Wednesday, September 27, 2017

Aldi: The Power of Operational Simplicity

Aldi, the German grocery store chain, is planning a large expansion in the United States.

They became one of the most successful grocery chains in the world by focusing on limited choice.

According to a recent Wall Street Journal article, Aldi originally had to start with less—when two brothers (Karl and Theo Albrecht), veterans of WWII, took over their family's store in the bombed out city of Essen.  They only offered 250 items, mostly what families needed to survive, like flour, sugar, coffee, butter, etc.

However, by around 1960, the German "economic miracle" occurred, and fancy supermarkets selling thousands of items appeared.  The brothers were forced with a choice.  They decided to keep the selection in their stores limited because it gave them a cost advantage.

Today, Aldi stores still stock much less than other chains.  The advantages: more clout with less suppliers, faster inventory turnovers, smaller stores (with smaller rents and utility costs), and (ironically) better quality control.

The last advantage, quality control, means that Aldi also attracts more middle and upper class customers than you would expect.

Thursday, September 21, 2017

Crocs: An Example of Market Simplicity

I'm the expert in Strategic Simplicity®, and I work with clients in all four areas of Strategic Simplicity: Market simplicity, Decision Simplicity, User Simplicity, and Operational Simplicity.

Yesterday, I read an article in the Chicago Tribune about Crocs called "Crocs' billion-dollar strategy: Stay ugly".  It was a good example of market simplicity.

The Crocs' fad wore out about 10 years ago, and they tried to diversify into other styles.  But they suffered heavy losses and at least one prominent analyst felt that the company "was toast".

But, Crocs was able to generate a turnaround by focusing around their "ugly" shoes.

They realized that their classic clogs were popular in two sub-markets: sports teams (for wearing before/after competitions) and hospital workers.

Also, many people still preferred comfortable over fashionable for casual foot wear.

So, Crocs stopping making many of the new styles, and shifted back to their classic clogs—adding more colors and buttons (such as Marvel, or Disney characters).

Tuesday, September 19, 2017

Time Magazine Unsubscribe Example of Non-User Design Simplicity

I have a subscription to Time Magazine, and they kept emailing me offers for other magazines.

I got tired of it and went to unsubscribe.  They had an email opt out.  I clicked on it and:

1. I had to enter my email.

2. They said that it will take effect within a week.

This is not user simplicity.  In most cases, when you want to opt out of email, you just click on the link and click "confirm".  You do not have to retype your email (which is already known, since you are clicking on their email), and it takes affect immediately.

When it comes to improving your business with Strategic Simplicity, its not always a matter of making a massive change.  A lot of irritating complexity is caused by little things that can be easily changed.

Friday, September 15, 2017

Old Joke Contains A Serious Business Lesson

There is the old joke about the plumber who gets called to fix a water heater:

He listens to the heater for a few seconds, taps it with his hammer, and it starts working!

The plumber then gives an $80 bill to the homeowner, who then complains that the plumber didn't do anything.

The plumber then writes up an invoice and gives it to the homeowner:

          $1 to hammer the heater

          $79 for knowing where to hit

Interestingly, this joke actually contains an important business lesson.  Business should be about generating results for customers, not in methodology or outputs.

In other words, the value to the homeowner is to get the heater working.  The value doesn't depend on   what the plumber actually did or how hard he worked.  In fact, getting it fixed quickly is more valuable for the homeowner.

Yet, in our society, we value hard work.  Even worse, we (the service provider) feel that, unless we generate enough work, we haven't given value to the client—even if they are happy with the results.  We are our own worst enemy!

In the joke, the plumber was pressured to generate a simple invoice. But, in the real world, many companies would go further, and, under self-pressure, add even more unnecessary deliverables such as power points, documents, etc.

If your company wants to be productive, agile, and innovative—in other words, strategic simplicity℠ —then it should focus on generating results, and resist the urge to justify value through busy work.

Wednesday, September 13, 2017

Three Productivity Hacks

1. Don't make a to-do list, instead make a don't-do list of time wasters.

2. Schedule tasks (such as writing an article) as an appointment on your calendar.  Treat it like a meeting.

3. The cure for procrastination is to "micro" something by breaking it down. Ex: write a micro-article, or do a micro-task.

Tuesday, September 5, 2017

No "User Simplicity" At AT&T

One of the important components of Strategic Simplicity that I help companies with is User Simplicity.

In today's world of Attention Scarcity, you irritate your customers if you waste their time and make the user experience difficult or unpleasant.

This morning, I had a negative user experience at AT&T.  I needed to call on behalf of an elderly relative who wanted to make his number unlisted, to cut down on unwanted calls.

As soon as you call AT&T, your connected to an AU—Artificial Unintelligence.  It kept asking me to explain what I was looking for, without immediately giving me the option to reach a human.

In my case, getting a number unlisted seems to be an uncommon operation, so the AU struggled to understand.  It kept ping-ponging me between menus—until I jabbed the '0' key several times in a row.

Then, I finally got put into a queue and waited another 10 minutes before reaching a human...

Relationship between Change, Complexity, and Simplicity

When change creates new chaos / complexity in your life or business, you have two choices:

Change  ==> Complexity  ==> Do Nothing ==> Stagnation      {negative feedback loop}


Change ==> Complexity ==> Simplify  ==> Innovation   {positive feedback loop}

For Simplicity, Shrink Your Options

For creativity and innovation, we always hear that "you should keep an open mind", or "think outside the box".

But this is only half the story.  This is great for the experimental phase, where you test and iterate through ideas to find the best ones.

But, once you decide to execute, you need to shrink your box.  You need to focus on a few, high-quality, core ideas.  Otherwise, you'll get overwhelmed, spread through thin, and your business will be mediocre at best.

So, you need to keep your experiment/testing phases and production/execution phases separate.

The correct sequence is:

1. expand your ideas and "play" in your "sandbox" (development environment).  Come up with proven, break-through ideas.

2. Implement selectively and focused so that your production offerings are streamlined and well-executed.

3. Go back to your sandbox and experiment some more.  If you create something better than your "production" model, then replace it.

4. Rinse and Repeat.