Google search.
Think Mobile First - Design for the phone first then for the desktop.
delivering bad news
- Recognize bad news
- Communicate properly
- Reveal it, don't conceal it
- Communicate more than once
- Use a variety of mediums, not just email
- Write down bad news, even if you are delivering in person
- Include the positive (if any)
- Do not sugarcoat, minimize or disguise
- Empathize and apologize
- Do not rely on cascading, trickle down, communications
- Communicate with impacted people first
- Answer essential questions
- Individualize the message
- Don't communicate on people's personal time
- Use accurate and appropriate titles or subject lines
- Avoid blaming others
- Outline what you're doing to reduce the impact
- Keep your commitment to communicate
principles of internal communications
- Be Transparent
- Be Consistent
- Be Visible
- Be Genuine
- Be Fast
principles of external communications
- Present the facts - accurate without deceit
- Balanced - proactive and responsive
- What clients need vs. what clients think they need
- Build and sustain - incrementally change behaviors
- Celebrate customers in inclusive, non-exploitive way
- Target - message and delivery
- Innovative and flexible
- Consistency - PR and non-PR messages
- Measurable
storytelling
- Tell a story vs. just delivering info. It is more memorable.
- Understand your audience and be able to adapt to them to be RELEVANT.
- Create an emotional connection between you and your audience. An emotional connection resonates more with an audience and is memorable.
- Be sure there is a key takeaway in each slide of your presentation so audience stays on track with you.
- There should be a takeaway both for EACH slide and for the presentation AS A WHOLE.
- When carrying a theme, your beginning and ending are crucial to tying everything together. Your beginning sets the audience up for the key message you are about to portray and your end must reiterate/drive the point home.
- Help your audience follow you (either through key points as structure, icons, color coding, structure, something consistent throughout)
- The opening sets the tone for the presentation. Nail the opening!
- Be intentional. Know what devices can work in your favor.
- Create an overarching theme for your presentation. There should be an underlying consistency.
- Try starting with a concept that is not clearly defined (ex: happiness) so that audience members may engage by defining on their own what these themes mean to them.
- Translate nervous energy as excitement.
- The content you are delivering is 50%, the delivery is 50%.
How do you describe a story?
A story is... emotional, humorous, relatable, conversational, intriguing, visual.
A Story is a Sequence of Events
Beginning: establish setting, characters, problem
Middle: stakes, conflict, tension builds
End: highest tension, climax, consequences
Be specific (paint the picture for your audience), honest (vulnerability reads as a strength), and personal (if you care, the audience is going to care).
Being able to tell the story behind your achievements or title is more powerful than telling the achievement or title itself.
digital advertising intro
What is digital?
- Digital isn't simply a technology, or a platform, or a medium. Digital is a way of life. People live digitally.
- It's an entirely new behavior, a way in which people find, watch, share, and even produce the content we now call advertising...
- It's a different way of connecting with users and of creating and distributing ideas and content across an ever-changing media landscape.
- Who are digital natives?
Algorithms will never replace the value of a good idea or a compelling story.
An algorithm is a step-by-step procedure for solving a problem by accomplishing some goal or end - especially by a computer.
There are two kind of digital advertising
- Work that is digital, and...
- Work that goes digital.
Work that is digital...
- Requires people with tech skills to build
- These ideas can't be made simply by words and pictures...
- Nor are they simply a message that can be distributed on an open-source platform like Twitter or Instagram
- They are built using technology which include tings like apps, sensors, coding, virtual reality, etc.
Work that goes digital...
- Ideas that don't necessarily need a person with deep technical skills
- What you do need to know (which you already know) is how people access information, how they interact with it and how things are shared/spread
- Work that's funny, entertaining, interesting, charming, informational may very well get shared over digital channels. Not by the advertisers but the consumers
An integrated campaign's goals is to create interesting or useful or relevantly interesting experiences for the brand. It may involve an ad, it may not. Relevance is important or else no one will remember what the ad is for.
The internet has created greater pressure on the marketer to be honest! Not only for moral reasons but for bottom line reasons. The internet will catch you in a lie and spread it.
There is a difference between honesty and credibility. You can be a credible source who lies! Needless to say, it's safer to be on the honest side.
Before digital, marketers spoke...
- ...at the customer
- An experience is created through content
- There is more brand-customer dialogue
- The experience is evolving to a "we" mindset - the consumer and the marketer, together - as opposed to a us vs. them mindset
Being more collaborative, interesting and engaging in the digital world is more than an opportunity, it is a necessity. This is due to all the CLUTTER.
The team dynamic has changed and created a new way of working. The new role is creative technologists--coders/buildings of apps and websites, user experience (UX) designers, social media designers to the mix, depending on the project.
Paid media- paid ad space
Owned media- social pages, your website
Earned media- word of mouth, shared content
The Digital Difference:
- Digital is differentiated by asking for contributions.
- Going digital means getting spread.
- Before digital advertising, ads were talking at the consumer and now, digital ads are talking with the consumer.
- The ultimate goal is to offer more than a message but to do something; saying > doing.
Choose to either join a conversation or create your own. If your target is already talking about a topic relevant to your brand, jump in!
Instead of saying something, do something. Instead of controlling the content, invite others to create it with you. Create a story that is shared both in owned media and earned media.
Ask the question: how might we ___________ can get you to your answer.
Inject yourself into the culture, the moment, the conversation, the technologies and the digital environments people are using.
say it better
Say something that’s already been said and done but in a fresh way through the use of metaphors.
Positioning:
A word about the mind...
But beware...
It's good to be number one...
But there's only one number one. If you're not that then you should think of positioning like...
Cherchez le Creneau
Tactics: Bringing the Position to Life...
Positioning:
- A position—often expressed as a positioning statement—refers to how a given product, service or brand fills a particular customer need in a way that it’s competitors can’t.
- What does, “… in a way that its competitors can’t” mean?
- It's what sets that product, brand or service apart from the competition.
- ...a product—a device, a piece of merchandise, food, clothing, book, company, school. candidate, etc.
- BUT (Ries and Trout) positioning is not what you do to a product. It is what you do the mind of the target.
- The goal is to create a unique impression in the customer's mind so that the target associates something specific and desirable with the product that is distinct from the rest of the marketplace.
- The product is and does what the target thinks it is and does.
A word about the mind...
- Your mind has some expectation before you experience a product.
- How do you think that expectation affects the experience? (Cognitive Bias)
- How do you think an expectation might determine how you feel about...
- a glass of wine
- a restaurant
- a person
But beware...
- An expectation that is an obvious overpromise can backfire. Why is that?
- What role does the internet play in the overpromise scenario?
- Nothing kills a bad product faster than good advertising.
It's good to be number one...
- SOV - Share of Voice (How much money you put into advertising)
- SOM - Share of Market (How much you sell)
- A person tends to hold a finite number of products in any category in their heads.
- These products tend to be like rungs on a ladder.
- The higher your product is on that ladder, the better.
- The top rung, the number one brand, is in the best shape. They cannot sit on their laurels but then again, they have a lot of power: iPhone, FedEx, Amazon, Google. Starbucks. All number ones, all hard to dislodge.
- But, it's fun to be a challenger.
But there's only one number one. If you're not that then you should think of positioning like...
- A commuter looking for a seat
- A soccer player dodging defense and heading towards the opposing goal
- In other words, you're trying to find daylight where your product can be discovered.
Cherchez le Creneau
- You have to look for the hole.
- And then you have to fill it with your product and/or campaign.
- How did Volkswagen do it? What was their creneau? (Being small, smart, hip and NOT phony)
- What was Apple's creneau? (Being different)
- Re-position the competition (Tylenol vs Aspirin (we don't upset your stomach))
- Against position - Avis (we try harder)
- Low price airline (Southwest)
Tactics: Bringing the Position to Life...
- Through the product: design, price, distribution, voice improvements, disruption, etc.
- Through communication:
- We vs. Them (Mac vs. PC)
- Life before and after product (made for TV products)
- Heritage of the brand (KFC - The Colonel)
- Smart advice (Colgate Wisdom Tooth)
- Turn a negative into a positive (VW and Avis)
- Demonstrate product superiority (Timberland shoes)
- Reposition your product into another category (Arm & Hammer Baking Soda)
- Admit to shortcomings (Domino's)
- Change how people use the product
where to start (pertaining to advertising)
The Winning Combination of Insecurity & Confidence
The Process of Coming up with Ideas is a Hard One...
James Webb's Philosophy of Thought Process:
Creativity is like a "controlled daydream." -Joseph Heller
Advertising is sticking your head into the clouds while keeping your feet on the ground.
The Beginning Questions: The "What's in it" Theory
Some Practical Advice:
Find the Central Truth about the Category and the Product
You Against the World
Look for the One Word that Captures Your Product
So...
- A little of both is a good thing
- You're not the only one feeling less-than-sure-of-yourself --taking a test analogy
The Process of Coming up with Ideas is a Hard One...
- It takes time
- It takes perseverance
- It takes a willingness to fail
- It takes sweat
- It takes luck
James Webb's Philosophy of Thought Process:
- Gather as much info as possible
- Attack the problem
- Drop everything and do something else
- Have a Eureka! moment
- Figure out how to implement your ideas
Creativity is like a "controlled daydream." -Joseph Heller
Advertising is sticking your head into the clouds while keeping your feet on the ground.
The Beginning Questions: The "What's in it" Theory
- what's in it for the client
- what's in it for the agency
- what's in it for me?
- what's in it for my ego?
- what's in it for my career?
- But most of all what's in it for the customer
- Connecting with the customer with something relevant, informing, entertaining, delightful and motivating is your most important goal
Some Practical Advice:
- Get to know your product
- Keep a tight strategy
- Get to know your client's business the best you can
- Get to know the target and start thinking like them
- Review past advertising & review the competitor's advertising
- Pose the assignment as a problem. "A problem well-stated is a problem half-solved." -John Dewey
- Get it out of your mind and onto the paper
- Make the strategy "yours"
- First say it straight. Then say it great. The great part usually comes later.
- Allow yourself and your partner to have crappy ideas.
- Flip things around. If you're looking for words look at pictures. If you're looking for visuals visit your thesaurus.
- Check out award books!
Find the Central Truth about the Category and the Product
- Cameras don't take pictures, they stop time
- Volunteering does a lot of good for the volunteer
- Las Vegas is about letting go
- Fashion is about being yourself or someone you want to be
You Against the World
- You are not only competing with your direct competitors, but with the entire realm of advertising
- Keep it Simple Stupid
- Complicated is easy; Simple is hard
Look for the One Word that Captures Your Product
- Nike = Encourages
- IBM = Solves
- Apple = Innovates
- Volvo = Safe
- Jeep = Tough
- Porsche = Fast
- BMW = Performs
- Wholefoods = Healthier
So...
- Break the Clutter
- Keep it Simple
- Keep it Interesting
- Find the Truth
- Tell the Truth
- Keep it Single-Minded
- Take it Seriously but Don't Forget to Laugh
personal brand with purpose
"Work on what you love, not what you would love to love."
You attract what you put out there. Your personal brand is your greatest tool.
A personal brand is how you are perceived by others - your friends, colleagues, the public. It is the sum of all experiences people have when they engage with you via web searches, conversations, social media, personality, appearance, etc.
With increased connectivity, personal and professional lives are becoming increasingly blurred, it is everything you do in life as a whole.
Escalate your brand from confusing, informative and dreamlike to clear, inspiring and realistic.
Better to show your traits through your actions than to state your traits. Actions speak louder than words.
Unique Selling Proposition:
"You are what you do, not what you say you'll do."
Two Constants in Your Career:
The Future of Work:
Volatility
Uncertainty
Complexity
Ambiguity
It's Worth the Investment
"Always be a work in progress." -Emily Lillian
Personal Branding
You attract what you put out there. Your personal brand is your greatest tool.
A personal brand is how you are perceived by others - your friends, colleagues, the public. It is the sum of all experiences people have when they engage with you via web searches, conversations, social media, personality, appearance, etc.
With increased connectivity, personal and professional lives are becoming increasingly blurred, it is everything you do in life as a whole.
Escalate your brand from confusing, informative and dreamlike to clear, inspiring and realistic.
Better to show your traits through your actions than to state your traits. Actions speak louder than words.
Unique Selling Proposition:
- Who You Are
- What You Do
- What You Believe
"You are what you do, not what you say you'll do."
Two Constants in Your Career:
- Your Personal Brand
- Your Networks
The Future of Work:
Volatility
Uncertainty
Complexity
Ambiguity
It's Worth the Investment
- We spend thousands on our education but don't put attention to our communication expertise
- People need to fully understand the value we provide, the skills we share to solve the problems they have
- Every opportunity is attached to another person
"Always be a work in progress." -Emily Lillian
Personal Branding
- Develop a deeper understanding of your passions, purposes, skills, and career goals.
- Identify your niche, target market, and how you can solve the problems they have.
- Create new career opportunities, by leveraging your story for business.
- Develop strategies for adapting and maintaining your positioning
- Learn: What you truly want in life and how your personal brand can get you there. What makes you unique? What is your goal? What do you want to be known for/stand for?
- Inspire: How can you inspire people with your brand to create opportunities?
- Grow: Research those that inspire you. Connect emotionally via storytelling. Be authentic, distinctive and consistent.
video as an advertising medium
- YouTube has almost 1/2 of all internet users - over one billion
- 90% of mobile video viewers share content with others
- More than 500 million hours of videos are watched on YouTube every day
- 10 million videos are watched on Snapchat every day
- 87% of online marketers use video content
- Most marketers, worldwide, name video as the type of content with the biggest ROI
- Marketers who used video grew revenue 49% faster than non-video users
Most of the rules and skills used in TV commercials apply to online videos with length being an exception
Audio/Visual Components. There are 4 not 2.
- Visual
- Pictures
- Words (Supers)
- Audio
- Words
- Surrounding Sound
- Words
- Music
- SFX
- Tone
Give the viewer something worth watching:
- Make it interesting
- Make it informative
- Make it entertaining
- Make it dramatic
- Make it memorable - not just the commercial, but the product.
- Make it c-o-n-n-e-c-t
What helps...
- A clean, tight strategy
- A demonstrable difference
- Powerful visuals
- Powerful words
- A great insight
- A meaningful connection
Whenever possible, show don't tell.
Creat a story. Show how to do something. Demonstrate a benefit. Be memorable. Anthropomorphize. Empathize. Entertain.
If you make the customer feel good about themselves, they will want to return the favor and buy from them.
Make sure you tie up the ends.
- Reward the viewer for staying tuned.
- End with a punch, a button, a pleasant reminder.
- This is the last chance to get your name across.
- Deliver your call to action.
- Leave a moment for the viewer to breathe.
Video Jargon
- SFX (special effects)
- VO (voiceover)
- Anncr. VO (announcer voiceover)
- Cut (from one scene to another... the in between)
- Dissolve (transition from one scene to another... fade away)
- Pan (camera stands still and rotates)
- Dolly (camera rolls)
- Zoom
- Establishing Shot (sets scene)
- Close Up
- Medium Shot
- Wide Shot
- Super (words on the screen)
- Product Shot
- Fade to Black
- Dailies (what you shot that day)
- Rough Cut (edited a bit but still rough)
- Director's Cut
- Wrap Party (celebration after shooting is done)
First comes the creative brief, then comes the storyboard.
headlines + tagline
The secret to coming up with good lines (headlines and tagline) is to keep writing and writing and writing...
Think HOT. Edit COLD.
Fail BIG. Fail FAST.
If you "succeed" right away, it's probably not a true "success."
Think HOT. Edit COLD.
Fail BIG. Fail FAST.
If you "succeed" right away, it's probably not a true "success."
- Try flipping an expression: "We can't make it slow enough" playing off of "We can't make it fast enough"
- Exaggerate time: "Continental drift happens faster than this bourbon"
- Show longevity: "First bottled when American History was called Current Events", "If we could get any more behind the times, we would"
attributes, benefits & laddering
Attribute: What the product or service is/or does
Benefit: What the product does for you
Usually, it is better to advertise the benefit over the attribute... "what's in it for the customer?"
Your target wants to know "what's in it" for them, their company, the people they love, the planet, etc. In other words, they want to know what the benefit is.
When an attribute is big news, that's all you need to talk about. But make sure it is truly, "big news."
If a car X gets 200 miles per gallon, that's all you need to say. "Car X gets 200 miles per gallon." No need to get cutesy or clever, just state the fact.
When promoting yourself or your business... don't tell them just your attributes (Photoshop, InDesign, etc.) but also include the benefit of having you on their team (you can be trusted, you can handle it, etc.)
A little laddering goes a long way... (You do, however, need to know when to stop so it is not too much of a stretch)
Example: Join Weight Watchers because:
Benefit: What the product does for you
Usually, it is better to advertise the benefit over the attribute... "what's in it for the customer?"
Your target wants to know "what's in it" for them, their company, the people they love, the planet, etc. In other words, they want to know what the benefit is.
When an attribute is big news, that's all you need to talk about. But make sure it is truly, "big news."
If a car X gets 200 miles per gallon, that's all you need to say. "Car X gets 200 miles per gallon." No need to get cutesy or clever, just state the fact.
When promoting yourself or your business... don't tell them just your attributes (Photoshop, InDesign, etc.) but also include the benefit of having you on their team (you can be trusted, you can handle it, etc.)
A little laddering goes a long way... (You do, however, need to know when to stop so it is not too much of a stretch)
Example: Join Weight Watchers because:
- You will loose weight (why is that important?) —>
- You will lower your blood pressure and cholesterol levels (why is that important?) —>
- You will be healthier (why is that important?) —>
- You will live longer (why is that important?) —>
- Living longer is better than not living longer
simplicity
Common Misperception:
Simple = Easy
Complicated = Hard
It is actually HARDER to make something 'simple' because you must remove the clutter that often complicates.
Simple = Easy
Complicated = Hard
It is actually HARDER to make something 'simple' because you must remove the clutter that often complicates.
writing rules
- Less is more
- Avoid jargon
- Write once, check twice (not just for grammar but also how your message can be perceived)
- Be professional, not necessarily formal
- Names, titles, genders
- Remember the five "Ws" (and the "H")
- Call to action
- Don't give too many choices
- Think about: What's in it for the reader?
message development
You should have in the first two sentences...
What?
What?
- Share Important Information
- Make it Personal
- Outline Desired Action (AIDA)
the tick tock
scheduling method
Time | Audience | Message | Delivery Message | Sender | Dependencies | Notes | Materials
(Min. by Min.)
(Min. by Min.)
different ways to communicate difficult messages based on audience
Internal
|
Email | Face to Face | PR Releases | Social Media | Conference Calls
|
communications matrix
Information Gathering Sample
- Example New Product: Shampoo (No-Poo)
- Category: Consumer Goods
- Launch: Spring 2018
- Competitors: L'Oreal, Johnson & Johnson, etc.
- Expansion of Current Line (Existing Brand)
- Expected Dollar and Percentage Growth
- What it Means for Responsible Employees
- Where it is Launching
- Target Demographic
- Potential Conflicts
- What was Testing Process
- How is this Product Different from Competitors
Overall Objective (This information translates amongst the matrix below, the information varies depending on the audience denoted throughout the matrix... for example: the c-suite will care more about different key messages than the potential audience will care most about (each check mark denotes multiple deliverables in this category))
- Key Messages Regardless of Audience (Should have 3-5 Points)
- Supporting Facts for Each Key Message (Flush out any Potential Questions that may Arise)
|
Audience
Internal Management/C-Suite Teams/Departments Employees/Staff Freelancer/Contractor Subsidiaries External General Public Shareholders Customers Suppliers Business Partners Competitors Consulting Firms Regulators/Official Sector Potential Employees |
Medium
Email | S.Media | Phone | Face-to-Face | Ads/Market. | Press Releasee State. | Video Stream | Town Hall | Offsite | PR X X X ✓ X X X X X X ✓ ✓ X ✓ X X ? ? X X ✓ ✓ X X ✓ ✓ ? X X ✓ |
presentation skills
- Know your content
- Know your audience
- Arrive early
- Practice, practice, practice
- Transform nervous energy to enthusiasm
- "No-one can intimidate me without my permission." -E. Roosevelt
- "Depth of conviction counts more than height of logic, and enthusiasm is worth more than knowledge." -Dale Carnegie
- First impressions
- 4-7 seconds
- 40 minutes maximum listening
- Stimulate engagement/personal connection
- The power of "3"
- Retention (Dale Cone's Experiment)
- Read 10%
- Heard 20%
- Seen 30%
- Heard and seen 50%
- Said 70%
- Said and done 90%
- Prepare - enjoy - smile
- Be confident
- Set expectations
- Be aware of your body language
- Power stance
- Use your voice/cadence
- Pause
- Wrap up positively
personal branding
Know your brand
- Understand your authentic self
- Strengths and weaknesses
- Willing to be vulnerable
- Main idea
- Main themes radiate from the idea
- Branches and twigs
the impact of negative communications
Reviews - impact on the bottom line
Companies that communicate effectively had a 47% higher return to shareholders
Examples:
GM (response/testimony re recalls)
Lululemon (public comments re customers)
Netflix (price increase and brand expansion)
Paula Deen (racist commentary)
Companies that communicate effectively had a 47% higher return to shareholders
Examples:
GM (response/testimony re recalls)
Lululemon (public comments re customers)
Netflix (price increase and brand expansion)
Paula Deen (racist commentary)
the message communicated
- Permanent
- Up for interpretation
- Lack of control of distribution
- Common Elements: Purpose/Intent, Audience, Content, Sender, Medium
- Up for interpretation
- Lack of control of distribution
- Common Elements: Purpose/Intent, Audience, Content, Sender, Medium
2017 active users of the top social platforms and messaging tools, by age
Trump's use of Twitter as his primary social media platform is strategic because the age demographic he is reaching is appropriate in regards to voting/political susceptibility.
global digital snapshot for the world's internet, mobile, and social media users in 2017
These numbers are ever-increasing as years go by. Social media is a scrolling experience and a cluttered space. It is hard to stand out and go from being scrolled past to a clicked post.
evolution of communications
Developments in technology and communications go hand-in-hand
Pictographs (Static, Local, Permanent, Storytelling) --> Paper/Papyrus/Wax (Printing, Universal Language, Transfer of Content, Wider Audience) --> Electronic (Internet, Social Media (Social is no Longer separated from business), Speed, Global, Increased Competition for Attention)
Pictographs (Static, Local, Permanent, Storytelling) --> Paper/Papyrus/Wax (Printing, Universal Language, Transfer of Content, Wider Audience) --> Electronic (Internet, Social Media (Social is no Longer separated from business), Speed, Global, Increased Competition for Attention)
communications dilemma
Everyone uses different news sources and there is so much clutter out there. How do I get my message out there to be seen/shared/exposed?
the sectors of communications
Personal
- Personal Interactions
- Personal Branding
- Personal Values
- Storytelling
- Professional Perspective
- Internal
- Staff
- Management
- Peers
- Subordinates
- External
- Public
- Shareholders
- Customers
- Potential Customers
- Public Sector
elements of a print ad
- Headline
- Sub-Headline (Try to Avoid)
- Visual (The headline and the visual should have individual messages so it is not redundant)
- Body Copy
- Logo
- Tagline
(You don't need all elements in your print ad)
Elements should be added so that the total is greater than the elements on their own.
- Sub-Headline (Try to Avoid)
- Visual (The headline and the visual should have individual messages so it is not redundant)
- Body Copy
- Logo
- Tagline
(You don't need all elements in your print ad)
Elements should be added so that the total is greater than the elements on their own.
the creative brief
A document that summarizes your research and your goals in a clear, crisp format so that your message can be communicated succinctly, precisely and clearly.
Why Brief?
The message delivery is limited by:
Time (how long a commercial is, a person’s attention span, etc.)
Space (the amount of characters you can use, the dimensions of a billboard, etc.)
The “H” Factor (the humility factor, the message is more important to YOU as the creator, than your audience)
By taking these limitations into account the Creative Brief forces you to stay focused, single-minded, and on message. Example: car ads give too many stats, no one is taking notes so they have limited take-away. On the other hand, politicians have one single slogan that sticks with their audience.
A Design Brief Should Provide the Following:
The audience you want to reach
The present relationship that the audience has with your service or product
How you would like that relationship to change as a result of your communications
What you can say to make that change happen
WHO are we talking to?
WHAT do they think/feel/do now?
WHAT do we want them to think/feel/do in the future?
INSIGHT a fact, often psychological or sociological, that can help inform the message
Target should be broken into two sections
Demographic and Psychographic
Demographic- Measurable (gender, age, education, income, etc.)
Psychographic- Less Measurable (values, personality, inner thoughts)
You can differentiate yourself from a parody product (competitor) by using customer insight as your line to run with (ex: Nike’s Just Do It)
Unique Selling Propositions / Differentiating Proposition (May be Added to Briefs if Important)
Must be meaningful to customers. Ex: you may talk about how great the wood on the dashboard is but the customer is concerned with car speed not the interior aesthetic details
Why Brief?
The message delivery is limited by:
Time (how long a commercial is, a person’s attention span, etc.)
Space (the amount of characters you can use, the dimensions of a billboard, etc.)
The “H” Factor (the humility factor, the message is more important to YOU as the creator, than your audience)
By taking these limitations into account the Creative Brief forces you to stay focused, single-minded, and on message. Example: car ads give too many stats, no one is taking notes so they have limited take-away. On the other hand, politicians have one single slogan that sticks with their audience.
A Design Brief Should Provide the Following:
The audience you want to reach
The present relationship that the audience has with your service or product
How you would like that relationship to change as a result of your communications
What you can say to make that change happen
WHO are we talking to?
WHAT do they think/feel/do now?
WHAT do we want them to think/feel/do in the future?
INSIGHT a fact, often psychological or sociological, that can help inform the message
Target should be broken into two sections
Demographic and Psychographic
Demographic- Measurable (gender, age, education, income, etc.)
Psychographic- Less Measurable (values, personality, inner thoughts)
You can differentiate yourself from a parody product (competitor) by using customer insight as your line to run with (ex: Nike’s Just Do It)
Unique Selling Propositions / Differentiating Proposition (May be Added to Briefs if Important)
Must be meaningful to customers. Ex: you may talk about how great the wood on the dashboard is but the customer is concerned with car speed not the interior aesthetic details
steps to getting into creative mindset
Step 1: Start by studying product/background info/competition. There must be upfront work so creativity can
come.
Step 2: Step away/do something else/listen to something funny (to relax and give examples of unexpected
connections). When you come back, the idea will come out of the blue. Rarely is your first idea the best
idea.
come.
Step 2: Step away/do something else/listen to something funny (to relax and give examples of unexpected
connections). When you come back, the idea will come out of the blue. Rarely is your first idea the best
idea.
fine line between truth and crafting clever verbiage
Examine the statement “Nothing works faster than Alka-Seltzer”. The customer reads the sentence as “Alka-Seltzer is the fastest” when really the advertisement is legal because all it is saying is that nothing is faster than it (it could work at the same speed as all other pharma products). If you really think about the copy, it is just saying that Alka-Seltzer is the same speed as all others, the sentence just gives the illusion the product is better than it is.
define advertising through clutter
An effective advertisement must break through the clutter by…
Being authentic with their audience
Being appropriately placed
Reaching target audience
Connecting with potential users
Making user believe that you (as a brand) understand them
Afflicting the comfortable (creating a problem that you can then solve) or comfort the afflicted (solve a problem/empathize with them)
Making customers feel like you are telling it as it is (not spinning situation)
Lightening up ones day / making them feel better
Telling old stories that we’ve heard before but in a fresh way (take something that has been done and make it better)
Being authentic with their audience
Being appropriately placed
Reaching target audience
Connecting with potential users
Making user believe that you (as a brand) understand them
Afflicting the comfortable (creating a problem that you can then solve) or comfort the afflicted (solve a problem/empathize with them)
Making customers feel like you are telling it as it is (not spinning situation)
Lightening up ones day / making them feel better
Telling old stories that we’ve heard before but in a fresh way (take something that has been done and make it better)
define advertising through user
Different Kinds of Users/Consumers:
Light (once in a while)
Medium
Heavy
Lapse (used to use it and don’t anymore)
Non-Users
The perception of a product is different for different kinds of users.
Light Jello users say it takes 3 hours to make Jello because they count the time Jello has to settle after the 10 minute preparation time. They are thinking with mindset of ‘Jello is inconvenient.’ Heavy Jello users say it takes 10 minutes to make Jello because they don’t count the settling time since they are so used to it and have a more positive mindset.
Light (once in a while)
Medium
Heavy
Lapse (used to use it and don’t anymore)
Non-Users
The perception of a product is different for different kinds of users.
Light Jello users say it takes 3 hours to make Jello because they count the time Jello has to settle after the 10 minute preparation time. They are thinking with mindset of ‘Jello is inconvenient.’ Heavy Jello users say it takes 10 minutes to make Jello because they don’t count the settling time since they are so used to it and have a more positive mindset.
define advertising through change
If you don’t have a need for change, there is no need for advertising.
Changes can be:
Perception
Brand Identity
Product Re-Design
Customer Behaviors
Squash Competition
Increase Sales
Getting Rid of Possibility of being Forgotten
Changes can be:
Perception
Brand Identity
Product Re-Design
Customer Behaviors
Squash Competition
Increase Sales
Getting Rid of Possibility of being Forgotten
4 stages of 0-1 product
Create valuable new intentions.
- Define your people outcomes: Identify the People Problem you’re trying to solve. Define the initial target audience. Describe what people will do differently if your product is wildly successful.
- Get product/market fit: Optimal fit does not come instantly. Create a focused MVP (minimum viable product) for a target segment. Define metrics that will prove intended people outcomes are happening. Assume you will learn; don’t assume you will ship globally. Not shipping does not mean you’ve failed: in 0→1 development, it’s unrealistic to expect that every hypothesis we come up with will be correct. If you assume everything we try must ship, then we will only try conservative, incremental ideas. Preventing premature optimization: don’t worry about getting your product neutral on revenue or time spent before you’ve demonstrated it’s valuable. Also don’t assume anything existing in the product is off-limits to change, lest overconstrain your product too early.
- Reconciliation: Optimizing the tradeoffs in the broader ecosystem. Having an opinion on whether the product is net positive for the company. Making it a high-quality experience: Because the “Product Market Fit” phase meant moving as quickly as you can, you may have cut corners in the development process when it comes to craft and polish.
- Growth: A successful growth model… Has a story for how to expand to new segments. Has a story for how to increase depth of engagement. Continues to monitor the effectiveness of your funnel.
how to start building a product
If I build ____________ and it's for ___________ audience, and it has ___________ features, ___________ will happen.
This will evoke customer, industry (pr, brand, press), company, and market (additional audiences you don't have or don't know you have) reactions.
This will evoke customer, industry (pr, brand, press), company, and market (additional audiences you don't have or don't know you have) reactions.
ux mapping methods compared
Visualization of understanding of the user.
- Empathy Mapping- projection of how customers feel; helps the designer to understand the customer's mindset.
- Customer Journey Mapping- what actually happens (customer based). Used for understanding customer needs and pain points.
- Experience Mapping- what ideally happens (designer based) Visualization of an end to end experience that one type of user may have. Used for understanding general human behavior. Three forms: what is intended for general audience, what general audience actually does, deviations between intended use vs. actual use.
- Service Blueprinting- visualizes the relationships between different service components - people, props (physical or digital evidence), and processes - that are directly tied to touch points in a specific customer journey. Part two to customer journey maps. An ideal approach to experiences that are omni channel, involve multiple touch points, or require a cross functional effort (that is, coordination of multiple departments).
testing
- User Testing
- AB Testing: Two sets of variables. Audience is split amongst two different forms of the product (simultaneously).
- MVT: Multivariate Testing, involves observation and analysis of more than one statistical outcome variable at a time
- Split Testing: Same audience with two choices
- Organic Testing: Leave product out and see what happens
- Market Testing: Looking to get into new market
pattern recognition
Revolves around customers viewing products as part of the ecosystem. Customers look for system based designs. This is because it speaks to the human nature to collect.
Pattern recognition allows the designer to speak to this need for system based design to therefore satisfy customers.
Pattern recognition allows the designer to speak to this need for system based design to therefore satisfy customers.
roi chains
If a product is purchased, the customer expects to get back more than they paid. Experience/fulfillment/pleasure must be greater than purchase cost. ROI is fundamental.
design experience vs. behavioral design
Behavior Design attempts to incentivize and trigger a specific action. Design for hesitation, lack of awareness, excitement, more than one emotion so that you can get through to customers and fulfill transactions. Don't just look at ideal customers, evaluate multiple cohorts.
dissonance and anomalies
Dissonance and anomalies can be found within data. The unanticipated that occurs organically and can reveal a future for the product that was not envisioned. This can become a secondary purpose or new main purpose (example: Netflix model transformation, Amazon). Organic dissonance says to let it happen and embrace these new ideas.
bicameral consumerism
Bicameral: Differentiating thoughts as purely own vs. outside influences.
Pertaining to Consumerism: Discussion consumers have with themselves to decide if they need a product. An aspirational state. Can I afford this? What would it do for me? Both unconscious and conscious states duke it out. Explains why we buy the way we do. Similar to systems one and two. We are what we consume (self identity). What you do with the products is where creativity exists. We picture our lives as narratives that we fulfill with purchases and acquisitions of products and how we feel about them. Motivations and instincts and aspirations are just as real as fact. Helps teach how to appeal to the appropriate customers. It's an internal dialogue of decision making.
Emotional intellect and empathy are directly correlated.
Different states of mind effect reaction to different products.
Pertaining to Consumerism: Discussion consumers have with themselves to decide if they need a product. An aspirational state. Can I afford this? What would it do for me? Both unconscious and conscious states duke it out. Explains why we buy the way we do. Similar to systems one and two. We are what we consume (self identity). What you do with the products is where creativity exists. We picture our lives as narratives that we fulfill with purchases and acquisitions of products and how we feel about them. Motivations and instincts and aspirations are just as real as fact. Helps teach how to appeal to the appropriate customers. It's an internal dialogue of decision making.
Emotional intellect and empathy are directly correlated.
Different states of mind effect reaction to different products.
distribution
Must calculate:
How to disrupt
What's being disrupted by your product?
What's going to disrupt you?
Can self disrupt to stay relevant (examples: new product release, expansion, new brand, etc.). However, this is the perfect time for competitors to jump in because you are reflecting in your own brand and not the market.
Assembly: What you chose and the order you chose it. Loose assembly of people, processes, planning. All parts have meaning, no excess. Use built.
Collective: What you see as result of assembly. A product/service. The assembly in operation.
Cooperative: How user feels based on selections (assembly and collective). Customer brings needs/jobs to be done to the product. Customer uses for either intended or unintended purposes.
How to disrupt
What's being disrupted by your product?
What's going to disrupt you?
Can self disrupt to stay relevant (examples: new product release, expansion, new brand, etc.). However, this is the perfect time for competitors to jump in because you are reflecting in your own brand and not the market.
Assembly: What you chose and the order you chose it. Loose assembly of people, processes, planning. All parts have meaning, no excess. Use built.
Collective: What you see as result of assembly. A product/service. The assembly in operation.
Cooperative: How user feels based on selections (assembly and collective). Customer brings needs/jobs to be done to the product. Customer uses for either intended or unintended purposes.
so the product gets the job done... what's next?
Genuflection: The ability to impart/transfer emotion.
Instilling relevance. Relevance is based on who you are, what you believe, what you choose. Product needs to work to dish relevant. Products don't change people. One can't escape the inertia of who they are; products amplify who one is but doesn't change them.
Instilling relevance. Relevance is based on who you are, what you believe, what you choose. Product needs to work to dish relevant. Products don't change people. One can't escape the inertia of who they are; products amplify who one is but doesn't change them.
customers vs. users
A customer is not the same as the user. A customer is temporary. They can be lost or regained. Repeat customers indicate/quantify customer happiness. Just as their opinion can. Lastly, one needs to see that their customers are getting their jobs done and mini hires continue.
product friction
The idea that there must be something better, simpler, more convenient. If given less information upfront, the customer is more excited by the product (expectations are lower). There are limits to how high companies can set the bar for products and how long they make customers wait because the experience is built up and is either amazing experience or awful.
transact model
Transact model - the way in which we measure success of product or service
through revenue, koi and metrics, audience share, and other mechanisms. Transact doesn't always mean purchase it can be word of mouth, clicks, time on site, and returns.
The user higher the product to get the job done. If you build a product that has strong word of mouth, you can decrease marketing budget.
Engagement Cycle
Hope - Experience - Belief - Convinced
through revenue, koi and metrics, audience share, and other mechanisms. Transact doesn't always mean purchase it can be word of mouth, clicks, time on site, and returns.
The user higher the product to get the job done. If you build a product that has strong word of mouth, you can decrease marketing budget.
Engagement Cycle
Hope - Experience - Belief - Convinced
- Awareness: Hope is the belief of something without evidence and has a short memory. Once aware, can aspire, project, transfer
- Engagement: Expectation. Interaction and use (includes apathy, safe, euphoria, remorse, awareness, advertising, word of mouth, influencer marketing, yelp/social opinion started keeping brands and experiences alive). Pre-experience.
- Conversion: Experience. To change habits, to hold, to take the request. Experience has three phases: pre, during, post.
- Transact: Post-Experience. To exchange. Made a commitment.
- Affinity: Hopeful you have affinity. Both invested, vested and interested. More likely to keep focus. A vest is a return and have an inclination to use and willingness to try.
- Loyalty: Have used/experienced and have belief. Belief has evidence 1st hand, collective, social. More experience than affinity . Anything can happen
- Retention: Conviction. To not let go. Sustained use and non-use. Marketing department for product because will share experience both good and bad. Invested and had experience so can't be convinced otherwise.
how to quantify sustainability’s impact on your bottom line?
The Impact of Brazil’s Beef Industry
Using the Same Methodology for Other Value Chains (Sequential Process)
- 20% of the world beef market
- 6% of Brazil’s GDP
- Between 1993 and 2013 cattle herd in Brazilian Amazon expanded 200% to a 60 million herd
- 300,000 sq. km of rainforest was cleared
- Deforestation causes up to 10% of global GHG emissions
- Focused on the impact of sustainable and deforestation-free practices
- Net Benefits were demonstrated across the value chain, over 10 years, using NPV
- 18 to 34 million(12 to 23% of revenue) for ranchers
- 20 to 120 million (0.01 to 0.1% of revenue) for slaughterhouses
- 13 to 62 million (0.01 to 0.7% of revenue) for retailers
- ‘Measuring the value of sustainable business can be done, and sustainable business itself can be cost-effective’
Using the Same Methodology for Other Value Chains (Sequential Process)
- Identify the potential benefits
- Analyze the drivers of performance, quantify the results, assign a dollar value
- Conduct interviews, site visits, data collection
- Desktop research, adjust benefits and values
- Input data, assumptions, and assign final monetary values to benefits, and compile results
can sustainability impact be measured?
major takeaways
Defining Materiality
• Different Definitions of Materiality used by Different Reporting Regimes
• GRI Focuses on Stakeholders, SASB Focuses on Investors
• Companies use Different Definitions Depending on the Report
Key Findings from ‘First Evidence on Materiality’
• Firms with Strong Ratings on Material Issues and Poor Ratings on Immaterial Issues have the Best Future Performance
• Different Definitions of Materiality used by Different Reporting Regimes
• GRI Focuses on Stakeholders, SASB Focuses on Investors
• Companies use Different Definitions Depending on the Report
Key Findings from ‘First Evidence on Materiality’
• Firms with Strong Ratings on Material Issues and Poor Ratings on Immaterial Issues have the Best Future Performance
hooked: how to build habit – forming products
by nir eyal with ryan hoover
Provides a four step framework (consisting of trigger, action, variable reward and investment) to ensure that your product is deep underneath the skin of your users
Takeaways:
Takeaways:
- First Step: Triggers (external and internal) urge the users to take action whether through information or associations.
- Businesses that create customer habits gain a significant competitive advantage and have little dependence on advertising
- Design a product that connects the users’ problems to a solution frequently enough to form a habit
- The trick is to determine whether the goal of your company is to design a vitamin or a painkiller. Habit-forming products often start as nice-to-haves ( vitamins) but once the habit is formed, they become must-haves (painkillers).
- Solve the user's pain by creating an association so that the user identifies the company's product or service as the source of the relief (example: Kleenex).
- There are three ingredients required to initiate any behavior. (Action is the simplest behavior in anticipation of reward): The user must have sufficient motivation, the ability to complete the desired action, a trigger must be present to activate the behavior
- Variable Rewards must satisfy the user's needs while leaving them wanting to re-engage with the product: Reward of the tribe (the search for social rewards fueled by connections with other people), Reward of the hunt (the search for material resources and information), Reward of the self (the search for rewards of mastery, competence and completion)
- Fourth Step: The investment of effort exploits the concept of consistency. Spending a significant amount of time doing something makes a person believe that investment must have been worthwhile, and increases the probability of continuing that behavior.
what should sustainability reporting (and strategy) focus on?
Defining Materiality:
GRI: aspects that reflect the organization’s significant economic, environmental and social impacts; or substantively influence the assessments and decisions of stakeholders
SASB (and SEC): presenting a substantial likelihood that the disclosure of the omitted fact would have been viewed by a reasonable investor as having substantially altered the total mix of information made available
Companies often use different definitions, depending on the document
Should Companies Focus Their Strategies?
‘First Evidence on Materiality’
Key Findings:
Moral of the Story: Focus on the issues that matter, not the irrelevant issues depending on the industry the firm lives within.
How does the current administration impact progress on sustainability?
Analysis - Basics
Analysis of data
Evaluate & Conclude
Recommendations
Design Management Matters
Design management seeks to link design, innovation, technology, management and customers to provide competitive advantage across the triple bottom line: economic, social/cultural, and environmental factors. It is the art and science of empowering design to enhance collaboration and synergy between "design” and "business” to improve design effectiveness.
Simply put, design management is the business side of design.
GRI: aspects that reflect the organization’s significant economic, environmental and social impacts; or substantively influence the assessments and decisions of stakeholders
SASB (and SEC): presenting a substantial likelihood that the disclosure of the omitted fact would have been viewed by a reasonable investor as having substantially altered the total mix of information made available
Companies often use different definitions, depending on the document
Should Companies Focus Their Strategies?
‘First Evidence on Materiality’
- Uses the SASB/SEC definition of materiality
- Examines whether a focus on material or immaterial sustainability issues impacts company stock price performance
- Attempts to neutralize impacts of other factors, including analyst coverage, advertising, etc
- Looks at performance across different sectors
Key Findings:
- Firms with strong ratings on material sustainability issues perform better than firms with inferior ratings on the same issues
- Firms with strong ratings on immaterial issues do not out-perform firms with poor ratings on these issues
- Firms with strong ratings on material issues and poor ratings on immaterial issues perform the best
Moral of the Story: Focus on the issues that matter, not the irrelevant issues depending on the industry the firm lives within.
How does the current administration impact progress on sustainability?
- Op-Ed from Bloomberg and Gov. Brown
- ‘American society remains committed to our pledge under the (Paris) agreement’
- States, cities, and businesses representing more than half of the U.S. economy have reaffirmed Paris commitment
- Together they would be the third-largest economy in the world
- Pledge is to reduce emissions by 26% below 2005 by 2025
Analysis - Basics
- Data Compilation- Decisions making, what information to use
- Selection process should not be biased
- Frameworks should provide guidance and credibility
- Relevant- Keep circling back and check on relevance
- Timely- Info can be both too old and too new
- Independent- Very important that it is developed by an independent party
- 360 Degree View- Different perspectives matter
- Be Cognizant of the ‘Negative Space’
Analysis of data
- Selection of analysis methods: TBLD+C, SWOT, Ration, Trend Analysis, etc.
- Start intuitively then step back and do it consciously
- Be conscious that the method used can change the outcome (just like how scale of a graph changes visual outcome)
- Economy
- Social Norms
- Industry
- Business Cash Cycle
- Business Life Cycle
- Benchmarks: Historical, Competitors, Company Good- Benchmarking has context
Evaluate & Conclude
- Above Average
- Average
- Below Average
- Make Judgement Call
Recommendations
- Realistic (Stretch)
- Actionable
- Measurable
Design Management Matters
Design management seeks to link design, innovation, technology, management and customers to provide competitive advantage across the triple bottom line: economic, social/cultural, and environmental factors. It is the art and science of empowering design to enhance collaboration and synergy between "design” and "business” to improve design effectiveness.
Simply put, design management is the business side of design.
5 specific benefits of creating a customer journey map
- Produces Clear, Visual Takeaways
- Puts the Team in the User's Shoes
- Sheds Light on All Customer Touch Points
- Correlates Key Decisions with Emotions
- Highlights Different User Segments
9 types of innovation
moore's law
Moore's Law- the observation that the number of transistors in a dense integrated circuit doubles approximately every two years.
Technology gets smaller, faster, cheaper, better over time.
Technology gets smaller, faster, cheaper, better over time.
intended vs. unintended use
Can a designer design for intended and unintended use?
Example of adaption- a designer making a fragile object less fragile knowing that it may be tossed.
The designer is responsible for unintended use... this is why disclaimers exist.
Products designed for good can become lethal if not careful. That is why the greatest skill is the ability to anticipate use and misuse. Users are responsible for their actions but designers must anticipate them to minimize the risk for bad. Ask wildcard questions to survey participants to see how they would abuse/misuse product?
A brilliant idea with breakthrough technology makes a product.
Example of adaption- a designer making a fragile object less fragile knowing that it may be tossed.
The designer is responsible for unintended use... this is why disclaimers exist.
Products designed for good can become lethal if not careful. That is why the greatest skill is the ability to anticipate use and misuse. Users are responsible for their actions but designers must anticipate them to minimize the risk for bad. Ask wildcard questions to survey participants to see how they would abuse/misuse product?
A brilliant idea with breakthrough technology makes a product.
consumer / product relationships
- Value chains are established through use.
- Use of a product incorporated into our reliance upon and expectance of it.
- Appreciation model can be expressed as reliance or as 'I appreciate from afar'. Can be wonderful and complimentary when people love your product and opposite when people are disappointed in your product.
Pandora theory- Highly codependent, can't live without, product recall is an example.
Consumer Mindsets:
- Short memory satisfaction al value
- Long memory let downs
Value Chain for Product Development:
- How do you create reliance and dependency?
- Where does the value chain potentially go sour?
- How do you get to co-dependency? (Mutual Relationship)
Emotional Intelligence- Ability to empathize, EI people can be passive aggressive, is important in establishing dependency and relationships.
Brands with a personality sell better. As does a sense of emotional well being by using product or service.
Before first use, if you have low emotional intelligence you may be buying on impulse or out of necessity, availability, or low cost. Emotional intelligence appeal explains why people purchase, how they felt and how they would use it; mix between logic and emotion. Logic and emotion battle each other. The product designer wants the consumer to overcome their logic of need with their emotion of want.
3 Reasons Behind Being Impulsive:
- Need
- Want
- Unresolved
There is high brow and low brow way to sell- sometimes appealing to need and want is great (high brow) and sometimes you can expect/appeal to impulse purchasers (low brow).
The Passionate Consumer- a blessing and a curse.
If you build a relationship on something special, it's hard for the passionate consumer to adjust to innovation/new products. Passionate users just receive products and don't challenge the company. They won't give honest feedback because they see one outcome... good. They also have high expectations and if they are not met then they are crushed and tell other people. They are your most fragile customer. On the bright side, you get more emotional, empathic, appreciation and positive insights that are user specific. They are best for word of mouth, influenced marketing.
The Agnostic Consumer- not devoted. They have no expectation until expectation is received. They are willing to try things. They are not devotees; important to corporations because these customers come in with no prior biases.
Don't build a product when you can build an experience.
Cognitive Biases- Deeply routed in the structure of the brain whether bad or good; they are there and they make us human.
Behavioral Economics:
System One- Automatic, always on, automatic, quick thinking.
System Two- Slower deeper thinking, "pay attention" is fitting because we have limited amount of attention to until we rest.
Common Cognitive Biases- should be kept in mind when building products.
Anthropomorphism- The attribution of human traits, emotions, or intentions to non-human entities. It is considered to be an innate tendency of human psychology.
Opinionated Products- Have a clear point of view.
Negativity Bias- Humans greater recall unpleasant over pleasant experiences.
The Gottman Ratio: Shown to predict everything from brand affinity to workplace satisfaction to divorce with remarkable accuracy. The strongest predictor of success in long term relationships = ratio of positive to negative moments. Gottman Ratio is most important at initial use phase.
Loss Aversion- Losses loom larger in our minds than gains. In other words, we like to win but we hate to loose.
Reciprocity- Most feel indebted to the giver of the gift received therefore there should instead be an equal exchange. There is hesitation/skepticism if something is just given away; if there is an exchange there is more likelihood for traction.
Peak and Effect- People tend to place higher weight on how they felt during the peak and what they recall in it. When is the peak and how long is the journey? A peak can be positive or negative. Extreme highs and extreme lows overshadow small in-between moments. There should be ease in jobs to be done with payoffs within the experience. The goal is to make the experience memorable and the payoff exceptional.
Cognitive Dissonance- Mental stress associated with performing inconsistent actions or holding multiple contradictory beliefs simultaneously. Ask people what their limits are and operate within them. Your wildcard is going out of their range. For example: ask customers their price range and then show within their range and a few options outside of their range. Try asking or collecting info from your users that you can remind them about later (push notifications).
Goal Gradient Effect- Most people are willing to put more effort into achieving a goal the closer they perceive they are to it. An example would be me at the gym (almost done with a workout). Therefore, establish a ladder of goals for your group. Show how far in the process your customer is and reward them along the way.
Social Proof- People assume the actions of others when they are unable or unwilling to determine the appropriate mode of behavior. Driven by the assumption that others possess more knowledge of the situation. In every situation, users have a choice either in what happens or how they react to what happens. You will always have conformists and non-conformists so try to appeal to both cohorts.
Intellect vs. Experiences- Intellect can be shared. Experiences can be understood and appreciated by others but cannot really be shared. Experiences borrow intellect from others.
Trust- Can be built through word of mouth. If your company lacks brand power, connect with other brands or media outlets or influencers that do have power.
Empathy Map- About persona/personality vs. a user experience which is projected order/experience/starting basis.
A Customer Journey Map/Experience App- Based on actual; it compiles multiple customers and incorporates empathy and phases of their journey. There is a long term trajectory. It's a hybrid map of the overall feelings of users that can also have additional distinguished marks of what you would like to happen. It reveals feelings, behaviors, outcomes, what works and what doesn't work; it shows history and use over time. Shows 'as is' vs. 'use to be' (used for new companies compared to old ones) and shows differentiation.
Embedded Audiences- People who have used a different but comparable product. Two approaches: products already in use vs. new products. Can plot time against actions and feelings (x and y axes). Reveals thoughts, what we can do better; based on five stages of use as framework. Tells customer behavior from the beginning to the end of the process and what they are looking to gain from their use.
product economies
Economy- environment of exchange for revenue, people participate and goods produced. Economies collapse because of lack of interest.
Different Types of Economies:
Different Types of Economies:
- Freemium- Facebook, Twitter, Google (free services)- Produce goods or service acquired at no cost to consumer. Creates initial adoption (fastest, best way). Based on incentivizing adoption, for long term usage, data feedback, etc. Built either to get an audience, initial use or one time use.
- Premium- An exchange for revenue: performance, reward and merit systems.
- Barter/Exchange economy- service to service, no money exchanged. Exchange one discipline or service for another (knowledge/skill economy).
- Reward- Merritt based goods for activity reward .
- Maker Economy: Experience, creator, maker, contributor, crowd, cause. Participant in process. (Habitat for Humanity).
Maker is defined outcome and harnessed process vs creator is more open. - Market Economy- Attracts a certain type of user, activity and behavior of users attracted.
- Experience Market Economy- Millennials value experiences more than objects. Key commodity is experience.
- Creator Economy- Don't know what you're building but know you're building something (Hackathon, conception of idea).
- Contributed Economy- Economy doesn't exist without contribution (Yelp, YouTube). Can be unique individual (blog).
- Crowd Market Economy- Doesn't exist unless there's a crowd. Cannot be achieved individually (GoFund me, elections).
- Cause Market Economy- Vegan, clean water, taking care of son, self improvement (one or many). Ideology can be a product.
allocations
Anything Untraced is Mayonnaised / Spread Across a Company
Allocations Can Make or Break a Product or Company
Cost Drivers and Cost of Objects:
Allocations Can Make or Break a Product or Company
Cost Drivers and Cost of Objects:
- How Can They be Cut?
- Are they Beneficial?
- How to Divide Costs?
inventory
Inventory for Manufacturing:
Company Buys Materials, Creates and Sells Product
Methods for Valuation: Raw Materials (valuation could be based on market prices) | Work in Progress (unassembled products can be hard to count up) | Finished Goods
People Who Take Care of Records Create a Pseudo Finished Product (How to Establish WIP Number)
Inventory for Resellers:
Buying and Selling
Methods for Valuation:
Average Cost (Not an Expense but an Asset)
FIFO (First in First Out)
LIFO (Last in First Out)
Pick a Method and Stay Consistent
Company Buys Materials, Creates and Sells Product
Methods for Valuation: Raw Materials (valuation could be based on market prices) | Work in Progress (unassembled products can be hard to count up) | Finished Goods
People Who Take Care of Records Create a Pseudo Finished Product (How to Establish WIP Number)
Inventory for Resellers:
Buying and Selling
Methods for Valuation:
Average Cost (Not an Expense but an Asset)
FIFO (First in First Out)
LIFO (Last in First Out)
Pick a Method and Stay Consistent
interest / interest rates
Cost of Borrowing Money
Time Affects Interest Rates
Credit Score is Looked at When Borrowing
Simple Interest = Principle Amount Borrowed x Rate of Interest x Time Borrowed (this total is multiplied by the amount of times it occurs to get compound interest)
Interest Rates are Managed by Central Banks of Countries
Currency Value Fluctuates Based on Supply in Demand
Interest Rates Fluctuate Constantly
Companies Have Letter Credit Ratings. Cause of Economic Collapses May Be Lack of Accurate Credit Ratings.
Time Affects Interest Rates
Credit Score is Looked at When Borrowing
Simple Interest = Principle Amount Borrowed x Rate of Interest x Time Borrowed (this total is multiplied by the amount of times it occurs to get compound interest)
Interest Rates are Managed by Central Banks of Countries
Currency Value Fluctuates Based on Supply in Demand
Interest Rates Fluctuate Constantly
Companies Have Letter Credit Ratings. Cause of Economic Collapses May Be Lack of Accurate Credit Ratings.
accounting record
Retained Earning is All Profits Kept
Drawings: accounting record maintained to track money withdrawn from a business by its owners. A drawing account is used primarily for businesses that are taxed as sole proprietorships or partnerships.
Dividend: A dividend to stockholders or shareholders involves two entries. ... In this entry the account retained earnings is debited and dividends payable is credited for the amount of the dividend that will be paid. Retained earnings is a stockholders' equity account and dividends payable is a current liability account. Corporations use term dividends.
Notes Payable: Amount Due, Due Date, Interest Rate
Payment Made Goes to Principle and Interest
Drawings: accounting record maintained to track money withdrawn from a business by its owners. A drawing account is used primarily for businesses that are taxed as sole proprietorships or partnerships.
Dividend: A dividend to stockholders or shareholders involves two entries. ... In this entry the account retained earnings is debited and dividends payable is credited for the amount of the dividend that will be paid. Retained earnings is a stockholders' equity account and dividends payable is a current liability account. Corporations use term dividends.
Notes Payable: Amount Due, Due Date, Interest Rate
Payment Made Goes to Principle and Interest
risk management
1st Step in Risk Management: Identify the Risk
2nd Step in Risk Management: Quantify the Impact
3rd Step in Risk Management: Multiply by the Probability of the Event
4th Step in Risk Management: Accept or Reject It
Cost x Probability = Expected Value
2nd Step in Risk Management: Quantify the Impact
3rd Step in Risk Management: Multiply by the Probability of the Event
4th Step in Risk Management: Accept or Reject It
Cost x Probability = Expected Value
empathy maps
Empathy Maps give the ability to map your target audience properly
Cycle: Think and Feel - See - Say and Do - Hear
Separate Factors: Pain and Gain
Focus: User Experience
Don't confuse what you want to happen vs. what is actually happening (these should be separate maps)
Empathy: The ability to share the sensory experience, associate, understand, comprehend and share feelings
Create a Series of Maps:
1st map is what your goals are as designer
2nd round of maps are actual true feedback
4 maps total: user personas, broad audience, target audience, designer's perspective (idealized)
Simplified Version of the Map:
Tasks (for users to complete)
Influences (what people things or places may influence user)
Overall Goal (users' ultimate goal)
Pain Points (to overcome)
Feelings (evoked by experience)
Special Divide:
Middle of map is about user and external piece of map includes use of product
Therefore, can segment map into wedges to analyze individually
Purpose:
Map removes fog and accelerates emergence and reduces uncertainty
Product designer adhering to customers biases is not biased
User Persona:
Customer Dependency Lifecycle:
Discovery - initial use - configuration/customization - adoption/dependency/reliance - long-term use
Product design should be quantitative and qualitative. Find the balance of data and empathy.
Cycle: Think and Feel - See - Say and Do - Hear
Separate Factors: Pain and Gain
Focus: User Experience
Don't confuse what you want to happen vs. what is actually happening (these should be separate maps)
Empathy: The ability to share the sensory experience, associate, understand, comprehend and share feelings
Create a Series of Maps:
1st map is what your goals are as designer
2nd round of maps are actual true feedback
4 maps total: user personas, broad audience, target audience, designer's perspective (idealized)
Simplified Version of the Map:
Tasks (for users to complete)
Influences (what people things or places may influence user)
Overall Goal (users' ultimate goal)
Pain Points (to overcome)
Feelings (evoked by experience)
Special Divide:
Middle of map is about user and external piece of map includes use of product
Therefore, can segment map into wedges to analyze individually
Purpose:
Map removes fog and accelerates emergence and reduces uncertainty
Product designer adhering to customers biases is not biased
User Persona:
- Maps need to be about largest cohorts
- User persona: targeted user, if there are enough people with these traits then company should adapt their traits for.
- Target should not be ideal user because those will seek the company/product no matter what.
- Break down your millions of customers into a handful of types by creating cohorts. Create a composite of serious representation of a user (not idealized, not minorities).
- An archetype is a grouped extraction of people types; can be a demographic cohort.
- What devices/platforms are customers using and then next step... what are they using these for?
- Study customers and then study customers' interactions with the product
- Brand and Product Relationship: what do customers think about the product? Here, view the customers through the lens of the product.
- Every person exists as a product.
Customer Dependency Lifecycle:
Discovery - initial use - configuration/customization - adoption/dependency/reliance - long-term use
Product design should be quantitative and qualitative. Find the balance of data and empathy.
capturing consumers
Consumers have innate skepticism when making a purchase. That is why bad reviews are more memorable than good. Companies must overcome this. That is why new companies often offer free trials. Companies need convergence from engagement. Start with engagement, overcome awareness and trust to arrive at convergence. Product trust comes from word of mouth. Initial engagement requires overcoming inheritance.
Aspirational love- reality wrapped in thin layer of fantasy, idealizes experiences.
Aspirational love- reality wrapped in thin layer of fantasy, idealizes experiences.
4 key pillars for what it means to operate in the world of businesses
pragmatic life cycles
- Emergence: to be reveled over a slow period; not disclosed all at once. Not all can be exposed all at once because it hasn't all been realized yet. The course of product development is ever-evolving. Exposure to knowledge, awareness and comprehension over a period of time. From uninformed to informed. We are not in full possession of all knowledge. We embrace that we don't know everything until data comes back. Emergence should be taken with caution and calculation.
- Complexity: reveals complex understanding, lack of understanding and decisions. Frequently associated with a single reveal. No wall is a solid, break down into components. Unify, divide and conquer. How do you simplify the complex? Go to the core and extract the inevitable outcome. Use reduces complexity significantly.
- Constraint: a teacher. Real (budget, resources) and artificial (first to market, differentiation). Can be wonderful and horrible. Teaches us in a way we can't understand. 90% of product strategy constraints are external. Constraints cause developers to adapt. Set of conditions placed upon us that have a tendency to affect things in good and bad ways.
- Uncertainty: have you ever succeeded and felt less aware? What you feel in the void of knowledge. Must adapt for it. Don't get fixed. Follows an action or inactions.
One is exposed in emergence to concepts and complexity arises. Constraints are applied and uncertainty is felt.
These traits can be positive or negative depending on how you approach. If you adapt to these four traits, they will become positive. You can not choose these elements, it's what you do with them that differentiates failure vs. success.
jobs to be done mindset
3 Ways of Thinking: Jobs to be Done, Design Thinking, Product Thinking
Jobs to be done is different for all users. Yet, there is a sole purpose that is common among all... a core. An example is a car. Some people want a luxury vehicle, some people want a fast vehicle but all people need to drive/be transported.
- Think about most important job then extra jobs
- Jobs to be done most quantifiable
- Jobs to be done is an experiential approach. The 'product' is the customers' tool to get the job done (which is the product's purpose)
- Don't form a product before being informed
- Segment your market
- Identify competition
- Analyze the job, identify unmet needs
- Analyze satisfaction of needs
- Solve unmet needs
- What is the customer's willingness to pay to get the job done
- Reality of revenue
- Value added of getting job done = price x # of people unsatisfied by current standings
- Prioritize road map
- Measurable impact on customer needs is
- Hard to quantify happiness (returning customer)
Jobs to be done is different for all users. Yet, there is a sole purpose that is common among all... a core. An example is a car. Some people want a luxury vehicle, some people want a fast vehicle but all people need to drive/be transported.
designing for human experience
The Enemy of Relevance is Apathy
Product Development Involves:
Product Strategy | Portfolio | Development | Marketing | Relevance | Engagement | Support | Enabling Technology
One Must Account for:
Emergence | Complexity | Constraint | Uncertainty
Taking strategic technology and applying to a better framework... a symphony that works together
Strategic Technology: The way in which we use a technology with planning and design.
An example of a symphony of efficiency is McDonalds
Critical Acronyms:
HIPPO- highest paid person's opinion
MVP- minimum viable product (good enough for initial use, adoption, feedback, data, prototype with steroids)
2 Things to be Accomplished: Company/Product vs. Customer/Experience
Rubicon: Critical info that comes in at the last minute
Product Development Involves:
Product Strategy | Portfolio | Development | Marketing | Relevance | Engagement | Support | Enabling Technology
One Must Account for:
Emergence | Complexity | Constraint | Uncertainty
Taking strategic technology and applying to a better framework... a symphony that works together
Strategic Technology: The way in which we use a technology with planning and design.
An example of a symphony of efficiency is McDonalds
Critical Acronyms:
HIPPO- highest paid person's opinion
MVP- minimum viable product (good enough for initial use, adoption, feedback, data, prototype with steroids)
2 Things to be Accomplished: Company/Product vs. Customer/Experience
Rubicon: Critical info that comes in at the last minute
accounting key terms
Balance Sheet: Assets = Liability + Equity
Income Statement: Revenue - Expenses = Net Income
Cash Flow Statement: “Cash Flows” Disclosed 3 Categories: Operations, Investing, Financing (Business managed from bottom up but disclosed as expressed)
Accrual vs. Deferral: An example of an accrual is an employee’s benefit. They earn it with their performance throughout the year but don’t receive it until the end of the year. An example of a deferral is paying your insurance premium. Accounts Receivable is an Accrual. Accruals only deal with revenues and expenses that occur in a time different than the cash. Accounts received on the balance sheet is an estimate. There are a limited number of permutations, they cross over time periods and cross over balance sheets and income statements.
Statement of Changes (In Owner’s “Equity”) a financial statement that outlines the sources and uses of funds and explains any changes in cash or working capital.
Footnotes (depends on type of company): If item or topic is ‘material’ the organization must disclose information in statement itself or in footnotes. Defined as ‘material’ it will change the behavior of the investor.
Cash Basis of Accounting vs. Accrual Basis: In a cash basis, accounts for revenue only when the money is received and for expenses only when the money is paid out. An accrual basis is revenue is reported when earned regardless of when the cash has exchanged hands. Benefits of accrual include: good for stakeholders, indicates management, accounts for longterm projects. A drawback is that it becomes more of an estimate and less accurate than cash basis.
Retained Earnings: refer to the percentage of net earnings not paid out as dividends, but retained by the company to be reinvested in its core business, or to pay debt. It is recorded under shareholders' equity on the balance sheet. Housed in statement of changes.
Income Statement: Revenue - Expenses = Net Income
Cash Flow Statement: “Cash Flows” Disclosed 3 Categories: Operations, Investing, Financing (Business managed from bottom up but disclosed as expressed)
Accrual vs. Deferral: An example of an accrual is an employee’s benefit. They earn it with their performance throughout the year but don’t receive it until the end of the year. An example of a deferral is paying your insurance premium. Accounts Receivable is an Accrual. Accruals only deal with revenues and expenses that occur in a time different than the cash. Accounts received on the balance sheet is an estimate. There are a limited number of permutations, they cross over time periods and cross over balance sheets and income statements.
Statement of Changes (In Owner’s “Equity”) a financial statement that outlines the sources and uses of funds and explains any changes in cash or working capital.
Footnotes (depends on type of company): If item or topic is ‘material’ the organization must disclose information in statement itself or in footnotes. Defined as ‘material’ it will change the behavior of the investor.
Cash Basis of Accounting vs. Accrual Basis: In a cash basis, accounts for revenue only when the money is received and for expenses only when the money is paid out. An accrual basis is revenue is reported when earned regardless of when the cash has exchanged hands. Benefits of accrual include: good for stakeholders, indicates management, accounts for longterm projects. A drawback is that it becomes more of an estimate and less accurate than cash basis.
Retained Earnings: refer to the percentage of net earnings not paid out as dividends, but retained by the company to be reinvested in its core business, or to pay debt. It is recorded under shareholders' equity on the balance sheet. Housed in statement of changes.
- Hard to grow fast in a large company.
- Standard naming does not exist in accounting, terms are up to a company’s controller.
does sustainability really impact performance?
Channels of Sustainability Impact
Stakeholder relations - Traditionally companies aim to create shareholder value, but are moving toward ‘shared value’ or ‘total societal impact.’ Companies can generate value by identifying and addressing sustainability issues that intersect with their business. Stakeholder engagement is ‘enlightened self-interest.’ Companies that engage with stakeholders are better positioned to anticipate and react to economic, social, environmental, and regularly changes.
Risk Management
Environmental and social risks can manifest over longer term, have multiple channels of impact, and can be outside of a company’s control
• Natural capital costs are internalized until there is an ‘issue’
Innovation
Investing in sustainability can drive innovation. Environmental standards or social needs can generate new business opportunities.
Customer Loyalty
Consumers expect transparency, honesty and tangible global impact
Employee Recruitment and Engagement
Sustainability initiates and performance can increase employee loyally, performance, and productivity while reducing turnover
Financial Performance
Companies can recognize competitive advantages and significant costs savings
Downside risk performance led to higher market valuations
Stakeholder relations - Traditionally companies aim to create shareholder value, but are moving toward ‘shared value’ or ‘total societal impact.’ Companies can generate value by identifying and addressing sustainability issues that intersect with their business. Stakeholder engagement is ‘enlightened self-interest.’ Companies that engage with stakeholders are better positioned to anticipate and react to economic, social, environmental, and regularly changes.
Risk Management
Environmental and social risks can manifest over longer term, have multiple channels of impact, and can be outside of a company’s control
• Natural capital costs are internalized until there is an ‘issue’
Innovation
Investing in sustainability can drive innovation. Environmental standards or social needs can generate new business opportunities.
Customer Loyalty
Consumers expect transparency, honesty and tangible global impact
Employee Recruitment and Engagement
Sustainability initiates and performance can increase employee loyally, performance, and productivity while reducing turnover
Financial Performance
Companies can recognize competitive advantages and significant costs savings
Downside risk performance led to higher market valuations
the innovator's dilemma - major takeaways
How Can Great Firms Fail?
Value Networks and the Impetus to Innovate
Paradigms of sound management are useless even counterproductive when dealing with disruptive technologies
What Goes Up Can't Go Down
Give Responsibility for Disruptive Technologies to Organizations Whose Customers Need Them
Match the Size of the Organization to the Size of the Market
Discovering New and Emerging Markets
How to Appraise Your Organization's Capabilities and Disabilities
Performance Provided, Market Demand, and the Product Life Cycle
Disruptive innovations involve no new technologies rather they consist of proven technologies put together in a novel way
The Dilemmas of Innovation: A Summary
- The disk drive industry was studied because it's so rapid
- Satisfying the needs of the next generation determines a company's success or failure
- Technology Mudslide Hypothesis- Keeping up with technological challenges is synonymous to a mudslide
- 2 Types of Technological Change:
Sustaining- radically new and different, non-disruptive, does not precipitate failure
Disrupting- straight forward, make the unfeasible feasible, entrants to the industry (not incumbent leaders) - Leading firms held captive by customers enabling entrant firms to attack
Value Networks and the Impetus to Innovate
- Leading firms stumble with technological changes
- Value networks define and delimit what companies can and cannot do
- The network a company sits within effects its progress and success
- The company addresses well understood company needs
- It's fatal to ignore technologies that do not address customer's needs (allows competitors to slip in)
- Entrant firms have advantage over establish firms
- The attacker (new to industry) has increased flexibility
Paradigms of sound management are useless even counterproductive when dealing with disruptive technologies
What Goes Up Can't Go Down
- Leading companies can migrate into high-end markets
- Moving downward market is difficult
- "Northeastern Pull"- leaving current customers to higher end customers
- It's very difficult to decrease costs as a way of increasing profits
- Managing Disruptive Technological Change: Hard to win when faced with disruptive challenges, can't be high profit, technologically feasible AND fight disruptive technology
- Disruptive technology effects ALL industries
Give Responsibility for Disruptive Technologies to Organizations Whose Customers Need Them
- Company's customers are the ones who control what can and cannot be done
- Resource Dependence: companies' actions are controlled by customers and investors
- Customers/managers determine what companies can do
- Good resource allocations weed out the unwanted by customers
- Discount retail is profitable due to high inventory turns
Match the Size of the Organization to the Size of the Market
- Mangers commercialize disruptive technologies
- Creating new markets is greater than entering old markets
- There is no evidence that leaders are greater than followers in sustaining technologies
- In disruptive technologies, leaders are greater than followers
- The larger a firm, the harder to transfer into emerging markets
Discovering New and Emerging Markets
- Markets that do not exist cannot be analyzed (suppliers and customers discover together)
- Disruptive technologies are unknowable
- Managing innovation is not relevant to disruptive technologies
- Working harder and planning smarter works for sustaining technologies not disrupting technologies
- It's less risky to enter an established market than emerging
- Plans to Execute: Careful planning and aggressive plans to execute equal success in sustaining technologies
- Plans to Learn: In disruptive situations, actions occur by planning (because less is known about the market
How to Appraise Your Organization's Capabilities and Disabilities
- The only companies that succeeded in addressing disruptive technology were those that created independent organizations whose size matched the size of the opportunity
- 3 Factors Affect What an Organization Can and Cannot Do: Resources, Processes, Values
- Acquiring rather than developing a set of capabilities makes competitive and financial sense
- Processes and values are by nature inflexible (because of their task specific nature it is impossible to ask one process to do two fundamentally different things)
- The idea of a "disruptive technology" is relative because what is disruptive to one company might have a sustaining impact on another
- Managers whose organizations are confronting change must first determine that they have the resources required to succeed. Then, they need to assess if they have the processes and values to succeed.
Performance Provided, Market Demand, and the Product Life Cycle
- When performance oversupply occurs, it crates an opportunity for a disruptive technology to emerge and subsequently to invade established markets
- The process of communization is defined by the interplay between the trajectories of what the market demanded and what the technology supplied
- A product becomes a commodity within a specific market segment when the repeated changes in the basis of competition completely play themselves out. In other words, when market need on each attribute or dimension of performance have been fully satisfied by more than one available product
- Once two or more products credibly satisfy the market's demand for functionality, customers tend to chose a product and vendor based on reliability. When two or more vendors satisfy the reliability demanded by the market, the basis of competition shifts to convenience. Lastly, once convenience is satisfied, the basis of competition shifts to price.
- 2 Important Characteristics of Disruptive Technologies that Affect Product Life Cycles and Competitive Dynamics:
the weaknesses of disruptive technologies in mainstream markets are their strengths in emerging markets, disruptive technologies are typically simpler, cheaper, and more reliable and convention than established technologies
Disruptive innovations involve no new technologies rather they consist of proven technologies put together in a novel way
The Dilemmas of Innovation: A Summary
- The pace of progress that markets demand or can absorb may be different from the progress offered by technologies
- Managing innovation mirrors the resource allocation process: innovation proposals that get the funding and manpower they require may succeed; those given lower priority have less chance of success
- Match the market to the technologies. Disruptive technologies are better off seeking new markets rather than fitting current.
- The capabilities of most organizations are far more specialized and content-specific than most managers are included to believe
- In many instances, the info required to make large and decisive investments in the face of disruptive technology simply does not exist
- It is not wise to adopt a blanket technology strategy to always be a leader or always a follower (situational depending on whether addressing a disruption or a sustaining technology)
- There are powerful barriers to entry and mobility that differ significantly from the types defined and historically focused on by economics
defining strategic technology by 23 key criteria
• Humanity [Human Centric Design]- it unites us, a feeling; us projecting humanity on inanimate objects
• Barriers to Entry Created- Barriers to entry- can they be created? Yes, through patents (yet, people who can afford to break
patent will) The first to the market have an advantage. One must create marketing that produces affinity, loyalty. Barriers to
entry become irrelevant. They are artificial, temporary, formal and hard. They help continue to sustain innovation.
• Economic Metrics / Measurement- key performance indicators, analytics, more prevalent. You should get data before
release product, during and after. Data driven decisions have increased. All products become irrelevant. Charge most at the
beginning, and produce fewer, to create higher demand.
• Commercial Viability- the purpose for existence. Can forecast viability through data
• Environmental Sustainability- a product can be built without harming the ecosystem. Capitalism is a serving mentality like a
restaurant. A product should be in harmony with the ecosystem. This takes into account people because people are the
number one reason products fail.
• Ethical / Moral Acceptance- ethics vs morality - ethics are values that govern an individual. Morality guides good vs. bad and
protects society. Products don't innately have ethics or morality. Designers can design in and users absolutely add in.
• User Relationship [Relatable]
• Market Timing [Intro, Longevity]- intro and longevity are the two factors that matter most. All products die. In fact, one can
design a product’s death. Brands will benefit from being the first of a product. Longevity is situational. Give customer as
many choices as you can.
• Differentiation [Uniqueness]- is your product distinct enough? Differentiation is inherit mostly and uniqueness is often
created. Uniqueness creates an advantage. Unique products are more powerful.
• Intended Application [Use]- anticipate good and bad, lethal, illegal, intended and unintended uses.
• Design Form [Form]- aesthetics, form, beauty, desirability - A product has to be most beautiful at the moment of purchase
and must portray living an aspirational life. What does it fulfill?Intellectual, mental (feeling driven). What will it look like with
us?
• Enablement & Pain Resolution- what pain did you alleviate, what gain did you enable? Best products do both.
• Capitalization [Funding]- do the numbers begin to look beautiful? What is sufficient? Take as little as possible but accept
enough funding to get your brand to generate positive income. Money can be a huge distraction (that’s why too much is bad).
However, you need an appropriate/sufficient amount to make a difference. Create affinity by customers and revenue,
sources and uses of funds.
• Usability [User Comprehension]- appropriate and intuitive. Should feel natural and logical. One will instinctively know what
to do. No user friction.
• Value Proposition [To User]- we believe products have value and purpose/ a promise. A sale is a value proposition (it tells
customers they are getting a good value).
• Displacement Factor [Disruption]- get customers to change their mind and displace another product. Gain ‘favorite’ status.
Apple does this to itself by introducing new phones.
• Brand Identity- products can be agnostic with their own reputation. Rarely do companies show the designer behind the
product. Yet more and more personalities are selling products hence influencer marketing. ‘Steve Jobs’ phone is an example
of letting personality show (but only if it’s a desirable or memorable personality). Influencer marketing is more influential
than company promoting.
• Feature Richness [Feature]- balance. You need the right mix of feature richness. Your product shouldn’t be too complex or
too simplified. The Apple Iphone has 800+ features yet doesn't market that because that is intimidating. There should be
ease when using a multitude of tools.
• Fosdick Curve Measurement- there are 3 phases for any product. A product’s lifespan is comprised of: market entry (hype
and early adopter phase), Innovation adaption (peak adoption phase) and commodity maturation (saturation phase). When
things are great, innovate. This is a never ending cycle. Companies often choke at the second step (innovation adaption).
• Competitive Advantage- how do you achieve advantage? Your product will live in an environment of competition.
• Innovation Cycle- what is the cycle and sustainability of a product? What, when, and why do we continue to innovate?
• Functional Capability [Functionality]- ability to perform needed function. Job to be done. It does the job intuitively and
produces value. Is it functional?
• Engagement and Experience Value- to be engaged can be defined as to be hooked. This involves several factors and is the
hardest job. Engagement and experience value must be balanced. Too much good experience is bad. It must be nuanced,
proportionate.
• Barriers to Entry Created- Barriers to entry- can they be created? Yes, through patents (yet, people who can afford to break
patent will) The first to the market have an advantage. One must create marketing that produces affinity, loyalty. Barriers to
entry become irrelevant. They are artificial, temporary, formal and hard. They help continue to sustain innovation.
• Economic Metrics / Measurement- key performance indicators, analytics, more prevalent. You should get data before
release product, during and after. Data driven decisions have increased. All products become irrelevant. Charge most at the
beginning, and produce fewer, to create higher demand.
• Commercial Viability- the purpose for existence. Can forecast viability through data
• Environmental Sustainability- a product can be built without harming the ecosystem. Capitalism is a serving mentality like a
restaurant. A product should be in harmony with the ecosystem. This takes into account people because people are the
number one reason products fail.
• Ethical / Moral Acceptance- ethics vs morality - ethics are values that govern an individual. Morality guides good vs. bad and
protects society. Products don't innately have ethics or morality. Designers can design in and users absolutely add in.
• User Relationship [Relatable]
• Market Timing [Intro, Longevity]- intro and longevity are the two factors that matter most. All products die. In fact, one can
design a product’s death. Brands will benefit from being the first of a product. Longevity is situational. Give customer as
many choices as you can.
• Differentiation [Uniqueness]- is your product distinct enough? Differentiation is inherit mostly and uniqueness is often
created. Uniqueness creates an advantage. Unique products are more powerful.
• Intended Application [Use]- anticipate good and bad, lethal, illegal, intended and unintended uses.
• Design Form [Form]- aesthetics, form, beauty, desirability - A product has to be most beautiful at the moment of purchase
and must portray living an aspirational life. What does it fulfill?Intellectual, mental (feeling driven). What will it look like with
us?
• Enablement & Pain Resolution- what pain did you alleviate, what gain did you enable? Best products do both.
• Capitalization [Funding]- do the numbers begin to look beautiful? What is sufficient? Take as little as possible but accept
enough funding to get your brand to generate positive income. Money can be a huge distraction (that’s why too much is bad).
However, you need an appropriate/sufficient amount to make a difference. Create affinity by customers and revenue,
sources and uses of funds.
• Usability [User Comprehension]- appropriate and intuitive. Should feel natural and logical. One will instinctively know what
to do. No user friction.
• Value Proposition [To User]- we believe products have value and purpose/ a promise. A sale is a value proposition (it tells
customers they are getting a good value).
• Displacement Factor [Disruption]- get customers to change their mind and displace another product. Gain ‘favorite’ status.
Apple does this to itself by introducing new phones.
• Brand Identity- products can be agnostic with their own reputation. Rarely do companies show the designer behind the
product. Yet more and more personalities are selling products hence influencer marketing. ‘Steve Jobs’ phone is an example
of letting personality show (but only if it’s a desirable or memorable personality). Influencer marketing is more influential
than company promoting.
• Feature Richness [Feature]- balance. You need the right mix of feature richness. Your product shouldn’t be too complex or
too simplified. The Apple Iphone has 800+ features yet doesn't market that because that is intimidating. There should be
ease when using a multitude of tools.
• Fosdick Curve Measurement- there are 3 phases for any product. A product’s lifespan is comprised of: market entry (hype
and early adopter phase), Innovation adaption (peak adoption phase) and commodity maturation (saturation phase). When
things are great, innovate. This is a never ending cycle. Companies often choke at the second step (innovation adaption).
• Competitive Advantage- how do you achieve advantage? Your product will live in an environment of competition.
• Innovation Cycle- what is the cycle and sustainability of a product? What, when, and why do we continue to innovate?
• Functional Capability [Functionality]- ability to perform needed function. Job to be done. It does the job intuitively and
produces value. Is it functional?
• Engagement and Experience Value- to be engaged can be defined as to be hooked. This involves several factors and is the
hardest job. Engagement and experience value must be balanced. Too much good experience is bad. It must be nuanced,
proportionate.
product service experience value definition
basis of accounting
Accrual Accounting - Basis - Breaks into 2 Sections:
Accruals | Deferrals
Accruals: Revenue or expense event that is recognized (recorded in books) before cash exchanged. Benefit before paying. Deferrals: Revenue or expense event that is recognized (recorded in books) after cash exchanged.
Touches at least 2 accounts: income statement and balance sheet (crosses over the two)
Revenue on the income statement, accounts receivable on the balance sheet
Revenues, estimates, accruals, deferrals are all initially estimated
Basis of Accounting | Cash Basis and Accrual Basis
An example of an accrual is an employee’s benefit. They earn it with their performance throughout the year but don’t receive it until the end of the year. An example of a deferral is paying your insurance premium.
Accruals | Deferrals
Accruals: Revenue or expense event that is recognized (recorded in books) before cash exchanged. Benefit before paying. Deferrals: Revenue or expense event that is recognized (recorded in books) after cash exchanged.
Touches at least 2 accounts: income statement and balance sheet (crosses over the two)
Revenue on the income statement, accounts receivable on the balance sheet
Revenues, estimates, accruals, deferrals are all initially estimated
Basis of Accounting | Cash Basis and Accrual Basis
An example of an accrual is an employee’s benefit. They earn it with their performance throughout the year but don’t receive it until the end of the year. An example of a deferral is paying your insurance premium.
introduction to the principles of sustainability reporting and the ‘new wave’ of accounting standards
Sustainability: meeting the needs of the present without compromising the ability of future generations to meet their own needs (World Commission on Environment and Development, 1987)
3 Pillars of Sustainability:
Economic Development
Social Development
Environmental Protection
In corporate sustainability reporting, ESG (environmental social governance) may be used:
Environmental
Social
Governance
Keep in mind the differences between sustainable business models vs. sustainable practices
(remaining profitable vs. being eco friendly)
Reporting on Sustainability
250 of the world’s largest companies that are reporting on sustainability - 93%
Oil and gas companies have the highest rate of reporting 81% because they have the biggest threat
Retail is the lowest at 63%
Reasons to Report
Contributes to value (intangible asset)
A large percentage of corporate value is associated with intangible assets
Example: resource intensity, reputation, employee happiness/retention
Investors are demanding disclosure
Consumers and employees care (72% of students entering the workforce want a job with a positive impact)
What gets measured, gets managed
Is there an equivalent to GAAP for sustainability reporting?
These groups develop a set of metrics (not about auditing)
There are lots of them, too many
Sectors:
SASB - industry specific, deals with issues regarding material impact on financial performance (in financial reporting… note it is not a stand alone sustainability report), trying to achieve standardization because there too many sectors
GRI - all companies report on all issues, certifies
CDP - focuses on greenhouse gas emissions and energy usage
ATM - drug companies use, deal with drug accessibility
TCFD - the task force on climate-related financial disclosures
SDGs - UN initiative
IIRC - international integrated reporting council
Company reporting varies by ‘regime’ and by industry, but common topics include environmental, social, governance
Where Companies Report:
Stand-alone sustainability, (car, citizen, etc), reports and websites
Annual financial reports. Of the Fortune 250 companies, 78% include sustainability info in annual financial reports (however that doesn’t mean that all sectors of sustainability are considered)
Third party issue-specific reports (cap, access to medicine)
3 Pillars of Sustainability:
Economic Development
Social Development
Environmental Protection
In corporate sustainability reporting, ESG (environmental social governance) may be used:
Environmental
Social
Governance
Keep in mind the differences between sustainable business models vs. sustainable practices
(remaining profitable vs. being eco friendly)
Reporting on Sustainability
250 of the world’s largest companies that are reporting on sustainability - 93%
Oil and gas companies have the highest rate of reporting 81% because they have the biggest threat
Retail is the lowest at 63%
Reasons to Report
Contributes to value (intangible asset)
A large percentage of corporate value is associated with intangible assets
Example: resource intensity, reputation, employee happiness/retention
Investors are demanding disclosure
Consumers and employees care (72% of students entering the workforce want a job with a positive impact)
What gets measured, gets managed
Is there an equivalent to GAAP for sustainability reporting?
These groups develop a set of metrics (not about auditing)
There are lots of them, too many
Sectors:
SASB - industry specific, deals with issues regarding material impact on financial performance (in financial reporting… note it is not a stand alone sustainability report), trying to achieve standardization because there too many sectors
GRI - all companies report on all issues, certifies
CDP - focuses on greenhouse gas emissions and energy usage
ATM - drug companies use, deal with drug accessibility
TCFD - the task force on climate-related financial disclosures
SDGs - UN initiative
IIRC - international integrated reporting council
Company reporting varies by ‘regime’ and by industry, but common topics include environmental, social, governance
Where Companies Report:
Stand-alone sustainability, (car, citizen, etc), reports and websites
Annual financial reports. Of the Fortune 250 companies, 78% include sustainability info in annual financial reports (however that doesn’t mean that all sectors of sustainability are considered)
Third party issue-specific reports (cap, access to medicine)
accounting introduction
Frameworks:
GAAP- generally accepted accounting principles, rooted in USA but crosses over (most dominant)
IFRS- International
CAS- Chinese accounting standards
2 Takeaways:
There are multiple traditional frameworks in the world
The most dominant framework is the GAAP one
Asset:
Useful or valuable
Company owned
Can be sold
Does not have to be physical
Can be intangible (hard to value and fragile)
Liabilities - have value like an asset but own owes instead of owning it (opposite of asset)
Equity - the value of a company on an accounting basis
Original Equation: Assets = Liabilities + Equity
Modification: Subtract liabilities from both sides
Output: Assets - Liabilities = Equity
Contingent Liabilities -a potential liability that may occur depending on the outcome of an uncertain future event
(example BP oil spill)
The value of a company (if being sold) is based on an educated guess of future dollars based on the value of the dollar today
Balance Sheet: equivalent to a scoreboard and is a snapshot (one moment in time)
Income Statement and Balance Statement: on an accrual basis
Cash Flow Statement (prepared at years end): prepared on a cash basis, cash flows must be categorized (operations, investing activities (in company like buying of equipment), financing activities) note.. categories are ordered with intention, ironically business is run in reverse
(bottom - up). Changes in balance sheets can be #4 statement or included in footnotes
In a family photo, the adults represent the assets (they are there to work to generate more income), liabilities are in-laws (the necessary evils), children are the equity (backed by assets, the future of the company)
Revenue and experience occur simultaneously but independently
There is always an asset and a liability (depending if you are providing the work or the customer)
Deposit: cash before work
Cash at the time of work: simple
Cash after the work: revenue/income, have an accounts receivable (you owe me money = asset)
Accounting:
mechanics create symmetry
there are a limited number of permutations and combinations
There is a varied time warp because of different timing when it comes to receiving cash
(before vs. at the time vs. after)
Revenue is money received (earned)
Expense is pay out (incurred)
We typically match the two in the same time period regardless of when the cash goes
back and fourth
GAAP- generally accepted accounting principles, rooted in USA but crosses over (most dominant)
IFRS- International
CAS- Chinese accounting standards
2 Takeaways:
There are multiple traditional frameworks in the world
The most dominant framework is the GAAP one
Asset:
Useful or valuable
Company owned
Can be sold
Does not have to be physical
Can be intangible (hard to value and fragile)
Liabilities - have value like an asset but own owes instead of owning it (opposite of asset)
Equity - the value of a company on an accounting basis
Original Equation: Assets = Liabilities + Equity
Modification: Subtract liabilities from both sides
Output: Assets - Liabilities = Equity
Contingent Liabilities -a potential liability that may occur depending on the outcome of an uncertain future event
(example BP oil spill)
The value of a company (if being sold) is based on an educated guess of future dollars based on the value of the dollar today
Balance Sheet: equivalent to a scoreboard and is a snapshot (one moment in time)
Income Statement and Balance Statement: on an accrual basis
Cash Flow Statement (prepared at years end): prepared on a cash basis, cash flows must be categorized (operations, investing activities (in company like buying of equipment), financing activities) note.. categories are ordered with intention, ironically business is run in reverse
(bottom - up). Changes in balance sheets can be #4 statement or included in footnotes
In a family photo, the adults represent the assets (they are there to work to generate more income), liabilities are in-laws (the necessary evils), children are the equity (backed by assets, the future of the company)
Revenue and experience occur simultaneously but independently
There is always an asset and a liability (depending if you are providing the work or the customer)
Deposit: cash before work
Cash at the time of work: simple
Cash after the work: revenue/income, have an accounts receivable (you owe me money = asset)
Accounting:
mechanics create symmetry
there are a limited number of permutations and combinations
There is a varied time warp because of different timing when it comes to receiving cash
(before vs. at the time vs. after)
Revenue is money received (earned)
Expense is pay out (incurred)
We typically match the two in the same time period regardless of when the cash goes
back and fourth
the five dysfunctions of teams (lencioni)
- Intention to results (status and ego driven)
- Avoidance of accountability
- Lack of commitment
- Fear of conflict
- Absence of trust
stages of team development
Forming
Storming
Norming
Performing
- Orientation, break the ice
- Leader facilitates social interchanges
Storming
- Conflict, disagreement
- Leader encourages participation, differences surface
Norming
- Establishment of order and cohesion
- Leader helps clarify team roles, norms and values
Performing
- Cooperation, problem solving
- Leader facilitates task accomplishment
characteristics of "successful" teams
- Clear elevating goal
- Competent team members
- Technical and personal
- Results-driven structure (problem resolution, creative, tactical)
- Clear roles and accountabilities
- Effective communication
- Monitoring performance and feedback
- Fact-based judgements
model of team effectiveness
Type of Team
Team Characteristics
Team Dynamics
Team Performance
- Functional
- Cross-Functional
- Self-Directed
- Virtual/Global
Team Characteristics
- Size
- Diversity
- Interdependence
Team Dynamics
- Task and Socio-emotional needs
- Stages of development
- Cultural values/norms
- Cohesiveness
- Conflict
Team Performance
- Innovation/adaption
- Efficiency
- Quality
- Member satisfaction
evolution of teams and team leadership
Functional Team
Cross-Functional Team
Global Team
Virtual Team
Self-Directed Team
- Grouping individuals by activity
- Leader centered
- Vertical or command team
Cross-Functional Team
- Crosses organizational boundaries
- Leader gives up some power
- Special purpose team, problem solving team
Global Team
- May be cross-functional or self-directed
- Spans multiple countries
- Needs strong leader
Virtual Team
- May be cross-functional or self-directed
- Dispersed membership
- Shared leadership
Self-Directed Team
- Autonomous, defines own boundaries
- Member-centered
- Self-managed team
vertical, horizontal and matrix organizations
Vertical Organizations
Horizontal Organizations
Matrix Organizations
- Defined chain of command and areas of responsibility
- Employees advance through ability and performance on familiar, known tasks and the career path of someone Looking to advance “through the ranks” is clearly understood
- Gain in-depth knowledge and expertise over the course of time
- Takes longer to make decisions
- Info does not always filter up or down
- Bureaucracy
- Individual lines of business become isolated from each other, develop separate cultures and procedures
- Info you should need to know to do your job is within your “stovepipe”
Horizontal Organizations
- Speeds up decision making
- More shared information
- Cross functional relationships
- Allow management flexibility and cross-training as individuals work more closely with other areas
- Eliminates bureaucracy because more people are talking to each other across vertical lines of business
- Increases a company’s flexibility when creating new products or reacting to the new market conditions
- Workforce reductions that create a loss of experienced managers, who often make up the “institutional memory”
- Uncertain career paths for aspiring manager
- “Jack of all trades, master of none”
Matrix Organizations
- Teams are more relative
- Transparency & collaboration
- Vertical lines of accountability to the immediate line-of-business superiors and horizontal accountability to one’s project teammates
- Vertical lines of business intact to maintain core competencies, farming out individuals within those specialties to develop new products and services
- Requires cross-functional communications
- More regular and formal contact across disciplines
- Challenges are accountability, authority and perceived “loyalty”
- “Out of sight, out of mind”
charisma
Charisma: special personality characteristic that gives a person superhuman or exceptional powers and is reserved for a few "secret weapon"
Charism: Greek root, means gifts of grace, filled with attractiveness or charm , kindness
Types of Charismatic Leaders:
Style of Charismatic:
Effects of Charismatic Leadership:
Max Weber's Classic Definition:
Charisma: A Cure or a Blessing
Musser (1987)
The Views of Charismatic Leaders Through the Eyes of the Followers:
Key Concepts:
Techniques for Developing Charisma:
Charism: Greek root, means gifts of grace, filled with attractiveness or charm , kindness
Types of Charismatic Leaders:
- Socialized charismatics restrain the use of power to benefit others
- Personalized charismatics exercise few restraints on power to serve their own interests
- Divine charismatics are endowed with a gift of divine grace
Style of Charismatic:
- Very persuasive with an effective use of subtle body language and overt verbal language tactics
- They may change their attitude and presentation based on observing others and discerning their moods, needs and concerns
- Interact with people and observe their needs (empathetic)
Effects of Charismatic Leadership:
- Social skills and personal appeal gain the followers
- Leader will typically attach firmly to the identity of the group (joining the group is to become one with the leader)
- May instill confidence in their group and challenge their group to meet his/her expectations
Max Weber's Classic Definition:
- Introduced 'personality charisma' sense
- Charisma is a certain quality of an individual personality by virtue of which he is set apart from ordinary men and treated as endowed with supernatural, superhuman, or at least specifically exceptional powers or qualities. These as such are not accessible to the ordinary person, but are regarded as of divine origin or as exemplary, and on the basis of them the individual concerned is treated as a leader
Charisma: A Cure or a Blessing
- Leaders can become addicted to charisma
- Organizations can become addicted to the charismatic leader
- Charisma grows for its own sake and forgets it's purpose
Musser (1987)
- Notes that charismatic leaders seek to instill: commitment to ideological goals and devotion to themselves
- The extent to which either of these two goals is dominant depends on the underlying motivations and needs of the leader
The Views of Charismatic Leaders Through the Eyes of the Followers:
- Omnipotent: (parent archetype); a leader who will nurture and guide them
- Mystical: (in touch with "higher truths"); a leader who knows the way and knows the answers
- Heroic: (perhaps derived from past achievements); a leader who can move mountains
- Value-Driven: (concerned with the collective and able to empower it); a leader who's pure in spirit
Key Concepts:
- Charisma in leadership occurs when a leader's authority is based upon what his followers believe are extraordinary personal traits and qualities of the leader rather than any formal authority sanctioned by law or office
- A charismatic leader's authority and legitimacy is based solely on his personal traits, such as heroism, religious sacredness, extraordinary character, or demagogy. The follower's belief in the cause or mission of the charismatic leader often reinforces the leader's authority
- Charismatic leadership is a rather unstable form of leadership. Remember, it depends on the follower's devotion to a specific individual rather than a particular office or organization. If the leader dies, leaves, or is discredited, the organization is likely to fall apart unless there are other bases of authority
Techniques for Developing Charisma:
- Create vision for others
- Be enthusiastic, optimistic, energetic
- Be sensibly persistent
- Remember people's names
- Develop synchrony with others
- Develop a personal brand
- Be candid
- Display an in-your-face attitude
bass's theory of transformational and transactional leadership
- Transformational leaders possess charismatic leader characteristics (vision, rhetorical skills, etc.)
- Transactional leaders do not posses these leader characteristics, nor are they able to develop strong emotional bonds with followers or inspire followers to do more than they thought they could. Instead, transactional leaders motivate followers by setting goals and promising rewards for desired performance.
pseudo-transformational leadership
- Leaders who are self-consumed, exploitive, and power oriented (Bass & Riggio, 2006)
- Personalized leadership focused on the leader's interests rather than interests of others (Nass & Steidlmeier, 1996)
transformational leadership
Transformational Leadership: Behavior that inspire greatness and gains followers on a volunteer basis, not forced.
The leader's popularity may be due to emphasis on intrinsic motivation and follower development that fits needs of 21st century workforce who want to be inspired and empowered to succeed in time of uncertainty.
- Process where leaders raise one another to higher levels of morality and motivation
- A solid relationship with high levels of trust
- This relationship results in an increase in motivation (both intrinsic and extrinsic)
- Transform followers through inspirational nature and charismatic personalities
- Rules and regulations are flexible, guided by group norms
- Creates a sense of belonging for the followers
- Followers easily identify with the leader and the purpose
The leader's popularity may be due to emphasis on intrinsic motivation and follower development that fits needs of 21st century workforce who want to be inspired and empowered to succeed in time of uncertainty.
servant leadership
Servant Leadership: (Robert Greenleaf, 1977)
Principles of Servant Leadership:
- the leader has responsibilities for the followers
- leaders have a responsibility towards society and those who are disadvantaged
- people who want to help others best do this by leading them
Principles of Servant Leadership:
- transformation as a vehicle for personal and institutional growth
- personal growth as a route to better serve others
- enabling environments that empower and encourage service
- service as a fundamental goal
- trusting relationships as a basic platform for collaboration and service
- creating commitment as a way to collaborate activity
- community building as a way to create environments in which people can trust each other and work together
- nurturing the spirit as a way to provide joy and fulfillment in meaningful work
the two theories of change
Theory E: (The Hard Side of Change)
-All about economic value and maximizing shareholder value with top down management
-Relates to addressing the financial crisis
-May involve use of performance incentives, bonuses, layoffs, downsizing, restructuring
-Targets short-term performance results
Theory O: (The Soft Side of Change)
All about organizational capability and positive corporate culture with participation, commitment, and attitude overcoming resistance to change
-Capitalizes on human capital
-Builds employee commitment
-Creates an ever-changing/adapting learning culture
-Requires high levels of employee involvement
-Is seen as an organic and flat structure (less hierarchical)
-People are the most important asset
Theory E is more timely, while Theory O has more long term payoffs. Overall, Theory E is probably more effective in both its short and long term in respect to profitability. The people, on the other hand, may not stick around in Theory E due to treatment.
Change awakens us | With revolution comes revelation -Monte Gibbs
-All about economic value and maximizing shareholder value with top down management
-Relates to addressing the financial crisis
-May involve use of performance incentives, bonuses, layoffs, downsizing, restructuring
-Targets short-term performance results
Theory O: (The Soft Side of Change)
All about organizational capability and positive corporate culture with participation, commitment, and attitude overcoming resistance to change
-Capitalizes on human capital
-Builds employee commitment
-Creates an ever-changing/adapting learning culture
-Requires high levels of employee involvement
-Is seen as an organic and flat structure (less hierarchical)
-People are the most important asset
Theory E is more timely, while Theory O has more long term payoffs. Overall, Theory E is probably more effective in both its short and long term in respect to profitability. The people, on the other hand, may not stick around in Theory E due to treatment.
Change awakens us | With revolution comes revelation -Monte Gibbs
design management: overarching theme
The major question we are seeking to answer within this two year program is how to make money by doing something that is socially good? In other words, we must learn to combine creative and commercial skills to achieve not only profit, but also create for social and environmental impact.
potential behavior incentive
In class we discussed how much it costs to keep an inmate in prison. Without food, health care, etcetera, it costs around $90,000 per person/per year of tax payer money. As we were discussing this, and how hard it is to get employed post incarceration, I began thinking to myself. What if, instead of spending so much money on those who do wrong, we re-delegate those funds to the people who do right? Much like social security, the citizens of the United States would all be enrolled in an incentive fund. Every year that goes by in which they have committed zero crime (including speeding tickets, parking violations), they could be rewarded with an annual check. This would help prevent falling into the vicious criminal cycle and help people recover after jail. This also would help the homeless and lower income portion of the population. I think, all around, it would bring good, and, save the government money (and agony) in the long run. Not to mention, the crime rate would decrease tremendously. Just a thought...
the four d's
Discover: Who bears the burden of dis-ease?
Define: Interventions with impact
Design: For user needs in eco/cultural/community context WITH users and their systems including sustaining partners
Deliver: Approaches that accompany and support the provision of care
Define: Interventions with impact
Design: For user needs in eco/cultural/community context WITH users and their systems including sustaining partners
Deliver: Approaches that accompany and support the provision of care
summary of section II: the theory of leadership: personal attributes, functions, and relationships from harvard business press: 'advancing leadership theory and practice'
This section encourages leadership research to advance our understanding of both the attributes of leaders as well as their functions and relationships.
This section provides a review of leadership across the following disciplines: organization behavior, psychology, psychoanalysis, sociology, economics, history and political science.
Organization Behavior: After assessing leadership research in organization behavior, a "definitional quagmire" (predicament) is defined. This includes approaches focused on the personality of a leader, the process of leadership, the impact of leadership as well as leadership performance (Glynn and DeJordy). The study produces suggestions on a more productive agenda for the future of the field.
Psychology: There are three critical capabilities for organizational leadership. These are, the leader's diagnostic abilities, behavioral flexibility, and unambiguous signaling of intentions. At the team level of leadership, the three key tasks are: convening the group and developing identification, coaching group members and setting group norms.
Psychoanalysis: Unconscious intrapsychic dynamics play a role in the behavior of leaders. Leaders are what they are and lead the way they lead, due to their early development. People in organizations are meant to be understood at their psychological and emotional levels in order to help their leaders understand how to best motivate, reward, and enable them to carry out the organization's goals. Also important are the three triangles: the mental life triangle, the conflict triangle and the relationships triangle. These dictate human behavior and need to be understood in order to effectively lead.
Sociology: The model of leadership is ever-evolving. Initially rooted with a focus on formal authority, it later developed into a new approach through institutional functionalism, followed by a critical theory that was concerned with the power and preservation of the elites, moving into the contemporary approach that emphasizes the social and relational elements for exercising power and influence.
Economic: There tends to be a lack of attention paid to leadership in economics. However, an effective economic model of leadership would define the leader as the member who credibly communicates the mission of the organization and enables their team members to coordinate actions in the face of potential changes. The leader is to begin by evaluating the environment and defining a corresponding mission statement. Next, the team is to use their own knowledge of the environment to choose the appropriate course of action. Lastly, the leader gathers any new information in regards to the environment and incorporates it into a strategy for implementation. This model demonstrates a well-coordinated execution of strategy resulting in high payoffs. Another theory suggests that the leader is tasked with moving their team members from inferior equilibrium to superior equilibrium. This is achieved through the six tasks: vision, enrollment, commitment, integrity, communication, and authenticity.
History: Through a comparative and historical lens, both the evolution and dynamics of leadership can be understood. By understanding past situations and establishing similarities and differences, the phenomenon of leadership can be better understood and can be compared to/defined as (Schumpeterian) "disruptive art".
Political Science: The worlds of leadership and power are intertwined. There are two forms of power: the hard form (coercive/forceful) and the soft form (appealing/attractive). In "smart power" (Nye), a leader is exercising both forms. Defining a leadership role can be broken down into three key components of the social and power dynamics: leaders, followers, and the context in which they interact.
Specific disciplines set aside, there is a theory promoting the idea that leaders must embody certain distinctive characteristics. It is thought that one must be courageous and have the charisma that enables others to look to them as a leader. On the other hand, a separate set of scholars argue back that what makes someone a leader is not their personality, but their ability to help their followers meet their needs for meaning, social order, group identity and goal accomplishment.
Main Responsibilities of a Leader:
This section provides a review of leadership across the following disciplines: organization behavior, psychology, psychoanalysis, sociology, economics, history and political science.
Organization Behavior: After assessing leadership research in organization behavior, a "definitional quagmire" (predicament) is defined. This includes approaches focused on the personality of a leader, the process of leadership, the impact of leadership as well as leadership performance (Glynn and DeJordy). The study produces suggestions on a more productive agenda for the future of the field.
Psychology: There are three critical capabilities for organizational leadership. These are, the leader's diagnostic abilities, behavioral flexibility, and unambiguous signaling of intentions. At the team level of leadership, the three key tasks are: convening the group and developing identification, coaching group members and setting group norms.
Psychoanalysis: Unconscious intrapsychic dynamics play a role in the behavior of leaders. Leaders are what they are and lead the way they lead, due to their early development. People in organizations are meant to be understood at their psychological and emotional levels in order to help their leaders understand how to best motivate, reward, and enable them to carry out the organization's goals. Also important are the three triangles: the mental life triangle, the conflict triangle and the relationships triangle. These dictate human behavior and need to be understood in order to effectively lead.
Sociology: The model of leadership is ever-evolving. Initially rooted with a focus on formal authority, it later developed into a new approach through institutional functionalism, followed by a critical theory that was concerned with the power and preservation of the elites, moving into the contemporary approach that emphasizes the social and relational elements for exercising power and influence.
Economic: There tends to be a lack of attention paid to leadership in economics. However, an effective economic model of leadership would define the leader as the member who credibly communicates the mission of the organization and enables their team members to coordinate actions in the face of potential changes. The leader is to begin by evaluating the environment and defining a corresponding mission statement. Next, the team is to use their own knowledge of the environment to choose the appropriate course of action. Lastly, the leader gathers any new information in regards to the environment and incorporates it into a strategy for implementation. This model demonstrates a well-coordinated execution of strategy resulting in high payoffs. Another theory suggests that the leader is tasked with moving their team members from inferior equilibrium to superior equilibrium. This is achieved through the six tasks: vision, enrollment, commitment, integrity, communication, and authenticity.
History: Through a comparative and historical lens, both the evolution and dynamics of leadership can be understood. By understanding past situations and establishing similarities and differences, the phenomenon of leadership can be better understood and can be compared to/defined as (Schumpeterian) "disruptive art".
Political Science: The worlds of leadership and power are intertwined. There are two forms of power: the hard form (coercive/forceful) and the soft form (appealing/attractive). In "smart power" (Nye), a leader is exercising both forms. Defining a leadership role can be broken down into three key components of the social and power dynamics: leaders, followers, and the context in which they interact.
Specific disciplines set aside, there is a theory promoting the idea that leaders must embody certain distinctive characteristics. It is thought that one must be courageous and have the charisma that enables others to look to them as a leader. On the other hand, a separate set of scholars argue back that what makes someone a leader is not their personality, but their ability to help their followers meet their needs for meaning, social order, group identity and goal accomplishment.
Main Responsibilities of a Leader:
- Establishing purpose and objectives
- Securing the voluntary cooperation of the organization's members
- Conducting coordination across team efforts
- Creating meaning for the team
- Ensuring that the organization was institutionalized
- Maintaining a relational network
- Mobilizing support across different identity and interest groups within the organization
- Allocating decision rights
- Promoting the flow of information
- Structuring incentives
- Setting a vision
- Communicating a direction
- Empowering/Delegating authority to others
- Overseeing execution
- Modeling integrity
creatives bring innovation to more traditional sectors
Consider this... traditional industries were once creative, before becoming a commodity, at conception. That being said, how can newly emerging industries be used to reinvigorate the traditional industries?
the concepts of sigmund freud and edward bernays
Sigmund Freud
Edward Bernays
- Sigmund Freud compared the mind to an iceberg (the conscious mind is what is exposed above their surface while the unconscious mind is hidden underwater)
- Freud believed that hidden inside all humans are dangerous oppressed thoughts
- Freud started hating humanity and began studying group culture and the aggressive instincts of humans
- Sigmund Freud was Edward Bernays' uncle
Edward Bernays
- Edward Bernays believed that if you can use propaganda for war, you can use it for peace.
- Bernays performed a social experiment encouraging women to smoke. He did so by analyzing what cigarettes meant to women (why they weren't currently cigarette consumers). He then found that, at the time, cigarettes and smoking represented masculinity. He used that knowledge to create a marketing initiative in which he had suffrage activists display cigarettes as torches of freedom, therefore gaining the support of women activists. This campaign made smoking socially accessible through symbolism. Bernays had connected the concept of smoking with power and independence. This linked connection increased sales by creating a cultural shift.
- The smoking experiment proves that you can pursue people to act irrationally by attaching desirable symbolism to an object or movement.
- You must convince the customer that they are making more than a purchase but are engaging in a larger picture and are making emotional connections.
- At the time of Bernays, corporations learned to transform the way Americans thought about product. This is when we see the shift from a 'needs' to 'desires' culture. Desires began to overshadow needs.
- Bernays taught physiological theory on how to appeal to the masses by deciphering what motivates the human mind.
- Bernays was an innovator in linking products to significant figures and product placement in movies, attaching symbols to products, and using products as a self representation.
- At this time, the citizen is now seen as as a consumer.
- Bernays also introduced the idea that ordinary people should buy shares.
- Bernays was known for understanding the mind of the crowd (however he was not good 1:1).
- Politics met PR for the first time through the work of Bernays.
- Engineering of Consent: Need to control the unconscious of the masses (because they have irrational instincts). We must appeal to the desires and unrecognized longings and tap into the deepest fears of the masses for your beneficial purposes.
- Bernays' version of democracy meant maintaining power through stimulation of the irrational self.
- Bernays believed the masses were stupid.
types of leadership
The Style Approach to Leadership:
Contingency Theory- Suggests there is no one style of leadership. It is more about the relationship between the leader and those being led. It depends on the situation the leader is in... it's not a one size fits all model.
Situational relationships:
Supportive vs Directive Behaviors
Directive: gives direction, establish goals and methods of evaluation (when leading less experienced employees)
Supportive: two way communication, more conversation/collaborative (when leading higher ups)
Blake and Mouton's Leadership Grid:
The FIRO-B: aw way to diagnose employee types to put together a successful team
Transactional vs. Transformational Leaders
Transactional Leadership:
Leader-Membership Exchange Theory- The leaders in the group maintain their position through a series of implicit exchange agreements with their members; it should be a very even way of managing. This is a two-way relationship between leaders and subordinates that increases organizational success by creating positive relationships between the leader and subordinate.
In-Group:
Transformational Leadership is the process where "leaders and their followers raise one another to higher levels of morality and motivation" (James McGregor Burns) Popularity of this leadership is due to the intrinsic motivation and follower development that fits the needs of the 21st century workforce who wants to be inspired and empowered to succeed in this time of uncertainty.
New Leadership: These leaders make decisions that are good for the company and its employees... there is a lot of trust in this relationship. The needs and feelings of the employees are accounted for. It is more of a "working together" environment as opposed to a "working for" relationship. Rules and regulations are reliable and guided by group norms (less hierarchical).
- Employee centered: is structured through leader support and interaction. The leader seeks to minimize conflict.
- Job centered: the leader directs activities towards efficiency, cost cutting and scheduling.
Contingency Theory- Suggests there is no one style of leadership. It is more about the relationship between the leader and those being led. It depends on the situation the leader is in... it's not a one size fits all model.
Situational relationships:
- Different situations demand different kinds of leadership.
- Effective leaders adapt their style depending on demands.
- Leaders evaluate the employee and assess how competent and committed they are to perform a certain task.
- Leaders change the degree to which they are directive or supportive to meet the changing needs of the employee.
- Leadership composed of directive and supportive dimension
- Delegating is a learned leadership skill and needs to be taught to avoid micromanagement
- Follow the self fulfilling prophecy, the belief that they can do it
Supportive vs Directive Behaviors
Directive: gives direction, establish goals and methods of evaluation (when leading less experienced employees)
Supportive: two way communication, more conversation/collaborative (when leading higher ups)
Blake and Mouton's Leadership Grid:
- Middle of the road: comfortable employees, non-threatening environment, no extremes in behavior
- Impoverished management: little or no work at all (just delegators)
- Team management: team players, interdependent around common stake, trusting relationships
- Country club management: thoughtful attention to the needs of the people resulting in a friendly organization atmosphere (all about the people)
- Authority-Compliance management: human elements interfere to a minimum degree creating efficiency in operations (all about the task)
The FIRO-B: aw way to diagnose employee types to put together a successful team
- The wanted scores describe internal needs (how much we want others to initiate)
- The expressed scores describe what we present to others (how much we initiate)
- The wanted scores and expressed scores are often different
- The test measures inclusion, control and affection
- The lower the number, the less you express that taut
- 0-3 low interest, 4-6 medium interest, 7-9 high interest
Transactional vs. Transformational Leaders
Transactional Leadership:
- Similar to Authority-Compliance Management (Blake and Mouton's Leadership Grid)
- Suggests that people perform best when the chain of command is definite and clear
- Rewards and punishments motivate workers
Leader-Membership Exchange Theory- The leaders in the group maintain their position through a series of implicit exchange agreements with their members; it should be a very even way of managing. This is a two-way relationship between leaders and subordinates that increases organizational success by creating positive relationships between the leader and subordinate.
In-Group:
- Special relationship with an inner circle
- Often high levels of responsibilities and resources
- Can receive special privileges
- Expected to be loyal
- No additional attention or benefits
- Work "hard-enough" but no more
- Very task oriented
- Leader influences with little or no reciprocating
Transformational Leadership is the process where "leaders and their followers raise one another to higher levels of morality and motivation" (James McGregor Burns) Popularity of this leadership is due to the intrinsic motivation and follower development that fits the needs of the 21st century workforce who wants to be inspired and empowered to succeed in this time of uncertainty.
New Leadership: These leaders make decisions that are good for the company and its employees... there is a lot of trust in this relationship. The needs and feelings of the employees are accounted for. It is more of a "working together" environment as opposed to a "working for" relationship. Rules and regulations are reliable and guided by group norms (less hierarchical).
influencing others
• Formal authority based on the role's position in the organization
• Assertiveness or willingness to take action
• Having knowledge or expertise
• A charismatic or likable style
• The ability to network with others or form a coalition by obtaining support from others
• The ability to identify key issues and purpose their resolution
• Assertiveness or willingness to take action
• Having knowledge or expertise
• A charismatic or likable style
• The ability to network with others or form a coalition by obtaining support from others
• The ability to identify key issues and purpose their resolution
leadership
Leadership may be considered as the process (act) of influencing the activities of an organized group in its efforts toward goal setting and goal achievement. (Stogdill, 1950)
Leadership is defined as the process of moving a group (or groups) in some direction through mostly non-coercive means. (Kotter, 1988)
Leadership: an influence relationship among leaders and followers who intend real changes and outcomes that reflect shared purpose. (Daft, 2004)
Leadership is typically the solution to most of the problems we have. (The fish stinks from the head. If the head is in tact, all is well. If the fish is beaded, it stinks.)
Leadership is defined as the process of moving a group (or groups) in some direction through mostly non-coercive means. (Kotter, 1988)
Leadership: an influence relationship among leaders and followers who intend real changes and outcomes that reflect shared purpose. (Daft, 2004)
Leadership is typically the solution to most of the problems we have. (The fish stinks from the head. If the head is in tact, all is well. If the fish is beaded, it stinks.)
duality of the creative side
and business side
There is a paradox of fostering creativity and innovation and remaining commercially successful.
Creative people still need processes and constraints (Bilton, 2007).
Creation and innovation work better with boundaries.
"Complimentary Opposites" (term by Kirton) -
consisting of innovators who devise the ideas and adaptors who exploit the products in the market
"Dual Leadership" (Townley, Beech and McKinlay, 2009) - artistic leader seeks to foster creativity and a managerial leader focuses on commercial demands.
Creative people still need processes and constraints (Bilton, 2007).
Creation and innovation work better with boundaries.
"Complimentary Opposites" (term by Kirton) -
consisting of innovators who devise the ideas and adaptors who exploit the products in the market
"Dual Leadership" (Townley, Beech and McKinlay, 2009) - artistic leader seeks to foster creativity and a managerial leader focuses on commercial demands.
new leadership reality
Old Paradigm:
Industrial Age
Stability
Control
Competition
Things
Uniformity
New Paradigm:
Information Age
Change
Empowerment
Collaboration
People and Relationships
Diversity
Organizations aren't changing; it's what's done, how it's done and why it's done that changes. This change is due to the generational differences of people. Priorities of different generations are different. At the end of the day, the profitability is still the driving factor but with the means to get there ever changing.
The new paradigm is a shift from "me" to "us" (Richard Barrett, The New Leadership Paradigm)
Industrial Age
Stability
Control
Competition
Things
Uniformity
New Paradigm:
Information Age
Change
Empowerment
Collaboration
People and Relationships
Diversity
Organizations aren't changing; it's what's done, how it's done and why it's done that changes. This change is due to the generational differences of people. Priorities of different generations are different. At the end of the day, the profitability is still the driving factor but with the means to get there ever changing.
The new paradigm is a shift from "me" to "us" (Richard Barrett, The New Leadership Paradigm)
millennial generation mentality
(opinion piece)
This new flexible minded mentality is not due to generational entitlement but due to the advancements of technology and therefore the increase in job prospects/connectivity. For example, LinkedIn and Indeed, etc. have exposed the endless job possibilities. In addition, remote working options are now feasible and people are no longer confined in their job searches based on location. Therefore, it is due to our circumstances in today's ever changing world, that we believe in a corresponding ever changing work environment.
the trait theory
Concept: Identify different personality traits and characteristics that are linked to successful leadership across a variety of situations
Under this theory it is believed:
-People are born with leadership traits
-Certain traits produce certain patterns of behavior
-These patterns are consistent across different situations (I disagree with this point as I know that on a personal level this does not hold as true)
Traits associated with follower perceptions of leadership:
-Intelligence
-Dominance
-Masculinity
-Flexibility
-Social Sensitivity
Under this theory it is believed:
-People are born with leadership traits
-Certain traits produce certain patterns of behavior
-These patterns are consistent across different situations (I disagree with this point as I know that on a personal level this does not hold as true)
Traits associated with follower perceptions of leadership:
-Intelligence
-Dominance
-Masculinity
-Flexibility
-Social Sensitivity
four types of learning styles
- Activist
- Pragmatist: the most favored of the four styles amongst the creative sector (41% respondents expressed it as their preference)* Pragmatists' seek to practically apply the theoretical concepts learned to their job and prefer a link between what they are learning and their professional role.
- Reflector
- Theorist: the least favorite option amongst the creative sector (receiving only 2% of the votes)*
tips on being a leader
- It's not so easy to find the balance between being inspired and pragmatic.
- Evaluate your team members... are they productive or STRATEGICALLY productive?
- Work efficiently towards your vision, it's not a sprint!
- Remember that everything we're used to today seemed far fetched at one point in time. If you can imagine it, it's probably possible.
- There is a BIG difference between probable and possible.
- Your appetite for growth can't supersede quality.
- Ambition without capacity is toxic. Know your realistic limits.
- If you dream it, you've got to be able to build it brick by brick AND sustain it.
- In you work place, move out of your constrained/set box and into the bubble... see where you aren't currently contributing and where you need to insert yourself.
- If you increase asset value without increasing your investment in assets this will lead to failure/breakage.
- Try building a culture where you catch people doing right.
- The secret of leadership is teaching people your incompetences. If you claim to be capable of doing it all, you are stealing capacity from other people.
- Unconscious behavior gets you to an unconscious place.
- The customer service relationship is from pre-purchase to post-purchase. It's not a one time transaction if you're looking to build a brand/business.
- The customer is your single MOST important asset.
- Don't be defined by your role -- step outside.
- You can move up when you put on your big hat; expand your role authority.
- You are never given 100% of the info and it's never 100% accurate. The information is in your surroundings; talk to team members.
- As the leader, you should have charisma without being too charismatic. If you're too charismatic, you will develop dependent/weak followers.
- Do your best to foresee what could get in your way and go ahead and fix it; if you foresee issues, you can prevent them.
- Influencing and ordering are VERY different; don't command people, guide them.
- Leadership is believed to be behavioral and therefore can be developed.
swot, standard business model
SWOT is a way of thinking and an acronym that stands for:
Strengths | Weaknesses | Opportunities | Threats
If using this model with a more opportunistic approach, one would call 'weaknesses' challenges/stretch steps
Good strategists should be able to turn their strengths into opportunities and plan so that opportunities come and threats can be avoided/minimized
Organization can have strengths such as:
ideation, innovation, culture, efficiency
All these strengths can also be weaknesses (interchangeable) -- Strengths/weaknesses are time based/current and internal.
Opportunities are outside and are (ing) -- (happenING)
Ask yoruself: When does the future intrude on the present moment and come toward you as you come toward it?
Strengths | Weaknesses | Opportunities | Threats
If using this model with a more opportunistic approach, one would call 'weaknesses' challenges/stretch steps
Good strategists should be able to turn their strengths into opportunities and plan so that opportunities come and threats can be avoided/minimized
Organization can have strengths such as:
ideation, innovation, culture, efficiency
All these strengths can also be weaknesses (interchangeable) -- Strengths/weaknesses are time based/current and internal.
Opportunities are outside and are (ing) -- (happenING)
Ask yoruself: When does the future intrude on the present moment and come toward you as you come toward it?
product launching and relaunching
Terms:
Line extensions and relaunches provide the best risk/ return ratio. This is due to the following benefits of line extensions and relaunches:
Potential problems with line extensions:
When to extend line:
- New: product and brand name are completely new to the company (new product intros are on the decline)
- Flanker: new brand but existing product (Ex. Anne's Veggies introduced Sultana Veggies)
- Franchise: product launch that is extension of brand name familiar to customer (Ex. Jell-o introducing Jell-o pudding)
- Line extension: product launch involving new size, shape or flavor of existing brand (Ex. Cheerios creating Honey Nut Cheerios)
- Relaunch: refining a product and its positioning to better fit changing consumer needs (One must re-evaluate the following elements for relaunch: product composition, positioning, packaging, merchandising, and distribution)
Line extensions and relaunches provide the best risk/ return ratio. This is due to the following benefits of line extensions and relaunches:
- Capitalization on the company's strengths (brand name)
- The established consumer awareness and high trade acceptance
- Minimized needed capital investment due to the use of parent brand's plant (as needed)
Potential problems with line extensions:
- If the new products fail, it can hurt the parent brand
- Too many products can muddy the brand image (while brands grow and remain household words, they lose their strong association with specific products (ex. Betty Crocker, Quaker))
When to extend line:
- Competitors can easily duplicate your product
- New variation does not change brand positioning
- New variation is consistent with parent/image
- Innovation is different enough to expand the brand's market instead of competing with current products/compete with itself
steep(led)
S: social
T: technical
E: environmental (leading as if life matters, how to achieve profit and prosperity without deteriorating the environment)
E: economic (steady growth vs. unsustainable growth, currency conversions as a factor)
P: political (the way people organize themselves into government, effects of terrorism, tight physical boarders vs. open digital borders- meaning borders are absolute)
L: legal and regulatory (no international law, just regulatory framework and tariffs/taxes)
E: education (level of education corresponds with level of work output/compensation)
D: deeply held values (cultural, set of values that influence behavior)
SREEP(LED) is an acronym and is meant to be a way of effectively thinking/a method of decision making. One must take into account all the components of steep(led) because if they don't fully understand what's going on, then they can't effectively influence it.
The root of the acronym, STEEP, is an appropriate word choice because it is a descriptor of the journey any thinker faces. The journey is an uphill climb with constant changing elements. Therefore, one needs to combine their creative side along with their strategic side, in order to overcome the mountain ahead.
An excellent example of using STEEP(LED): Imagine starting a company. Where should it be based? Think about the kind of people that are most drawn to the product, whether or not the current economy would support or hurt the product, how high taxes/tariffs are on this product, what level workers will be needed to create this product, how broad is the audience for this product and so on.
STEEP(LED) based thinking is a way to be cover all bases of proper decision making.
T: technical
E: environmental (leading as if life matters, how to achieve profit and prosperity without deteriorating the environment)
E: economic (steady growth vs. unsustainable growth, currency conversions as a factor)
P: political (the way people organize themselves into government, effects of terrorism, tight physical boarders vs. open digital borders- meaning borders are absolute)
L: legal and regulatory (no international law, just regulatory framework and tariffs/taxes)
E: education (level of education corresponds with level of work output/compensation)
D: deeply held values (cultural, set of values that influence behavior)
SREEP(LED) is an acronym and is meant to be a way of effectively thinking/a method of decision making. One must take into account all the components of steep(led) because if they don't fully understand what's going on, then they can't effectively influence it.
The root of the acronym, STEEP, is an appropriate word choice because it is a descriptor of the journey any thinker faces. The journey is an uphill climb with constant changing elements. Therefore, one needs to combine their creative side along with their strategic side, in order to overcome the mountain ahead.
An excellent example of using STEEP(LED): Imagine starting a company. Where should it be based? Think about the kind of people that are most drawn to the product, whether or not the current economy would support or hurt the product, how high taxes/tariffs are on this product, what level workers will be needed to create this product, how broad is the audience for this product and so on.
STEEP(LED) based thinking is a way to be cover all bases of proper decision making.
triple bottom line design
Unlike the business term, bottom line, that only thinks about whether or not a company is profitable, triple bottom line design takes the concerns a step further.
Triple: refers to profit, people, planet
Therefore, instead of carrying on worrying only about revenue exceeding costs, with no cares/means, the triple bottom line design thinker also worries about their effect on the people working for and around them and the environment they are in.
The ultimate goal is for the company to be profitable and to make a positive impact in both the land and its people. Although there are not sufficient laws covering all of these areas, it is the designers duty to think bigger when decision making.
Triple: refers to profit, people, planet
Therefore, instead of carrying on worrying only about revenue exceeding costs, with no cares/means, the triple bottom line design thinker also worries about their effect on the people working for and around them and the environment they are in.
The ultimate goal is for the company to be profitable and to make a positive impact in both the land and its people. Although there are not sufficient laws covering all of these areas, it is the designers duty to think bigger when decision making.
day one
When I completed my undergrad experience at Skidmore College, I thought that my life as a student was over. Then, once I began working, I quickly realized that there were still so many questions left to be answered and lessons to be learned. That is when I decided to pursue my Masters degree at Pratt Institute.
The program I am enrolled in is titled: Design Management and it is structured similarly to an MBA program with the major difference being an added focus on creativity and an emphasis on triple bottom line design (to be explained in next post).
The classes run every other weekend from 9 AM to 5:15 PM on Pratt's Manhattan campus with group meeting occurring, as needed, on weeknights. Therefore, the program is structured with the full time worker in mind. In fact, it is preferred that students are working so the concepts learned in class over the weekend can be applied in the office the following week.
The program consists of five semesters (two years). Today was day one, and with only the basic class structure laid out, I feel like I have already started learning and thinking more strategically. Major concepts/takeaways to follow.
The program I am enrolled in is titled: Design Management and it is structured similarly to an MBA program with the major difference being an added focus on creativity and an emphasis on triple bottom line design (to be explained in next post).
The classes run every other weekend from 9 AM to 5:15 PM on Pratt's Manhattan campus with group meeting occurring, as needed, on weeknights. Therefore, the program is structured with the full time worker in mind. In fact, it is preferred that students are working so the concepts learned in class over the weekend can be applied in the office the following week.
The program consists of five semesters (two years). Today was day one, and with only the basic class structure laid out, I feel like I have already started learning and thinking more strategically. Major concepts/takeaways to follow.