Tagged: Change Management Toggle Comment Threads | Keyboard Shortcuts

  • feedwordpress 00:19:11 on 2016/09/22 Permalink
    Tags: AARON RENN, , , , Change Management, , , , , environment, , innovation comes from the edges, james clear, John Carpenter, john hagel, Katy Lynch, metaphors, pearls of wisdom, peter thiel, , Roosevelt University, Scott Kleinberg, Shia Kapos, silicon valley, , stategy, strategy, , texas, the edge of innovation, thiel   

    Dear Chicago: Embrace the Edge 

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    Dear Chicago: Embrace the Edge

    Last week, Peter Thiel casually and brazenly denigrated Chicago, hyping Silicon Valley while speaking at a Roosevelt University Chicago event:

    In Thiel’s own words: “If you are a very talented person, you have a choice: You either go to New York or you go to Silicon Valley.”

    Chicago has reacted with numerous self-depricating or defensive articles.

    Buck up, Chicago.

    According to the IRS, Five MILLION people have left California in the past decade. The exodus equates to a whopping net loss of $26 billion in annual income for the state. The majority headed to one of five states: Texas, Oregon, Nevada, Arizona, Washington.

    The reason for the California exodus is no secret: exorbitant housing costs, a housing shortage, the second lowest home ownership rates in the country, high taxes, statewide unemployment higher than the national average, low wages, fiscal instability, systemic gender/race discrimination, increasing business regulation, not to mention a dearth of companies solving *actual* problems, severe droughts, a water shortage, earthquakes, dry lightning, and accelerating ozone pollution levels (also among the highest in the country).

    Peter Thiel paints a rosy picture of Silicon Valley. Meanwhile Silicon Valley’s restaurant industry is literally starving.

    Location is everything. Research has proven that environment has a surprisingly strong influence on success. Unless you fit the Silicon Valley’s very narrow niche “mold for success” (read: white, educated, technology-savvy males under age 40 — age 50 if you are lucky enough to be a VC — with money and family connections), look elsewhere for opportunity. The folks in Silicon Valley are not more talented; they’re merely more insular, provincial, protectionist, and elitist with regard to membership in their private club.

    Remember folks: DIVERSITY DRIVES INNOVATION and INNOVATION COMES FROM THE EDGES. In the words of brainy entrepreneur James Clear: “Life is a game; if you want better results over a sustained period of time, play the game in an environment that favors you.” James also wisely once advised: “worry not — aim for the subtle art of not giving a f*ck.”

    Embrace the edge, Chicago. Don’t kow-tow to Silicon Valley pundits and bullies. You’re better than that.

  • feedwordpress 22:06:56 on 2015/12/30 Permalink
    Tags: agile, , business strategy, change agents, Change Management, , corporate change, , , , lean innovation, lean startup, prosci, stage-gate   


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    PROSCI change methodology has been widely used in both private and public sectors to manage “the people side of change.” The methodology is based on three phases: (1) PREPARING FOR CHANGE READINESS, (2) MANAGING CHANGE, and (3) REINFORCING CHANGE. But PROSCI is fast becoming a relic – a dogmatic, outdated methodology based on old school management and business strategy perspectives that should be deemed obsolete.


    Change has become much more multi-faceted. In today’s fast-paced, fiercely competitive world — a volatile world where ambiguity and fluctuation abound with an ever-accelerating rate of technology adoption — change is inevitable and constant. All organizations change, regardless of whether employees are “prepared and ready.”

    Executives and HR managers can no longer prod or coax people to change — and they can’t afford to wait until employees are “prepared and ready” for change. Neither can they merely be content to “manage” change; they need to be ahead of it. Implementing a three-phase change management control process, project workstream, and checklist will leave you the equivalent of three (or more) phases behind in the dust, struggling to recover pace.


    Beyond communicating a clear vision, allocating the right resources, and aligning performance management systems, the key to successful organizational change is removing barriers and creating circumstances in which employees’ inherent motivation and drive is freed and channeled toward achievable goals. Every single day. Doing so requires a shift in perspective; where employees are not merely informed about change or trained to manage/handle change but rather deemed to be an integral active component of the entire change equation.

    Instead of managing change, you need to lead through change and create it. “Change management” has shifted to “change leadership.” You need to recognize that in today’s brave new world, every employee — top to bottom in your organization — is a change agent and a valued member of your “continuous change team.” As are your customers.


    When it comes to strategic methodology obsolescence, ANYONE who professes to have the silver bullet solution in today’s volatile, uncertain world is selling you a half-sighted, flawed manifesto. For instance: practicing lean startup without acknowledging/integrating aspects of design thinking, agile, stage gate, and other “best practice” methodologies will only impede your company’s capacity to innovate and create what’s next.

    An organization’s ability to adapt and integrate MULTIPLE strategic methodologies — or better yet customize their own approach based on their company’s unique capabilities, current environment, and future market potential — will define its’ ultimate competitive advantage.

  • feedwordpress 14:34:08 on 2015/12/15 Permalink
    Tags: antitrust, , bumble bee, bumble bee foods, , business integration, , Change Management, chicken of the sea, cooley, , DOJ, flakeboard, gun-jumping, Hart-Scott-Rodino Act, howard morse, HSR Act, , litigation, , , mergers and acquisitions, monopoly power, Rockefeller, tuna   

    AntiTrust Law and M&A Deal Value 

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    AntiTrust Law and M&A Deal Value

    RE:INVENTION, inc. helps companies with pre- and post-merger (M&A) brand and business integration. The process of combining and rearranging businesses to realize merger and acquisition (M&A) deal value and materialize potential inside-out efficiencies and synergies is complex and riddled with numerous antitrust and other legal issues.

    Because of our understanding of operational integration issues and antitrust risks in M&A transactions, we’re committed to sharing solutions in a forum for your review. Our discussion today involves the antitrust litigation related to Thai Union (Chicken of the Sea) and their recently dissolved M&A deal with Bumble Bee Foods. Bumble Bee Foods offices are located just a stone’s throw away from RE:INVENTION’s HQ in downtown San Diego.

    Our interview that follows introduces Cooley LLP AntiTrust Practice Leader, Howard Morse, one of the country’s leading antitrust lawyers.


    RE: Can you tell our readers a little bit about yourself and your background in antitrust law with respect to company mergers and acquisitions (M&A)?

    Howard Morse, Cooley

    Morse: I am a Washington, DC-based partner and chair of the antitrust practice at Cooley LLP, where we represent clients, particularly in high-tech industries – including tech, life sciences and telecom companies – as well as automotive parts and consumer product companies.

    Early in my career I spent 10 years at the Federal Trade Commission (FTC), where I was a staff attorney, deputy for policy and assistant director of the Bureau of Competition, and was responsible for more than 50 merger enforcement actions under the Hart-Scott-Rodino (HSR) Act.

    For the last 15 years, I have been guiding mergers and acquisitions through the regulatory approval process at the Department of Justice (DOJ) and FTC.

    RE: Can you provide a basic overview of the nature/concept of “antitrust” for our readers?

    Morse: The term “antitrust” was coined at the turn of the 20th century, as the government established laws to counter the “trusts” or holding companies of the day, such as John D. Rockefeller’s oil trust (Standard Oil) and J.P. Morgan’s steel trust (U.S. Steel), which were recognized to have gained monopoly power.

    What we call “antitrust law” and much of the rest of the world calls “competition law” restricts agreements in restraint of trade, monopolization or abuse of dominance, and mergers and acquisitions that may lessen competition.

    The goal of antitrust is to prevent conduct, including mergers and acquisitions, that is likely to lead to higher prices – or lower quality, reduced service or less innovation – to the detriment of customers and consumers. It is not, as some mistakenly believe, aimed at protecting competitors from competition.

    RE: When is a merger or acquisition likely to run into antitrust concerns?

    Morse: The government focuses its attention on mergers and acquisitions among the largest competitors in concentrated markets, say when #2 and #3 of 4 major firms in a market propose to combine.

    The key question that the government asks is will the merged firm raise prices, compared to likely prices if the merger were not to take place, either unilaterally because the merging firms’ products are close substitutes or the merged firm will dominate the market or through coordinated interaction or tacit collusion among remaining firms.

    RE: When announcing the recent abandonment of the Bumble Bee / Thai Union deal, the US Department of Justice (DOJ) declared that “that the parties knew or should have known from the get go – that the market is not functioning competitively today, and further consolidation would only make things worse.” What do you make of that specific statement from DOJ Assistant Attorney General for AntiTrust, Bill Baer?

    Morse: Public reports indicate that the DOJ has issued subpoenas and is conducting a criminal investigation into whether the ‘big three’ canned tuna producers – Bumble Bee, Chicken-of-the Sea and Starkist – fixed prices. While the DOJ has not commented specifically on that investigation, there have been a number of civil lawsuits filed since the announcement that Thai Union was suspending its offer to acquire Bumble Bee in July.

    Companies considering a merger or acquisition with a competitor in a concentrated market ought to recognize that proposed transactions and the companies’ internal documents will be carefully scrutinized by antitrust authorities. If there are suggestions of price fixing or market division in company documents, the companies may find not only that they can’t complete their proposed deal but also that they become the target of a criminal investigation, which can mean large fines and even jail time.

    RE: To wit, Del Monte Foods originally considered selling Starkist to Bumble Bee before selling to Dongwon Industries back in 2008. Pre-deal information sharing has obviously already happened – with great frequency – in the tuna industry. At this point, is any merger and acquisition (M&A) in the tuna industry bound to be riddled with antitrust issues?

    Morse: Transactions involving smaller firms in a market – even deals in which they are acquired by one of the big firms – are likely to be looked at quite differently than those combining two of the big three players.

    RE: The Hart–Scott–Rodino Antitrust Improvements Act of 1976 (Public Law 94-435, known commonly as the HSR Act) guides the premerger notification and merger review process. Can you tell our readers a little bit about the Act and the waiting period?

    Morse: The HSR Act requires notification of proposed transactions that meet specified thresholds to the DOJ and FTC to allow the antitrust authorities to investigate whether they may lessen competition before they are consummated.

    Most deals are subject to an initial 30-day waiting period. If the authorities believe a thorough investigation is warranted, the reviewing agency will issue a so-called “Second Request” requiring the parties to produce additional data and documents before they can proceed with the deal.

    During FY2014, HSR filings were made for 1,663 transactions and 51 second requests were issued, in 3.2% of all transactions.

    The HSR rules are complex – much like the tax code – so firms are advised to consult with counsel but generally need to consider whether they have to make an HSR filing when they make an acquisition or will hold securities of the target company, valued over $76.3 million.

    Some transactions that firms may not even think of as M&A, such as entering into an exclusive license, may require an HSR filing if thresholds are met.

    RE: Due diligence and integration planning are vital for M&A deal success. But companies need to avoid unlawful premerger coordination. What are some of the things that a company can do to avoid antitrust issues during the HSR waiting period?

    Morse: The HSR rules prohibit firms not only from consummating deals but also from exercising control over the other party before the waiting period expires. And since the firms remain independent, allocating customers or coordinating prices can violate antitrust law.

    During due diligence, competitors need to consider antitrust issues when exchanging competitively sensitive confidential information. For example, they should ensure that they only share information required for due diligence and take steps such as restricting personnel that have access to information and limiting use of information shared, and in some cases setting up “clean teams” to review the most sensitive information.

    Firms can plan integration but cannot actually integrate during the HSR waiting period. Firms have gotten themselves in trouble when they started answering phones and handing out business cards at the target with the acquiring firm’s name, have had personnel report to managers at the other firm, or have sought approval from the other firm before giving discounts to customers.

    RE: What are some of the consequences or penalties companies face when their merger deals are scrutinized by the DOJ for HSR Act antitrust violations?

    Morse: A transaction may be delayed for months by a government investigation, even if the government never takes enforcement action. Keeping language out of offering memoranda, management presentations and other documents that must be provided to the government with HSR filings that may be misinterpreted by government can avoid such delay.

    If the government does conclude that a transaction will lessen competition, the typical remedy is divestiture of competing product lines. Where that is not possible deals may be blocked altogether or abandoned in the face of threatened enforcement, as we have seen recently with GE/Electrolux, Sysco/US Foods, and Comcast/TimeWarner.

    RE: Companies in a concentrated market with three or fewer competitors seem particularly susceptible to potential antitrust violations and tacit collusion. When companies are considering a merger or acquisition in a concentrated market, what if anything can they do to pre-empt collective dominance and collusion issues?
    Morse: Defending every case requires a careful examination of the facts. In some cases, one can argue the definition of the product or geographic market is broader and so not concentrated; in others one can argue that new entry will prevent anti-competitive effects; and in others one can argue that small fringe competitors or power buyers will constrain the merged firm. In dynamic, high-tech markets one can argue that the products are highly differentiated and rapidly changing, making collusion among remaining firms unlikely. In any case, it is important to consider the efficiencies that may result from the transaction, lowering costs or resulting in improved products to customers.
    RE: If companies in a concentrated market set the same prices for similar products does that always indicate an agreement to fix prices?

    Morse: Absolutely not. Two gas stations across the street from each other may well sell gas at the same price, posting their prices on a sign and their tanks for all to see, without fixing prices. Price fixing requires an agreement, though not an agreement in writing.

    RE: Originally there were rumors that Bumble Bee and Thai Union received subpoenas from the DOJ but Starkist didn’t, suggesting that Starkist may have been a whistleblower. Can you speak a bit about amnesty/corporate leniency for the first co-operator in an antitrust lawsuit?

    Morse: In order to encourage self-reporting of price fixing cartels, the government provides immunity or leniency to those that self report.

    The first company to report a cartel will be entitled to immunity if it does so before the government begins an investigation, it cooperates with the government, it was not a ringleader, it promptly ends its involvement in the cartel, and it makes restitution. Leniency may be available to the first company to come forward even after the government has begun an investigation.

    RE: Could seeking leniency for price fixing be a good alternative strategy for companies opposed to a proposed merger among competitors?

    Morse: For sure, it is a good bet the government will be skeptical of a merger in a concentrated market where there is a history of recent price fixing.

    Of course, while the first company to file for leniency may avoid criminal charges, it may still find itself liable for damages in civil antitrust suits. While in most antitrust cases, plaintiffs can recover treble damages, Congress in 2004 created an additional incentive for companies to report cartels, limiting civil damages recoverable from a corporate amnesty applicant to actual damages.

    RE: You provided expert commentary on the DOJ’s enforcement action against Flakeboard. What similarities or lessons learned (if any) do you see between the Bumble Bee / Thai Union DOJ investigation and the Flakeboard/Sierra antitrust lawsuit?

    Morse: DOJ obtained a $1.9 million civil penalty from both Flakeboard and Sierra Pine for violating the HSR Act, and they agreed to disgorge $1.15 million in “ill-gotten gains” for gun jumping.

    After announcing their merger, in the face of a labor dispute arose at one of the firm’s facilities, the firms consulted and reached agreement to close the facility and transfer customers to the other firm’s nearby facility, while the transaction was still being reviewed.

    DOJ alleged that conduct, which was undertaken without any assurance that the underlying transaction would be consummated, was per se unlawful under the antitrust laws, as well as gun jumping under the HSR Act.

    Whether what is at issue in the Bumble Bee / Thai Union matter is similar “gun jumping” activity, price fixing that pre-dated the merger, or lawful activity remains to be seen.

    RE: We’ve addressed what companies can do DURING the merger process and HSR waiting period to avoid anti-trust issues, Howard. Are there any steps pre-acquisition that companies can take to avoid running into problems with the DOJ? Meaning, as companies are considering an acquisition, what are the do’s and don’ts they should take to avoid running into problems later?

    Morse: Companies should avoid language in documents that suggest a deal is anti-competitive, for example, projecting that the deal will lead to price increases. At the same time, is important that companies consider, analyze and quantify efficiencies that will result from proposed transactions, and be able to explain why the deal will be good for customers. Certainly, companies should avoid writing documents that are a red flag for scrutiny, like I saw in one deal, when I was with the government, that said the proposed acquisition would allow the acquirer to “monopolize the industry … in an expeditious and timely manner.”

    RE: Are there any other Cooley anti-trust resources you can point our readers to for reference?

    Morse: Sure. Here’s a link to Cooley’s “How to Avoid Gun-Jumping” Article, a practical how-to for companies considering M&A opportunities.

    We hope RE:INVENTION’s interview with one of the nation’s leading M&A antitrust lawyers sparks thought and discussion among curious readers. We invite you to share your thoughts and stories in comments below. Many thanks to Howard Morse for sharing his insights.

  • feedwordpress 01:32:50 on 2015/11/20 Permalink
    Tags: acquisition, acquisitions, brand, brand consoldation, , brand itntegration, brand metrics, brand portfolio, brand reputation, , Change Management, , merger, , post-merger, pre-merger, , Whole Foods Market   

    M&A Brand Integration: How To Do It Right 

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    M&A Brand Integration

    During my days leading marketing and brand strategy at Whole Foods Market, we subsumed ten acquired individual operating companies and their brand names under the Whole Foods master brand. The six month M&A brand integration process was defined and implemented years after the initial mergers, thereby involving entrenched (and oft times, confusing and dissimilar) customer and employee perceptions and requiring extensive perception change management. Since then, I’ve advised several clients through sell-side M&A deals managing brand and executive transitions.

    Unfortunately, brand integration is often an afterthought in M&A deals. Companies get caught up in the deal bidding and negotiating process rather than assessing and planning for potential conflicting brand issues and creating a blueprint for future brand valuation/growth. Insufficient (or non-existent) M&A brand integration planning can have disastrous consequences including poor M&A financial performance and dramatically diminished future brand valuation.

    For M&A to work — if you want to leverage a CAPABILITIES PREMIUM in M&A — the deal needs to: (1) enhance your company’s distinctive capabilities, (2) leverage your existing competitive advantages, (3) complement your internal innovation processes, and (4) take your brand assets, brand strategy, and customer/investor/employee brand perceptions into account.

    Want to ensure BRAND is part of M&A pre-merger deal making and post-merger integration?

    Here are four tips:

    1. Evaluate Potential Brand Reputation Impact, Pre-Merger
    2. A successful M&A deal starts with an audit of current and potentially acquired brands pre-merger to determine how one brand might negatively or positively affect another in the brand portfolio or the company reputation. Are new brands congruent with the acquiring company’s overall brand promise? What legacy internal systems and equity assets do the brands associated with the deal bring to the table? These decisions require thoughtful analysis.

      Use common sense. An acquired brand doesn’t always have to take on the brand name of the acquiring company.

      At Whole Foods Market, we rebranded all acquired companies with one exception: a legacy brand (Mrs. Gooch’s) in Southern California. Local customers and employees were so invested in the Mrs. Gooch’s name that we permanently branded the La Jolla location in-store cafe as Mrs. Gooch’s to preserve the vested brand equity and recognize the brand’s heritage. It was a brand reputation win-win.

      Conduct thorough brand due diligence pre-merger and you will prevent unexpected, insurmountable post-merger brand integration challenges.

    3. Dedicate Resources to Manage Brand Integration Planning
    4. Consider appointing a full-time internal or external brand integration planning manager or partner during the M&A deal bidding and negotiating process, before the transaction finalizes.

      Having key full time integration resources in place early in the process can mean the difference between success or failure of any M&A deal. Without strategic leadership accountability, post-merger brand integration is doomed to fail.

      Give your integration team the responsibility of identifying the issues to be addressed and developing your internal brand integration plan – including spelling out “non-negotiables”. Integration project managers can ensure that executives and employees of both the acquirer and acquired entities understand and are committed to the same goals and communicate the same message.

      In the case of Whole Foods Market, our brand integration team included corporate HR employees, store team leaders, regional Presidents, regional marketing coordinators, regional art directors, store design engineers, and IT team members as well as a brand manager, investor relations manager, customer service manager and public relations (PR) manager. The diverse, cross-functional team helped us circumvent potential gaffes in store operational changes and multiple points of communication with quality assurance checkpoints.

    5. Pre-Empt Potential Brand Conflict Issues
    6. Customers, employees, and even investors can be fierce and territorial during post-merger brand consolidation. Executives need to clearly communicate the broad strategic purpose of the M&A deal to employees and investors, setting vision for the integrated brand portfolio (and unique individual brand assets). When it comes to customers, it is important to understand highly-charged emotional brand heritage and broaden customer perceptions of their invested brand while preserving aspects of the brand equity of the former entities. All three constituencies — customers, employees, and investors — need to feel involved.

      At Whole Foods Market, we were lucky to have well known, publicly stated visions and values to guide our post-merger brand integration process. In a company where vision and values aren’t well communicated to employees, you will inevitably encounter pre- and post-merger brand integration challenges.

      Employees help to define a brand. Engaged employees build strong brands. Thus, cultural integration goes hand in hand with brand integration. HR, PR, and Brand Integration project managers will need to work in tandem, addressing structural, political, and social variables. Awareness sessions and transparent internal/external communications can reassure employees and customers that pre- and post-merger brand integration won’t impact day-to-day business or their lives.

    7. Create a 90-Day Post-Merger Brand Transition Plan With Measurable Metrics
    8. A well-managed brand transition plan can provide a blueprint for growth. Integration is the key to future valuation creation. During the first 90 days post-merger, you need to verify due diligence data, gather additional intelligence information, create internal integration implementation teams, and identify/leverage internal integration resources.

      Your post-deal plan should be carefully coordinated in order to ensure successful implementation. An effective plan will:

      • align brand strategies,
      • identify and thwart cultural integration challenges,
      • establish operational transition parameters,
      • encourage and incentivize rapid decoupling of legacy internal systems,
      • dedicate resources and assign accountability,
      • identify “go-forward” initiatives and action plans,
      • define desired end states,
      • provide post-merger acquisition metrics such as EPS (earnings per share) accretive transactions value and EPS dilutive transactions value,
      • create mechanisms to monitor, measure, and manage customer, employee, and investor perceptions.

    Research suggests that companies that fail to bring brand into M&A discussions almost always underperform deals that are forged with deliberate, pre-planned fusion branding strategies. Proactive pre- and post-merger brand integration planning coupled with a sound implementation process can mitigate uncertainty, clarify the intent of the merger to customers, employees and investors, and ultimately determine a merger’s success or failure.

  • feedwordpress 20:07:33 on 2014/03/03 Permalink
    Tags: , , business success, Change Management, , executional excellence, implemention, , , , lego, , ,   

    How LEGO Learned How to Winch 

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    How LEGO Learned How to Winch
    Image credit: www.atvcourse.com

    Business experts will tell you that inertia — “paralysis or passive resistance” — kills companies. Other thought leaders suggest that active inertia — “relentless pursuit of the tried and true” — causes business failure. Neither is correct.

    What does inertia have to do with LEGO and winching, you might be asking. Bear with me, I will get there. But I need to make a simple point first….


    Few companies, if any, suffer from inertia. There is little to no evidence of companies being too paralyzed to take any action at all. Executives and employees are always busy doing something, even if only to justify their job. Alas, they are often accelerating the wrong activities and they aren’t doing the right activities well. They spin their wheels like a car stuck in mud.

    And active inertia (“relentless pursuit of the tried and true”) is rarely a company’s problem. Faced with mounting competitive pressure, most companies get desperate and unleash a flurry of new, oft ill-conceived initiatives to try to stop the bleeding. By doing so, they spin their wheels even faster and dig an even deeper hole.

    What causes companies to fail nearly every time is crummy (or sloppy) execution — akin to spinning wheels in mud. Crummy implementation cripples companies, not inertia. The biggest barrier to innovation is EXECUTIONAL EXCELLENCE. The world is littered with great ideas, poorly implemented.


    My family hails from Michigan and South Carolina, a state that boasts its own Mud Run Guide. Here’s what I know: when your car gets stuck in mud, you are almost always better off if you stop digging your wheels into the ground. Leave the wheel-spinning to half-wits. To get out of a mudhole, you need to add traction or use a winch.

    A winch is a handy hand- or motor-powered machine used for hoisting and hauling. Winching improves traction and power….implementation….and executional excellence.


    Today LEGO is the world’s #1 toy company. Sales are up despite a sluggish global toy market. Profits have grown 40%. But that wasn’t always the case.

    Faced with declining margins and value in the 80s and 90s, LEGO did what most ailing companies do. They got desperate and unleashed a flurry of new, oft ill-conceived initiatives to try to stop the bleeding. They binged on unbridled innovation – launching theme parks, clothing, jewelry, TV programs, electronics, video games, learning labs, publications, and ill-conceived strategic alliances.

    By 2003, LEGO was on the brink of bankruptcy. The company was virtually out of cash with annual losses mounting upwards of $300 million and a $400 million loss projected for 2004.

    How did LEGO recover from a 10-year period of declining performance? Company leadership stopped spinning their wheels and focused on improving execution.

    They shortened go-to-market product development time, organized to increase accountability and decision-making, shed unrelated businesses, built “change-readiness,” established global in-region manufacturing facilities, improved their safety record, and dedicated themselves to smarter 12 C’s of Commercialization performance. Instead of desperately pursuing uncontrolled innovation — spinning their wheels — they focused on improving their innovation success rates. In other words: they found a winch and added traction.


    Another example of the “wheel-spinning without a winch” phenomenon: Kodak.

    Contrary to media reports, Kodak didn’t suffer from inertia (“paralysis”) OR active inertia (“relentless pursuit of the tried and true”). The company was never short on new ideas. Kodak developed countless technology innovations over the years including the digital camera in 1975 but they failed to successfully commercialize it. They held $3 billion worth of patents, valued at more than five times the company itself. They suffered from numerous reorganization efforts, making it incredibly difficult to implement smart long-term strategy. Their eager and rash M&A and alliance deals — from Scitex to Imation to Verizon and Creo — lacked strategic due diligence and led to integration headaches. Kodak was undeniably IN MOTION, spinning its wheels like a car stuck in mud.

    Alas, Kodak never fully understood that their problem was crummy execution. They never sought or found a winch. They never improved implementation to gain better traction.


    A 2013 Accenture study found that only 18% of CEOs have seen their investments in “innovation” pay off — fewer than one in five. And according to research conducted by the Doblin Group, a startling 96% of all innovations fail to return their cost of capital.

    The key to increasing innovation ROI lies in improving innovation success rates. A 2005 study by Boston Consulting Group concluded that companies that concentrate on IMPROVING THEIR INNOVATION SUCCESS RATES achieve the greatest gains. Instead of spinning your wheels, you need to learn how to winch and add traction.


    Are you in an innovation rut? Instead of spinning your wheels and digging a deeper hole, get better at business execution. Create sound action plans but remember that execution and making strategy work is more difficult than the task of strategic planning (developing the strategy is never more important than the results). Hold people accountable, involve the right people in decisions, build “change readiness”, practice the 12 C’s of Commercializing Innovation. In other words: figure out a way to add traction. Learn how to winch.

    It’s basic physics. Winching can lessen the strain on any rig and increase torque. Winching can help companies that overestimate their capabilities. Winching can help your company overcome the most difficult of situations. Learn how to winch and you will always recover. Return on innovation depends on it.

  • feedwordpress 20:48:04 on 2014/02/26 Permalink
    Tags: actionable benchmarking, actionable results, audits, , brands, , Change Management, Coke, , General Mills, , , ,   

    The #1 Secret of Successful Benchmarking 

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    The #1 Secret of Successful Benchmarking

    Benchmarking can be a company eye-opener. Internal, competitive, and outside industry benchmarking all have merits. Internal benchmarking can foster best practices. Assessing performance versus competitors can reveal your shortcomings and tell you where to focus. Looking at other industries can generate creative ideas for growth.

    During my days leading marketing and innovation initiatives at Coke, General Mills, and Whole Foods, I participated in numerous company benchmarking exercises. We benchmarked quality measures, workload, product development, pricing, channel management, market information management, packaging design, and marketing implementation. Each company had its own unique approach to benchmarking — from searching publicly available data to primary research using IT-supported software tools.

    Here’s what I learned: the secret of successful benchmarking isn’t about HOW or WHERE YOU DIG. In other words, it isn’t about how you conduct your audit (there are no “right” or “wrong” rules). Or whether you benchmark performance inside the four walls of your company, against competitors within your industry, or outside your industry…

    The #1 Secret of Successful Benchmarking

    The #1 secret of successful benchmarking is knowing what to do with the information you discover — taking the results and making them actionable.

    Knowing where you stand provides a point of reference for what could be and reveals uncommon, oft surprising insights — but it’s only half of the equation. Discovery is not enough. Benchmarking data needs to support action to have any significant meaning or effect. And this holds true for companies of all sizes — from startups to global Fortune 100 corporations.

    How to Make Benchmarking Data Actionable

    Actionable data is always better than big data. The most important part of any benchmarking process is creating a plan of action that will improve organization performance. You need to leverage your new knowledge and implement changes.

    Some tips to get you started:

    1. Start with a Goal
      Before you launch any benchmarking initiative, define what you want to accomplish. Clear objectives. How will you use the data to create value? At Coke, our benchmarking exercise goal was to justify shifting from glass to plastic packaging in the Non-Carbonated Beverages Division.
    2. Schedule Collaborative Sessions To Review Benchmark Findings
      Facilitate internal discussion and interaction to identify ways that you can use results to improve business performance. After conducting retail industry benchmarking activities at Whole Foods, we held numerous cross-functional team member workshops to assess and plan store design and product merchandising changes.
    3. Improve Your Enterprise Asset Management Systems
      Despite IT asset management systems being at the bottom of the trough of disillusionment in Gartner’s 2012 Hype Cycle, a good asset management system can make actionable benchmarking less formidable. Sharing knowledge assets across your company can improve data utilization and performance. With nearly 40,000 employees worldwide, General Mills used benchmarking results to build a massive standardized system for managing enterprise learning. The result? Stronger total employee engagement across the organization. Early stage companies can do this too, simply by storing and sharing data between founders and future team members.
    4. Integrate Benchmarks Into Sales and Operations Planning Cycles and Day-to-Day Planning
      Help the front line. Ensure that benchmarking data is available to employees every time they make a decision about the future. This single act can boost innovation in your company from the bottom up.
    5. Reallocate Resources
      Consider realigning resources — tear down silo walls — to activate your company’s plan of action after benchmarking. Concentrate resources on realistic targets.

    Hungry for more benchmarking best practices? Check out this oldie but goodie from Harvard’s Working Knowledge titled, “Best Practices for Benchmarking,” originally published in 2003. Ahh, memories! That was the year I officially incorporated RE:INVENTION, inc..

  • feedwordpress 11:38:19 on 2014/02/11 Permalink
    Tags: , , business failure, , Change Management, change managment, , donald sull, , , , , , , innovation barriers, innovation management, , london business school, Michigan, , mudhole, passive resistence, South Carolina,   

    Crummy Implementation Cripples Companies, Not Inertia 

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    Crummy Implementation Cripples Companies, Not Inertia
    Image credit: www.atvcourse.com

    Many business experts will tell you that inertia kills companies. That the biggest barrier to innovation is inertia – paralysis or passive resistance prevents innovation from getting started.


    Few companies, if any, suffer from inertia. Executives, managers, and employees rarely are too paralyzed to take any action. They are always doing *SOMETHING* even if only to justify their job. Alas, they are often accelerating the wrong activities and they aren’t doing the right activities well. They spin their wheels like a car stuck in mud.

    My family hails from Michigan and South Carolina, a state that boasts its own Mud Run Guide. Here’s what I know: when your car gets stuck in mud, you are almost always better off if you stop digging your wheels into the ground and turn off your engine. To get out of a mudhole, you need to add traction or use a winch.

    In 1999, London Business School Professor Donald Sull also questioned the incidence of paralyzing business inertia and coined the alternative term “active inertia.” Sull suggested that active inertia — responding to market shifts by accelerating activities that succeeded in the past rather than ceasing activity altogether — causes business failure.

    Sull is partially but not completely correct.

    Inertia doesn’t kill companies; there is little to no evidence of companies being too paralyzed to take any action at all. And active inertia is rarely a company’s problem; faced with mounting competitive pressure, most companies get desperate and unleash a flurry of new, oft ill-conceived initiatives to try to stop the bleeding. What causes companies to fail nearly every time is crummy (or sloppy) execution.


    In my humble opinion, the biggest barrier to innovation is EXECUTIONAL EXCELLENCE.  The world is littered with great ideas, poorly implemented.

    Take for instance, Kodak. Contrary to media reports, Kodak didn’t suffer from inertia (“paralysis”) OR active inertia (“relentless pursuit of the tried and true”). The company was never short on new ideas. Kodak developed countless technology innovations over the years including the digital camera in 1975 but they failed to successfully commercialize it. They held $3 billion worth of patents, valued at more than five times the company itself. They suffered from numerous reorganization efforts — CEO after CEO — making it incredibly difficult to implement smart long-term strategy. Their eager and rash M&A and alliance deals — from Scitex to Imation to Verizon and Creo — lacked strategic due diligence and led to integration headaches. Kodak was undeniably IN MOTION, spinning its wheels like a car stuck in mud.


    Are you in an innovation rut? Instead of spinning your wheels and digging a deeper hole, get better at business execution. Create sound action plans but remember that execution and making strategy work is more difficult than the task of strategic planning (developing the strategy is never more important than the results). Hold people accountable, involve the right people in decisions, build “change readiness”, practice the 12 C’s of Commercializing Innovation. In other words: figure out a way to add traction or find a winch. It starts with analyzing and improving your internal innovation processes and your go-to-market strategies.

    Editor’s Post Script: No intended offense to Dr. Sull. He’d be an excellent thesis adviser were I ever to pursue a PhD.

  • feedwordpress 18:42:11 on 2013/12/09 Permalink
    Tags: , , , , Change Management, , , , , Kindle, Mayday, , , transformation, XBOX One   

    Looking Ahead to 2014 

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    Looking Ahead to 2014

    There are more than enough posts about predictions and trends for 2014 out there to entertain your mind. I’m not one to make predictions. I prefer to set the agenda. Two things I will talk about in this post to look forward to the next year: connected experiences and how we think about innovation.

    Let’s Talk About Connected Experiences

    While most of the discussion in 2014 will still be around the hot topics of Big Data, The Internet of Things, 3D Printing, and other buzzworthy topics; what holds these things together and can’t be easily replicated is an overall connected experience.  Organizations will still look at all of the hot topics as separate pieces, to see how they can integrate them, and this is usually how it starts: you starting testing in isolation until you figure out if works for you.

    But experiences are more fluid and connected than ever. The recent advances in sync technology that the XBOX One brings to the table is a leading indicator on how devices are connected experiences. You can bring them with you anywhere. And, while tablets and smartphones will become pervasive touch points in those experiences, the human element will not be replaced. People still want to have contact with people, if it makes sense.

    Amazon shows that they understand this better than ever with their Mayday feature that comes with the newest breed of Kindles. Whether they got it right or wrong isn’t the point. What they are saying is that they want to have contact with customers, and will be available with one click when the customer needs them. This is thinking ahead of the game, and just comes to show how they are “retail”.

    The Key Takeway Here

    The conversation about emerging technologies should be around the connected experience and outcomes for customers, not the benefits for an organization. Your point of view should define what to do and what not to do.

    To look back is to look forward. The saddest thing about 2013 is that the word “innovation” keeps getting diluted. It is now a marketing ploy. Before the end of the year, and every day after that, companies who are serious about innovation should ask themselves this question: how can we be the only ones who do what we do?

    The answer to that question isn’t about Big Data, or any other “hot topic”, it is about what are you enabling customers to do. How are you transforming them?

    People don’t remember specific features, they remember the experience had. Companies are confusing a product upgrade with innovation, and to believe that changing one thing is enough to make a splash is short-term-ism at its finest. A recent post on the Wall Street Journal has pretty much put it in perspective how executives are looking at innovation: “something that is innovative to them”.

    The Right Way to Think About Innovation

    The right way to think about innovation is this: how are we transforming customers? How are we helping them be innovative?

    This is a different way of thinking about value proposition; it’s about developing human capital. Not simply delivering a product or service “because that is what companies do”. Companies that believe that out-featuring competitors is the way to innovation riches are kidding themselves. You might feel that way in the short term, but you are simply adding more wood to the fire that creates a thick screen of smoke that distracts and annoys people.

    Customers, people, users, are experiencing more chaos than ever. Too many choices are creating noise in their lives. This is a huge opportunity for both startups and established companies to make an impact in people’s lives. The sooner you rethink how you look at innovation, the faster you will orient your efforts towards really thinking about how you might transform them.

    To finish, I’ll leave you with this last thought: the more you say you are innovative, the less innovative you are.


  • feedwordpress 22:43:56 on 2013/12/05 Permalink
    Tags: , Change Management, , , , , ,   

    Expert Series: Sperry Van Ness 

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    Expert Series: Sperry Van Ness

    RE:INVENTION’s Expert Series presents an interview with a major player at a company that is notable as progressive, transformative and/or innovative within its industry.

    In an industry primarily dominated by traditional approaches to business operations, innovative practices and thinking outside of the box can make all the difference. Sperry Van Ness International Corporation, a transformative commercial real estate brokerage and property management franchisor, was recently awarded as one of the most recognizable brands in commercial real estate in 2013 by the Lipsey Survey.

    This week’s Expert Series features five questions with Diane Danielson, the Chief Platform Officer of Sperry Van Ness.


    RE: First, can you give us a brief background of yourself and of Sperry Van Ness as a company?

    Diane: Sperry Van Ness International Corporation is a franchisor. Our day job is selling franchises to commercial real estate firms. They brought me in as the Chief Platform Officer, which is kind of a weird title, but I like to say it’s a combination of COO, marketing, technology and sales, with a focus on growing the bottom line. We have 175 franchise offices in 38 states across the United States and we’re expanding into Canada and Europe.

    As for me, I have been in and out of commercial real estate for past 20 years. I started out as a real estate attorney but then joined real estate companies and worked as the vice-president of business development and marketing at various large commercial real estate firms in the Boston area. Then I took some time off from the commercial real estate industry and got involved in a career where I built a company called the Downtown Women’s Club, which was a national women’s network that launched the first social network for businesswomen in the United States back in 2005. After that I ended up consulting with companies on technology and how to use technology most efficiently to meet your marketing and business development goals. And that led to Sperry Van Ness calling me and saying they had a perfect job for me, because I had all of the different categories, including commercial real estate and a legal degree, and everything they were looking for on the marketing and technology side.

    RE: What has been your biggest challenge for you at Sperry Van Ness and how did you deal with it? What did you learn from it?

    Diane: One of the biggest challenges we have is an innovative business model in a very traditional industry. Commercial real estate is very resistant to change… and 80% male, with the average age of a commercial real estate broker these days around 57 years old. Trying to change an industry is very tough; but the company I’ve been with has been doing things differently for about 35 years. We actually believe in the open sharing and co-listing of our sales properties; we’ve been doing that for years but it is very in-tune with the direction all industries are going these days. And also, we’re very big on technology. We’ve developed and partnered with software platforms so that our franchisees are not tied to their desks. They can use the cloud platform for all our tools, and they can work anywhere because sales are done on the road a lot of the time.

    RE: How did your team start building a culture of innovation or transformation?

    Diane: Well, it helps to have a CEO and President who is in his early 40s, who’s very visionary. Kevin Maggiacomo is a big believer in not doing business in the same way, because if you do, eventually somebody’s going to put you out of business. So, following his vision, it’s from the top-down. He has brought on people, others and myself, who are rewarded for trying different solutions. With a franchise business model, while some people may think it’s a very old-fashioned model, I find it very innovative, as it’s a way to have a smaller independent team that can use the tools and resources of a large shop. We’re able to be more nimble, because we’re smaller in a sense as a franchisor, and having local franchises allows us to test with them on a small scale. Collaboration is also something that we really stress in the Core Covenants of our company.

    RE: Have you found yourself having to transform your business methodology since you started? How have you done so?

    Diane: We had a series of changes that started before I got there, one of which was back in 2007 when we started moving towards a franchise business model. That was a big change and it helped us survive the economic downturn in 2009, and we actually came through that profitably, which was extremely rare for our industry.

    About two or three years ago, we signed on with Google apps. Taking everything into the cloud was a big transformation because it allowed us to work virtually and our franchisees were able to do the same. Then we helped customize another tool that our brokers use for marketing properties and listings. And since it’s cloud based, they’re able to access that virtually. So they’re able to streamline their overhead costs. The next phase, what we’re doing now and in 2014, is focused on increasing our franchisees’ productivity. It’s not just handing them tools and resources, it’s delivering training and helping them focus on their business so that they can increase productivity. That’s where we’re testing out some innovative tools. We are also bringing out and dusting off old resources that worked in past years and are still applicable today.

    It’s also learning from outside the industry. We are looking at what tech companies are doing, what other B2B businesses are doing and what franchises are doing. We were on the Inc. 5000 list this year so we went down there to learn from other companies that were not in our industry. I even hired somebody to lead our marketing team from the retail industry.

    RE: What do you think is most important for your company to do in order to keep up with the rapid changes in technology?

    Diane: Looking outside the industry. We need to learn from other industries; see what’s working for them and figure out how to apply it to our industry. We can’t just sit here and say nobody else is doing this in commercial real estate so we won’t either; we need to be proactive about thinking of new ways to change the way we do business and keep up with technological changes.

    We also have something called the “SVN Difference”. For me, that’s whenever we put the right people with the right process and the right platform. That together creates a system that allows people to maximize productivity.

    Many thanks to Diane Danielson for sharing insights during this week’s Expert Series. Look for our next Expert in two weeks time, right here on RE:INVENTION’s Everyday Inventive Blog.

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