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Business "No-How"

Posted By Ron Sidman, Friday, October 25, 2019

 

While all leaders want to be positive, supportive, and proactive, there are times when the right thing to do is say no. Knowing when and how to say no to an opportunity or request is a critical leadership skill and a key to business success. But it’s often surprisingly difficult to do.

 

If you’ve read my previous posts, you know I’m a big advocate of positive thinking, continuous improvement, prudent risk-taking, and customer service. But when I reflect on my own career, there were times when saying no to customers, employees, or other stakeholders was the right although more painful thing to do. The problem is that it’s typically much easier to say yes and make someone happy than say no and have to deal with the negative fallout.

 

The best method I know of to make decision-making easier is to put the time and effort in up front to create both a clear “vision” for your business (exactly what you want it to look like in 5 or 10 years) and a clear “mission” (the means by which you’re going to achieve your vision). Then as each opportunity or decision comes along, you can ask yourself whether saying yes gets you closer to your vision. And, if so, does it do it in a way that is in sync with your mission. If you’ve ever wondered what visions and missions are for, this is it.

 

Of course, like all life and business advice, it’s great in theory but not always easy to follow. To illustrate the difficulty, I’ll tell you about a couple of instances in my own career where I fell off the wagon.

The First Years Vision and Mission

From the brand’s creation in 1972, we had a vision of becoming a leading juvenile product brand respected for helping parents make the first 3 years of life happier, healthier, and easier for themselves and their children. The mission that we felt would be the means to that end was to provide parents with “superior value from superior in-use performance.” In other words, we would attract customers via functional superiority—offering products provably superior to competition in doing what parents and their babies needed them to do. In fact, we did that quite successfully for many years by virtue of excellent designers and engineers, an outstanding product development process, our Parents’ Council, and input from child development experts. But then . . . .

Unbearable Temptation

In the mid 90’s, what was dangled in front of us was an opportunity that just seemed too good to pass up. Because of our reputation for product quality and child development expertise, Disney offered us exclusive rights to the red-hot Winnie-the-Pooh license for virtually our entire product line. Exciting and flattering as it was, it was clearly a departure from our mission. The appeal of a license is all about the graphics, not product performance. While I had some reservations, the enthusiasm of our marketing team and my own vanity persuaded me to go for it.

 

It was absolutely fantastic for a few years. Driven largely by licensed product sales, our overall sales and profits skyrocketed. However, as a consequence, we became more and more reliant on and beholden to Disney while taking away resources from building our core product line. It also made it less clear internally and probably to our customers what our company and brand stood for. As usually happens with hot licenses, gradually the bloom came off the rose culminating in a sudden precipitous decline in Pooh product sales. This could have been financially disastrous had we not seen it coming. I also always wonder what we could have done with The First Years brand had we devoted our full resources and attention to it rather than being distracted.

“Starck” Reality

Another time “no” was probably the right answer was when one of our biggest customers, Target, asked us to produce for them a line of private label products designed by renowned designer Philippe Starck. Again, this was clearly a departure from the substance of our mission. It couldn’t have been further from our strategy of building our own brand and relying on our own design expertise and product superiority to win the day. Understandably, our Target sales people desperately wanted to do it. Their rationale was that it would solidify our relationship with a very important account. I took the easy way out and agreed rather than risking alienating a large customer and disappointing my own sales force. 

 

To put it mildly, it was a disaster. While Mr. Starck was and I’m sure still is an excellent and successful designer of many things, I think it’s fair to say that infant products were not his forte. The products just plain didn’t sell and the whole program was discontinued within a couple of months. We lost money and I’m not even sure it improved our relationship with Target. In retrospect I could have and should have explained to Target up front that this type of product development was not our strength. They probably would have respected us more if I had.

Next Steps

You can clearly see from my examples that you need a clear vision and mission for your company and should resist the temptation to drift away from it. You can’t be all things to all customers. Every time you say yes to something, you’re taking resources away that could be applied to something else. Let your vision and mission be the guides to what to do and not do. 

 

As always, if you’d like more information or assistance regarding achieving your business and life goals or you just want someone to brainstorm, vent, or commiserate with, consider taking advantage of JPMA’s Executive Mentor Program by scheduling a Skype or Face Time session with me. I’d enjoy meeting you and helping you any way I can. Check the JPMA web site for more information or contact Reta Feldman at  rfeldman@jpma.org.

 

 Ron Sidman was the founder and CEO of The First Years, Inc. and former Vice Chairman of the JPMA Board of Directors. He is currently a business consulting resource for JPMA members and serves on the Advisory Boards of both the Institute for Entrepreneurship and the Dean of the College of Education at Florida Gulf Coast University. Ron is also the President of Evolutionary Success, LLC, a life and business coaching company.

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The Forgotten Skill

Posted By Ron Sidman, Wednesday, September 11, 2019

it seems like more than ever people all over the world are struggling to resolve differences of opinion. Yet, there's a simple but powerful skill set that can often produce almost magical results - the lost art of negotiation. 

 

Different people always have and always will see things differently. Whether because of variations in genealogy, life experience, religion, values, income level, geography, or simply mindset, we all interpret facts and situations in our own unique ways. But we have a choice as to how to deal with this reality. We can go down the fruitless path of trying to bludgeon those we disagree with into submission, complain about others and do nothing, or learn how to maximize cooperation in a diverse world through negotiation.

 

Applications for Negotiation

Negotiation might be the most versatile and useful interpersonal skill you can have in your tool kit. Here are just a few common personal and business applications:

·        Buying a house, car, etc.

·        Resolving a dispute with someone from whom you’ve purchased something

·        Resolving a marital disagreement

·        Dealing with your children

·        Making a sale to a customer

·        Managing a consumer complaint

·        Selling your company or buying someone else’s

·        Dealing with difficult employees

The list is really endless. Essentially any time you don’t see eye to eye with someone or wish to persuade someone to do something they are not doing, negotiation could be your best option.

 

Key Negotiation Principles

Like every other topic I address in my posts, I can’t begin to cover all the bases on such a broad and complex subject in a few pages. However, I can offer a few suggestions to hopefully act as a top-level guide and stimulate your thinking. Getting what you want through negotiation is never guaranteed. But here are some things you can do to improve your odds.

1.     Understand your desired outcome and alternatives
Quite often people undermine their chances of success by plunging in half-cocked. Before you act, make sure you are clear up front about (a) what exactly the issue is, (b) what outcome you are seeking, (c) what your options are if you can’t negotiate an agreement, and (d) what the other side’s options are if they can’t reach an agreement with you. Points ‘c’ and ‘d’ should not be overlooked. You may need some leverage to encourage someone to be cooperative and you don’t want to be blind-sided by what the other side might do.   
 

2.     Maintain a line of communication
It should come as no surprise that you need to communicate with someone if you want to negotiate with them. Becoming emotional yourself or riling up the other side is a great way to sabotage your effort from the start by cutting off communication. You can and should be empathetic and civil with someone even if you disagree with them.

3.     Truly understand the other side’s perspective
We too quickly jump to the conclusion that those with differing opinions are just wrong or, even worse, stupid. Once you’ve established or secured a communication link, the next step is to thoroughly understand exactly what the other side’s perspective is. Do this by direct discussion with lots of open-ended questions (e.g. “Why is that important to you?”). If something doesn’t make sense to you, it’s typically not that the other side is irrational, it’s that you don’t understand them yet. Keep probing. And, be willing to acknowledge the legitimacy of aspects of their position that are valid. Setting a tone of objectivity is very important.

 

4.     Help them understand your perspective
Once you know where the other side is coming from, make sure you lay out in an easy to understand way how you’re looking at the situation. Be patient. Their own blind spots may make it difficult for them to understand your point of view. Stick to provable facts. Use 3rd party objective data or standards if appropriate. And, be open to modifying your view if facts presented justify it. Again, maintain an objective tone.

5.     Jointly seek a win-win resolution
Despite what some people seem to think, long-term positive results don’t come from win-lose outcomes. Better to position the situation as both sides working together to reach a mutually acceptable result. Keep lists of each side’s issues in the forefront and conduct joint brainstorming to generate possible routes to a settlement. Quite often, when people take the time to really understand each other’s wants and needs, they find previously invisible points of agreement and “concessions” acceptable to both sides. And, the fact that you reach a solution together is just as important as the solution itself.

6.      If necessary, ramp things up
Hopefully, you’re able to reach an agreement without going any further. If not, remember I mentioned earlier that you need up front to have a sense of what you can do if unable to reach a negotiated settlement. If you’re still at a stalemate, now’s the time to calmly and respectfully indicate the next steps you need to take and why. Just the prospect of what you plan to do next may be enough to push things over the line. If not, you may have to actually take action before the other side recognizes they would be better off agreeing to terms.

 

Negotiation isn’t a cure-all. Some differences of opinion simply can’t be resolved. But because it respects the fundamental principles of human nature, it’s a methodology that, in my experience, often produces miraculous results. Why not give this technique a try!

 

Next Steps

As always, if you’d like more information or assistance regarding achieving your business and life goals or you just want someone to brainstorm, vent, or commiserate with, consider taking advantage of JPMA’s Executive Mentor Program by scheduling a Skype or Face Time session with me. I’d enjoy meeting you and helping you any way I can. Check the JPMA web site for more information or contact Reta Feldman at  rfeldman@jpma.org.

 

Ron Sidman was the founder and CEO of The First Years, Inc. and former Vice Chairman of the JPMA Board of Directors. He is currently a  business consulting resource for JPMA members and serves on the Advisory Boards of both the Institute for Entrepreneurship and the Dean of the College of Education at Florida Gulf Coast University. Ron is also the President of Evolutionary Success, LLC, a life and business coaching company.

 

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A Wakeup Call!

Posted By Ron Sidman, Tuesday, July 9, 2019

THERE IS ONE COMPONENT OF YOUR LIFE UPON WHICH ALL THE OTHERS, INCLUDING YOUR BUSINESS OR CAREER, DEPEND. IF IT'S NOT PROPERLY MAINTAINED, EVERYTHING IMPORTANT TO YOU IS IN JEOPARDY. YET MOST OF US PAY LITTLE IF ANY ATTENTION TO IT UNTIL SOMETHING GOES WRONG.

 

Of course, I'm talking about your physical and emotional health. In my mentoring of CEOs and young adults, I now emphasize that you have to look at your life holistically. You can't effectively make business or career decisions without also addressing your vision for family & friends, financial condition, where you’d like to live, and recreation. But most importantly you need to pay attention to your health.

 

The importance of a healthy lifestyle was underscored for me a couple of years ago when I got a call from my new doctor in Florida. “Hi Ron. We got the results back from your cardiac heart scan. As I told you, I do this test on all my new patients. Well, if there was no plaque in the arteries of your heart, your score would be zero. Yours was 500!” He went on to explain the frightening implications. “That means you have a very high risk of having a heart attack or stroke over the next 5 to 10 years.” 

 

It’s impossible to determine how much of that unhealthy arterial crud was due to heredity or a diet that for most of my life was dominated by generous portions of prime rib, Caesar salad, veal parmesan, Chinese food, and pepperoni pizza. That’s not exactly a regimen consistent with the healthy eating pyramid and it undoubtedly didn’t help my cause.

 

While I had always exercised fairly regularly, until I sold my company, I never really confronted the fact that my diet and other aspects of my lifestyle might come back to haunt me at some point. Nor did it help that my previous doctor didn’t realize that because of my family history of heart disease, putting me on a statin drug years ago might have been a good idea.

 

As each new medical study is published, it becomes more and more clear how what we ingest, what we breathe, how and how often we move our bodies, how we think, and the medical care we receive impacts the quality and length of our lives. Fortunately, for the most part, these are all things we can control! Yet it often takes a negative medical test or, even worse, a heart attack or serious illness to get us to do what we should know we should do. 

 

With my wakeup call as the impetus, for the past few years I’ve been making an annual pilgrimage to the Mayo Clinic in Rochester, Minnesota to participate in both their Executive Health and Healthy Living programs. The former is an extensive physical examination and the latter a fitness assessment and educational experience. Here are just a few of the things I’ve learned on my annual “medical vacations” that you might find helpful too:

 

It’s Never Too Late to Make Up for Past Sins

You can’t always undue damage to your body that has been done. But you can most likely prevent further damage and counter-balance potential negative impacts. For example, diet and exercise changes can have profound positive benefits even if initiated at an older age. Learning how to relax through meditation or other forms of mindfulness can help you prevent or turn around stress-induced illnesses.

You’ve Got to be Your Own Health Advocate

The harsh reality is that no one really cares as much about your health as you do. Even the Mayo Clinic where they truly believe “the patient comes first” is after all a business that is servicing thousands of patients and is motivated to some degree by finances. So is your family doctor. No medical professional will lose sleep if you don’t do everything you can to live a long and healthy life. Doctors today struggle to even have the time to give patients the basic attention they deserve. And not all doctors are competent or knowledgeable. It’s totally up to you to seek the best physicians, ask the right questions, insist on proper care, and distinguish between fact and fiction.

Really Know What You’re Putting in Your Stomach

We all know that what we eat is important for good health. But it’s the hidden ingredients in foods that can hurt you. My blood pressure is a bit too high. Too much salt increases blood pressure. A Mayo nutritionist pointed out to me that while I never apply salt to my food, I was consuming much too much salt because of all the prepared foods and sauces I was eating. Read the labels! You’ll be shocked.

It’s About All-Day Movement, Not Just “Exercise”

You should certainly schedule dedicated physical fitness sessions multiple times a week. But if you sit on your duff all day in-between, you’re still doing your body significant harm. There’s even a name for activity that should be occurring outside of formal exercise times—"Non-Exercise Activity Thermogenesis” or NEAT. It includes things like walking, gardening, walking up stairs, doing the dishes, even just standing up if you sit a lot. Turns out your NEAT is just as important as aerobics and resistance training.

Get to Know Your Pharmacist

If you’re taking any medications or supplements regularly, how and when you take what you take makes an enormous difference—time of day, full or empty stomach, chewable or non-chewable, interactions between them, etc. It’s quite likely your doctor is not as up to date on the latest studies as a pharmacist is. That’s why the Mayo program includes a consultation with a pharmacist. It’s a healthful thing to do.

Next Steps

If health issues can jeopardize every one of your hopes and dreams, it certainly pays to be just as proactive about your health as you would about your business:
 

1.      Conduct a Situation Analysis Annually--With the help of medical professionals, thoroughly assess the state of your health. I highly recommend the Mayo Clinic or another respected medical institution with similar proactive, holistic, preventive medical care programs.

2.      Create a Vision & Goals--Create a long-term (e.g. 10 year) Vision of where you’d like your physical and emotional condition to be. Then establish 3-year, 1-year, and next quarter goals that will enable adequate progress towards that Vision. Make sure every goal has measurable success criteria.

3.      Create an Action Plan—Document the steps you will take to achieve your next quarter goals. Undoubtedly it will include blocking out in your calendar enough time each week to do the health-related activities that are essential. 

4.      Implement Your Plan—Start today pursuing your goals and monitor and react as needed.

 

As always, if you’d like more information or assistance regarding achieving your business or life goals or you just want someone to brainstorm, vent, or commiserate with, consider taking advantage of JPMA’s Executive Mentor Program by scheduling a Skype or Face Time with me. I’d enjoy meeting you and helping you any way I can. Check the JPMA web site for more information or contact Reta Feldman at  rfeldman@jpma.org.

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Does AI Have a Place in Your Company?

Posted By Ron Sidman, Monday, April 8, 2019

 

Few technological innovations have been hyped as much or created as much concern as artificial intelligence. In reality, it is simply the next generation of information processing. And the only thing you should fear are the implications of NOT utilizing it to increase your business’s competitive advantage.

 

You’re undoubtedly already familiar with the need for you and your company to evolve as the world around you changes and as technology advances. Even so, your first reaction to artificial intelligence may be that it’s only relevant for huge or high-tech corporations. Not so. Just as the advent of computer automation revolutionized the way business is done in companies of all types and sizes, AI will inevitably have the same effect.

 

The reason is that there are business functions that machines can perform far better, faster, and more accurately than humans. If you don’t take advantage of this fact, you can be sure your competitors will. The difference between the automation your familiar with and AI is that AI actually mimics human behavior. Rather than just performing routine tasks, AI technology can learn from experience, react appropriately to sensed changes in the environment, make decisions, and predict the future.

 

But before you ponder the end of the human race as we know it, I can assure you that there are also things humans can and most probably always will be able to do better than machines. The promise of AI comes from letting machines do what they can do best thereby freeing up humans to do what only they can do. This not only could make your company stronger and more efficient, it could also increase employee satisfaction by letting machines do the boring repetitive work while allowing your employees to have more satisfying and enjoyable jobs. 

 

What Exactly is Artificial Intelligence?

AI applications can be organized into three different categories of technological advancement:

·        Machine Learning (ML)

·        Natural Language Processing (NLP)

·        Robotics

Machine Learning is the use of computer programs that actually learn from experience rather than relying on rules-based programming. An example is the ability of Google Photos to search for images of people, animals, and objects. By feeding huge amounts of data into the system and letting the system know when it’s right and wrong, the program actually “learns” how to distinguish for example cats from dogs.

 

Natural Language Processing enables people to have a natural conversation with a computer. This aspect of AI has become pervasive almost overnight—Siri, Alexa, Google Home, etc. As the technology continues to improve, it will get more and more difficult to distinguish between people talking to you and machines. The savings in payroll costs are obvious.

 

Robotics refers to machines that can perform physical tasks in the real world. Unlike movie robots, they typically do not look like humans and are designed for very specific tasks. Sophisticated washing machines, driers, and dishwashers can all be thought of as robots--as can autonomous cars and self-driving fork trucks. Any device that senses what’s happening around it and performs an action based on that information is a form of robot.

 

Applications in the JP Industry

Let me give you just a few of the many possible applications in the juvenile products industry to start you thinking.

·        Parenting Chatbot
Add a chatbot to your web site that answers parenting questions, provides customer-specific product suggestions, solicits ideas for new and improved products, and triages product complaints. This can reduce customer service costs, increase customer satisfaction, and enhance your company’s reputation for parenting expertise.

·        Product Development Team Virtual Assistant
Use machine learning technology to support teams as they wrestle with the complexities of product development in the JP industry. A virtual assistant could prompt teams on the next steps in the process, review research for thoroughness, assist in regulatory reviews, forecast potential sales and return on investment, and report on project progress to senior management. This could speed time to market, increase your product development “batting average”, and reduce development costs.
 

·         New Kinds of Products and Product Enhancements
The flood of products and product features that utilize AI is well underway. AI allows a product to not only sense environmental conditions but react to them automatically. Imagine how this could be applied to strollers, car seats, floor toys, etc. Natural Language Processing offers intriguing options for child entertainment and education. Robotics could also be applied to perform some of the grunt work of parenting allowing moms and dads more time for quality parent-child interaction. The possibilities are endless.

 

Implementation Considerations

My advice to every CEO would be to learn at least the basics of artificial intelligence. I took a 6-week online MIT course but there are also many excellent videos, books, and articles readily available. Here are some other implementation tips:

·        It will be critical to position AI as a necessary enhancement of currently used technologies that are required to ensure continued growth and financial success.

·        Just like when computer automation first came along, substantial training will be required for everyone in your organization.

·        Understand and respect the ethical issues that are likely to arise such as with respect to customer information and privacy.

·        Take it step by step, proving the effectiveness of initial AI applications by monitoring results and communicating benefits.

 

Next Steps

Consider how technology and AI might fit into your 10-year vision. Then start building the interim goals and action plans into your planning and implementation cycle. Like everything else, adopting artificial intelligence will be an evolutionary process with some setbacks and learning along the way.

As always, if you’d like more information or assistance regarding AI implementation or you just want someone to brainstorm, vent, or commiserate with, consider taking advantage of JPMA’s Executive Mentor Program by scheduling a Skype or Face Time with me. I’d enjoy meeting you and helping you any way I can. Check the JPMA web site for more information or contact Reta Feldman at rfeldman@jpma.org.

 

   

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Taking Risks

Posted By Ron Sidman, Monday, December 3, 2018

If there is one regret I have when I look back on my own business career, it’s that I wish I had more aggressively pursued more of our riskier strategic alternatives.

Certainly, I made many moderate to high risk decisions when I was leading my company and most worked out very well. But as the company grew bigger, as I got older, and with the visibility and pressure of being a public company in the Sarbanes-Oxley era, I frankly became a bit more reluctant to try bold new directions. Looking back now with the benefit of 20-20 hindsight, I wish that were not true. I wish I had taken a gamble on some of the bolder breakthrough ideas we had at the time.

 

Who knows how they would have worked out. But the fact that I’ll never know is regrettable. In reality, most of us are naturally risk-averse for good reason. It’s a life-saving characteristic built into our DNA. As a result, too often it takes a crisis to get an organization to try a totally new approach. By then it can be too late.  

I would argue that the companies that have been and will be most successful going forward are the ones that consider prudent risk-taking to be a critical ongoing component of their culture and behavior.

 

The Challenge Today

In the years since our company was sold, being a CEO hasn’t gotten any easier. I don’t have to tell you about the increasing pace of change. And it’s absolutely impossible to predict the future. Five years ago, how many people predicted the total demise of Toys R Us/Babies R Us, a trade war with China, or the growing impact of artificial intelligence. The feeling most business leaders are experiencing today is like being strapped to the front of a speeding train not knowing what’s waiting for you around the next turn. The one strategy that clearly won’t work is to just continue to do what you’ve been doing regardless of what’s going on in the marketplace. Woolworths, Toys R Us, Sears, and many JPMA companies learned this the hard way.

 

The Need to Continually Evolve

This is where mastering risk-taking becomes important. Successful business leadership requires that you do today what will be needed to be successful in the future. So how do you prepare your company for a future you can’t predict? First, you need to think of your business not as a static entity but one that is in a continuous state of evolution. Then to evolve, you have to continually experiment with new business model components that seem like they might have promise—new product categories, new operating processes, new technologies. I’m not suggesting you recklessly plunge into the deep end. Any new bold direction can and should be validated with your customers and employees before you implement.

 

Next Steps

At the very least, make sure you perform an annual plan review that includes brainstorming possible creative new initiatives. Preferably you do this quarterly. Also make sure, as I mentioned, that you have a mechanism for testing and validating the best of the generated new ideas before plunging ahead.

 

As always, if you’d like more information or assistance regarding your unique challenges or you just want someone to brainstorm, vent, or commiserate with, consider taking advantage of JPMA’s Executive Mentor Program by scheduling a Skype or Face Time with me. I’d enjoy meeting you and helping you any way I can. Check the JPMA web site for more information or contact Reta Feldman at rfeldman@jpma.org.

 

Ron Sidman was the founder and CEO of The First Years, Inc. and former Vice Chairman of the JPMA Board of Directors. He is currently a  business consulting resource for JPMA members and serves on the Advisory Boards of both the Institute for Entrepreneurship and the Dean of the College of Education at Florida Gulf Coast University. Ron is also the President of Evolutionary Success, LLC, a life and business coaching company. He can be contacted at ron@evolutionarysuccess.com.

   

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Who's Your Mommy?

Posted By Ron Sidman, Tuesday, October 2, 2018

Have you really pinpointed exactly who your target customer is? Determining specifically whom to focus on is a crucial strategic decision that should impact the design of every aspect of your business model and increase your likelihood of success.

 

I do quite a bit of consulting with entrepreneurs and I mentor college students studying entrepreneurship. One of the very first and most important steps in starting a new company is to select a specific, somewhat homogeneous segment of the total market to be the target you intend to dominate. A startup can’t begin to develop products or form channel, pricing, and marketing strategies until it does so. Yet I’ve found that established companies often have lost track of or never really clearly defined who their target customer really is. The typical result is a loss of competitive advantage. 

 

Whether or not you feel you have target customer confusion, I have some thoughts and suggestions:

Don’t Try to be All Things to All People

To paraphrase Abe Lincoln, “you can’t please all of the people all of the time.” Maybe more than ever in this country, there are major differences between people’s interests, beliefs, lifestyles, parenting styles, and incomes. If you try to please everyone with your product, you may be loading it up with costly features that many customers could do without. The good news is that because there are so many market segments, there’s a better chance you can find one or more you can dominate. And domination is what you should be seeking. Better to totally satisfy and dominate a smaller market than be a me-too player in a big market. 3% of a 50-million-dollar market ($1,500,000) is not as good as 40% of a 5-million-dollar market ($2,000,000)—and probably not as profitable.

Define Your Market Segment

There are numerous attributes that can be used to define customer segments. To name a few:

·        Age

·        Income level

·        Education

·        First-time vs. second-time (or more) parent

·        Geography

·        Beliefs—religious and political

·        Parent or gift-giver

·        Lifestyle (e.g. outdoorsy, like to travel, dog owner, etc.)

You can cut it as finely as you want. For example, first-time parents over 30 with a college education who live in rural areas and like to travel by car. Just make sure the market is big enough to make pursuing it worthwhile.    

 

Leverage Your Strengths

Pick a target segment that you know well or syncs with your skills or interests. The simplest approach, and it happens a lot in the juvenile industry, is to create products for people like yourself. That certainly reduces the need for market research. If not, it’s helpful to have one or more people on your team from the target segment who can give you feedback.

Look for Unhappiness

You also should look for a market segment that is not totally satisfied with the competitive products that are currently available. There’s bound to be some definable group of customers that wants products or features that no one else is offering in your category. That’s your opportunity!

Become an Expert on Your Customer

Once you’ve defined a niche, you’ll want to become and remain the world’s leading expert on it for your product category. This is done via internet research, in-person interviews, and field observation. You’ll want to identify unsatisfied needs of course. But you also want to learn how they make their buying decisions, where they get their information, how they like to shop, and any other information that will help you design your product and let them know why it’s their best choice and how they can easily purchase it.

Start on a Beachhead

If you’re a new company or you’re introducing a new product, it’s often best to start with a relatively small “beachhead” market segment where you have the best chance of success. This will allow you to work out any bugs in the product or delivery system on a small scale without taking a huge risk up front. Once you’ve made corrections and improvements, you can then safely move on to larger adjacent market segments.

Next Steps

If you feel that you’ve defined a very specific target customer for your products, everyone in your company understands who that is, and you’re the category leader in that segment, congratulations! If not, I hope some of these suggestions will help you get there.

 

As always, if you’d like more information or assistance from me regarding your unique challenges or you just want someone to brainstorm, vent, or commiserate with, consider taking advantage of JPMA’s Executive Mentor Program by scheduling a Skype or Face Time with me. I’d enjoy meeting you and helping you any way I can. Check the JPMA web site for more information or contact Reta Feldman at rfeldman@jpma.org.

 

Ron Sidman was the founder and CEO of The First Years, Inc. and former Vice Chairman of the JPMA Board of Directors. He is currently a  business consulting resource for JPMA members and serves on the Advisory Boards of both the Institute for Entrepreneurship and the Dean of the College of Education at Florida Gulf Coast University. Ron is also the President of Evolutionary Success, LLC, a life and business coaching company. He can be contacted at ron@evolutionarysuccess.com.

 

   

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Trade War Woes

Posted By Ron Sidman, Monday, August 6, 2018
The current trade dispute between the US and China is just another reminder that juvenile product manufacturers need to continue to be alert and nimble to cope with an ever-changing environment.

Your supply chain is the bloodstream of your company and any interruption or complication can put your business in jeopardy quickly. It’s tough enough having to deal with today’s distribution channel challenges, safety regulation, and competitive pressures. The last thing the JP industry needs is another thing to worry about. But here we are in the midst of a battle of economic titans that has injected a level of uncertainty into both cost and continuity of product supply.

 

It was different when I started in business in the seventies. Baby product importers were able to buy from multiple countries. A typical Asian buying trip for me included Japan, South Korea, Taiwan, and Hong Kong. If one country was a problem at any point in time, there were alternative sources elsewhere. But gradually labor costs in all those countries increased and China became virtually the only source for most of our labor-intensive products.

 

Meanwhile duties on most imported juvenile products have declined over the years. As JPMA’s general counsel Rick Locker pointed out in his recent JPMA webinar, countries have generally agreed that there’s a benefit to keeping tariffs on goods for children low. Currently duties for most JP products are very low or zero. But this may be about to change for products imported from China if the US goes through with its threats.

 

It’s in situations like this that the rationale for having a JPMA comes into focus. And as usual the association is responding quickly to this potential threat. If you’ve stayed up to date you know that JPMA is making industry concerns known to the appropriate government entities and is arguing persuasively that children’s products should be excluded from tariff increases. At the same time, it is doing a great job of keeping members up to date on what’s transpiring.

 

I think most observers feel that some kind of mutually face-saving resolution of this dispute will occur before long. It’s just not in either side’s interest to prolong a fight that will clearly harm both sides. But, leaving aside the issue of whether tariff threats are the best tactic to use to provoke change, the lack of a level playing field is real and ought to be addressed. And it’s highly likely if not inevitable that any progress in resolving trade differences between the US and China will be slow in coming leaving the possibility of a rocky road ahead for many years.

 

So, what if anything should you be doing in response to these geopolitical machinations? There’s no need to panic but it might be wise to take the opportunity to do a “failure modes and effects analysis” on your supply system—and not just products made in China.

 

This is something you should be doing anyway at least once a year as part of your overall planning and management process. But let the current China situation serve as a wakeup call to spur a more aggressive consideration of all possible threats to cost and supply continuity and possible ways to minimize the likelihood of occurrence or the negative effects if they do occur. Here are some ideas to consider:

 

  • Make sure you are comparing apples to apples in your product costing by including indirect costs such as the added inventory carrying cost for longer lead time foreign sources and the “cost of quality.” You may find that costs for some imported products are not as inexpensive as they seem.
  • Study whether for at least some of your products, consumers would be willing to pay a sufficient enough premium for the product to be produced in the US.
  • For critical large volume products, consider dual sourcing in both Asia and US/Canada keeping the dominant share in Asia but having the capability to shift if necessary.
  • Review whether automation advancements may now allow some currently imported products to be feasibly produced in the US or Canada.
  • Monitor the sourcing strategies of larger companies in other categories who are making products similarly constructed to yours. You may find they are successfully producing in countries other than China.

  • Even within China, make sure you have some kind of ongoing process for cost comparisons between alternative suppliers.

  • As your order sizes increase, make sure you are routinely renegotiating production costs based on the higher volumes.
     
  • Make sure someone in your company is periodically physically inspecting both domestic and foreign factories looking for potential issues that could interrupt supply. 

 

As always, if you’d like more information or assistance from me regarding your unique challenges or you just want someone to brainstorm, vent, or commiserate with, consider taking advantage of JPMA’s Executive Mentor Program by scheduling a Skype or Face Time with me. I’d enjoy meeting you and helping you any way I can. Check the JPMA web site for more information or contact Reta Feldman at rfeldman@jpma.org.

 

Ron Sidman was the founder and CEO of The First Years, Inc. and former Vice Chairman of the JPMA Board of Directors. He is currently a  business consulting resource for JPMA members and serves on the Advisory Boards of both the Institute for Entrepreneurship and the Dean of the College of Education at Florida Gulf Coast University. Ron is also the President of Evolutionary Success, LLC, a life and business coaching company. He can be contacted at ron@evolutionarysuccess.com.

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Manage Problems: Rule the World

Posted By Ron Sidman, Monday, April 2, 2018
If you can train yourself and your staff to prevent the problems that are preventable and solve the problems you can’t prevent, you are well on your way toward a more enjoyable and fulfilling business and life.

 

My juvenile product industry odyssey started with having to face a huge problem. When I graduated from college in 1968, I was contemplating going to law school or business school but decided to take a year off before plunging back into academia. Needing to earn a little money to pay for burgers, dates, and rent, I took the path of least resistance and went to work for the family company—a modest-size baby product distributor called Kiddie Products. Turns out I arrived at a pivotal point in the company’s existence. Our customers, the early discount stores, had gotten so big that they didn’t need a distributor any more. They could buy big enough quantities to deal directly with the importer/manufacturers who were our suppliers and enjoy considerable savings in product cost. Of course, our suppliers were more than happy to accommodate them.

 

To his credit, my father saw the writing on the wall. Most of what we sold we were buying from importers sourcing their products in the Far East. So, in desperation, he decided that the company’s only hope was for him to travel to all the “countries of origin” and do to our suppliers what they were doing to us—bypass the middleman and go straight to the source. Unfortunately, he had limited knowledge of importing, injection molding, product design, packaging, or quality control.

 

Meanwhile, I had just finished sleepwalking through four years at a small, all male, New England liberal arts college and arrived on the office doorstep. Since my father was concerned about his lack of manufacturing expertise and was reluctant to travel to those alien lands alone, he asked me to go with him. I guess he thought my four years of Latin could come in handy. So off we went to Japan, Taiwan, South Korea, and Hong Kong on the first of many (for me not him) journeys to the Orient. Our mission was to knock off every product we were buying from the importers as quickly as possible. And that we did with great success—at least for a while.

 

As you can imagine, our profits on all those now directly imported products effectively doubled and our financial statements never looked better. So good in fact that, at the urging of his golf club buddies, my father decided to take the company public. By doing so he saw an opportunity to get the company out of hand to mouth mode and finally make some decent money after he and my mom had worked so hard to build the business.     

 

Soon thereafter, as happens in life and business, the euphoria was interrupted by another crisis. The FDA, which was responsible for the safety of children’s products at the time (pre-CPSC), decided to impose what I believe was the first ban of baby products ever. They issued a press release banning 28 products in one fell swoop—including a few of our knock-offs. Suddenly our little company was getting national attention in a not so flattering way.

 

Now I can’t explain why, but it was at this point that I had a life-changing epiphany. Rather than look at this turn of events as a business-threatening tragedy, to me it was an exciting opportunity. The FDA ban was not just a commentary on the quality of our products. It was a sweeping condemnation of the quality of infant “accessories and playthings” in general. Fueled by idealism, naiveté, and inexperience, I saw an opportunity to be a crusader for babies and their parents and create a safer, much higher quality product line. This is how The First Years brand was born. 

 

But now I had another problem. I was single, no babies, no knowledge of what was important to our consumer customers. How could I lead the effort to design superior products? They say necessity is the mother of invention. Well, ignorance of vital information is the mother of learning. In college, I struggled to get myself motivated to study subjects whose relevance to my life was not clear. Now it was obvious what I needed to learn to accomplish my dream, and the sooner the better. We put an ad in the local paper to see if we could get expectant and new moms to meet with us in a local hotel to talk about their hopes, fears, and parenting practices. Much to our surprise, they came and they absolutely loved meeting other moms and sharing their thoughts. In all the years I attended our regular focus group sessions like this, I never failed to come away on an adrenalin high from some new insight or idea that could be implemented immediately. These early sessions eventually morphed into a nationwide online community of parents that we called The First Years Parents Council. It was an invaluable source of ongoing market research information that contributed enormously to our competitive advantage.

 

The moral of this story obviously is that while you should certainly try to do everything you can to prevent problems from occurring, sometimes problems can be the trigger for breakthroughs in thinking and action. The key is accepting the fact that, as a wise Chinese supplier of mine once said, “If there are no problems, there’s no business.” Then, see if you can get in the habit of looking for the hidden opportunities in every new problem that comes along. 

Next Steps

You can’t problem-solve or prevent reoccurrence if you don’t know the problem exists. Make sure your corporate culture encourages making problems and failures visible and acceptable.  You might also want to adopt and teach a company-wide problem-solving methodology.

 

As always, if you’d like more information or assistance from me regarding your unique challenges or you just want someone to brainstorm, vent, or commiserate with, consider taking advantage of JPMA’s Executive Mentor Program by scheduling a Skype or Face Time with me. I’d enjoy meeting you and helping you any way I can. Check the JPMA web site for more information or contact Sam Adams at sadams@jpma.org.

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Make Your Company an Innovation Powerhouse

Posted By Ron Sidman, Thursday, March 1, 2018

If you want to survive and prosper in this world of fast-paced change  and intense competition, you need to build innovation into every nook and cranny of your company. Business success is all about creating and sustaining a competitive advantage and innovation is the key. 

 

What sets apart companies like Google, Amazon, “Elon Musk Inc.”, and Apple is their extraordinary pace of innovation. Hardly a day goes by when they aren’t announcing some new product, feature, technological breakthrough, business model redesign, or other initiative. As a result, their competitors are choking on their exhaust fumes as they futilely try to catch up.

 

Now, you may believe that rapid-paced, company-wide innovation is only required in the high tech world. But I would argue that companies in the juvenile industry who want to break out from the pack and flourish in today’s very challenging marketplace would be wise to adopt the philosophy that has driven the high tech company boom. And it’s not really difficult to do if you are committed to it. In a previous post, Crafting an Innovation Culture, I talked about how you can create a culture that energizes the implementation of your mission. Here’s how to make sure your culture fosters state-of-the-art innovation:

 

Innovate Everywhere

Let it be known in your company that everything is up for grabs. No sacred cows. You obviously can enhance your competitive advantage by designing innovative new products, but also by creating a clever new way to attract consumers, redefining your target market, revamping your sourcing strategy, leveraging artificial intelligence, simplifying your organization chart, changing your compensation system, entering a totally new category, and on and on. These are all innovations.

 

Adopt an Experimentation Mindset

In the “old days”, companies were reluctant to create radically new products, processes, and business models because of the high cost of failure and related risks to personal job security. Today, it’s easier than ever to simulate and test ideas at low cost rather than immediately take the high risk plunge. We now know Innovation is best accomplished through iterative experimentation. Generate an idea, simulate or prototype it, get feedback from internal or external customers, revise as necessary, get feedback again, and so on until you’ve got something you’re confident will fly. Then you invest the big bucks and make it happen.

 

Encourage Idea Generation from All Sources

Successful innovation is a numbers game. The more ideas coming into the funnel the more great implementable ideas will surface. The nurturing and harvesting of ideas has to be built solidly into your business model so it automatically happens all the time. Identify all the potential idea sources and make it easy and rewarding for people to make suggestions. It shouldn’t be just a passive approach where you wait for ideas to be generated. The search for ideas should be proactive—a part of everyone’s job.  Monitor the number and quality of ideas from all sources and take corrective action if you’re not getting what you need.   

 

Screen Effectively

The quickest way to discourage idea generation is to not provide feedback to idea generators. The well will quickly run dry. Every idea should be acknowledged and responded to with information about the likelihood of implementation. You’ll need a very good screening process to separate the wheat from the chaff. The art of screening is to be able to recognize the ideas that have potential even when they are still undeveloped. You’ll also need a mechanism for refining and implementing the best ideas in a timely manner.

 

Leverage Teamwork and Diversity

Innovation is a team sport. It takes a blend of diverse perspectives to take the seed of an idea and develop it into something that will really work. A team will almost always come up with a better idea than an individual. There’s a magical synergistic effect generated by a cross-functional team trained to build on and implement an idea.

 

Teach Innovation Techniques

One of the most effective things we did at The First Years to encourage innovation was to adopt one company-wide innovation process that people across the company were trained in. We used a technique developed by a company in Cambridge, MA called Synectics. Whenever we needed a new idea or a problem needed to be solved, we got the appropriate cross-functional group together and conducted a Synectics brainstorming session. The more we used it, the better we got at it. And it was fun! 

 

Next Steps

Do a self-assessment to see how innovative your company is right now. Ask yourself if you are generating enough new product and process ideas to keep you out in front of competition for the foreseeable future. If not, consider implementing some of these suggestions. You might be surprised by the amount of creativity in your company you can tap into.

 

As always, if you’d like more information or assistance from me regarding your unique challenges or you just want someone to brainstorm, vent, or commiserate with, consider taking advantage of JPMA’s Executive Mentor Program. Check the JPMA web site for more information or contact Sam Adams at sadams@jpma.org

Tags:  business  competition  innovation 

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Why You Need a Mentor

Posted By Ron Sidman, Friday, February 16, 2018

If you haven’t yet established a relationship with one or more confidants with whom you can share your deepest concerns and get reliably helpful feedback, you’re missing a huge opportunity. 

Most successful CEOs and senior executives are not totally independent and self-sufficient    pioneers who boldly move forward without the need for advice or a shoulder to cry on. In fact, some of the least successful CEOs I know have avoided mentor help because of fear of looking weak while the mega-stars almost always thrive because of mentor guidance.

 

Bill Gates credits Warren Buffet with teaching him how to deal with tough situations and how to think long term. Mark Zuckerberg got advice from Steve Jobs about how to build a high-performing team and about focusing on changing peoples’ lives. Nike founder Phil Knight says if it hadn’t been for his mentor and co-founder Bill Bowerman, there would have been no Nike.

 

While I certainly don’t put myself in the same league as the aforementioned billionaires, I too benefited from mentors in my career. Bart Wendell is a business consultant and psychologist whose experience working with family companies was especially relevant to my situation early in my career. Joe Selame was a highly talented graphic designer who taught me the basics of good design and helped bring out the innovator in me. I also for years met monthly with a group of successful “big league” CEOs organized by a company that was called TEC at the time. Their guidance was of enormous value during the ups and downs of my career and particularly when the time came to sell the company.

 

Since that sale in 2004, I myself have enjoyed mentoring many JPMA CEOs and executives and for the past three years I’ve been the lead mentor at the Institute for Entrepreneurship at Florida Gulf Coast University. Learning how best to help people of all ages succeed in whatever it is they are trying to accomplish has been the highlight of my “second career”.  Here’s some of what I’ve discovered. 

 

Characteristics of great mentors

Mentoring is a skill of its own. Just being a successful executive yourself does not teach you how to help others. Here are some of the characteristics of the best practitioners:

  • Totally supportive—not in a position to cause you harm or affect your compensation or standing in any negative way.
  • Empathetic—has a sincere interest in helping you solve your problems and improve your life.
  • Curious—asks open-ended questions that enable you to talk openly about your thoughts and actions and pays full attention to the story and the story behind the story.
  • Honest but diplomatic—able to be direct without being offensive.
  • Experienced—already gone down the same road that you are going down.
  • Discreet—able to keep everything discussed totally confidential without exception.
  • Connected—having a broad and relevant network of resources.
  • Innovative—recognizes opportunities that you may have not thought of and able to stimulate your creative juices.

What a mentor can do for you

Consultant and mentor Bob Proctor defines a mentor as, “someone who sees more talent and ability within you than you see in yourself, and helps bring it out of you.” The fact is that we all live in one form of a “mental prison” or another. What I mean is that our mindsets have blind spots and walls that prevent us from seeing everything objectively. And you’re not going to ever get the straight scoop from your board, your boss, your employees, or even friends and family. A good mentor that genuinely wants to help you and has no axe to grind can quite simply open your eyes and bolster your confidence. This can make all the difference in the world regarding your ability to learn and progress.

 

How to find the best mentor

Just like the process you would use to hire a new employee, you need to start with an understanding of at least the general area of needs you are trying to fill. In my case, I was looking for someone with a family business background who also understood the particular stresses of being a CEO. It was the emotional and personal side of business I wanted to talk to someone about, not the nuts and bolts of how to manage a company where I felt more confident.

Once you know what you’re looking for, use your existing network of business associates, trade associations, friends, and family to find someone who you know you can trust because of the referral. Then follow the typical process of phone screening followed by a trial session. I ended up finding someone through a referral from a member of my TEC CEO group.

 

Next Steps

If you don’t currently benefit from a relationship with a qualified supportive mentor, I would highly recommend at least giving it a try. Use the methods listed above to identify a candidate and have at least one meeting to see what comes out of it. You really have little to lose and you may have created a new life-changing relationship.

As always, if you’d like more information or assistance from me regarding your unique challenges or you just want someone to brainstorm, vent, or commiserate with, consider taking advantage of JPMA’s Executive Mentor Program. Check the JPMA web site for more information or contact Sam Adams at  sadams@jpma.org.

Tags:  mentor 

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