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Archive for July, 2006


In response to a discussion started by my friend Francois Gossieaux – Here’s a quick elaboration on my previous post about Peter Drucker’s assertion that “the purpose of a business is to create a customer”:

While one of the functions or objectives of a business is to create customers (as it is to be profitable), it isn’t its purpose.

Its purpose is its reason for being there – which could be to design the best computers on the market, or build the lightest race bike, or create the best search engine in the world, or help people find great deals on flights and book their tickets online.

Semantics. I know. I may be splitting hairs here, but I think that the distinction between business functions and the purpose (or raison d’etre) of a business is important.

Businesses earn and retain customers by being true to their purpose, which is generally to provide either a great product or a great service, or both. When businesses get in trouble is when they stray from their purpose and begin to think mostly (or only) in terms of function: Creating more customers and becoming more profitable. Hence the difference.

I once worked for a company that started out with a purpose (and quickly rose to the very pinnacle of its industry, where it stayed for a couple of decades), but over time, replaced purpose (creating great products, providing the best quality and customer service in the industry) with function (increasing sales and profits). The result:

1) To cut costs, production moved from the US to asia.
2) The company started buying ready-to-build products instead of designing them.
3) Quality took a nose dive.
4) Deliveries became a problem.
5) Customer service took a nose-dive as well.
6) The functionality and specific (branded) look and feel of the products evaporated into thin air.
7) The company, which had always been profitable and relevant by selling superquality products – but no longer did – found itself forced to defend its fading relevance in a market already saturated with low-price “same-as” products. Within a year of the change, its only resort was to start engaging in price wars with other cheap, similar looking asian imports.

Everything that had once made this company the best in its industry (quality, design, dependability, and superior service) shriveled up and died.

Purpose vs. function. Two sides of a coin that MUST be a) clearly defined, and b) balanced as well as possible.

But back to my example: On paper, the business looked good, at first. By lowering its prices, it created a few more customers than it lost. By buying its products for a fraction of the cost of making them, its profits increased.

For anyone looking to make their company’s books look good in the short term, this was a brilliant plan.

In the long run, however, this kind of strategy (or lack thereof) is the kiss of death for a brand.

Could this particular business have balanced its purpose with its objectives? Yes. Of course it could have. (Heck, it should have.) But it didn’t. Why? Because its leadership didn’t understand a) the difference between purpose and function, and b) the importance of having a purpose. A raison d’etre.

This is why creating customers (and being profitable) can’t be the purpose of a business. Function, yes. Objective, yes. Side-effect, definitely. Purpose, nope.

(If that makes any sense.)

Feel free to disagree. ;)

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I’ve been hanging out in the archives again, thanks to Francois, over at Emergence Marketing. Here are some words from the great Peter Drucker on Marketing… and a few observations you are welcome to comment on:

“Because the purpose of business is to create a customer, the business enterprise has two–and only two–basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business.”

I like the second part of that statement a lot, but I business has evolved beyond the first one: The purpose isn’t to create a customer. The purpose of a business is to serve a customer. Or better yet, to earn a customer or to improve the life of a customer. Businesses can create products, markets, trends, technology, industries and lifestyles, but their aim is not to create customers. That would be… I don’t know, a bit conceited.

Don’t create customers. Create for customers.

“The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself. “

Amen.

“The most important thing in communication is hearing what isn’t said.”

Maybe not the most important, but definitely the most chronically overlooked.

“Quality in a service or product is not what you put into it. It is what the client or customer gets out of it.”

That should be a T-shirt or a poster or something.

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The question: “So… if F360 were to buy an ad in the yellow pages, under what category would it fall?”

The answer: “There isn’t really a category for us yet.”

From Gaping Void, via… well, Gaping Void:


Rule #11: Don’t try to stand out from the crowd; avoid crowds altogether.
Your plan for getting your work out there has to be as original as the actual work, perhaps even more so. The work has to create a totally new market. There’s no point trying to do the same thing as 250,000 other young hopefuls, waiting for a miracle. All existing business models are wrong. Find a new one.
Two words: Boo-yah.

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Earlier today, it ocurred to me that I get bored with things pretty easily. Once I’ve mastered a skill, I move on to the next one. Once I’ve enjoyed a product or a brand for a year or two, I am ready for a change. Laptops, fashion, music, TV shows, authors, cars, camera lenses, websites, software, languages, restaurants, coffee shops… I eventually get bored (or curious about something else – however you want to look at it), and move on.

When I realized this, I kind of felt guilty about it. For maybe half a second, I wondered if that made me fickle. But then, I realized that it was perfectly normal.

Some things wear in. Like… a good SLR camera, a good pair of jeans, a pair of Ray Ban aviators, Campagnolo components, friendships, love, a hand-seeded lawn, handed-down recipes, good books, classic songs, a tweed hat, and even furniture – as long as it is at least three times older than you are. (It’s just science.)

Most other things, on the other hand, wear out. Their utility diminishes over time. Case in point: I used to LOVE Starbucks. Really. I did. I was a Starbucks addict. I would go out of my way to go spend $3.50 on a coffee, even though I was never really much of a coffee drinker, just because Starbucks was… well, Starbucks. Fast forward two years, to the here and now: I don’t really care about Starbucks. It’s become the norm. The middle of the bell curve. The boring soft center of the coffee drink industry. It has lost its spark. Its appeal. Its relevance.

A few weeks ago, a Starbucks opened up less than a block away from where my laptop spends most of its day during the week, in arguably what might be the hottest retail space in Greenville, SC, and I haven’t been in yet. It’s within walking distance of where I spend most of my day, but I would rather walk the extra five blocks to get my coffee from the new French place that makes croissants and pains au chocolat that taste like the ones I grew up with. Their coffee isn’t great, but I get to chat in French with the owners, its clientelle is a little more interesting, and the experience has a subtle but unique charm.

The experience at Starbucks, just like the experience at Best Buy or Target or The Gap is always the same. At best, predictably enjoyable, regardless of where I am. Predictably vanilla. Predictably safe. Predictably… uneventful. (Target still manages to stock its shelves with cool stuff, but I am seeing the writing on the wall.)

Suddenly, I find myself un-wowed by the very companies that, just five years ago, were rewriting the rules of their respective industries. When the rebels took over, they stopped being rebels. They became the soft, boring middle. They stopped innovating and started playing things safe. They turned into the exact opposite of what made them successes to begin with. That’s sad.

What scares me a little is that a) these brands don’t seem to be evolving, and b) they aren’t really being replaced by anything better or smarter or cooler. It’s like being in an episode of the Twilight Zone in which the protagonist (me) is stuck in an ecosystem of deja-vu brand experiences.

Scary.

Come on, brand managers. Wow me. Surprise me. Give me something to talk about. Anything. Make me smile and nod my head and say, “yeah, that was pretty cool. That was pretty unique. I can’t wait to tell my friends about this.” The downtown L.A. Standard Hotel did it. The men’s room at Bandera’s (Chicago) did it. Sip in Greenville did it. The Encounter restaurant at LAX did it. The Hudson Hotel’s bar in NYC did it. Believe me: So can you.

Here’s a little something I found on Swamp Fox Insights (via orange yeti) that kind of sheds some light on the whole boredom, ephemeral nature of rebels, innovation, and the big unstoppable wheel of progress. Hopefully, it’ll stir some creative juices… or at least inspire a little necessary mayhem.

“In Italy for thirty years under the Borgias they had warfare, terror, murder, bloodshed – but they produced Michelangelo, Leonardo da Vinci and the Renaissance. In Switzerland they had brotherly love, five hundred years of democracy and what did that produce – the cuckoo clock!”

- Orson Welles, as Harry Lime in The Third Man.

“The intersection of diverse cultures sparks intense conflict and creativity. Innovation is a passionate, messy business, not for the faint hearted or the weak minded. (…) The fundamental impulse that sets and keeps the capitalist engine in motion comes from the new consumers, new goods, the new methods of production or transportation, the new markets, the new forms of industrial organization … that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. This process of Creative Destruction is the essential fact about capitalism. It is what capitalism consists in and what every capitalist concern has got to live in.”

- Joseph Schumpeter

So there you go. I thought I was fickle, but it turns out that I’m just a capitalist. Eh. Who knew!

PS: If you think that this post echoes Tom Peters’ assertion that Innovation comes from “pissed off people”, you are’t wrong.

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Call me lazy, but instead of writing something insightful for you guys today, I’m going to share some of my favorite finds from my morning’s croissant-induced online browsing.

All quotations courtesy of Pulled Quotes.

On retaining talent:

“One of my favorite cliches is “there is no such thing as indentured servitude”. I use that line to talk about the fact that talent can’t be bought and sold. It must be retained with something more than money.”

Fred Wilson


On finding out what works:

“I have no earthly idea what really works. I don’t know if it’s lunch or that powerpoint or the Christmas card I sent last year. But you know what? You have no clue what works either. I’ll keep experimenting if you will.”


Seth Godin


On why blogs work:

“Bloggers drive blogs, share price drives traditional media. Blogging is personal, traditional media is corporate.”

Mark Cuban


On remembering what creativity really is:

“Creativity is an act of open disobedience against the norms. Creativity is an act of courage.”


Chris Bailey


On innovation, grabbing life by the horns, and not pissing your life away:

“Do things that are gaspworthy.”

That was one of the main messages delivered by Tom Peters, the influential business thinker and management guru, in his speech yesterday at Epsilon’s Integrated Marketing Symposium 2006 at the Quail Lodge in Carmel, CA.

“Do cool stuff that make people gasp,” said Peters, who looked older and angrier than in his “In Search of Excellence Days” (the book he co-authored with Richard Waterman in 1982 that was hailed by NPR as one of the Top Business Books of the Century). “Don’t piss away your life.”

He changed his speech at the last moment after having learning this week that one of his best friends has a terminal illness, Peters said.

Also noted

“Innovation comes “not from market research or focus groups, but from pissed off people.”

DM News


On passion and work:

“Whether you are Jack Welch or the Dalai Lama, it is dangerous not to do what you love. If you don’t have a level of passion that drives your thinking about what you’re doing day in and day out, there will be others out there who are passionate who will overtake and outrun you. People who care will take the initiative away from those who are half-hearted. So loving what you do is a competitive imperative, not simply a nice thing to have.”

Knowledge @ Wharton interviews Mark Thompson and Stewart Emery, co-authors along with Jerry Porras of Success Built to Last


So there you go. Now we’re all on the same wavelength. Have a great Tuesday!

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Instead of looking for new places to defile with a) lousy advertising for b) lousy products, how about this: Leave our toilet paper, our barf bags and our eggs alone.

(What’s next: Sliced bread? Receipts? Utility bills? Stamps? Bar soap? Diapers? Please stop the madness.)

To all advertisers:

(A short letter)

Printing lame “ads” on toilet paper, eggs, and barf bags is spam.

Yeah, spam. (Not advertising.)

It isn’t good, it isn’t effective, and it makes you look bad.

Please stop. You’re embarrassing yourselves, and you’re getting on our collective last nerve.

Sincerely,

People with brains.

Here’s what you do:

a) Stop with the gimmicks.
b) Get back to creating great products (like the companies that don’t need to advertise on eggs, toilet paper and barf bags).
c) Even if you can’t make great products, please find someone who’ll put together some great ads for you. We might not buy your stuff, but at least we’ll be entertained.

THE SPIN ZONE

On a related note, the funniest quotation of the week (and it’s only Monday) comes to us via John Moore’s “Brand Autopsy” blog, and is from Phil Gee (US Airways’ spokesman), explaining US Airway’s decision to sell advertising on their air sickness bags:

“The airsick bag is not used like it was in the past — primarily with turbo-prop aircraft and cabins that weren’t pressurized — so the negative connotation of the sick sack has gone away.”

Phil, if you managed to say that with a straight face, you’re my new hero.

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Michael McDonough
brings us this list of the the top 10 things they never taught him in design school. (Article courtesy of DesignObserver.com via the IdeaFestival blog.)

Why should any of this matter to anyone who isn’t a designer? Because many of his observations apply to other disciplines as well, whether you’re in marketing, PR, brand management, accounting, senior management, engineering or retail. If you love what you do, you will find some great lessons here:

1. Talent is one-third of the success equation.
Talent is important in any profession, but it is no guarantee of success. Hard work and luck are equally important. Hard work means self-discipline and sacrifice. Luck means, among other things, access to power, whether it is social contacts or money or timing. In fact, if you are not very talented, you can still succeed by emphasizing the other two. If you think I am wrong, just look around.

2. 95 percent of any creative profession is shit work.
Only 5 percent is actually, in some simplistic way, fun. In school that is what you focus on; it is 100 percent fun. Tick-tock. In real life, most of the time there is paper work, drafting boring stuff, fact-checking, negotiating, selling, collecting money, paying taxes, and so forth. If you don’t learn to love the boring, aggravating, and stupid parts of your profession and perform them with diligence and care, you will never succeed.

3. If everything is equally important, then nothing is very important.
You hear a lot about details, from “Don’t sweat the details” to “God is in the details.” Both are true, but with a very important explanation: hierarchy. You must decide what is important, and then attend to it first and foremost. Everything is important, yes. But not everything is equally important. A very successful real estate person taught me this. He told me, “Watch King Rat. You’ll get it.”

4. Don’t over-think a problem.
One time when I was in graduate school, the late, great Steven Izenour said to me, after only a week or so into a ten-week problem, “OK, you solved it. Now draw it up.” Every other critic I ever had always tried to complicate and prolong a problem when, in fact, it had already been solved. Designers are obsessive by nature. This was a revelation. Sometimes you just hit it. The thing is done. Move on.

5. Start with what you know; then remove the unknowns.
In design this means “draw what you know.” Start by putting down what you already know and already understand. If you are designing a chair, for example, you know that humans are of predictable height. The seat height, the angle of repose, and the loading requirements can at least be approximated. So draw them. Most students panic when faced with something they do not know and cannot control. Forget about it. Begin at the beginning. Then work on each unknown, solving and removing them one at a time. It is the most important rule of design. In Zen it is expressed as “Be where you are.” It works.

6. Don’t forget your goal.
Definition of a fanatic: Someone who redoubles his effort after forgetting his goal. Students and young designers often approach a problem with insight and brilliance, and subsequently let it slip away in confusion, fear and wasted effort. They forget their goals, and make up new ones as they go along. Original thought is a kind of gift from the gods. Artists know this. “Hold the moment,” they say. “Honor it.” Get your idea down on a slip of paper and tape it up in front of you.

7. When you throw your weight around, you usually fall off balance.
Overconfidence is as bad as no confidence. Be humble in approaching problems. Realize and accept your ignorance, then work diligently to educate yourself out of it. Ask questions. Power – the power to create things and impose them on the world – is a privilege. Do not abuse it, do not underestimate its difficulty, or it will come around and bite you on the ass. The great Karmic wheel, however slowly, turns.

8. The road to hell is paved with good intentions; or, no good deed goes unpunished.
The world is not set up to facilitate the best any more than it is set up to facilitate the worst. It doesn’t depend on brilliance or innovation because if it did, the system would be unpredictable. It requires averages and predictables. So, good deeds and brilliant ideas go against the grain of the social contract almost by definition. They will be challenged and will require enormous effort to succeed. Most fail. Expect to work hard, expect to fail a few times, and expect to be rejected. Our work is like martial arts or military strategy: Never underestimate your opponent. If you believe in excellence, your opponent will pretty much be everything.

9. It all comes down to output.
No matter how cool your computer rendering is, no matter how brilliant your essay is, no matter how fabulous your whatever is, if you can’t output it, distribute it, and make it known, it basically doesn’t exist. Orient yourself to output. Schedule output. Output, output, output. Show Me The Output.

10. The rest of the world counts.
If you hope to accomplish anything, you will inevitably need all of the people you hated in high school. I once attended a very prestigious design school where the idea was “If you are here, you are so important, the rest of the world doesn’t count.” Not a single person from that school that I know of has ever been really successful outside of school. In fact, most are the kind of mid-level management drones and hacks they so despised as students. A suit does not make you a genius. No matter how good your design is, somebody has to construct or manufacture it. Somebody has to insure it. Somebody has to buy it. Respect those people. You need them. Big time.

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