Too many companies make innovation way more complicated that it needs to be.  The best source of new product ideas or problems to solve will usually come from observing your customers or directly from a customer request.  Once you have identified a few promising ideas, take them to your customers and get feedback – would your customers really find big value if you solved this problem or added this new benefit?

If the answer to this question is “yes”, the next step it so identify a very small group of willing customers to work side-by-side with you in further exploring and developing the idea into an actual product or service. 

The goal at this stage is to quickly get a simple working prototype up and running – a proof-of-concept.  It need not be perfect and flawless.  What you want is something functional that expresses the core purpose and heart of this particular innovation effort. 

Once you have something “real”, you can begin to test it.  Testing your new beta idea with real customers will enable you to quickly draw out the weaknesses and flaws, helping you to quickly transform your rough sketch into a finished masterpiece.

Once the product or service is ready for prime time, your marketing department can leverage the partner-based relationship that was created by the development team and your customer for a rich source of marketing and promotional material – there is no better sales rep that one of your own satisfied customers.

Copyright 2006 Christopher A. Gayle & Capital Genesis LLC ©. All Rights Reserved.

This aspect of innovation cannot be stressed enough.  Your HR director must be elevated to the same level as your COO and CFO.  In today’s competitive and uncertain times, you absolutely must find and retain the best people, period. 

No strategy planning or decision should take place until you have the right people in the right places, and the wrong people are gone.

 Employees are no longer “cogs in the wheel.”  They are means by which your organization can create success or failure.  They should be made to be “co-owners” of the business and not just “employees” who show up for work and then clock out at five.  Your employees must become active and integral part of all ongoing innovation initiatives.

Your HR strategy must be linked to your over all corporate strategy. 

• Do your people have the skills needed to profit from the challenges of tomorrow? 
• Are you doing everything you can to create a pipeline of qualified leaders from within your company? 
• Are you making it easy or difficult for your employees to grow as individuals?

When recruiting and hiring new employees, focus most of your attention on their intelligence and personal character, and less on a paper trail of education, degrees and certificates.  It’s more important to know “who they are inherently” as opposed to what they’ve done.  Level of education, schooling and degrees are a dime-a-dozen – it’s not hard to find people with impressive academic records or extensive work experience. 

In today’s world of political and corporate corruption and failure, the qualities of creativity, intelligence, initiative, honesty, independent thinking, imagination, leadership and ethical decision making are very rare personal characteristics and are the qualities your hiring process should be looking to identify and attract.  You can always send someone with great personal character to college to get a degree.  You can’t send anyone anywhere to “get” initiative, passion, kindness and honesty – they either have it or its absent.

What you want are the best minds and personalities, NOT primarily people with the best degrees.  You want passionate people who can think, communicate, create and solve problems.  If they happen to have a degree too, then super!

As I’ve always said, people, not money, make the world go round.  In this case, your people either make your company outstanding or they’re slowly grinding your company to a halt, so choose wisely.

Copyright 2006 Christopher A. Gayle & Capital Genesis LLC ©. All Rights Reserved.

Most companies, after they’ve identified an idea with potential, run in to a brick wall when they try to implement those ideas.  One of those obstacles is a lack of internal support which leads to an absence of the timely information and data needed to transition from dream to reality.

“How do you expect to be an adaptive, innovative organization that can quickly profit from inevitable change, when every new idea has to reinvent the support infrastructure ‘wheel’ needed to develop those ideas and bring them to market?” remarks Christopher Gayle, CEO of Capital Genesis LLC.

On the most basic level, your business must have in place some formal mechanism that allows all departments to have rapid and accurate access to all information within the company.  An Intranet would be great for this task.  Every idea, project, deadline, financial forecast – all internal information and data should be accessible to everyone in the company – uncensored and unfiltered.  This system you create need not be big and complex, but if this system does not exist in your organization, make it happen. 

Once you have a working system of information sharing, the next step is to put in place a simple mechanism for all departments and key customers to provide input in evaluating, supporting and developing new ideas into a marketable product.  First, the inter-departmental team must evaluate the potential of the new idea and determine if this is something your company should pursue.  If the decision is made to move forward with the new idea, the next step this team should take is to formally schedule time and resources to help transform the idea into a marketable product. 

With a system of free information flow functioning and with a mechanism for channeling all the talents each individual department brings to the effort, blind spots can be avoided, preventing delays and costly mistakes.  Inevitably with such a system in place, the turn around time from idea to marketable product will be greatly reduced, allowing you to realize your ROI much sooner than was previously possible.

Copyright 2006 Christopher A. Gayle & Capital Genesis LLC ©. All Rights Reserved.

In an ongoing effort to improve the quality of product and service delivery, the premier tool for the job was and continues to be “Six Sigma”.  This tool was created by Motorola for its own internal error reduction and quality improvement efforts.  Due to its amazingly successful track record of saving tens of billions of dollars to industry annually, the service sector has adopted the “constant improvement” philosophy of Six Sigma.

Simply put, Six Sigma is defined as only allowing a maximum of three errors for every one million repetitions of a service, output of a process or manufacture of a product that you provide to your internal and external customers.  The philosophy and methodology lends itself to simple and easy adoption by the service industry.

For your company, this means dramatically reduced occurrences of customer complaints, improved communications, increased efficiency, less paper work, fewer errors, increased employee moral and improved levels of customer service.

Besides improving the way you run your business, the other attractive element of Six Sigma is that it is focused on improving your bottom line right from the start.  Reducing waste, simplifying complex operations and eliminating the causes of errors, all save time and money while simultaneously improving the customer experience, which very quickly translates into free word-of-mouth marketing, customer loyalty and increased revenues for your organization.  Six Sigma’s profit centric methodology also makes the distinction that while a particular improvement may be an excellent idea, it may be cost prohibitive to implement.  In such cases, an alternative solution would be selected.

Ultimately, Six Sigma is a way of thinking about how your business adds value to your customers.  It forces you to ask “Is this the best service that I could possibly provide to my customers?”  More often that not, there are many areas within your organization that could use improvements.

The steps to performing a Six Sigma quality improvement initiative progress through the following steps: Define, Measure, Analyze, Improve and Control – DMAIC.

“Define” asks you to state who the customer is, what their requirements for your services are, and what your patient expectations from you are.  Define your process boundaries ­ when does your service start and stop?  Define the process to be improved by mapping the process flow.  Define by what percent you wish to improve or how much money you desire to save.  Finally, ask “What is the problem I’m trying to fix or process I’m trying to improve?”

Before you can improve any aspect of your business, you have to know how it performs in its current state.  To do this you have to “Measure” it.  Collect data from many sources and from both your employees and customers.  Data collection does not have to be complicated, but it does have to be accurate and unbiased.

Once an acceptable period of data collection has taken place, the next step is to “Analyze” the data.  Identify the gaps between your current performance and the performance goal you desire to meet.  Identify the sources of this performance gap.
Prioritize what areas you should improve first.

“Improve” your processes by using common sense, simplicity and creativity.  Some of the improvements will require investments in technology and others will not.  After you modify and improve your process, conduct another round of “Measuring” to make sure the process really has been fixed to your customer’s satisfaction and to your expectations.

If you were successful in improving the delivery of your service, you must take steps to prevent anyone from sliding back to the “old way” of doing business.  The “Control” phase handles this step.  Training, documentation, positive incentives and new policies and procedures may be needed to ensure that the solution you’ve implemented stays implemented.

Throughout the entire Six Sigma improvement process, involve your customers as much as possible, since their satisfaction is the primary reason to initiate a Six Sigma improvement project.

Six Sigma sounds complicated, but in reality it’s a simple, logical, scientific and customer focused way to improve a product or service, which will create loyal clients and increased profits to your bottom line.  As a word of caution, select small and easily managed areas of your practice to apply the Six Sigma methodology to.  Once several small and medium sized initiatives have been successfully completed, you can progress to larger, longer term improvement endeavor.  In the end, you’ll help your customers get what they want and allowing you to improving the bottom line of your business.

Copyright 2006 Christopher A. Gayle & Capital Genesis LLC ©. All Rights Reserved.

Ideas come from everywhere! 

Innovation is crucial to the success of any organization.  Innovation can be though of as “creative destruction”, rebirth or constant improvement.  Innovation is the end result of traveling with and adapting to the currents of change.

Despite the importance of innovation, most companies have no idea how to make innovation a pro-active and standard way of doing business, as opposed to a reactive response, completely subject to the forces of “luck”.

Innovation is not a thing you “do”.  Foremost, it is a way of thinking about your business.  The doing and creative action comes second.  The first step to creating an innovative organization is getting everyone to adopt this new way of thinking.  The central concept to understand is that “ideas come from everywhere and from everyone”. 

Encourage everyone to use their imagination and ask to “why not” and “what if” questions.  At this beginning stage, no idea is too crazy. 

What can you do to stimulate the creative process and come up with new ideas? 

First, it’s useful to reengage the child like wonder we all had as children.  Shake off the numbing effects of familiarity and start to become amazed at the ordinary aspects of everyday life.  This first suggestion is the most valuable, because it trains your mind to be open and to pay attention to everything.  If you have no idea where the next great idea will come from, can you afford to allow some information in and block the rest out?

A second source of new ideas can come from study. Scrutinize your completion; learn more about different industries.  How could certain principles or themes in your personal hobbies or interests be applied to your business?  An almost infinite source of creativity is Mother Nature; study the natural world around you.

Third, get your customers involved in this process.  Ask them about their current problems.  Ask them what they’d love to see you offer, produce or do to better serve their needs.  Ask them to share their “why not” and “what if” ideas.

Finally, every department (HR, Finance, Accounting, etc) must be expected to offer ideas.  This will cause you to look at your customers from a perspective different from sales and marketing.  In addition to traditional customer service, the focus areas for new ideas are to improve inter-departmental service and strengthening business partner relationships.

At this initial phase, no idea is too outlandish, expensive, or impractical.  Brainstorm and imagine.  It would be best to schedule re-occurring meeting time to generate ideas and capture them on paper.  At this foundational stage towards innovation, getting ideas on paper is your goal.

Copyright 2006 Christopher A. Gayle & Capital Genesis LLC ©. All Rights Reserved.

New Rule: Watch me make the world a better place and admire my Soul!
Old Rule: Watch me make tons of money and admire my Might!

Word-of-Mouth marketing is widely known as the ultimate, most effective and least expensive form of marketing there is. 

To take advantage of word-of-mouth marketing or “WOM”, a business needs to start with three ingredients. One, you need a compelling, honest, emotional story.  Two, your business needs a meaningful purpose (to you) other than making money.  Three, listen to your customers, partner with them, co-develop with them and help them to get what they want and what their customers customer wants.

Today, especially after the financial fallout of 2000 and in addition to the growing awareness of issues like global warming, broad spectrum pollution, globalization and general cynicism directed towards big business and governments, customers do not care how much money you need to make in order to pay your bills or to keep your investors and Wall Street happy.  Customers just don’t care.

As a result, several enlightened and progressive companies have realized this and are communicating to their customers in genuine, honest and emotional ways, the reasons why their companies exist today and the value they desire to offer the world. 

The purpose of a business is not to make money.  The purpose of a business is to allow an individual or a group to use their passion and talent to contribute to society and ultimately to make the world a better place (on a large or small scale).  Money comes second, and is used as a medium of fair exchange for the value you offer.  Thus, money allows you to continue your mission of adding value and is used as a gauge or measuring stick to figure out how successful or unsuccessful you are at effectively adding value to your customers (in the form of financial statements, etc).

The Soul Purpose of your organization
How do you figure out what the ultimate purpose of your company is, other than making money?  Jim Collins, author of “Good to Great” offers these three questions as a tool to help you to figure out what your purpose is, other than making money.  Answer these three questions:

1. What are you naturally and genuinely passionate about (other than making money)?
2. What can you naturally be the best in the world at?
3. What’s the best way to get the highest, most fair exchange for the value you add?

Use short sentences with plain and simple language to respond to these questions.

When you’ve answered these three questions, answer this one:

• Will the answers to question 1 and 2 above, be valid 300 years into the future, when today’s technology will be obsolete?

If the answer is “no”, then you haven’t gotten down to the level of pure, human emotion, so try again and dig deeper.

Once you’ve identified your “mission” or “ultimate purpose”, you should use simple language and one short sentence to capture it.  This ensures that it will be easy to:

• Understand
• Repeat to others
• Remember

Your customers don’t care about you, they only care about what you can do for them, so help them to understand what that something you can do for them is and why you’re so excited or passionate about it. 

If you focus on your passion, the commonality of all Human Beings and your customers, the money will come, just as sure as the day follows the night.

Copyright 2006 Christopher A. Gayle & Capital Genesis LLC ©. All Rights Reserved.

New rule: Hire a courageous CEO who can Balance Ethics & Corporate Profit
Old rule: Hire a charismatic CEO who can Close Deals

Our research has shown that a CEO is more vulnerable to being fired and replaced if the stock price of the company continues to lag behind the S&P 500 by an average of 2 percent once occupying the top job.

This ominous reality – that of doing what ever it takes to increase the value of the company’s stock price – is foremost in the mind of every CEO.  How they respond or react to this reality is the difference between an outstanding CEO and all the rest.

Back in the 80s and 90s, a charismatic, celebrity CEO was the way to go if you wanted to grow a successful business.  From a long term view, the stock market was strong and the focus was on growth – get big and grab as much market share as you can, as fast as you can.

The problem was that several (but not all) of these charismatic, super star CEO’s used their influence and ego’s to either engage in ethically questionable business practices, stubbornly ignore obvious warning signs of trouble or focused too heavily on short-term up-ticks in share price with little focus on long term, organic growth.  

These corporate emperors could do no wrong.  Or so we thought.

As 2000 came and the stock market went, everyone started to sober up, ask questions and began to look very closely at company financial statements (once again).  What did they find?  They soon discovered that several companies had been fudging, twisting, obscuring, tweaking and in some cases, out right lying about the numbers.

Some of these charismatic, super star CEO’s have been fired and a few of them are in jail.  As a result, courage and ethics have returned to their rightful place as the preeminent qualities of leadership.

Brave New World
What concerns do today’s CEO and senior executives need to summon bravery for to face in today’s market place?  Here is a brief, incomplete list:

Organic growth – our research highlights the fact that 90 percent of 940 executives questioned, said that organic growth was essential to their company’s future success.
Problem – Organic growth is not a quick fix; it often happens very slowly.

Environment & corporate social responsibility – we’re reached a point in the history of the Industrial Revolution that can’t be ignored by anyone: the way we practice business today is damaging to the Earth, which in turn threatens our very existence.
Problem – Most corporate leaders want to be Earth friendly and being “green” is now becoming a huge competitive advantage, but starting such initiatives can be intimidating and costly.

Shareholders & Securities Analysts – people invest in companies to make money and investors want to see results, or they’ll take their money elsewhere.  However, the performance assessment of the CEO is very much tied to the current share price. 
Problem – How can the CEO balance the often conflicting priorities of reaching for short-term results while achieving more substantial long-term goals and not get fired?

Globalization – to expand market share, many companies are going global.  If this done without an ethical compass, small business owners, indigenous communities and entire cultures can be uprooted and in some cases destroyed.
Problem – How can a business expand in a way that supports and not destroys indigenous cultures and local communities?

Employees – people are not assets, they are people, so treat them like people and not like assets.
Problem – How do you demand the highest level of performance from your people, but not burn them out?

These are but a few of the of issues facing the CEO and top management, and these issues require a courageous leader to humbly face them and work to prevail, turning them into opportunities to innovate and profit. 

Negotiating these daunting realties demand courage and a strong ethical core. Sarbanes-Oxley, lost confidence in the stock market and increased levels of cynicism directed towards business is the net effect we all endure when courage and passion are lacking in today’s corporate leaders.

Here are some words of wisdom to contemplate, on the subject of courage:

“Brave men are all vertebrates; they have their softness on the surface and their toughness in the middle.”
-G. K. Chesterton

“Nothing in life is to be feared, it is only to be understood. Now is the time to understand more, so that we may fear less.”
-Marie Curie

“Creativity requires the courage to let go of certainties.”
- Erich Fromm

“Courage without conscience is a wild beast.”
- Robert G. Ingersoll

“To go against the dominant thinking of your friends and peers, your teachers, of most of the people you see every day, is perhaps the most difficult act of heroism you can perform.”
- Theodore H. White

Copyright 2006 Christopher A. Gayle & Capital Genesis LLC ©. All Rights Reserved.

New rule: Hire passionate people.
Old rule: Rank your players and always go with the “A’s”.

Ranking Employees
This approach to Human Resources is a byproduct of the internally focused obsession with “efficiency” and “productivity”. In these environments, Lean and Six Sigma (and other such improvement philosophies) become a monster and living, thinking, feeling people are reduced to statistics on a spread sheet and a slice on a pie chart.

This not the way to bring out the best out in your people nor is it the way to stimulate loyalty from your employees.

Find the “Right” People
Instead of “grading” and ranking people, first you need to be sure your recruiting mechanisms are designed to be a filter that lets the right people in and keeps the wrong people out. The “right” person is someone who naturally shares and believes in the values of your organization. Secondly, this person will have natural enthusiasm and passion for the mission of your company and their individual contribution to furthering that mission (i.e. their job).

I read an article the other day about how to “motivate” your employees. The author argues that the key to motivating your employees to be their best is by using the techniques of: job rotation, job enlargement and job enrichment. These three techniques will only pay of in the long run, only when you have hire people who are naturally passionate about what it is your company does. It’s the difference between “I love my work” and the “it’s just another job; it pays the bills” attitude.

Job rotation, job enlargement and job enrichment will provide maximum benefit to those employees who genuinely believe in the overall purpose and motivation of the business – they will associate job rotation, job enlargement and job enrichment as new ways to contribute to the team. For those employees who see their work as “just another job”, in the long run (in most cases), changing where they work or changing what they do won’t suddenly create passion in them. If an employee isn’t driven from within, you can’t manufacture this drive externally.

Natural Enthusiasm
This passion for your company and their new job cannot be faked or manufactured. It exists naturally or it does not exist at all. It’s not possible to make a meaningless, unfulfilling job meaningful by changing the environment or work pattern – you’ll be creating the illusion of career growth or job satisfaction, but it’s still an illusion!

People who work for Microsoft, Apple, Toyota, FedEx, Nordstrom and Merck, for example are historically beyond passionate about their work and the company they work for. They are fanatical. It sounds a little bit scary but it’s true. It’s like a cult – you either fit in or you don’t. You either absolutely (genuinely and naturally) love what it is we’re about or you don’t. If you don’t fit in, no hard feelings and we wish all the best for you, but you might want to seek employment else ware.

These companies have figured out ways to filter all recruits so that only the “right” ones get in and succeed and all the wrong-fits are screened out very early in the hiring process.

These employees need no motivation. Association with the organization, what it stands for and their ability to contribute to the company’s success is satisfaction enough.

In these environments, there is never a need to rank employees against their peers. Instead, the employee is graded against themselves. All evaluations and reviews are geared towards increasing their skill set, so the employee has new and increased capabilities to simultaneously grow and contribute to the mission.

Passionate Side Effects – Increased Profit
The biggest side effect for having the right employees working for your company is superior levels of customer service, which automatically creates buzz, viral marketing and rapid word-of-mouth referals, which brings to you new customers at a much smaller investment.

Passion Rolls Down Hill
Again, you can’t manufacture passion. It has to be natural and real and it absolutely has to start at the top – president, owner, founder, CEO, etc. Every successful company always has at the top a passionate, visionary leader who radiates with natural, balanced enthusiasm. Charisma, tough negotiator, problem solver, multitasking skills, etc., all pale in importance to a leader who absolutely believes in what the company is trying to accomplish, other than making a dollar. This conviction is what creates the environment that causes other passionate people to follow.

Copyright 2006 Christopher A. Gayle & Capital Genesis LLC ©. All Rights Reserved.

Fed’s Fisher: Inflation greatest risk to US
Wed Aug 16, 2006 3:46 PM ET

By Ros Krasny

DALLAS (Reuters) – Inflation is still the greatest risk to the U.S. economy, and policy-makers will not hesitate to raise interest rates again if incoming data shows it is necessary, Dallas Federal Reserve Bank President Richard Fisher said on Wednesday.

“There is a definite increase in inflationary momentum,” Fisher said at a luncheon by a commercial real estate group. “The Federal Reserve will not tolerate inflation,” he added, terming it the Lex Luthor to the “Superman” United States economy, referring to the superhero’s nemesis.

Inflation “is a sinister force that has the capacity to charm and romance the heck out of you, but in the end wreaks only havoc,” he said.

Fisher is the first Fed policy-maker to speak publicly since the Federal Open Market Committee voted this month to hold U.S. benchmark interest rates steady at 5.25 percent. He is not an FOMC voting member in 2006.

The Fed’s decision, taken with a single dissenting vote, paused a string of rate hikes made at 17 consecutive meetings over more than two years.

Financial markets are split on whether the Fed will resume its tightening cycle; futures show just a 25 percent chance of a September rate increase, but higher prospects for a Fed move in October or later.

Chances for Fed rate moves have slipped this week after July’s core producer and consumer price data came in below Wall Street expectations, suggesting the Fed’s forecasts for inflation to moderate may be playing out.

The U.S. economy typically slows before inflation comes down, Fisher noted. But assessments that the Fed is either done raising rates, or is already preparing to raise again, are mere guesses, he said.

SENSES WORKING OVERTIME

Fisher said the Fed “will watch and listen and ‘taste’ the indicators as they come in,” stay dependent on both statistical and anecdotal data, and continue to monitor the lag between its policy actions and their effect on the economy.

“I expect the 17 consecutive (Fed) actions have begun to take their effect … but I don’t know any great precision how long it will take or how long of an impact there will be,” Fisher told reporters.

At their core, central bankers worry most about inflation, “the enemy of sustainable growth,” he said.

“If we see, after this pause, that inflation is beginning to threaten economic prosperity, we will take deliberate … measures to counter it,” he said. Even so, “that doesn’t mean we need to take a sledgehammer to the economy.”

Price inflation does not typically become entrenched unless accompanied by wage inflation, Fisher said.

“Conversations with CEOs and other business operators all indicate an emerging and widening shortage of skilled and semiskilled workers, along with attendant upward wage pressures.”

Fisher later told reporters that a slower economy should start to tamp down wage pressures somewhat, but the economy has been running near full employment at a jobless rate that fell as low as 4.6 percent in June before rising to 4.8 percent in July.

More companies are reporting the ability to raise prices with less customer resistance, he said.

Energy prices are a factor. Some Dallas-area restaurants, for example, have seen energy prices spike by 40 percent this year, Fisher said.

“It becomes an inflation driver when you have pass-through” from headline prices to core prices, he said.

RECESSION NOT ON HORIZON

Fisher said U.S. gross domestic product growth for the second quarter was likely to be revised closer to 3 percent from its initial print of 2.5 percent, and third-quarter growth could be similar. “Recession is not visible on the horizon,” he added.

Still, the U.S. housing market is in the midst of a correction notable for its “suddenness and depth,” he said. That, along with high energy prices and higher interest rates, was “definitely having an impact on the consumer.”

Fisher spoke at length about the impact of globalization in blurring the usual lag between Fed policy actions and their impact on the economy.

The lags “may become longer, increasing the time it takes for the consequences of Fed tightening measures to take hold,” he said.

In an effort to maximize profit and growth, companies introduce new products or variations on existing products, thinking that if they give the customer more choices, the customer will be happy, thus translating to larger profits.

What usually happens however is the opposite.  Inadvertently, what ends up being created is additional complexity, superficial value add and a cluttered portfolio of products that can end up confusing, not helping customers.

The Shotgun approach
The Shotgun approach to product development does not take the time to really understand your customer.  It’s what happens when a company refuses to put forth the effort to create a relationship with their customers and truly understand them.  The shotgun method is fast and cheap.  Usually it takes existing products and alters them with superficial variations.  There’s nothing wrong with offering your product in both green and blue colors, but do not mistake these options for innovation.

A company with too many products and product categories usually indicates that they are failing to understand the needs of their customers. Companies with too many products also run a greater risk of not getting the right product in front of the right consumers in the right distribution channels and retail outlets.

Companies hung up on the superficial shotgun approach to new product and service development end up offering nothing of real value to their customers, and will soon find themselves commoditized and irrelevant.

Organic Growth
By focusing on your core business – the reason your company exist, other than making money – you will naturally limit your introduction of new products to those that add real, genuine value to your customers. 

In addition, companies that focus on their core business – their core purpose and mission – they tend to naturally work side-by-side with their customers in the product/service development process to ask new questions and create new solutions that serve deep and genuine needs.  When you truly understand your customers, you can add significantly more value to them with fewer products/services.  This approach takes more time, effort and in some case capital, but the subsequent return on investment outweighs the costs several times over. 

From this approach, innovation and organic growth will blossom logically as a result.  The principle of “less-is-more” holds true for both business-to-consumer and business-to-business companies.

Here are two simple examples to illustrate the point we’re making – when you understand your customers, there’s no need to guess what it is they want, flooding them with products and services they may find no value in and regard as useless.  You can narrow your efforts to giving them exactly what they desire and value:

Financial
American Funds – 29 mutual funds
Compound annual growth rate 2000 – 2005: 19%

Fidelity – 168 mutual funds
Compound annual growth rate 2000 – 2005: 4%

Cosmetics
Neutrogena – 17 SKUs per product category
Vendor sales growth from 2003 – 2004: 15% 

Revlon – 79 SKUs per product category
Vendor sales growth from 2003 – 2004: 3% 

Christopher Gayle

Copyright 2006 Christopher A. Gayle & Capital Genesis LLC ©. All Rights Reserved.