Alphas don't follow and they don't stand still

There has always been an unjustifiable admiration of large companies by smaller ones.  Simply because it appears that large companies MUST be smarter (due to their success at getting large), smaller companies fall into the terrible trap of following their example.  

The worst example set by large companies is to stand still in times of crisis.  Right now, large companies are making the worst mistake that can be made during an economic crisis:  they are standing still and holding their breath.  The world is changing around them, and most larger companies are hiding out until they can see what the world looks like after the dust clears.  Any smaller company that follows that example will find itself deep in the ranks of followers and scavengers that populate most product or service categories.

The reason smaller companies so often rise to positions of significant influence following a recession is because they ignore the example of larger companies and CREATE the future that those large companies are waiting to see.  Instead of standing still or hiding out, these few smaller companies create a new definition of what their category is and they create new, higher customer expectations that everyone else has to follow.

This is the time for change, not stagnation.  The answer is in the Alpha model:  driving new, higher customer expectations that make everyone else follow your lead.  Over the past 25 years, I have seen innumerable smaller companies grow dramatically during recessions (and even more afterward) because of their use of the Alpha model.

Stop standing still.  Stop waiting to see what world someone else creates for you.  Create your own new world that you can dominate.

If you don't know what the Alpha model is or how dramatically it differs from the model used by non-Alpha companies, then you need to learn about The Alpha Factor.  This powerful book is a "revolutionary new look at what really creates market dominance and self-sustaining success." You can get your copy at www.thealphafactor.com or through any online bookstore.

How Apple finally became an Alpha

I had an email from a frequent reader the other day asking me how it is that I only now consider Apple an Alpha, since they have been innovation leaders since the early 1980s.

The answer goes to the heart of what I learned about Alphas and creation of self-sustaining success in my long-term research, The Alpha Factor Project.  

Here's some history that helps define this:

I recall comparing Apple's first real knock-out innovation, the "Lisa" computer, as I was shopping for my first business computer in 1983.  The Lisa was a forerunner of the modern Mac in that it offered WYSIWYG with a high degree of interactivity.  It looked great as an art-focused computer, but I feared that it might not handle all my standard business needs.  It disappeared shortly after that, because I was obviously not the only one feeling that way.

A few years later, when I owned both a marketing research firm and an ad agency, I had Macs on the agency side and PCs on the research side.  I was forced to do that, because, although the Macs proved themselves far more intuitive and easy to use for what they did, I could not get the software I needed for my research and business applications on a Mac.

Functionally, Apple's product did not meet the minimum requirements.  They were far more reliable in most cases, and they were certainly easier to learn and use, but that did not help me with my minimum functional requirements.

Apple's answer to that was to take pride in that segmentation and to make itself a "cult" product line among artistic-types.  That did little to help it grow, but it certainly made for some loyal customers who took great pride in being "Mac users."  By closing off the ability for programmers to write a broad range of software for the Apple OS, they effectively eliminated the largest segment of the market as potential customers... no matter how "cool" or easy to use their products were.

In the meantime, Microsoft was churning out inferior products and inferior operating systems that made the company one of the most revered (buy financial analysts) and most hated (by users) companies in the world.

What turned Apple into an Alpha were three things:  1) opening up their code to programmers who could finally write software to run on a Mac,  2) raising the bar on product design, and 3) expanding their line to reach an even broader range of customers.

Opening up their code to programmers allowed Macs to finally meet minimum functional needs (the base line for acceptability).  I now have my research, accounting, word processing, spreadsheet, page layout, and every other kind of software I need on my MacBook.  And, because the operating system is still better than MS-DOS, I don't have the daily agony I did when I had to work with DOS-driven programs.

Raising the bar on product design created even more ego-satisfaction (the critical differentiating factor in the Alpha model) than just having an operating system that works better.  Many people describe the tactile and visual experience of owning and handling any of the new Macs in almost transcendental terms.  They make people feel really good and really good about themselves.  They also have created a sense of "significance," every time someone runs up the the holder of a MacBook to see and touch it.  This level of ego-satisfaction drives extreme loyalty, as long as the minimum functional requirements are being met.

Expanding their line of new high-design products has given them more entry points into the Apple family.  This took the already fiercely loyal customer base and expanded it quickly.  The iPhone and iPod created entry points that drove loyalty among a whole new group of users.  Their value was driven by both the same strong functionality that Apple had become know for and new design that was incorporated into all of their products. All of their line now has a high-tactile experience plus a unique and yet pleasing visual appeal, which adds up to an extreme "cool" factor.  

Functionality alone does not make them an Alpha, although lack of minimum requirements held them back for years.  In the case of the iPhone, it was not as functional as some of its pre-existing competitors and it certainly cost more, but that did not stop it from becoming the top-selling "smart phone."  It's following competitors have not been able to overcome Apple's hold.

The real secret to Apple finally became an Alpha was in overcoming its functional deficiencies, increasing the ego-satisfaction fulfillment of the product through design, and making it easier for more people to enter the Apple family form a variety of entry points.  After being the best performing, most innovative product for decades, Apple finally got it right.

If you would like to learn more about how to become an Alpha company, go to www.ballgroup.com or www.thealphafactor.com.  You can also purchase a copy of The Alpha Factor – a revolutionary new look at what really creates market dominance and self-sustaining success at either of these sites or on any online bookstore.

Grow your business with the right employees

I was at a conference last weekend, and I heard John Bisnar, a very successful Alpha attorney in California, describe how he gets and keeps the best employees.  He described it as his process for getting and keeping "superstar" employees.  It's certainly a strategy that has merit for any business of any size.  In fact, a version of this is used by Andy Grove at Intel, one of the few long-term Alpha's still maintaining its Alpha position today.

The strategy is pretty simple in concept, but, like most things that really work, it is hard to stick to and implement consistently.  Here's how John's version works:

Start with a clear definition of what a "superstar" employee would look like in your company.  Write a list of the specific attributes and behaviors you would expect.  This is not a job description.  This is a description of how a superstar employee works.

For instance, your list might include things like...

• extraordinarily skilled
• anticipates needs
• arrives early and is working at "start" time
• works well as a team participant
• never says, "That's not my job."
• thinks "outside the box"
• models how all employees should behave
• extremely productive
• understands and is committed to the company's mission

John Bisnar's team came up with 25 specific attributes that they believe describe a "superstar" employee, no matter what specific job title they hold.  When they hire, they hire to that model.  They look beyond just how much experience the person has or what success they have created in the past.  They look for signs that this person will be a superstar.  If that isn't what they see, the person doesn't get hired.  There is no hiring for the "B" team.  

Everyone is held to the same standard of excellence.  When a person proves that he is not going to become a superstar, he is gone as quickly as is practical.

Why this obsession with excellence?  Because in order to become and stay an Alpha, you have to be absolutely committed to having the right team driving your company.  The difference between having a superstar team and an ordinary team is not just how much people enjoy coming to work and working with each other.  It is also a matter of how much horsepower you are putting to the wheels of your daily efforts.

More gets done with more effectiveness and greater return on investment.  Every great employee spurs on every other great employee.

If you are not already an Alpha, you need The Alpha Factor – a revolutionary new look at what really creates market dominance and self-sustaining success.  You can get your copy at www.thealphafactor.com or at any online book store.  

What not to do

Let me see...

Most of the large corporations in the U.S. are in big trouble.  One thing they really need is some new thinking that might help them get past the model that is not working for them.  That means they really need to uncover some new outside suppliers who are at the cutting edge of thinking.  Right?

So, why is it that most huge companies have isolated and insulated their employees from hearing from new suppliers?  Talk to any employee at a large company, and you will hear that they feel extremely isolated from outside thinking at a time when they are being hammered to create new growth, profit, and innovation.  

More and more companies are "protecting" employees by not giving their names out to new suppliers who call trying to find the person who might most need what they offer.  I guess they are concerned that they might get distracted from all the meetings that they have to attend, if they were to talk to people with new ideas.  Most employees I know at larger companies spend more than half of every day in meetings that then require them to do something to prepare for the next meeting.  Most say they don't have time to hear about good new thinking, even if they could find any.

Even when they happen to find a new supplier who has some unique thinking or approach to growing their business, corporate screening often kicks that supplier out, because there is a limit to the number of vendors allowed in the corporate buying chain.

Is it any wonder that larger companies are always the ones to hurt the most in a recession?  They are the ones who think the world is coming to an end when they see a 5% reduction in sales, while small to medium-sized companies regularly survive swings of as much as 15% to 30%.  

Small to medium-sized companies, beware!  Don't believe for a second that what the big guys do is how you should run your companies.  The lifeblood of innovation and dominance is new thinking that challenges what you are already doing.  Allow your employees to be connected outside, and you will drive the innovation that the big guys will only be able to follow.

Getting people to reveal real core needs

I just took a break from a coaching email.  I was explaining how people really want to tell you what they need; it's just that they have surrounded themselves with too many perceived barriers and limitations.  That's why most market research fails to uncover much that is a clue to breakthrough innovation.  

Since the core element for creating Alpha domination in the marketplace is the skill of uncovering the real core unmet needs of people (especially the unstated ones) and then innovating to help people fulfill more of their higher-level unmet needs, this is a pretty critical issue for anyone trying to follow the Alpha model.

Every time I help someone through this, I learn how to explain it better.  I have the advantage of having developed research tools that make it fairly easy for me to uncover these core needs.  But it is far harder for someone to try to do it without those tools.

Here's a start:  

Think about the barriers we set up around ourselves to try to make sense of the world.  Let's face it: the world is a pretty crazy place.  What looks like order actually turns out to be controlled chaos.  People struggle constantly to understand how they can get what they think they want and need.   They are continually trying to understand the unstated "rules" of how things work.  

Since "how things work" is obviously limited by what solutions are visible or offered, we start off with some serious limitations and barriers.  If I have never been able to believe that I can feel more appreciated or more powerful in my world by purchasing breakfast cereal, guess what?  I don't reveal those needs in research about cereals.  That doesn't mean I don't still have those core needs.  I just don't waste my time telling them to you anymore than I would reveal that I really want to have a vacation in the south of France this year.

We quickly "learn" that certain things cannot be attained through the solutions available.  So we create a limitation to our expectations that limits what we can and will reveal about our real needs.  

On the other side (and this is even more devastating to both customers and marketers), we also absorb confusing and false information through the culture that says we can and should be able to fulfill certain core needs through means that can never actually fulfill them.  For instance, why do people continually believe that they will find real love by buying a product?  It never works.  It never can work.  Yet I see more of that false promise foisted on the public than almost anything else in today's jaded advertising culture.  That pervasive false preconception has actually become a barrier to attaining real fulfillment, because the person never looks in the right places for that fulfillment AND he starts to believe that his needs can never be fulfilled properly.

The challenge to an aspiring Alpha is firstly to not fall into the trap of helping continue such lies.  People will pay almost anything to have their real core needs fulfilled, but false promises never pay off long-term.  Secondly, the aspiring Alpha must help potential customers become comfortable with the possibility that they might fulfill more of their core needs through products or services in his category.  Again, this doesn't have the intent of falsely promising anything.  Rather it is opening the possibility and then allowing potential customers to uncover and define what that could look like and how it would be played out in products and services. 

The result is (depending upon the skill of the researcher and the creativity of the innovator) a list of areas for innovation that can drive greater fulfillment of core needs, which will in turn drive greater market influence for your product or brand, increased price leverage, improved profitability, and dramatically more control over your category.

Can you think of any examples of how you have seen this at work in the marketplace?

Welcome to the world of Alpha domination

I've spent the past two and a half decades turning around companies by using a revenue-generation model that I discovered only after fighting past all the silly things I learned in college.  It has been an uphill battle trying to convince MBAs and CEOs that the world works a lot differently than they were told and read about in the business press.

I thought that having created growth of as much as 300% for companies that had not been able to grow in more than a decade would convince them.  I thought that the research findings alone would have convinced them.  I even believed that the basic logic of what I discovered would convince them, because it makes so much sense when viewed through the filter of how customers actually make decisions rather than how we have been taught to create business success.  But the weight of all that "learning" that kept them following a model that has not worked and cannot work was too much for most.

Then I discovered something really profound:  its much easier for smaller companies to become Alphas than for large companies who have become embroiled in their internal processes and who cater to the opinions of a business press sold out to a wrong model.  

I am about to launch a new coaching model for small to medium-sized businesses to become Alpha companies, knocking over their much larger competitors.  

In this blog, I plan to chronicle much of what I observe and learn, as I work to build a group of businesses across the country who are working to become Alphas, whether on a local level or a national level.  My hope is that you will help me by sharing your own experiences in using Alpha principles.

If you are not already familiar with The Alpha Factor and the Alpha model, you can learn about it at www.thealphafactor.com or www.ballgroup.com.  I look forward to a dynamic conversation here.