Saturday, May 29, 2010

Survey Indicates Business World More Complex Than Ever

Creativity and innovation the keys to business survival. Heed economic indicators, not schizophrenic stock market. Five keys to a real-world business plan.

U.S. financial markets continued their slide, hampered by uncertainty over how tough U.S. regulators will get with Wall Street speculators and how many blue-chip financial institutions may get sucked into the mounting European debt crisis. The key word here is “uncertainty” not actuality.

In the real world, consumer confidence is rising as the job market and housing front continue to improve. On Tuesday, The Conference Board said its Consumer Confidence Index rose to 63.3 points, up from 57.7 points in April. The index got a boost from the six-month consumer outlook which jumped to 85.3 from 77.4, the highest since August 2007. A reading of 90 indicates economy on solid footing, 100 means growth. Index hit a record low of 25.3 back in Feb 2009. Home sales were better than expected in April. Existing home sales were the highest in five months according to National Association of Realtors (NAR) and median home prices rose for the second straight month, 2.1 percent in April despite an 8-month inventory on the market. And ad spending continues to rebound as researcher IDC projected U.S. online ad spending to shoot up 12.6 percent by end of 2010, it has now raised that number to 19 percent to $31.5 billion. The change follows a string of surprisingly strong numbers for all segments of online advertising, even display, which had been in decline for the past two years. Last week, the Interactive Advertising Bureau said internet ad spending rose 7.5 percent in Q1 to $5.9 billion.

Creativity key to corporate survival

A newly released IBM study of 1,500 CEOs found that 79 percent expect increased global complexity and only 49 percent feel prepared to deal with it. The IBM study was based on face-to-face interviews with leaders of all size companies in 33 industries and 60 companies.

Surveyed execs identified “creativity” as the single most important leadership competency for enterprises seeking a path through this complexity. How so? Creative leaders expect to make deeper business model changes to realize their strategies. To succeed, they take more calculated risks, find new ideas, and keep innovating in how they lead and communicate.

CEOs now realize that creativity trumps other leadership characteristics. Creative leaders are comfortable with ambiguity and experimentation. To connect with and inspire a new generation, they lead and interact in entirely new ways. CEOs saw the need to seed creativity across their organizations rather than set apart “creative types” in siloed departments like product design. To benefit from the diversity of ideas each employee can contribute. Standouts encourage a new mindset of questioning. They invite employees at all levels to challenge assumptions based on past experiences and scrutinize “the way we’ve always done things.”

Our take? Great ideas, but a commitment to creativity and agility is more easily said than done when you factor in quarterly analysts and shareholder pressure and a hyper-paranoid workforce that’s scared to death of having a mistake pinned on them.

5 keys to a real world business plan

According to blogger, Seth Godin, the traditional corporate or venture capital-seeking business plan is a croc.

“If I want the real truth about a business and where it's going, I'd divide the modern business plan into five sections,” quips Godin:

1. Truth
2. Assertions
3. Alternatives
4. People
5. Money

The truth section describes the world as it is. Tell me about the market you are entering, the needs that already exist, the competitors in your space, technology standards, the way others have succeeded and failed in the past. The assertions section is your chance to describe how you're going to change things. We will do X, and then Y will happen. We will build Z with this much money in this much time. The alternatives section tells me what you'll do if that happens. How much flexibility does your product or team have? If your assertions don't pan out, is it over? The people section rightly highlights the key element... who is on your team, who is going to join your team. 'Who' doesn't mean their resume, who means their attitudes and abilities and track record in shipping. And the last section is all about money. How much do you need, how will you spend it, what does cash flow look like, P&Ls, balance sheets, margins and exit strategies.

Cell phones use more for data than calls

CITA, the wireless industry association reported last week that the amount of data in text, music, e-mail and other activities surprassed voice calls on mobile devices in 2009.

According to comScore, total cell phone subscribers from 2009 to 2010 is about the same, but the number of users going online is up across almost all Web categories. Visitors to social networking sites like Facebook and Twiter increased 78 percent. Many more users are going to reference site like or wiki, up 46 percent and banking sites up 45 percent.

Top categories for browsing on mobile devices

1. Search 32.1M users +36%
2. Social networking 27.3M users +78%
3. Weather 26.1M users _+ 21%
4. News 24M users +29%
5. Sports info 19.7M users +25%

Don’t be fooled by the schizophrenic stock market. This recovery – no matter how fragile – is the real deal. Today’s market leaders are the ones who’ve had the pedal to the metal since the depths of the recession, not the “duck and cover” crowd. Agility, creativity and the willingness to make mistakes (and learn from them) will guide you through all types of water, no matter how turbulent.


Wednesday, May 12, 2010

Markets and Economy Slog Through Fortnight of Tests

New research points to impact of social media and ‘digital natives’ on your brand.
Despite last Thursday’s stomach churning “flash crash” in the financial markets, most U.S. stock indices are clawing their way back to positive territory for the year. This resiliency, in the face of the European debt crisis, the Time Square Bombing, the Staten Island Ferry crash, the BP/Gulf of Mexico oil spill, flooding in the South and tornados in the Midwest, is encouraging.

U.S. payrolls rose by nearly 300,000 in April, the largest monthly jobs gain in over four years. Most experts are ignoring the fact that the squishy “official” unemployment rate rose to 9.9 percent from 9.7 percent. Experts say it’s a sign that once-discouraged Americans have returned to the job market – not a deluge of layoffs from corporate America.

The construction and manufacturing sectors also showed signs of life in the latest economic report, raising hopes of an improving job market. The Institute for Supply Management Monday said the manufacturing barometer had improved 60.4 percent in April, the highest level June 2004. A Commerce Department report said consumer spending rose 0.6 percent in March – the largest increase in five months and households saved less, socking away 2.7 percent of their income in March down from 3.0 percent in Feb. Again, we see the gradual reduction in consumer savings as a confidence indicator, not a return of the conspicuous consumption that marked the latter part of the previous decade.

Is the worst over?

“The worst of the economic impact on Internet advertising is over and the seeds of growth have been planted,” said PricewaterhouseCoopers’ David Silverman in a statement following the release of a new study his firm did in conjunction with the Interactive Advertising Bureau. Forrester Research, Zenith Optimedia and other media forecasting groups have generally revised their 2010 and 2011 ad spending projections favorably in recent months, with most of the upside going to growing sectors (Web, online video, social media, television, outdoor) with a modest slump to continue in out of favor sectors (newspapers, magazines and radio).

Social media and your brand

Though slightly more than 50 percent of regular users never post status updates on Twitter; 70 percent do so on social networking sites like Facebook. Experts say Twitter acts more like a broadcast medium than Facebook does, but users are more than three times as likely to follow brands and companies on Twitter as others users of social networks do, with over 40 percent using Twitter to learn about and provide opinions on brands, according to a recent Edison Research study.

So will social media deliver measurable results for marketers? Well, more than half of marketers surveyed by Datran Media in its fourth annual Marketing & Media Survey say they’re confident it will, and only one in eight (12%) say they’re confident it won’t deliver results. Researchers said social media continues to be a wildcard, but it’s getting easier to measure the impact of a tweet or an update on LinkedIn on the final conversation.

Social media is not as effective at building search engine rankings as it is for building brand awareness and reputation, says a recent Marketing Sherpa study of over 2,000 marketers.

Social media IS effective for:
• Increasing brand or product awareness 49% agree
• Increasing brand or product reputation 45%
• Increasing public relations 43%
• Increasing Web site traffic 41%
• Improving search engine rankings 35%

The future?
Anti social networking of teens, i.e. your future consumers

Last week, the Pew Research Center found that half of American teenagers — defined in the study as ages 12 through 17 — send 50 or more text messages a day and that one third send more than 100 a day. Two thirds of the texters surveyed by the center’s Internet and American Life Project said they were more likely to use their cell phones to text friends than to call them. Fifty-four percent said they text their friends once a day, but only 33 percent said they talk to their friends face-to-face on a daily basis. The findings came just a few months after the Kaiser Family Foundation reported that Americans between the ages of 8 and 18 spend on average 7.5 hours a day using some sort of electronic device, from smart phones to MP3 players to computers — a startling number,

The question on researchers’ minds is whether all that texting, instant messaging and online social networking allows children to become more connected and supportive of their friends — or whether the quality of their interactions is being diminished without the intimacy and emotional give and take of regular, extended face-to-face time.

Gary Small, a neuroscientist and professor of psychiatry at U.C.L.A. and an author of "iBrain: Surviving the Technological Alteration of the Modern Mind," said in a New York Times interview that so-called “digital natives,” a term for the generation that has grown up using computers, are already having a harder time reading social cues. “Even though young digital natives are very good with the tech skills, they are weak with the face-to-face human contact skills,” he said.

While many parents and educators fret that the ease of electronic communication may be making teens less interested in face-to-face communication with their friends, we think marketers and employers need to adjust their communications strategies for the crowdsourcing nature of today’s digital natives.

Will young people still be able to sell and communicate?

“Teaching new sales people how to ask good questions and how to listen and keep the intelligence gathering dialogue going in a face to face setting is an absolute ssential,” said Eric Wynne, President of Wynne Media Company in a recent panel discussion I moderated. “It doesn’t come naturally to many of them as they’ve been attuned to communicating by screen in a very truncated fashion.”

Molly Sargent, Principal of Professional Impressions Consulting concurred. “Younger sales people just haven’t been trained the right way. You can’t just do your due diligence on the Web. There’s more to researching a company than Google and Hoovers. They’re not trained in how to pick up the phone, how to ask those critical questions, how to find the internal champion, how to sleuth ahead of time before the call.

At the end of the day, people want to do business with people they like and trust. With all the new technology tools available for reaching, tracking and micro-targeting our prospects, let’s not forget the most important part of selling and marketing successfully -- human interaction.