Showing posts with label business strategy. Show all posts
Showing posts with label business strategy. Show all posts

Thursday, October 8, 2009

The businessman’s guide to putting on lipstick


The Lipstick Building in Manhattan is famous for its architecture. It is a commercial office block which is now associated with capitalist greed, theft and lies. The history of the Lipstick Building is fascinating. I, however, have a new fascination with lipstick. Lipstick has given me a new insight into how to approach new business ventures.....as well as inter-personal relationships


My daughter, Noa Ariella, put on some lipstick, walked over to me, and asked:

'So, what do you think?’

With that kind of question, any man is bound to get into trouble with a lady. It's almost as risky a question to answer as the 'Do I look fat?' question.

But, in my continuing effort to be honest with my children, and teach them that there is good and bad in the world, ugly and beautiful in this world, good ideas and bad ideas in this world, I approached the lipstick idea the way we 'rational' thinkers usually approach things, when we want to be -what we usually call - ‘brutally honest’.

Brutal honesty is important. It should highlight pros and cons. It should be thought out. It should be mindful of whether something has potential, or not.

But, in most cases, ‘brutal honesty’ should be called ‘rational negativity’

I looked at her lips, with the lipstick, and I immediately had a view and an opinion on how the lipstick looked

I proceeded to say the following***:

“You can't be upset with what I'm gonna say about your lipstick. You asked for my opinion, and I'm gonna be honest regarding what I think about your lipstick. I have your best interests at heart, so you need to hear, what I believe, is right. And the truth may hurt. Being brutally honest means that you may have to go back to the bathroom and have a rethink about lipstick, your lips, and beauty. It means that you may still have lots of work do. It means you will have to challenge the underlying assumptions you have about lipstick and beauty. It means you must be willing to do a lot more work, and then, some re-work. So, do you really want me to be honest? Do you really want to know what I think about your lipstick?”

She said: “Yes”

I said………………. “I think your lipstick looks beautiful”

And I meant it

I could have used every rational argument to dismiss her good lipstick idea. I could have said:

“You asked my advice, and you may not like what I have to say. I think beauty-care and lipstick are good ideas. But, I have your best interests at heart. And because I care about you, I am going to be brutally honest with you. You should know, that using lipstick means you will get caught up in all the things that wearing lipstick and beauty-care require. And those things are tough to deal with. Those things are challenging. Those things are time consuming, require lots of energy…. and some money. So rather don’t wear lipstick.”

Following the lipstick encounter with this particular lady, I now prefer the approach:

“You asked my advice, and you may not like what I have to say. I think lipstick is a good idea. But, I have your best interests at heart. And beauty-care and lipstick are good ideas, but because I care about you, I am going to be brutally honest with you. You should know that using lipstick means you will get caught up in all the things that wearing lipstick and beauty-care require. And those things are tough to deal with. Those things are challenging. Those things are time consuming, require lots of energy…. and some money. So, on your path to beauty-care, be warned that there will be challenges. Beauty-care and lipstick are good ideas, and you have my full support in facing (intentional) those challenges”



***Not verbatim. Due to the fact that I am indeed a licensed poet, I used poetic license



Note to the person who read this far:

I still have no clue about lipstick or beauty-care.

But my daughter does

Thursday, October 1, 2009

The Pizza Shop Caper

Today, I was fortunate to join two old school friends for lunch. Lior and Marc. More correctly (respectfully) Lior, and Rabbi Sosnovik


I had chatted to Lior earlier in the day, and he told me he was meeting Marc (Rabbi S) for lunch. I decided to join them. I had not seen Lior for a couple of months. And I had not seen Marc/The Rabbi for a year or more.

We met at Next Door, In Norwood, Johannesburg. Lunch was great. The food was very yummy and the company was awesome. What more could I ask for.

And, to top it off, my brother Darin (who lives in Sydney, Australia) called to say ‘Hi”. I excused myself from the table to take the call, and chatted to my brother away from the main restaurant area. While I was chatting, I saw a Next Door employee, with boxes of little bottles. Little bottles filled with capers. (for those that don’t know, here is an explanation of capers, and how to use them )

Anyways…..What was this Next Door employee doing with the bottles of capers?

He was removing the standard labels with hot water and soap, and was replacing the labels with Next Door branded labels

It got me thinking:

Why would a Next Door employee be removing standard caper bottle labels, and replace them Next Door labels?

So, I had a chat to Anthony, the owner of Next Door. Anthony wants to start branding in-house products with Next Door branding (e.g. Next Door chilli sauce) as well as other products with Next Door Branding (e.g. company X’s capers). Anthony obviously wants to promote the Next Door brand. When you sit down to eat, he wants people to see Next Door branded sauces and condiments. If people buy products for their home, he wants them to have Next Door branded products. Great idea Anthony. After all, product recognition is pretty standard ideal that most companies strive for.

But wait a minute. Anthony’s strengths lie in running a restaurant, providing high-quality food along with superior service. Why would he want to brand capers, you may ask?

Brand recognition

I told you that already. Have you not been paying attention?

Back to the lesson. Anthony knows what his strengths are. He knows what he wants to achieve. To support that end, he wants Next Door branded products (even capers). But the branding of capers is not going to distract him from his core activities and goals.

Many businesses are faced with the caper-branding dilemma. Businesses ask: How can we brand capers? It would be great for our brand recognition, but it’s necessarily not core to me running, growing and improving my business?

And many businesses then embark on a thinking process that goes something like this:

1. Contact all ‘caper bottling’ companies so that we can enter into a branding agreement

2. Or think bigger and consider buying a ‘caper farm’ so that we can grow our own capers

3. No, a ‘caper farm’ is not our core business, so scrap that idea

4. Back to contacting the ‘caper bottling’ companies

5. Select the one that we can do business with

6. Negotiate a superb deal whereby the ‘caper bottler’ supplies us with bottles capers, displaying our brand

7. Get lawyers to draw up contracts between us and the ’caper bottler’

8. Negotiate a wholesale rate, whereby the ‘caper bottler’ supplies us with ‘capers’ at 10% lower than the standard retail rate

9. Arrange logistics details, including delivery, returns, payment, discounts, claims, returns etc

10. Stock, and sell, our branded ‘capers’ in our store, as a nice sideline, aimed at supporting our goal of brand recognition

(Again, keep notes. This non-exhaustive list above, will be referred to later. It’s called the ‘noise’ list)

Shew, so many steps in order to get branded capers. After so much effort, we got what we wanted: Our own branded capers

Well done.

Branding capers with your own brand is a great strategy. Brand recognition is important in today’s business environment. And it will only take 10 steps to get that. And it will only take 2 weeks of sourcing a caper supplier. And it will only take 2 months of negotiations and the finalization of a legal contract. And you too will then get 10% off the standard retail price. Wow. What a deal.

And then there is Anthony and Next Door. Anthony knows what he wants. He wants brand recognition. He wants branded capers. And his goal is to run a successful restaurant…and have a certain personal lifestyle. So, to that end:

1. He bought a whole lot of bottles of capers and probably got 5% off the standard retail price

2. He got an employee to spend 30 minutes taking off the labels and replace them with Next Door labels

What an amazing lesson. Anthony did not let the ‘branding of capers’ take him away from his primary focus: Running a successful restaurant.

To get branded capers, an employee spent 30 minutes taking off labels and replacing them:

• Anthony did not spend hours in meetings with caper suppliers

• He did not pay lots of money getting legal contracts drawn up

• He did not enter into lengthy negotiations over a perio of 2 months

• He did not attend time consuming meetings, with each session lasting 2 hours

He did, however, save 5%, buying wholesale. And he could have saved 10% following steps 1 to 10 above (the ‘noise’ list). So he lost out on 5% margin for the capers he bought off the wholesale shelf, and not from the factory direct

And he missed out on 5% margin on a product that is not core to his business activities

And he spent all the time he could have spent on 1 to 10 (the ‘noise’), on:

• Keeping an eye on his business

• Developing his staff

• Meeting with key customers and suppliers

• Lying on the couch, reading a book

Anthony got what he wanted: Branded capers.

It cost him more to buy them wholesale, rather than enter into an agreement with the caper bottler. But that is not his core business anyway. Anthony will make a lot more money than the potential 5% caper saving, by focusing on his business, employees, suppliers, customers and re-energising..... by lying on the couch, reading a book.

He could have been really, really busy. He could have met with caper bottlers. He could have met with lawyers. He could have had legal documents drawn up. He could have entered into agreements. He could have looked like a real-life, flesh and blood, busy businessman.

BUT….that ‘busy’, as with so many ‘busies’, was not key to the development of his business

The lesson for the capers: Focus on what you do best, on what you want to do and what you need to do (managing a restaurant when you need to and lying on a couch reading a book when you want to). Don’t create work for work’s sake, and make yourself feel better by thinking you are busy (negotiations and contracts in order to save 5% on your non-core branded capers)

Focus

Keep the goal in mind

And be clever in evaluating options that help you achieve your goals, without creating unnecessary noise