Blog: strategy

Jul
13
2011
By Avery Faller

Speaker: Drew Lipsher
Company: Clear Channel

Clear Channel LogoSometimes—more often than not—you will find that your company cannot complete its goals alone.  Partnerships, between your company and other corporations, academic institutions, customers and maybe even competitors, can be key to achieving success whether you are a web startup or a manufacturing plant.  Last week, Drew Lipsher of Clear Channel spoke to the Summer Fellows about methods you can use to help you make successful deals. 

Making the Deal

Over the years, Drew has worked in a wide range of industries from beer brewing to music.  This diversity of experience has allowed him to draw conclusions about larger trends in how businesses interact.  When meeting with potential partners, especially larger companies, Drew encourages startups and small companies to bring three great (often unsolicited) ideas of ways you can add value to the first meeting.  Drew pointed out that if you enter the conversation with three great ideas you are essentially offering them options for three different types of partnerships that they could enter into with you, allowing them to choose which type of relationship will be best for them. 

Drew Lipsher Headshot

“Make their job easy,” Drew said, referring to your potential corporate partners.  “Make it easy for them to say ‘YES!’”  While a company may say ‘no’ to one idea, it is really hard for a company to say ‘no’ to three great ideas.  And let’s define exactly what it means to be a ‘great idea.’  These are not just ideas that you thought of in your car ride that morning; these are well-researched, presentation-worthy ideas--ideas that you have financial models for and have done focus groups on.  This type of preparation significantly reduces a company’s reluctance to embarking on a partnership as they have proof for their higher-ups that it will be valuable to them.  All these methods are essentially ways to make them want the deal as badly as you want it, increasing your odds of a positive outcome. 

Also, be sure to think about all the things that could potentially go wrong down the road and proactively build in “outs” to the contract or relationship.  (If a company is asking you for exclusivity, will you then require a minimum commitment?)  Although your partner may be much bigger than you, you don’t have to revere them.  Make sure you structure a deal that is favorable not only to them but also to you.  You don’t want this deal to kill your own company. 

The Takeaway

Partnerships are a great way for you to grow your business, but don’t be surprised if for your first few you have to do more than your fair share of brainstorming and development.  While this or that deal may be critical to the future success of your company, your partner may have no such motivation.  So as eager and enthusiastic as you are, be prepared for a long deal-making process ahead of you. 

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Jun
02
2011
By Avery Faller


Who: Ashok Vasudevan
Company: Preferred Brands International

Ashok Headshot

“Every business should be global,” Ashok Vasudevan, CEO of Preferred Brands International boldly stated at the start of his talk to the summer fellows yesterday.  Throughout, he spoke to both the practical and abstract sides of running a business using Preferred Brands International and its child company Tasty Bites as examples.  Ashok emphasized the importance of a strategy that identifies a megatrend and drives the need in building a business that will be relevant both today and 15 years down the line.

Strategy

Ashok broke down the process of building a business into three parts: Strategy, Process and Execution.  “Strategy,” he said, “is an integrated set of choices about what an organization wants to accomplish, where an organization will play, and how it will play.”  Strategy does not necessarily depend on certain people, but rather can be built into the DNA of a company from day one.  That being said, everyone in a company should understand a company’s strategy.  Ashok has implemented a practice at Tasty Bites where department heads carry around a “Tasty Bite Spice Card” at all times.  Much like a Balanced Score Card, managers write down their branches’ annual and quarterly goals in one sentence or less in addition to their branches’ goals for three years out.  Ashok believes that this helps his employees stay focused on the companies’ strategy both in the short and long terms.  

Tasty Bite LogoA good strategy can take advantage of valuable resources which are created by the convergence of three trends in a market: a scarcity, a demand, and an appropriability, which intersect to form the “Value Creation Zone.”  In Tasty Bite’s case, there was a scarcity of products in the markets of natural foods and special dietary needs.  Most vegetables came frozen, diminishing their taste, so Tasty Bite worked to develop a series of pouches which enabled vegetables to have an 18-month unrefrigerated shelf life.  At the same time, the demand for specialty foods has risen dramatically in America in the past 10 years.  This is due to two trends: more and more teenage girls are becoming vegetarian and at the same time Americans are eating more cuisines per week than any other nationality.  The appropriability of these fast cooking meals is also on the rise.  As more women in America joined the workforce the average time spent cooking a meal dropped from 48 minutes in 1995 to 12 minutes in 2011.

By recognizing this series of converging megatrends Ashok was able to develop a product that would be successful its first year and whose need would continue to make it successful over the coming decades. 

Ashok Lecture 1

 

The Takeaway

Building off of the practical examples and abstract theories that he discussed throughout the morning, Ashok stressed that the best businesses are based in the real world.  “Concentrate on building the business and not the business plan,” Ashok said, pointing out that although a business will flow into a business plan, a business plan will not flow into a business as the real world can strongly influence a product.  So while it is key to have a vision and a strategy while building your business, make sure that you build a business that is based in reality and not just on paper.

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