Kaihan ccl march 2014

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Presentation delivered on March 22, 2014 to CCL Industries' leadership in Asheville, NC.

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  • Outthinkers see these strategic options others don’t see. For example…
  • Innovations come taking time to imagine creating things that people don’t believe are possible. defying what is out of are ordinary ways.Even the last one – Edison calling his own invention of having no commercial value shows that we don’t even believe in our OWN ability to create disruptive, innovative ideas. We resort back – like our classically trained business ways tell us – to the single right plan, the best practice, to the way that others are doing.
  • Outthinkers see these strategic options others don’t see. For example…
  • If we choose a starting year and an initial slate of companies in the Fortune 500 for that year, we can see at each successive year the number of original companies that still remain. Due to the constant change in the economy, this will necessarily decline. By choosing different starting years and plotting the curves of the decline from year to year, we can see how the pace of this turnover has quickened. For example, the list of Fortune 500 companies in 1955 (black curve) declines far more slowly than the list beginning in 1975 (red curve).
  • Insight 1: 8Ps not 1. Say "in comparison to" one big idea/ a big bet … no … it is actually lots of Fourth Options. 6 min exercise using 8Ps tool. Transition: so then the Q is HOW do we come up with fourth options?
  • Insight 1: 8Ps not 1. Say "in comparison to" one big idea/ a big bet … no … it is actually lots of Fourth Options. 6 min exercise using 8Ps tool. Transition: so then the Q is HOW do we come up with fourth options?
  • What Urban Outfitters has done is the answer to the key questions of 5 of the 8 dimensions.Positioning: how does the company position itself differently than the competition in the minds of its customers? What characteristics do the company’s clients closely associate with that company? Urban Outfitters (URBN) is the only retailer of its size focused almost exclusively on college students and the only chain that achieves a type of localization in which every store looks a little different than the other. The store near Harvard University looks & feels different than the store near Stanford University.Product: what product features, design elements, and capabilities are unique relative to the competition? These can be things that are protected by intellectual property rights or not. Urban Outfitters sells used clothes and for new clothes it separates merchandizing from design so that URBN’s designers cannot be sure that stores will carry their designs.Processes: what unique processes differentiate the company from its competitors? Process innovations are often overlooked as tactical and operational but they can lead to meaningful and long-term advantages.URBN allows store managers to make decisions on what the store will sell and how it will satisfy customer issuesPhysical experience: how is the sensory experience of the company’s customers different than that of its competitors? Do they see, hear, feel, smell, or taste something different?URBN, mentioned above, is able to make every store a little different while its large competitors make every store look and feel the same.People: what people’s policies in uniqueness does the company implement that support its differentiation? People are the foundational support of the company’s strategy. This dimension includes all elements of the people’s equation including how people are recruited, trained, engaged, and incentivized.Urban Outfitters hires managers from art programs rather than business schools and choose them based on their aesthetic skills rather than their proven management skills.
  • The 8 Ps is an interesting framework to think about innovation and where it can come from.Who has heard of the 4Ps of marketing? We simply added 4 more. Notice at the top is position and at the bottom is people. Why would we do that? Positioning: how does the company position itself differently than the competition in the minds of its customers? What characteristics do the company’s clients closely associate with that company? Urban Outfitters (URBN) is the only retailer of its size focused almost exclusively on college students and the only chain that achieves a type of localization in which every store looks a little different than the other. The store near Harvard University looks & feels different than the store near Stanford University.Product: what product features, design elements, and capabilities are unique relative to the competition? These can be things that are protected by intellectual property rights or not. Urban Outfitters sells used clothes and for new clothes it separates merchandizing from design so that URBN’s designers cannot be sure that stores will carry their designs.Processes: what unique processes differentiate the company from its competitors? Process innovations are often overlooked as tactical and operational but they can lead to meaningful and long-term advantages.URBN allows store managers to make decisions on what the store will sell and how it will satisfy customer issuesPhysical experience: how is the sensory experience of the company’s customers different than that of its competitors? Do they see, hear, feel, smell, or taste something different?URBN, mentioned above, is able to make every store a little different while its large competitors make every store look and feel the same.People: what people’s policies in uniqueness does the company implement that support its differentiation? People are the foundational support of the company’s strategy. This dimension includes all elements of the people’s equation including how people are recruited, trained, engaged, and incentivized.Urban Outfitters hires managers from art programs rather than business schools and choose them based on their aesthetic skills rather than their proven management skills.
  • Chess Champion Alexandra Kosteniuk is known for performing something of a media stunt. She lines up 15 chessboards and invites 15 players to sit in front of each one. They sit and look at the chess boards while she stands and moves from one to the next. When she has played her first move for each of the 15 games, she starts over with the first one and makes her second move. This gives each of her opponents a lot of time to think about their next move, whereas she only has a few seconds. She usually wins all of her matches. She is able to look at the board and know the winning move even though her opponent cannot see the move. She is using her repertoire for strategic framing to perform a mathematical trick; she sees a pattern in how the other is playing the game and says: “I’ve seen this before, and the way to win is to…”What enables some innovative thinkers to see solutions that others overlook? The answer is that they overcome a mathematical problem by deploying the mental trick. Studies of expertise and expert performance give us insight into how they do this. If you are playing a game that requires onlythat you consider five options, you can easily think through those options. If you are playing a more complex game, however, one in which you must consider 30 or 100 possible options, you run out of short-term working memory capacity, and your mind then starts hiding options from you. It simply doesn’t have the capacity to show them all. Experts are able to implement more complex strategies by applying a “chunking” process. While a novice might think about moving a specific piece to a specific space on the chess board, his expert opponent is thinking about applying higher order approach. Experts play with more higher order patterns or “strategic narratives” than novices do. To enable you and your team to see options that your competition does not see, you also want to play with the larger and more diverse repertoire of patterns. This means your ability to see strategic options that others don’t see has little to do with your innate intelligence or how creative you are. It is simply a function of the number and variety of frames or narratives you bring to the game.
  • Most humans are able to retain between five and nine items in their short-term working memory. If you go to a grocery store, for example, and only have to buy five things, you may not need a grocery list. But if you have to buy 15 things and do not write a list, you’re probably going to forget something. We can really only remember 7 items at a time, +/-2. That’s why phone numbers were originally (before area codes) seven digits. We remember them in three basic ways. Let me give you a number to remember: 60952. Now, how many of you are repeating that number in your head: 60952, 60952…?That’s using the phonetic loop method. Now, how many of you are picturing the number in your head? For those, you are using the visuospecial sketchpad method. Now, how about if I asked you to remember the number 2468?You would probably be using another method; in fact if I wanted to add a number to that combination, you could probably anticipate what that number would be, which is?This we call the episodic buffer; or strategic narratives. It’s about the story. Seeing the number as a story, you say to yourself “I’ve seen this before” and record it as such, even anticipating what will come next!
  • Research into this expertise and expert performance has actually been measured. Master chess players recognize twice as many patterns as when they took up the game; grand masters are able to recognize 10 times as many.For us, it’s a matter of how many strategic narratives can we bring to the game to find our fourth option and strategic differentiators.
  • When we hear “Trojan Horse”, we don’t just see a horse but know the story that comes with it. Those stories in America & Europe are known as “fairy tales”, in Japan, India other names. Kaihan Krippendorff’s research uses the “36 Stratagems” as the foundation of these stories or narratives. For the past 12 years, he has been working with this set of “strategic narratives” found in an ancient Chinese text called the 36 Stratagems. This collection of strategic metaphors was written sometime between 500 and 1500 A.D. Nobody knows the author of the stratagems. They were developed over a period of 1000 years through the process of oral tradition. Our research into the competitive dynamics of corporate competition indicates that the stratagems represent a complete vocabulary for describing and managing competition.
  • Space X was founded in 2002. Kaihan interviewed him one year after the founding. From Wikipedia: Space Exploration Technologies Corporation, or SpaceX, is a space transport company headquartered in Hawthorne, California. It was founded in 2002 by former PayPal entrepreneur Elon Musk. It has developed the Falcon 1 and Falcon 9launch vehicles, both of which were designed from conception to eventually become reusable. SpaceX also developed the Dragon spacecraft to be flown into orbit by the Falcon 9 launch vehicle, initially transporting cargo and later planned to carry humans. On 25 May 2012, SpaceX made history as the world's first privately held company to send a cargo payload, carried on the Dragon spacecraft, to the International Space Station.[4]In order to control quality and costs, SpaceX designs, tests and fabricates the majority of its components in-house, including the Merlin, Kestrel, and Draco rocket engines used on the Falcon launch vehicles and the Dragon spacecraft. In 2006, NASA awarded the company a Commercial Orbital Transportation Services (COTS) contract to design and demonstrate a launch system to resupply cargo to the International Space Station (ISS). On 9 December 2010, the launch of the COTS Demo Flight 1 mission, SpaceX became the first privately funded company to successfully launch, orbit and recover a spacecraft. On 22 May 2012, SpaceX's Falcon 9 rocket carried the unmanned Dragon capsule into space, marking the first time a private company has sent a spacecraft to the space station. The unmanned, cone-shaped capsule became the first privately built and operated vehicle to ever dock with the orbiting outpost.NASA has also awarded SpaceX a contract to develop and demonstrate a human-rated Dragon as part of its Commercial Crew Development (CCDev) program to transport crew to the ISS. SpaceX is planning its first crewed Dragon/Falcon9 flight in 2015, when it expects to have a fully certified, human-rated launch escape system incorporated into the spacecraft.Besides NASA contracts, SpaceX has signed contracts with private sector companies, non-American government agencies and the American military for its launch services. It has already launched, for a paying customer, a low earth orbiting satellite with its Falcon 1 booster in 2009.[5] The company plans to launch its first commercial geostationary satellite in 2013 from a Falcon 9.Future projects that are in the planning stages or in development include the Falcon Heavy launch system, as well as a NASA robotic mission to Mars in 2018. The Heavy is based on Falcon 9 technology, and if construction goes as planned, it will be the most powerful rocket in the American inventory since the Apollo-era Saturn V. Falcon Heavy can be used to send a crewed Dragon spacecraft on lunar orbiting missions – such as the Apollo 8 mission; or be used to send a modified unpiloted Dragon on a Mars landing mission. Musk has stated that his intention for the company is to help in the creation of a permanent human presence on Mars.Elon Musk has stated the personal goal of eventually enabling human exploration and settlement of Mars.[21] He stated in a 2011 interview that he hopes to send humans to Mars' surface within 10–20 years.[21]As of May 2012[update], SpaceX has operated on total funding of approximately $1 billion in its first ten years of operation. Of this, private equity provided about $200M, with Musk investing approximately $100M and other investors having put in about $100M (Founders Fund, Draper Fisher Jurvetson, ...).[22] The remainder has come from progress payments on long-term launch contracts and development contracts. As of April 2012[update], NASA had put in about $400–500M of this amount, with most of that as progress payments on launch contracts.[23
  • Robert Joyce, President & CEO of Norican Group, knows he is not in the business of selling the Wheelebrator, they are in the business of selling replacement parts for the Wheelbrator. His “greenline” business – selling new equipment – dominates for 10 years but then the “redline” business aftermarket - takes over. Clients are enormously loyal (70%). Wheelabrator Plus supplies original wheelblast parts for all Wheelabrator product lines, as well as a selection of high wear parts for non-Wheelabrator wheelblast equipment. Original Equipment Manufactured (OEM) parts are available for Wheelabrator, BCP, Spencer Halstead, Schilck, TilghmanWheelabrator, and DISA. The ASTRAL Collectionis the range of replacement wear parts for non-Wheelabrator blast equipment.Wheel blasting is a process in which abrasive is propelled by a wheel using controlled centrifugal force. Typically a metallic abrasive like steel shot or grit is used in wheel blast equipment. The abrasive is thrown from a rotating, bladed wheel onto the parts to be blasted.
  • Walmart’s original innovation, what gives it its most meaningful competitive advantage, is that it coordinates its stores. Unlike competitors, who choose store locations based on the attractiveness of the market around the store, Walmart builds its stores in clusters, then puts a distribution center at the center of each cluster. As a result, Walmart can distribute goods to stores at a lower cost than competitors: rather than asking a vendor to drop off at each store, that vendor only makes one drop off at the distribution center, then a Walmart truck distributes. This is a more efficient process. We cannot validate the commonly held belief that Walmart uses its bargaining leverage to buy at a lower cost, but we can show that it distributes at a lower cost. When we did this workshop for Walmart, they stated this was their fundamental source of advantage.Walmart is now applying the same pattern again, going further. They are starting to pick up goods directly from vendors.
  • Autodesk: The Secret Star Behind Oscar-Winning Visual EffectsBy E.B. Boyd | February 25, 2011No matter which film walks away with the Oscar for Best Visual Effects on Sunday, one organization that has previously made Fast Company’s Most Innovative Companies list will be a clear winner: Autodesk. Every single movie nominated this year—from Alice in Wonderland to Harry Potter and the Deathly Hallows, Part 1, [from]Hereafter to Inception to Iron Man 2—used its software to craft some portion of their effects.And while Autodesk is best known for its architecture tools, less well known is its Media & Entertainment line of products, which are used to create effects in films, television and video games. The tools are so [highly] valued within the industry that they have been part of the toolbox used to construct scenes in every single film that has won Best Visual Effects at the Academy Awards in the last 15 years.Autodesk’s MotionBuilder, for example, was central to last year’s Avatar. The tool was able to instantly transform the motion data it was capturing into an image of what the characters and scene would look like in the final film. So while Sam Worthington and Zoe Saldana romped around the set in black suits and funny-looking headgear, director James Cameron could watch a monitor where blue Na’vi characters were performing the scene against the Pandora landscape. That meant he could see the movie—in real-time—essentially as it was going to appear in its final form and make any adjustments right there and then.Autodesk’s Maya was used to map Brad Pitt’s performance onto the older version of himself in 2008’s The Curious Case of Benjamin Button. MudBox, which was originally created by New Zealand’s Skymatter and later acquired by Autodesk, was used to sculpt the ape in 2005’s King Kong. And Maya was used as far back as 1997, in Titanic, to place virtual characters on top of the doomed ship as it sailed out of harbor. That film also used Inferno, a compositing software that allowed the filmmakers, for example, to add smoke to the Titanic’s smokestack and have it track tightly with the ship’s movement.Much of the core competency Autodesk brings to the table lies in developing complicated mathematical models of how objects look and behave in the real world, then baking that into the software, so that artists and designers can essentially push a button to run an algorithm and have the result applied to the element on screen—a much more sophisticated version of what happens when you apply an effect to an image in photo editing software.“Our job,” Jos Stam, senior research scientist at Autodesk and inventor of Maya Fluid Effects, tells Fast Company, “is to hide all the math.”But he’s humble about the tools’ ultimate contribution to what viewers see at the movies.“We create these tools,” he says, “and I’m always amazed by what the artists can do with them. It’s like creating brushes and then seeing a Rembrandt. You can improve the brushes, but it still takes an artist to really create amazing effects.”http://www.fastcompany.com/1731618/autodesk-the-secret-star-behind-oscar-winning-visual-effects
  • Google is investing in many sectors outside of their core “search” and “advertising” business, but yet for the most part the way they plan to succeed in these spaces is through their core business model, leveraging their core capabilities.
  • Autodesk: The Secret Star Behind Oscar-Winning Visual EffectsBy E.B. Boyd | February 25, 2011No matter which film walks away with the Oscar for Best Visual Effects on Sunday, one organization that has previously made Fast Company’s Most Innovative Companies list will be a clear winner: Autodesk. Every single movie nominated this year—from Alice in Wonderland to Harry Potter and the Deathly Hallows, Part 1, [from]Hereafter to Inception to Iron Man 2—used its software to craft some portion of their effects.And while Autodesk is best known for its architecture tools, less well known is its Media & Entertainment line of products, which are used to create effects in films, television and video games. The tools are so [highly] valued within the industry that they have been part of the toolbox used to construct scenes in every single film that has won Best Visual Effects at the Academy Awards in the last 15 years.Autodesk’s MotionBuilder, for example, was central to last year’s Avatar. The tool was able to instantly transform the motion data it was capturing into an image of what the characters and scene would look like in the final film. So while Sam Worthington and Zoe Saldana romped around the set in black suits and funny-looking headgear, director James Cameron could watch a monitor where blue Na’vi characters were performing the scene against the Pandora landscape. That meant he could see the movie—in real-time—essentially as it was going to appear in its final form and make any adjustments right there and then.Autodesk’s Maya was used to map Brad Pitt’s performance onto the older version of himself in 2008’s The Curious Case of Benjamin Button. MudBox, which was originally created by New Zealand’s Skymatter and later acquired by Autodesk, was used to sculpt the ape in 2005’s King Kong. And Maya was used as far back as 1997, in Titanic, to place virtual characters on top of the doomed ship as it sailed out of harbor. That film also used Inferno, a compositing software that allowed the filmmakers, for example, to add smoke to the Titanic’s smokestack and have it track tightly with the ship’s movement.Much of the core competency Autodesk brings to the table lies in developing complicated mathematical models of how objects look and behave in the real world, then baking that into the software, so that artists and designers can essentially push a button to run an algorithm and have the result applied to the element on screen—a much more sophisticated version of what happens when you apply an effect to an image in photo editing software.“Our job,” Jos Stam, senior research scientist at Autodesk and inventor of Maya Fluid Effects, tells Fast Company, “is to hide all the math.”But he’s humble about the tools’ ultimate contribution to what viewers see at the movies.“We create these tools,” he says, “and I’m always amazed by what the artists can do with them. It’s like creating brushes and then seeing a Rembrandt. You can improve the brushes, but it still takes an artist to really create amazing effects.”http://www.fastcompany.com/1731618/autodesk-the-secret-star-behind-oscar-winning-visual-effects
  • Wal-mart reached a point where in the US it couldn’t build a new store without the community rallying against it. It realized this was actually destroying shareholder value. So it has invested billions of dollars on programs to undo this reaction, not just change people opinions but actually alter its business practices so that it becomes a net “do dooder” for the community and environment.
  • Best Doctors offers an innovative health benefit. When you get sick and get a doctor’s diagnosis, you can call Best Doctors if your employer is a client, and get a free second opinion from a network of the best generalists and specialists in the country … at no cost to you. It has grown from about $5M to nearly $100M in revenue in the past ten years. One way it has been able to achieve such phenomenal growth is that it positions itself as being helpful to would-be competitors by doing the grunt work, washing the dirty dishes. Much of Best Doctors' work is laborious. After an employee from one of Best Doctors' clients, such as Home Depot, Boeing or ConAgra, calls them, a specially trained analyst from Best Doctors collects the patient's medical records. It's the kind of work few have the patience for or skill to embark on. As Evan Falchuk, president and chief strategy officer says, "That can be a nightmare, a lot of work, but we do it well." By putting together medical data that other doctors do not, Best Doctors can give its network of expert doctors a more complete picture and thus a better chance of making the right diagnosis. Evan says that when other doctors make a mistake in their diagnosis – Best Doctors finds something wrong in about 20% of the cases they investigate – the "key issue is cognitive; you give them [doctors] partial information and rush them, they get it wrong." By doing the tough data-gathering work few others flock to, Best Doctors gives its physicians more information and more time. Google grew into the number one search business by doing search when others (Yahoo! and Alta Vista) didn't want to do it anymore. Microsoft became the world's dominant operating system by offering an OS when few others wanted to take on the hassle. If you can do something no one else wants to do, you avoid competition. Try to think of one thing that people in your industry would gladly outsource and consider becoming the best at that one thing.
  • 4_BrightFarmsFor slashing the distance from farm to market by building farms on grocers’ rooftops. Farmers markets are great. But the truth is, most people shop at the supermarket. BrightFarms works with supermarkets to plant lettuce, tomatoes, and herbs on site (or very nearby), which cuts transport costs and waste for the grocer and adds days to the shelf life of perishable foods in customers’ refrigerators. This spring, the company will debut a 100,000-square-foot rooftop farm, the largest in the world, in Brooklyn’s Sunset Park, which will produce 1 million pounds of produce annually.
  • The 4 Questions That Help You See--And Dominate--A Market OpportunityYou’ve heard the story before, a generic narrative with a thousand faces, the sort of entrepreneur’s “hero’s journey” (http://www.amazon.com/Joseph-Campbell-The-Heros-Journey/dp/B000K7UEMW). A woman stops working to take care of her children and is exposed to a whole new set of consumer needs that only new parents are privy to. Her entrepreneurial drive to get back to work fights against motherly instincts and – she just can’t help it – she comes up with something that all mothers in the world would want to have and no one is providing! So she launches a funky, new company/brand that sells organic baby food or hypoallergenic baby socks. It’s just a hobby, something to give her some grownup interaction, but the world’s moms demand more and more, so the hobby becomes a fully operational business.Well, Julie Pickens’ story may sound the same, but it is beautifully different in at least four ways. You can download my entire interview with Julie for free on my website (go to http://www.kaihan.net/tools.html and click on “Interviews”). Like the “Hero Mom Entrepreneur,” Julie, founder and CEO of Boogie Wipes (http://www.boogiewipes.com/our-story/), was fully engaged in a successful career, helping her father run his sales and distribution company. When her family sold its business, she got involved in several franchises including Cold Stone Creamery. After she had three girls, she decided to “do the mom thing” for a while and take her foot off the gas. Her “aha” moment hit when she decided she wanted a natural alternative to the usual perfumed antiseptic baby wipes. She searched for wipes treated with saline and when she couldn’t find any, Julie decided to explore creating it herself. This is where her story veers. Instead of making some in her basement for home use and sharing them with her friends as the “Hero Mom Entrepreneur” is supposed to do, Julie made four uncommon choices to outthink even the largest, most well-funded baby consumer products companies. As a result of these four choices, Julie’s company now owns its category niche, holds a position too expensive for competitors to copy, and has inked a collaboration partnership with Proctor & Gamble to bring her creativity and innovation into yet a larger opportunity.Outthinking your competition begins with looking past the obvious choices, beyond the logical, reasonable ones your competition and industry experts have settled on, and choosing something different. Here are four strategic patterns that Julie put in place to set her on her path to success:Focus on what others ignore: Julie and her business partner recognized the wipes market was saturated, so instead of jumping in to compete for baby’s bottoms, they decided to design baby saline wipes for use on baby’s noses. What are your competitors ignoring and what would happen if you embraced that?Command an input: From day one, Julie began working on building proprietary technology. She and her business partner pooled together $20,000 and hired a chemist to formulate a product. Then they refined and refined. The result? A patent that severely complicates any competitors’ efforts to copy their innovation and create a similar wet wipe or tissue. What critical input would your competitors need to copy you and how could you control that?Step in where others step out: When Julie’s company Boogie Wipes (www.boogiewipes.com) launched in 2008, they enjoyed a nice headwind. Some traditional pharma companies with cold and cough solutions were pulling off the shelves because of health concerns, and customers were looking for natural solutions. Saline wipes were perfectly positioned to fill this gap. How are competitors reacting to market trends and what opportunity does this create for you?Create repeated occasions: Venture capitalists put a higher value on repeated revenue than on one-time revenue. You should too. So look to attach to, or create, repeated occasions. Julie shared with me, “[We looked at] how people are using tissues. Most people use it to blot their face or blow their nose. A lot of people buy it for the cute box. I sort of took all those elements and said, ‘If we are going to talk about expanded use, what would we do?’” This gave her one of her boldest ideas yet. She licensed Proctor & Gamble’s “Puff” brand to create the first wet tissue, which was just launched, available at Target, under the name Puff Fresh Faces (http://www.puffsfreshfaces.com/). What repeated occasion can you link to … or create? Ask these four questions, and you may see an opening past the competition. What are others ignoring? What input can you control? Where are others stepping away? What repeated occasion can you create? And then? “Plan,” says Julie. “There are a lot of great ideas but how you make them come to life is you plan. Be ready to dig your heels in and know it’s going to be a ton of work. People look at me like a deer in their headlights when I say this, but write a business plan, create a pro-forma [financial projection].” This last piece of advice is so good, it would make an entrepreneurship professor cry.
  • Founder: DhirubhaiAmbaniThe company is ranked 99th on Fortune Global 500 list of the world's biggest corporations for the year 2012.[4]$67b revenue$3.7b operating income
  • Then in 1955, Ingvar Kamprad had another setback. Competitors, feeling threatened by his growing success, grouped together and pressured suppliers to stop supporting him. Unable to source supplies and banned from trade fairs, Kamprad's sales were drying up. He responded by buying his own exhibition centres, creating different furniture exhibits to give visitors choice - even though every exhibit was owned by him. The IKEA store was born
  • The interactive promotions company ePrize has found a creative way to do just that, but right now its people are dealing with an emergency. They are under siege by a group of attackers, dressed in gorilla costumes, from their archrival, Slither Corp. Slither personnel have entered ePrize’s building, trying to find the keys to ePrize’s success. This assault is perhaps not completely unexpected because Slither has launched aggressive PR and e-mail campaigns in the past. Its name and logo—which resembles Enron’s—seem designed to invoke fear. No matter how far ahead ePrize gets, Slither is just steps behind and closing in fast.Yet Slither Corp. does not really exist.It is a competitor fabricated by ePrize’s management to keep this innovative company on its toes and leaning forward. The goal is to keep ePrize’s people thinking from the competitor’s point of view and guarantee the continuation of ePrize’s phenomenal growth.Under the leadership of founder and CEO Josh Linkner, ePrize has emerged as the dominant interactive promotions company in the United States and beyond. The company has produced more than 5,000 interactive promotions across 36 countries. It designs and executes Internet promotions campaigns for clients such as Coca-Cola, American Express, Gap, Procter & Gamble, Warner Bros., Dell, and Adidas.When you log on to a website and punch in a code you found under a bottle cap, there is a good chance you are experiencing ePrize’s work firsthand. The company works with three quarters of the top 100 brands and has more than doubled in size in the past two years. Since its inception, ePrize has consistently produced about 40 percent annual revenue growth.By asking its employees what they think their counterparts at Slither would do, Linkner says ePrize “creates a fun, safe opening for continual discussion about what the company could do better.”4 It also establishes a disruptive filter. With Slither standing over their shoulders, forcing ePrize’s people to ask, “How would Slither respond?” ePrize has better chance of launching ideas clients will love and that the competition will not copy.It does not take much to step back and ask, “How will the competition respond?” For outthinkers, it’s a matter of habit.
  • Here is an example. Bandwidth.com which had built one of the largest competitive local exchange carriers (CLECs) saw something was wrong. They know that you can make phone calls with your native dialer directly using WiFi. But no one was doing it. Why? Because the industry value chain was motivated to drive people to use their data plans. So you had skype and other apps that helped people make VOiPWiFi calls, but you could not directly dial from your phone. So they decided to create republic wireless. They got into the Android OS layer and altered it to allow direct WiFi calls. It would search for WiFi and if it found it would route your calls through that. When you are not near WiFi, they use a data service. But no one was going to open either OS to let them build an app “I wish I could just offer software to anyone with an unlocked phone”, which means they needed to actually build a hand-set and alter it, and they didn’t know how to do that. If they COULD build a ahdn set, there was a risk that they would lose money on people who are not around WiFi. And finally, the customer service challenge would be too huge. All of these hurdles looked like show stoppers. But then tafter months, they convinced Motorola to build a hand set for them with an altered OS. They did market research and found that people were actually away from WiFi rarely and for their early adopters WiFi would be even more prevalent. Finally, they tested the hypothesis “others don’t do customer service.” They found it to be true. Other mobile service providers push custoemrs heavily to use self service.
  • 5 Archetypes Who Get In The Way Of Big IdeasWe’re crossing Mongolia at 660 mph, down from the North Pole toward Singapore, a continuation of an incredible week facilitating 13 strategy sessions, guiding groups toward finding bold, disruptive strategic ideas: fourth options.Whatever you are building--a house, a business, a career, a society--life will ask you to make choices. Wood floors or carpet? Price per hour or day? You can make the obvious choices, building what others have already built. But that never leads to greatness. To create something new, unique, special, you want to be prepared to make a few unorthodox choices. Greatness depends on looking beyond the three obvious options and choosing the fourth option.In Singapore, where I am headed now, the former prime minister, Lee Kwan Yew, took a third-world nation with a GDP per capita of $300 and transformed it into a first-world one, with a GDP per capita of $50,000. He did this by choosing several fourth options such as adopting English rather than Chinese as the national language; paying government workers market salary levels when most countries consider it near charity; preferring order over freedom. Regardless of how you personally feel about Singapore’s choices, they point to a central fact: If you want to create something great, you and your team must have the guts to choose fourth options.As you guide your organization toward finding fourth options, five people will emerge to stand in your way. Look out for them, then get them out of your way. Otherwise you will end up a lemming, a follower, repeating what others have done before.Mr. PracticalTo get your team to see innovative options, you must first allow them to dream. But there is someone on your team, Mr. Practical, who narrows your team’s vision. He wants them to attack the immediate hurdles first. He says, “We don’t have time to dream right now,” or “What we need to do is solve ABC issue,” or “If we don’t solve this problem, we’ll never even survive until tomorrow.” His aim is a good one--to keep your team from overlooking what must be done today. He will have his time, but not at the beginning. Remember, we cannot create what we cannot imagine. You must first imagine a great future to create the possibility of being great.Mr. ObviousAfter imagining a different future, your team will then settle on where to look for the answer. There is the obvious answer, the center of the system, but often the breakthrough ideas come from looking for answers where others do not. Mr. Obvious is confident because he has seen this problem before, and he has solved it. If he is a marketer, he sees a marketing solution. If he is in operations, this is an operational problem. Like a child with hammer seeing everything as a nail, Mr. Obvious knows exactly where the team should bang away for a solution and grows impatient when they want to explore new territory.Mr. ExpertAfter seeing a new area to explore, you team must then create potential solutions. The more possibilities they create, the greater the likelihood they will find a fourth option. But inevitably someone emerges to cut off their flow. The conversation devolves into a pattern of “What if we did this,” followed by, “We’ve tried that before.” Mr. Expert has seen it all and needs to prove it. His cup is full and cannot fit new ideas. He cannot accept the idea that a group of novices could sit down and find an elegant solution to a problem that he and his expert peers have struggled to solve for years. So, consciously or unconsciously, he won’t let that happen.Mr. What WorksAfter creating possible solutions, your team will want to select a few to work through. This is where Mr. What Works steps in. He knows that whatever problem you are solving has been solved before and so sees it as preferable to go with the solution that works. When your team wants to explore a radically different idea, he says, “Why waste our time thinking that through when we know that simply doing ABC, like so-and-so did before, works?” Great solutions require us to unravel what at first seems impossible, which requires us being willing to set aside, at least temporarily, the solutions that have worked before.Mr. CogIf the idea your team settles on is innovative at all, it will exist in conflict with some prevailing beliefs and assumptions. To get people to buy into the idea--to get a budget, win over your sales force, get distribution--requires you to shape existing dogmas. Mr. Cog sees you as a cog in a wheel, who must roll in the direction the boss directs you. He says, “They’ll never agree to this,” and so wants to give up or take the idea elsewhere.Look out for these five naysayers. Get Mr. Practical to dream, Mr. Obvious to explore, Mr. Expert to empty his cup, Mr. What Works to consider, and Mr. Cog to seize the power your team truly has. You will soon be devising fourth options that disrupt the competition, generate new revenue, solve impossible problems. If it seems like work, picture the soaring glass skyscrapers of Singapore and remember that without the willingness to make unorthodox choices, those buildings might be rice patties and slums.
  • Kaihan ccl march 2014

    1. 1. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net Anyone Can Change the World March 22, 2014 Kaihan Krippendorff www.kaihan.net
    2. 2. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net
    3. 3. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net
    4. 4. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net
    5. 5. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net Mohammad Yunus
    6. 6. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net Ratan Tata
    7. 7. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net
    8. 8. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net Thomas Edison
    9. 9. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net Ray Kroc
    10. 10. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net Betsy Johnson
    11. 11. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net Richard Branson Oprah Winfrey Elizabeth Arden Dhirubhai Ambani Bill Gates Charles Revson Henry Ford Sōichirō Honda
    12. 12. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net Martin Luther King, Jr. Mother Teresa Mahatma Gandhi Nelson Mandela Rosa Parks Mohammad Yunus Margaret Thatcher Benjamin Franklin
    13. 13. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net Elon Musk CEO, Tesla Motors Tom Adams CEO, Rosetta Stone Mark Zuckerberg CEO, Facebook Arianna Huffington CEO, Huffington Post Robert Keane CEO, Vistaprint Wayne Gattinella CEO, WebMD Sabrina Herrera Cofounder, Genomma Lab Marissa Mayer CEO, Yahoo Larry Page CEO, Google Mark Vadon Founder, Blue Nile Josh Linkner Founder, ePrize Ann Hand CEO, Project Frog Susan Lyne CEO, Gilt Groupe Cory Booker Mayor, Newark, NJ, USA Jeff Bezos Founder, Amazon.com
    14. 14. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net “First they ignore you, then they laugh at you, then they fight you, then you win.” Mohandas Gandhi
    15. 15. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net The option beyond the obvious choices; the option others do not see, will not consider, and will not respond effectively to. The 4th Option®
    16. 16. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net 1 Go home Wait Cross
    17. 17. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net
    18. 18. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net
    19. 19. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net Outthinkers are Outliers “Heavier than air flying machines are impossible.” Lord Kelvin President, Royal Society, circa 1895 “Who the hell wants to hear actors talk?” Harry M. Warner, CEO of Warner Brothers Pictures, circa 1927 “There is no reason for any individual to have a computer in their home.” Ken Olsen President , Digital Equipment Corporation,1977 “There is no likelihood man can ever tap the power of the atom.” Robert Millikan, Nobel Prize in Physics, 1923 “The phonograph … is not of any commercial value.” Thomas Alva Edison (Inventor of the Phonograph), circa 1880
    20. 20. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net
    21. 21. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net
    22. 22. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net URBN Revenue History $ Millions Source: Bloomberg & TIAA-CREF 350 425 550 830 1,090 1,230 1,510 1,840 1,940 2,270 2,470 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
    23. 23. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net URBN Results 5 5 13 Industry ANF** URBN Growth 5Y Ave.* Revenue CAGR (%) 14 12 20 Profitability 5Y Ave.* EBITD Margin (%) * 5 years average as of October 2013 ** Abercrombie & Fitch, closest peer by market capitalization Source: Reuters
    24. 24. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net College students only Used clothing Artists not managers in charge Manager freedom Every store different …
    25. 25. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net Position Process Physical experience People PlaceProduct PromotionPrice 0 = no difference 1 = different; competition will catch us in < 5 yrs. 2 = different; competition won’t catch us for 5+ yrs. LEGEND
    26. 26. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net How to we create our 4th Option®?
    27. 27. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net The IDEAS Framework Imagine Imagine a different future
    28. 28. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net The IDEAS Framework Imagine Dissect Imagine a different future Pick leverage points others ignore
    29. 29. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net The IDEAS Framework Imagine Dissect Expand Imagine a different future Pick leverage points others ignore Generate more strategic options
    30. 30. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net The IDEAS Framework Imagine Dissect Expand Analyze Imagine a different future Pick leverage points others ignore Generate more strategic options Choose options others view as “impossible”
    31. 31. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net The IDEAS Framework Imagine Dissect Expand Analyze Sell Imagine a different future Pick leverage points others ignore Generate more strategic options Choose options others view as “impossible” Build buy-in
    32. 32. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net The IDEAS Framework Imagine Dissect Expand Analyze Sell
    33. 33. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net Position Process Physical experience People PlaceProduct PromotionPrice The 8Ps • Which are the obvious 2Ps? • Which are being overlooked? • Where will you look?
    34. 34. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net The IDEAS Framework Imagine Dissect Expand Analyze Sell
    35. 35. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net Alexandra Kosteniuk How Do Great Strategists See the “Winning Move?”
    36. 36. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net Source: Baddeley model of short term working memory Consciousness Phonetic loop Visuo-special sketchpad Episodic buffer
    37. 37. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net Relative number of narratives chess players recognize: Grand master Master Expert
    38. 38. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net Europe & Americas – Fairy tales Japan – Koan India – Puranas China – 36 stratagems
    39. 39. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net Identifying Outthinkers Value creation (TRS) Revenue growth (CAGR) (EBITDA) Profit margin
    40. 40. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net Core Research
    41. 41. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net Narratives to Find a Fourth Option #7 Force two-front battle #32 Create something out of nothing #22 Move early to the next battleground #34 Coordinate the uncoordinated #33 Be good
    42. 42. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net Move Early to the Next Battleground22
    43. 43. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net Move Early to the Next Battleground22 “I just think a future in which anyone can shoot stuff into space is more exciting than one which only the government can.” Elon Musk, founder, Space- X (2003 interview)
    44. 44. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net Move Early to the Next Battleground22
    45. 45. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net Move Early to the Next Battleground22
    46. 46. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net Identify and move early to the next battleground. Where is the next battleground? - Technological trends? - Social shifts? - Geographies? - Buying patterns? - Needs? 22 Move Early to the Next Battleground
    47. 47. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net Narratives to Find a Fourth Option #7 Force two-front battle #32 Create something out of nothing #22 Move early to the next battleground #34 Coordinate the uncoordinated #33 Be good
    48. 48. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net
    49. 49. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net
    50. 50. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net
    51. 51. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net Coordinate the Uncoordinated34 Digital Coordination
    52. 52. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net Coordinate the Uncoordinated34
    53. 53. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net
    54. 54. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net
    55. 55. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net Coordinate the Uncoordinated34
    56. 56. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net Coordinate the Uncoordinated34
    57. 57. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net Combine and coordinate independent elements within your environment to orchestrate much greater power. Who would we like to coordinate? - Customers - Experts - Employees - Real estate - Regulators - Competitors - Driveways - … Coordinate the Uncoordinated34
    58. 58. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net Narratives to Find a Fourth Option #7 Force two-front battle #32 Create something out of nothing #22 Move early to the next battleground #34 Coordinate the uncoordinated #33 Be good
    59. 59. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net Force a Two-Front Battle7
    60. 60. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net Force a Two-Front Battle7
    61. 61. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net 7 Force a Two-Front Battle Cloud providers Cloud services Retail “There is no physical analog for what Amazon.com is becoming.” - Jeff Bezos
    62. 62. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net Force a Two-Front Battle7 Film Animation Cos.
    63. 63. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net 7 Force a Two-Front Battle Traditional CPA firms Projects Resources (Accnts)
    64. 64. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net Force a two-front battle7 Project your unique capability into a new area. What is your unique advantage/ capability? Into what new area could you project this?
    65. 65. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net Narratives to Find a Fourth Option #7 Force two-front battle #32 Create something out of nothing #22 Move early to the next battleground #34 Coordinate the uncoordinated #33 Be good
    66. 66. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net Environment Employees Community Govern- ment / country Share- holders Customers Corporation 33 Be Good
    67. 67. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net 33 Be Good
    68. 68. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net 33 Be Good
    69. 69. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net 33 Be Good
    70. 70. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net The Holstee Manifesto
    71. 71. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net Adopt a strategy that Benefits others. How can you profitably benefit key stakeholders that you are not now considering? Be good33
    72. 72. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net Narratives to Find a Fourth Option #7 Force two-front battle #32 Create something out of nothing #22 Move early to the next battleground #34 Coordinate the uncoordinated #33 Be good
    73. 73. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net Create Something Out of Nothing32
    74. 74. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net Create Something Out of Nothing32
    75. 75. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net Ingvar Kamprad Create Something Out of Nothing32
    76. 76. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net Create Something Out of Nothing32
    77. 77. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net Create Something Out of Nothing32
    78. 78. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net Add a new piece the board. What would you like to create/ add to the game? - New categories? - New occasions or needs? - New customers? - New suppliers? - New distributors? - New regulations? Create something out of nothing32
    79. 79. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net Find More Stratagems at www.kaihan.net
    80. 80. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net Narratives to Find a Fourth Option #7 Force two-front battle #32 Create something out of nothing #22 Move early to the next battleground #34 Coordinate the uncoordinated #33 Be good How can you project into a new sector? What can you create? Where is the next battleground? Who could you coordinate? How can you be good?
    81. 81. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net The IDEAS Framework Imagine Dissect Expand Analyze Sell
    82. 82. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net “Impossible is a word to be found only in the dictionary of fools.” Napoleon Bonaparte
    83. 83. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net
    84. 84. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net Selecting your 4th Option High Low Crazy ideas Winning moves Wastes of time Tactics Impact • How far would this get me toward my goal? • How long before the competition responds? Difficult Easy • Can we do this quickly? • Is this inexpensive? • Do we have the capability?
    85. 85. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net Selecting your 4th Option High Low Crazy ideas Winning moves Wastes of time Tactics Impact • How far would this get me toward my goal? • How long before the competition responds? Difficult Easy • Can we do this quickly? • Is this inexpensive? • Do we have the capability?
    86. 86. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net “It's not that I'm so smart, it's just that I stay with problems longer.” - Albert Einstein
    87. 87. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net Make the impossible possible Don’t build handsets Risk of no WiFi Customer Service too costly “Each of these looked like show stoppers” Motorola Early adopters No one provides service David Morken, CEO Bandwidth.com
    88. 88. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net Objectives Commit to a different future Imagine Choose leverage points others overlook Dissect Generate more potential strategies Expand Choose strategies others won’t copy Analyze Decide how to get key stakeholders board Sell Mr. Practical Mr. Obvious Mr. Expert Mr. What Works Mr. Cog
    89. 89. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net
    90. 90. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net
    91. 91. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net
    92. 92. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net Mohammad Yunus
    93. 93. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net Ratan Tata
    94. 94. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net
    95. 95. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net Thomas Edison
    96. 96. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net Ray Kroc
    97. 97. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net Betsy Johnson
    98. 98. 2013 Kaihan Krippendorff All Rights Reserved.www.kaihan.net kaihan@outthinker.com www.outthinker.com www.kaihan.net @kaihan • Work out your Fourth Option® • Email me to get presentation • Sign up for newsletter • Access tools and videos • Contact us for more support

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