Today we learned that video chain – Blockbuster – has called in the administrators,  in the same week that music retailer – HMV – did the same.

For many observers, it’s no big surprise.  You only need to look at the prolific rise of initially DVD mail services like Lovefilm, who have quickly migrated their business model over to a film on demand model or the launch of new services like Netflix or Blinkbox to know that the writing was on the wall for “nightly hire” DVD’s.  Also on the threat matrix are the thousands of DVD’s to be impulse purchased in supermarkets for the price of a nightly rental.

I’ve spoken time and time again in this blog of the necessity to always understand what disruptive technologies are launching, who your indirect competitors might be and what changes are being wtitnessed in consumer behaviour, in order that you can make sound choices about future pathways.  Without these, you are not keeping pace with the world.  Add to that the totally transparent levels of pricing of just about anything and you have a perfect hurricane (not storm) ready to rip through your business model.

It’s hard to believe that the strategic plan of Blockbuster did not consider these things, if they didn’t, then the blame lays firmly and squarely with the senior team.  Maybe it was speed, they knew what needed to be done, but didn’t possess the talent or technology to move quickly.  Perhaps it was the business model, over 500 locations with eager landlords tied into long leases which couldn’t be unwound.  Or the cost of downsizing the whole thing simply couldn’t be borne from reserves.  The administrators will quickly figure things out and see what value remains.  Whether anyone feels there is anything sustainable to buy, I think unlikely.

Hungry consumers will be ready to pick over the bones, to give the shops a temporary buzz as they sense a bargain and a kill.  It’s estimated that the closure of Blockbuster, along with HMV and Comet will increase the empty retail outlet numbers by 5%, so cue more charity shops to a town near you soon.

Retail needs to be multi-channel and highly distinctive.  Creating store experiences that blend the on and off-line world, giving people a real reason to visit a store.  I categorise today’s buyers into three types: -

1. I-WIN = I Want It Now.  The tribe that leaves things too late to internet shop or hunting down something due to a breakage or fault.
2. I-WAIT = I know what I want but I will happily on-line shop for it.  Likely to go to a store to see something or try it on, but happy to wait and order it on-line for a better deal.
3. I-BROWSE = In a state of active purchase.  Happy to browse a shop and make an impulse purchase or browse an internet site.

Many of the big retailers have already recognised this and have created “destination” stores and integrated multi-channel experiences giving someone a real reason to visit using theatre or over and above benefits to shopping on-line, I call these “perkonomics”.  Hi-Fi retailer Richer Sounds are great at this, driving foot traffic to stores promising “better than the web deals” with real personal service.

Blockbuster won’t be the last.  Other retail chains may fall in 2013, January is normally the time when chains go, with Christmas sales dictating whether they can pay the next quarters rent.  What’s for certain is the landscape has permanently changed and the internet has truly challenged the high overhead cost of chains running stores.  Things will be fine for the big retailers that own their own brands and margins, life will remain pressurised for those that don’t.

The UK MD of Starbucks – Kris Engskov – did an embarassing climb down today, in response to consumer and government pressure about their UK tax position.  Offering to pay £20M over the next two years to the UK tax authorities, regardless if Starbucks make a profit or not, they’ve opened themselves up for further fire.  UK authorities have taken the gesture badly, tax isn’t negotiable.

Starbucks are one of the three American ‘GAS’ companies (Google, Amazon, Starbucks) who have adoped similar tax positions which sees them use loopholes in tax law to minimise their corporate taxation position.  There is nothing illegal in what they are doing, they are simply optimising their global tax position, through professional advice.  Maybe their mistake is that this did not exist on a risk register somewhere – What if we got found out and opinion turned against us?

The consumer backlash has been vociferous, with customers boycotting the stores and Starbucks being the lead story in the national media, fuelling sentiment even further.  Clearly Starbucks has taken a battering and they are trying to go on the offensive, perhaps with a slightly ill-advised recovery strategy.  The horse has bolted.

A business is entitled to minimise its Corporate taxation position under the rules, morality aside.  They are not the first, nor will they be the last.  I’m sure the media are undertaking an audit of other USA businesses to keep the story going and there will be further outings in weeks to come, like the MP’s expenses.

Will Amazon and Google suffer at the hands of consumers too?

It’s easy to walk into another coffee shop – maybe Costa – as you’re “voting with your wallet to show displeasure moment” to crowd-force Starbucks into doing something in the short term - and its easily argued that this has worked, we’ve seen action.  However, a long term boycott means staff may suffer as takings decline and stores get closed or consolidated.  It’s not the fault of the front-line people, it’s a strategic decision for the management to take the flack for, that’s why I’m still ordering my coffee from my usual shop, from the usual barista’s, in the usual way.   The people at the top have taken notice and long term changes will come as a result, they are on the radar of the politicians, not a good place to be.

Google and Amazon have stayed very quite on the issue, happy to see Starbucks take the bullets.  They were the easy target, on the high st., a discretionary purchase and easy to blame.  I haven’t seen a boycott of  Google or Amazon in the same way.  Google and Amazon feed a need for instantaneousness and convenience in peoples lives in such a way that they are simply embedded in the way people transact their daily business and the back-up options are few and far between. 

They will no doubt be reviewing their position and have media statements ready, however I don’t think they will see the bottom line impact of a consumer mob in the same way that Starbucks has seen.

Fundamentally, if blame were to go anywhere, it should go towards the system.  If a system exists which allows GAS -  as companies – to move profits around the EU legally using all of these royalty payments and licence agreements, then that is what needs to be reviewed.  We may not like that these businesses take full advantage of it, but equally if they choose to, then they should not complain if they suffer a consumer backlash as a result.  That is simply part of the decision making process and management of risk.  Tax authorities allow for such things in complex international organisations under transfer pricing agreements and the like, the question is for any business is how far do you want to take it?

They realise this, you only need to read the open letters on their website from their CEO, CFO and UK MD to see that the situation is complex.  However, like anything, headlines say one thing, details say another.  De-fragging a complex global tax structure is never going to be easy, particularly for the average person in the street.  The bottom line is that the issue it out.  To protect their UK employed partners, their brand reputation and their long term investments in apprentices, they need to tackle this quickly and make it yesterday’s fish and chip paper, or low-fat blueberry muffin packaging in their case.

Today I did a short talk at a local event called Tameside4good describing our reasons for supporting a local charity.  The event, designed to connect local charities with local businesses, was a great platform to talk about why charitable giving doesn’t have to be about chequebooks.  I entitled the talk “Feel like a secret millionaire” comparing the personal ephiphany of the millionaire who gives on the TV show with what you might also experience when helping others.

Smaller charities are finding it harder than ever to raise funds, with the recession continuing to squeeze incomes and businesses tightly controlling costs.  The big charities are spending more than ever on their marketing, dominating their share of the giving wallet, with the top 3% of named charities in the UK mopping up over 60% of the £11bn donated.  Healthcare, hospitals, animal and religous charities scoop 49% of all available cause donations, leaving the remainder to mop up the difference.

My role today was to describe why we – a large corporate – work with a small local charity and what benefits they get and we get in the deal.  Some of my key points were: -

• We preferred to work with local charities to our office where our footprint could be felt more strongly and staff more connected with the local outcome.
• You can’t help everyone and better to back someone local and back them big (relative to their running costs) to make a difference.
• It’s not always about the money.  We help out with other resources, time, administration, printing, website updates and marketing.
• Our profile as a large company adds a lot of kudos to a small charity, attracting other companies to the concept.
• The impact of our effort is clear and the majority of funds raised (95%+) go into delivery on the ground giving much bigger impact.
• The charity is far more accessible and they are always dropping by to let us know how things are going or to ask advice, they feel part of us.

There is a lot of upside to going local.  Nearly all large businesses have some sort of Corporate Social Responsibilty programme and the concept is trickling right down to micro-businesses who are also ‘giving something back.’  There is an immense sense of personal and business achievement when you can unconditionally help others and I remarked that “you’ll sleep easier and night and wake up with a ready-brek glow in the morning” when you know that you’ve done something amazing.

I finished today by saying that charitable giving should not be attached to ROI (return on investment) as with other money/time that you might contribute in day to day life.  It should be attached to simply doing the RIGHT thing, growing yourself by growing someone else and being “mad for it” (mad being an acronym for “Making A Difference”).  Giving doesn’t have to be about money, you might well possess multiple skills in your business that would be solid gold to a small charity.  Things like accountancy services, PR, marketing, website maintenance, vehicle servicing, signwriting – stuff that might not cost you anything but might cost a small charity lots.

So, be MAD for it yourself.  Pick a local charity, go see them and see what they do, understand their problems and how you can help, then DO SOMETHING AMAZING by helping them out.

“A wise man knows everything and and a brilliant man knows everyone” – a great anecdote re-capped by Chairman of Downtown Manchester in Business Chairman – Michael Taylor – at a leaders lunch in Manchester today.

Michael used today’s lunch to wax lyrical about a learning journey he went on with some other business leaders to Silicon Valley in the USA.  Attending the offices of some of the top performing businesses out there and comparing the differences in the entreprenerial eco-system to that of Manchester and the UK in general.

You can learn more about Michael’s experience in this short video.  What was evident is that Michael and the people that went on this incredible journey had a “Life Impacting Experience” and now Michael and his fellow journeymen have altered their pathway as a result – powerful stuff.

As he spoke today, I enjoyed hearing about the obsession that many of the entrepreneurs have in silicon valley, the nervousness not to miss a great opportunity and the importance of failure on your CV, making you a more investable proposition for many high-ticket angels. 

Most of all this event became a massive learning experience, one destination with several individual journeys. 

Events and trips become experiences primarily due to the people you meet and spend time with, we should never forget that.  Learning is best when experienced experentially.  This sounded a fantastic trip, a once in a lifetime combination of people, places and insight which drew together those things into a life impacting experience which has re-determined their pathway, their thoughts, words and actions.

We learned today that a service that visits our business, a blood donation bus, is to be cancelled due to government cuts.  It’s a classic example of a short term decision taken in the moment, which can have far reaching effects.  Why?

Put simply – convenience.  Bus pulls in our car park and we give permission to anyone in the business who is prepared to donate blood the abilty to do it in work time.  A total no brainer and the easiest way to engage people to give blood for the first time.  We have many people that never gave blood, but encouraged by a colleague, in they went to realise it isn’t so bad.

What now?  Well now, people will be expected to look up where there nearest donation centre is, fit that in around their busy life away from the office and make the effort to get there.  You know where that’s going to go in todays time and attention poor world.

What’s happened to the numbers?

After a lot of back slapping about the immediate cost benefits, the other major KPI (units donated) is going to go down.  Someone is going to start a project team about it, decide that they need to invest money in a donor acquisition campaign, brief an agency and spend some money leafleting or advertising to get the numbers back up.  The yellow vehicle in the picture is a blood donation bus.  Challenged by the fact that many young people weren’t donating blood, a health authority in the Scandics built this Lamborghini styled blood bus to drive around and get young people involved, so mobile is where it’s at.

It’s a classic lesson to always look at the bigger picture before making short term cuts of any sort.  We use a decision making matrix developed by Meyers Briggs to ensure we fully evaluate such decisions before execution, because you may well end up executing another one of your KPI’s unintentionally.

So, we’re back in recession, officially. Cue further talking down of the economy, headlines, general pessimism and politicians talking about the importance of manufacturing – yawn 2.0. Who cares? Most people I know in business are going about their business, not moping about but chasing the money that is out there. They are upping the work rates, refining the marketing and thinking how to keep creating.  Looking back achieves a number of things: -

1. It can show trends of the past.
2. It can point you in the way of previous failure and success.
3. It can provide deep insight into previous behaviour.

I think Steve Jobs had it right though, he assumed people didn’t know what they want yet and set about designing things for their tomorrow, less than their now. 35,000 products sold an hour and last quarter revenues of $38bn can’t be wrong – but Apple is a special case right? Wrong.

 They capture the headlines yes, they’ve penetrated our lives – yes, their products are great – yes, but they are one tiny fraction of the amount of money that gets spent in the world, across technology, business and consumer, so there’s plenty to go at.

Just because we are in recession it does not mean people are not spending. They may spend less on discretionary items, perhaps but people still spend. So, hold your head up high, breathe in a lungful of air, shoulders back and march on out into that economy and do something wonderful. You’ve nothing to lose and everything to gain. Stay positive, stay sharp and get recession busting. See you out there.

Gerald Ratner is perhaps the most famous casualty of how your words can come back to haunt you.  The former CEO of jewellery chain Ratners famously describing the products they sold as “total crap” whilst speaking to the Institute of Directors annual conference in 1991.  The media went for him and his fall from grace was quick.

Wind forward to 2012 and step forward Chairman of London mini-cab company Addison Lee – John Griffiths, who has whipped up a storm after using inflammatory language about London cyclists in the “in car” magazine they publish called “Add Lib” (read the story here).  This time, social media played the role of the traditional media and within twenty four hours, the backlash has been significant. 

Looking back, when people started to talk about web 2.0 and how it would put the web back in the hands of the people, from the big corporations, I’m not sure if we all really knew on what scale that would happen.  Now we’re here, you can see exactly how.

Be Careful What You Wish For

Griffiths, clearly underestimated the impact of his words and the unified nature of the cycling community.  Twitter literally exploded with outraged cyclists, many of whom happened to be Addison Lee’s customers at the Corporates within which they work.  A hashtag was started #boycottaddisonlee, where you can see the impact of the story – one Twitter follower alone who is responsible for £100K a year of bookings to Addison Lee claiming that they’ve closed their account with the company.  All the nationals picked up the story, if Addison Lee were smart they would have realised that The Times had only weeks before run a cycle safety campaign called “CycleSafe,”  so any inflammatory words would put a journalist straight to work.  The five hundred of so cyclists that are intending to stage a “die in” outside Addison Lee’s HQ won’t do the Corporate image any good either and throw more wood on the fire.

Damage Limitation

As you can imagine, the PR damage limitation machine has now engaged reverse and Griffiths is quickly softening his language, manicured clarifying statements are being released and he’s even backing the Times CycleSafe campaign – classic PR crisis management in action and very predictable, if not a little shallow.  It’s amazing how a backlash from paying customers can quickly change your view.  Addison Lee will feel the aftershocks of that for some time to come, I’m sure.  What’s different about today’s times however, is that if you search “Addison Lee” in google, you’ll read nothing but up to the minute negative stories and you’ll also get to read blog’s like this, which will have a big impact on their organic search for some time to come.

Leading Lessons

Every business needs a good spokesperson, particularly big businesses more than others.  It doesn’t always have to be the CEO, you can cast people according to skill.  What you must make sure of however is that they generate headlines for the right reasons.  Web 2.0 (social media and user generated content) have put power to the people.  You can see this manifest itself in many ways such as crowd sourcing, crowd funding and – in this case – “crowd forcing” – where the crowd get together to express their aggregated anger and create impact.  The impact to Addison Lee will be an entire community of cyclists, who have vowed to veto using their company ever again – oh dear.

Something as important as  your customer magazine, needs to be carefully filtered for content, it’s not the platform for your rant.  It should always be objective, considered and informative.  You can tackle big issues, of course you can, however the approach taken by Addison Lee on this occasion I think may well make the MBA courses as a case study of how to damage your Corporate reputation at a Ratner level scale.

Today, news broke that I am to get a new role, taking on the day to day running of the UK business.  I’ve been inundated with messages of congratulations via multiple messaging platforms all day, my Blackberry finally ran out of puff around 3pm due to overuse. I particularly liked the headline in the Manchester Evening News, once a salesman, always a salesman – true.

Having been in the business now for 18 years and working my way up through the company, I thought it might be interesting to share a few thoughts on how I ultimately got here, as there are lessons to be learned, particularly if you are starting out on your career in a large enterprise.

In no particular order: -

1).  There are no easy options.  It’s taken me a long time to get here, it’s taken perserverance and hard graft.  A lot of long hours, nights away, trips, weekends and sacrifice.  If you want it, be prepared for it.

2). In the early days, if extra responsibility was available, I took it.  No shirking, just stepped up and did the extra work, sacrificing my social time in the early days for my career in order to get on.

3). I’ve built trust.  Within a Japanese working culture, trust is very important.  You have to do what you promise and be good to your word to build long term credibility.  I’ve always treated my personal reputation the same, guarding it closely by my actions.  Be good to your word.

4).  I’ve never settled for average.  Being average often leads to mediocrity.  Averages are made of overs and unders, to get the middle ground.  I’ve always aimed to be an over by pushing my own personal limits.

5). There are no quick fixes.  Forget reality TV, you want to make it in the Corporate world it’s all about the value you add over the long term, not in one audition or single moment of glory.

6). Remember where you came from.  As you push on, don’t let your new found fame go to your head.  Keep your feet on the ground and continue to look for bits of advice from those that you work with.  Remember to network as much internally as you do externally.

7). Develop yourself.  Read, network, attend conferences.  If you become institutionalised within your business, then it’s easy to be pigeonholed.  Stay bang up to date by constantly updating your knowledge.  Think of your knowledge like an API, there to let others develop it.

8). Stay relevant.  The world moves at an amazing pace, you will only stay relevant if you stay close to the latest goings on, trends, thinking.  Linked to point (7), how are you keeping up with the latest goings on in your industry or sector?

9). Be yourself.  It took me a long time to realise that I just needed to be me.  For a long time I was one person at home and one person at work, putting my “workface” on when I walked through the Corporate doors.  Soon realised that I was becoming “roboemployee” so aligned the work me with the real me.

10). Don’t push too hard.  Written lots about this.  If you add value, your time will come and you will get your reward.  If you push your agenda too much, execs above you will tag you as “only in it for yourself”.  Always think of the big picture, take one for the team if you need to, execs will always remember that in the long term.

There are lots more as I come to think about this topic.  The key thing is that effort + results = value.  No silver spoons, no fast-tracks, no funny handshakes.  In the world economy now, employers are looking for people that are MAD, that is they “make a difference”.   Long term stakeholder value, trumps a quick win any day.  

Put the hard yards in, develop, grow, network, thing BIG, be respectful to others, take the bad days with the good and ultimately enjoy what you do or move on.  I’ve loved evey minute of my time within the business I work within, even the hard days, as I’ve learned something about myself with every experience/challenge and situation.

Ask a room full of people whether they have more free time now then they did five years ago and rarely do you see a hand go up.

Time, Attention and Trust are all in short supply, we’re optimising every moment, catching up, organising, on top of our other competing demands.

So, if this is now the convention of life – work/life blend, rather than balance, how should you change your business development approach to your customers?

Circles

Life seems to have gone full circle.  Being a proud Generation X, I’ve been schooled in the the importance of personal relationships.  During the late nineties and into the new millenium, businesses went a little CRM crazy, defining relationships by database fields.  It was all about your system.

Compare that to now.  Ten years on, we’re now talking about the importance of one to one, not one to many.  Traditional media continues to find ways to justify itself and social media has created hundreds of millions of individual voices.

Relationship building is becoming about the balance of how frequently you listen combined with how frequently you communicate (reception+transmission) at a one to one level.

Where are you FRoM?

If people are time starved, then traditional methods of reaching out to them may be less effective.  You’re networking events may not be so well attended, your e-shot open rate may be a fraction of a percentage, your direct mail may be directed to the re-cycle bin.

Using applications to stay front of mind (FRoM) with your customers and network are key.  Blanket bombing them with mailshots is a guaranteed way to put yourself in the “less relevant” box of their thinking.

Working smarter with tools like Linkedin and Twitter to create a simmer effect in your relationship isn’t hard.  Primarily it means that when they have a problem, you’re aware and – more importantly – you’re in their field of view as a potential problem fixer or trusted advisor.

Completing some training with a professional services company on Friday, I hit this point home.  Quite often, interventions by the professional services sector are event driven.  If you don’t have proximity to your clients (in range to listen) at their point of need, then you may well find a competitor through the door.  Use the technology that exists today, to make that job easier.

I’ve had personal experience of this over the years and it’s a timely reminder that you have to stay in regular, relevant, contact with the people that are important to you, if you wish to be the person they talk to in their moment of need.

Imitation is the sincerest form of flattery or so the saying goes.  This gave me a few laughs on a short break to Tenerife this weekend when I came across the following: -

1. A Michael Buble tribute act called “Michael Bubble”
2. A restaurant called “Gordon Ramsey’s” offering a three course dinner for €8,95 – their logo was exactly the same as the famous chef – “Gordon Ramsay.”  I did look twice thinking I was about to have the cheapest fine dining meal ever!
3. A Ghanaian looky looky seller (fake watches etc) wearing a Tesco “Here to Help” T-Shirt and badge – he even had Tesco carrier bags if a customer made a purchase!

There is so much talk about innovation today, that it’s easy to forget that imitating or copying a product and trying to improve it is also a tried and tested way of starting a business.

Now, I’m not suggesting that you rip off a major brand owners trademark – you’ll get into serious trouble for that – however significant markets exist for commodity products, where operationally efficient businesses can drum up significant revenues just by doing something better or introducing a complementary product into an existing customer base.

It’s widely acknowledged that in the seventies and eighties that many of the Japanese consumer electronic brands, took existing technology and bettered it.  They reverse engineered products, found ways to either improve them of their manufacturing processes and then launched them in the market, often with another 100 flashing LED lights for full effect!

Many of those brands are now household names – Sony being a great example of a brand that did it well and then went on to bigger and better things, like the Sony Walkman.

So if you’re thinking to try and find ways to expand your business, it doesn’t need to always come as a result of an innovation.  Five ways to further increase revenues could be: -

1. Pick a feature that is the current big thing in the market and see how you could better or improve it (subject to patent).
2. Establish other products that your customers might already sell, that you may be able to supply (always a good one if your customer wants supplier consolidation).
3. Consider how technology you might have developed could be used for other things.  Dyson do this really well, think how they have introduced hand-dryers and vacuum cleaners using their powerful motor technology.
4. See how your competitors might be deriving revenues from complimentary goods and services that you might be able to offer as up-sells or cross-sells.  Classic example for TV’s would be HD cables and cabinets.
5. Consider adjacent marketplaces to your current offering and see if you could move sideways into an adjacent market, rather than trying to do something brand new in a market you may not have expertise in.

Innovation doesn’t always have to be the next big thing, the most radical idea or a game changer.  Small improvements plus complementary products can also increase your capacity to do more business.