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Archive for the ‘Industry Change’ Category

Times | Flickr - Photo Sharing!It can be argued that businesses were traditionally built to be predictable, consistent and stable. Processes were designed to ensure consistent output and to control employee behavior to produce efficient outcomes. I would argue that in recent years the great recession, technological change and other factors have transformed business as we used to know it, into a more dynamic environment characterized by a faster speed of change than ever seen before.

Here are my 5 success strategies organizations can leverage to survive and thrive in today’s dynamic business environment:

1. Accept that Constant and Fast Change is the New Normal

In recent years the business environment has under gone a transformative shift where a heightened pace of change has become the new normal. As David Burstein author of the Fast Future argues:

The future is coming at us faster and faster, the rate of change is increasing and the amount of change that takes place in a given year is skyrocketing as well. So much change has taken place so fast that our governments, businesses, and other large institutions haven’t always had enough time to fully catch up.”

We are living in a time where anyone has the potential to make an impact. Start-ups can transform technology capabilities and anyone can share a message with the world through social platforms. While change can be daunting, executives need to embrace change and accept that the future is harder to predict than ever before.

2. Leverage the Possibilities of Big Data

Most organizations sit on a mountain of data. Today large, complex data sets can be analyzed to obtain greater business intelligence and statistical information than ever before. This data can be leveraged to improve the customer experience, product/service, logistics, customer segmentation, pricing, customer retention, inventory management and many other factors. David Court, McKinsey Director argues that regardless of whether or not you are a data based company, all businesses can leverage data and analytics to make stronger data-supported predictions and optimize performance by obtaining a broader view of operations. It is important organizations ensure data doesn’t become siloed, so they can fully optimize and take advantage of advanced analytics. Information may not be valuable for long so it’s important businesses exploit it and get utility out of it, to strengthen their competitive position.

3. Constant Innovation

Given the dynamic environment a constant focus on innovation is fundamental. It is important executives recognize that innovations can come from anywhere in the organization. Communication channels need to be open to allow for the free flow of information throughout all levels of the hierarchy. Employees need to be empowered to innovate everyday and share knowledge. To facilitate this change in organizational thinking, employee performance systems will need to be adapted to award innovative thinking as opposed to following corporate created guidelines.

4. Agility

Traditional bureaucratic organizational structures are slow to change and thus not adaptable enough for today’s innovative business environment. Organizations need to be redesigned to be more agile; to adjust in real-time as change occurs.

5. Face Disruption Head On

Almost 50% of the companies in 1999’s FT 500 were no longer in the FT 500 by 2009. It can be argued that while businesses are focused on constant improvement, they don’t always change in the right ways. If we take the case of Tower Records, the former music store peaked and had their most success year ever in 1999. In the years that followed Tower Records continued to improve their operations and efficiency, however they failed to recognize that customer demand could be met better in a new way: through online music; to the detriment of the survival of their business. It is important that companies continually scan the environment in which they operate and constantly research new ways in which they can better meet their customers’ needs.

What other strategies do you think organizations can leverage to survive and thrive in today’s dynamic business environment? Share your thoughts in the comments section below. 

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“We’re tweeting live from HR where we’re all being fired! Exciting!! #hmvXFactorFiring”

If you’re going to fire your social media planner wouldn’t you think to change the passwords first? This week British retailer HMV’s slight oversight, led to a live broadcast of their 60 person mass layoff to their official twitter account’s 60,000 + followers.

So who are HMV and what happened?

HMV is a 91-year-old British entertainment retailer similar to the almost defunct Virgin Megastore. I have always been a huge music fan and in my teens this was one of my favorite stores. As you can imagine given the online shift HMV has struggled to adapt its business model fast enough to the changed business environment.

On January 15, 2013 HMV entered administration (a form of bankruptcy).

On January 31, 2013 following advice from Deloitte, HMV laid off 190 employees from their corporate office and distribution centers. While this was always going to be a difficult task, the situation gained more exposure than HMV could ever have imagined, as their about to be laid off social media planner Poppy Rose Cleere tweeted the events live from the company’s twitter account:

Jilted employee live-tweets layoffs—from company account | Articles | Home

Comparing the corporate office mass firing of 60 employees to an X Factor elimination the hashtag #hmvXFactorFiring quickly went viral as HMV gained over 10,000 new Twitter followers.

The remaining employee’s lack of ability with social media was laid out for the world to see as these tweets reveal:

Jilted employee live-tweets layoffs—from company account | Articles | Home-1Poppy Rose (poppy_powers) on Twitter

The tweets were later taken down but the damage had been done and they are now part of the company’s digital footprint. Poppy Rose Cleere who had been responsible for managing HMV’s social media accounts for over 2 years, explained her action as the result of frustration at seeing the company she loved ruined. She hopes her actions can help educate HMV remaining executives finally realize the importance of social media:

“I worked tirelessly to educate the business of the importance of social media – not as a short-term commercial tool, but as a tool to build and strengthen the customer relationship – and to gain invaluable real-time feedback from the consumers that have kept us going for over 91 years. While many colleagues understood and supported this, it was the more senior members of staff who never seemed to grasp its importance. I hoped that [Thursday’s] actions would finally show them the true power and importance of social media, and I hope they’re finally listening.”

HMV has responded by sending out the following tweets:

hmv (hmvtweets) on Twitter

Time will tell if their remaining marketing staff choose to utilize social media as a way to engage with their customers. For now HMV needs to find a way to create customer experiences to stop the brand from heading to “Borders” town.

What’s your take on this story? Share your thoughts in the comments section below. 

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Rocket Science | Flickr - Photo Sharing!Recreational space travel was once seen as accessible only to billionaires, yet today the emergence of a commercial space travel industry targeting a broader demographic has never been closer. With an anticipated launch as early as 2014, space travel reservations are already being taken by Virgin Galactic and XCOR Aerospace.

Virgin Galactic

Richard Branson had grown up dreaming of going space, yet as the years went by he observed that:

“NASA didn’t seem to be that interested in getting you and me into space.”

In 1990, ever the opportunistic entrepreneur Branson patented the name Virgin Galactic and began to investigate the feasibility of commercial space flights. In 2004 he licensed SpaceShipOne technology (the technology behind the first manned commercial vehicle to reach suborbital space) to create SpaceShipTwo. Double the size of its predecessor, SpaceShipTwo holds 2 pilots and 6 public participants (not called passengers due to legal reasons around the safety risks of space travel). To date Branson has spent over $200 million on turning his commercial space travel dream into a reality.

Virgin Galactic space travelers will fly out a spaceport in New Mexico. Branson anticipates that after arriving in space, travelers will be able to float around in the back cabin to experience about five minutes of weightlessness. The company is already taking reservations at $200,000 a ticket ($20,000 minimum deposit) or $1,000,000 to reserve an exclusive space flight for you and up to 5 friends. Here is Branson’s short video on Virgin Galactic:

XCOR Aerospace

Created in 1999 by a group of rocket engineers, XCOR Aerospace is setting out to become the “Southwest” of space travel. To date the start-up has spent over $45 million on developing a spaceship the Lynx that can operate like a commercial airliner. XCOR’s chief test pilot is “39 days in space” pilot commander Richard Searfoss.

Pinterest _ Search results for xcor aerospaceXCOR aim to offer up to 4 flights a day, 6 days a week departing from Midland, TX. Some flights will be for space travelers, while other flights will carry space experiments and small satellites for deployment. Chief test pilot and former NASA astronaut Richard Searfoss describes XCOR’s positioning:

“We’re trying to position the Lynx adventure as kind of The Right Stuff experience.”

Like Virgin Galactic, XCOR Aerospace flights will travel up to sub-orbit providing about 5 minutes of weightlessness. However, at this time due to safety concerns and given the prospect of space sickness, XCOR Aerospace travelers will not be able to float around the cabin. XCOR Aerospace are currently taking reservations for $95,000 a ticket. Check out this short video to learn more about their proposed experience:

As with any new industry it will take time for prices to come down enough for space travel to become accessible to the mass market. Nevertheless this is an exciting start to the creation of a commercial space travel industry.

But what do you think? Share your thoughts in the comments section below.

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E. 38th St and Mass Ave. | Flickr - Photo Sharing!-1A few years ago, Princeton PhD and Google CIO Douglas Merrill was enjoying some time by his pool when he received a phone call. The phone call was from his sister-in-law Vicki who was a single mom of 3, balancing full-time work and school. Vicki had called in a bind unable to afford new tires for her car. The expense was unanticipated and without new tires she would not have been able to get to work. Merrill lent her the money and asked what she would have done if it weren’t for him. Vicki responded that she would have got a payday loan. This one event led to the creation of an idea that would forever change Merrill’s career path.

Merrill considered it unfair that people with sub prime credit, who don’t have financially supportive relatives, have to resort to overpriced payday or pawn shop loans. Merrill gives the stats:

“According to the National Federation for Credit Counselors, 64% of Americans do not have a savings account of $1,000 or more to cover emergency expenses. About 17% are… able to borrow money from a family member. Unfortunately, that leaves the majority of Americans with no family to turn to, and no access to traditional credit. Unexpected expenses can push them over the edge of financial stability.”

Approximately 30 million Americans take out at least 1 payday or pawn shop loan each year to help cover unexpected expenses. These loans are essentially predatory debt, often with interest rates of over 600% hurting borrowers’ chances of regaining financial stability. Indeed payday loan payments are fee based resulting in a large number of payments that aren’t applied to the principal. In 2011 payday loan borrowers paid over $8 billion in fees.

Merrill saw a gap in the market to offer a form of credit with rates somewhere in between credit cards and payday loans. He created ZestCash (now ZestFinance) in 2010 to offer an alternative solution to payday and pawn shop loans for Americans who don’t qualify for credit cards, but may still be reliable borrowers if the traditional FICO credit assessment formula is rethought.

Close to the Hollywood Sign | Flickr - Photo Sharing!Merrill teamed up with Shawn Budde a senior executive for Capital One who was experienced in traditional underwriting. Together they set out to use big data to give what Merrill refers to as the “underbanked” access to lower cost credit, potentially saving this group billions of dollars in the long run.

Traditionally underwriting has utilized between 10-15 variables through logistic algorithms and or decision trees to decide whether or not to offer credit. By using big data, advanced mathematics and machine learning, ZestFinance goes beyond the traditional under writing approach, by analyzing thousands of potential credit variables (previously not examined) to assess fraud potential, default risk and long-term customer relationship potential. One previously unexamined variable which ZestFinance analyzes to determine willingness to pay, regards pre paid cell phones (popular among those with sub prime credit). A person’s willingness to keep their pre-paid phone number active, can correlate with the likelihood they will make payments on their loan.

Today ZestFinance offer loans of $300 to $800 through Spotloan for rates approximately 50% less than standard payday loans. Unlike payday loans every payment made by the borrower reduces the principal as well as paying down the interest.

ZestFinance hope to bring the “underbanked” back into the financial mainstream. Merrill argues that if they can get just 10% of payday loan customers to qualify for ZestFinance loans, they will help save that group of money conscious customers $800 million. The loans are not cheap, but are a more affordable alternative for those that don’t qualify for traditional credit or don’t have relatives to borrow funds from.

To learn more about Douglas Merrill’s “big idea” watch his TedX presentation below:

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To combat economic pressures as customers increasingly migrate online, retailers continue to look for ways to entice customers to their brick and mortar stores. One such approach has been the rise of in-store dining. Back in the 1900s many U.S. department stores ran restaurants within their department stores, many of which have stood the test of time. With online retail sales expected to increase by 16% by the end of this holiday season, retail locations are looking to add an experience to their physical stores that the online space can’t offer.

Tommy Bahamas is a flagship example of how lucrative in-store dining can be. The tropical shirt retailer’s 14 (and counting) island stores with restaurants generate 2.5 times the sales of their regular retail locations. Furthermore, the company’s restaurants generate approximately 12% of Tommy Bahamas’ total annual revenue of $452 million. In the company’s new fifth avenue store there is a restaurant on one floor and a bar on another, perfect for that shopping break. Also notable is Tommy Bahamas’ focus on quality, delicious offerings, in contrast to the sub-par food court offerings you would find in the average mall. Check out this commercial of their Myrtle Beach in-store restaurant:

The idea here is that the restaurant is an extension of your brand and the quality needs to be consistent with your retail offerings. CEO of Tommy Bahamas, Terry Pillow describes the reaction fellow CEOs have had to their restaurant-retail concept:

“Fellow CEOs are fascinated first of all that we have it and the second thing they’re fascinated about is that we run it ourselves.”

Indeed in the rise of the hybrid restaurant-retail concept, the trend is for the retailer to run their own restaurant, rather than having it as a concession. One of my favorite clothing retailers Urban Outfitters, have followed suit introducing restaurants into their two Terrain branded home and garden stores. These restaurants play on the popularity of farmers’ markets offering locally sourced food, to give customers a different experience and menu depending on the locale. Terrain’s president Wendy McDevitt acknowledges the lure of the retail-restaurant concept:

“The one thing you can’t get in the cyber world is the tactile experience, and that won’t go away. Food is becoming bigger in terms of entertainment value.”

The in-store restaurant concept is also a great way to increase the amount of time each customer spends in the store. McDevitt estimates that if customers typically spend up to 90 minutes browsing, this can double to 3 hours if stop for a glass of wine or lunch.

Other stores increasing their restaurant-retail offerings include Nordstrom, who are adding contemporary diners and espresso bars to their current eatery options and JC Penney who plan to add juice bars and coffee shops to hundreds of their stores over the next few years.

I think the in-store restaurant concept if executed well could be very successful for a number of retailers, but what do you think? Share your thoughts in the comments section below. 

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As smart phones have grown in popularity, cellular network capacity has become increasingly stretched. As a result an alternative is needed to meet bandwidth demand. Hello, Wi-Fi. Today many cell phone carriers have Wi-Fi offload plans to limit the cost of expanding their capacity.

Take AT&T for example, the large carrier has set up approximately 30,000 of its own hotspots in Starbucks, McDonald’s and other public facilities in part to satisfy its subscriber’s media data network demand.

Small carriers however, are taking a more innovative approach to sourcing Wi-Fi capacity, by using a software called Devicescape. San Bruno, CA company Devicescape has identified an untapped opportunity to utilize unprotected public hotspots to expand cellular network capacity. David Fraser, CEO acknowledges this opportunity:

“There’s a huge network that’s been hiding in plain sight… Why not use it?”

How it Works

Devicescape have created a continually updated database of unsecured Wi-Fi routers owned by businesses and organizations. This database of usable hotspots is growing at a rate of 25,000 spots per day. Currently Devicescape has a database of 9 million unprotected hotspots. Devicescape’s software has been sold to mobile carriers such as MetroPCS and Republic Wireless. These carriers then install Devicescape software onto their network’s handsets. When these carrier’s subscribers make calls (unbeknownst to them) in many cases the Devicescape software will automatically detect and connect to a nearby Wi-Fi hotspot with available bandwidth.

Benefits of Devicescape’s Approach

Devicescape offers significant client benefits enabling approximately 40% of their mobile data to utilize Wi-Fi hotspots. While customers won’t necessarily know the difference, Wi-Fi is typically faster and more reliable reducing connection disruptions.

Threats of Devicescape’s Approach

If every carrier adopted this software, many public free Wi-Fi hotspots would get flooded with users, slowing access speeds. This could then lead to greater use of password protection, reducing the number of hotspots available.

There are also legal risks surrounding the Devicescape software. Harold Feld Senior VP of Public Knowledge a digital rights group, acknowledges that while Wi-Fi siphoning is probably not illegal, it is nevertheless a gray area:

“It’s like a limo pulling up in front of a soup kitchen for the free food.”

Devicescape has been careful to measure hotspot traffic to avoid already overburdened Wi-Fi hotspots. Nevertheless, the company has received complaints from some business owners. In response to such complaints Devicescape’s database has been amended accordingly to abandon using those hotspots. So far this response has been sufficient and the company has not yet been sued. 

Mobile data traffic is expected to increase 78% a year through 2016. With increasingly scarce network capacity in busy (city) areas, Wi-Fi can enable cell phone carriers to offer additional bandwidth without substantially raising costs. Time will tell if Devicescape’s approach can be sustainable, but given AT&T’s increasing purchase of Wi-Fi hot spots; the use of Wi-Fi offloading by cellular carriers looks set to continue.

What do you think? Share your thoughts in the comments section below.

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If you’ve been to any popular tourist spot, chances are someone on your Facebook friends list has too. After all what frequent Facebook user hasn’t seen a friend’s vacation snap shots of somewhere they themselves have been at some point? Frequently people posts pictures in front of popular tourist haunts such as the Statue of Liberty, Buckingham Palace, with Mickey and Minnie at a Disney theme park or even with that Times Square cowboy. Perhaps such pictures are even better shots than yours. Maybe your Facebook friend had better weather; which lets face it is very possible with the Buckingham Palace example. With so many people having similar vacation experiences, which are now more visible than ever before, it may be harder than ever to have bragging rights when it comes to travel.

An article in the July 23, 2012 edition of Fortune Magazine, suggests that there is a growing trend of one of a kind travel experiences. The article claims that a growing number of companies in the travel industry are starting to offer travel experiences that go beyond generic tourist spots. Here are some company examples:

Frommer’s Remix: this successful travel guide company now offers itinerary creation based on destination preference and interests. Users even receive a custom-made book containing maps to the different activities based on the hotel they are staying at.

An AirBnB option in France, image courtesy of Pinterest

AirBnB: back in May I featured a blog post on AirBnB, a San Francisco start-up, which offers a wide variety of things to rent. The website’s diverse offerings include interesting places to stay and unique activities. There’s an experience for almost any budget. You can go on a street food tour of London with locals or go to an urban rooftop farm in New York or an architecture exhibition in Munich; the options when you think outside the box are endless.

Fortnighter: New York company Fortnighter utilizes the talents of over 100 freelance travel writers’ local knowledge to create custom itineraries based on a user’s interests and preferences. This company custom designs trips of any length and can even help you decide where to go. Here is an example:

“One client asked the company to structure a three-week road trip through New Zealand. He had heard of caves full of mesmerizing glowworms but didn’t know any details, so Fortnighter’s writer did the research, tracked down an outfitter to escort him through the caves, and found hotels for 10 stops along the way.”

Essentially the company creates customized vacations based on local knowledge to save people hours of research.

One&Only Resorts, image courtesy of Pinterest

One&Only Resorts: One&Only Resorts is an upscale hotel company that tries to create memories by surprising its guests. The company’s concept is based on details, if a guest mentions a favorite food or song, the company will find a way to surprise them accordingly, perhaps by playing that song at dinner and serving that favorite food item. Essentially this concept reminds me of creating magical moments, something I did in my days as a Disney cast member.

Based on a True Story: An option for the millionaires out there, Based on a True Story organizes just a few dream come true trips each year. Here is the description of what they offer:

“We take our clients to the most secluded, untouched and awe-inspiring locations on earth and create… a magic-carpet-ride of exclusive experiences…  all in utter privacy. A travel experience that is individually created and truly yours alone. Our holidays provide strategic and seamless discovery, encompassing an eclectic range of incredible events and activities enriched by exceptional private chefs, slick logistics and utterly exclusive and authentic accommodation.”

One group of past clients were enjoying a bonfire after a South African safari, only to be surprised by Zulu tribes people performing a battle and drum performance. Based on a True Story trips include a professional photographer who helps to create a book of the once in a lifetime experience.

What do you think of the growing trend of experiential vacations? Share your thoughts in the comments section below.

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