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People Power: How Technology is Changing the Consumer Market

The Consumer market has seen increased activity over the last few quarters, with multinational organisations scrutinising their portfolios to create a more streamlined offering.  With the ultimate aim of reducing cost in their operating model, multinational consumer brands have been rationalising their portfolios and shedding underperforming lines.  This ‘shrink to grow’ attitude is a relatively new approach for such organisations.  But the world around, and particularly below, these giants of the consumer market is changing, and to all intents and purposes they have been a little slow off the mark to respond so far.

Over the last few years with the advent of new and better technology appearing all the time, all markets have become so much more customer driven.  Customer satisfaction, ease of service provided and reputation have become three key drivers in whether a consumer led business will thrive or fail.  Digital technology has given customers the knowledge to make informed choices, and a traditional marketing approach no longer guarantees the success of an individual product or business.

Smaller consumer businesses or start-up’s have begun to gain the advantage, as they are nimbler and more flexible in their approach to customer service and satisfaction.  They are also able to amend their offering to satisfy customer demand.  Where traditionally these smaller organisations might have been snapped up by a multinational and lost their identity, these smaller businesses don’t have the need or desire to be consumed in such a way anymore.  They don’t need to be – technology allows them to not only keep their independence, but excel at what they do on a smaller and more personal level.

Customer purchasing trends have changed significantly.  We all want to buy local where we can, and we have much better defined purchasing needs.  Millennials are seen to be more interested in products that don’t necessarily scale well, particularly in the food and beverage sector: grains, coconut oil and water, oils, humanely treated animal proteins; the list could go on.  This is the stuff of the small, niche producer and seller.

Large retailers are also involved in affecting this change.  The Baby Boomer, although still relevant in a purchasing and profit model, is not the only cash rich purchaser on the block these days.  The Millennials are right behind them, and they demand a very different in-store approach.  To respond, retailers are getting better all the time at talking to and doing deals with the small guy, therefore providing a more rounded and up to date offering, both through ecommerce and in store.  Studies show that ecommerce seems to democratise virtual ‘shelf space’, as top brands do not dominate online as they do in a real shop environment.

There is space in the market for everyone, and technology is the biggest driver in how all consumer business will behave moving forward.  Technology streams not only show the customer instantaneously what is on offer, but also the best route to purchase.  Customers have much greater influence over each other than ever before on what to buy and where to buy it.  All empowered by social media.  This digital revolution has left the customer with the ‘tyranny of choice’, so back to social media again for the information search and evaluation of alternatives.  A world away from the traditional route of a business getting their product to market.  The supplier must have a deeper understanding of the customer and their online habits as well as their purchasing habits.

For the smaller business or start-up, life has never been so good.  The cycle time from the seed of an idea to a sucessful scale business has shortened dramatically.  The barriers have literally never been lower.  Social media is probably the ultimate key to success.  The flexibility and agility typical of a small business suits the social media approach.  Quick response times to customer queries, growing followers organically, getting online conversations started, friend recommendations – these all spread the word and help a small business gain a steady and loyal following which ultimately offers stability for the business.  You can even set up your ecommerce site in under 24 hours if you really put your mind to it.  So why would you want to sell out to a multinational who might quash your identity and your ideas.  Or possibly even your ideals……

The small guys are ultimately forcing the large corporates to rethink and reinvent the way they engage with their customer base.  And rethink it they have.  Companies such as Unilever and Kellog’s are taking a very different approach with market investment moving forward.  They have, alongside others, set up venture capital funds, in order that they can invest in new technologies and small businesses without over influencing and changing the face of that business, yet still gain the benefits.  Big multinational consumer groups are offering venture capital finance to entrepreneurial companies.  What a great way to access new ideas and trends.  Young promising companies could or will become strategically relevant to the multinational in the future, either through product, packaging or technology.  By starting the relationship early, you increase not only the success of the smaller business, but the knock on effect for the corporate.  Smaller, entrepreneurial businesses are more willing to engage with, collaborate and share their technology and product with big companies like this, as the funding is at arm’s length from the company itself.  The multinationals know they need to change.  The problem just might be they don’t know how to.  Internal private equity funding might just be the answer.

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Letter 1 Thoughts of a Chairman: Organisational Health

In Patrick Lencioni’s latest book, The Advantage:  Why Organizational Health Trumps Everything else in Business, I was intrigued to learn whether he had indeed found the Holy Grail:  Sustained Competitive Advantage.

Lencioni’s claim is that the biggest opportunity for achieving competitive advantage lay not in the smart things a company does, like strategy, finance, marketing and technology, because this is something most manage to do anyway.  Lencioni states being smart is not enough: to gain competitive advantage, a company also has to be organisationally healthy.  At its core, organisational health is about integrity, not in the moral or ethical sense, but in its consistency where management, operations, strategy and culture all gel together.  That means minimal politics and confusion, high degree of morale and productivity, and low turnover among good employees.  So far, so good but how do us mere mortals get there?

The key behaviour Lencioni focuses on and a foundation for all the others, is trust.  This is not trust in its predictive sense where you might have a high degree of confidence that someone you know will deliver on a promise.  What Lencioni focuses on is vulnerability based trust, where members of a leadership team can be completely comfortable being transparent, honest and naked with one another.  A highly laudable attribute but how new is this concept?

Here’s what Alan Webber wrote in a HBR in 1993, which closely echo’s Lencioni’s idea:

“Trust is tough because it is always linked to vulnerability, conflict and ambiguity.  Vulnerability is a precondition of trust.  Before any two people can form a personal bond, they must first open themselves up, let each other know ‘where they stand.’  But that creates the possibility of disagreement and conflict.  Indeed, healthy conflict is a sign of the existence of trust.  It shows that two people care enough to disagree.  Finally, trust acknowledges the inevitability of ambiguity.  No two people will see the same event in the same way or have the same feelings about it.  Trust admits to that ambiguity and strives to negotiate it.”

And my conclusion?  I’m enjoying Lencioni’s latest book which unlike his earlier books, is not written as a fable.  As you may have guessed, I’m still ploughing my way through so a further instalment can be anticipated.

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An Intelligent Career Model for the 21st Century – part three – by James Parsons

Last time I talked about passion. If you are genuinely passionate about what you do on a daily basis, that’s all well and good. Become the expert, the go-to person and be prepared to consider other ways of delivering your expertise should your employer decide to strategically, ahem, refocus. So forget about passion.

And while you’re at it, forget about goals too.

The best advice we can give people is to think about the job after the next one. Job seeking, like networking, is not something one does only when necessary but should be a continuing process. This makes perfect sense if you do the maths: chances are that the best job for you won’t become available at precisely the time you declare yourself ready.

Therefore, getting a job is part of a system, not a goal.

Systems-based career planning means thinking about yourself, your market, your competitive edge, being clear about your performance factors and how you can improve your quality of output vs. the person next to you.

If you’re in technology, healthcare or engineering, it might mean thinking more like an ambassador of your firm than an MD or employee, increasing your visibility at forums designed to develop next level thinking. If you’re in a sales role, your career management system should include building awareness of your customers’ preferences and thinking styles as a major component of increasing your numbers.

For everyone, it usually means learning more about yourself – your life purpose, values, environments that will suit you and where you will best FIT next. Again, guided self-analysis to figure out your motivated skills will help determine whether you want to stay a producer or become a manager (and potentially, a cost).

But do not expect your employer to do it for you. They are interested in keeping you doing what you are doing, thank you very much, especially if you are earning them money or freeing them from what stuff no-one else can or wants to do.

As a search firm, we’ve always had our antennae up, looking for examples of people who use systems as opposed to goals. In most cases, as far as we can tell, the people who use systems do better.

The systems-driven people have found a way to look at the familiar in new and more useful ways. For example, as we moved into the second decade of the new millennium it was clear the writing was on the wall for many conventional business models – think big box retailing, think Blockbuster, think big chunks of wholesale finance, music or how we buy consumer technology. The clever ones made a choice and put systems into place to transfer themselves to safer ground. Some picked up a new sector, build new relationships and figure out their transferability quickly, some offered to cover a new market or geography and built a defensible franchise and others retrained.

Within 15 years, so much has changed yet so much hasn’t. Structural upheaval in business is almost the only certainty – most of us will run the risk of becoming functionally obsolescent at least once in our careers. Putting systems in place to manage your career by taking regular time out to appraise where the ship you’re on is headed is increasingly critical.

If you’re out there looking to make your first break into something new, then systems thinking is also essential. The whole deal – clarifying who you are and what you want, targeting employers, writing CVs, dealing with recruiters, networking for information and contacts, interviewing, negotiating and closing – all requires a system as none of these components of a successful job search strategy happens in isolation. If you think through this list with your own situation in mind, you will quickly see how the last item is linked in a dependent chain all the way back to the first.

Finally, the old adage about learning through failure is as true as ever. It’s a good place to be because failure is where success likes to hide from plain sight. Everything you want out of life is in that huge, bubbling vat of failure. The trick is to get the good stuff out.

Next time, I’ll start introducing the model. Until then, enjoy the rest of the summer.

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Thoughts of a Chairman – The Start – by Andrew Paszkowski

In the early noughties, I undertook an academic research project into business strategy, marketing and leadership, looking specifically at the role non-executive directors can play in adding value to businesses.  I probably read 45 business books cover to cover and about 300 academic articles.  Blah!  It brings me out in a cold sweat just thinking about it, but it did culminate in a dissertation and master’s degree.  It also formed the foundation of a methodology (developed together with my friend and colleague Richard Hardy) to support managing and value creation in private equity and venture capital invested SMEs.

In truth, I actually read 44 and a half books because as soon as I had submitted my dissertation, I could not bear to read about a new idea or a reaffirmation of a developed view without being able to include it in my work.  During the two or so years of research, the only books I read for escapist pleasure were JK Rowling, and that was to keep up with my kids.  So having submitted my dissertation, I put my business books to one side: it was time for me to persue some other interests and reading passions.  But I certainly did not stop thinking about business or on each occasion striving to realise the quality of the strategic conversation in the numerous board meetings I attended.

Then about a year ago, having found a little more time on my hands, my business reading slowly crept back into life.  Linking up again with Richard and another friend and former colleague Andrew Blatiak, we started looking into developing another methodology, this time focused on larger, national SME growth accelerator programmes.  We needed to check what was the latest thinking on business strategy and how to apply it.  Has someone finally found a new simple and seemingly magical solution to a complicated problem?  Well, we found some new words like ‘gazelles’ and ‘unicorns’, and new business activity such as the ‘Internet of Things’ (or as Steve Case claims in his book The Third Wave, the ‘Internet of Everything’) but the silver bullet?  Hmm, you’ll have to wait and see…

My intention is to start blogging with reasonable regularity, providing a glimpse on current thinking.  Where relevant I hope to compare and contrast these to what was hot 20 years ago.  And by the way, I don’t claim any academic rigour in my choice of reading or views and opinions developed, some of which quite possibly could be entirely wrong.

Finally, some further context.  Amongst a couple of other activities, I am the non-executive chairman of an exciting and growing company called Miramar Executive Search.  Part of my aim is to introduce, nurture and develop a wider perspective through the quality of the strategic conversation with my colleagues in this excellent headhunting company.

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An Intelligent Career Model for the 21st Century – part two – by James Parsons

In our last note, I highlighted different career paths that people tend to take.  With such differences apparent in how we all go about building our careers, I would argue a systems-based approach to career planning work better.  Goals change and career models change but the system by which you navigate your journey can be established and modified as you go along.

Scott Adams, Dilbert creator and all round good guy, is an interesting and wise character and made some good points in a recent article for Inc. magazine about career planning.

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He says:

“beware of advice from successful people because no two situations are alike”

“inspirational biographies are no help – biographers never have access to the internal thoughts of successful people.  If a biographer says Henry Ford invented the assembly line to impress women, that’s probably a guess”

“don’t follow your passion”

Wait a minute, come again?  You’re telling me not to follow my passion??  Yes, dear reader, we agree with Dilbert.  Passion will undoubtedly give you high energy, high resistence to rejection and high determination.  Passionate people are more persuasive, too.  However, Adams’ point is that banks don’t lend to passionate people, on the basis that they are not objective and dispassionate enough in their decision-making and therefore represent a bad credit risk.  He says banks want the grinder, not the guy who loves his job.

The point seems to be this:  it’s easy to be passionate about situations that are working out and that distorts our impression of the importance of passion.  Situations that don’t work out tend to slowly drain the passion as they fail.  Things that work out become more exciting as they succeed.

The problem is that most work is not passion-inducing, is it?  I remember working for corporates in the 90s and always noticing those who were more “passionate” than others.  You know the ones – first in last out, seem to have read all the industry rags, best briefed at sales meetings, always ready to smile ‘n’ dial.  It looked and sounded great and the bosses loved it.  Looking back, we suspect lots of them were more passionate about what the job could do for them, not the job itself – rise through the ranks quicker, get paid quicker, leave quicker.  And that’s no bad thing.  It’s just you need to be clear about what and who you’re doing it for and why.

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Getting to Medical Grade in Wearable Technology – by David Bell

What started as a murmur in the hushed halls of some medical and technology giants may soon become a roar.  The idea of using wearable consumer-originated technology for medical use is advancing rapidly.  But there is significant research to be done, and significant issues to overcome before research becomes a reality.

The term “activity tracker” now refers mostly to the wearable fitness devices that have been available to the consumer market since the early 2000’s.  These were an extension of the early heart rate monitor, and even bicycle computers that monitored speed, distance, calorie count and so on.  The idea, in both the medical and technological world, is to take the next step and create devices that can be used for medical grade assessment and management of medical conditions.  Wearable devices can track literally everything, from exposure to sunlight, physical activity and sleep patterns.

Samsung, Qualcomm and Apple, to name but three, are all in the race to create the most effective and accurate technology for the medical market.  All are focusing on managing different diseases, and all are focusing their medical solutions around their own technology products.  This lack of joined up thinking – although one could argue the case for the individual business – means that when medical solutions are ready for market, any hospital, clinic or indeed patient could be looking at major investment before having access to the correct solution for the inividual or medical issue in question.  If that individual has two separate medical issues, he or she might require a Samsung phone and tablet to monitor data from one wearable, and an Apple phone and tablet to monitor data from another wearable.  The return on investment for Government and medical organisations will surely have a major effect on how and when this technology is able to move forward.

Accuracy is also an issue.  At a recent meeting with the Head of Innovation for a Global Pharma company, the four identical trackers he was wearing were producing four different results on every metric.  Plenty has been written regarding wearables, and how each different product can provide you with different data at the end of each day – even on steps taken, let alone medical issues where accuracy could literally be a case of life or death.  Peoples ages, their gait, their own technical ability, can all have an effect on technology.  Human error has the potential to completely change how the data looks and is acted upon by a medical professional.

Another major issue, which still seems undecided, is how the medical profession will manage and keep safe patient data.  Privacy and security concerns loom large.  Privacy advocates worry that as patients upload potentially intimate health information into gadgets and apps, there aren’t enough protections to prevent the data from being misused.  Even if this is overcome, the data from each device or patient would still need to be merged with other medical data for each patient.  Another potential headache.  Unless a medical professional can access a patient’s full medical records, how are they to assess the uploaded data from a wearable and make good use of it?  The key is that medical data is not directly linked to an individual should it be hacked, so for example a blood pressure reading itself is harmless enough, but if it’s got your name on it, it becomes a major data breach.

Is it more of a worry perhaps, that patient’s will have access to their own medical data?  This could go wither way.  For some, self-diagnosis and monitoring will lead to appointments being missed with medical practitioners, thereby exacerbating their medical complaint.  With others, access to such data could lead to panic and a level of self-diagnosis that leads to more regular visits to the Doctor.

This brings us to medical approval.  If we are to use these devices to diagnose, prevent, monitor and treat disease then we need Government to give the green light.  This seems, today, some time away.  Health and privacy laws that protect patient data don’t apply to the makers of consumer devices currently, so the legal process alone is long and arduous.  To move to a law (Internationally) that covers all medical data, no matter what it’s source, is time and expense indeed.

So where next?  The key is for developers and medical professionals to understand that patient ‘buy in’ is there.  As individuals we have to be both willing and able to make changes to our own health monitoring, and want to take more responsibility for our own health.  Compliance is also key.  How exactly does the idea come off paper and in to daily use?  And, of course, who is going to pay for it?

ROI in the rapidly growing wearable space is still an inexact science, at best.  Many healthcare providers feel it’s there, but they just can’t quantify the financial ROI precisely, say, in the same way a business could calculate the ROI horizon of a new heating system or sale of a car.  The real ROI has to be in patient engagement, one of the most important elements in modern health and healthcare.