Tag Archives: business cliche

SoLoMo

Have you heard this term yet? I have and every single time I have to unpack the three words that contribute to the term to understand what the speaker means.

Social – Local – Mobile. It’s an attempt to coin a single word that combines the potential of these three trends. It’s being called a revolution that “picks up where hyperlocal left off

Or not. I’ve only heard the term used by Americans, and at one conference recently it was met with blank stares from an audience drawn from 10 or 12 European nations.

The New York times gives a definition, helpfully pointing out that it’s “unique to the mobile device”. Makes sense – my desktop doesn’t move more than about 5 cm in either direction.

The examples I’ve found seem to be new businesses focusing on entertainment, few service organisations or established businesses seem to be using this at all.

  • Forecast is a fun and simple way for friends to share where they’re going.
  • SCVNGR is a game about doing challenges at places
  • Foodspotting; Find and recommend dishes, not just restaurants.
  • Localmind is a new service that allows you to send questions and receive answers about what is going on—right now—at places you care about.

Those listed are all US-based, they all use the geo-location (local) function of your phone (mobile) to let you send some form of message (social). Like any social tool they rely on a critical mass to be truly useful; in the same way that the first fax machine was useless, and only started to become useful as others came into use. So it’ll be interesting which of these (if any) survive.

I’m also curious to see whether an established business will build an own tool – my guess is not, they’re more likely to find ways to advertise and provide services through whichever SoLoMo tools emerge as having the numbers to make it worth while.

Will the term catch on in Europe? Who knows, among non-English speakers it may require just a little too much explaining. In any case I’m not the only one who cringes when I do hear it. Techcrunch have already called for the term to die.

Walled Garden

Screen Shot 2013-06-15 at 5.47.34 PMTraditional walled gardens protected the plants from high winds and frost, in fact they often create a warmer micro-climate as the brick walls release stored heat from the sun. They often sit alongside stately homes, where they would have provided vegetables, fruit, herbs and flowers for the household.

The same term has been borrowed for a more modern, geek-world use. It has come to mean a virtual environment where entrance/access is controlled. The best examples currently are facebook – which controls a person’s access and the provision of content, and apple’s operating system which limits developer and user access.

Sometimes the walled garden is created as a security measure, but most often it’s now a way of maximising profits. A supplier wants to keep you in their own environment as long as possible – that way you’re more likely to buy from them or be exposed to more of their ads for which they earn income.

However more cynical visitors may refer to the area as a “walled desert” particularly if the content within the garden is not as rich as the content outside.

image A beautiful September display in the walled garden of Mottisfont Abbey in Hampshire /Anguskirk/ CC BY-NC-ND 2.0

Throw Someone Under a Bus

Maybe I have a warped sense of humour but this phrase always gives me a very literal image.

I heard it a few weeks ago via a friend in the middle of a tough project, there have been words in the project board and the only consolation he could draw from the meeting was “well at least they didn’t throw me under the bus”.

The origins are murky, according to the Word Detective, the first sighting in print was only in 1991. He proposes two possible origins; one relates to sports managers chivvying their team members to be “on the bus or under it”, the second is a more generic city scene with buses racing around corners.

Whatever the origins it has come to have the association of a person being sacrificed in a crisis. In my friend’s case his bosses could have blamed him for all the projects faults and kicked him off the project. Then pointed at him as the source of the project’s failure. Instead he had to deal with a tough conversation, but ultimately got some help that (fingers crossed) will turn the project around.

What about you, is this a term you use?

image Mini Bus /(deaf mute)/ CC BY-NC-SA 2.0

Sweat Equity

Ownership in company, even a startup, can be shared. When shared the proportion each owner has is calculated based on what they brought in. For some owners it’s a straight financial transaction, for others – especially in a start up – some of that ownership comes from the hard work they’ve put in getting the business started. This share derived from work is known as “sweat equity”. It’s sweat equity that allows Mark Zuckerberg to retain a 28% equity stake in Facebook.

It’s often a highly valued part of the start up process for a budding entrepreneur, as explained in Blog Maverick, where Mark Cuban writes

Businesses don’t have to start big. The best ones start small enough to suit the circumstances of their founders. I started MicroSolutions by getting an advance from my first customer of $500. The business didn’t grow quickly in the first couple years. We didn’t grow past 4 people in the first couple years, and we all worked dirt cheap.

So what’s wrong with that? It’s OK to start slow. It’s ok to grow slow. As much as you want to think that all things would change if you only had more cash available, they probably won’t.

The reality is that for most businesses, they don’t need more cash, they need more brains.

The reality for entrepreneurs is that the less money they take from investors the great share of the equity they retain. But there’s a trade off – take no money and your opportunities to grow are reduced.

But recently I saw an article online that referred to increasing the value of your home by putting in “two weeks of sweat equity”. It seemed a weird use of the word to me, but in a sense it is exactly what hard work improving your house can be – you’re increasing the value of the asset by hard work rather than financing an improvement, and you’re also increasing the proportion of the asset that you own, since the bank is not adding an equivalent amount.

I then checked wikipedia, fount of all knowledge, and it appears I’m behind on my dictionary meanings, and Habitat for Humanity has used this model of funding to help people get into their home. A home that would otherwise be unaffordable.

image Sweat or rain? /Kullez/ CC BY 2.0

Upselling

Upselling is the practice of offering the customer a little more than their original purchase request. The most well-known example is probably the McDonald’s “would you like fries with that?”, in fact whatever you order at McDonald’s you’ll be offered one more thing.

It’s a normal part of service in the US, but it’s less common here in the Netherlands, and there have been times here where I’d have welcomed a little upselling rather than trying to catch a waiter’s eye to order water.

But last week I had a sales experience where upselling almost lost them the sale. I wanted a small item, a nail buffer. I imagined the price would be in the 5-10 euro range. But I couldn’t just buy the buffer, I had to buy a set… I tested the hand cream, it smelt good. I agreed to by the set, my decision helped by it being on sale. At this point I’ve agreed to spend 3.5 times my initial planned spend.

But then they tried to upsell again, for twice what I’d just agreed to spend I could have a body scrub and a moisturiser – telling me that I had “skin discoloration” as part of the sales pitch. I declined politely. Then at the cash register, while I was standing with the money in my hand, I was asked again – I was so tempted to walk.

But on reflection I think the hard sale is one of the reasons this company is being forced to offer big discounts on their products. The Dutch are a bit allergic to this approach.

Image cold-oil-yukon-gold-french-fries /Theresa/ CC BY-NC-ND 2.0

Glass Ceiling

This phrase is used to describe an invisible limit to a higher level. It’s most often used in reference to the barrier that keeps women from rising to the upper levels of management, despite having appropriate qualifications and experience.

Despite incredible success of individual women in business and public service roles, such as Meg Whitman, Carly Fiorina and Hilary Clinton, the glass ceiling still exists. Many women make it to upper management levels, but few – very few, make it to the executive level of large companies.

It’s phrase that was probably most used in the 70s and 80s, there is some debate about who first used the term, and the concept was already referenced by Orwell in the 1930s but in a discussion of class difference.

Now that education and employment opportunities are gender equal the term shouldn’t be needed any more, but women still earn just 80% of what men earn in the US, and few companies have equal representation on the board room. Some commentators connect that to women’s own behaviour in the workplace – we’re not competitive, we don’t fight for it, we don’t network as well as men do. There may be some truth in that; amongst my women friends it’s unusual to ask for a promotion or pay rise – relying instead on a manager noticing your good work.

.

image The glass ceiling / CC BY-NC-ND 2.0

Murphy’s Law

He wasn’t the first to say it, and he didn’t put his name to the law, and he was American not Irish.

Oh, and what he said was

“If there is any way to do it wrong, he will”

He was Captain Ed Murphy from Wright Field Aircraft Lab in 1949 and he was talking about a technician who repeatedly made mistakes.

It was later paraphrased to “if something can go wrong it will”, and now is used in any situation where something goes wrong that might have been prevented. It’s also often used where the wrong choice is made, for example, when it turns out that we’ve chosen the slowest check-out in the supermarket. Which is more a recognition that hindsight is always so clear, and that’s the sense in which I heard it this week.

The concept does predate Captain Ed, there are mentions back to the 1800’s, but it’s Murphy’s name that stuck with the modified saying.

And if Murphy’s law seems too optimistic for you, I’ve heard something called Mrs Murphy’s Law “Murphy was an optimist”.

Image Murphys /Tom/ CC BY-NC 2.0

The Elephant in the Room

Ever been in a meeting where there’s a subject that everyone is thinking about and no-one wants to mention?

For example – imagine you’re in a meeting with people from several different departments, regarding a possible new project. No-one wants to mention the ‘B’ word; budget.


Budget is the “Elephant in the room”, it’s obvious that it needs to be discussed but no-one wants to, just in case they end up paying

It seems to be a relatively recent term, OED cites its first use as 1959, but no-one seems to know where it came from.  A live version of the saying was created by Banksy in 2006, as a comment on our reluctance to discuss issues of great importance such as poverty.

I like the slightly surreal mental picture the phrase creates, and the situation doesn’t arise often enough in my world for this to really feel like a cliche. Maybe because Dutch business culture favours directness, my colleagues tend to just ask the question.

Image PhotonQ-Certainties on the gravitation of an Elephant /PhOtOnQuAnTiQuE/ CC BY-NC-ND 2.0

Just in Time

Screen Shot 2013-06-16 at 9.50.32 AMI was watching BBC a while ago and saw the documentary about John Lewis. I’m fascinated by this company, the legal structure is a partnership so they do not talk about employees but about partners. They pride themselves on service, which means everyone is knowledgeable about their product line and their call centre performs well.

But the business is under pressure. In the documentary two cost saving innovations were discussed; one was to outsource the call centres, which I can see as a potential cost saver but I wonder about the impact on the level of customer service. The other innovation was to reduce inventory further, to push for their suppliers to supply them faster and hold more inventory. In short “Just in Time” inventory management.

“Just in time” reduces inventory carried as the inventory for sale is delivered much closer to demand. With barcodes and automatic stock taking it’s become possible to use it even in relatively fast moving and dynamic retail environments.

The advantages for retailers are that they don’t have to store large amounts of inventory, and can be more responsive to customer demand. It does push the costs and risks of holding inventory back to the supplier. Some suppliers are charging a premium for supplying on “Just in time” schedules.

However if the distribution channel is not reliable or if the price is volatile it may be wiser for the retailer to choose to hold inventory to reduce the risk of running out of stock, or to take advantage of lower price offers.

Image Clocks /Michael/ CC BY 2.0

“It’s a Cash Cow”

“Cash cow” is a term I usually hear used somewhat sarcastically in reference to a high margin product. The expression itself is probably pretty old, but it’s adoption into business is about 40 years old and comes from a matrix produced by Boston Consulting Group in 1968.

It’s a 2 by 2 matrix, perhaps one of the first to be popularised by consultants, with decreasing market share on the x axis and increasing growth on the y axis, the four quadrants are then categorised as shown below.

matrix
Matrix showing the categorisation of products according to market share and growth

A star is a product with high growth and high market share, this is likely to be a new product. A company should invest in further development and marketing of this product.

A question mark indicates that a product has high growth but hasn’t really gained a sizable market share, it may be a new product. There is a risk that such a product could turn out to be a fad, or may be vulnerable to competition. A company must watch the question marks and judge investment carefully as the product could evolve into a star, or fall into a dog.

A cow, often termed a cash cow, has high market share and and low growth. It’s likely to be a mature product in a mature market. A company should exploit the revenues from the products in the cow quadrant to finance the investments in the stars.

The dog is in the fourth quadrant, and refers to products that have low market share and low growth, they may be products that have reached the end of their life-cycle. Companies should not invest in these products directly unless there is an opportunity to re-invent the product and relaunch it. In general companies should cease production of products categorised as dogs as they will quickly become unprofitable.

Of course this is a simplification but it does help understand your product mix and where your investment should go.