The Definition of Confidence

Self-confidence is essentially an attitude which allows us to have a positive and realistic perception of ourselves and our abilities. It is characterised by personal attributes such as assertiveness, optimism, enthusiasm, affection, pride, independence, trust, the ability to handle criticism and emotional maturity. Confidence is learned, it is not inherited. If you lack confidence, it … Continue reading “The Definition of Confidence”

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Self-confidence is essentially an attitude which allows us to have a positive and realistic perception of ourselves and our abilities. It is characterised by personal attributes such as assertiveness, optimism, enthusiasm, affection, pride, independence, trust, the ability to handle criticism and emotional maturity.

Confidence is learned, it is not inherited. If you lack confidence, it probably means that, as a child, you were criticised, undermined, or suffered an inexplicable tragic loss, for which you either blamed yourself or were blamed by others. A lack of confidence isn’t necessarily permanent but it can be if it isn’t addressed. Our religion, the influence of the culture which formed our perspectives, our gender, social class and our parents, in particular, are all factors which influence and contribute to our level of confidence and esteem.

Confident people have deep faith in their future and can accurately assess their capabilities. They also have a general sense of control in their lives and believe that, within reason, they will be able to do what they desire, plan and expect, no matter what the foreseeable obstacle. But this faith is guided by more realistic expectations so that, even when some of their goals are not met, those with confidence continue to be positive, to believe in themselves and to accept their current limitations with renewed energy. However, having high self-confidence does not mean they will be able to do everything they want. That view is unrealistic, one for the perfectionists. A desire to be good at everything we do in order to impress others stems from a competitive instinct and lack of personal reinforcement. Any truly successful life has both rewards and the ability to learn from any setbacks, which increase our resilience, self- belief and determination. Real confidence requires that we face the possibility of failure constantly and deal with it. However, if we consistently lose out on both achievement and validation, even our identity is called into question.

Self-esteem is the opinion you have of yourself. It is based upon how you perceive your value as a person, particularly with regard to the work you do, your status, achievements, purpose in life, your perceived place in the social order, potential for success, strengths and weaknesses; how you relate to others and your ability to stand on your own feet. Because esteem is a perception of your worth, your own value of yourself dictates how others perceive you too. Buddhists classify low self-esteem as “a negative emotion or delusion, which exaggerates one’s limitations in capacity, quality and potential for growth”. It results from having a poor self-image according to personal experience in all the elements of life mentioned above. People with poor esteem never feel in charge of their lives. They often feel like victims, or outsiders – ignored, excluded, unimportant, insignificant and unloved. As they spend their lives internalising the criticism of others, taking it to heart while searching constantly for that elusive acknowledgment, their personal assessment will reflect itself in the appraisal of others – no more, no less. But if we allow others to take control of decisions we should make, we gradually become dependent upon them too, abdicating responsibility for our lives, which tends to lead to us being doormats for other people’s benefit.

Low self-esteem usually has three sides. The first is exhibited by the individual who always seems to be the underdog, the under-achiever, the negative one who says “I couldn’t”, “I shouldn’t”, “I can’t”, “I have no choice” and “I have to”. The opposite side to that, and the second type, is the person who seems very confident superficially, a take-charge type of person, appearing to be much in control, very opinionated and often found in leadership positions. But this is usually a mask for low self-esteem because he/she is likely to be tense, serious, anxious and finicky. When things go wrong that’s when the low esteem comes to the fore. Often perfectionists, they find crises difficult to handle and tend to blame others for everything. They are usually demanding, self-centred, very independent, markedly self-sufficient in their distrust of others and slow to take criticism, instruction or direction. Locked in their own narrow world, they dread new experiences, always going by the book and resenting innovation. In effect, occupying leadership positions without being true leaders. This type of low self-esteem will often deny that anything is wrong, because their belief in being totally in charge and more competent than their bosses or subordinates, is their main protection. Yet being fully in charge of your life actually eliminates the need for anger, insecurity and the desire to judge, control or denigrate others.

Fun Seekers

The third type of personality is the one who is always seeking fun and happiness from others, especially partners and love interests. Laughter becomes a mask for the low opinion these people have of themselves, so everything is done with an emphasis on ‘fun’ to make them feel worthy – either finding it or giving it. Sensitive and thin-skinned, fun people have very low self-esteem, hiding their anxieties behind a bland mask of cheerful superficiality that tends to grate on others after a time because they don’t know when to stop being happy and playing the fool. Like the office clown who tries terribly hard to show how ‘happy’ she is, yet is anything but that; the practical joker who likes to laugh at the expense of others, particularly through racist, sexist or offensive quips – anything to feel superior; the lad who is always hanging out with friends because he cannot stand his own face or company for any length of time; the type who loves a dare, particularly in doing outrageous things, to show his bravado, talent and machismo, and the ones who boast to potential dates about being able to make them laugh and keep them happy.

In relationships, fun people find it hard to commit to others because of their acute social fears. The main desirable attribute they offer to potential partners is ‘fun’, always seeking laughter, sex and good times to hide their insecurity and pain. However, as ‘fun’ people always try too hard, they are in fact the most boring, mirthless people around, the type who have little humour themselves. It then becomes heavy work for their partners. This is because laughter has to be found within us. No one can make us happy, only enhance that happiness. Fun people’s method of feeling significant is to be the centre of attention in a more positive way. But, as their activity is often not genuine, more to hide their low confidence than to enhance it, their effort isn’t really effective. They never openly address their personal pain or hurt. They are reluctant to trust others and are even more reluctant to commit themselves to anyone, which makes them feel insignificant if they are not being perennially happy lads or laddettes. To behave otherwise would deny them the attention they crave.

Many people with low self-esteem gravitate towards the uniformed and public services where they can use the power invested in them, while being validated by the uniform and authority, to boost their self- confidence and ego. The strict hierarchy affords the security of a given status, reinforces the ‘traditions’ to be maintained, and the consistent feedback they require. However, that is also what makes change so difficult to introduce in these occupational fields. The fear of innovation and the lack of self-belief to carry it out foil them every time. Very confident people tend to become scientists, engineers, entrepreneurs, writers or creative, artistic types, preferring to control their own environment and destiny. The commercial, media and technology spheres also appear to provide the freedom of expression and the font of opportunity they actively seek.

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Zero Tolerance for Mediocrity

Talk to any MBA student and he or she will tell you that there are two styles of management; Theory X and Theory Y. Under Theory X management, it is assumed that people are naturally lazy and irresponsible and further that if brains were gunpowder, the average employee couldn’t blow his nose. Theory Y managers seek open communications and invites employee participation and feedback while providing clear direction and enough empowerment for their people to grow and make mistakes if necessary.

The Zero Tolerance manager comes from Theory Y and says that you respect and have empathy for the employee, while expecting them to perform to the best of their abilities and you never let them settle for less. It says that the manager (or the work team itself) sets the expectations and passes them on in such a way that people know the expectations are not arbitrary or debatable but not punitive either.

Tom Peters & Robert Waterman in their landmark book, In Search of Excellence found that; “The excellent companies are marked by very strong cultures…so strong that you either buy into their norms or you get out. There is no halfway house.” When you join the team, you understand that you have to live up to these expectations or you are not a part of the team.

Retailing superstar Nordstrom’s is a great example of Zero Tolerance. People who work there, face very high expectations (some don’t make it) and are given many responsibilities. There are only two employee rules; #1. Use your own best judgement. #2. If you follow rule #1 no other rules are necessary.

The U.S. Marines are a Zero Tolerance outfit. Expectations are high, discipline is unyielding and the pressure to perform is legendary. But don’t try to take that “Semper Phi” bumper sticker off of the car of a marine. Marines are a proud and motivated lot because they have been a part of a tough and unyielding, worthwhile organization that expects and gets the best out of it’s people. They have learned the truth about teamwork and individual responsibility and passed the test of Zero Tolerance for Mediocrity.

You can lead you people into excellence and self-pride by coaching them to understand Zero Tolerance is the only thing that is acceptable and if you are going to be on this team…you will excel.

Rules to Remember

#1 You can never not lead!

The beleaguered manager says, “I tell the employees to honor our customers. ‘They write your paycheck’ I tell them that, ‘ The Customer is # 1’ but we are still losing market share and I know it’s because of poor service habits.” Denial is more than just a river in Egypt.

Employees watch your feet not your lips. The question is what is the manager doing to show the staff where his priorities really are.

Good intentions are no substitute for positive results. I remember many years ago I was guilty of whining about the lack of sales productivity on my team of sales reps. George Morgan, our vice president of sales looked me straight in the eyes and said, “Rick, you’ll be surprised how good they will get once their manager gets good!”

Teddy Rooseveldt said, “There are no bad soldiers only bad officers.” The manager hires, trains and establishes the work environment and must ultimately take responsibility for the results. Everything that you and I do as managers affects the fragile attitude, motivation and work ethic of our employees.

As a manager, you can never not lead. You can’t nail Jello to a wall. You can’t find a sunrise by walking west and you can never not lead. Someone once said, “If you keep doing what you have always done, you’ll keep getting what you have always gotten.”

#2 Do unto your employees as you would have them do unto your customers.

Who are the most important people to walk through the doors of your business each day? Customers, right? Wrong!

We learned a long time ago while doing sales training and consulting, that the lowest paid employee on the staff can run off more business that the highest paid salesperson can bring in. Please recognize that how we treat our people, will be directly reflected in their attitude toward our customers. It’s human nature.

Some managers seem to wait for people to do something wrong, just to correct them. When rules or work directions are unclear, vacillating or arbitrary, people become frustrated and even resentful. And our customers can read it.

Give clear direction and let people know your expectations are not arbitrary, not punitive and not debatable.

Once your staff understands the rules, get them involved in the decisions about those rules. Let them know it is OK to question the rules and they will make a very positive impact in the organization. As a salesman told me one time, “Anybody can walk on water if they know where all of the stumps are.”

The German philosopher Goethe said, “Treat a man as he appears to be and you will make him worse. But treat a man as he was already what he could potentially be and you will make him what he could be.”

#3 NEVER SETTLE

Never settle? Never settle for what has always been acceptable or has worked in the past. Settling for past accomplishments, leads to complacency. How long will your customers settle for your past reputation or accomplishments? The greatest enemy of excellence is ‘good’ and once you settle for ‘good’, you will never see excellence again.

A manager once told me that an uncompromising attitude like “never settling” is unreasonable. My question is, “Are your customers reasonable?” If not then perhaps it is time to get unreasonable.

Is the unreasonable possible? If you have never stretched your staff to discover what is “unreasonable,” you don’t know what your potential really is. Have unreasonable expectations. Walk around assuming that nothing is unreasonable and you will get a whole new definition of what is possible.

One of the greatest dangers facing American industry is the under utilized employee. Typically, employees in Japanese electronics industry submit 54 suggestions per employee. For the same period, each American employee submitted less than one suggestion.

Front line people who, are intimately familiar with the details of their work environment, are not contributing their ideas to promote productivity. They continue to tell us “Nobody listens so why even try?” We can’t accept or settle for employee complacency that is rooted in old management practices. When employees are involved and empowered in the organization they will contribute and buy into the future of the organization.

One word of caution to managers: Once you ask employees to look beyond what most people assume is reasonable to what is possible, you have to become an advocate for their ideas. You will have to be an active listener and a participant in the change. Employee motivation and trust is fragile and circumstantial and that is the responsibility of the manager.

Finally, we need to understand that the impact of Zero Tolerance for Mediocrity stretches far beyond the doors of our businesses. It reaches into the very fabric of our country since the only standard of performance that can sustain a free society is excellence.

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Importance of Supply Chain Management in Modern Businesses

Supply Chain Management (SCM) as defined by Tom McGuffog is “Maximising added value and reducing total cost across the entire trading process through focusing on speed and certainty of response to the market.” Due to globalization and ICT, SCM has become a tool for companies to compete effectively either at a local level or at a global scale. SCM has become a necessity especially for manufacturing industry when it comes to deliver products at a competitive cost and at a higher quality than their competitors. Here are some of the reason SCM has become important to today’s manufacturing industry:-

Competitive Edge through Core Competencies

Today’s business climate has rapidly changed and has become more competitive as ever in nature. Businesses now not only need to operate at a lower cost to compete, it must also develop its own core competencies to distinguish itself from competitors and stand out in the market. In creating the competitive edge, companies need to divert its resources to focus on what they do best and outsource the process and task that is not important to the overall objective of the company. SCM has allowed company to rethink their entire operation and restructure it so that they can focus on its core competencies and outsource processes that are not within the core competencies of the company. Due to the current competitive market, it is the only way for a company to survive. The strategy on applying SCM will not only impact their market positioning but also strategic decision on choosing the right partners, resources and manpower. By focusing on core competencies also will allow the company to create niches and specialization of core areas. As stated in the Blue Ocean Strategy outlined by Chan Kim, in order to create a niche for competitive advantage, companies must look at the big picture of the whole process, and figuring out which process can be reduce, eliminate, raise and create.

As an example stated by Chan Kim, the Japanese automotive industries capitalise on its resources to build small and efficient cars. The Japanese automotive industries gain competitive edge by utilising their supply chain to maximise their core competencies and position itself in a niche market. The strategy works and now Toyota Motor Corporation, a Japanese company, is considered to be the number one auto car maker in the world beating Ford and General Motors of the United States.

Value Advantage

SCM has allowed business nowadays to not just have productivity advantage alone but also on value advantage. As Martin Christopher in his book, Logistics and Supply Chain Management: Strategies for Reducing Cost and Improving Service’ states, ‘Productivity advantage gives a lower cost profile and the value advantage gives the product or offering a differential ‘plus’ over competitive offerings.’ Through maximizing added value and also reduce the cost in the same time, more innovation can be added to the product and process. Mass manufacturing offers productivity advantage but through effective supply chain management, mass customization can be achieved. With mass customization, customers are given the value advantage through flexible manufacturing and customized adaptation. Product life cycles also can be improved through effective use of SCM. Value advantage also changes the norm of traditional offerings that is ‘one-size-fits-all.’ Through SCM, the more accepted offerings by the industry to the consumers would be a variety of products catered to different market segments and customers preferences.

As an example, the Toyota Production System practiced in Toyota, evaluates its supply chain and determines what is value added activities and what is not value added activities. Non added value activities are considered to be ‘Muda’ or waste and therefore must be eliminated. Such non added value activities are overproduction, waiting, unnecessary transport, over processing, excess inventory, unnecessary movement, defects and unused employee creativity. The steps taken to eliminate waste are through Kaizen, Kanban, Just-in-time and also push-pull production to meet actual customer’s demands. The Toyota Production System revolutionise the Supply Chain Management towards becoming a leaner supply chain system that is more agile and flexible towards meeting the end users demands.

Top 40 Wealth Quotations

What does wealth mean to you? Use these quotes from famous people to think about what it means to be wealthy.

1. “Man was born to be rich, or inevitably to grow rich, through the use of his faculties.” – Ralph Waldo Emerson

2. “Wealth is not a material gain, but a state of mind.” – Jerry Gillies

3. “Wealth is the accumulation of possibilities.” – Writer in Mexico

4. “There is wealth within the sound of your voice.” – Russell Conwell

5. “Wealth comes from knowing what others do not know.” – Aristotle Onasis

6. “Never forget: the secret of creating riches for oneself is to create them for others.” – Sir John Templeton

7. “…Every person who gets rich by creation opens a way for thousands to follow – and inspires them to do so.” – Wallace D. Wattles

8. “The great road to wealth is to learn useful facts.” – M.R. Kopmeyer

9. “Money is for making things happen.” – Richard Branson

10. “When you realize that prosperity is your divine heritage, you should persist in claiming it.” – Catherine Ponder

11. “No one can become rich without enriching others. Anyone who adds to prosperity must prosper in turn.” – G. Alexander Orndorff

12. “If you are not as wealthy as you like, there is something you don’t know.” – David Wood

13. “Priorities lead to prosperity.” – Michelle Singletary

14. “Ideas will be the major source of new wealth.” – Brian Tracy

15. “Study well what the billionaire does. It may make you a millionaire.” – John Emmerling

16. “Wealth is largely a result of habit.” – John Jacob Astor

17. “Wealth is the product of man’s capacity to think.” – Ayn Rand

18. “Wealth is not a matter of intelligence it’s a matter of inspiration.” – Jim Rohn

19. “Money is like manure; it’s not worth a thing unless it’s spread around encouraging young things to grow.” – Thorton Wilder

20. “The way to wealth depends on just two words, industry and frugality.” – Benjamin Franklin

21. “Today the greatest single source of wealth is between your ears.” – Brian Tracy

22. “Wealth is power. With wealth many things are possible.” – George Clason

23. “The real source of wealth and capital in this new era is not material things.. it is the human mind, the human spirit, the human imagination, and our faith in the future.” – Steve Forbes

24. “Wealth is the ability to fully experience life.” – Henry David Thoreau

25. “Wealth is the product of energy times intelligence: energy turned into artifacts that “advantage” human life.” – Buckminster Fuller

26. “That some should be rich shows that others may become rich, and, hence, is just encouragement to industry and enterprise.” – Abraham Lincoln

27. “The way to become rich is to put all your eggs in one basket and then watch that basket.” – Andrew Carnegie

28. “Formal education will make you a living; self-education will make you a fortune.” – Jim Rohn

29. “I have about concluded that wealth is a state of mind, and that anyone can acquire a wealthy state of mind by thinking rich thoughts.” – Andrew Young

30. “It requires a great deal of boldness and a great deal of caution to make a great fortune, and when you have it, it requires ten times as much skill to keep it.” – Ralph Waldo Emerson

31. “Don’t let the opinions of the average man sway you. Dream and he thinks you’re crazy. Succeed, and he thinks you’re lucky. Acquire wealth, and he thinks you’re greedy. Pay no attention. He simply doesn’t understand.” – Robert Allen

32. “Innovation is the specific instrument of entrepreneurship. The act that endows resources with a new capacity to create wealth.” – Peter Drucker

33. “Wealth flows from energy and ideas.” – William Feather

34. “If you see yourself as prosperous, you will be. If you see yourself as continually hard up, that is exactly what you will be.” – Robert Collier

35. “Wealth is in applications of mind to nature; and the art of getting rich consists not in industry, much less in saving, but in a better order, in timeliness, in being at the right spot.” – Ralph Waldo Emerson

36. “Every day I get up and look through the Forbes list of the richest people in America. If I’m not there, I go to work.” – Robert Orben

37. “Seek wealth, it’s good”. – Ivan Boesky

38. “Beloved, I wish above all things that thou mayest prosper and be in health, even as thy soul prospereth.” – 3 John 1:2

39. “Wealth is not in making money, but in making the man while he is making the money.”- John Wicker

40. “Lazy hands make a man poor, but diligent hands bring wealth.” – Proverbs 10:4

Every Blue Ocean Will Eventually Turn Red – Create An Unfair Advantage Instead

The vast red and blue oceans of the marketing world tsunamied into our awareness and vocabulary a few years ago, when two INSEAD professors, W.Chan Kim and Rene Mauborgne, claimed that competition can be rendered irrelevant.

Their book, Blue Ocean Strategy, heralded the news to marketing managers and CEOs all over the world: after years and years of surviving in red bloody oceans, swarming with murderous competitors, finally there’s a better alternative! In red oceans, executives captivated in a conception-cage of competitive strategy business thinking, have been rivaling head to head with their competition over the same consumer segments doing exactly the same things, only better and cheaper in order to offer customers a better cost/value tradeoff in order to convince them to stick around with their wallets open. In the process, these executives wore out their own companies and their profits were ground to dust. Now, the Blue Ocean enunciation, based on long years of research, claimed that both serenity and profitability can be amply found in Value Innovation, which creates, via a new business model and new products, a “Virgin territory devoid of me-too brand propositions and cutthroat pricing” (BusinessWeek).

Let us consider an example of a company which supposedly followed Kim and Mauborgne’s Blue Ocean strategy:

Casella Wines, an Australian winery, decided to “de-complex” wine for the sake of intimidated unpretentious adults. It decided to create new wine drinking rules, and to make a fun wine, sweet and fruity, to suit any taste. The chosen brand name was Yellow Tail; the label was highly recognizable, the selection targeted the mainstream (Chardonnay and Red Shiraz), and the price just above budget: $6.99.

The result? The brand quickly became the number one imported wine into the USA, without a promotional campaign or consumer advertising. In just two years it emerged as the fastest-growing brand in the histories of both the Australian and US wine industries. Casella Wines even grew the overall market. Genuinely Impressive.

The big “Blue Ocean” promise took over the business world, but also aroused a great wave of criticism, partially justified; with the strongest claim being that the text carries no novelty beyond Ted Levitt’s old differentiation directive, remolded with the trendy belief in the importance of innovation. Personally, I think differently. First, Kim and Mauborgne talked about differentiation and innovation on the levels of strategy and business model, while most traditional occupation with differentiation and innovation has been focused on the level of products or brands. But more importantly, the Blue Ocean thinkers honed a major observation regarding the nature of business competition.

In sports competitions, competitors are compelled to completely defined rules while striving to achieve a superior result. In the business world, competitors also strive to achieve a better result of the same type: a larger share of the consumer’s wallet. However, the competition does not restrict participants to any specific actions. The contrary is true. And yet, it is in this aspect exactly that Kim and Mauborgne are wrong and misleading, upon claiming that competition can be rendered irrelevant. Even in the case of Yellow Tail, which obviously turned many non-wine-consumers to active buyers, clearly when consumers are buying Yellow Tail they are buying other types of alcohol that they would have purchased in its absence. The prospect of raising demand infinitely simply does not exist. This is where the Blue Ocean Strategy finds its limitation. Since you always take sales away from someone (whether a direct or an indirect competitor), and being that you will always be surrounded by businesses striving to increase sales, once your Blue Ocean Strategy works, sooner or later someone will copy or even improve your already successful model.

One must credit the writers that they are not blind to this fact. In an interview with W. Chan Kim posted on http://www.businessinnovationinsider.com on October 2005, he said very openly: “After a while the first copycats will arise, competing on the very same value points as you. That’s completely normal; however it forces the entrepreneur to find a new strategy every several years.”

In other words, the most brilliant BOS will grant you with no more than a limited, relatively peaceful, period of time. Does this mellow promise of the BOS express maximal possible achievement? Naturally, you can guess that my answer is no. Introducing the Unfair Advantage. An UA is a situation in which you become unique and adored by your customers, while competitors do not imitated you.

Beyond the not so simple challenge of creating a differentiated value innovation, the critical question is: what can be done which is immune from imitations? Apparently the principle is simple as it is unexpected: when your innovation and differentiation are improving on benefits considered central to customers in your industry, fully expected from a product or service such as yours (I call it On-Core Differentiation), then sooner or later imitations will mushroom, no matter how big your innovation. Why? Exactly because the benefit is considered relevant by your consumer. On the other hand, when your innovation and differentiation offer further benefits which are not considered relevant in your category (I call it Off-Core Differentiation), there is a good chance of avoiding imitations, even after years of success.

This kind of differentiation, when it manages to excite consumers, is that which creates the Unfair Advantage. Why will you not be imitated? Because what you offer is perceived by your competitors as weird, irrelevant, or overly-unique, such which is pointless to imitate. This is the big secret. This is your competitor’s trap.

There are two main types of Off Core Differentiation: Imported Benefits, and Peculiar Particularity. In many cases we find a combination of the two. The first type happens when you import a benefit which is important to consumers in other product categories, but are not considered relevant in yours. Umpqua Bank turned its branches into a unique combination of packaged goods stores, and community clubs, in order to provide consumers with benefits of a pleasant buying experience as well as a social neighborhood hangout, to which they go on a regular basis for various activities and social gatherings. Umpqua is today the largest independent bank in the Pacific Northwest, and it grew in 15 years from four to 120 branches, which is an imaginary growth rate in the banking industry. And the best part is that no one even tried to imitate them.

The other type is a unique style which is not typical to the category. Take Toblerone, the Swiss chocolate brand. It has been producing its triangular alp-summit look alike chocolate bars since 1908. No one has imitated them. The Body Shop chain has grown to 2,000 shops in 50 states, to become the second largest cosmetics chain in the world. It is an active crusader fighting for environment protection, underprivileged rights, human rights and animal rights, worldwide. It fine tunes its acquisition policy, employee volunteering requirements, marketing communication budgets etc, for serving these purposes. Again, no one has imitated them.

So I’m challenging you now: do not settle for just the Blue Ocean Strategy, go out there and get yourself an Unfair Advantage.

Principles of Speech Communication

Speech making is perhaps one of the innate abilities of man, irrespective of one’s citizenry, or ethnic affiliations. Yet many people speak without understanding that it is a special ability without which communication between people and groups would not be possible.

Speech communication differs from normal day to day talking in which one speaks sporadically without considering ethics and skills. However, it is similar to every day communication in that they are both driven by the aim to communicate meaningfully.

Speech making is an organized communication aimed at sharing specific message about a given subject to create impact towards solving human problems.

This article provides guidance in the following areas:

Types of speech

Sages/steps in the speech making process and

Structure of a speech

Types of Speech

The onus remains squarely, on every speech maker to identify the type of speech most suitable to his/her purpose. For emphasis, it should be known that the aim of your delivery should be the sole factor dictating the style/type of speech you should choose to use.

Generally, there are, for conveniences, sake, four basic speech types, viz:

• Argumentative speech

• Persuasive speech

• Educative speech and

• Informative speech.

Argumentative Speech Type

Arguments imply elaborate presentation of all perspectives to an object or a subject of discussion, before settling down for the most applicable option. What comes out of an argument as most acceptable may not necessarily be truer, or better than other options, but the process of arguing makes it best, when compared to the others. This is why one choosing this type must bear in mind that it is his/her approach to it, and the ability to convince that determines the success or failure of the entire process.

While this may be closely related to persuasive essay, the dissimilarity lies in using points to convince at all cost.

To argue therefore, the speech maker needs to clearly and exhaustively raise every point of the issue and state facts about it. And this statement of facts is the “why” of the validity or not of your argument.

Persuasive Speech Type

As the name indicates, this type of speech is meant to stimulate a favourable disposition towards the subject of your concern or to appeal to audience to see it your way and act as you desire.

Companies, individuals and Non-Governmental Organisations (NGOs) that depend on project grants are often required to their proposals in brief, before forums of grant agencies. In doing this, they are expected to give brief, straight-to-point run down of what they propose to do to achieve goal, if given grant. This summary must necessarily include a statement of methodology and justification why it has to be your proposal, and not that of another. You must convince that using so and so method, you will be able to achieve set goals within the specified time, without waste of resources and this, you must do without doubt.

A high point worthy of emphasis is that to persuade, a speech maker must JUSTIFY why you are convinced that your method is most suitable to deliver best result. Your entire exercise will be meaningless if it fails to provide justification.

Also, students defending their research projects/thesis/dissertations ought to bear this in mind, as they will at one time or another, need to persuade their tutors I favour of their work.

Educative Speech Type

Although teaching in a class room situation requires more than speech making skills, it would do you well as a professional teacher, haven undergone training in the profession, to add these to your skills. As one who teaches in a school or a religious organization, one makes speeches often, both officially and otherwise.

Advertising agencies as well make use of this type of speech as product display demonstration to teach prospective consumers of a new product a step – by – step approach to using it.

An educative speech provides a comprehensible how-to-do-it guide to given subjects and must be done carefully to avoid confusing consumers/students/audience/congregation.

Informative Speech Type

The aim of this class of speech is to make known. This may come in presentable form in which the speech maker delivers it to audience or may be a press release. Whichever the case, both the writer and giver of speech must choose words carefully in order not to mislead, as the aim is to give accurate, unmistaken information as at press conference, organizational report forums, annual general meetings, state of the affair reviews etc.

Whether as government official, a politician or celebrity wishing to tell subordinated, colleagues or fans and the mass media something, this type of speech serves you best, as it equally serves the technology company wishing to inform its market of its newest innovation.

Security agencies and Public Relations Executives of all manner of corporate entities should be versed in this type of speech, as they will find it useful in the course of their careers.

Stages in the Speech Making Process

As already stated in the introduction, why you make speech is to communicate towards an end. Thus, your speech can only be seen as a success if the aim is achieved at the end of the day. To achieve an aim, professional speech communication follows a procedure, which is here written as the stages/steps in the speech communication process. They include:

• Research: If you are to speak, it means that there is someone you are to speak to, about something, something of importance to both of you, and at a given time and place. Your first responsibility is to FIND OUT what it is you are going to talk about. Whatever it is, you must study it to know far more than you will need to talk about and in this case, it is necessary to preempt the likely questions your audiences are to ask, and provide answers in the speech you make.

where and when necessary, consult with people such as experts, who have better technical understanding of the subject than you and to these, pose ALL your questions and let their answers be the knowledge with which you confront the exercise, as these answers should be the basis of the speech you present. In doing this, you should avoid stating the obvious. By this I mean elements that can easily be deciphered and understood should not be your primary aim to explain, rather you will do more good to seek out areas that are not likely to be understood at first glance by the lay man and on these, place your emphasis.

If for instance your speech is a political manifesto, it will be more profitable to describe in detail, what you intend to do to solve certain societal problems and your conduct in office, should you be elected, than to dwell on the might of your political party or on the electioneering process – whoever your audience are already know how to vote and how strong your party is but even if they don’t, there are people stationed to teach them those.

If on the other hand your concern is a product/service as a PRE/Advertiser, or an issue intangible as those handled by spiritual leaders and programme facilitators, seek out beforehand, opinions and opposing views about the product/service/issue. Be sure to find out details about the product/service/issue as to how it functions or implications of every standpoint in an issue. It is only this detailed understanding of subject that places you above your audience to be able to grant answers to their every question, including the ones they are not able to ask.

When you have satisfactorily understudied the subject of your presentation, you should as well endeavor to study the people to whom you will be speaking. This may require going the extra mile to study the various groups of people likely to be present at your presentation as well as their depth of understanding of the subject. Also, their depth of understanding of the language of communication is of importance, as this helps your diction for proper understanding.

You may as well, need to take a closer look at the place and time of your presentation. Though this may not be of same relevance as the first two, but is advisable because the place and time of an event contribute to a large extent, to the atmosphere of the event and in effective communication, the atmosphere is as important as the message itself as it colours the meaning of a message. This is why “good morning” at a time may be a greeting and at another time, a disturbance, as “yes” may mean yes at time but mean “no” at other times.

• Speech Writing: A well-researched speech may often end up poorly delivered if it is poorly documented, as many speech makers find the Read Only Strategy (ROS) more convenient than any other method. For a speech to be remarkable, its research, documentation and delivery must be sufficiently mastered.

Whether commissioned to write a speech for someone else to deliver or not, speech writing requires an interplay of excellent writing skills controlled by specific facts gained through research conducted at the initial stage with appropriate and accurate choice of words and illustrations, analogies etcetera.

Here are the basic formats of speech writing: the scripted speech, the semi-scripted speech, the outline speech and the unscripted format.

Scripted Speech: Earlier I mentioned ROS (Read Only Strategy) which is my description for a speech that is pre written and delivered verbatim unfortunately, this leaves no room for improvisation thus, where the speech writer is different from its presenter, the latter may have little or no idea about the technicalities of the subject of discussion, as he/she only read what is on paper. In this case, questions asked pose a great challenge to the presenter and may often be a source of embarrassment. A person delivering speech using ROS, without sufficient rehearsal may get pronunciations wrong and dodge questions at the end of the exercise as politicians do, because they are hardly involved in the creation of their speeches. However, this is the most used type of speech, practiced by political icons and celebrities because of its convenience.

The hugest merit of this is the convenience and the fact that individuals who are extremely shy or incompetent can hide away their weaknesses behind the paper already written for them. Also, the speech presenter may not need to have a deep knowledge of the subject, provided the writer of the speech does a good job. It is of advantage to persons who make many speeches within limited time and have little or no time to rehearse.

Notwithstanding, the problem with ROS is that it leaves the audience bored, as the speech maker is buried in the paper rather than keeping contact with the people to whom the presentation is being made.

The Semi – Scripted Speech Format: a speech is semi – scripted when only the principal lines of thought are written down, leaving the rest to be done on the spot of delivery. The preacher in a religious event may for example, write down a theme and scriptural texts while leaving the connected sentences to the process of delivery.

This method, a combination of ROS and improvisation proves beneficial when the speech writer is the same as the one to delivers. Otherwise, it becomes almost impracticable to deliver a semi – scripted speech prepared by somebody else. Where it is feasible, the writer and presenter must necessarily require massive effort at rehearsals which may not always be forth coming.

Out – Line Speech Format: Highly flexible and creative method that only notes in sequence, key points while leaving connected sentences to the delivery point. The advantage of this lies in the fact that where the atmosphere does not permit certain lines of thought or use of language, the speech maker changes direction. And because it is outlined rather than scripted, prevailing circumstances, at event venue, such as mood, time and language suitability are easily manageable. However, this method is most successful where the speech writer is the speech maker or where the latter has equal in-depth knowledge of subject and shares similar views with the former.

Unscripted Speech Format: This, otherwise referred here as improvisation or impromptu, is a speech format that requires no prior writing at all. Its success solely depends on the speech maker’s ability to improvise, that is, to create instantaneously, a spontaneous response to the situation. This, experience has shown, is the most effective speech style that does not fail to take audience along, as it is a child of circumstance.

Often you are asked to provide a repertoire or vote of thanks without warning. Using this format, you get your data from the prevailing circumstance and must immediately become a millionaire in thinking and in language if your audiences are of the millionaire class or you can be a road side mechanic if those are the people you are to communicate to.

The problem with this is that for beginners, improvisation could be challenging, as it requires tact and a lot of self-confidence.

• Rehearsals: After your documentation, the next stage is rehearsals. This simply means a trying out of yourself, a practice simulating the actual presentation you will be doing.

When doing this, critique your eye contact, facial expressions, gesticulations and general comportment. While practicing in front of your mirror may not be exactly similar to doing it in front of a thousand people, it gives you an idea of your look and performance and allows you to improve on those areas. You may like to present to your friend, spouse or kin to have their inputs.

• Speech Presentation: The essence of all the activities carried out from stage one is to achieve a remarkable presentation, such as would leave a desired impact by achieving the goal pursuant of which the speech was meant to be made. It therefore cannot be over-emphasized that this is the most vital aspect of the entire exercise, as it is the only thing people see and know about. Audiences do not follow you to your closet to see that you have researched your piece well but they will decide whether or not you have done well once you have delivered. For this reason, I like to say that it is better to conduct a poor research, do a poor documentation but superb presentation rather than having it the other way round.

To aid your performance in this regard, a couple of problems have been identified and solutions proffered here:

Overcoming Stage Fright: The incidence of stage fright is one menace too many that ruins otherwise, a remarkable speech. Your ability to manage this is as important as the other elements in the process involved, as your audience are not lenient, but are always looking for loopholes to capitalize on in unmaking your effort.

Ironically, everyone has some level of stage fright. The only difference being that some see the high tensed atmosphere and the rapid beating of their hearts as a positive force that complements their strength of delivery, while others fret at it.

What constitutes stage fright is fear; fear of the many eyes gazing at you, possibly “dissecting” and finding fault in whatever you are telling them, what you wear and the entirety of your being. Surprisingly, all this is more imagined than real, as audience hardly have any doubt until you give them a reason to. When you give the impression that you are in control, they accept that you are and thus, look up to you for answers.

Your appearance and perhaps gesticulations which you may have seen as errors become model to be emulated. This is why you must make your fear work for you.

There are several tricks to achieving this, two of which are suggested below:

Ice-Breaking – this refers to a ploy of ventilating tension rising from high expectation and an aura of formality. Audience expecting or rather, awaiting your presentation are kin and formal. This formality exerts more pressure on you, as you feel intense need and anxiety to deliver. In extreme cases, this raises doubts inn you as to whether you can satisfy them or not so you begin to stammer, jump words on the speech or add nonexistent words to the already prepared piece.

To break-the-ice, you can tell a short, relevant story or begin by doing an out of the way exercise like giving a joke or introducing yourself. This breaks the air of formality and helps both you and your audience relax enough to conveniently and enjoyably face the business of the day. By the time you have made your audience laugh or you have expended your pent-up tension telling a story, you will have made the atmosphere informal enough and gained the rapt attention of the audience.

Pen Cap Trick: Another way of managing stage fright is by directing the tension to your finger tips rather than to your head and mouth. This is possible by keeping your fingers actively engaged, as the natural course of function of the human system directs pressure/energy to a part of the body that is engaged in an activity. Therefore, if your attention lies only with your eyes and vocal cord, they will have to find a way of expending all the energy directed at them and in the process, mistakes could be made.

Splitting this pressure from your upper region to another section helps to keep balance in the overall management of tension and helps you coordinate and concentrate better in the efficacious delivery of your speech. The trick is to keep an object in your hand which your fingers will be compressing while you do the talking.

Because this activity is more physical than the intellectual role of speaking, more tension/pressure in exerted and expended here, leaving your heart with less thuds per time, and your concentration devoid of excessive anxiety.

However, it is advised that you pick an object that would not attract more attention than the speech. Something small enough to be completely hidden in your pals, and that does not make noise would do. Many people use paper clip, which they bend and straighten many times, while they speak. I had used pen cap made of plastic.

Looking, not Seeing: When presenting a speech or any creative work before an audience, many beginners find that they get lost if they focus on keeping eye contact with specific members of audience. The fact that your audience are taken along more when you keep eye contact with them is not to say that you must pay attention to the expressions on the faces as this will, more often than not, distract you. You can look in the direction of your audience generally without seeing of focusing on any one in particular. That way, everyone thinks you are looking at the next person and you end up achieving satisfactory presentation at the conclusion.

Diction: This had been touched earlier, but cannot be exhausted. The language of presentation should be chosen in line with the characteristics of the audience. Generally, a verbose speech is unnecessarily lengthy and full of jaw breaking language that make everyone clap for you not for the meaning and sense derived from your presentation, but for the amusement. The bottom line is to communicate, not to impress.

Structure of a Good Speech

A good speech, like every good piece of writing, is not just poured out at audience, but is meaningfully communicated only when it meets a prescribed, conventional specification. Every speech, good or bad has the following components, which either makes or mars it, depending on the writer/presenter’s ability to weave the various components into one beautiful piece or failure to do so, which leaves the work deformed like a physically challenged man.

• An introduction: this being the first line of your presentation, it is the most important as it sets the tone and mood for the rest of the presentation. If therefore, your introduction is good, it captivates audiences’ attention and stirs up interest: sends questions, expectations and anxieties running in the minds of the audience. So also does a poor introduction kill their appetite, so that rather than get anxious to get the rest of the gist from you, they get anxious to dispose of your time wasting presence. Speech makers of reasonable experience will tell you that the most embarrassing moment of their careers was when an audience just stared at them indifferently, while they made frantic efforts to get their attention. Often, they’d ignore you and fill in the gap by telling stories and holding pockets of briefs underground.

To avoid such pitfalls, your introduction must stir interest and be interesting enough for one man to tell another to keep quiet let him hear you well, as each speech must be worth the time spent to receive it. Otherwise, they would just switch off psycho-mentally, while leaving you to make the noise.

To achieve this, you can ask a rhetoric question, use an anecdote (a short analogical story) or a catchy quote but which must be relevant and which would make your presentation easier to achieve.

• Linkage: while some may argue rightly that the body of a speech and this section are indistinct, there is a need here to split them for the purpose of proper better understanding. A linkage is a sentence or two that connect the introduction with the details’ section (body) of the presentation.

• The Body of Details: Haven captivated the interest of your audience in the introduction and properly linked it using appropriate word, the emphasis now rests on providing all the details that are the main thrust of the presentation. All the points you may have gathered in the research will now be knit together beautifully and well explained to answer the questions your audience are likely to be asking. Your points must be well explained and objectively convincing enough that at the end, your audience will be left in no doubt (even if their own opinion differ), but rather have clear understanding of your impressions.

• The Conclusion: the last line of a good presentation should leave a lasting impression on people’s minds. Often, a relevant quote or rhetoric does the magic but the speech writer or (and) the presenter should understand that the relevance of the devices to subject or occasion as well as your accuracy of expressions is what leaves indelible marks on the minds of audiences. The conclusion should be food for thought, something people should remember long after they may have forgotten everything else, including the speech maker.

Basic Principles by Dreg En Ay

E-Books Success – Can Amazon Kindle?

E-Books: A Guessing Game

In honor of Amazon.com’s Kindle let’s play a game and try to guess the forecast for ebook sales over the next few years.

In 2007 the ebook market is in the infancy stage. Despite Sony and Amazon.com both releasing consumer friendly devices ebooks have yet to gain widespread consumer acceptance.

Based on the reach which Amazon.com has in customer base, the proliferation of technology and the comfort of consumers purchasing electronics and virtual goods online – I forecast the sales of ebooks in 2008 will be $25 to $40 million. This is a small fraction of the overall publishing revenue per year as you can see below.

A few numbers of note (numbers are rough estimates):

2007 Literature Rate: 50%

US Population:300 Million

PC Penetration: 60+%

Itunes Downloads: 2.5 Billion

Amazon.com customer base 40+ million

# of books purchased per year – per consumer: 4

Publishing Industry revenues in 2006: $25 Billion

As we see electronics advancing the trend is convergence. The long term trend will no longer be for a separate gps, handheld, cell, mp3 player, etc – but for one unified device.

We can already see this happening with cell phones, organizers, cameras and mp3 players. As technology evolves this trend will only increase. This will result in a super-set of market size for any good or service that can be delivered to that device. Ebooks will be just such a product. In 10 years I see pocket sized devices that project onto any surface, that read and translate any text, are simple, powerful and consumer friendly. Based upon this the potential consumer (or market size) for ebooks will be in the range of 50 Million in the US, 400 Million Worldwide.

In technology the market is nearly always guided by innovators and then grown by imitators. The cutting edge innovators first create the product, unit or system in order for the innovators to make it affordable and bring it to mass production. This holds true for older products such as dvds, downloadable movies and music. From Beta video players to 8-tracks the innovation piqued curiosity in the marketplace, but little else. Until the imitators came along and created copies and more drove prices down.

The same will hold true in the e-book marketplace. As Amazon and Sony are on the cutting edge of innovation – others (like Microsoft) will sit back, watch customer reaction and learn.

At the right time the imitators will enter the market and bring volume of both product and consumers.

Let’s compare ebooks to the popular itunes – as itunes provides a near-as possible model (discounting the hardware device for ebooks which has yet to appear)

Examine the itunes sales for 5 years (again – estimates):

Itunes:

Year 1 = 70 million

Year 2 = 370 million

Year 3 = 602 million

Year 4 = 1.5 billion

Year 5 = 2.5 billion

As we can see – low volumes for the first year but nearly double each year after. I will concede that Apple’s ‘star’ power has helped itunes sell in such rapid pace.

Discounting that affect for ebooks (although it certainly a possibility.

2008: 40 Million

2009: 75 Million

2010: 135 Million

2011: 200 Million

2012: 350 Million

These figures are arrived by extrapolating the # of consumers who purchase books per year, as well as textbooks (which I predict will be the first large ebook market to hit critical mass). They are much lower then itunes volumes as you can see – as we’ve got a much lower base of consumer for books then for music.

Adoption of ebooks will be similar to music. The major difference in adoption really lies in the behaviour of the consumer. Music is vastly more popular of a medium then literature, and is much less ‘easier’ of a consumable. Meaning that consumers can make use of downloadable music in many different ways, while working, playing, in recreation and anywhere that the device follows. The consumption of music does not require dedicated attention as does literature. This creates a much tougher challenge for the adoption of ebooks – both in terms of device (hardware) and usage patterns. Music is rather indifferent to device, some may be stylish, others not – but all have the overall same delivery methodology. Until the innovators can find an acceptable delivery platform the volumes will not materialize. However, once the acceptable platform is found it will be imitated and the pattern will closely follow that of the music downloads.

The attitudes of digital content have changed dramatically in recent years. The Internet as we know it and worldwide web passed the 10 year maturity mark and has saturated through the population at a staggering rate. As this has happened the flow of information and data has followed and opened up opportunities and marketplaces which we could only dream. As the generation X’ers grew up into expendable incomes of their own they began to influence online purchases. These purchases are no longer limited to physical goods (ie . amazon.com) but now virtual services and goods such as movies, music and ebooks are common. Music content delivered electronically opened the floodgates and direct delivery of movies via electronic methods is now hitting its stride. As often occurs with new technology the old producers had difficulties (and still do) monetizing their product in a new delivery method. Early delivery methods were prone to theft and abuse. Ebooks have struggled to catch on to this new marketplace as no consumer friendly device has been introduced to satisfy the apparent need. There are many less consumers for electronic literature then movies and music, and whereas a movie or music can be delivered to a computer literature is not often read online. Attitudes have changed, but roadblocks still remain.

Hardware devices play the pivotal role in widespread adoption of ebooks. The critical hurdle which must be overcome is finding a consumer friendly hardware device which can be marketed to the masses. The Kindle (Amazon’s) is a leap forward on that front. The device addresses several important consumer concerns such as ease of use, ease of purchasing ebooks, readability, portability and battery life. The Kindle is an advanced ebook reader and Amazon is a true innovator. The major flaw (or hurdle) to the Kindle is the price-point, $399. At that price the average consumer will not jump into an unknown or unproven technology. The major advantage of the Kindle lies in the wireless ability to connect to the ebook marketplace and download fresh content. The benefit Amazon has given to the market is in innovation. The new device will test out the market and provide feedback to other device makers on what works, what is accepted by the consumer and what does not. The hidden benefit is in market awareness. Since Amazon is such a large public entity many have been exposed now to the Kindle (many more consumers then those exposed to the Sony ebook reader). Market awareness is raised for the ebook product itself and downloadable literature.

The flattened marketplace of our era has created many opportunities for businesses, products and sales. The ebook will reach out to educators and recreational consumers alike -given time, consumer acceptance and ever changing technology.

Pricing Strategies – The Top 10 Mistakes Most Companies Make

Price strategy is emerging as the most important resource for companies to increase their competitive advantage. The vast majority of companies have spent years achieving gains through cost cutting, outsourcing, process re-engineering and the adoption of innovative technologies. However, the incremental benefits from these important activities are diminishing, and companies need to look at other areas to improve their business results. Today, companies are looking to serve well-defined market segments with specialized products, messages, product variants and services, and to earn superior profit margins while doing so. Savvy companies are implementing price optimization schemes and focusing on building their organization to serve their most profitable customers. Many are even “firing” customers who are unprofitable. All too many companies, however, use simplistic pricing processes and cannot even identify their most profitable customers or customer segments. This lack of information means that all too many management teams have their sales staff focusing the bulk of their time servicing the least profitable of their customers. Some companies even embrace policies and pricing strategies that drive away their best customers, and then they wonder why their profits are not growing. In the course of our engagements, we have seen examples of good and bad pricing policies. The following is a list of ten of the most common mistakes companies make when pricing their products and services.

Mistake #1: Companies base their prices on their costs, not their customers’ perceptions of value.

Prices based on costs invariably lead to one of the following two scenarios: (1) if the price is higher than the customers’ perceived value the cost of sales goes up, discounting increases, sales cycles are prolonged and profits suffer; (2) if the price is lower than the customers’ perceived value, sales are brisk, but companies are leaving money on the table, and therefore are not maximizing their profit. Costs are only relevant in the pricing process because they establish a lower boundary for the price. In certain circumstances, there are strategic reasons a company may decide to sell a product below its cost for a period of time, or to a certain market segment as a “loss leader.” However, when a price is set according to the perceived value of the product or service, sales are brisk, and profits are maximized.

Mistake #2: Companies base their prices on “the marketplace.”

The marketplace is often cited as the “wisdom of the crowds,” the collective judgment of the value of a product. But by resorting to “marketplace pricing,” companies accept the commoditization of their product or service. Marketplace pricing is a resting place for companies that have given up, where profits end up being thin. Instead of giving up, these management teams must find ways to differentiate their products or services so as to create additional value for specific market segments. The marketplace is full of companies that have managed to drag themselves out of commoditization and establish a unique value proposition. They have then gone on to capture that unique value at prices higher than those of “the marketplace.” The best-known case of reverse commoditization is Starbucks in its early days. By rethinking the entire experience consumers engage when they consume a cup, the company has produced prodigious growth and outsized profits. A Starbucks cup of coffee delivers a unique value proposition that engages millions of consumers daily (including this author!), and they happily pay $3.00 to $4.95 for what used to be a nightynine-cent cup of coffee. More recently, Starbucks has surrendered its vision of innovation supporting premium prices. It has allowed other companies to encroach on its claim of superior taste and a better experience. It has begun to count on price cutting as its primary mechanism for creating customer value.

Mistake #3: Companies attempt to achieve the same profit margin across different product lines.

Some financial strategies support a drive for uniformity, and companies try to achieve identical profit margins for disparate product lines. The iron law of pricing is that different customers will assign different values to identical products. For any single product, profit is optimized when the price reflects the customer’s willingness to pay. This willingness to pay is a reflection of his or her perception of value of that product, and the profit margin in another product line is completely irrelevant.

Mistake #4: Companies fail to segment their customers.

Customer segments are differentiated by the customers’ different requirements for your product. The value proposition for any product or service is different in different market segments, and the price strategy must reflect that difference. Your price realization strategy should include options that tailor your product, packaging, delivery options, marketing message and your pricing structure to particular customer segments, in order to capture the additional value created for these segments. An innovative software company priced their desktop version at $79.00 per seat, a figure that “felt right” for the executive team. Sales stagnated. Research showed that there were two distinct market segments: consumers and professionals. The $79.00 price was too high for the consumers who were interested in purchasing the product, and too low for the professionals. It communicated “not a serious tool” for the professionals who were interested in its value proposition. As a result of this research, the company decided to focus on the professional marketplace, and raised the price to $129.00. Sales soared.

Mistake #5: Companies hold prices at the same level for too long, ignoring changes in costs, competitive environment and in customers’ preferences.

While we don’t advocate changing prices every day, the fact is that most companies fear the uproar of a price change and put it off as long as possible. Savvy companies accustom their customers and their sales forces to frequent price changes. The process of keeping customers informed of price changes can, in reality, be a component of good customer service. Marketplaces change radically in a short period of time. It is important to recognize that the value proposition of your products changes along with changes in the marketplace, and you must adjust your pricing to reflect these changes.

Mistake #6: Companies often incentivize their salespeople on unis sold or revenue generated, rather than on profits.

Volume-based sales incentives create a drain on profits when salespeople are compensated to push volume, even at the lowest possible price. This mistake is especially costly when salespeople have the authority to negotiate discounts. They will almost always leave money on the table by: (1) selling lower priced products, and (2) dropping prices to “clinch the deal.” When their “job” is to get the deal, regardless of profitability, salespeople will do exactly that. And, as a result, your profitability will diminish. Companies need to redefine the salesperson’s “job” as maximizing profitability, and incentivize profitability, while also providing the salespeople the necessary “tools” to do so. These tools include information on profitability on each of the products your company sells, strict control of the awarding of discounts, and alternative choices and configurations to enable the salesperson to manage the inevitable negotiation about price.

Mistake #7: Companies change prices without forecasting competitors’ reactions.

Any change in your prices will cause a reaction by your competitors. Smart companies know enough about their competitors to forecast their reactions, and prepare for them. This avoids costly price wars that can destroy the profitability of an entire industry. Savvy companies understand that any significant lowering of your price – which may drive increases in volume – will provoke a reaction from your competitors.

Mistake #8: Companies spend insufficient resources managing their pricing practices..

There are three basic variables in a company’s profit calculation: cost, sales volume and price. Most management teams are comfortable working on cost reduction initiatives, and they have some level of confidence in growing their sales volume. But good price setting practices is seen as a “black art.” Consequently, many companies resort to simplistic price procedures, while the same companies use highly sophisticated procedures and technologies to track and control their costs in minute detail and in real time. Likewise, companies may confidently forecast what effect marketing campaigns and “the number of feet on the street” have on sales volume. Managers feel comfortable with these two hard data sets. Therefore, they spend nearly all their time on the issues of sales volume growth and cost control, overlooking the vital role of pricing strategy. They erroneously believe that pricing is not important, or that hard data and rigorous methods are not available to enable them to control pricing. In fact pricing is of outmost importance, and a key element of the marketing mix. Good pricing strategies use hard data generated by modern methods such as Value Attribute Positioning, Conjoint Analysis or Van Westendorp’s Price Sensitivity Meter, to generate accurate hard data on the perceived value of a product or service, thereby enabling mangers to maximize their profits by optimizing their prices.

Mistake #9: Companies fail to establish internal procedures to optimize prices.

In some companies, the hastily-called “price meeting” has become a regular occurrence-a last-minute meeting to set the final price for a new product or service, or a semi-regular review of the company’s price list. The attendees are often unprepared, and research is limited to a few salespeople’s anecdotes, perhaps a competitor’s last year’s price list, and a financial officer’s careful calculation of the product’s cost structure across a variety of assumptions. A more productive approach to price optimization requires data, analysis and discipline. These are the same ingredients that drove the cost-cutting success of the 1980’s and 1990’s, when companies systematically studied, reviewed and re-engineered their processes to eliminate redundancy and to reduce costs and cycle times. Price optimization requires, and deserves, the same level of attention and support.

Mistake #10: Companies spend most of their time serving their least profitable customers.

Most companies do not even know who their most profitable customers are. While 80% of a company’s profits generally come from 20% of its customers, a careful review of the data often will show surprises, since a company’s largest customers are often only marginally profitable. Failure to identify and focus on their most profitable customers leaves companies undefended against wIier competitors. Such failure also deprives the company of the loyalty that more attention and better service would provide. It can also mean that the company cannot actively seek out more profitable customers because they identified or profiled them. These companies base their decisions on anecdotes, stories, whispers and hearsay rather than hard data about customers and competitors.

Conclusion:

The optimization of pricing strategy is as important as the management of costs and the growth of sales volume. Since most companies have never done it, rigorous price optimization has emerged as an important source of competitive advantage and increased profitability. The iron law of pricing states that different customer’s will ascribe different values to your products and services. Savvy companies do the research to identify the various market segments they serve, and they re-engineer their marketing, packaging, and service operations to excel at meeting their needs. They use that research to align their prices with the value perceptions of their customers. In this way they win customer loyalty, lower costs of sales, and above all, enhanced profits.

Implementing Change – Innovation Vs Transformation

Innovation and transformation are two terms that get thrown around a lot when implementing change is on the table. Both terms are applicable to the process of change implementation. The problem is that they tend to get used inappropriately as interchangeable terms, in much the same way that idea and concept are used interchangeably. In both cases, this stems from a degree of overlap between the terms. When it comes to implementing change, they need to be separated.

Innovation is primarily about bringing something new into an organization, but it is not necessarily something new to the world. Organizations are like microcosms. The organizational structure represents the boundaries of the organizational world. When someone has an innovation, it is specific to that particular microcosm, which means that it could very well have been in the larger macrocosm of the outside world for some time.

In many cases, an innovation is simply a new way of using an existing technology to further the ends of the organization. After all, how much technology really sees full utilization within an organization? In most cases, only a small sliver of the capacity of a given piece of technology is put to use. Excel, for example, is a piece of software that can do some amazing things, but the average user only employs a handful of functions.

Where innovation leaves off is in implementation. Innovations are ideas about how things could be done, rather than how they will be done. Whether or not those innovations ever progress to the level of implementing change in the organization is frequently out of the hands of the innovator. This is where transformation differs from innovation.

Implicit in the meaning of transformation, as it is used in implementing change situations, is the follow through of implementation. Transformation certainly begins with a new idea or innovation, but it also entails that concrete steps are taken to ensure that innovation is adopted by the organization. For example, it may occur to someone in HR that social media could be used to enhance the organization’s morale or streamline teambuilding. Until some concrete steps are taken to actually get the employees involved with the social media, it is not transformation, merely innovation.

Seven Critical Success Drivers – Why New Products Win

The challenge in successful product innovation is to design a playbook, blueprint, or process by which new-product projects can move from the idea stage through to a successful launch and beyond, quickly and effectively. Before charging into designing this playbook, let’s first understand the secrets to success – what separates successful innovation projects from the failures, the critical success factors that make the difference between winning and losing.

Some are fairly obvious, but before you dismiss them as “too obvious”, recognize that most firms still neglect them. As we probe each success driver, reflect on how you can benefit from each, and how you can translate each into an operational facet of your new-product system or playbook.

1. A unique, superior product is the number one driver of new-product profitability.

Delivering products with unique benefits and real value to users – bold innovations – separates winners from losers more often than any other single factor. Such superior products have five times the success rate, over four times the market share, and four times the profitability of products lacking this ingredient.

The definition of “what is unique and superior” and “what is a benefit” is from the customer’s perspective – so it must be based on an in-depth understanding of different customer needs, wants, problems, likes, and dislikes:

  • Determine the customer needs at the outset – build in voice-of-customer (VoC) research early in your projects. Wants are usually fairly obvious, and easy for the customer to talk about. But spotting needs, particularly unmet and unarticulated needs, is more of a challenge, but often yields a breakthrough new product.
  • Do a competitive product analysis. If you can spot the competitors’ product weaknesses, then you’re halfway to beating them. The goal is product superiority and that means superiority over the current or future competitive offering. Never assume the competitor’s current product will be the competitive benchmark by the time you hit the market!
  • Build in multiple test iterations to test and verify your assumptions about your winning-product design. Test the concept with users – and make sure they indicate a favorable response. That is, even before serious development work begins, start testing the product!

2. Building in the voice of the customer into a market-driven, customer-focused new-product process.

But the great majority of companies miss the mark here, with insufficient VoC and no fact-based customer insights (in more than 75 percent of projects, according to one investigation). A thorough understanding of customers’ or users’ needs and wants, the competitive situation, and the nature of the market is an essential component of new product success.

Research has shown that top performing companies: work closely with customers and users to identify needs/problems, work with lead or innovative users to generate ideas, determine product definition via market research, interface with users throughout development, and seek market input to help design the Launch Plan.

Strong market focus must prevail throughout the entire new-product project, and should be considered throughout the new-product process:

  • Idea generation: Devote more resources to market-oriented idea-generation activities. The best ideas come from customers!
  • The design of the product: Use market research as an input to the design decisions to help guide the project team before they charge into the design of the new product.
  • Before pushing ahead into development: Be sure to test the product concept with the customer by presentation a representation of the product, and gauging the customer’s interest, liking, and purchase intent.
  • Throughout the entire project: Customer inputs shouldn’t cease at the completion of the pre-development market studies. Keep bringing the customer into the process to view facets of the product verifying all assumptions about the winning design.

3. Doing the homework and front-end loading the project – due diligence done before product development gets under way.

The best innovators are much more proficient when it comes to completing activities in the “fuzzy front end” of projects – they do their homework:

  • Initial screening – the first decision to get into the project
  • Preliminary market assessment – the first and quick market study
  • Preliminary technical assessment – a technical appraisal of the project
  • Preliminary operations assessment – manufacturing and operations issues
  • Detailed market study, market research, and VoC research
  • Concept testing – testing the concept with the customer or user
  • Value assessment – determining the value or economic worth of the product to the customer
  • Business and financial analysis – just before the decision to “Go to Development” (building the business case).

Best innovators also strike an appropriate balance between market/business-oriented tasks, and conduct more homework prior to the initiation of product design and development. Furthermore, the quality of execution of the pre-development steps is closely tied to the product’s financial performance.

“More homework means longer development times” is a frequently voiced complaint, and a valid one. But experience has shown that homework pays for itself in reduced development times as well as improved success rates:

  • Evidence points to a much higher likelihood of product failure if the homework is omitted.
  • Better project definition (the result of solid homework) actually speeds up the development process.
  • More homework up front anticipates changes to product design and encourages them to occur earlier in the process (rather than later when they are more costly)

Cutting out homework drives your success rate way down, and cutting out homework to save time today will cost you wasted time tomorrow. Make it a rule: No significant project should move into the Development stage without the actions described above completed, and done in a quality way. And devote the necessary resources to get the work done; that is, front-end load the project!

4. Getting sharp and early product and project definition means higher success rates and faster to market.

Securing sharp, early, stable, and fact-based product definition before Development begins is one of the strongest drivers of cycle-time reduction and new-product success. Best innovators clearly define the benefits to be delivered to the customer, they clearly identify the target market, the product concept is clearly defined, and the product features, attributes, and specifications are clearly defined.

Build in an integrated product and project definition step or check-point before the door is opened to a full development program. This integrated definition must be fact based: developed with inputs and agreement from the functional areas involved: Marketing, R&D, Engineering, Operations, etc. This definition has six components:

  1. the project scope
  2. target market definition
  3. product concept
  4. benefits to be delivered (the value proposition)
  5. positioning strategy
  6. product features, attributes, performance requirements, and high-level specs

Acknowledging a stable product definition is a challenge – even the best innovators struggle. Markets can be quite fluid and dynamic, so build in the necessary front-end homework, pin down the integrated product innovation as best you can before Development begins, specify in advance which part of the product requirements and specs are “known and fixed” versus which as “fluid, uncertain, and variable”, and build steps into your development process to gather data so that the “variable parts” of your product definition can be pinned down as development proceeds.

5. Spiral development – put something in front of the customer early and often – gets the product right.

Spiral development is the way that fast-paced teams handle the dynamic information process with fluid, changing information. Many businesses use too rigid and linear a process for product development. By proceeding in a linear and rigid process, the project team and business set themselves up for failure.

Smart project teams and businesses practice spiral development. Best innovator businesses are 6 times more likely to interface with customers and users throughout the entire Development stage. They build in a series of iterative steps, or “loops, whereby successive versions of the product are shown to the customer to seek feedback and verification.

Use spirals – a series of “build-test-feedback-and-revise” iterations. This approach is based on the fact that customers don’t really know what they are looking for until they see it or experience it – so get something in front of the customer in front of the customer or user fast (and keep repeating these tests all the way through to formal product testing).

6. A well-conceived, properly executed launch is central to new-product success.

Not only must your product be superior, but its benefits must be communicated and marketed aggressively. A quality launch is strongly linked to new-product profitability. Best innovators do the necessary market research – understanding buyer/customer behavior – in order to better craft the launch plan. They also conduct a test market or trial sell to validate the marketability of the new product and also test elements of the market launch plan. Best innovators also undertake a solid pre-launch business analysis, and most importantly, they execute the launch more proficiently – by a ratio of 3:1 when compared to poor innovators.

Don’t assume good products sell themselves, and don’t treat the launch as an afterthought. A well-integrated and properly targeted launch does not occur by accident, however; it is the result of a fine-tuned marketing plan, properly backed and resourced, and proficiently executed.

Marketing planning- moving from marketing objectives to strategy and marketing programs – is a complex process. But this complex process must be woven into your new-product system.

Four important points regarding new-product launch and the marketing plan:

  1. The development of the market launch plan is an integral part of the new-product process: It is as central to the new=product process as the development of the physical product.
  2. The development of the market launch plan must begin early in the new-product project. It should not be left as an afterthought to be undertaken as the product nears commercialization.
  3. A market launch plan is only as good as the market intelligence upon which it is based. Market studies designed to yield information crucial to marketing planning must be built into the new-product project.
  4. Those who will execute the launch – the sales force, technical support people, other front-line personnel – must be engaged in the development of the market launch plan, and some should therefore be members of the project team. This ensures valuable input and insight into the design of the launch effort, availability of resources when needed, and buy-in by those who must execute the product and its launch (elements so critical to a successful launch).

7. Speed counts! There are many good ways to accelerate development projects, but not at the expense of quality of execution.

Speed to market is an admirable goal, and there are many apparently valid reasons that cycle-time reduction should be a priority:

  • Speed yields competitive advantage: First in will win!
  • Speed yields higher profitability.
  • Speed means fewer surprises.

Speed is important, but not as vital as one might have assumed. Speed is only an interim objective – a means to an end. The ultimate goal, of course, is profitability. But many of the practices naively employed in order to reduce time-to-market ultimately cost the company money. They achieve the interim objective – bringing the product quickly to market – but fail at the ultimate objective: profitability.

Be careful in the overzealous pursuit of speed and cycle-time reduction. There are ways to reduce cycle time, however, that are totally consistent with sound management practice and are also derived from the critical success drivers outlined. Here are five sensible ways to increase the odds of winning but also to reduce time-to-market!

  1. Prioritize and focus: The best way to slow projects down is to dissipate your limited resources and people across too many projects. By concentrating resources on the truly deserving projects, not only will the work be done better, it will be done faster. But focus means tough choices: It means killing other and perhaps worthwhile projects. And that requires good decision-making and the right criteria for making Go/Kill decisions.
  2. Do it right the first time: Build in quality of execution at every stage of the project. The best way to save time is by avoiding having to recycle back and do it a second time. Quality of execution pays off not only in terms of better results but also by reducing delays.
  3. Front-end homework and definition: Doing the upfront homework and getting clear product and project definition, based on facts rather than hearsay and speculation, saves time downstream: That means less recycling back to get the facts or redefine the product requirements, and sharper technical targets to work toward.
  4. Organize around a true cross-functional team with empowerment: Multi-functional teams are essential for timely development and are a topic in the next chapter. Rip apart a badly developed project and you will unfailingly find 75 percent of slippage attributable to: (1) ‘siloing’, or sending memos up and down vertical organizational ‘silos’ or ‘stovepipes’ for decisions; and (2) “sequential problem solving”. Sadly, the typical project resembles a relay race, with each function or department carrying the baton for its portion of the race, then handing off to the next runner or department.
  5. Parallel processing: The relay-race, sequential, or series approach to product development is antiquated and inappropriate for today’s fast-paced projects. Given the time pressures of projects, coupled with the need for a complete and quality process, a more appropriate model is a rugby game or parallel processing. With parallel processing, activities are undertaken concurrently (rather than sequentially); thus, more activities are undertaken in an elapsed period of time. The new-product process must be multidisciplinary with each part of the team (Marketing, R&D, Operations, Engineering, Sales) working together and undertaking its parallel or concurrent activity. Note that the play is a lot more complex using a parallel rugby scheme, hence the need for a disciplined playbook.

Building the Success Drivers into Your Playbook

Many businesses have “operating procedures” or guides on how to do things right. Imagine you are crafting a new-product guidebook or set of operating procedures for how to do a new-product project right – for example, an “idea-to-launch playbook” or a stage-and-gate system to drive new products to market.