Strategy ⁽¹⁹⁾

Services vs Product Business Models

It always struck me that there are very few companies that are equally as strong in products as they are in services. This is in sharp contrast to the number of companies that have moved from their core to embrace the other side.  Companies like Cap Gemini quickly abandoned the idea of becoming a product company and we see HP struggle with services by now trying to jump start it through the acquisition of EDS. IBM might be held as a contra-example with both products and services, but I would submit that they have switched from being a product company to the current service company that they are today (e.g., selling the laptop division to Lenovo and printer division to Lexmark)

A few steps before you write your next business plan

I then outlined a template to help form his ideas that looked like this for each idea:

• What is the business need in the market that needs solving?
• How are you (and your company) uniquely qualified to solve this?
• How will you identify such customers and how will you make contact with them? Continue reading...

It is a tragedy when smart people create nothing more than smart data.

Years ago I worked for Honeywell making sensors used in steel production.  Our premium systems were the market leader in high speed, precise measurements.  My role at the time was manager of the "cost effective" product line.  One day, while visiting a customer using our equipment, I made a discovery: Our worst sensor was already five times faster than they needed! Their control systems connected to the sensors were so slow that any increase in data acquisition was just a waste.  Yes, at the same time,  our 'most educated' customers were pushing us to build faster sensors, our competitors were trying to build sensors as fast as ours, and we were proudly announcing our latest speed triumphs each year.  How could this be? Continue reading...

"Not just is it profitable, but is it right?" -Obama

I just listened to Psychologist Barry Schwartz  give a lecture on "virtue" at TED Talks.  If you have not heard of TEDTalks, they are Technology, Education, and Design talks,  a free-form gathering and speaking by some truly intelligent people.  I highly recommend it.  In this season's speakers, Barry was a standout.  I also found his talk on moral intelligence and virtue particularly relevant to sales.

First off, we need to eliminate the "pusher" and "manipulator" salesmen as not "real" salesmen because the value of a true salesmen is that they connect need with ability to supply.  A true salesman knows that discovery is key:  "You probably did know we exist (or could do this) but...."   While this is a necessary part of selling, it is only the first, smallest, step. The real bulk of the work begins when the salesman has identified a customer with a need his company can fulfill.  After discovery, the salesman identifies an entire list of reasons why the customer will not make the obvious business engagement; They can't decide;  the order process is too complex;  already committed to another (likely less good) supplier: we don't trust your company;  we are scared and can't decide...  There are also supplier side barriers that come into play:  We don't know that they will pay; they want special treatment; we sold to them before and had a bad experience.... Continue reading...

"What doesn't kill us makes us stronger." -Friedrich Nietzsche

My corollary, similar to that famous quote is, "Risk of being killed can have positive consequences".

Years ago when I was Director of Engineering for a division of Honeywell, I was curiously following a long-standing problem facing my colleague, Tom Armfield.  Tom was a seasoned manager who had just been promoted from field service manager to Director of Manufacturing.  (See "Production vs Prototype Sales" for more on Tom.)  The problem was with the work quality of the team that manufactured the electrical control cabinets was terrible and it was affecting the entire company. Continue reading...