What’s the ‘POP’ in your corn? 3 Things you must examine in your strategy if you want to play to win!

How does popcorn pop? Ancient Native American Indians believed that a spirit lives in every kernel of corn. When heated, the spirit gets angry and throws a fit. As a result, the corn pops! However, we now know that the popcorn phenomenon occurs because water trapped in the kernel turns to steam when heated, and like a steam engine, it pushes against the soft kernel, causing it to burst open with a ‘pop’.

Last week, at a business strategy course, I heard a story of a man who turned his popcorn business around by capitalizing on this little secret. This man realized that selling popcorn was a business that did not have much competitive edge. So how do you differentiate yourself when your product is a mere commodity that everyone sells? He started to ask himself ‘who buys popcorns and why?’

His answer – families with young children and the reason they buy is to watch the popcorn go ‘pop’.

So he kinda figured out that the unique selling point of pop corn is the ‘POP’. So he asked himself the next question, how do I make my popcorns pop louder?

After studying and discovering how popcorns explode, he found out that the amount of pop was tied to how much water the kernel had; it will determine how much steam it will produce. He tinkered with various ideas how to increase the amount of water in each kernel, until he was able to produce a type of packaging that allowed the right amount of moisture to be maintained in storage. This allowed him to sell popcorn that gave a bigger POP! Now, his popcorn was differentiated from his competitors in the area that mattered to the client – the POP!

So what can we learn from this story? As the year comes to an end and business planning cycles begin for the next year, what are some areas you must consider in your planning? From this story, there are three things:

First – how well do you know your core customer? Do you know why they buy what they buy? Can you articulate in one sentence who is your core customer, and what problem are you really solving for them? Have you differentiated their needs, fears and their wants? Many businesses have a vague idea about this. And from my experience working with companies worth a few million to a few billion, they usually have little time invested in dissecting this question.

Secondly – Do you know in particular, why they buy from you, and not from your competitor? What makes you different? How does your product or service address your customer’s needs and fears? In a world where everything is becoming more and more commoditized, the need to stand out is critical. The only problem is this – many times, our customers want to ‘commoditize’ us because they want it cheap, but is that the game you want to play? Too many businesses get sucked into this whirlpool of letting your customers, and sometimes your competitors, decide what your business should be. Identify three reasons why people buy from you and focus on making these three things better!

Thirdly – What is the core competency you need that will help you make that special difference? The common thinking is to focus on correcting weaknesses or plugging gaps. However this approach will not help you to scale up. It may solve your problems but it will not help you grow exponentially. Take a step back this planning session and ask this question,

Many of my clients start off saying they don’t know what makes them different; they just try to meet industry norms or standards. Or they list an industry standard as a competency e.g. ‘We have ISO XXXX and this is our edge’.  However, they miss the point that everyone has the same competency as them.

But when we push them harder and help them ask the right questions, they discover that every business has a core competency they can leverage. It is just a matter of finding out, and putting a strategy to enhance it. “What makes us special? What makes us unique in meeting our customers’ needs? What makes it hard for our competitors to copy? These are questions to explore in your planning.

Too many year-end planning sessions go to waste because business leaders ask the wrong questions. Wrong questions lead to the wrong answers, and wrong answers lead to bad strategy. While business may still grow due to various factors, we want to not just grow but to grow continuously. These three questions, when answered well, will lead you to not just profitability but profit-ability – the ability to continuously grow your profits. Happy planning!

A tale of two airlines: How Singapore companies can touch customers Hearts

In a highly competitive environment, how do you win raving fans for your business? How do you turn your detractors to your supporters? if you can do this, your business has an edge. Read about it in my latest article first published on the Singapore Business Review on:

Singaporeans have always complained about service providers. Why is it so? Is it because service is really bad, or are companies doing their best, but just not being able to meet their customers’ needs? Granted, there will always be customers who are unreasonable, but what about the bulk of people out there who just want to feel valued and get value for their money? Are they unreasonable as well to ask to be cherished and to get value for their money?

The term ‘value for money’ is contentious. How do you measure this? Unfortunately, the ‘real’ value of a business proportion is often revealed when a ‘crisis’ occurs. While this article is not a scholarly piece on customer service, it is an observation of a recent case where I believe a complaint could be turned into an opportunity to build raving fans by proving that the value of their product is beyond what money can buy. That is the assurance that the vendor can truly meet the needs and fears of the client, not just the wants. However, unfortunately from this instance, we can see that the company was only interested to meet the wants, which is the product they paid for, versus the needs and fears of the customer. In other words, the company was not selling what money could not buy.

As a business coach, I like to ask my clients this question:

“What is your client buying from you that money cannot buy?”

Are you selling a budget air ticket? Or are you selling convenience and happy times for family and friends? Are you fulfilling a transaction, or are you building a relationship? While safety is important, I excluded it from this discussion because it is a must for this industry.

Recently, a couple of budget flights from a Singapore based airline were delayed more than 20 hours, and passengers complaint that little was done to make up for their inconveniences. Even senior citizens and little children were not given assistance their age required. The delay was so bad that some passengers were even told to go home. While I am not going to discuss the reasons for these incidents or company policies, I will look at how their response to complaints revealed that they did not have their core customer’s needs and fears in mind, and therefore did not know what their customers were really buying from them.

After the furore of the incident went viral on social media, which some passengers described as almost like a riot, the budget airline first explained that the reason for the flight delay was due to safety. I won’t fault them for that because safety is paramount, and I would rather be late than not arriving at all. What happened later, according to the people affected, was a public relations disaster, even though the CEO gave a public apology.

What I find strange was the CEO’s need to remind his customers that they bought a budget ticket, and therefore should not expect anything more than ‘getting from point A to B’. He even emphasized that this is the ‘understanding’ between buyer and seller when they transacted. While the whole letter and other correspondences from the CEO sounded really sincere, I wonder why he needed to remind passengers that Scoot is going beyond their promise to issue some vouchers as compensation. Do you think it makes your disgruntled customers grateful?

I find it puzzling why he needed to remind them of that – especially when they were hugely inconvenienced by his company’s poor handling of the matter. Legally he may be correct, but is playing the technicality game going to win you customers? The delay was so bad that passengers were even told to leave the airport and go home. Precious moments of having fun together with friends and families were lost. And these could not be replaced. Will people whose happiness got dashed by your poor service be convinced by your ‘legal correctness’? You can hide behind the ‘Buyers Beware’ clause, but it will not make you raving fans, which is the point of business.

In this case, the response of the company seemed to arise from the need to defend itself more than to assure the customer. In an argument with customers, especially one that was caused by your own mistakes, you almost never win because they contribute to your livelihood. And they have choices. What is worse, staff echoed the view that if you want better treatment when the airline messed up, passengers should buy a seat on a premium airline instead of a budget – and they had no qualms posting that on Facebook. This reveals condescension for those who are paying your salary. I wonder if internally, the corporate culture is one of contempt for their customers. To be honest, I was contemplating a trip to Taiwan next year on this airline with my children, three years and seven years old, but after this incident, I decided I will try other airlines. I shudder to think what they will say to me if such an incident happens and I have two young children stranded.

So I wonder why they felt a need to respond in this way.

Does it make customers feel better? Are you assuring them that you know what they are really buying from you – which is time with family and friends, convenience and happy memories? It seems that the airline just want to push a product to the customer without establishing a bond with them. When things don’t go well, too bad – fall back onto the T&Cs. This is why they will not have raving, loyal fans. If they want to keep things to just a monetary transaction then they will get the same level of loyalty from their customers. In highly competitive markets, this might not be a good idea. No amount of cute marketing will win you raving fans more than a wrong made right. Being ‘legally right’ certainly wins you no future business. Showing contempt is even worse.

So how should they have responded? A good case study would be Air Asia’s response to complaints that their flights are not safe for disabled passengers because disabled passengers had to be physically carried up by people to the plane. This caused the criticism that it is not safe, because the passenger could easily fall if the personnel carrying him lose his balance. Air Asia recognised that their customers’ need is not just for an air ticket – which anyone else can supply, but comfort, assurance and the timely access to loved ones and time with them. No one likes to have a potential holiday or a visit to family spoiled by an accident.  So instead of ‘defending ‘their lack of infrastructure to support disabled customers simply because they are a budget airline, Tony Fernandes, CEO of Air Asia, said,

“It is great to finally see that our disabled friends are able to fly with us more comfortably today with the assistance of the ambulifts and aisle wheelchairs. After understanding the needs of our disabled friends, we have also enhanced our booking system to enable everyone including our disabled friends to now enjoy low fares when they log into our website. As a low cost carrier, we acknowledge that there are certain limitations on our end with the services that we can offer but we will enhance our services and accessibility where possible and we hope to set the example for other LCCs to work towards an improved environment for our disabled guests in terms of enhanced amenities for greater mobility and comfort.”

He did not defend his business’s failings. Best of all, he did not claim that as a budget airline, he could not afford to purchase the equipment that made it possible for disabled people to enjoy what Air Asia was truly selling – convenience, time with and access to loved ones. His reply showed customers that Air Asia understands what really matters to the customer and is on their side despite their limitations.

Why did he do that? After all, disabled passengers only take up four seats per plane. Is it worth the cost of buying the special equipment for them? Some things are not about money. As Peter Drucker said, the sole purpose of business is to serve its customers. This is what it means to put customers ahead of money. And perhaps this is why Air Asia is an award-winning business despite being a budget airline.

What is your business selling that money cannot buy? Find that, emphasize it, inculcate that into your culture and you will make raving fans. When you face a complaint, see it as an opportunity to go beyond the T&Cs, and people will love you for it. When you have raving fans, business will not stop flowing.

Core Purpose – The Driving Force that Turns the Ship Around!

Ford-Factory-1903

As a Gazelles business growth coach, I have been helping my clients revisit their company’s core purpose at the start of every planning session. From local businesses to international ones, the question of Core Purpose has always been hazy.

What really is the use of articulating, remembering and living out the Core Purpose? Why is it important, and how should Core Purpose be positioned? At the start of each session, there will be cynicism, as key personnel wonder would Core Purpose be relegated to a poster on the wall, unremembered, unarticulated and totally irrelevant to business the way how Mission and Vision had been for them in the past?

So what exactly is Core Purpose and why is it important?

The founder of Gazelles, Verne Harnish, a.k.a the Growth Guy whose business tools and consulting have helped more than 40 000 companies around the world including some national brands like Benetton International (India), shared an article from Bloomberg on how Ford Motors was turned around from near bankruptcy to its former glory. Always looking for stories to inspire business owners to grow, Verne shared this article on his website www.scalingup.com. The article is called The Happiest Man in Detroit.

3 Things I Learnt from this Article

Purpose gives strength through hard times

Alan Mullaly, the CEO who turned Ford from the brink of bankruptcy to the most profitable auto-maker in US said he derived strength from the Core Purpose of Ford Motors, as envisioned by the founder Henry Ford. Every day, when he walks into the company building, he reads the Ford advertisement published in 1925:

“Opening the Highways to All Mankind”

In his own words, Mullaly said,

“I walk in here every morning [at 5:15 a.m.], and the light comes on, and I stop and read it—to serve all mankind. It makes me cry.”

(Source: Bloomberg Business, Feb 03, 2011, The Happiest Man in Detroit by Keith Naughton)

He believes that his job in Ford is to bring safe and efficient transport to EVERYONE.

Mullaly talks about it frequently. He memorizes it. He begins auto shows with the declaration of the core purpose of Ford. And this belief in the noble purpose of Ford gave him strength to turn Ford around despite the hard times. When we only look at financials and forget why we do what we do, it is easy to forget. Worst, if finances are the only reason we do what we do, we will never have the fortitude to survive a crisis. If we hire people who do not believe in our Core Purpose, they will leave when the company goes through a crisis. Only people who share your Core Purpose will stay and turn the ship around.

Purpose Gives Focus

Mullaly had to make some critical decisions – what should Ford focus on to turn the ship around? They had limited resources; at one time even surviving on a loan while burning $2 Billion a month. Again, the CEO went back to Ford’s purpose – what does it mean to bring safe and efficient transport to EVERYONE?

He returned to Ford’s roots to provide affordable and top-quality cars for the common man. Thus, he sold off the European luxury lines like Jaguar, Land Rover, Aston Martin and Volvo, and focused on beating Toyota and Volkswagen, two similar brands that targets the man-on-the-street by becoming more fuel-efficient, safer and more beautiful than these two competitors. When the Lehman Brothers crisis was over, Ford showrooms had cars that were nicer, better and more efficient than what car buyers remembered Ford had. By focusing on their Core Purpose, they went back to what they did best.

Purpose gives Clarity

The last thing I learnt from this article if the importance of clarity. In line with Ford’s purpose to bring transportation to EVERYONE, Mullaly asked himself where is the world’s largest population, and what do they need?

The answer – Asia and small cars.

Asians neither need nor idolize gas guzzlers. And Asia’s big population would generate enough demand to lift Ford’s profits. This belief drove him to get his designers to design cars that are good for all markets rather than just regional ones. This led to billions in savings as Ford plants got great economies of scale. He hired the right people to lead the Asia team, invested in plants in China, and set a target that 70% of Ford’s growth must come from Asia. Core Purpose helped him to see clearly where to put his resources to achieve the company’s financial as well as highest goals. Although late to the China market, he believes Ford can make an impact by having cars that are beautiful, high-quality and at the same time affordable – cars that have universal appeal to the man-on-the-street.

Conclusion

Last week, as we celebrated Chinese New Year in Singapore, our company, the Adam Khoo Group held our annual AGM. During our AGM, we reiterated our Core Purpose, which is to Inspire a Better World through Training.

What does it really mean?

For us this year, it means adopting a CSR project that will allow us to use our expertise as a training and education company to create a better world. We decided to work with a school in a slum in Batam, where students can’t even afford to pay $4 a month for school fees.

Why did the management team do this? For publicity, as most cynical people would label CSR? It is because Core Purpose, if not DELIBERATELY lived out, made alive and acted upon, will die crucified upon some poster hung on a wall, unremembered. When purpose is alive and well, it will be like a lighthouse pointing us in the right direction. At times of haze and fog, it will direct us safely through the storm. It reminds us who we are, and where we can be at our best.

Is your company clear about its core purpose? This is how to find out:

Does the Core Purpose give you clarity, focus and strength? Ask yourself, if your company stops its operations tomorrow, will your customers feel a sense of loss? Or will they shrug and go next door to your competitor and life goes on?

Does your company have a clearly defined and articulated Core Purpose?

Are you keeping your Core Purpose alive?

If you need help on how to craft a meaningful Core Purpose statement that will drive your company forward and inspire everyone through difficult times, grab the book Scaling Up or just join us at the upcoming Scaling Up MasterClass with Verne Harnish “The Growth Guru” Live! in Singapore on 27th April.

You can also visit www.scaling-up.sg for more details or contact the team at masterclass@akltg.com for more details.