The Business Plan Is Alive And Well But It May Not Be What You Think

As many times I have written a “business plan”, it seems the flavor of it can vary quite substantially. I think the notion of this catches a good number of people by surprise. And why shouldn’t that be the case? Many textbooks and templates seem to cover business plan outlines with relatively similar structures. My suspicion is that the perspective that gets lost in the mix is intent. The intent of a business plan affects its format and content dramatically (more than outline). For this post, I thought it would be good to share some perspectives on why the process and plan should vary.

Business plan as a process – The process of vetting ideas, getting buy-in, and achieving alignment is most important in these situations. Example situations are new business launches in larger companies (e.g., intrapreneurship). Business plans can often take the form of workshop sessions and Powerpoint documents as opposed to a traditional textual Word document. See a popular post of mine, “In Consulting The Process Is An Essential Part Of The Deliverable“.

Business plan as a sales document – This situation is particularly appropriate for fund raising (e.g., angels, VCs). Key goals of the document are to establish trust with prospects, enable the investment idea to be shared via networks, and persuade people of the merits of an investment opportunity. Often need a mix of instruments here (Powerpoint & Word docs, napkin drawings, demo), depending on the team, industry, and phase of product development (e.g., technology feasibility, commercial feasibility, ramp-up).

Business plan as a hypothesis test or investigative framework – An entrepreneurial way of looking at a business plan is more as a framework or series of hypotheses tests. Questions may be: do customers really want product aspect A, do customers prefer this variation over that one, do customers perceive me as Y relative to my competitors, and will the dog eat the dog food? The business planning effort can be more organic than written and involve focus groups, customer prospect interviews, etc. But the framework process should be systematic in determining which hypotheses are true/false to prove out aspects the business over time.

Some other ways that come to mind are viewing the business plan as a communication tool, a dissertation (that must be closely inspected), debate tool, product development stage gate requirement, and RFP response requirement (e.g., for government grants).

How do you view you business planning efforts? To what extent could you benefit from new ways of thinking about them?

Using a “Frontier Chart” to Evaluate and Plan Project Portfolio Strategy

The introduction of new product or service lines into an existing customer base is a challenge that companies often face with new business development. Sometimes the opportunities can be readily quantified using traditional financial analysis (e.g., using net present value, scenario, and waterfall buildup methods). At other times, there may be hazards of trying to quantify an opportunity too early in the process before conceptual alignment of the stakeholders. For example, people can simply get stuck “in the weeds with the numbers”.

In this post, I share a method that I have sometimes found useful as a first step in framing and getting alignment among parties (especially when looking at new product development situations involving platforms upon which multiple products or product lines can be built). To be honest, I am not sure if there is a name for the type of chart I describe below, but I call it a “frontier chart” (which is derived from investment portfolio theory from finance).

The basic idea is that there are a set of lower risk projects out on the left side of the chart which have more known (potentially lower) expected returns. In contrast, projects on the right side might have higher risks but also higher, expected returns. So as an example of a project on the left side, a software company may have early customer engagements with a straightforward, add-on product that it directly developed (say a GPS mapping tool). As an example of a project on the right side, that same software company may be looking to introduce new platform capabilities such that indirect, 3rd parties can develop applications (e.g., Apple’s “there’s an app for that”). The later project venture is more risky, but the payoff could be larger than the former project.

Frontier Chart and Project Portfolio Strategy

A key benefit of using a frontier chart is that it can help to get buy-in on the high-level things and projects that people tend to agree with. There will be plenty of time later to put on our “propeller hats” and get bogged down in detailed numbers and execution tactics.

The ability to facilitate a company’s management team to move forward is priceless, and sometimes facilitation can be more difficult when introducing new products or services (which is outside of the core, day-to-day business). Consider using frontier charts and thinking about platform strategies (the latter which may be topic for another post).

Musings On Conducting Competitive Intelligence Ethically

Competitive intelligence (CI) is an activity done by a wide range of professionals ranging from marketers to product managers to consultants to strategic planners. Now I’ve held back for many years on posting on the subject of conducting CI ethically. I tend to be more on the conservative side, and by posting my thoughts on this subject publicly, I’ve had concerns that some clients and future employers would see me as too soft on the issue. Would a client shy away from hiring me because I was unwilling to go the “distance” to get a job done?

In spite of my concerns, I’ve decided to address the issue here. In my experience with the business world, I’ve seen the topic of ethics (in the context of CI) discussed much less frequently than I would have expected, and that should change. Here I’ll provide some examples of bread and butter methods and more infrequently used methods for conducting CI. People should feel free to comment on other methods they have used. I’ll also provide some examples of activities that I either think are questionable or outright unethical.

Here are some examples of ethical, secondary research methods for performing CI:

  • Pulling annual reports and shareholder presentations on competitors from the web
  • Analyzing securities and exchange commission (SEC) filings and financial statements
  • Gathering marketing collateral information from trade show booths of competitors
  • Obtaining industry reports from investment banks and/or financial institutions
  • Reverse engineering the positioning focus of competitors from marketing collateral
  • Searching through LinkedIn to analyze salesforce profiles and reverse engineer likely go-to-market methods
  • Analyzing resumes of employees of competitor
  • Using Google satellite to analyze geographic profile and size of competitor facilities
  • Using Crunchbase or Techcrunch to analyze private companies
  • Using Compete, Alexa, and other web services to analyze web traffic
  • Analyzing advertising copy and positioning
  • Purchasing third-party reports (e.g., Gartner, Forrester, Parks Associates) to round out research
  • Looking through job postings by the company on the web

Here are some examples of ethical, primary research methods for performing CI:

  • Interviewing a distributor that has experience with competitors and asking questions whether client’s proposed offer would be competitive
  • Asking distributor to describe any non-confidential information that they would be comfortable sharing about either the competitor or distributor’s relationship with competitor
  • Visiting retail outlets of competitor to infer go-to-market methods, assess general profile of locations, etc.
  • Directly purchasing a competitor’s service or product
  • Surveying salespeople within client organization to get their feedback on what they’ve run into with respect to selling against the competition
  • Conducting focus groups with general customers to get their feedback on competitor’s products versus the client’s prospective offerings
  • Obtaining general information by calling into a competitor’s call center

Finally, here are some examples of questionable or unethical methods of performing CI (and these topics come up somewhat frequently in my experience):

  • Misrepresenting oneself as a potential customer of competitor in order to get pricing information not made generally public
  • Asking a current distributor or employee of competitor to share proprietary information about competitors and violate non-disclosure agreements
  • Interviewing a competitor’s employees for the sole purpose of gathering competitive information as opposed to intending to consider such people for direct hire

One problem that I see organizations run into is that they can get focused on one single issue. For example, they may say “I must know exactly how competitor XYZ is pricing”. This type of logic can be dangerous because it tends to lead to one solution. It may also tempt one to try to take unethical shortcuts. If the problem statement is reframed around “getting a better picture of whether my client’s market offer is competitive”, then this can lead to more flexible and varieties of solutions. Tools like conducting customer focus groups, surveying salespeople, etc. then become possibilities for solving the real problem at hand.

As a closing note, in a framework I alluded to in a prior post, one way to think about activities are to classify them in two dimensions: (ethical – unethical) & (legal-illegal). The other framework that I use for weighing ethical issues is to determine how I would feel if my activities were plastered all over major press outlets. Would I be embarrassed by my team’s or my personal activities? Posing that type of question is often a nice litmus test for good behavior.


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Stretching Your Personal Brand Through Brand Management Concepts

Linda VandeVrede invited me to post on her blog regarding brand-related topics, and I did so by providing some perspectives on “personal branding”. “Personal branding” is not a widely understood term, so readers may find it interesting from a career and personal development perspective. In this post, I set the frame in the context of how companies look at a key aspect of brand management – in particular, brand associations. In my post, I take the position that personal branding is best built by making investments in three areas: 1) refining the meaning that defines where you want to be, 2) making conscious investments to improve yourself, and 3) ensuring that you use the prior investments to help and reach out to others. For more on the post, please visit Linda VandeVrede’s blog.

Update (5/26/2011): It has come to my attention that the links are no longer valid. As such, I’ve attached a copy of the blog post below:

Last week when I saw Linda’s post on “Don’t brand yourself into a corner”, it triggered some thoughts that personal branding is not a widely understood topic. To me, personal branding is not simply about surface “image” and “an eyeless game” (an anagram adapted from drummer and famed lyricist Neil Peart) – one’s personal brand affects how deeply other people understand, remember, emotionally connect with and engage a person.

So why is it important to be able to know how to stretch and influence your personal brand? In today’s ever-changing environment I find increasing numbers of people that either feel trapped or constrained on professional dimensions. For example, some people feel like they are doing the same thing on the job day-in and day-out. Others may find themselves unemployed and feel a need to reinvent themselves. Additionally, there are those that have taken a static view of personal branding. Yet one of the dangers of overspecializing and failing to evolve your personal brand it that it can lack resilience. If market or external conditions change enough, your personal brand, while differentiated, could gradually become irrelevant or crowded out by others.

This is not to suggest that personal branding should be all over the place. There should be an aspect of fortification. That said, just as managers for companies help to stretch and improve brand associations, the connections that people form in their minds about products and services (e.g. quality, positive attributes, emotional feelings, functional use areas, substance), people can seek to influence and stretch their personal brand associations.

Consider Apple’s iPod. While the original core identity had been around enabling users to create their own music environments on the go, the company invested in innovation (process and meanings), technology (assets), and marketing (outreach & feedback) to gradually stretch people’s mental associations with the iPod. Now the company has created associations like “There’s an app for that.” Memories gradually fade about the original, more constrained personalized music environment – it’s now much more about having what you need to make your mobile life more exciting and having solutions at your fingertips. The new incarnations of the iPod are dramatically new, yet the process to get there was connected to a strong foundation.

People can similarly make investments to stretch their brands over time. Here are some examples:

  • Process and meaning investments – A person may start to think about himself as more than an engineering specialist by working towards problem-solving views and/or outward-facing activities. Individuals may try to get involved with consulting projects to develop end-to-end experience.
  • Asset investment – A person may want to develop more skill and knowledge about how to develop teams and foster innovation. Some possibilities may be to attend training in either organizational behavior or design courses. As another option, a person may seek to provide probono consulting services to specific organizations on the side to gain experience in new sectors. Alternatively, others may get involved with projects outside their own organization but within the same company.
  • Outreach and feedback investment – Find ways to gradually influence how you think about yourself and how others think about you. Consider giving lunch talks on specific subjects, creating tutorial presentations, starting a blog, teaching courses, and leveraging the networks within all of those areas. Learn to help others in the network, and your brand image will be influenced positively and perhaps stretched in significant ways.

This post has just scratched the surface on personal branding, but I like to think about it in terms of stretching and reinforcing brand associations, and then making investments in the three areas of process and meanings, assets, and outreach and feedback. For those interested in exploring more about personal branding, I would recommend Dan Schawbel’s Personal Branding Blog as a destination point on the web.

Business Development May Be On The Upswing Careerwise, But What Is Business Development?

Earlier this year I had heard from sources at various business schools that given the recession and slower consulting and investment banking hiring, a lot of MBA graduates were looking to careers in business development. This is a great development, but in my experience the term "business development" means quite different things to different people. Here's a paraphrasing of some of the types of statements I've heard in the workplace:

  • "Business development is about new customer acquisition and sales."
  • "Sales personnel are divided into existing accounts and hunters. Business development looks for breakthrough, strategic sales."
  • "Business development handles strategic partnerships & deals."
  • "Channel sales are the primary focus of the business development team."
  • "The VP of Business Development works financing, acquisition, and strategy activities."
  • "Business development establishes the cross-promotional marketing deals."
  • "Business development focuses on strategic initiatives (whether partnership, financing, product) identified by the Board."
  • "The business development team is facilitating design of a new product with XYZ company and our development team."
  • "Business development sells product to the channel."
  • "Oh. You handle a mixture of finance, marketing & sales, strategy functions. You're business development."
  • "Business development folks are jacks of many different trades."
  • "Business development is about getting larger partners to commercialize on brand extensions that you may not be able to handle on your own."
  • "The sales team does that. You want to know what business development does? We need to talk about that in my office. Come on in, and please shut the door so we can have some privacy."

There is an element of truth in all of these statements. Business development can be all of these things. It really depends on company. In my mind, however, the role of business development is to find new strategic opportunities for the company and start the company on the path to execute (incubation). It is not uncommon for business developers to have a combination of strategy, marketing & sales, finance, legal, and operations background.

Based on my experience in business development, here's the flavors I've run into (roughly from more to less common):

  • Partnership development
  • Strategic market development and sales
  • Strategic marketing
  • Mergers, acquisitions, and financing
  • New business line exploration
  • Channel sales
  • New product development

What are your experiences with business development professionals? To what extent is it a well-defined function within your business? What types of issues have you run into?


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Mini-Brand Audit of Guitar Hero By Activision (Independent Research)

Listed below is a pre-release, draft copy of a brand audit on the Guitar Hero brand by Activision. I performed this mini-brand audit as a self-funded, independent party, and I created this document for reasons related to business development, marketing, and teaching purposes (brand management & consulting).

The purpose of a brand audit is to provide a company with a starting point for managing brand architecture, brand identity, and brand-building activities. Brand audits are often refreshed every one to two years and may be done by either internal staff of the company or external consultants.

Although I am a stickler for crafting problem statements, I did not explicitly articulate the problem statement assosciated with this audit (which is something I typically recommend in a consulting deliverable). That said, the general notion of an audit performed by an external 3rd party is to provide a wholistic, and independent view of strategy and tacics. I believe this document accomplishes that goal within the described limits stated in the document.

For the coming weeks, I would appreciate input and feedback from folks. I would also appreciate help in spreading the word as I am not a mainstream media channel. 🙂

Again, there are few angles I am thinking about in terms of releasing this note in the public domain:

  • business development purposes for consulting
  • general marketing & personal brand development
  • instruction and teaching purposes

I plan to finalize version 1.0 of the document and re-release around September 1, 2009 before key milestones are reached by Activision and competitors.

Thanks for your interest. Please help to spread the word!

Draft copy of brand audit here (PDF file replaced by update below).

Update (8/30/09): Version 1.0 of Guitar Hero brand audit here (PDF file).

Update (9/4/09): Guitar Hero and related subbrand logos get a bit of a refresh (see here and here). The changes are consistent with the strategies outlined in the audit.


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Collecting My Favorite Multimedia Clips and Exhibits For Marketing Course

Starting to collect my favorite videos and photos on my new posterous site (marketing section at for teaching business school classes (e.g., marketing, brand management). Folks may find some of the videos and photos entertaining.

I am still trying to find the best way to organize the videos in the context of what part of the marketing or brand management framework is being covered. I may also find a better way to include more detailed marketing notes on each video or photo. In any case, please feel free to send me links of your favorite videos. I may extend the posterous site to include organizational behavior topics, depending on my fall teaching load.

As background, I am using my posterous site as a scratchpad space separate from this blog and Twitter streams.


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If I Was A Brand (Marketing Collage)

When one is thinking about developing a brand identity from a marketing perspective, it is best to think broadly so that a cohesive system and set of principles are built to support the underlying cause. Dr. David Aaker (e.g., in his book "Building Strong Brands") puts forth a system that challenges practitioners to decompose the way they think about brand identity (both core and extended) along several dimensions, including "Brand as a Product", "Brand as an Organization", "Brand as a Person", and "Brand as a Symbol".

Although I leave the terms above undefined here (because they are defined more rigorously in Dr. Aaker's book), it is a useful exercise in some marketing and brand management classes to have students build a collage as if "they were a brand" by clipping pictures from magazines. The visual imagery is intended to connote some aspects of your core brand identity (some of your "essence") along multiple dimensions (e.g., quality, personality, attributes, skills).

Here's an example that I pieced together for myself (note: first draft, essentially unreviewed). What do you see? What does it tell you about how I see myself? If you know me, does it fit with what you know about me? What consistencies or inconsistencies do you see?


Tony Karrer on LinkedIn and Web 2.0 for Management Consultants

Tony Karrer gave a Web 2.0 presentation in Los Angeles to an audience at the Institute of Management Consultants (unfortunately I was not able to attend having just learned about it that day).  He covers two aspects: serving clients and reaching prospects. Apparently, most of the interest was in the latter area, and as a summary of one of his theses, I reference the title of his blog post, "LinkedIn – Prospecting No – Conversation Yes : eLearning Technology".

For those looking for more info as it relates to consultants and LinkedIn, Ford Harding is one of the gurus I've looked to as a guiding light when I committed in early 2000ish to work at actively improving my sales and sales management IQ, particularly around professional services sales. Here's one of Ford Harding's posts on "Liking LinkedIn?". He has other posts regarding LinkedIn as well, so be sure to dig in and poke around if you have a chance.

Corporations Are Learning About Social Media Faster

A lot of people in Twitter circles characterize that twittering feels like the days of early majority blogging, for me circa 2004ish with an even less mature toolset (I am being generous). With respect to business use, it seems like everyone needed more help back then, as not everyone came out of the gate running. Here Dave Sify summarized the state of the corporate blogosphere in 2004. How few the companies were. Later at the beginning of 2006 and indicative of a forthcoming early majority, Robert Scoble and Shel Israel were motivated to publish their book, "Naked Conversations: How Blogs Are Changing The Way Businesses Talk With Customers. Well, it's 2009 now, and we're in a large recession. But it seems like businesses are smarter this time around in the use of social media like Twitter. I recently ran across an article on Corporate Twitter Accounts worth following. Seems like we skipped the whole convincing phase this time around. Much less of the skeptical talk time this time around.

Kudos to those companies that are able to build brand, improve customer service, and potentially lower costs (latter less widely known) using Twitter. How often is it that companies are able to get marketing and customer service to sync up, let alone talk? It seems that we are making progress, even if it means we'll all have to learn the best practices of communicating in 140 characters or less.

Update (3/20/09): Not business-centric, but here's an article that indicate social networks more popular than email (see CNET article regarding Nielsen Online study)? Not sure how this was measured, but I don't think it is intuitively true for me, even though I consider myself a moderate blogger.

Update (3/23/09): Steve Rubel has a good post entitled, "Customer Service is the New PR". I like his post because it ties together some of the concrete stuff going on in the social media space (along with references to some of the more esoteric, forward-looking items).