What’s the Retail Battle- do you Showroom?

Posted on January 14, 2013 by Peter Klinge

Bulls-eye on Price

What’s The Retail Battle About? Do you Showroom as a Consumer but Loathe it as a Business? The concept of show rooming is that shoppers go to a retail outlet for products they are interested in, then check their smartphones for the best pricing online, and often then buy online and not at the store. How unfair, right?!!! Great for the consumer but awful for retailers and the manufacturer’s pricing margins.

What Does this Mean? Best Buy, the consumer electronics retailer, last year was a big victim of this practice as it saw sales and profit skids. The CEO was ousted and the stock price has fallen.

Show rooming is affecting more than just consumer electronics to everything retail as more people go online to shop for a better price.

Brick and mortar retail sales results are being reported this month. It appears the holiday sales results through December were not as strong as expected. Black Friday sales after Thanksgiving got off to a good start for both physical stores and online but then seemed to go soft.

Wal-Mart is redoubling its emphasis on everyday low pricing. Last year they became more aggressive about price matching competition. Not clear the company is extending the price match offer to online competitors; though they claim they are evaluating online pricing every 20 minutes.

Target is stepping up to match online pricing. Target Showroom Video Story As this ABC news piece demonstrates shoppers can compare and contrast the store price and offer to online. Target will honor the online price.

How Should Business Adapt? There’s an always opportunity to find in shifts like this:

Consumers are clearly winners
Smartphones and the telcos win i.e. AT&T, Verizon, T-Mobile, Sprint
Supply Chain & logistics, information systems get smarter and better
Improved Productivity
Retailers find New Competitive Advantage

You may ask how do Retailers benefit? Well, if they adapt as Target is, then they can demand better pricing at the source, this will tend to equalize pricing across all channels- online included.

But the most important opportunity for retailers is to reconnect with consumers on service value and experience. After all, the whole premise behind show rooming is that consumers shopping online can’t see, touch, or experience the item they want to buy. Add in product knowledge, friendly service, convenience- the shopper is already in the store; and the confidence the customer got the best price, then retailers can reestablish their main advantage.

Service, convenience, and shopping experience; difficult to get all of that in same way online. As an example of retail success, I have not seen an Apple retail store that isn’t always full of people, shopping bags full of products.

There’s more details to the Showroom story from AP in this link

Peter Klinge, Jr. helps companies achieve their desired growth outcomes. He brings extensive business experience from a variety of industries and around the world.

Posted in CEO and C-suite, Client Case Studies, Consumer Marketing, Global Business, Management Leadership, Retail, Sales Management, Social Media | Tagged Advertising, battle, Best Buy, business, CEO, consumer, international, management, online, Retail, revenue, sales, shopper, showroom, Target, Wal-Mart, warfare | Leave a comment

What 6 things Small Business Fears Most…?

Posted on January 8, 2013 by Peter Klinge

6 Things Small Business Fears Most

Keeping employees motivated and satisfied: Man, if you’re a business owner you might think people should just be happy to have the job your company affords in this uncertain economy. Well, I hear the point… BUT if you want employees and an environment that people and you enjoy coming to work everyday, consider this:
1. Employees want more than a job and a paycheck. Yep, they want to contribute. Work with them on goals that are relevant to the company.
2. Provide recognition for performance. Celebrate deserved success; Individual and Company wide.
3. Pay attention to work/life balance challenges your staff might be facing. Your employees AND yours.
Boss’ relevance: You’re the owner, the head of the company. People look to you to lead, give direction, make decisions; basically a know it all. This is a falsehood! Heads of companies are often playing this role at the detriment of the company. At worst they’re a poser. Accept that it’s OK NOT to know. Then get the best available talent around you. Collaborate, get input, then make an informed decision based on the input you’ve received. This is decision making NOT consensus management. As the owner/CEO the decision is ultimately yours. The difference is you’ve done what you can to engage your talented staff for input. They then should be able to agree to and execute the decision.
Costs: Rather than look at costs as a line item, consider whether there’s an investment toward creating economic value, e.g., revenue that supports the expense. Beyond certain basic support costs to the business review direct costs that create economic value to growth. Evaluate, change, and refine. This might included eliminating unprofitable customers (yes, there’s such a thing), dropping certain products from the portfolio, evaluating customer facing and support personnel on both qualitative and quantitative measures.
Revenues: Consider what is profitable, sustainable and repeatable. NOT just what grows the top line. Often small companies grow fast BUT at a loss on every incremental revenue dollar. Review 6 Keys to Revenue for more specifics.
International Competition from over the Horizon: Your blind to what might be coming at you outside of your backyard. In past years China manufacturing was the key concern. People ran over there to establish sourcing deals. Well China is becoming more expensive, less competitive. What’s the next country to go to? Consider this… Don’t worry about what you can’t see… Yeah really! Instead plan your own future. Map out your international strategy and programs. Where are you now? What products seem to have international traction? What are the appropriate channels and partners for country markets? Do you even need to source manufacturing beyond your home country?
Government Regulation: In the U.S. the new health care provisions in 2013 really begin to kick in. The policy of greatest concern appears to be the requirement that any company with more than 50 employees. The company must provide health insurance or the employer will need to pay a penalty to the government on each employee not covered. Many companies are looking at ways to avoid the mandate by reducing full time headcount below 50 or to shift more people to part time status. This is a knotty issue: complex from the perspective of human resource, legal, and tax. Consider:
1. Review of total employee compensation; wages, salary, benefits. What is the change effect? How do employees feel about this, and what solutions might be arrived at?
2. Strategic evaluation: as with any regulation consider the situation, the issues and opportunity to be constructive with what may otherwise seem a huge impediment.
3. Get Related Human Resource expertise to advise on healthcare implications for your company. There are some good resources to speak with. Please email me if you’re in need peter@klingeassociates.com

My friend and associate Rich Hennessey comments that economic uncertainty is the new business normal. I’ll add… don’t lament about what’s not in your control. Focus on what you can do.

Rich adds, “…be optimistic; take calculated risks…”. He suggests 10 Methods for Growth in 2013. Two of the 10 focus on customers as both a source of additional business AND input about your business.

REMOVE your FEAR!!! Be bold, create your own certainty to overcome fear. Lastly, remember to have fun on the journey to growth that satisfies you.

Peter Klinge, Jr., is an executive whose purpose is helping companies grow to achieve their desired potential. He works alongside owners and executives to define and execute growth strategies. As needed he engages in operating, project, and board advisory roles.

Posted in CEO and C-suite, Global Business, Interpersonal, Management Leadership, Team Organizational Development | Tagged bosses, C-suite, China, competition, employees, government, healthcare, human resource, international, management, marketing, mission, regulation, revenue, sales, strategy, teamwork | Leave a comment

Do You Still Read? Holiday Reading List Review…

Posted on January 3, 2013 by Peter Klinge

Have you heard that people don’t read much beyond what they snack on digitally with various feeds on their smart phone?

I don’t have the readership facts on hand. It appears difficult to find time to read thoughtfully and critically. Below is a review of a wide range of books you may find useful.

My family asked me to clear out the home office stacks of books so I read a lot the last few weeks. By New Year’s Day I pretty much got through the books I wanted to.

My reading ranges from business, to novels, biographies, history, and reviews of global policies. Here’s a sample of what I read recently and highlights of each.

Business biographies— Autobiographies of 2 regional entrepreneurs from Utah.

Larry H. Miller’s Driven. Larry Miller built Larry H. Miller Enterprises into a billion dollar business consisting of one the largest automotive dealer groups in the country, theaters, and shopping malls. He’s probably best recognized for his ownership of the Utah Jazz NBA franchise in Salt Lake City. He passed away in 2009.

He admits to being a micro manager. He grew up in business with no formal background or education. Starting in the parts department of an auto store he found his gifts, and then began to buy his own auto dealerships.

His hard charging style and emotions on his sleeve personality led him to take on one project after another. Always in motion he overworked at the detriment of his personal life and health which he acknowledges later in his career but too late to reverse his health decline.

Good read on a business leader who gave much to his community. Equal parts what to do and NOT to do in business leadership.

Bill Child’s How to Build A Business Warren Buffett Would Buy… The R.C. Willey Story. An uplifting business story from Chairman Bill Child who in the mid 50’s was thrust into the CEO spot of the small appliance retailer when his father in law and the namesake founder became ill and died.

Interpersonal skills

Crucial Conversations Tools for Talking When Stakes are High by Kerry Patterson, Joseph Grenny, Ron McMillan, Al Switzler. Great how tos in this practical book on addressing communication challenges in personal and business life.

Leadership

Start With Why: How Great Leaders Inspire Everyone to Take Action by Simon Sinek. Helpful guide to asking of ourselves a basic question about the purpose of individual labors and the work we contribute to in business.

International

What the U.S. Can Learn From China: An Open Guide to Treating Our Greatest Competitor As Our Greatest Teacher by Professor Ann Lee. The professor delivers an interesting perspective from both a Chinese and American point of view. Born in China Professor Lee and her parents and family came to the US while she was still in grade school to make a new start.

Well educated with a Wall Street investment banking career behind her she presents views on wide ranging topics about China and how the US can learn from this country. A bit later she provides her insights on the what China can learn from the US. The book’s subject matter includes comparisons on government and political structure, economic and fiscal planning, entrepreneurship, cultural values.

A new book I’m reading Infinity of Being: In the Beyond by Sandra Eells Klinge is a fascinating spiritual and existential novel full of adventure and thoughtfulness.

Peter Klinge works hands on with company owners and executives to help their companies grow to achieve their desired goals.

Posted in Biography, CEO and C-suite, Global Business, Interpersonal, Management Leadership, Team Organizational Development | Tagged business, C-suite, CEO, globalization, international, leadership, management, marketing, mission, planning, strategy, teamwork, vision | Leave a comment

How to Effectively Transition Leadership for Growth

Posted on December 10, 2012 by Peter Klinge

Leadership transition of the CEO is hard and messy, but it’s possible to effect transition in meaningful, gratifying ways that build legacy companies for generations to come.

The central issue appears to stem from alignment of the company’s products and services to purpose, vision or the Why to stakeholders i.e. CEO, board, employees, customer, shareholders (private and public). Combine this with ineffective communication and there’s a mess on your hands.

Paul Strebel, Emeritus Professor ,at IMD presents thoughtful points and how to’s in his article Pitfalls in CEO Succession. Much of the challenge in getting the CEO position right is due to corporate culture and politics.

6 Factors are identified:

Board is out of touch
Ego Interference
Ignorance of Internal talent
Superficial Search Process
Poor on-boarding of CEO
Relationship and Communication Break Down Between CEO, Chair and Board

I believe it’s important to look at the objective strategic planning and operating execution approach in the next growth cycle of the company. Assess the organizational and leadership needs and skills required relative to the current and anticipated business situation.

Evaluate if the current vision/mission is up to date with market conditions.

Determine if the current leadership and team is capable of the changes necessary through the next stage.

Create an independent team to properly review the company’s condition and leadership.

Too often the company will view succession appointments as some version of the current CEO’s qualities and board perspective. This will lead to a redundant appointment of past and current leadership perspectives on the company prospects.

Less probable will be a fresh take on the company’s future potential or the skills needed in new leadership that could differ greatly from the current CEO.

Examples of this might be the current CEO was excellent from start up to early stage development. The next CEO, however, needs to deal with growth challenges for a mature company. Different traits and skills from the past.

Or functional skills need to change. Engineering background gives way to more product, customer centric marketing skills; financial etc. to accommodate acquisitions, divestitures.

Companies and their boards need to avoid working with reference points wedded to their past. Especially true if anticipated market conditions will be quite different.

In fast moving markets companies need to adjust to business cycle changes. Often the CEO and team of the past won’t be able to meet the challenges going forward.

Industry specific expertise or experience may not be as critical as people think. If the company has a deep bench of talented industry veterans, then why should the CEO background match that?

You can follow a good LinkedIn discussion group on this point re: Lou Gerstner becoming IBM CEO with no technology industry background. I commented as follows….

…Intellectual curiosity combined with broad organizational experience, and an ability to listen intently to draw insights will work better vs an over emphasis on industry experience in choosing C-suite leadership. The CEO can’t ignore industry expertise but shouldn’t be constrained by it in viewing strategic directions and org changes. Humility, objectivity, and decisiveness is a real balance. That’s why not everyone is cut out to be CEO/leaders.

Gerstner is a notable example of bringing such traits forward to help re-imagine IBM’s potential, and aligning many of the execs from industry to new possibilities. The succession of IBM CEOs since Gerstner’s time are all long time company and industry people who have ably adjusted to changing market conditions. A line of IBM execs that can do that is Mr. Gerstner’s legacy as well as long term shareholder value…

It is a rare CEO that can change from one growth stage to the next over long periods of time or bring varied industry backgrounds to a new role and situation. But why use the past CEO’s credentials and qualities as a basis for the next CEO?

Peter Klinge, Jr. is an executive who addresses challenges as described here. He works with small to mid size companies on growth stage opportunities and organizational transition. He is asked by founders and CEOs to affect change via interim, project, and board adviser engagements.

Posted in CEO and C-suite, Client Case Studies, Global Business, Management Leadership, Team Organizational Development | Tagged C-suite, CEO, Gerstner, growth stage, IBM, leadership, management, planning, strategy, vision | 1 Comment

Tick,Tech, Tock 2012 Technology Excitement Review

Posted on December 2, 2012 by Peter Klinge

This year was full of so much business news about products, innovation and finance. Most true in technology with topics on IPO, leadership and the void in Steve Jobs passing; as well as points about design, marketing, customers. Let’s not forget about what constitutes IP protection in the Apple/Samsung titanic struggle of the rounded phone corners! And finally who is up and who is down, and their futures, notably, Apply and Microsoft.

Both LinkedIn’s relatively new Business Insider, Steve Ballmer’s Nightmare and WSJ 11/30/12 B5 page offered insights in a summary form that I can comment from.

As I commented on a LI post I’m excited by how much consumers are benefitting from all the technology innovation and the competitiveness among leading established players and relative new comers. The range includes MS and Apple, to Amazon, Google, FB.

New phones, pads/tablets, notebooks, entertainment, media are thriving and as consumers we’re benefitting on improved price, performance and value.

Leadership, research capabilities and the opportunity to advance various business models are in play.

I don’t believe economies benefit from a winning, dominant player. In fact there’s room aplenty for all the major players and many more to come.

Microsoft IS successful and will continue to remain so. They have so much cash, research capability, and an enormous customer base. Combine this with a management team driven to continue to build and grow.

Ditto for Tim Cook and his gang, the leaders of Google, and Amazon. Room for all.

I read with interest a Jeff Bezos Fortune cover story recently. The net impression was that he continues to take a long term investment view of building Amazon. During the dot com 90’s and early 2000’s this view was discouraging to the average retail shareholder as the stock languished and lost value especially if you were hyped into buying near its IPO days.

Bezos continues his approach. Each time the Amazon financials begin to look attractive Bezos takes another start up investment approach to the next Amazon growth opportunity. No time to catch your retail investor breath.

However, both the Amazon strategy and shareholder return in the last several years have been rewarded. Though at it’s current share pricing $252 and PE 3000; the indication is you and I need to be a 20 year investor to hope to have a reasonable return. Nonetheless, the company has a tremendous business foundation and prospects. But depending on your point of view it’s hard to figure out.

I believe there are great opportunities as well for MS, Apple, Google , Samsung for years to come.

I’m less certain for Facebook; see my earlier review… How Much is There, There?. The company appears to be the sad face of social media public companies: Groupon, Zynga, and FB are oversold disappointments.

Lots of great ideas, but in my view poorly mapped business models, leadership; conflated by IPO hype. It appears some of these companies would be better off returning to private status, away from the public scrutiny, to develop their technologies, customer insights, pricing and revenue models. And not be subject to retail investors angst.

I contrast this with the steady, quieter success of professional social media company LinkedIn. My most used media platform LI appears to know its professional audience, and model to secure revenues from a range of offer streams. Though at $108/share and a PE approaching 700 it’s rich for this value investor.

There’s been much to observe and learn in 2012 and I look forward to continued dynamism in 2013.

Peter Klinge, Jr. is an executive focused on growth strategy and execution for small to mid size companies. He accepts interim, board advisor, and project engagements with founders and CEOs.

Posted in Brand Marketing, Client Case Studies, Global Business, Management Leadership | Leave a comment

Klinge Business Growth Ideas

Posted on October 31, 2012 by Peter Klinge

Happy Halloween!

Hopes and Prayers to everyone in the East suffering in the aftermath of Sandy.

Three Growth Ideas to bring to your attention.

Story of one of the greatest business decisions- Intel
Business Warfare and the power of positioning. Think again if you don’t think the Presidential campaigns are not about marketing
China today and the future. Great book, On China, from Henry Kissinger highlights global changes unprecedented in the history of great power diplomacy. The Cold War and the last 20 years are not indicators of what the future will bring or how to address and work with the remarkable and continuing ascent of China well into this century. Perhaps I’ll review this book in greater detail at a future date. I’m still processing its ideas. I certainly encourage its reading.

Peter Klinge, Jr. is an operating executive focused on helping private companies grow.

Posted in Brand Marketing, Client Case Studies, Global Business, Management Leadership, Uncategorized | Tagged Advertising, brand, branding, business, international, management, marketing, strategy, vision, warfare | Leave a comment

Great Business Ideas- Intel’s Greatest Decision- what Peter Klinge Learned

Posted on October 15, 2012 by Peter Klinge

Fortune’s latest issue highlights how Intel made one of history’s greatest business decisions. The concept and implementation of Intel Inside in the early 90’s changed technology marketing and introduced or reintroduced the notion of ingredient branding.

What few people may know less about is the fact that though Intel had been in business since about 1968, few had heard of the company until beginning in 1991.

The Intel Inside and complementary tag line The Computer Inside (see Pentium II commercial) changed and forever influences awareness and consideration of what customers think about Intel Corporation.

Even though other companies such as AMD have been making microprocessors about as long as Intel, only Intel Inside confers the premium value ingredient associated with providing computer users with power and applications for all aspects of our lives. Their processors recently began supplying Apple’s most popular products.

In the late 90’s I joined the Dahlin Smith White team (part of global firm HAVAS: Euro RSCG) to help with the Intel account. DSW was the agency behind the brand development of Intel demonstrating how with Intel Inside the user can experience huge benefits in multimedia, Internet, and other applications.

Product introduction cycles concurrent with Moore’s Law, attributed to Intel co-founder, that processing power would double every 18 months underlay the latest processor introduction. We timed launches through the 90’s and 2000s to this cycle around the Pentium brand and subsequent Centrino (WiFi mobility) announcements.

I thing Apple’s product marketing strategy is similarly timed to offer news about the brand every year or so now to stimulate purchase of the latest i Phone, i Pod and to retain top of mind awareness and brand loyalty.

As with Apple, Intel’s marketing and communications were carefully crafted across Intel’s various customer segments ranging from developers to consumers, and IT decision makers/buyers at large corporations. The famed bunny people ( so named after the clean suits worn in the fabs) made Intel iconic. The Web business and marketing strategies via Intel.com and online advertising helped to drive e-commerce and how people engage with the Internet.

We succeeded making something extremely technical and complicated to understand fun and accessible. See the fun we have with Homer Simpson commercial.

Intel’s business performance is rewarded handsomely for its strong execution in connecting with customers.

Peter Klinge was a partner with the Euro RSCG DSW Partners for several years and was privileged to be a leader a team for Intel’s web strategy.

Posted in Advertising, Brand Marketing, Client Case Studies, Global Business, Management Leadership, Uncategorized | Tagged Advertising, brand, business, management, marketing | 5 Comments

Business Warfare: Mass, Superiority, Economy, Initiative, Simplicity

Posted on October 8, 2012 by Peter Klinge

A dear friend and long time associate Brad Majors and I love history. We often talked about military history and the inevitable comparisons to sport, and the game of business.

Warfare is an unfortunate part of human history. Nonetheless, when we consider the physics of our universe warfare is often a forcing function for how we overcome obstacles. This applies to how we organize people, supply and logistics; or to figure out how to gain advantage or leverage against superior physical forces e.g. a larger group, scaling a mountain, crossing a river.

We economize with limited resources; find initiative and innovation to address a problem. I found an old letter among my files from my friend Brad that summarized 10 Principles of Business (War) that are relevant today… They teach this in various forms in management programs from diverse institutions as West Point to business schools.

Keep the Objective in mind.
Achieve Superiority in Mass at the decisive point.
Economize Your Forces where you don’t mass.
Maneuver— stay moving.
Maintain Security.
Show Initiative— Take the Offensive.
Do not underestimate the Element of Surprise.
There should be Unity of Command.
KISS— Keep it Simple, Stupid.
There must be Cooperation among the lieutenants.

There are countless business strategy and marketing books that represent these tenets. The most interesting are those that provide past and contemporary business examples. One good book I refer to friends is by Trout & Ries: Positioning The Battle for Your Mind. There are new editions frequently printed with contemporary marketing case studies.

An ancient classic is Sun Tzu: The Art of War. This may be one of the earliest written books on the tenets of diplomacy and warfare. I’m reading a book by Henry Kissinger: On China. It makes frequent reference to Sun Tzu in the form of diplomacy and global engagement the Chinese leaders use.

I believe there are business books written as rewrites of the Sun Tzu principles but I recommend an edition closer to the original. It’s straightforward and condensed well in a few pages.

When I’m engaged with a company I bear these basic ideas in mind in considering how to build sustainable growth. Evaluating the application of strategies and tactics to meet objectives always comes back to these principles. I believe too often presentations around economics or finance create hard to understand abstractions for business leaders.

This then confuses the company’s underlying purpose, and the needed focus on execution of well crafted yet simple strategy. Any plan that is confused becomes too theoretical and the lieutenants can’t agree on how to follow. So, they don’t.

Of the many companies I was privileged to be involved in each case we assessed the marketing in terms of the principles above to understand the mission, our plan to get there, and what resources there are to achieve the goals. For example:

Pepsi- a challenger brand; we positioned Diet Pepsi during a diet cola growth phase with Ray Charles to broaden appeal among all cola drinkers via entertainment that benefited the Pepsi Cola trademark and Pepsi to Wall Street as the Uh Huh…! company. A fun period.
Compaq Presario- we outflanked IBM and Apple by presenting to consumers in a simple way how multimedia innovation and the onset of the Internet can enhance people’s life, education, and small office/home office opportunities.
Intel- we told the story of the Computer Inside or Intel Inside visually, demonstrably, and simply to distinguish Intel from all other manufacturers of processors.

In each example, over the history of these brands they continue to market with focus. At times they adjust to remain contemporary, or make changes due to business cycles.

Peter Klinge, Jr. is an operating executive, board advisor and CEO cheerleader to help companies sustainably grow. He’s had both F500 and start up business experience with strong perspective borne of a career in the advertising/media industry on how to create value through communication.

Posted in Brand Marketing, Client Case Studies, Global Business, Management Leadership, Team Organizational Development | Tagged business, economy, growth stage, leadership, management, marketing, mission, strategy, warfare | Leave a comment

Klinge Twitter Weekly Updates for 2012-10-07

Posted on October 7, 2012 by Peter Klinge

Zynga Ugh…! Is it the company, the industry, what? http://t.co/54sjgQNP #
I'm attending this NY event @ NYAC 10/9 to 10/10/12 http://t.co/KWKDBr3A #
imagine a time when humans communicate only w pics on cave walls to show where the good hunting & berries are; no read…http://t.co/N5cHwP4r #
Found my past online; still useful http://t.co/X9oa6K7t #

Posted in Management Leadership | Leave a comment

Klinge Twitter Weekly Updates for 2012-09-30

Posted on September 30, 2012 by Peter Klinge

Interesting compare & contrast among generations Who's more tech adept in social media? http://t.co/mekDm4RO #

Posted in Management Leadership | Leave a comment

klinge

What 6 things Small Business Fears Most…?

6 Things Small Business Fears Most

Do You Still Read? Holiday Reading List Review…

How to Effectively Transition Leadership for Growth

Tick,Tech, Tock 2012 Technology Excitement Review

Klinge Business Growth Ideas

Great Business Ideas- Intel’s Greatest Decision- what Peter Klinge Learned

Business Warfare: Mass, Superiority, Economy, Initiative, Simplicity

Klinge Twitter Weekly Updates for 2012-10-07

Klinge Twitter Weekly Updates for 2012-09-30

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