This is the 4th in a series of posts based on the April 2009 issue of the Harvard Business Review on navigating in a downturn economy. This post is a review of the article entitled, Who Can Help the CEO? by Phil Terry P. 33)
As one who writes business fables, I have to confess a weakness for these fictionalized case studies in the HBR. This particular one is about a CEO who finds himself behind in his overly aggressive financial projections, his VP of sales has just resigned, and the CEO feels quite isolated and frozen. What to do, what to do? In the context of the story he gets well-wishing advice from his wife and squash partner. Then here’s what 3 outside professionals offer:
1. An IT entrepreneur CEO suggests a peer counseling group.
2. A dean of a Business School suggests the CEO share his weakness with his board and create a culture of valued input.
3. A venture capitalist suggests the CEO get active mentors and ask them for input.
I suggest any CEO looking to get out from under the feeling of being isolated, read this article closely.
Showing posts with label downturn. Show all posts
Showing posts with label downturn. Show all posts
Wednesday, April 8, 2009
Monday, April 6, 2009
Marketing in a Downturn Economy
This is the 2nd in a series of several posts this week from a review of the April issue of the Harvard Business Review, which focuses on navigating in a downturn economy.
Article Review: How to Market in a Downturn (by John Quelch and Katherine Jocz).
The authors suggest that marketers in any company consider four (4) psychological states that their markets might be segmented into:
1. Slam-on-the-Brakes: People most affected by the recession—lower income or anxious consumers. They halt all but the most necessary of purchases.
2. Pained-but-Patient: More stable and optimistic about the long term. Less certain about the future. Cautious about larger, less necessary purchases. Typically the largest segment of population, who are often unscathed by employment issues.
3. Comfortably Well-Off: These folks continue to purchase nearly at the same levels as pre-recession. They think they can ride out the bad time.
4, Live-for-Today: This group tends to be urban and younger consumers, unconcerned about savings, who yearn for experiences, less than possessions. They tend to buy today and are unlikely to change their habits.
I like the easy-to-comprehend matrix that describes each class of consumers and well worth studying and applying to your particular market segment.
The authors have also have created a second and equally useful matrix called “Tailoring Your Tactics” to the above 4 psychological market against types of products at risk described as follows:
--Essentials—basics products/services needed to sustain life (survival)
--Treats—indulgent products/services considered justifiable
--Postponables—needed products or wanted but can be put off
--Expendables—products/services that are both unnecessary and unjustifiable.
For example, the authors suggest when marketing Treats to the Pained-but-Patient consumer, offer frequent patron use items (buy 3 and get one free), advertise products as morale boosters, and advertise products as options to more expensive and frivolous luxuries.
The authors also offer a list of “7 Smart Ways to Economize on Advertising.”
For example: “#4 Advertise brands jointly with a marketer in a different product category that targets a similar consumer segment.
This article is well worth the read in its entirety for any business in the midst of trying to redefine a strategy for troubled waters.
Article Review: How to Market in a Downturn (by John Quelch and Katherine Jocz).
The authors suggest that marketers in any company consider four (4) psychological states that their markets might be segmented into:
1. Slam-on-the-Brakes: People most affected by the recession—lower income or anxious consumers. They halt all but the most necessary of purchases.
2. Pained-but-Patient: More stable and optimistic about the long term. Less certain about the future. Cautious about larger, less necessary purchases. Typically the largest segment of population, who are often unscathed by employment issues.
3. Comfortably Well-Off: These folks continue to purchase nearly at the same levels as pre-recession. They think they can ride out the bad time.
4, Live-for-Today: This group tends to be urban and younger consumers, unconcerned about savings, who yearn for experiences, less than possessions. They tend to buy today and are unlikely to change their habits.
I like the easy-to-comprehend matrix that describes each class of consumers and well worth studying and applying to your particular market segment.
The authors have also have created a second and equally useful matrix called “Tailoring Your Tactics” to the above 4 psychological market against types of products at risk described as follows:
--Essentials—basics products/services needed to sustain life (survival)
--Treats—indulgent products/services considered justifiable
--Postponables—needed products or wanted but can be put off
--Expendables—products/services that are both unnecessary and unjustifiable.
For example, the authors suggest when marketing Treats to the Pained-but-Patient consumer, offer frequent patron use items (buy 3 and get one free), advertise products as morale boosters, and advertise products as options to more expensive and frivolous luxuries.
The authors also offer a list of “7 Smart Ways to Economize on Advertising.”
For example: “#4 Advertise brands jointly with a marketer in a different product category that targets a similar consumer segment.
This article is well worth the read in its entirety for any business in the midst of trying to redefine a strategy for troubled waters.
Sunday, February 1, 2009
Leadersip: Thriving, Not Just Surviving in a Downturn Economy
This is the second in a series of posts on leading in a downturn economy.
In the January 2009 issue of the HBR, Donald Sull of the London Business School writes "How to Thrive in Turbulent Markets" (pp.78-88). In a piece full of advice and boxing analogies, Sull notes that thriving in such an economic downturn requires leaders and companies both to absorb the blows and be agile enough to take advantage of emerging opportunities. The problem is that often times leaders often retreat into such a defensive absorption role that they forget that there are opportunities (offense) as well that must be exploited to ensure a strong comeback.
Measures of Absorption (defense). Have...
--Diversified cash flow lines
--Unique tangible assets
--Powerful business partners
--Low fixed costs
Measures of Agility (offense):
--Exploit change (my note: if you get lemons…make lemonade)
--Use the sense of urgency to move the company forward. (everyone unites faster when faced with a common threat)
--Attract entrepreneurial leaders.
--Reallocate cash and talent across units.
This is an article worth getting for all managers and fashioning a hard discussion around what your company is doing both to absorb the blows and counter-punch.
By the way, Sull likes Mohammad Ali as the best boxing example of his model—an ability to absorb or take a punch and the ability to be agile and throw an offensive blow.
Remember Ali’s famous chant: Float like a butterfly,sting like a bee. Good advice for leaders today.
In the January 2009 issue of the HBR, Donald Sull of the London Business School writes "How to Thrive in Turbulent Markets" (pp.78-88). In a piece full of advice and boxing analogies, Sull notes that thriving in such an economic downturn requires leaders and companies both to absorb the blows and be agile enough to take advantage of emerging opportunities. The problem is that often times leaders often retreat into such a defensive absorption role that they forget that there are opportunities (offense) as well that must be exploited to ensure a strong comeback.
Measures of Absorption (defense). Have...
--Diversified cash flow lines
--Unique tangible assets
--Powerful business partners
--Low fixed costs
Measures of Agility (offense):
--Exploit change (my note: if you get lemons…make lemonade)
--Use the sense of urgency to move the company forward. (everyone unites faster when faced with a common threat)
--Attract entrepreneurial leaders.
--Reallocate cash and talent across units.
This is an article worth getting for all managers and fashioning a hard discussion around what your company is doing both to absorb the blows and counter-punch.
By the way, Sull likes Mohammad Ali as the best boxing example of his model—an ability to absorb or take a punch and the ability to be agile and throw an offensive blow.
Remember Ali’s famous chant: Float like a butterfly,sting like a bee. Good advice for leaders today.
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