Tuesday, May 29, 2018

CEO's From the Outside are More Likely to be Hired and Earn More Money

CEOs are an integral part of the leadership team. They make and steer the helm of the ship and rely on their crew to keep the company moving forward. For those seeking to maximize their earning power future CEOs should consider moving to outside companies rather than being promoted within the company.

Research has shown that external hiring of CEO's earn more money than internal CEO's (Palomino & Peyranche, 2013). The reasoning is not necessarily clear but much of it may have to do with perception and negotiation power during the hiring process.

Board of directors seem to support outside CEO's and seem to increase compensation packages in the form of equity than internal CEO's. They also hire them more often making the case that any CEO who wants to earn more money should look elsewhere.

When we think about this there is a case for outside CEO's when you need to change the culture or need to do something unique. However, internal CEO's have a history and understand the organization well. This has advantages if you need to create a deep change and the CEO who would know that best is the one that comes from the inside.

Palomino, F. & Peyranche, E. (2013). Internal versus External CEO Choice and the Structure of Compensation Contracts. The Journal of Financial and Quantitative Analysis, (48), 4.

Sunday, May 20, 2018

5 Tips for Managing Change and Resistors!

Change is a constant for a business. If it isn't then you have a problem and your company will soon be irrelevant. Change comes with resisters who are not necessarily opposed to the change itself but changing their work habits. There are five ways to encourage people to join up with change (Armbruster, Moran & Beitshe, 2013).

1. Speak to Loss: Discuss the necessity of change and why the organization must move in a certain direction. Making known the risks of not doing so is important.

2.Get them On Board: Get people on board and removing those who refuse to join up. Successful change requires participation.

3. Skin in the Game: Get people involved and let them own it. Hand out tasks and make them owners.

4. Humor: Lighten the mood with a little humor. Not everything needs to be stone cold serious.

5. Celebrate Success: Recognize people and celebrate changes as they occur.

Armbruster, S., Sonja, M. & Beitsch, L. (2013). Change resistors: people who block change initiatives and 5 tips to overcome resistance. Journal of public health management and practice, 19 (5). 

Saturday, May 19, 2018

The Decision Making Logic Used by Entrepreneurs

Entrepreneurs have a hard time making decisions that improve their outcomes. Many start out without much knowledge in business and when they are faced with tough choices they don't know what to do or where to go. According to an analysis of 385 decision events they found that effectuation and causation logics dominated the entrepreneurs decision models (Reymen,et. al 2017).

What is a decision logic? It is a methodology people use to make decisions about events where they may not have all of the information. With limited information people have to use a methodology.

Effectuation Logic: The logic incorporates concepts of self and their abilities to make decisions. They also may focus on losses vs. profits, find collaborators to reduce risk, understanding contingencies, seek to control factors that impact the future.

Causation Logic: Try and see the relationships between what causes another. If they do A they are hope to have B happen.

You may find that entrepreneurs are not just poking into the night to find success. They have a logic that allows them to look at themselves, their current situation, abilities, collaborators and possibilities to make decision. The ultimate goal is to reduce risk and increase reward.

Reymen, et. al. (2017). Decision making for business model development: A process study of effectuation and causation in new... R&D Management, 47 (4).

Friday, May 18, 2018

Awe and Anger Drive Viral Marketing

Companies engage in the online marketing world seek to create viral messages that will be passed on the Internet form user to user to create a broader reach. It can be difficult to determine what makes something viral and what doesn't. Research indicates that viral marketing is driven by physiological arousal and emotion (Berger & Milkman, 2012).

The study found that users who viewed media that cause high arousal states such as positive awe or negative anger shared the media more often.

On the flip side, those media pieces that led to sadness were less shared by others.

What this tells us is that companies should create awe inspiring media driven by magnificence or focus on things that really anger people.

Not all things work well for all types of industries. For example, a company may have fall out trying to produce anger so would be best focusing on create awe. At the same time, non-profits and advocacy groups might be better served by anger motivations that push people to act and get involved.

Berger, J. & Milkman, K. (2012). What makes online content viral? Journal of Marketing Research, 49 (2).

Wednesday, May 16, 2018

Brand Strategies for Social Media Marketing

Using social media is highly important for improving sales. It is one of the main methods businesses interact with their customers. A review of marketing managers found that there were five methods of encouraging greater interaction with customers and raising awareness of their products (Tsiomonis & Dimitriadis, 2014).

-Prize Competitions
-Announcing New Products
-Interaction with Customers.
-Advice and Useful Information.
-Effectively Handling Customer Issues.

Social media is becoming more powerful but is someone limited. Most mobile media refers back to a webpage hosted somewhere else. However, it does create a channel to interact with customers and provide announcements. The key here is "engagement". Make sure you are actively engaged with subscribers and visitors.

Tsimonis, G. & Dimitriadis, S. (2014). Brand strategies in social media. Marketing Intelligence & Planning, 32 (3).

Tuesday, May 15, 2018

How to Use Systems Thinking in Creating Business Strategy

Markets are complex. As you move into a global world you will find this complexity increasing. Supply chains, marketing, legal regulations, production, supplies, personnel and finance seem to be overwhelming consideration. Developing appropriate strategies within all of these processes is daunting. Using systems thinking we can gain a better grasp of this complexity and improve corporate performance (Rajagopal, 2012).

First lets discuss what systems thinking is. It is an ability to think of how the parts mesh within the whole and how it interacts with larger systems.

With systems thinking you can see an entire system interrelating with other parts and how that impacts the success of the whole organization.

As you create strategies you will need to understand how all of these parts work together to create success in the organization as it competes in the market.

Many times it is beneficial to include key personnel in the strategy creation process that understand these individual chains. It is up to the executive team to connect them together in a way in which you can see how the entire organization works.

One of the best ways to do this is to map the entire system through first understanding how they create and sell the final produce. Further grasping how the functioning of one system and changes in its parts impacts the whole will help you find places that need adjustment.

You will also want to compare your businesses systems approach to the systems of other companies to see where your strengths, weaknesses, opportunities and threats occur. If your system has advantages they should be included in your strategy to maintain competitive positions.

Rajagopal (2012). Role of Systems Thinking in Developing Marketing Strategy: Some Conceptual Insights. Journal of transnational management, 17 (4).

Sunday, May 13, 2018

Keeping Teams Focus by Finding Purpose

Teams are successful when they are focused. As the team moves through its stages and accomplishes goals sometimes it will begin to break down unless it has a new purpose. Nearly all teams are the same whether the be as large as Congress or as small as a few friends hanging out. The goals are subject to the teams wishes and motivation. Rejuvenating your team means finding a new purpose.

Purpose should be important enough and meaningful enough to the team to spark their interest. If the goal has no meaning to the members and is not worth their effort they simply won't engage. 

There should be rewards associated within to encourage active participation. The goals may be social, financial or personal in nature.

The objectives should be clear and people should know what success looks like. If achievement is not defined you won't have significant misalignment of action and possible motivational loss.

Each member should have a role. If roles are not defined many times people are not sure how they fit within the team and whether or not their actions are beneficial.

Members of the team should be treated as important participants. It isn't about making their boss look good or encouraging the glory of someone else. People deserve recognition, respect, and be treated as a valued member.

Wednesday, May 9, 2018

Developing Cross Functional Teams

Cross functional teams are dependent on the type of people you select and the goals you have in mind. Making sure your cross functional teams have the right people is important. It isn't cost effective or wise to add a lot of people from various departments that don't have a direct impact on your success. Whether you are processing a new product or service you will need a team that can help you get from point A to Z.

Consider the general needs of the team to create your new product or service. There may be a need for designers, engineers, marketing managers, purchasing representatives, etc... Your team should be based on creating a successful launch.

You may not need everyone right away. During the initial product development stages you may not need everyone right away. Instead you may want to include people that are more focused on the creation aspect in the initial stages, manufacturing in the second stages and sales in their final stages.

Furthermore, you should consider having a few key people such as project managers throughout all the stages that understand how the entire product will move throughout the process. Having such people ensure that information isn't lost in any of the transitional stages.