Ever run or cycled into a headwind? You have to work a lot harder to make the same progress that normally comes a lot more easily. Conversely, running or riding with the wind at your back is a glorious feeling.

On a recent ride, I had plenty of opportunity to consider how headwinds and tailwinds apply to business as I tried to distract myself from all the huffing and puffing I was doing just to maintain a decent speed. Here’s what I came up with:

The prevailing “winds” of business can make a huge difference in the amount of effort a company has to exert to be successful. Market shifts like the emergence of a new technology or the discovery of a new raw material create a tailwind which companies can use to their advantage (e.g., You Tube enjoyed a rapid ascent thanks to the democratization of video-recording capabilities) — or a company’s foundation can be threatened by a headwind like when Kodak found itself blown away by how digital imaging transformed the use, value, and meaning of cameras and picture-taking.

Consumer trends also create head- and tailwinds. Demographic shifts like the growing aging market have fueled the success of Oil of Olay’s Regenerist skincare products, while attitudinal changes like the growing concern for the environment drove (pardon the pun) Hummer out of business.

Developments in channels and distribution function like winds as well – shopping malls and mobile payment providers are operating in head- and tailwinds respectively. Political environments speed and slow businesses as the impact of recent changes in taxation, regulation, and healthcare demonstrates.

Although a generous wind at your back doesn’t guarantee success, business is generally better when the winds are working in your favor. Entrepreneurs would be wise to ascertain the prevailing winds of the market before developing their business model and plan. And established players need to maintain enough nimbleness to navigate the changing winds in their business environment.

But it’s not always possible to go with the flow – and sometimes there’s more to gain from zagging when others zig. Fritz Maytag didn’t allow his microbrewery, Anchor Brewing, to get caught up in the category’s popularity whirlwind of the 1990’s, and so the label continues to enjoy a strong reputation and high price premium today. At a time when most e-commerce companies are using a drop-ship model to offset inventory risks in a volatile economy, Zappos has engendered remarkable customer loyalty in part because chooses to face the headwind and manage its distribution in order to control the customer experience.

So the point is not to avoid headwinds – but rather, to be aware of the head- and tailwinds impacting your business and to develop your strategies and run your operations accordingly.

If you’re determined to tackle a headwind, some lessons from my running and cycling experiences apply:

- go slow and be deliberate – When it comes to headwinds, B.F.I., an abbreviation for Brute Force and Ignorance which I’ve heard the Army uses, is not the way to go. I’ve learned the hard way that trying to blast through a headwind when working out rarely works. The same goes for business.

Pace yourself and prepare for a long, hard haul. You’ll want to dole out expenditures slowly, set interim goals which keep you on track toward your ultimate objective, and double-up on efforts to boost morale. And you’ll want to ensure every step you take moves you closer to your goal, which requires careful analysis and planning. Accenture Institute for High Performance researchers report that conservative financial management and a bias toward profitable internal growth over acquisitions enabled companies to successfully face the headwinds of the early 1990’s recession.

- remove detractions and distractions – When I cycle into the wind, I zip up my jersey and crouch down a bit in order to lessen the mass for the wind to catch. I also keep my focus on the road and don’t look around as much, so that I can channel all my energy to the ride.

In the same way, businesses should cut – or at least delay — activities and programs which aren’t core to the mission. You’ll want to focus all resources on the task at hand and eliminate the things (bureaucratic processes, stale partnerships, and perhaps even cultural norms) which are slowing you down. Unfortunately in some cases this might mean cutting jobs. Kodak has emerged from a potential demise in part by slashing its workforce from 60,000 in 1982 to around 7,000 today.

I believe running and cycling also hold some valuable lessons for operating in tailwinds:

- don’t become overconfident – I can’t tell you how many times I’ve unknowingly run with a tailwind and chalked up my speedy time and great feeling to my training, only to turn around to head home and get woken up from my delusion by the strong headwind.

When your company experiences success, it may be tempting to attribute your progress to having the smarts that your competitors don’t, or to running a more efficient operation, or to having superior leadership. While all of these may be true, it’s likely that the winds of business have also been working in your favor.

You need to keep your corporate ego in check and not become overconfident. Taking favorable market conditions for granted can blind you from the need to develop new strategies and capabilities. So far Apple has been riding a great wave – I hope the recent antenna-gate isn’t evidence of dangerous arrogance.

- conserve some resources. Taking advantage of a tailwind makes sense. When I’m running with one, I pick up my pace knowing I can go farther and faster than normal. And I enjoy it, for sure. But I always conserve some energy, even if I’m not on an out-and-back route and worried about facing a headwind on my way back.

I never know when I’ll need an extra boost to get around a detour – or if a yellow light is going to necessitate a last-minute sprint across a large intersection – or even if another runner comes up on my heels and my competitive spirit kicks in. Likewise, companies should always be prepared for surprise detours, deadlines, and competitive attacks. Andy Grove’s famous motto “Only the paranoid survive” definitely applies here.

The MIT Enterprise Forum is a great program for gleaning business insights from real, live case studies.  Every month a CEO of a local, up and coming, high tech company presents an executive overview of his/her business and introduces two current challenges they’re facing.  Then an expert panel of advisors gives their advice and feedback and offers potential solutions to these challenges.  Audience members get to observe the presentation and panel interaction, and then offer their own questions and observations.  The following recaps lessons learned from this month’s program.

I’m not calling out the company or its founder here because this isn’t intended as a critique of them – rather, I’m hoping these lessons are helpful to all businesses.  But here’s a bit of background:

This month’s Forum covered an email marketing company which had experienced great success as a trailblazer years ago.  But now as the gap between the company and the competition has narrowed, the company realizes the need to respond with a robust next generation solution.  The founder explained the history of the company, introduced the company’s new offering, and asked for advice on the best customer value proposition for this new version – should it be a suite of brand management and marketing services OR an email marketing provider which also offers related services?  The panel was comprised of really smart businesspeople and I got a lot out of their discussion.

Below are nine lessons based on the panel’s advice as well as my own insights from the program:

1.  Don’t let your product define your vision – The key question of the case presentation was actually the wrong question.  Instead of trying to figure out whether to position the company as an integrated solutions provider or an email marketing provider, the company needs to first identify its brand vision.  It needs to figure out what it wants to stand for and what future it wants to create.  The values and attributes which define the company and differentiate it will be far more sustainable, extendable, and defensible than a product-based value proposition.

2.  Innovation isn’t always the answer – For many tech companies, innovation can be a knee-jerk reaction to commoditization.  As lower-priced competitors start stealing market share by offering the same products and services, it seems the only answer is to shore-up development and try to innovate your way into a new, less competitive space.  But that transition is not easily, cheaply, or quickly made – and there’s no guarantee commoditization won’t ultimately show up there too.  Instead of innovating simply for survival, perhaps the company would be better off figuring out how to thrive in a commoditized world — whether through a distinct feature set, target audience, or pricing strategy.

3.  The business you’re in may not be the real business you’re in – The company views itself as an email services provider and that may be the root of the problem.  With such a limited view of what business it’s in, the need to transition to a broader, more comprehensive offering seems obvious.

But if it were to re-frame the business from what it does to what it provides, it might see itself in the customer database business or in the message distribution business.  A database orientation would lead the company to focus on services managing relationships and optimizing the value of the database.  A distribution business might lead it to focus on efficiency and deliverability of communication across multiple channels and platforms.  Either direction provides a more focused path for the company than pursuing an amorphous “integrated solutions provider” platform.

4.  Know thy customer – Throughout the panel discussion it became clear that the company lacked clarity and insight on their customers.  The founder talked about targeting “marketing professionals” without acknowledging that this could include everyone from an account representative at an ad agency who manages email marketing for multiple clients, to a brand manager who is responsible for all marketing programs for his consumer packaged goods brand, to a small business owner who does her own B2B marketing.  “Everyone” is not a target strategy.  The company needs a robust market segmentation which indicates the differences in needs and drivers between segments as well as the current profitability and projected value of each segment, so it can determine which segments are its best targets.

5.  The customers you have may not be the ones you want – Further on the customer, the company must look beyond its current customer base.  The most valuable segments in the market or the ones driving market growth may be different from the ones which have fueled the company’s current business.  It’s important to understand who these prime prospects are and how they differ from existing customers in order to determine whether or not to target them instead.  And instead of feeling assured by positive feedback received from current customers, the company should solicit input and development collaboration from target prospects.

6.  Figure out the problem you can solve better than anyone else – The founder explained they designed their new product to solve as many problems as possible.  All of these problems fall under the broad umbrella of customers not having enough time, but they’re an unwieldy bunch of needs when grouped together.  It’s the classic mistake of trying to do a bunch of different things and ending up producing mediocre results, instead of being focused on doing a few things well.  The company needs to start by intimately understanding its target customers’ needs and then it should identify the one or two ways it can serve them better than others.

7.  Just because you can doesn’t mean you should (aka “the Lycra principle”) – This is a corollary to the previous point.  With its new version, the company added a host of capabilities and features, some of which seem truly impressive.  But the result is an overwhelming home page and a user experience that actually gets in the way of the user accomplishing his/her mission.  This is a common problem among technology firms, where product development is driven by a product/engineering mindset vs. a customer needs mindset.

8.  Be confident but not arrogant – It seems the company has a distorted view of the competitive landscape.  On the one hand, the founder talked about many different competitors in different sectors (Constant Contact in email marketing, Facebook in community, etc.) – he struggles to identify where his company fits in.  He needs to be clearer about its competitive advantage and to be able to communicate it confidently and compellingly.

On the other hand, it seems the company is somewhat dismissive about the strength of its competitors.  The founder listed email marketing giants like Constant Contact and Exact Target as competitors but suggested that his company really only competes with a little known player because it’s the only one which rivals his company’s quality and robustness.  Overconfidence can be misleading.

9. “Once bitten, twice shy” may hold you back – Several years ago the founder brought in a CTO and essentially handed over the reins to him.  Unfortunately that person overpromised, under-delivered, and ultimately left the company stranded with indecipherable code and without a new product launch.  It’s clear the founder felt burned by this and is now gun shy about hiring in other leaders.  But it’s also clear he needs to bring in other people to help him run the company.  He needs a strong marketing leader to address many of the points above, and he’s going to have to trust this person to take the company to the next level.  At this point in the company’s lifestage, marketing needs to be the driver.

related posts:

• re-position? just do it
• rethink your business

I’ve finally made it through all of the hours of Olympics coverage which I DVR’d because I had been unable to watch most of the Games live.  Since I already knew the result of many of the competitions, I was interested in watching mostly for the profiles of the athletes and stories behind and nuances of their achievements.  I gleaned a few insights that seem to have relevance for companies who are competing in the game of business.

from Shaun we learn the importance of safety nets

There was a lot of buzz about the secret half-pipe that Red Bull built for snowboarder Shaun White to train on.  But what seemed to have been overlooked in the story is the actual half-pipe structure itself.  In addition to the standard half-pipe, it included a foam pit (the first of its kind, apparently) which Shaun used to practice his amazing aerial tricks.

With mounds of foam as his safety net, Shaun tried out moves he had only previously imagined, saying, “The foam pit let me learn what the move in my head should feel like in the air.”  After nailing the stunts over the foam pit, Shaun then took them to the snow-covered steel half-pipe.  The half-pipe, the website explains, enabled Shaun to take “his tricks from concept to reality and the sport from today to tomorrow.”

Companies need similar safety nets — venues where they can try out big moves without risking fallout from failure. The confidence you have when you know you have little to lose is truly empowering.

The good news is that safety nets are more easily created — and used — these days.  Whether it is customer panels, or virtual reality environments, or living labs, companies now have tools to develop their own safety nets.  And a more collaborative, inclusive mindset is permeating corporate cultures.

With willing collaborators and less resource-intensive contexts, companies can create their equivalent of a foam pit to cushion the landings of bold new ventures they set aloft – and in doing so, push the limits of innovation.  As Shaun’s website states, “When you’re at the top…that means pushing into unknown territory.”

from Apolo we learn the wisdom of knowing when to hang back and when to seize the moment

Speedskater Apolo Anton Ohno has become famous for his ability to capture the winning slot at the most opportune moment of a race – and he demonstrated this unique skill once again at these Olympics.

In one particular contest, his move from last position to first was so fast, you might have missed it if you blinked – and yet it was so graceful, it looked effortless.  After the start of the race, he settled into the back of the pack — you could almost see him sizing up the competition and plotting his move.  While the others jostled for position, he skated patiently behind the others until the last few laps.

And then in one instant, when Apolo sensed the opportunity to move ahead, he glided into the lead position.  He then broke away from the pack as he skated the last lap and crossed the finish line as the winner.

The contest painted a picture of ultimate patience and agility.  Companies need to have both.

On the one hand, hanging back makes sense sometimes.  Instead of racing to be first to market, companies might sometimes be better served by spending the time to size up the opportunity and the competition.  A careful assessment and analysis of the situation might reveal a better tact – and by letting others go first, you let them work out all the kinks and deal with players who are likely to spark and flame out before the culmination of the competition.

On the other hand, business leaders must always be ready to make their move.  This requires keeping a vigilant eye on the market and competitors.  Companies should engage a team in continuous marketplace scanning – with today’s social communication tools, this kind of scanning has become easier and less costly.

It also means companies need to be nimble enough to move quickly when the time is right. Smaller companies can ensure this by implementing an organizational structure, adopting a culture of readiness, and establishing processes which enable their entire organization to change immediately as needed.  Larger companies probably need to designate SWAT team-style groups which are ready to deploy on a moment’s notice in order to seize emerging market opportunities.

The tactics of Apolo-style competition may be unusual, but so are the results.

from Lindsey we learn about dealing with pain

Just days before she was scheduled to compete, downhill and super-G skiing champion Lindsey Vonn injured herself during a training run.  Her bruised and swollen right shin put into question her ability to  participate in the Games.

When she revealed the injury to the press and public, she explained that at first she had been in denial:  “I pretty much stuck my fingers in my ear and just pretended like I didn’t hear what was going on. I didn’t want to hear that my shin was fractured.”  But then she realized she had to face reality, ultimately telling reporters:  “I’m sitting here today questioning whether…I’ll be even able to ski.”

She underwent a healing regimen and tried to keep focused on her goal.  Between that discipline and a weather delay which gave her extra time to rest, she made the decision to compete.  And despite being “very emotional and very scared” and experiencing “excruciating pain,” she ended winning the gold medal up in her first event!

The arc of Lindsey’s story is one that business leaders can learn from to overcome the crisis or serious setback that every company will inevitably face at one time or another.  While the natural tendency may be to ignore the problem or deny the severity of the situation, it’s best to face the facts as soon as possible.  Once you acknowledge the problem, you can move on to understand its consequences and determine a course of action.

As you take steps to repair the damage, it’s important to remain focused on your goals.  There’s a fine line to walk between addressing the problem and not getting distracted by it.  Maintaining clarity on ultimately what you’re trying to achieve and not wavering in your commitment to your goals will help.  The way you deal with the issue can be a step in the path to your goals, not simply an exercise a crisis management.  Rahm Emmanuel’s famous quip, “never let a serious crisis go to waste” definitely applies.

And you must move forward, despite how painful, scary, or emotional doing so may be.  Some organizations become paralyzed by problems.  But, Lindsey shows us that pain is a part of competition and is not a barrier to success.  Companies must be willing to feel the pain and do it anyway.

The Olympic motto is “Citius, Altius, Fortius” – Latin for “Faster, Higher, Stronger.”  From these 3 athletes and their stories, we learn the nuances behind achieving these ideals.

U.S. News & World Report’s interview with Susan Docherty, North American Vice President for General Motors provided some valuable insight into the troubled car company.  Her comments made it clear that GM is operating from a reactive, backward looking stance.

Here are 5 things she said and the problems they point to:

1. “If [new CEO] Fritz [Henderson] says he’s giving a press conference, we all stop work and put on the TVs. Then we do a debrief and make sure everybody understands what the message is.” — So the Vice President of one of the company’s largest divisions is getting direction from her new CEO via the press conferences he gives?  It’s concerning that the information any CEO covers in press conferences would be new news to any companies’ employees — shouldn’t they be involved in crafting those announcements?  Not only should the people who are running the business be driving the strategy, but also they should be initiating news that is press conference-worthy in the first place. (n.b., I recognize there was probably a lot of confidentiality surrounding the leadership change, so it’s understandable that that announcement would have been a surprise — but Docherty’s comments seem to indicate this is a regular occurrence now.)
2. After President Obama announced the company’s leadership change, “Fritz Henderson held his press conference, and he said that what we’ve provided is not good enough…Then right after that we launched Total Confidence.” (Total Confidence is GM’s version of the Hyundai Assurance program.) — So it took a shocking management shake-up to get the company to realize it needed a bold promotion like Total Confidence?  It seems the company should have introduced consumer confidence-building strategies and tactics back in November when it first went trolling for bailout money.  Also more wholesale changes have been needed for quite awhile now — but the company has waited to a breaking point to seriously considering them.
3. “It’s too early to see if interest in our brands has dropped off completely from all the news…The buyer behavior data come out quarterly, and we don’t have the first quarter’s data yet.” So the company is relying on slow, standard methods to evaluate what’s going on with consumers?  As a reminder, the interview with Docherty took place on Friday, 04.10.09 — and she’s saying she doesn’t have data to gauge consumer reaction from January?!  In today’s environment, such a time lag is unacceptable.  The company needs to implement methods that allow it to keep its finger on the pulse of the consumer and to respond quickly to the learning from the research.
4. “The real wake-up call for us was the Congressional hearings in December. It was very clear from the questions they asked, and also from the questions the press asked, that the perception of our company and our brands was at least a decade old.” So prior to the Congressional inquiry, the company didn’t have an accurate view of the public’s perceptions of its brands?  Like it would have been that hard to figure out.  A company like GM has to have on-going, in-depth brand tracking research that monitors consumer sentiment towards its brands, right?  So was their research wrong?  Or were they just not listening to what the research was telling them?   Or??
5. “I had tickets for my husband and I to go the Final Four…on the day we were supposed to leave for the Final Four, we got a request from the team in Washington…I called my husband and said, ‘you need to find a friend to go with you.’” and “I was at the Detroit opera with my daughter and husband that Sunday afternoon [when former CEO Rick Wagoner resigned.]  And I looked at my daughter and my husband and said, ‘I have to go.’” So Docherty uses the stories of her sacrificing the Final Four and leaving the opera early to demonstrate how seriously she’s taking the company’s recovery plan and how emotionally impacted she’s been by the management changes.  Her comments seem to suggest that the company’s answers to the crisis are to ensure everyone understands how serious it is and to put in long hours to respond to requests from Washington.  Not quite the positive, proactive, productive stance the company needs to adopt.  (Also I must point out that any savvy media-trained leader should know to use an interview like this to talk about new innovation processes they’re developing or even ways they’re managing their teams through a leadership change — instead of relaying anecdotes about sacrificed personal luxuries that may be offensive to folks who are personally struggling to simply keep a roof over their heads.)

If I didn’t know any more about GM other than what was covered in this interview about how it’s “fighting for survival,” I would be skeptical about the company’s chances.  Docherty’s comments alone reveal some of the systemic changes that the company must address in order to survive, including:

• robust, two-way internal communication
• more proactive, forward-facing posture in developing turnaround strategies and programs
• up-to-the minute metrics, including a system for monitoring brand perceptions and responding to issues

The problem is, I do know more — and it doesn’t assuage my concerns.

This is one in a series of posts about brands have failed to live up to their potential — from Jonathan Salem Baskin, author of Branding Only Works on Cattle, the “dim bulb” blog, and Ad Age/CMO Strategy column.  Jonathan has taught me a lot through his insightful analyses of brands and businesses — and he’s entertained me with his dry wit and occasional rant.  What I appreciate most is that, along with his critique Jonathan provides thought-starters for how to do things better — his post below is no exception.

I’ve asked Jonathan to share his thoughts on a brand disappointment  — he chose Facebook.

From Jonathan:

I know, I know.  You’re already thinking that the Facebook brand is a poster child for the social media movement.  Everybody and their brother (or third-cousin, or that dork from high school who needed to be avoided like the plague) has a page, and probably checks it at least somewhat regularly.  Also, founder Mark Zuckerberg is a famous brand, right?  Like a post-bust market proto-Steve Jobs, or something.

Only I say not really, and so what?

Functionally, Facebook is a glorified address book combined with a chatroom, allowing for incessant updates that create an experience of intrusion that is glowingly labeled ambient awareness.  It’s great, for sure: I post my daily Dim Bulb essays, created a page for my new book, and I occasionally comment on news from a friend (or get a funny little comment on mine).  I was particularly involved right after I first opened my account, trolling my address book and failing memory to reconnect with all of those names from my past that had otherwise slipped from my daily life.  Done.

Now, I’m sort of running out of things to do.

There seems to be a usage curve based on social media functionality, and I’d suggest that it’s the inverse of 1) total participation numbers, and 2) number of functions or add-ons.  It was fun the first or second time I was gifted or poked, but now I just ignore that stuff (and usually de-friend whatever numbnut bothered me).  I’m ambiently aware of the things people I barely know are doing, but for the life of me, I can’t see any reason why I should care.  Awareness is certainly not the same thing as recognition, let alone relevance.

I’m reminded of the fun I once had receiving and then forwarding jokes and funny video links via email.  It was a blast…and then it got old.  For that matter, I remember the thrill of downloading every song I could even think of via Napster.  Finally, I owned that Bay City Rollers song I’d remembered from high school, although I’d lived a productive and fulfilling life without ever hearing it again thereafter.  So I proceeded to continue ignoring it on my hard drive.

I worry the trend with such functionally-based technology tools is to skew heavily to the ambient part, and not so much on the awareness end.  The functional attributes of the Facebook brand could become a part of the background of my day, just ahead of the buzzing I hear from my fridge when I choose to hear it.  What makes the brand unique?  From an functional perspective, not much.

Conceptually, the Facebook brand is even more dicey.

It’s original brand proposition was that it was only open to college students, so it provided some protection from the vast wash of numbnuts who might otherwise want to look at your pictures, or chat with you.  But now it’s available to anyone, or to anything, as corporations can issue pages, run promotions, etc.  Lurkers are still somewhat stimied, but commerce isn’t.  Facebook’s owners are madly trying to figure out how to exploit…er, monetize…its members, just as some members are already working hard to exploit one another.

So is the Facebook brand about being safe, or transparent, or useful, or responsible, or what?  I’d suggest that there are no obvious or meaningful brand attributes that differentiate it, or that preclude it from slipping into the miasmic muddle of purposelessness that embraces MySpace, Second Life, and most other mainstream social networks.  It’s WOW without trolls, or Eve Online without spaceships.

It doesn’t have to be this way, however.

Facebook could adopt and promote specific behaviors that define its brand, and establish a framework for its user participation and future growth.  It’s not a marketing or branding challenge, per se, but rather a business strategy question: how to create, via real commitments and actions, a brand purpose that defied the general trend toward becoming generic (and losing out to the next tool embarking on the same path)?

Here are four starter ideas to illustrate what I mean:

Become a truly user-controlled referral community: Instead of selling commercial conversation to businesses, why not let users own it, a la eBay?  People could recommend things to one another, and receive credibility rankings (or some other accrued value).  Members could opt in or out of such activities.

Provide platforms for multimedia: Go one step past YouTube and merge membership with art, thereby creating user-controlled channels for original music, video, and audio works.  Make Facebook the brand that excludes professional art; make it the tool for everyone else to use.

Give up management authority to the collective: Transform Facebook into one gigantic town hall, and give members the responsibility (not just the opportunity) to vote on activities, allowable tools, functional additions, etc.

Monetize membership, not eyeballs: Figure out ways to make members want to pay (or subscribe) to Facebook, instead of trying to exploit their visits.  Think public television…what would the brand have to deliver/stand for in order for it to be valuable to people?

Fundamentally, though, the business would have to function differently in order to claim and substantiate its branding.  There’s little evidence that such actions are likely.  It’s just too easy to quip about members and time spent on the site, and relegate the issue of finding a sustainable, long-term business proposition to some future inevitability.

But that future is not a guaranteed outcome; in fact, the evidence is that, without real brand behaviors, the Facebook brand proposition has already reached its peak (and perhaps passed it?).

Now is the time for it to put a stake in the virtual firmament, and make the brand stand for something(s) real, different, and meaningful.

Good stuff, Jonathan — thanks for your post.  I’m particularly intrigued by the membership monetization idea – I’ve often thought that the problem with sites like Facebook is that they’re free, thus falling squarely in the category of you get what you pay for.

Jonathan and I would love to hear your feedback — and next Monday:  John Moore offers his thoughts on another brand that has failed to live up to its potential — can’t wait!