The McKinsey Quarterly’s Top Ten: Second Quarter 2011

In case you missed them, see which articles have been most popular with The McKinsey Quarterly‘s readers in the second quarter of this year. Here are the first five.

To learn which articles ranked #6-10 and read any/all of the ten articles, please click here.

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1. STRATEGY
Sparking creativity in teams: An executive’s guide

Senior managers can apply practical insights from neuroscience to make themselves—and their teams—more creative.

 

 

2. STRATEGY
Drawing a new road map for growth

New findings show how large and small companies grow—and reveal the startling performance of emerging-market players.

 

 

3. ORGANIZATION
Eric Schmidt on business culture, technology, and social issues

In this interactive video, Google’s executive chairman shares his strategies on hiring, running meetings, designing “mobile first” business models, and addressing joblessness and education reform.

 

 

4. ECONOMIC STUDIES

The challenge—and opportunity—of ‘big data’

A new report explores the explosive growth of digital information and its potential uses.

 

 

5. ORGANIZATION

To centralize or not to centralize?

It’s a hard call made harder by power struggles. CEOs can force a more thoughtful debate by asking three critical questions.

To learn which articles ranked #6-10 and read any/all of the ten articles, please click here.

Thinking INSIDE the Box

Photo credit: Genelet via flickr used under a creative Commons License.

Here is a recent blog post by Sam Carpenter, author of Work the System: The Simple Mechanics of Making More and Working Less. To check out the wealth of resources he offers, please click here.

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I am not one to challenge the status quo in order to flaunt some kind of anti-establishment pathos. I’m not a drone, either. But most times I find the status quo is correct as-is, and I attribute this condition to simple cause-and-effect: Whatever a particular accepted status quo happens to be, it’s that way because, in all probability, that’s the permutation that works best. Over some amount of time, through trial and error, the status quo got to be an accurate representation of reality.

One could say that the status quo is the result of a kind of a random, free-market social tweaking.

I can hear the howls of dissention. My retort is that, for some people, accepting any status quo would seem reactionary. For some, casting aspersions at any commonly accepted notion IS the status quo.

Of course the status quo can be wrong sometimes. But, not usually.

In any case, once one acquires the Systems Mindset, the thought process doesn’t choose a positioning based on whether it fits the status quo…or the opposite. The new thinking process is more detached and mechanical than that. Got a problem? Sometimes solutions can be radically different from the status quo, but most times, just a small reiteration of what’s already there is all that’s necessary. Don’t throw the baby out with the bathwater; don’t cut off your nose to spite your face, etc.

Fresh starts are sometimes necessary, but knee jerk start-overs too often result in carnage. The problem system-whether it’s a marriage or a career or a government-whispers quietly, please don’t discard me so quickly. First, just get inside and tweak me a bit.

Don’t jump into a divorce. Instead, drop the emotional theatrics, isolate the mechanical sore-spot, and then manipulate the internal mechanics of that sore spot to find resolution. Financial problems, personal or governmental? Challenging the laws of physics by deliberately spending more money is flashy but ridiculous. Doing some serious cost-cutting is the less exciting yet rational approach. Depressed? Rather than scoring anti-depressants from the doctor, stop drinking (because, silly, alcohol is a depressant). Do I need to say this is not rocket science?

So, problems? There’s a good chance the box you’re in doesn’t need replacement. It just requires some internal tweaking. Of course, thinking-outside-the-box is a good thing and is exactly consistent with the systems mindset approach, but as you float outside and slightly above your world, examining the problems down there, consider that maybe your situation is not really so bad after all, and that the simple solution to smoothing things out lies right there, inside the box.

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A resident of Bend, Oregon, author and speaker Sam Carpenter has been featured by hundreds of media, including NPR, ESPN radio, US News Radio, and Small Business Television. President and CEO of Centratel (http://www.centratel.com/), the premier telephone answering service in the United States, he has a background in engineering, publishing, telecommunications, and journalism. Carpenter founded and oversees Kashmir Family Aid (http://www.kashmirfamily.org/), a 501c3 non-profit that aids surviving school children of the Northern Pakistan and Azad Kashmir earthquake of October 2005. Originally from upstate New York, and an Oregonian since 1975, Sam’s outside interests include mountaineering, skiing, cycling, reading, traveling, photography and writing. He is married to Linda Carpenter who works with him as CFO at Centratel.

PrimeTime Women: A book review by Bob Morris

PrimeTime Women: How to Win the Hearts, Minds, and Business of Boomer Big Spenders
Marti Barletta
Kaplan Publishing (2006)

The nature and extent of a “prime marketing opportunity”

Those who have already read Marti Barletta’s Marketing to Women will welcome this sequel in which she develops in much greater depth her core concepts with regard to the purchasing power of what continues to be “the world’s largest market segment.” Of special interest to many readers is The GenderTrends™ Marketing Model that reveals in her first book why and how women reach different brand purchase decisions. She shares in PrimeTime Women some revealing and valuable new insights from all-new research and DDB Worldwide which will be of substantial value to senior-level executives – including but not limited to those primarily responsible for marketing – in all companies, regardless of their size or nature. Barletta carefully organizes and then presents her material within ten chapters which are divided between two Parts: Understanding PrimeTime Women™ and The Field Guide for Marketing to PrimeTime Women™, followed by an especially informative appendix which identifies “The Best Resources in the Business.”

As is her custom, Barletta makes brilliant use of a number of reader-friendly devices throughout her narrative that facilitate and expedite reviews later of key passages. They include clusters of bold face items, bullet points, and checklists. For example, in Chapter Seven, “The GenderTrends™ Marketing Model Applied to Women, a systematic and simple tool which is designed to achieve three objectives:

1. structure the complexities of gender differences into an organized view of female gender culture;
2. show how to use the principles of female gender culture to enhance each element in your marketing mix; and
3. apply the resulting insights to the five stages of the consumer’s purchase path.

In the same chapter, when examining the purchase decision process, Barletta focuses on the differences between men and women, and, the differences between PrimeTime Women™ and younger women. Then in the final chapter, “Notes to the CEO,” she briefly discusses the aforementioned “building blocks” and this material offers a value-added benefit to non-CEO readers who are senior-level executives: She provides them with a convincing, research-driven argument to support whatever changes must be made in terms of (a) how their respective organizations view women 50-70 years old, (b) how they position what they offer to them, and most important of all (c) how they nourish and thereby sustain a relationship with them.

How important are relationships to women? As Barletta observes, “Women think that people are the most important and interesting element in life, and they are oriented this way from birth…Women see themselves – and everybody, really–as part of an ensemble company. Their core unit is `we’ (sometimes `we two,’ sometimes a larger group). They take pride in their caring, consideration, and loyalty to and from others…Women’s first instincts are to trust and share, and their mentality is rooted in revealing, not concealing.”

While explaining “how to win the hearts, minds, and business of boomer big spenders,” Barletta also obliterates a number of misconceptions about female consumers in general and those who are 50-70 years old in particular. Did you already know that women control an estimated 80% of all household spending and the percentage is even high for PrimeTime Women™? Also, that women make 55% of all investment decisions, 55% of all decisions concerning consumer electronics, comprise 60% of all home improvement buyers and make 80% of all home improvement decisions, control more than 60% of new car purchase decisions, and 66% of decisions to purchase computers? With regard to income, between 1990 and 2003, women’s inflation-adjusted median income grew 26%, while men’s grew only 8%.

That is why Barletta asserts, “PrimeTime Women™ are the healthiest, wealthiest, most educated, active, and influential generation of women in history. This is their PrimeTime. And it’s your prime marketing opportunity.” What are you waiting for?

Marketing to Women: A book review by Bob Morris

Marketing to Women: How to Understand, Reach, and Increase Your Share of the Largest Market Segment
Marti Barletta
Kaplan Business (2002)

How to Succeed in the World’s Largest Market Segment

In this uniquely informative volume, Barletta answers three separate but related questions: “What makes women a worthwhile market?”,  “Why market differently to women?” and “How do we get beyond gender generalities to actionable tactics?” In her Introduction, she lists “Eight Myths of Marketing to Women” which, during the course of her book’s narrative, she convincingly repudiates. For example, #5: With women, marketing is all about relationships. “While it’s true that women put more emphasis on relationships — personal and corporate — than men do, their purchase decisions and response to communications are affected by far more than `relationships.’ From word meaning to word-of-mouth referrals, product priorities to Internet usage patterns, women differ from men in many, many marketing dimensions. And, to overlook their complexities would be to undermine the effectiveness of your company’s programs.” According to Barletta, there are four components of the women’s market: earning power (“What’s in her wallet?”), high-net worth women (“the ultimate asset-holders”), consumer spending power (the “household chief purchasing officer”), and women in business (“controlling the company checkbook”).

A majority of consumers in the U.S. are women. Research indicates that online spending will increase 26% this year to $96 billion. Consumer spending accounts for two-thirds of the economy and women influence 95% and make 85% of all consumer buying decisions; moreover, the majority of corporate purchasing agents and managers are women. Female entrepreneurs account for 70% of new business start-ups. If you are still unconvinced of the upside potential of marketing to women, consider these facts:

• Between 1970 and 1990, the number of women living alone doubled from 7.3 million to 15.3 million and this pattern has continued.
• At least 55% of those online each day are women.
• By the year 2010, women will control 60% of wealth in the U.S.
• College students were responsible for $210 billion in sales in 2002 and 58% of them were female
• Women purchase more than 50% of the cars and own more than 46% of the homes in the U.S.
• More than half of all business travelers are women.

In Part II of her book, Barletta introduces and then explains what she calls the GenderTrend™ Marketing Model, a systematic and simple tool to help her readers understand, reach, and increase their share of the world’s largest market — women. The model is designed to achieve three objectives:

1. “Structure the complexities of the gender differences into an organized view of female [in italics] gender culture.”

2. “Show you how gender culture interacts with each of the 12 [in italics] marketing elements [end italics] in the marketing mix.”

3. “Apply the resulting insights to the four stages of the consumer’s [in italics] purchase path.” FYI, the four are activation through market entry, nomination of purchase options to consider, investigation and decision with regard to nominees, and finally, succession (i.e. repeat business and, hopefully, evangelistic loyalty).

Few books fully deliver on the promises stated or implied in their subtitle. Barletta’s book is the commendable exception. She offers a wealth of information and an abundance of wisdom that will help decision-makers in literally any organization (regardless of size or nature) to understand, reach, and increase their share of “the world’s largest market segment.” This book provides just about everything you need to do precisely that. What are you waiting for?

The Prime Solution: A book review by Bob Morris

The Prime Solution: Close the Value Gap, Increase Margins, and Win the Complex Sale
Jeff Thull
Kaplan Publishing (2005)

Many of the same core concepts in this book were previously discussed in Thull’s Mastering the Complex Sale: How to Compete and Win When the Stakes are High! However, what we have here is a much sharper focus on two of the three objectives specified in the subtitle: close the value gap and increase margins while winning the complex sale. In the Foreword, Greg Lewin does a skillful job of explaining the need for this sequel, offering his own conclusions about customer value: “First, value should be added to the customer’s entire business, not just a specific part of it…Second, the value created for your customer should be easily identified and owned by your customer…Third — and this is the main objective of Thull’s Prime Solution — the value you promise must be delivered…Fourth, the `secret sauce’ is the heart and soul of your organization — the people!” According to Thull, Prime Solutions deliver optimal results which leverage value to the highest level of each customer’s business, ensure that customers are provided with the best answer to the given problem, and provide solution implementation and value-enhancement strategies that enable customers to achieve the ROI that they anticipated.

Presumably Thull agrees with me that getting beyond customer satisfaction and even loyalty to what Ben McConnell and Jackie Huba characterize as as “customer evangelism” requires that what Thull calls “robust solutions” must be provided consistently, time and again, whatever questions must be answered, whatever problems must be solved. To sustain that relationship, therefore, He recommends three separate but interdependent protocols: value maximization of product, process, and performance; decision acuity that enables customers to recognize — and thereby appreciate — the tangible benefits of the solution(s) provided; and optimization of a measurable ROI. I agree with Thull that what he calls the Prime Solution Cycle (please see pages 179-194) requires a cross-functional effort; that is, communication, cooperation, and collaboration between and among all areas within the provider’s organization.

In Part I, Thull explores the environment in which complex solutions must compete. Then in Part II, he shifts his attention to an analysis of how to translate the demands of that environment into the three protocols that define, guide, and inform prime solutions. Finally, in Part III, Thull responds to a question which each reader is probably asking as she or he arrives at page 125: “How can my organization develop and then deliver prime solutions to our own customers?” Four chapters are devoted to Thull’s response. First, he recommends a process of discovery and engagement that will reveal opportunities among those prospects currently experiencing insufficiency of the value offered. Next, diagnose and quantify what is needed. Then, design and produce what will fill (solve) the given need. Finally, deliver, measure, and improve on the solution(s).

Here are a few caveats. First, beware of what Jeffrey Pfeffer and Robert I. Sutton characterize as “The Knowing-Doing Gap” in the book that bears that title. More often than not, decision-makers fail to convert knowledge into action to achieve the desired results. In this context, I am reminded of Coach Darrell Royal’s assertion that “potential” means “you ain’t done it yet.” By all means absorb and digest the information and counsel that Thull provides in abundance. You and your associates must then focus together on formulating and then providing what each customer needs. Also, when seeking buy-in within your organization, expect to encounter resistance to change initiatives. If I understand Thull correctly (and I may not), he urges his reader to think in terms of cross-functional teamwork that involves customers as well as everyone within the provider’s organization. Granted, that is an ambitious objective but I wholly agree with him that it is also an “achievable reality.”