A new world of insight

I've spent my career trying to understand consumers, their lifestyles, their needs and their passions. I've watched people play paintball, take showers, plant gardens and cook gourmet meals. I've traveled the world to understand how consumers in different cultures differ in their desires and preferences.

But last week, I had a brand new experience. I spent 8 days in northern Haiti. Our charge was to capture video that could be used by a mission group to promote their ministry, solicit donations and encourage child sponsorships. Unlike past international trips, I didn't stay in a 5 star hotel and venture from my air conditioned cab into a recruited home.

This was immersion. We worked side by side with locals, conducted interviews with people that had no clothing in villages that had neither electricity nor running water. We traveled in a taptap, essentially an open bed truck with a steel insert for passengers to hang onto.

Haiti is the poorest nation in the Western Hemisphere. Having spent a lot of time in India, I've seen poverty before, but never in such a beautiful setting. Haiti reminded me a lot of Hawaii, or of many of the other Caribbean islands, but with poverty spread all across it.

In spite of the poverty, I've never encountered a culture so warm and friendly as what the Haitians were. As we walked or rode around, children would run out to wave yelling "Hey Blanc, Hey Blanc" - translating to Hello White.

It was both sad and beautiful at the same time. Seeing children with nothing that could laugh, smile and play with stones made me realize how spoiled our culture truly is. Our nation is in a panic because our 401k's have dropped in value. In Haiti, people wonder when they will eat again.

I spoke with a couple of civic leaders about the state of their nation. They made a comment to me that they truly appreciate what America has done for Haiti, and that the generosity of money has been considerable. However, if Haiti is to ever rise out of it's current state, it's time to do more than send money. It's time to send "teachers". People that can teach people how to farm, how to run a city, how to teach children, how to run a small business.

It will only be through education that the economy will be able to turn around and begin to grow from it's current third-world status.

I know in my own life it's often easier to open the checkbook and write a check to a good cause than it is to commit my personal time and energy to something. But checks alone are not going to improve our world. This was my first trip of this nature. I've got a feeling, it won't be my last.

Business Lessons from the Garden

I've planted a garden this year in my back yard. It's the first year I've had a garden at this house, and the first I've attempted in years. As I work in the garden each evening, my mind thinks about the parallels between this patch of earth, and business... Sort of like "Garden Musings". The following are some of the connections that I've been making. I'm sure I will add more as the season goes along.

"Don't expect too much, it's very hard to get a first year garden to grow."

I've heard this from many people, and I'm finding there is much wisdom in their words. The soil is not cultivated or fertile. It takes a lot of time and energy to work the soil and add the ingredients to make it garden ready. They say that next year, once it's been established, it will be infinitely easier...

This is no different than going into a brand new market with a business or new product line. It takes a lot of money and effort to "prepare" the market for your offering. It is much easier to go into an established market with a product and differentiate yourself than to try to build a market where one did not exist.

"I planted a lot more seeds that what actually came up"

I'm sure this ties to my first point, but I was surprised at how many seeds never emerged. It took as much energy to plant the dormant seeds as it did to plant the ones that have sprung up. There was no way of knowing which would be which when I put them into the ground...

That sounds a lot like prospecting. You never know which appointment, or which phone call will culminate in a contracted job. It takes as much time and nerve to make a call that goes no where, as it does to make a highly successful call. As with the garden, a more established plot will yield a higher percentage of crop. However, it is safe to assume you will always have to plant more seeds than you can possibly hope to grow.

"My sweet corn didn't come up at all, so I replanted it. This time it's growing".

I love sweet corn. And I was horribly disappointed when several weeks went by with no sign of growth... So, I started over, bought more seed and planted it all again.

In business, there are times when you want it bad enough you just won't take no for an answer. If you are met with rejection, you start again (and again if necessary) until you see success.

"It takes a lot of time and effort before you see any produce from the crop"

I'm probably 60 days away from eating much from my garden. And yet I find myself spending at least an hour/day weeding, feeding and watering my young plants.

Prospects are no different. They seldom spring up overnight and bear fruit. They show some level of interest, but require nurturing and guidance before you gain the benefit from them.

The Cart before the Horse?

I've been watching a new series on the Discovery Channel called Pitchmen . In this show, self-proclaimed informercial superstars Billy Mays & Anthony Sullivan speak with aspiring entrepreneurs each week whose sole goal is to get a shot at a national infomercial and the resulting overnight riches. The show does a good job of showing both high-potential ideas as well as ridiculous ones.

Last week's show had a product being pitched called the "Spin-Gym". The inventor was Forbes Riley, a woman who is a QVC celebrity in her own right. She developed a fitness product that will "fit in your purse" and yet provide you with "total upper body fitness". She was understandably passionate about the product and is promoting it across every channel imaginable.

The problem is two-fold. First, the product is hardly unique. I had a toy as a child that does essentially the same thing (except that my toy made a cool sound when you spun it really fast). I'm not sure how she patented the thing, but evidently she did. But more importantly, this seems to be the classic solution looking for a problem. On the show she had huge body-builders using this product as if to imply their shape somehow came from this tiny product. Yes fitness is a growing trend across America. However, the form of any new product must suggest its intended use in a manner that is believable. Be honest, can you believe in a fitness product that you hold only with your thumbs? You really got the opinion that the "research" they did consisted of putting the Spin Gym into people's hands with the question of "Isn't this the greatest?" or "Can't you feel the muscle burn?". On the show the product was tested in two markets at different price points. Almost no interest was generated in either market.

Having this unique opportunity to see this real-life, time-compressed example was fascinating. This same thing happens across our country everyday, both with entrepreneurs as well as with established corporations. Somebody falls in love with an idea, and becomes blind and deaf to feedback. They are determined to muscle their way into the market, regardless of what they hear.

How much time, money and energy could be saved if they sought the feedback early in the process, at a time when they could still make modifications (to the product or the messaging)? Let's be outrageous here... What if they actually spent the time to understand the needs of their targeted consumer, then designed a product to satisfy it?

It sounds so simple. But it seems to fly in the face of the way so many do business.

Life Lessons from the Indy 500

I had the chance to go to the Indy 500 over the weekend. Exciting race, perfect weather and the true highlight of the Memorial Day weekend. Since the race, I've been reflecting on some of the parallels that I see between this years race and life in general. I'm listing some of these below:

• It's tougher than ever to get in the race. There used to be a considerable difference in the qualifying speeds between the fastest car and the slowest. This year there was only 3 mph separating them... That sounds a lot like the people and companies that I work with on a regular basis. What used to provide you with a strong competitive edge merely gets you "in the game" these days. What are you doing to stand out from the crowd? Being the "best" at a traditional measure may not produce the results it once did.
  
• Performance across the field is at an all-time high. 19 cars finished the race on the lead lap, a new track record. It wasn't that long ago that 1/3 of the field would drop out due to mechanical "failure" of some sort in the first half of the race. It seems to be a given that a car can now race for 500 miles unless an accident takes it out of the field... Are your customer expectations any different? We used to think that a car with 100k miles was on it's last leg. New cars today don't even require service until then. What used to be an acceptable level of failure, will now turn a consumer to a whole new brand.
  

• A few big names (Helio & Danica) provided most of the exposure and the profitability... How "real-world" is that? You may provide a dozen high-value products or services, but the odds are your consumers associate only one or two with your brand. Are you taking proper care of those to ensure their longevity?
• Mario Moraes crashed on the first lap, and yet earned more prize money than Paul Tracy who finished the race on the lead lap... It's not always the traditional measures in life that drive our rewards. Being faster or working harder may not guarantee that we "win" more than others. Sometimes it's about being in the right place at the right time, or making the right networking connection. It could be about being the better negotiator early on. At a minimum, it's about being aware of the bonuses that life offers us along the journey.

Transitions

I went to my oldest son's graduation at Purdue over the weekend. It's hard to believe that he is already finished with college and is ready to enter his next phase of life. At the ceremony there were no protests, no alternate venues or controversy of any kind. But there was a lot of talk of near term discouragement. Over and over we heard that this was the toughest climate for new graduates to enter the job market since the Great Depression. I have no ideas of percentages, but none of my son's friends have been able to secure jobs as of yet. When companies have the choice of hiring new graduates or people that are currently out of work with 5-7 years experience, why would they choose the "newbie"?

As a dad, I'm trying to encourage him to take a long-term perspective and realize the current economy will not stay so dismal forever. And yet, he's facing the same reality that many companies (including my own Insight2) is facing, in that he has to somehow survive the near term to be there in the long term.

Something we're both learning in this interim phase is the importance of taking a non-traditional approach to the future. He went through numerous university sponsored interviews, taking many of them to the second and third levels. But ultimately to no success. Likewise, I've found that the way I've used to sell business is not effective in this climate. Now that he is out of school, I've been pointing him toward my network trying to surface opportunities. In just a week, I've been able to get him as many interested interviews as he was able to get through the university in a semester. From a business standpoint, I can't sell what I've been selling in the way it used to work. I'm having to really open my eyes to new networks to see where the opportunities lie. And I'm having to adjust what I sell to meet the needs of my new clientele.

This is a tough transition for my son. It's been a tough transition for many US companies. But those that survive it will come out of it with a whole new perspective, a leaner approach and a true appreciation for innovative approaches to doing business... or to finding jobs.

How do you define your business?

Are you in the "plastics business"? Perhaps you say that you make small appliances, or fishing tackle, or gas grills... Most people describe their business by either the technology they specialize in or the end products that they produce. That's not an inherently bad thing, but it can limit your growth, especially if your consumers don't operate by the same definitions.

Let's say for example that you make aluminum shelving. Your expertise revolves around the forming, shaping and packaging of aluminum shelving systems. You sell your products through big-box retailers and consider your competition to be low-cost imported aluminum shelving.

But how do consumers define your business? Realistically, they're not looking for shelving specifically, but rather a solution for organization. Specifically they are buying an "organized closet" or a "neat garage". When they go to the store, they are probably not pre-disposed to aluminum shelving at all. They look at wire, wood and plastic alternatives, then move beyond shelving altogether. Cabinets, peg-boards, tubs and wall-mounted rail solutions all come into play.

Every one of these products is vying for that consumers dollar, and they will ultimately decide which variation will provide them with the best option for their specific need. By definition, the aluminum shelving company plays into a very small sub-set of the consumer's consideration. No matter how "innovative" they try to be with their shelving they may or not ever intrigue the decision maker when it comes to a purchase decision.

Fast forward and assume this same company redefines themselves as a provider of home organization solutions. The world of opportunity literally opens up before them. Now they can learn what the real needs of their consumer are, and develop new products accordingly. While they will still wear the lens of aluminum forming core competency, they can look beyond that in terms of areas they can explore.

Don't let your definition of your company limit the possibility of your future.

Are "Big-Box" Retailers Killing Innovation?

I just got back from the National Hardware Show in Las Vegas where I was able to meet with several associates from different companies. One resounding and discouraging theme that I heard all centered around their absolute dependence on big box retailers such as Wal-Mart, Lowes and Home Depot. They all spoke of great product ideas that they had developed, but were not going forward with because they could not sell them in to these behemoths. The buyers are not interested in taking chances on "unproven" products or in expanding beyond their comfort zones. One of my associates used to work for a heating company. He told me that in the five years he was there, he went through 6 buyers. No single buyer ever lasted through an entire heating season. In other words, they were never around to be held accountable for the items that they agreed to put in their stores. He described these buyers as "ultra-conservative, MBA bean counters with a very short term focus". No one with this mind set is going to be willing to take a chance on "unproven innovation". They only want to force ongoing cost reductions as they focus on their internal margins. If a buyer is only going to be in a job for a short time, what incentive is there to take any risk?

Things have not always been this way. There was a time when I worked for Whirlpool Corp and was the product manager for Kenmore refrigerators. In those days, the appliance buyer at Sears was like a King. Once a person made it to that level, he was there for quite some time, until a larger category opened, or they left the company to go onto greener pastures. The buyer carried a lot of weight; one of the most important aspects they looked for was unique innovation. We would often include the buyer throughout the product development process, so they could appreciate the needs of the consumer, and recognize the value of the features that we placed on their products. They would work with us on merchandising and placement as we all had a vested interest in the product's success. As time went on, relationships grew and trust was strengthened. They were more willing to share in the risks with us as we ventured into new product spaces.

The companies that I was visiting with have been forced to cost reduce themselves to the point that they now only focus on the big box retailer. They no longer have the means to support distribution to the type of independent shops that would love a unique product offering.

It's truly a shame in my opinion. I saw several great ideas (behind closed doors at the show) that will not make it to market. And for everyone I saw, I heard of two more that fall into the same category. Many of these were products that I would personally love to own (or at least have the opportunity to buy). But I will never have the chance to. What has become of our enterprising culture of innovation? I love to save money just like the next guy, but you know what? When I'm not shopping for commodities, I'm going to start shopping at independent retailers. The ones that might be looking out for my best interests (as a consumer) instead of shear volume and short term profitability.