The Value of our Competition

I'm a runner - sort of. By that I mean I have run seriously in the past, and plan to do so again in the future. I have the kit, and the capability, but today am lacking the right weather. I guess you could say I'm a fair weather runner. But that's another blog post - for now, let's just take it as accepted that I'm a runner.

When I run, I am faster, and more focused when I run against a goal - that could be a time, a distance, but ideally it's another runner. I'm a tad competitive, and so want to push myself harder when I see another - to catch them, pass them, and keep my pace up. I realize this (as a runner) and seek out competition.

In other aspects of my life, I see the same behavior traits manifest themselves, and seek out competition where I can find it. I know my own performance in whatever it is I'm doing is enhanced when I have a competitive motivation. "Winning" isn't the end game in these situations, rather it's the ability to harness a latent aspect of how I was built to push harder, to do a better job and be favorably compared.

I think marketplace's experience companies behaving like this as well, however with a strict set of market dynamics blinders on, most companies don't understand the value (to themselves) of their own competition.

I was reminded of this today, when I heard that the market-leading dominant airline in my part of the world, would be starting service to an under-utilized, previously ignored little airport that happens to the home base of a start-up airline that's making some PR and other waves. This move to serve this airport is intended as a 'kill-shot' to the start-up. This start-up is doing what any small business needs to do - it's trying to get attention for itself by screaming from any available rooftop about it's services and trying to sway customers away from their obvious choice - the frequencies, loyalty programs and the fact that you can't get around the country without getting onto the major carriers' planes. They've an uphill battle - the list of failed start up airlines going up against this incumbent player is long and not particularly illustrious.

The story and lesson here isn't the new little carrier though, it's the impact on the established player of competition. Like any established player that has marketplace dominance, when it doesn't feel threatened, it gets complacent and lazy. It is one of the most loved and and also most hated organizations in my nation. It can be pretty cutting edge, and offers fantastic levels of service and value at times...its' people are innovative and push to make the customer experience memorable at times. But when it's not motivated to keep its customers - those are the days when you're lucky to get where you're going, lucky not be snarled at, and probably much poorer for the purchase of their offerings. They tend to fall back into "screw the client" mode very fast.

You see we like it as customers when an organization understands it needs to earn our loyalty, and keeps trying to impress us as we are involved with them. It makes us come back - pointedly it makes us not want to try the untested new player in town - and stick with what we know works well. Our marketplaces have a few of these spectacular providers around - but they stand out because they are so rare. What Tim Horton's, Disney or Zappos understand is that competition makes them reach farther, push harder and it makes them better at what they do. It helps them ensure that they don't get complacent and lazy and they see they ought not to try to kill off the competition, but rather they should learn from it and adopt its best practices (and a fair share of their competitor's customers).

You see the greatest value as consumers we can get from a providor is the understanding that they need to continually earn our custom. The smart organization leverages it's competition to provide that motivation.

When Things don't Go as Planned

I was on a plane on the weekend that was sick. That was clear as we sat on the taxiway and the on-board computer wouldn't reboot. I guess that's an important bit as it took 45 minutes of trying. (must run Windows). I'd have thought there were redundant systems but whatever. The good news was that we didn't have to return to the gate and we were able to take off. Or so we thought.

About 10 minutes into the flight I noticed we weren't climbing anymore. Flying at about 12,000 feet we cruised over the white countryside and when the engines relaxed (ok, not a technical term, it conjures up your bowels, not Pratt & Whitney thrust) and I popped on the map program on the screen in front of me. Now, I was on Air Canada and they do have great inflight A/V options so I spooled through various map views and saw us turn to the north. Not the right direction to our destination. Interestingly, I knew there was an issue about 10 minutes before the crew said a thing. Turns out this time the flaps wouldn't retract. (they aren't controlled by a computer perchance, are they ?) That meant we couldn't access some relatively vital control surfaces. (these matter on airplanes I've heard rumoured). Anyway, to cut a long blog short, it meant we landed again back at our origin after 45 minutes of burning off fuel and flying about in awkward circles. We went in very fast as landing profiles go for this plane type, and so got the firetrucks on the runway to meet us. A real-life emergency landing. Better safe than sorry I say, but I'll admit something about it struck me as odd. We stopped, dead stopped on the runway - wing flippers in the air and just sat there. I did wonder about this as the urgency was for the fire dept. to check brake temperature - not remove passengers from the molten brakes 3 feet below the JetA1 containers. You'll be pleased to read the brakes were fine. Phew! I can tell you were concerned (for the brakes).

The balance of the story is mundane. A new airplane was found but not the crew for it. The passengers going beyond the airplane's destination (including yours truly) were left to their own devices and the mercy of the destination ground crew. Happily for me it wasn't my first rodeo, but it did make my 6 hour trip into one lasting 12 hours. Quite a first world issue and not worth whinging about.

It's ok though. I got a free sandwich from the airline. I have to say though, I wonder what they did for the brakes on the other plane ? You know - to make them feel better too.

Let's Change the Business Model

Ever thought about reinventing your business ? I don't mean providing new services or expanding the offering, I mean fundamentally changing he economic model of how you make money.

Let me offer an example. Let say you make zippers (invented in Canada btw... look it up). Your zipper business has traditional pressures, manufacturing material cost increases and pressure from offshore competitors with lower labour costs. The price you're able to command in the marketplace is under pressure too as your product risks commoditization. Normal stuff in a business sense and not dramatically changed I might suggest (except in scope) in the last 10 years.

Historically you have sold zippers on a unit basis and discounted based on bulk purchases, which mapped to some degree to large manufacturing bulk order efficiencies. But. And here is where is gets interesting. What if you examined the value created by the zipper of those that bought it, and instead of selling it, you elected to rent it, or charged per hour that it was used. Now my example is a tad extreme here I’ll admit, as a zipper doesn’t constitute a large percentage of the cost of say, a pair of trousers, but the theory here holds. Placing a small sensor device within the materials to understand (and have relayed) when it was zipped (vs not) would enable you to gather usage profiles and put together a pretty clear picture of the nature of your offering’s use. Instead of selling it, perhaps you might charge per zip-up (or zip-down dependant on the market segment). We don’t think much of the value of a zipper normally – except when we really need it, and it becomes an indispensible part of the overall product. Ever thrown away a pair of pants due to a broken zipper, or perhaps a jacket or a tent that’s not kept out bugs ? I have. Now let’s extend this a little further. What if I offered hot swaps – replacement zippers so the users wouldn’t experience downtime (sorry) or have to throw out the whole greater package. Interesting yes, but it doesn’t make sense, does it…zippers are very very inexpensive and easily replaced. OK, let’s talk jet engines instead with the same situation imposed. Hmm.

As we look at our businesses, often the age-old pressures and tasks of pushing down our sourcing and creation costs and trying to fight for share in our old-world approach to buying & selling traps us.

Open up your creative side, and imagine how your customer uses whatever you do, and then creatively try to address that need – with a win for them in mind. That may see you radically reviewing how you collect their money.

Fire in the Middle East

Is this unexpected ?

No really, should the idea of a repressed group of people fighting back and being very angry surprise anyone..?

I was reading a little from Reza Asian (the author of No god but God) and learned the following today.."Seventy-five percent of the population of the Middle East is under the age of 35; fifty percent is under the age of 25. In Egypt, the median age is 24. In Algeria it is 27. In Jordan it is 21. In Yemen it is an astonishing 18! According to Reza Aslan, it is this restive, socially conscious, politically active, and globalized youth bulge that is changing the face of modern Islam." With unemployment reaching up to 40% in some parts of the region, is it any wonder that these people are restless, frustrated and angry..?

If you combine that with leadership that has been thrust upon them, supported by (suspect in their view) western governments and an almost complete lack of freedoms that we take for granted here...well it's only needed an ignition point. That came from the Tunisian student who set himself alight and captured the feelings of the generation, that it was too much to bear.

The youth in the middle east aren't very different from youth anywhere else. They believe themselves infallible and have enough knowledge to identify what they don't like. They don't have all the solutions (As is obvious from the streets of Cairo these days), but in reality what very young person does..? The vacuum here is wisdom and calm leadership from a voice that is respected by them - one that will be listened to. Historically, as in the west, that came from the religious leaders, but they appear to have been compromised by their own manipulations of power and perceived alignment with these autocratic regimes.

So what will happen - will they buy into the "I'll be nicer in future" comments the leaders in Egypt and other countries are making ? (I promise not to run again in future). Or will they take their cue from the Who - "Won't get fooled again". No one knows, and that includes the various deeply interested local parties that are very invested in the potential outcomes.

Can we help, should we help, if we did want to, who would we help ? All valid questions and all have varying answers. If I have learned anything it's that the values I hold dear, and define my way of living are my own - they shouldn't be forced onto anyone else, so to preach that this solution, or that direction is best for them reeks of hypocrisy and a blatant mis-read of the sentiments flowing across the region. My hope is that a voice of reason trusted across the age-divide emerges, and helps calm an extremely combustible situation.

Right now we have a wild-fire, and like a real fire, it will consume all in it's path until it reaches a natural or man-made obstacle. It will keep burning unless extraordinary measures are taken to put it out. Or it will die out naturally once it's passion dies. Ether way, it'll leave behind a charred landscape that will take time to prosper again.

Feeding Your Relationships

A good friendship, a strong one - it can withstand a period of inactivity. Weak ones can't. Even the strongest ties wither over the long term though, and years of no interactions erode the very idea of the friendship.

The death of a friendship isn't loud or clear or something we perceive at the same time, rather it is insidiously creeping in the background. It's the unspoken birthday greeting, or the lack of awareness of some major happening in the others life. Beyond when you stop speaking, it happens when you no longer think of one another. And then one day you just know it's gone.

It's not hard to keep it alive though either. The occasional discussion or the Christmas card holds it status quo for long periods. But like any living thing, you can only abuse a friendship through neglect for so long.

The death of a friendship isn't something we actively contemplate, so your task for today is to think about some old friends and make a conscious decision on whether a little investment there is worthwhile. In the end with any friendships, we should all acknowledge that no decision to act is a decision in itself.

The Killer App

As a fan for a long time of what they do and unabashedly showing some national pride RIM lately makes me very sad. You see they guessed wrong and are now on a downward slide.

Their products are still top notch and they still do corporate email connections that are the most robust and resilient. But it's not enough and these days it's not even the right card to be playing.

Phones morphed - if this is news to anyone the next point may be too freaky to consider. They moved from devices where our communication has broadened from push to pull. Talk to someone on my phone ? Well sure it's possible if you don't want to video conf or announce your proximity seamlessly or browse or play games. (did you know the #1 game platform isn't Xbox or Playstation or Wii, rather it's the iPod Touch).

RIM and the Blackberry suite of devices have been all about the email connection and for a long time as society's comfort level with non-voice uses of phones were developing, we all saw email as the killler app. That served them well, becoming one of the worlds largest five smart phone firms. But as their emergent role seemed firmly in place, other players (Apple, Google) saw fit to change the focus and pushed "apps". Better screens, resolutions and processers and user interfaces made this possible. With limited success at first, this app focus did eventually take off and while RIM has seen this and started to embrace it, in reality they are too late as they didn't move away from their QWERTY email centric devices fast enough. Sure there's a pad in the works, just like a hundred other companies. Sure they have an app store - but it's not a fully functional ecosystem the way the Android or iPhone one is. It's an afterthought to develop for RIM.

Moving forward what's the best path for them ? License out their software approach (for corporate email servers) like Palm did. But where is Palm now ? Continue to push away like Motorola ? (but admittedly that company went way downmarket and RIM may not have the stomach to be a price competitor having focused on value creation until now).

RIM is a victim to a trend that has moved on. So save your Blackberry as a museum piece. You can position it alongside your electronic calendar organizer with that cool stylus pen.

Sublime

Perhaps it was the early hour, dawn scratching through the cold air at ground level.

Perhaps it was every nerve fiber being accelerated, or the stability and luxury I was ensconced in. Maybe it was the beauty of the landscape, one of those frost-tipped-trees mornings where forests are painted an intricate white.

Hurtling along at 200kph and watching the rearview in case a 'fast' car came along, I moved with the effortlessness of a bird up and over hills and curves.

It was relaxing and exhilarating, beautiful and blurred all at once.

What a great way to start a day. Unforgettable.