The Blueprint

It's Not as Far Fetched as it May Seem

Here is a funny video published by TechCrunch showing a 1981 report on the news being delivered electronically.  Funny unless you work for a traditional news paper (i.e. New York Times or Chicago Tribune).

Most newspapers have and continue to hold-on to the old business model.  They have tried to change, but are too reluctant to break with the past.  Most news is funded by advertising.  In the 1980's, the newspaper was a good place to spend advertising budget. Today Google is getting more and more of that budget.  Companies are still spending money on advertising and people are still reading the news.  Its just a different business model.  I personally read the newspaper less and less.  I get more of my news digitally.  I don't think my children will read newspapers.

Imagine a news report recorded today about the construction document distribution industry being shown 20 years from now.  What would people in 20 years find funny?  My 16 year old son has never seen rotary phone (shown in the video).  20 years from now few will remember a diazo machine.  What will the business be like?  What will it be like in 5 years?

The Optimist, the Pestimist, and the Leader

Steve Bova, IRgA Executive Director, commented on my post yesterday and spurred a memory of an adage I heard.

A optomist says "the glass is half full", 

A pestimist says "the glass is half empty",

A leader says "maybe this is the wrong glass".

Look at your business and your customers business.  Things are changing.  Are you looking at your business correctly?  Are you presenting things your customers value?  How do you change your service offering or even just how you communicate what you are offering to match what your customers need right now.  Times are tough but people are working really hard.  What are they working on?  How can you be part of it?

Tough Talk

Guy Kawasaki has an a relevant post on the American Express OPEN Forum on how a CEO should communicate with his or her employees in these difficult times.  Some of the statements are very tech industry / venture capital oriented, but the others apply to almost any business feeling stress from the economic downturn.

The statements remind me of the Stockdale Paradox in the book Good to Great.  The author Jim Collins found that leaders whose companies outperformed their competitors "faced the brutal facts".  The Stockdale Paradox refers to Vice Admiral James Stockdale who was the ranking officer in the "Hanoi Hilton" prisoner-of-war camp in Vietnam.  James Stockdale did not tell his men "we will be rescued any day."  He basically told his men "It is going to be awful.  We will face more difficult times.  It may take years for us to be rescued.  Some of you might not make it.  But in the end we will prevail and we will get out of here."  This is the tough talk that employees need to hear as difficult as it may be.  They will have more faith in you as a leader if you are honest.

The Stockdale Paradox
Retain faith that you will prevail in the end, regardless of the difficulties.	AND at the same time	Confront the most brutal facts of your current reality, whatever they might be.

A book by Victor Frankl, Man's Search for Meaning, describes a similar phenomenon.  Frankl, an Austrian psychologist, was a prisoner in a Nazi concentration camp.  He found that the people who survived unimaginable difficulties held on to some sense of meaning.  They believed that their circumstances would not change quickly, but they had their own very personal reason for holding on.  Those who lost that sense of purpose didn't make it.

Why Do Robbers Rob Banks?

I had a mentor early in my career who during a conversation about where to invest our company's sales resources said "John, Do you know why robbers rob banks? ... Because that's where the money is."  This doesn't mean in times of economic crisis you should hold up a bank.  Keep your ear to the ground to see where money is being invested and how you can be part of it.  Trying to get business out of a customer or project that doesn't have the business to give you only impairs your relationship.  Here are some indicators from ENR as to where the money will be.

Transportation Projects Biddable in the Next 180 Days

Energy Companies Find Money Pipeline is Open Again

AEC Bellwether

Here is a graph created by Pacific Crest securities showing the correlation between Autodesk revenue growth and employment growth.  I'm not sure this is profound (no revenue = no employees), but it is interesting nonetheless.  I'd be curious how close other companies in the industry compare?  How correlated is your business to macro employment figures?

Selling the Way Your Customers Buy (Even Now)

"People hate to be sold, but love to buy" the adage goes.  Maybe today they don't love to buy, but still have to.  Too often we are focused on selling our products the way we want to sell them rather than the way our customers want to buy them.  Today people are concerned about the economy and have become risk adverse.  Hyundai put out an interesting program called the Hyundai Assurance Program.  If you lose your job you can return the car.  I assume they have run the numbers to make sure this can work for them, but this is a bold move.  It addresses the risk factor and it also gets them press and credit for being innovative.  I heard an article on NPR last night where the reporter asked the acting CEO whether he thought this might come off as desperate.  I had to laugh.  Didn't I just see the CEO's of the larger US auto manufacturers in front of congress asking for money or they would go bust.  They weren't presenting anything new and innovative that might help people and stimulate the economy.  That looked desperate.  

Even in a down economy people's will have situations where they need a new car.  There will still be business to be had.  More people will be thinking of Hyundai now and Hyundai may grab a larger share of a small market.

What can you do to address your customers risk aversion?  Do you have equipment sitting in inventory that could be placed at an FM?  A 2 to 3 year commitment would be nice, but would your customer be more interested in a month to month contract now?

Rethinking Reprographics Pricing

I have had many conversations with reprographers over the past year regarding the pricing of their services.  Some were convinced that the traditional model can't or couldn't change, but more and more people are becoming convinced that some substantive changes must occur.

When the margins were high on printing services it was easy to throw in additional services (i.e. delivery, file conversion, etc.), but as the margin for vanilla printing decreases and the demand for more services (i..e digital services) increases the traditional pricing model breaks down.

Here is an insightful link to a blog post by Seth Godin on pricing.