value creation

There are many popular stories about product companies like IBM and GE transitioning successfully to service-based sales. And while there are also stories of the occasional failure such as Boeing’s offer of financial services, the conventional wisdom is increasingly that all product firms should transition from dependence on product sales to selling value-added services. But is this valid?

In The Outsiders, William Thorndike argues that the most essential skill for a manager is capital allocation. To prove his point, he profiles CEOs such as Henry Singleton of Teledyne and John Malone of TCI who, while not household names, achieved outsized returns by wisely deploying their firm’s resources.

I recently wrote an article for OPENfor.business entitled, “Are You Making Excuses for Not Building Your Brand or Are You Embracing Its Potential?” In it, I explained that some CEOs try to explain why brand-building isn’t relevant or possible for them by claiming “Our situation is different.” But the unique challenges they think face are, more often than not, really just excuses for not having the commitment, discipline, and focus to build a great brand.

The idea of disruption excites some people and terrifies others. Consider the recent case of The New Republic, in which a new, disruptive CEO came in and vowed to “break shit.” The company’s top journalists balked, the brand was sullied and the business still struggles. And all for what?

For decades, marketers plied their craft according to a simple formula: Advertising creates awareness which in turn produces sales. This was not, as many would argue, a mistaken belief. Virtually all of the great brands of the 20th century were built using that model and many still prosper with it today.

In the go-go eighties, Dunlap’s enthusiasm for aggressive cost cutting and massive layoffs made him a corporate superhero. His subsequent indictment and conviction on fraud charges led business people to question his character, but not necessarily his methods.

Have you ever wondered why customers say they buy your products based on price - and then, in the end, they also stop buying because of price?

What's that phenomenon all about?

It’s been more than 50 years since marketing thought began to shift toward what became known as the marketing concept—an attempt to focus the firm on customers. Yet, in practice, the customer centricity that the marketing concept produces is still highly firm-centric, usually concerned with trying to sell customers more of what the firm produces.

The CES is a good one this year. Everywhere is IoT. And honestly I am little tired of hearing IoT or “Internet of Things” which is estimated to become a $7 trillion industry where thermometers, clocks, garbage cans, toilets, washing machines, watches, smart phones, fridges, baby monitors, garage doors and coffee makers are all connected digitally, allowing seamless interactions and smart living for us. Sensors are cheap and can be deployed everywhere collecting data, unnoticed.