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• How Broken is Your Business Model?
• Is the concept of masculinity changing?
• New hiring strategy: 'No experience necessary'
• Hot market for buying and selling a business
• Facebook: Ratings are now 'Recommendations'
• Reducing absenteeism from workplace stress
• Five reasons to use a list press release
• End conversations with a clear call to action
• Secretly snoop on competitor's tweets
• Are competitors changing your Google listing?
• The key to growing your business 26% faster
• Make sure employee reviews don't backfire
• Much more...
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How Broken is Your Business Model?
If you think your business model isn’t at risk of obsolescence, you’re probably not paying attention.
by Steve McKee
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HASBRO RECENTLY REPORTED a double-digit decline in revenue and a big internal overhaul. That followed Mattel’s news that it will be hiring its fourth CEO in as many years as it also tries to overcome slumping sales. Why are the behemoths of the toy business in such trouble? Because their most significant historical distribution channel, Toys “R” Us, declared bankruptcy.
Why did Toys “R” Us declare bankruptcy? Because of Amazon.
It’s true that other factors contributed to the decline of all three companies, including an ill-timed leveraged buyout that loaded Toys “R” Us with debt. But it was the advent of e-commerce in general, and Amazon in particular, that is dealing the heaviest blow. Toys “R” Us’ demise means that Hasbro and Mattel must find a way to adjust to the same distribution dynamics that a year earlier felled Sports Authority and caused Whole Foods to wave the white flag.
While the winds of change have always been unrelenting, never before have they created such noticeable gusts. We feel them in the marketing consulting business; for example, Google, Facebook and their ilk rapidly continue to sweep up ad dollars that used to come our industry’s way, causing a permanent shift to which firms like mine must adjust. I suspect you feel the breeze in your business as well.
In research we conducted this year, a plurality of corporate leaders confessed to unprecedented difficulties in managing (and even understanding) what’s happening to their businesses, with more than four in 10 going as far as to say they need an entirely new business model. It was especially true of companies whose growth is slowing and/or who are struggling with the “Amazonification” (nee: commoditization) of their industries.
Clearly, this is no time to be complacent. Because there is no time to be complacent. It’s all happening too fast.
Corporate strategy used to largely focus on carving out a defensible competitive position within an industry. Today it’s not enough to think in terms of the niche alone, or even of the industry. It really is a question of business model. As one of my partners recently quipped, we’ve got to stop defending the gates and focus on building the tower. We have to be willing to sacrifice branches to save the tree.
We must become the destructor rather than the destructed. It’s on us to question everything about the business proposition we’re putting forth into the world, granting no quarter to sacred cows.
For example, as Hasbro and Mattel face what amounts to existential challenges, what business model, exactly, should they be pursuing? To the casual observer, they both look like toy manufacturers. Is that what they really are, or should remain? Are they toy developers? Toy market-makers? Are they in the business of play? Entertainment? Education? Should they pursue vertical integration? Disintermediation? Cooperation?
These are deep and consequential questions, and the more of them they explore, the more additional ones may surface, at least for a time.
Which leads to the question for you: How broken is your business model? If you say “not at all,” I say you’re probably not paying attention. You may be out in front of your competition, but these days you’re less likely to spot them in the rearview mirror as you are darting out from a side street, arising out of the dust or dropping from the sky. We’re now in a “butterfly effect” economy, in which a shift in one business model can affect all others.
Most leaders don’t have their heads in the sand; they have some sense of where their business model is being threatened, up to and including obsolescence. That’s a good sign. To paraphrase Samuel Johnson, nothing focuses the mind like the sight of the gallows. But most also struggle with what to do about it.
That expertise, in fact, is the “tower” my company continues to build. Ironically, our changing business model is to help other companies identify and leverage their changing business models. It’s nothing if not relevant to the times.
There’s a cliché that says every family is dysfunctional in its own way. Similarly, every business model is broken — or breaking — in its own way. If you’re feeling the marketplace shifting under your feet, you’re not alone. Nothing, it appears, is beyond disruption or off limits to the forces of creative destruction. Not to pick on Amazon, but the company announced it’s going to start delivering packages straight to the trunk of our cars, for crying out loud.
So, yes, every company should ask itself, “How broken is our business model?” But there’s a second, more important question: “How might we break someone else’s?” All it takes to transform threat into opportunity is the proper mindset.
Whatever the case, don’t ignore the very real (if sometimes imperceptible) likelihood that your business model is becoming obsolete. Even if your company is cruising along, someone or something is coming after, hovering over or undermining it.
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Is the concept of masculinity changing?
Is the Marlboro Man an outdated archetype? This character left a long-lasting impression on advertising and the media in terms of what it meant to be a man. But in 2018, amid a rise in discussions around gender identity, toxic masculinity and other hot-button cultural topics, many are claiming the Marlboro Man is a relic from a bygone era, especially among younger cohorts who are more likely to resist broad, demographic-based targeting than older age segments.
In a potentially surprising development, marketers in categories not always known for progressive messaging, such as men’s retail and grooming, are helping to lead this change. Brands such as Axe, Harry’s and Bonobos have introduced campaigns that probe what defines masculinity and why some of its traditional pillars are problematic.
While the approach has courted backlash, it’s one of the key ways these brands are showing they’re perceptive to the thoughts of Gen Zers and their expanded notions and internal critiques of gender.
Sources: Marketingdive.com, Aug. 20, 2018
New hiring strategy: ‘No experience necessary’
More employers are abandoning preferences for college degrees, specific skill sets and work history to speed up hiring and broaden the pool of job candidates, according to a recent analysis of 29 million job postings by Burning Glass Technologies.
Many companies added requirements to job postings after the Great Recession, when millions were out of work and companies were stacked with résumés. Now, the tightest job market in decades has left employers looking to tamp down hiring costs with three options: Offer more money upfront, lower their standards or retrain current staff in coding, procurement or other necessary skills.
Across incomes and industries, the lower bar to getting hired is helping self-taught programmers to attain software engineering roles at Intel Corp. and the coding platform GitHub, Inc., and improving the odds for high school graduates who aspire to be branch managers at Bank of America Corp. and Terminix.
Amy Glaser, senior vice president of Adecco Group, a staffing agency with about 10,000 company clients, estimates one in four of the agency’s employer clients have made drastic changes to their recruiting process since the start of the year, such as skipping drug tests or criminal background checks, or removing preferences for a higher degree or high school diploma.
Source:
The Wall Street Journal, July 29, 2018
Hot market for buying and selling a business
A record number of small businesses changed hands in the first half of 2018, according to the most recent report by business-for-sale marketplace, BizBuySell. The growth can largely be attributed to a growing number of baby boomers exiting their business as well as improving business financials.
The number of businesses sold so far is already on pace to surpass 2017’s record-high transactions. The $526,048 median revenue of businesses sold in the second quarter reached a new high with a 7.4% increase from last year. Asking prices increased 4% from second quarter of last year to $260,000, raising the median sale price 4.4% to $239,000.
According to BizBuySell’s demographic survey, baby boomers still own the majority share (53%) of small businesses, but the demographics of buyers are shifting. Incoming buyers are less likely to identify as Caucasian (65%) than current owners as a whole (71%). They are younger, with the majority less than 50 years old. What’s more, one-third of buyers are non-natural born citizens, and 64% of these are first-generation immigrants.
Finally, women make up 22% of the buyers. Although they are a minority, more young women in their twenties are becoming business owners compared to their male counterparts.
Source: Smallbiztrends.com, July 26, 2018
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Facebook: Ratings are now ‘Recommendations’
Facebook is changing the way that users leave feedback about local firms. Instead of leaving a star rating on a one-to-five scale, users are now prompted to simply answer “yes” or “no” as to whether they would recommend a business. Once an option is selected, users are asked to provide review details through a structured, guided process that includes tags, text and photos.
The new Recommendations interface is intended to inspire users to provide more in-depth information. Through the tags and prompts, Facebook is hoping to get richer, more structured data about each business from its users. The tags will allow themes to emerge on what a firm is known for. Moreover, there is now a character threshold you have to meet to post a review (similar to Yelp). This should result in lengthier, more comprehensive feedback from individuals, and reduce fraudulent content.
You may be wondering if your current reviews will disappear. The simple answer is no. Going forward, the rating associated with a business will be a mixture of past star reviews and new yes/no recommendations.
Source: MDGadvertising.com, Aug. 8, 2018
Reducing absenteeism from workplace stress
WApproximately one in five adults in the U.S. experience mental health challenges every year and, unfortunately, work is often a contributing factor to those challenges. In a survey of 17,000 employees across 19 industries, more than 80% of respondents said that workplace stress affected their personal relationships, and 35% said they always miss three to five days of work a month because of workplace stress.
So, what can be done? The Lancet Psychiatry published a novel study showing the benefits of giving managers just four hours of training on mental health. Specifically, the researchers found that after six months, the managers’ direct reports had an 18% reduction in work-related sick time off (while the control group had a 10% increase). Based on this reduction in work-related sick time off, their cost-benefit analysis concluded that every dollar invested in training yielded a $9.98 return.
“You don’t need to be a licensed professional to move the needle on mental health,” according to Sarah Greenberg, a licensed psychotherapist and leadership coach. “It is just awareness and human relations 101: How to be kind, how to listen, what to look out for and how to create an environment of emotional (or psychological) safety.”
Source: Quartz at Work, qz.com, Aug. 9, 2018
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Five reasons why the list press release is a high performer. Lists beg to be read by journalists and readers alike. Think: “Top 10 Things to Do in Chicago” or “8 Easy Tips for Losing Weight.” Here’s why they are so effective: 1) List headlines provide a clear preview of the content. 2) List headlines grab the reader’s interest and make the reader wonder what they’re missing out on. 3) Lists are easy to scan — face it, most people feel pressed for time and scan rather than read. 4) Lists feel authoritative and valuable. 5) Lists appeal to human nature because people prefer things and ideas that are well organized.
Source: www.ereleases.com
Want someone to take action on something? End your conversation with a clear call to action. Whether spoken or written, conclude by spelling out the actions you want taken — a meeting, approval, funding, a commitment, etc. Ending with “If you have any questions, do not hesitate to contact me” is a wasted opportunity to finish strong. Instead, make your call to action positive and concrete, such as, “I’d like your approval to proceed” or “When can we start?”
Source: www.fastcompany.com
Secretly snoop on competitor’s Tweets with Twitter’s “List” feature. When set up correctly, a List timeline will let you watch a stream of Tweets from chosen accounts without having to publicly follow them. Instead of clicking on your competitor’s “follow” button, click the vertical ellipsis icon beside the “follow” button, and tap “add or remove from lists” to add the account to your list. To remain incognito, when creating a new List, be sure to select “private” and not “public.” To view your lists, click on your account photo icon and select “Lists.”
Source: www.ragan.com
Some clients just keep pushing for discounts — sometimes even after you have already agreed to a discount. What can you do to handle this type of negotiating tactic? Start by being absolutely clear on your price and the reason why you’re sticking to it. Otherwise, if they see weakness, they’ll see it as an opening to push some more. Don’t show that you need their business more than they need your solution. If they continue to push, try moving the discussion to other areas of negotiation. Ask what is more important to them than price, or if there is anything other than price they are willing to negotiate on (delivery times, payment terms, further purchase options, etc.).
Source: www.mtdsalestraining.com
If you want your company to grow faster, give yourself some choices. Doug Hall, author of the Jump Start Your Business Brain book series, conducted a study in which he grouped 96 small and medium-sized businesses based on how many fresh marketing ideas they were considering. The companies with the fewest choices saw an average grow rate of 4.5% over three years. Those with the most choices grew, on average, 26%. The fast growth companies also had higher profit margins and happier employees. The lesson is to push yourself and your team to come up with one new marketing idea a week. Most of the ideas may not work, but the more choices you have, the smarter decisions you’ll make and the faster your company will grow.
Source: www.bloomberg.com
Make sure your employee performance appraisal doesn’t backfire. A study from the Columbia Business School finds that when reviews are conducted such that the employee is evaluated against their past performance rather than against the performance of their peers, the reviews are seen as fairer, which in turn improves both productivity and morale. When compared against peers, the social comparisons often lack the specific details needed to improve performance. This made employees less open to feedback, regardless of whether it was positive or negative.
Source: www.adigaskell.org
What type of video closes the most B2B sales? In a recent study of 600 B2B decision-makers, 55% said case studies are the best way to move prospects down the purchase funnel. A separate study discovered B2B buyers’ single biggest motivator was learning how others are using a product. These buyers aren’t interested in hypotheticals or promises. They want to see outcomes — attributes you can put on display in a case-study video. B2B buyers need something to justify the purchase when they approach their superiors. Case-study videos provide social proof, which rests on the principle that people are more likely to take action when they have seen others take action.
Source: www.entrepreneur.com
Are competitors changing your Google My Business listing? Anyone can suggest a change to your Google My Business (GMB) listing, including your competition. These user-generated changes can be made live on your listing, and you might not even be notified about the changes. This includes changing your physical business location. That’s why it’s good practice to log into your GMB dashboard frequently. Once there, switch back to the “classic view” of the dashboard and then select “Google Updates.” It’s here where you’ll see a box that allows you to “Review Updates” that were either made or suggested.
Source: www.searchengineland.com
Arbitration is not always the answer. Many contracts require that disputes between the parties be solved by arbitration. This helps to avoid a costly legal battle and assures the dispute won’t be made public. But there are disadvantages. While touted as faster, that’s not always true. And there is no appeal from the arbitrator’s ruling. Talk to a disinterested attorney before agreeing to a contract with an arbitration clause and consider the motives of the other party. Chances are, they believe they’ll do better with arbitration than going to court.
Source: www.smbiz.com
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Business Intelligence Report (ISSN 1091-9597) is published 12 times a year by DBH Communications, Inc. PO Box 22337 Kansas City, MO 64113, email: [email protected]. Single subscriptions are $89 per year.
The intent of this publication is to provide business professionals with informative and interesting articles and news. These articles, and any opinions expressed in them, are for general information only and are not intended to provide specific advice or recommendations for any individual or business. Appropriate legal, accounting, financial or medical advice or other expert assistance should always be sought from a competent professional.
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