Summer 2011Price hike for all servicesDVD rentals and streaming services split (DVD mailing now called Qwikster)Customers outraged (took to social media)CEO Reed Hastings apologizedKept price hike, got rid of QwiksterAll too often, businesses will take a bad idea and run with it—only to have to come back later and pick up the pieces.But Hastings decided to cut his losses rather than draw them out. Not only was his decisionrefreshing, but it proved to be the best plan for his business in the long run: after losing 800,000 afterannouncing Qwikster, Netflix gained a net 610,000 customers in Q4 of 2011.
Maxine Clark, founder and CEO of Build-A-Bear WorkshopAn advisory board made up entirely of kids (find out where to open new stores, which products to create next, and whichproducts to discontinue)Clark has developed a keen attention to detail (Build-A-Bear’s teddy bear sneakers are equipped with tread bottoms for traction, andthe miniature teddy bear binoculars are actually functional)Clark listens to her employees as well. When Build-A-Bear is getting ready to launch a new product, Clark contacts the stores with the highest new-product-launch salesrates and asks for input and advice to relay to the rest of her team. Over 60 percent of Build-A-Bear customers are repeat customers who plan their visits in advance, and the 400 Build-A-Bear locations worldwide brought in over $394 million in 2011.
“All those that have ever worked with Michael Dell, and have experienced him first-hand, havesaid he's one of the most intense listeners you'll ever meet. He just insists upon listening over talking. Iworked with a Dell country manager from the Netherlands who had a meeting with Dell. He didn't sayanything at all for 45 minutes. When he finally spoke, he asked one question that simply cut through theBS.” - Verne2 KPIs: First, measure the number of minutes you spend listening compared to talking. Second, measure the ratio of questionsyou ask versus answers you give. The more questions you ask, the better you’re listening.
After Research In Motion (RIM) CEO Thorsten Heins took the reins of the company, heintroduced himself via video with the same rhetoric RIM had been repeating for ages about howeverything was going to be fine. Wall Street reacted negatively, with stock prices falling 13 percent.xxiInvestors were clearly displeased with the PR-canned messaging. Heins later clarified his message in aninterview, admitting that there had indeed been a shift in the mobile market and that because RIM had notrecognized it initially, the company had lost its competitive advantage. But, he said, there would be manychanges coming, both in structure and products, to help counteract this shift. Stock prices reactedpositively, climbing three percent.
The “hacker way” has defined the culture of the company. The foundation of the “hacker way” culture is the hackathon, an all-nighter that occurs every fewmonths at the company. There’s only one rule at a hackathon: no one is allowed to work on anything heor she normally does. This is the chance for Facebook engineers to try out a crazy idea and create newproducts to show Zuckerberg and othermanagers. This intense event has resulted in many of Facebook’shigh-profile features, including, more recently,Timeline.
Your company needs employees who will “poke the box,” or take initiative to implementtheir crazy ideas. You need the ones who aren’t afraid to speak up or do something new. If your companyitself doesn’t “poke the box,” you’re at risk of continuously playing catch-up rather than setting standards.“The job isn’t to catch up to the status quo,” says Poke the Box author Seth Godin. “The job is to inventthe status quo. You need a team of fearless employees. Hire the creative-thinking risk-takers, the ones who willjump from an airplane but build a parachute on the way down.
Carol Bartz, former CEO at Yahoo, was spectacularly ousted from the company in the fall of2011. Her infamously enraged reaction to the firing phone call and her recounting of it to the press weremore passionate than her leadership of the company—and that was exactly the problem. Bartz didn’twork out because she had no passion for what Yahoo did, and she didn’t attempt to spark a passion or reenvisionthe company to be in line with what she did love. She worked at a company she wasn’t trulyinterested or invested in. She didn’t belong there and ultimately floundered as a result.
Love the work you’re with.If you died doing what you loved, what would that be?
In the past, cars were unveiled at auto shows, but Ford decided to unveil the new Ford Explorer ineight cities simultaneously and on Facebook, giving fans exclusive advance notice. All communicationsefforts, from broadcast media to digital integration, were focused on the launch. On July 26, 2010, Fordfinally unveiled the Explorer with a combination of earned, owned, and paid media creating incredibleresults. Ford was able to reach 99 million people on social and 400 million online, with 500,000 homepage visits as opposed to the normal 10,000. The company calculated its marketing efforts had greaterimpact that day than if it had bought a Super Bowl ad. The Ford Explorer was the number one trendingtopic on Twitter and number two trend on Google, ousted by Lindsay Lohan due to her recent stay at arehabilitation center. Ford was the first auto maker to reveal a vehicle via Facebook, and for its ability toadapt to changing market conditions, the company reaped much better results than it would have with atraditional auto show press launch: sales went up 100 percent from the previous year.
Business success is Darwinism at its finest. Just as in human evolution, survival of the fittest will determine the ultimate success or failure of your business. Circuit City and Borders are examples of companies that didn’t survive, being paralyzed with fear in the face of changing consumer behavior and the digital age.Circuit City was founded in 1949 and enjoyed great success. In fact, author Jim Collins referred to it as a “Good to Great company” in his 2001 classic, Good to Great. In 1992, the value of $1 in Circuit City stock was $311.64. Unfortunately, Circuit City couldn’t keep up with the rapidly changing times. The company was complacent, a clear mistake in the aggressively competitive and fast-moving electronics industry. By deciding not to move into gaming as other retailers did, and not to do large in-store promotions with successful companies such as Apple, Circuit City created an opening for Best Buy, now the top electronics retailer in the U.S. Circuit City also failed to improve its online presence, just as online retailers such as Amazon were starting to really take off. The once-number-two electronics retailer in the U.S. filed for bankruptcy in November 2008 and closed all 567 of its stores in January 2009. Borders’s big mistake was sticking too stubbornly to its retail presence, investing money to improve the in-store experience for customers and expanding globally. The company invested heavily in physical stores as consumers were flocking to the Internet. Borders treated the Internet like a passing trend, outsourcing online operations to Amazon until it finally decided to take control in 2008. But by then, it was too late: the retailer was already in debt, lagging behind, and short on cash to invest. The deal with Amazon was ultimately a win for the online retailer: by the time Borders debuted its own Web site, Amazon had taken a massive portion of the online market share. Borders was always one step behind, going heavily into CD and DVD sales just as the industry was going digital. The company waited far too long to get into e-readers and e-books, and once it did, was too broke to spend enough on devising a digital strategy. Again, Borders outsourced the problem, this time to the Canadian e-reader company Kobo, Inc. Borders had built far too many physical locations (many more than Barnes & Noble), which there was no need for, especially in an era heading toward digital. While the industry shifted, Borders didn’t. The bookstore ultimately filed for bankruptcy in February 2011 and closed its 625 retail stores by September 2011.Not taking a risk is the riskiest thing you can do. Your company can’t stand still as the world around it steadily churns forward with modernity. Just as people adapt in order to survive, so must your business. http://www.theatlantic.com/business/archive/2011/01/what-went-wrong-at-borders/69310/In the year since gaining independence from its erstwhile parent, The Limited, Abercrombie has continued its gently provocative ways. This brand image represents a drastic change from the company's origins. During the first half of the 20th century Abercrombie & Fitch Co. was the definitive store for America's sporting elite, outfitting big-game hunters, fishermen, and other adventurers ala Ernest Hemingway. After the chain went bankrupt in 1977, Oshman's Sporting Goods revived the Abercrombie & Fitch name but shifted its focus to more contemporary sporting goods and a wider array of apparel for men and women. The Limited, Inc., after acquiring the company in 1988, eliminated sporting goods entirely.In 1887, a 16-year-old boy left his home country of Sweden for the promise of New York City, named John W. Nordstrom. He arrived with only five dollars in his pocket, unable to speak a word of English. He ventured to Alaska where he earned $13,000 in a gold mine stake He had befriended a man while in Alaska, Carl Wallin, who owned a shoe repair shop in downtown Seattle. It wasn't long before the two decided to go into partnership and open a shoe store together.In 1901, the two opened their first shoe store, Wallin & Nordstrom, in downtown Seattle. This was the start of what would become the retail legend of Nordstrom, Inc. From the beginning, John's business philosophy was based on exceptional service, selection, quality and value. The company built a devoted customer base; and in 1923, the partners added their second store.The company soon grew to become the largest independent shoe chain in the United States. By 1960, Nordstrom had eight stores in Washington and Oregon, and the downtown Seattle store became the largest shoe store in the country. By the early 1960s, the company was looking for new ways to spread its wings. Venturing into the clothing market, Nordstrom purchased Best Apparel, a Seattle-based clothing store, in 1963.While Nordstrom was growing nationally, it focused on catering to customers' needs, individually. Instead of categorizing departments by merchandise, Nordstrom created fashion departments that fit individuals' lifestyles. The company's philosophy has remained unchanged for more than 100 years since its establishment by John W. Nordstrom in 1901: offer the customer the best possible service, selection, quality and value.Abercrombie and Fitch http://bit.ly/NlMjD2In the year since gaining independence from its erstwhile parent, The Limited, Abercrombie has continued its gently provocative ways. This brand image represents a drastic change from the company's origins. During the first half of the 20th century Abercrombie & Fitch Co. was the definitive store for America's sporting elite, outfitting big-game hunters, fishermen, and other adventurers ala Ernest Hemingway. After the chain went bankrupt in 1977, Oshman's Sporting Goods revived the Abercrombie & Fitch name but shifted its focus to more contemporary sporting goods and a wider array of apparel for men and women. The Limited, Inc., after acquiring the company in 1988, eliminated sporting goods entirely.
Likeable Business: Why It Pays To Be Likeable
#LikeableBusiness November 5, 2012 @DaveKerpen Author of 2 @LikeableBook’s Slideshare.net/DaveKerpen