Thursday, April 28, 2011

Finding Yahoo's Way

Last year I had the pleasure of presenting a seminar at Yahoo Research. One of the things that interested me about that part of Yahoo was the fact that it had, in my field of economics, made some very significant hires from academia. In a time where some academically oriented labs had fallen aside, Yahoo had moved in the other direction. And this wasn't some independent and loosely tied research organization. The economists I knew were heavily embedded and yet still publishing freely.
My presentation there was actually about just that. While many tend to think of commercial pressures as anathema to scientific openness, Fiona Murray, Scott Stern and I developed a hypothesis that suggested the opposite. When commercial prospects are strong — in that firms can commercialize innovations securely with less threat of entry — they will also be more receptive to allowing their scientists publishing rights. Put simply, when entry prospects are low, you don't have to worry as much about academic publications helping entrants. And why should firms take any risk on publication? Because scientists get personal (and possibly career) value from it and so you can pay them less. The implication that everyone in the audience was sacrificing income for working at Yahoo Research and publishing was lost on no one.
But Yahoo Research was more than just a potential source of cheap scientific and engineering labor. At least for the economic part of the group, there was a clear focus — for the most part what they now focused on was advertising. The focus was not exclusive — they had freedom to work on what they wanted — but it was there. Preston McAfee, who leads the group, gave a keynote lecture at the International Industrial Organization Society in April after receiving its prestigiousDistinguished Fellow award. The talk focused on advertising exchanges and the direct impact the theory of auction design (of which McAfee was a prime contributor) on the actual design of advertising exchanges at Yahoo.
This focus was natural. Advertising was responsible for most of Yahoo's revenues and this is an area the company leads in. Its ad exchange displays billions of ads across a large array of websites. Its sales of display ads exceed those of Microsoft, AOL, and Google/Doubleclick. And each time an ad is displayed, in the quarter of a second between the time someone requests a page and the ad loads, an auction is run for that ad space. In fact, as McAfee pointed out, it is the largest auction platform (in terms of number of units sold) ever. And that means that there is some serious muscle at its heart.
When you click on a Yahoo-served page, the content loads first and the ad loads second. I'm sure you have experienced the opposite, when you go to a news site but it fails to load because the ad it is trying to display has held things up. Yahoo uses that time to their advantage to make sure the right ad is selected and loads.
The auction itself involves some serious economics alongside the computer science. There isn't enough time to really select the best ad for a particular page call. But Yahoo's economists have reduced the complexity of the process and matched it with a good deal of economic theory to ensure that the systems at Yahoo learn what to do ahead of time. It is no wonder that Yahoo CEO Carol Bartz wears t-shirts bearing economic formulae.
What is interesting here is that advertising exists as one side of a two-sided platform. The other side is content. Yahoo often describes itself these days as a media company. It has acquired and developed many content providers from all over the digital world. While that might aggregate consumer attention for the purpose of displaying ads, it does not necessarily resolve the difficult task of matching ads to content. When content selects for consumers of a certain demographic of interest to advertisers, at the same time it thins the market for advertisers. And if Yahoo's technical and economic competence is in managing thick advertising markets, does that mean its content strategy is acting in opposition to that competence?
This raises a number of strategic questions for Yahoo. First, does Yahoo's suite of products remain just that — a suite of distinct products — or can it coalesce into a platform? In a recent book,Michael Cusumano suggests that platform arises when external actors direct effort and investment towards enhancing the value of a company's products. But who is doing that for Yahoo? Where are its complementors? Contrast it with Wikipedia — arguably the largest-focused media entity on the Internet — which has an army of complementors voluntarily contributing content.
Second, if media is not at the core of Yahoo, is it a distraction? Should Yahoo be providing content at all or should it be more like Google and focus on advertising and tools to manage content? The pros of disintegration may be some corporate focus but the cons may be difficulties in designing ad markets that efficiently work when content is designed to self-select for the right kinds of consumers.
Finally, my earlier argument that commercial interests and academic motives for openness can be compatible rather than in conflict rests on an assumption that those commercial interests are somewhat protected. To be sure, Yahoo is a holder of important patents on advertising auctions. But it is equally the case that there are many economic ways to generate efficiently operating ad markets. Moreover, the underlying theory that has formed Yahoo's own operations is commonly known and published. Hence, competitors may be on their way and any distinctiveness Yahoo has could be limited.
The researchers at Yahoo may already be on to this issue and may be finding a way to bridge the advertising/content divide in the market. Otherwise, one wonders how long the model of an academically-founded lab embedded within a commercial organization will persist. Instead, it may slowly evolve to a more autonomous arrangement with a longer-term focus rather than immediate practical applications with its scientists having to choose between a commercial or academic way.
Joshua Gans is an economics professor at Melbourne Business School and a visiting researcher at Microsoft Research. All views expressed here are his own.

Coca-Cola Marketing Shifts from Impressions to Expressions

A lot of us remember when the role of the CMO was much simpler. Information flowed in one direction: from companies to consumers. When we drew up our plans and budgets, the key metric was consumer impressions: how many people would see, hear or read our ad?
Today the only place that approach still works is on Mad Men. Now information flows in many directions, consumer touch points have multiplied, and the old, one-size-fits-all approach has given way to precision marketing and one-to-one communications. Perhaps the most consequential change is how consumers have become empowered to create their own content about our brands and share it throughout their networks and beyond. It has changed my role as the chief marketing and commercial officer at Coca-Cola, and the company's approach to consumer engagement as we work to double our business by 2020.
In the near term, "consumer impressions" will remain the backbone of our measurement because it is the metric universally used to compare audiences across nearly all types of media. But impressions only tell advertisers the raw size of the audience. By definition, impressions are passive. They give us no real sense of engagement, and consumer engagement with our brands is ultimately what we're striving to achieve. Awareness is fine, but advocacy will take your business to the next level. (I used to think that loyalty was the highest rung on the consumer pyramid until I became the CMO of Allstate Insurance. There, I saw clearly that so much business was driven through personal referrals and advocacy by individuals for their agent.)
So, in addition to "consumer impressions," we are increasingly tracking "consumer expressions." To us, an expression is any level of engagement with our brand content by a consumer or constituent. It could be a comment, a "like," uploading a photo or video or passing content onto their networks. We're measuring those expressions and applying what we learn to global brand activations and those created at the local level by our 2,700 marketers around the world. For example, in our 24-Hour Live Session with Maroon 5, we captured impressions (the number of online views) but gained tremendous insights from expressions by our consumers — their comments, input on the song that was being created and what they shared with their networks.

So what are the keys to winning in this new era of empowered, engaged and networked consumers? Here are some of the top "expression" lessons we've learned so far:
Accept that consumers can generate more messages than you ever could. Don't fight this wave of expression. Feed it with content that touches consumers' passion points like sports, music and popular culture. We estimate on YouTube there are about 146 million views of content related to Coca-Cola. However, only 26 million views were of content that we created. The other 120 million views were of content created by others. We can't match the volume of our consumers' creative output, but we can spark it with the right type of content.
Develop content that is "Liquid and Linked." Liquid content is creative work that is so compelling, authentic and culturally relevant that it can flow through any medium. Liquid content includes emotionally compelling stories that quickly become pervasive. Similarly, "linked" content is content that is linked to our brand strategies and our business objectives. No matter where consumers encounter it, linked content supports our overall strategy. When content is both "Liquid and Linked," it generates consumer expressions and has the potential to scale quickly. An example of "Liquid and Linked" was our FIFA 2010 World Cup program, which was the largest-ever Coca-Cola activation in history. More than 160 countries used a common World Cup Visual Identity System, a pool of television commercials, and a common a digital platform. All were linked by the common thread of celebration.
Accept that you don't own your brands; your consumers do. Coca-Cola first learned this lesson in 1985 with the introduction of New Coke, but it's become even more important with the growth of social media. As I write this, Coca-Cola's Facebook page has more than 25 million likes (fans). Our fanpage wasn't started by an employee at our headquarters in Atlanta. Instead, it was launched by two consumers in Los Angeles as an authentic expression of how they felt about Coca-Cola. A decade ago, a company like ours would have sent a "cease and desist" letter from our lawyer. Instead, we've partnered with them to create new content, and our Facebook page is growing by about 100,000 fans every week.
Build a process that shares successes and failures quickly throughout your company.Increasing consumer expressions requires many experiments, and some will fail. Build a pipeline so you can quickly replicate your successes in other markets and share the lessons from any failures. For example, our "Happiness Machine" video was a hit on YouTube so we turned it into a TV commercial, and we've replicated that low-cost, viral concept in other markets.
Be a facilitator who manages communities, not a director who tries to control them. In 2009, we launched Expedition 206. Consumers voted for the three people they wanted to see travel the world as Coca-Cola Ambassadors, visiting most of the 206 countries where Coca Cola is sold and driving an online conversation about what makes people happy around the world. On every step of their 273,000 mile journey, the ambassadors blogged and created all the content. Our role was to facilitate their journey, which was no small task. We had to give up control of the content, so our ambassadors could share their own experiences. In an era of consumer expressions, seek to facilitate and participate with communities, not control them.
Speak up to set the record straight, but give your fans a chance to do so first. Of course, not every consumer expression will be positive. You have to be part of the conversation so you can set the record straight when you need to. Even better, we've found that our fans make online communities self-policing. When our Facebook site was targeted by an activist group whose members posted negative messages, our fans responded with messages of support for our company, and our fans challenged the use of the community for activist purposes.
Marketing has changed dramatically since Doc Pemberton poured the world's first glass of Coca-Cola in 1886. On May 8th, 2011, Coca-Cola and our fans around the world will celebrate our 125th anniversary. While I'll be curious how many impressions our activities generate, I will look most closely to the expressions of our consumers as a better measure of our success in keeping the world's most valuable brand relevant for the next 125 years.
Joe Tripodi leads global marketing, customer management and commercial leadership as Executive Vice President and Chief Marketing and Commercial Officer of the Coca-Cola Company.

Moving marketing from competition to creation - Nigel Hollis Milward Brown

The title of this post may seem bizarre. After all, isn’t all marketing about competition? Well, bear with me for a little while.
This is the last of a series of three posts sparked by an article by McKinsey’s global managing director, Dominic Barton, that called for business to abandon short-termism and become a force for good, worthy of the public’s trust. If that is to happen, then I believe one of the things that has to change is marketing’s fixation with market share.
As the American car companies found to their cost a few years ago, you can have a big market share and still make no money. Fighting for market share is a zero sum game that is far too easily lost when margins suffer in order to benefit volume growth. The real challenge is not how to beat the competition, but how to avoid it in the first place. When a brand is recognized as having no direct substitutes by its customers, loyalty and a price premium are assured. And to achieve this position, a brand must create meaningful differentiation.
Meaningful differentiation is most powerful when it is tangible and functionally based. The Toyota Prius, theNintendo Wii and Red Bull are all brands that created new categories, outside the established norms of their product category. By stepping outside the bounds of their category, these brands have created a space that they can call their own.
The advantage may not last, but the Nissan Leaf, Microsoft's Kinect for Xbox 360 and Hansen’s Monster Energy, not only have to deliver a compelling product experience, they must also overcome mental barriers to competition. Being first to mind when a need arises has always been a powerful driver of sales, and being known as the category creator is a powerful way to gain that position.
Of course, in many companies marketing has little influence over radical innovation of this sort. But people’s appreciation of a product is not independent of their knowledge of the brand. Effective marketing frames the brand experience to best advantage, even when the differentiating feature is not apparent on its own merits.
The sources of differentiation are not limited to physical attributes and ingredients. Provenance, a track record of innovation or increasing social and environmental responsibility, can all form the basis of perceived differentiation.
If Dominic Barton’s call to reinvent capitalism is to succeed, then marketing will need to play a leading role in that reinvention. We must help craft meaningfully different brand experiences, focusing on innovation not novelty, substance not fame, and creativity not buzz. Perhaps the biggest creative challenge facing brands will be to encourage consumers, the archetypal short-termists, recognize and adopt products that are not as convenient or as cheap as previously but which are far more sustainable.
Can marketers elevate their game and create advantages that support a price premium, and not simply steal market share? Please let me know your thoughts.

The Flap over Cisco's Flip: Why the Company Killed off a Popular Product

The Flip, a quick and easy video recorder that captures spontaneous moments for instant uploading to YouTube, is about to fold. Cisco Systems, which bought the Flip just two years ago, is closing the business in a move that illustrates how rapidly evolving technology and business strategies can force major corporate flip-flops.

Cisco's abrupt decision in April to kill off a successful product that is still the top-selling camcorder on has angered Flip enthusiasts. Some analysts suggest that the $40 billion networking company, which has been struggling in recent quarters, made the move in order to shift its focus back to its enterprise roots after a flirtation with consumers triggered, in part, by Apple-envy.

"It seemed like a great marriage at the time," says Kartik Hosanagar, Wharton professor of information and operations management. Cisco -- which paid $590 million to acquire Flip from Pure Play Technologies, the startup that launched the one-trick device in 2006 -- "was going after the consumer. It bet big that this would be a good opportunity."

According to Wharton management professor David Hsu, the enormous success of Apple has led many technology companies to look to the consumer market for growth. These companies hope that by focusing on consumer-oriented products, they can acquire the knowledge and experience necessary to produce huge hits like the iPod and iPhone.

Cisco's acquisition of Flip in 2009 was puzzling at the time, Hsu says, because the product -- even though it was very good at what it did -- seemed to run counter to the momentum building up for gadgets with many functions. "Cisco was trying to have more of a consumer-based strategy, maybe for corporate diversification," Hsu notes, adding that the company's other major consumer product is the Linksys home router which, like the Flip, is positioned as a simple product for the less technologically inclined. Perhaps Cisco, in trying to diversify away from networking, went after a product niche focused on "the consumer side in the easy-to-use segment."

Instead, rapid adoption of smartphones equipped with video and photo capabilities challenged the self-contained Flip.
Disappearing Market
"Cisco decided there really is no market in the stand-alone video device today," says Eric Clemons, Wharton professor of operations and information management, noting that consumers who want to record video will use a high-quality digital model or catch spur-of-the moment videos on their smartphones. Consumers do not want to carry numerous single-purpose gadgets and are choosing devices with more functions, such as the iPad 2 with front and back cameras and the ability to Skype. "Honestly, I don't even know where my iPod is," Clemons notes.

As another example of changing times, he points to the days when computers had fax modems built into them. Now, documents are sent electronically via email. "Sometimes devices really do disappear in the face of convergence. My guess is that when the iPhone and [other] smartphones became universal, the Flip became irrelevant."

Meanwhile, Cisco is struggling in its much larger enterprise business. In addition to Flip and Linksys, the company's consumer strategy included acquiring set-top box manufacturer Scientific-Atlanta and Umi, a digital teleconferencing system. Even so, consumer products account for only 2% to 4% of Cisco's overall revenues, and those sales dropped 15% in the second quarter. Overall, net income in the quarter was down 18% from the same period in 2010. In a statement released earlier this year Cisco CEO John Chambers said the company faces "air pockets" due to big declines in orders by government agencies and cable operators.

In announcing the Flip's demise, Chambers said in another statement: "We are making key, targeted moves as we align operations in support of our network-centric platform strategy." The company has provided no additional elaboration about its decision to kill the Flip, a move which also meant the layoff of 550 workers.
The company's decision drew some complaints from the tech community that Cisco acted too hastily in putting an end to a beloved consumer product. "I think it was a dumb decision," states Stephen Baker, vice president of industry analysis at NPD Group, a market research company based in Port Washington, N.Y. "It is short-sighted, and it was driven not by product or marketing concerns, but by financial engineering."

Baker argues that the Flip was sacrificed in order to build new credibility with analysts and investors by convincing them that the company was moving toward a stronger focus on its main business. Baker, however, says that the Flip represents less than 1% of Cisco's sales and 1% of the company's employees; therefore, closing the business will not save a significant amount of cash. Even if the Flip did not fit into Cisco's long-term plans, he adds, the company acted prematurely in killing off a product that is still viable and could generate revenue for at least several more years.
Building close contact with consumers is critical for technology companies going forward, Baker notes. "In the old days -- the 1990s -- the latest and greatest hot technologies all came through enterprise. Today it goes through the consumer."

These days, consumers use so much technology in their personal lives that the home is becoming the place where innovation takes place, according to Baker. New product acceptance now flows from the home back into the workplace. "I suspect in a couple of years that [Cisco] will regret this and will probably get beaten up by Wall Street for not having a consumer presence again. All the way around, it's an unfathomable bad decision."
Flawed Strategy
Carmen DelPrete, chief research officer for IDC, a market research firm based in Framingham, Mass., recalls that when Cisco acquired the Flip, YouTube and consumer video capability were generating tremendous excitement. "Back in those days, it was a bit of a renaissance time as consumer-connected devices were taking off," says DelPrete. Viral videos were exploding, and Cisco, as a leading manufacturer of Internet equipment, stood to gain from increased traffic. "What Cisco saw was that Flip would continue to load the network, and that would be good for Cisco's business overall," he continues. "They were thinking, 'We want to make sure we get this out in the market so that people can use it, and we can help differentiate the experience.'"

Ultimately, he says, the strategy was flawed because Cisco does not have much of a presence on retail shelves like other consumer-focused technology companies do, including Sony, HP and even Acer. Without consumer distribution channels, Cisco would never build mindshare through Flip. "There was not natural synergy there for Cisco," DelPrete notes, adding that "at some level, Cisco needs to be applauded for experimentation. But there is a mix between controlled experimentation and just making more of an impulsive move. [Acquiring] Flip was a little impulsive. If Cisco hadn't gotten so caught up in YouTube and viral video at the time, it probably would have been a pass."
DelPrete acknowledges that many tech companies are captivated by the Apple model, but the comparison to Apple is often "like apples and oranges." Apple, he says, "is a unique beast. They have a plan and are executing on that plan, and today they are doing quite well." But, he warns, "history has shown that these things move in cycles. We will see where the next part of the cycle goes."

Hosanagar, for his part, understands why Flip might not be the best fit for Cisco, but he is "shocked" that the company made no attempt to sell off the Flip business. "There's still a large group of loyal Flip users, and the Flip still commands significant market share," he argues. "Cisco has to explain why they spent $590 million less than two years ago and are closing shop without doing much with it." DelPrete's view is that Cisco might not have been able to find a buyer for the Flip because it straddles the space between high-end cameras and smartphones.
Wharton legal studies and business ethics professor Kevin Werbach has another theory: Cisco may have decided not sell the company in order to keep some of its intellectual property and knowledge in-house. "Flip was more than just a successful brand marketing company," he says. The company had strengths in video quality and user interface, which "certainly could be valuable to Cisco."

Indeed, Cisco should get credit for recognizing a mistake, admitting it and moving on swiftly, Werbach adds. "If you look at tech companies in recent years that have stumbled, it often takes a long time -- if ever -- to fully acknowledge the flaws that knocked them off their perch. Yahoo and Nokia really never fully acknowledged -- before it was too late -- what was going on."
However, Werbach says Cisco's openness and willingness to change direction is not necessarily a guarantee of success. "Cisco is a very large company and, like all large companies, they have a challenge in finding new market opportunities that are big enough to make a difference." It made sense for Cisco to want to increase its understanding of video technology, according to Werbach, but its core market remains enterprise customers. "Cisco is never going to be a consumer marketing company. It's just not in their DNA. So to the extent that a business like the Flip is really about selling cool gadgets to users, that may be a great business for Apple, but it's probably not for Cisco."

How Top CEOs Cope with Constant Stress

Justin Menkes, author of Better Under Pressure, explains why today's leaders need realistic optimism, subservience to purpose, and the ability to find order in chaos.

Marketing to motivate 1 Key marketing trends in 2011

Capitalism for the long term - McKinsey article

The near meltdown of the financial system and the ensuingGreat Recession have been, and will remain, the defining issue for the current generation of executives. Now that the worst seems to be behind us, it’s tempting to feel deep relief—and a strong desire to return to the comfort of business as usual. But that is simply not an option. In the past three years we’ve already seen a dramatic acceleration in the shifting balance of power between the developed West and the emerging East, a rise in populist politics and social stresses in a number of countries, and significant strains on global governance systems. As the fallout from the crisis continues, we’re likely to see increased geopolitical rivalries, new international security challenges, and rising tensions from trade, migration, and resource competition. For business leaders, however, the most consequential outcome of the crisis is the challenge to capitalism itself.
That challenge did not just arise in the wake of the Great Recession. Recall that trust in business hit historically low levels more than a decade ago. But the crisis and the surge in public antagonism it unleashed have exacerbated the friction between business and society. On top of anxiety about persistent problems such as rising income inequality, we now confront understandable anger over high unemployment, spiraling budget deficits, and a host of other issues. Governments feel pressure to reach ever deeper inside businesses to exert control and prevent another system-shattering event.
My goal here is not to offer yet another assessment of the actions policymakers have taken or will take as they try to help restart global growth. The audience I want to engage is my fellow business leaders. After all, much of what went awry before and after the crisis stemmed from failures of governance, decision making, and leadership within companies. These are failures we can and should address ourselves.
In an ongoing effort that started 18 months ago, I’ve met with more than 400 business and government leaders across the globe. Those conversations have reinforced my strong sense that, despite a certain amount of frustration on each side, the two groups share the belief that capitalism has been and can continue to be the greatest engine of prosperity ever devised—and that we will need it to be at the top of its job-creating, wealth-generating game in the years to come. At the same time, there is growing concern that if the fundamental issues revealed in the crisis remain unaddressed and the system fails again, the social contract between the capitalist system and the citizenry may truly rupture, with unpredictable but severely damaging results.
Most important, the dialogue has clarified for me the nature of the deep reform that I believe business must lead—nothing less than a shift from what I call quarterly capitalism to what might be referred to as long-term capitalism. (For a rough definition of “long term,” think of the time required to invest in and build a profitable new business, which McKinsey research suggests is at least five to seven years.) This shift is not just about persistently thinking and acting with a next-generation view—although that’s a key part of it. It’s about rewiring the fundamental ways we govern, manage, and lead corporations. It’s also about changing how we view business’s value and its role in society.
There are three essential elements of the shift. First, business and finance must jettison their short-term orientation and revamp incentives and structures in order to focus their organizations on the long term. Second, executives must infuse their organizations with the perspective that serving the interests of all major stakeholders—employees, suppliers, customers, creditors, communities, the environment—is not at odds with the goal of maximizing corporate value; on the contrary, it’s essential to achieving that goal. Third, public companies must cure the ills stemming from dispersed and disengaged ownership by bolstering boards’ ability to govern like owners.
None of these ideas, or the specific proposals that follow, are new. What is new is the urgency of the challenge. Business leaders today face a choice: We can reform capitalism, or we can let capitalism be reformed for us, through political measures and the pressures of an angry public. The good news is that the reforms will not only increase trust in the system; they will also strengthen the system itself. They will unleash the innovation needed to tackle the world’s grand challenges, pave the way for a new era of shared prosperity, and restore public faith in business.

1. Fight the Tyranny of Short-Termism

As a Canadian who for 25 years has counseled business, public sector, and nonprofit leaders across the globe (I’ve lived in Toronto, Sydney, Seoul, Shanghai, and now London), I’ve had a privileged glimpse into different societies’ values and how leaders in various cultures think. In my view, the most striking difference between East and West is the time frame leaders consider when making major decisions. Asians typically think in terms of at least 10 to 15 years. For example, in my discussions with the South Korean president Lee Myung-bak shortly after his election in 2008, he asked us to help come up with a 60-year view of his country’s future (though we settled for producing a study called National Vision 2020.) In the U.S. and Europe, nearsightedness is the norm. I believe that having a long-term perspective is the competitive advantage of many Asian economies and businesses today.

Nine things successful people do well

Why have you been so successful in reaching some of your goals, but not others? If you aren't sure, you are far from alone in your confusion. It turns out that even brilliant, highly accomplished people are pretty lousy when it comes to understanding why they succeed or fail. The intuitive answer — that you are born predisposed to certain talents and lacking in others — is really just one small piece of the puzzle. In fact, decades of research on achievement suggests that successful people reach their goals not simply because of who they are, but more often because of what they do.
1. Get specificWhen you set yourself a goal, try to be as specific as possible. "Lose 5 pounds" is a better goal than "lose some weight," because it gives you a clear idea of what success looks like. Knowing exactly what you want to achieve keeps you motivated until you get there. Also, think about the specific actions that need to be taken to reach your goal. Just promising you'll "eat less" or "sleep more" is too vague — be clear and precise. "I'll be in bed by 10pm on weeknights" leaves no room for doubt about what you need to do, and whether or not you've actually done it.

2. Seize the moment to act on your goals.
 Given how busy most of us are, and how many goals we are juggling at once, it's not surprising that we routinely miss opportunities to act on a goal because we simply fail to notice them. Did you really have no time to work out today? No chance at any point to return that phone call? Achieving your goal means grabbing hold of these opportunities before they slip through your fingers.
To seize the moment, decide when and where you will take each action you want to take, in advance. Again, be as specific as possible (e.g., "If it's Monday, Wednesday, or Friday, I'll work out for 30 minutes before work.") Studies show that this kind of planning will help your brain to detect and seize the opportunity when it arises, increasing your chances of success by roughly 300%.
3. Know exactly how far you have left to go. Achieving any goal also requires honest and regular monitoring of your progress — if not by others, then by you yourself. If you don't know how well you are doing, you can't adjust your behavior or your strategies accordingly. Check your progress frequently — weekly, or even daily, depending on the goal.

4. Be a realistic optimist.
 When you are setting a goal, by all means engage in lots of positive thinking about how likely you are to achieve it. Believing in your ability to succeed is enormously helpful for creating and sustaining your motivation. But whatever you do, don't underestimate how difficult it will be to reach your goal. Most goals worth achieving require time, planning, effort, and persistence. Studies show that thinking things will come to you easily and effortlessly leaves you ill-prepared for the journey ahead, and significantly increases the odds of failure.

5. Focus on getting better, rather than being good.
 Believing you have the ability to reach your goals is important, but so is believing you can get the ability. Many of us believe that our intelligence, our personality, and our physical aptitudes are fixed — that no matter what we do, we won't improve. As a result, we focus on goals that are all about proving ourselves, rather than developing and acquiring new skills.
Fortunately, decades of research suggest that the belief in fixed ability is completely wrong — abilities of all kinds are profoundly malleable. Embracing the fact that you can change will allow you to make better choices, and reach your fullest potential. People whose goals are about getting better, rather than being good, take difficulty in stride, and appreciate the journey as much as the destination.

6. Have grit.
 Grit is a willingness to commit to long-term goals, and to persist in the face of difficulty. Studies show that gritty people obtain more education in their lifetime, and earn higher college GPAs. Grit predicts which cadets will stick out their first grueling year at West Point. In fact, grit even predicts which round contestants will make it to at the Scripps National Spelling Bee.
The good news is, if you aren't particularly gritty now, there is something you can do about it. People who lack grit more often than not believe that they just don't have the innate abilities successful people have. If that describes your own thinking .... well, there's no way to put this nicely: you are wrong. As I mentioned earlier, effort, planning, persistence, and good strategies are what it really takes to succeed. Embracing this knowledge will not only help you see yourself and your goals more accurately, but also do wonders for your grit.
7. Build your willpower muscle. Your self-control "muscle" is just like the other muscles in your body — when it doesn't get much exercise, it becomes weaker over time. But when you give it regular workouts by putting it to good use, it will grow stronger and stronger, and better able to help you successfully reach your goals.
To build willpower, take on a challenge that requires you to do something you'd honestly rather not do. Give up high-fat snacks, do 100 sit-ups a day, stand up straight when you catch yourself slouching, try to learn a new skill. When you find yourself wanting to give in, give up, or just not bother — don't. Start with just one activity, and make a plan for how you will deal with troubles when they occur ("If I have a craving for a snack, I will eat one piece of fresh or three pieces of dried fruit.") It will be hard in the beginning, but it will get easier, and that's the whole point. As your strength grows, you can take on more challenges and step-up your self-control workout.
8. Don't tempt fate. No matter how strong your willpower muscle becomes, it's important to always respect the fact that it is limited, and if you overtax it you will temporarily run out of steam. Don't try to take on two challenging tasks at once, if you can help it (like quitting smoking and dieting at the same time). And don't put yourself in harm's way — many people are overly-confident in their ability to resist temptation, and as a result they put themselves in situations where temptations abound. Successful people know not to make reaching a goal harder than it already is.

9. Focus on what you will do, not what you won't do. Do you want to successfully lose weight, quit smoking, or put a lid on your bad temper? Then plan how you will replace bad habits with good ones, rather than focusing only on the bad habits themselves. Research on thought suppression (e.g., "Don't think about white bears!") has shown that trying to avoid a thought makes it even more active in your mind. The same holds true when it comes to behavior — by trying not to engage in a bad habit, our habits get strengthened rather than broken.
If you want change your ways, ask yourself, What will I do instead? For example, if you are trying to gain control of your temper and stop flying off the handle, you might make a plan like "If I am starting to feel angry, then I will take three deep breaths to calm down." By using deep breathing as a replacement for giving in to your anger, your bad habit will get worn away over time until it disappears completely.
It is my hope that, after reading about the nine things successful people do differently, you have gained some insight into all the things you have been doing right all along. Even more important, I hope are able to identify the mistakes that have derailed you, and use that knowledge to your advantage from now on. Remember, you don't need to become a different person to become a more successful one. It's never what you are, but what you do.
Heidi Grant Halvorson, Ph.D. is a motivational psychologist, and author of the new book Succeed: How We Can Reach Our Goals (Hudson Street Press, 2011). She is also an expert blogger on motivation and leadership for Fast Company and Psychology Today. Her personal blog, The Science of Success, can be found at Follow her on Twitter @hghalvorson

Why Nokia's collapse should scare Apple?

Nokia's inability to field a credible response to the launch of the iPhone in 2007 and Google's Android operating system in 2008 has precipitated a freefall in its share price. Today, Apple is riding high, making this the perfect time for it — and every successful company — to reflect on Nokia's fall and ensure that they don't suffer the same fate.
Not so long ago, Nokia was the disrupter. In 1994, the dominant global provider of mobile handsets was Motorola: its shares were trading at an all-time high and it was seen as an outstanding innovator and even described by a senior consultant at A. T. Kearney as "the best-managed company in the world" — not so different from Apple today. By 2000, Motorola's global market share had collapsed from 45% to 15%, while Nokia's had grown to a market-leading 31%. Nokia had won by promising, communicating, consistently delivering, and relentlessly improving straightforward, relevant customer benefits, in line with its easily understood brand promise, "connecting people".
Although Nokia introduced few radical new products, in the 1990s it was a bold, innovative company in broader business terms — more than most people realise. Previously a straggling and struggling conglomerate, it bravely focused 100% on mobile communications, was an early adopter and driver of 2G technology, and quickly became a recognised world leader in both supply chain management and brand-building. It was the first handset manufacturer to target the bottom two-thirds of the global income pyramid as well as the top one-third and among the first to understand the importance of ease of use, aesthetic product design, and that handsets were as much lifestyle as technology products.
Motorola missed most of these market trends, was slow to invest in digital (it was a classic victim of the innovator's dilemma), and dissipated its efforts on a bewildering array of technologies, product designs, and brand messages. As the failures piled up, so did the stories of mounting bureaucracy, back-stabbing, and top management "living in a different world". Effective execution became harder and harder, creating a vicious cycle of falling behind in the market, losing money, cancelling projects and shedding staff, all of which further damaged its ability to execute. Motorola is finally attempting a comeback with handsets using Google's Android operating system, but is now only a minor player.
Over time and with success, Nokia too lost some of its ability to stay in touch with, and adapt early to, market trends. In particular, just as Motorola missed the switch to digital, Nokia failed to see that the long-heralded mobile internet was now, at last, a practical option. In 2004, three years before the iPhone, it rejected a proposal to develop a Nokia online applications store.
Finally, after a wholesale change of top management, Nokia is now responding vigorously to Apple's and Google's challenge. It is phasing out investment in its own Symbian operating system and collaborating with Microsoft to try to create a powerful "third force" in smartphones. Making this work will be hard, not only for technology and marketing reasons — although the challenges here are huge — but also because of the disparity in size and culture between Nokia and Microsoft.
Why should Nokia's problems scare Apple, the world's most admired company with a stellar record of product innovation, design, branding, customer satisfaction, and business performance ever since Steve Jobs rejoined it in 1997?
The immediate answer — of which Apple is well aware — is that a host of handset manufacturers using Google's Android operating system are outpacing it in the smartphone market, threatening to make Android the dominant standard for application developers, network operators, and consumers.
Less obviously, Apple's success may have left it less open, less sensitive, less flexible, and less responsive. The signs are there. When iPhone 4 users complained of poor signal strength, a normally highly tuned-in Steve Jobs responded in a manner many regarded as ungracious, advising customers to hold the device properly and offering a very non-Apple 'patch' (a form of a rubber band) to anyone who asked for one.
There was also widespread shock and disappointment when Jobs announced that Apple would take a whopping 30% cut of content owners' sales through the iStore (Google takes 10%). Apple also insisted that the iStore must be able to offer any deal publishers offer elsewhere. Further, Apple will not share customer data with content providers (Google does share these data). Such is Apple's market power that, for now, most publishers have accepted its terms, but they are not happy and will continue to search for a better alternative.
Part of Apple's brand appeal has always been that it was a plucky challenger, first against IBM, then against Microsoft. But in smartphones, the challenger was Google and — maybe — Apple is the new Nokia. If so, this could be the start of a bigger change in terms of whose platform will dominate the wider internet. Apple should indeed be scared. As Intel's Andy Grove famously noted, only the paranoid survive.
Patrick Barwise is emeritus professor of management and marketing at London Business School. Se├ín Meehan is the Martin Hilti Professor of Marketing and Change Management at IMD, Lausanne, Switzerland. The authors' new book Beyond the Familiar: Long-Term Growth through Customer Focus and Innovation has just been published by Jossey-Bass.
More on: CustomersStrategyApple

How good designers THINK

We all know that really good designers somehow think differently from you and me about new products. But just exactly what does this difference consist of? The best summary of what makes really good designers tick was asimple post by Bruce Nussbaum back in 2007. Since reading that I've often pondered the subject and today, I find it helpful to look at my experience of how good designers think (and do) at each stage of the innovation process: insights, inspiration, and action.
Insight: They Look at What We
Don't Know

Most insight, because it relies so heavily on asking consumers, only deals with improvements to known/ existing products and services (I'd like it bigger, cheaper, quicker, smaller, etc). It rarely deals with the new/never been done before — the unexpected but relevant solution.
No one ever asked for Starbucks, or Walkmans or iPods, or the Internet ,or texting — they were truly new ideas. And no amount of consumer research gave Steve Jobs the confidence to re-imagine the music industry.
Good designers aim to move beyond what you get from simply asking consumers what they need and want. First of all because they understand that most people when asked don't say what they mean or mean what they say, but also because people often don't know. Good designers want to unearth what consumers can't tell them: latent & emerging needs and motivations; actual behaviors and attitudes; and, crucially, barriers to as well as drivers of change — or simply put, what your competitors don't also already know.
Firstly, good designers don't tend to think about consumers; they think about people and what they want and need. It's a subtle point, but thinking about people as consumers immediately dehumanizes them and makes it harder to empathize.
Secondly, good designers like observing — really looking at what people do rather than simply relying on what they say they do. As Paul Smith once explained, when asked where he got his ideas from: "You and I could walk down the street together and look at the same things, but I'd SEE ten times more than you would."
Thirdly, they bring expertise in other categories and industries to bear on problems in others. They pull together threads from different functions, disciplines, fields, and sectors, and integrate them into a new and (the dreaded word) "holistic" understanding.
Fourthly, good designers look at what might all change in the short, medium and long-term, by engaging with the best trends and forecasting intelligence. Unlike other crystal ball gazers they use this prescience to help them understand how they could bend the future, shape it to their vision.
And lastly, good designers pressure test their conclusions by consulting with other cultural 'interpreters' from a broad range of other disciplines.
Inspiration: They Look for What to Do
Good designers want to solve problems — and this makes them want to transform insights into inspiration.
Firstly, they have the ability to visualize what has never been. As Bruce Nussbaum said in the same post, "Many firms are plagued by articulate and persuasive 'smart talkers' who sound good in meetings but get bogged down in abstract complexities." Good designers are good at what I call inspirational tangibility, "making it real," whether it be by concretizing with a sketch what would otherwise be abstract thoughts or so many post-its in a meeting, enabling large amounts of complex data to be understood and absorbed quickly with a diagram, or as Bruce describes it "quickly lashing together a physical or digital mock-up" of a proposed solution.
Secondly, good designers live and work in the future most days, immersed in the activity of actively creating and shaping their client's future visions of new products and services. And this familiarity with fusing creativity with what's feasible and commercial every day is what makes good designers so good at doing this consistently and better than others.
Thirdly, they overcome the "not invented here..." syndrome. For new ideas to survive and indeed thrive they have to be successfully embraced by all the relevant (another ghastly word) "stakeholders." Good designers can act as a translator between functional silos as different as supply chain, marketing and R&D.
Action: They Keep Going
When good designers talk about innovation, they mean (and I make no apologies for cribbing Lord Sainsbury's much-quoted definition), "the successful exploitation of new ideas." They don't stop with the invention. They turn their inspirations into reality.
Firstly, in the case of a new product or service, it's unlikely to be successfully brought to market unless it can be integrated into and be supported by all the other aspects of the marketing mix: and if we're talking new business strategy, then good designers have to understand how the new offering could and should impact (and to what degree) all the other aspects of the organization: from its structure, to its mission and culture...all the way to the business model(s) that underpin everything.
Good designers don't claim to be able to do all these things, but they do know to work with the various functions and outside resources that do. And unlike some others, they don't leave their colleagues at the bus stop; they stay with the project until the end because nothing gives a good designer more satisfaction than being able to point to something that everyone else thinks is the best thing since sliced bread and saying, "I did that!"
Secondly, they are good at practical resolution. Bruce Nussbaum describes the problem thus, "Some of the smartest execs get bogged down in the messy process of implementation." But again, good designers' ability to "make it real" can help resolve contradictions and find highest common denominator compromises, helping the (innovation/ marketing) process more forward.
Thirdly, good designers are good at iterative prototyping, refining the concept through repeated cycles and getting feedback from the right people as they go. James Dyson famously made two thousand prototypes of his bagless vacuum cleaner before he got it right. The rest, as they say, is history.
Simon Rucker is an associate director at global design and innovation companySeymourpowell, based in London.