Business Strategy

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Qi Pad?

The ancient principle of playing the expected against the unexpected — zheng /qi — applies to both war and business. In chapter 5 of the Sun Tzu text, we are advised to engage with the zheng and win with the qi. In business, the formula is more like “bring’em in the door by meeting their expectations, and keep’em coming back by surprising them with delight.”

The key point, though, is that surprise is in the mind of the surprisee. As Boyd put it, you can’t surprise anyone. All you can do is try something with the intention that the opponent/competitor/customer will be surprised. Maybe, maybe not.

So how do you surprise people, like Apple customers, who are expecting to be surprised? Over and over again?

As Brook Crothers observed in a recent column on cnet, most potential customers were puzzled about what the new iPad was supposed to do for them.”Yeah, I kind of see what you mean,” was a common response to a new feature.

Other reviewers, though, seem absolutely blown away be at least two of the new capabilities. One, for example, said that after experiencing the new retina display, he could never go back even to an iPad 2. Another was entranced by the speed of the new iPad’s true 4G connection: There was no lag. Apps functioned instantaneously, even faster than on a wired broadband connection. The wait for data to download, which has plagued computing since the days of the telephone modem, is now over. And all of this (and more) for the same price as the iPad 2.

Is this unexpected? Delightful? Only you can answer that, and the success of the device, and the sales fate of future devices, depends on how many people decide that it is. If it just meets expectations, even if those expectations are high, then a marketing opportunity is opening. For someone.

For now, at least, Apple is riding the wave of its past zheng / qi successes:

So, this confirms my Apple Shiny Slab Theory. In short, certain buyers will, zombie-like, march to the Apple store and part with their cash. Yeah, they have vague ideas about new cool tech, but it’s all very vague.

And, come to think about it, it’s still a little vague to me as well. That’s never stopped me, though.  [“Do consumers really understand why they need the new thing from Apple? No, they don’t, in many cases.”  Brooke Crothers, March 17, 2012, http://news.cnet.com/8301-13924_3-57399321-64/some-people-dont-have-a-clue-as-to-why-they-need-the-new-ipad/]

[As an aside, zheng / qi used to be written as “cheng / ch’i,” which has the advantage of being pronounceable in English.]

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Thinking Like Marines

Mike Wyly’s classic article, Thinking Like Marines, on applying the concepts of maneuver warfare to business, is now available here on Fast Transients (it was one of the first pieces I posted on belisarius.com in about 1999).

Contains this classic line, which resonates with successful leaders in any field:

I should interject here that control is not what maneuver warfare is about. In fact it is not what warfare is about. As a commander in Vietnam I wanted to unleash my marines on the enemy, not control them.

It will be available through the “Articles” button on the menu bar.

 

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Toyota gets its mojo back

But unfortunately Jaguar, Mercedes, and oddly, Porsche do not.

Toyota took five of the 10 categories listed by CNN Money as Consumer Reports Top Car Picks:

  • Family sedan: Camry Hybrid
  • Small SUV: RAV4
  • Van: Sienna
  • Green car: Prius
  • Family SUV: Highlander (disclosure — I have a 2008 Highlander)

No other brand received more than one recommendation.

http://money.cnn.com/galleries/2012/autos/1202/gallery.consumer-reports-top-picks/index.html

On the other hand, in the category “Worst Value Luxury Cars,” Jaguar, Mercedes, and Porsche each had two “winners,” and all were dinged for mediocre or worse quality.

http://money.cnn.com/galleries/2012/autos/1202/gallery.worst-value-luxury-cars.fortune/index.html

This is particularly strange in the case of Porsche, which had been making great strides in quality by adopting lean production.

Speaking of which, this post might have been subtitled “The Toyota Production System is Back.”

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Industrial blitzkrieg

Milliken.  Wonderful article in today’s Wall St. J. about how the old line textile manufacturer, Milliken & Co., in Spartenburg SC has used the principles of lean / maneuver warfare to thrive against global competition. OK, they don’t call it “maneuver warfare”, but read the article and see what you think (subscription to the WSJ required).  This is no coincidence: the late Roger Milliken was a keen student of Tom Peters, who was influenced by John Boyd.

The basic idea, which applies to any form of human conflict, is to get everybody in the organization to use their creativity and initiative to achieve the goals of the organization. Boyd’s FESA climate is designed to do just that. But it takes a lot of effort to build the culture where this climate can operate. For example: “A common outlook possessed by “a body of officers” represents a unifying theme that can be used to simultaneously encourage subordinate initiative yet realize superior intent.” (Patterns, 74)

Apparently, Milliken has gone through this process over the years and built an effective climate. As Boyd insisted in Conceptual Spiral, the driving force must be the creation and exploitation of novelty — before competitors can understand what you’re doing and before customers get tired and go somewhere else.

Not all their ideas work, of course. Roger Milliken was an ardent protectionist for many years and spent a lot of money trying to erect and maintain barriers to foreign competition. Fortunately, though, he didn’t bet the company on this version of the Maginot Line.

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Lion: Just what I expected

Getting a little bored waiting for the mortgage company to decide on our loan (or ask for yet more information), so I decided to upgrade my old (2008) MacBook.  This time yesterday, it was running Leopard (not Snow Leopard) and had a badly full VMWare Fusion / Windows Vista installation that I no longer need.  Today, as we speak, I’m up and running with Lion!

Continue reading →

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Tempo — A Review

[Note:  An earlier and slightly different version of this review was originally posted at http://fabiusmaximus.wordpress.com]

Tempo:
Timing, Tactics and Strategy in Narrative-Driven Decision-Making

by Venkatesh Rao
(Ribbonfarm, 2011; 154 pages)

Reviewed by Chet Richards
July 25, 2011

A good book is read more than once while accumulating copious notes in its margins and on the blank pages that the publisher has thoughtfully provided before and after the text. Venkatesh Rao has written a good book. Continue reading →

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More adventures of zheng and qi

One of the pillars of Boyd’s framework is the idea of playing off the expected (zheng) against the unexpected (qi).  It’s an ancient principle, a component of shih, the title of the fifth chapter of the Sun Tzu text.  In some form or another, it is incorporated into all frameworks that descend from Sun Tzu, including the Marine Corps’ maneuver warfare doctrine and the various forms of lean.

Occasionally the principle itself gets rediscovered.  You may be familiar with the “Wow! Factor” or Tom Peters’ “the Pursuit of Wow!”

Here’s one of these from the Wall St. J. last Friday.

A couple of comments:

1.  “Exceeding expectations” is OK, but it makes it sound like “expectations” is a linear scale and all you have to do is score higher.  He’s on the right track, but there’s more to zheng / qi than a freebee every now and again.  For one thing, if that’s your approach, then customers will come to expect it.

2.  And there’s something I don’t like about “under-promise, over-deliver.”  Something about it just makes me uncomfortable.

Still, his conclusion that “… when you give them something more than they expect — faster service, extra help, more options, early delivery and so on — you end up with the loyal, raving fans you need to propel your business into the stratosphere” is certainly consistent with what we expect from zheng / qi.

How to Turn Customers Into Loyal, Raving Fans

By MIKE MICHALOWICZ

http://online.wsj.com/article/SB10001424052702304203304576447823427183788.html

Do you want satisfied customers or do you want customers who are so thrilled with your company they become loyal, raving fans? I’ll take option No.2. Satisfied customers may come back a second or third time; they may even become regulars. But unless you exceed expectations, your satisfied customers could just as easily become your competitors’ satisfied customers.

Read more (subscription required)

About the Author

Mike Michalowicz is the author of “The Toilet Paper Entrepreneur.” He is an advocate of a business philosophy by the same name, believing the greatest business successes come from underfunded, inexperienced entrepreneurs. His website is http://www.ToiletPaperEntrepreneur.com.

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Is Apple Vulnerable?

When asked this question, Motolola Mobile CEO Sanjay Jha gave a most interesting answer because he talked about culture rather than limitations of the iPhone4 or iPad2.  He noted that companies have a tendency to adopt a defensive mindset when they have had a run of market successes.  He did, however, suggest that Apple is well aware of this problem, which is one of the most difficult in strategy (“Victory makes you stupid,” attributed to the elder von Moltke).

You might also note an interesting take on zheng/ qi (cheng / ch’i) near the end of the interview.

http://money.cnn.com/video/technology/2011/06/22/t_ls_motorola_apple.fortune/

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Win With The Unexpected

“Engage with the expected, win with the extraordinary.”  So recommended Sun Tzu, and it’s proven to be a winning formula for business as well.  The Japanese used it in the 1970s, when the expected was good gas mileage (for those of you under about 50, the Arab oil-exporting states shut off oil to the US in 1973 for a while and then quadrupled its price), and the unexpected was great quality and durability.

Today, the expected might be great gas mileage and quality, and the unexpected is sex appeal, as an article in Wednesday’s WSJ vividly illustrates.

“Gorgeous design costs no more than boring design,” says [head of Hyundai’s US Operations, John] Krafcik.

There have always been exciting small cars — the BMW 3-series, for example — but Krafcik is talking about a Hyundai Elantra that retails for about $22,000.

“These are vehicles people are proud to own,” [Autonation CEO Mike Jackson] says.

Apple, of course, plays this game extremely well, also.

EYES ON THE ROADMAY 25, 2011
Auto Makers Sweeten the Recipe for Small Cars
Goodbye, Hand-Crank Windows and Hello, iPod Docks; Car Buyers’ Interest in Compacts Rises Along with Gas Prices

By JOSEPH B. WHITE

http://online.wsj.com/article/SB10001424052702304066504576343201704359810.html
(subscription required)

The cheap-looking, cramped, “econobox” car is dead.

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Great time to start a bus line

Tomorrow I fly from Atlanta to LA, where I’ll be holding a seminar and giving a keynote at the Lean Software and Systems Conference 2011.

When I made the reservation, my wife and I were traveling the Southland looking for a place to retire.  But I had to fly from somewhere, so I chose Atlanta faute de mieux.

Well, as luck would have it, the right answer was Savannah.  Delta, in its down home customer-oriented way, said “No problem.”  We’ll fiddle with our computers for 30 seconds and reprogram you out of SAV (through ATL, of course) for a mere $800. Additional.

Or, I could buy a one-way, SAV-ATL, for $300, connect with my original reservation, and drive my second car (now in storage in Atlanta) back to Savannah.  I don’t know how far SAV is from ATL, but you can drive them easily in about 4 1/2 hours.  $300.

At this point, I decided to check Greyhound.  For $55, they took me from downtown Savannah, which is closer to my house than the airport, to ATL in that same 4 1/2 hours.   The bus had leather seats, free WiFi, and no charge to check a bag (which they hand you about 30 seconds after you get off the bus).  Left and arrived on time.

So the airline was charging six times as much to get me there maybe 2 hours earlier.

Obviously the number of routes where this trick will work is limited, perhaps to cities 300 or so miles apart.   But at least here in the East, there are a lot of those.  If the bus lines can keep their level of service up and their prices down, it’s going to be hard for airlines to hold on to that chunk of the business.  Ironically, the most successful US airline, Southwest, started not as competition for other airlines but for busses — short point-to-point routes at high frequency and low cost.

[Those of you familiar with Boyd’s strategies may recognize a little cheng / ch’i here.]