Written by ZOOZ
consulting and training | (972)-9-9585085 | email@example.com
| Issue 4 |
We are glad to
send you the fourth issue of LaZOOZ.
The newsletter is sent
as a free service to thousands of senior executives in
the Israeli market. It is published every
other month, and does not include advertisements.
We tried to keep it short, assuming that
time is precious
and the work is plentiful.
Those who wish to learn more, will find
links to articles and relevant information sources.
We hope that you will find the newsletter useful. We will be glad to read any comments and suggetsions.
Ari Manor, CEO, ZOOZ
An interview with a senior executive
Amnon Shacham, CEO, Palkar
- Number of employees in firm: 40 in Israel, 12 others in the
- Number of employees under my direct responsibility : 5 report
directly to myself, but I consider myself responsible
- We provide : PVC boards,
especially for home fencing in the US (our major
market) - for both decorative and functional uses
(backyard privacy). Also profiles for
the Israeli construction industry.
- I'm on the job for : 18
Before that I was CEO of Camel-Sarid, and before that
I started up and managed
Camel-Sarid's subsidiary in Chicago.
- I like on the job
: The excitement - no day is like another - when
I answer the phone I never know what problem I might
face. The are many surprises that go with the job. In
addition, the fact that I work in a worldwide market
enables me to make interesting personal contacts,
especially in the US. For example - people are
enthusiastic about the fact that we are on the
banks of the Jordan
River. In a nutshell - I jump
out of bed to work every day.
- Most difficult on the job : Letting people go, which is
neccesary. Talks of cutting expenses might sound good,
but it always hurts someone.
- Goals I set for myself :
Camel-Sarid was a healthy firm taht tripled its
turnover and has built a well-known brand in the US
market - achieving some peace of mind and consumer
loyalty. In palkar I am trying
also to position the brand so that
will be secured for years to come,
changing market and currency exchange conditions, and to increase
the firm long-term value. In life in general
- I am a workaholic, and tremendously
enjoy what I do, which is felt in my personal life
as well. The children benefit and enjoy form my
feeling of satisfaction and success.
- Our vision :
in the previous paragraph is the one that leads
me, though I admit we haven't had an
orderly process and that I was the one that brought
it with me. I promote it mostly in the
US, in our marketing activities.
- Original product in our market: Palkar's white PVC fence was a
type of breakthrough, that occured before
my time. Previously there were only wooden fences, and the
PVC product was created as a result of an error
and proved to be a success (no need to paint,
no "eyes" like in the wooden ones, etc.)
Today, the Israeli market is in fact saturated with
this product, in spite of the slow growth of the
local construcion market.
- Sources of innovation :
As I mentioned, I am relatively new to Palkar, but I
am a great advocate of the Systematic Inventive
Thinking (SIT) method for New Product Development. In
Camel-Sarid we had several such workshops (incidently,
the first ones were facilitated by Ari Manor, CEO of
ZOOZ). In Palkar we did come up with new product ideas
during a technical forum discussion, but not through
systematic investigation - which
only strengthens my opinion that there are
other products to be developed in
a systematic manner. Palkar is a small company,
with some limitations on its activity, but when we approach
the matter, we will do so using SIT tools,
and with outside facilitation (although I myself am familiar
with the tools).
- Book recommendation :
Endurance, an Epic
of Polar Adventure (by Worsley and O'Brian, W. W.
Norton & Co.). It is the story of the British Sir
Ernest Shackleton who tried to cross the South Pole.
It's an amazing tale of a journey. I believe it to be
a must-read for every manager, although it was not written as a management book.
For me it's a source of
inspiration and even admiration, in
matters of team an d people management.
- Would you like to be interviewed?
: contact us
On strategic development in practice
Becoming a Rising Power
to Michael Proter, there are five major forces that
influence any given market, and therefore any
firm's chances of growing and maintaining high
profitability: Competitors, Suppliers, Clients,
Alternative Products/Services, and Potential Entrants
(new competitors not yet in the market). Every market
has its own balance of powers, that must be carefully
understood and considered.
instance, Israeli OTC medicine manufacturers have their
clients (especially the Health Care Associations)
as a very powerful and threatening force, while their
suppliers are much more convenient. Quite a
different case is that of a food chain restaurant branch
(e.g. a McDonald's branch) that is very much
dependent on its supplier (the chain) which might
terminate the franchise at will, and is less
dependant on the clients -single consumers (a
private person). Developing a business strategy in any
given market therefore consists of analyzing and
preparing to deal with these five forces, paying special
attention to the most powerful ones.
So far -
things are quite clear and well-known. However, the Five
Forces Model meay be used in a totally different, and
surprising, manner. Instead of checking the most
powerful forces in your market, you may ask yourself the
"opposite" question: how can our organization become a
powerful and threatening force, in the long term, for
other players? In other words: how can we become a
powerful and awesome client, supplier, competitor,
alternative or new entrant? Moreover - on which of these
five options should your strategy focus on?
demonstarte the above through some examples:
- A generic medicine
manufacturer - May become a powerful and
growing competitor, and an extremely strong
, thorugh a strategy of M&A, using the size
advantage to gain efficient purchasing and operations,
cut costs and offer a varried medical
solutions basket. This has been and continues to
be Teva's strategy.
- A food
chain - May
become a powerful and rising supplier
by sitching an ownership
model to one of franchising (instead of serving
end-consumer, it serves dependant franchisers). This is exactly what
McDonald's did. In fact, most of McDonald's dollars were
made in building a real-estate empire, by using
the rent from franchisers to fully pay for its
assets (commercial assets - restaurants).
- A big accounting firm
- May turn into a pwerful and threatening new
entrant, by going into the business consulting
market. This was done by the leading US accounting
firms, which became so powerful as to stimulate the
regulation of the authorities due to an apparent
conflict of interests (accountabts are supposed to
uphold the law, and therefore should be neutral and
not as invloved as
business consultants are).
tourism agency - May supply an
posing a major threat to local
tourism, by supplying cheap overseas vacation packages. Indeed, charter flights and tourism
packages to Turkey, Cyprus and other near
destinations offer some tough competition to
Israeli high-end hotels.
conclude, an interesting strategic discuusion may begin
with the following investigations: How may our
organization become a rising force? How can we turn into
a threatening competitor within our own market? How can
we be a powerful supplier through an unconventional
business model? How can we acheive
big client status
with dependent suppliers? How may we invade a new market and
be a major new entrant? How can we offer
an added-value alternative product/service to existing solutions
in parallel markets? Which of these direction might prove most promising?
Your future may depend on the anwsers to
- For articles on strategy and other
subjects: click here
A must-read book for managers
Chinese Market (Hebrew) / Y.
Einav / Ramot Pub.
grows ever closer to the West, and draws growing
attention in the business world. For Israeli business
people, China may represent a cheap supplier of import
goods (consumer goods), a good subcontractor of a
variety of human-labor industries (programming,
industries (plastic, metal,
etc.), and a giant client for sophisticated products
(watering systems, communication equipment, and various high-tech
products). However, in spite of the apparent
attraction of doing business with China, Israeli business
people who go there are faced with tremendous difficulties, especially because of the almost
unbridgeable cultural gap, and the Chinese's tough and stubborn attitude in negotiation, and to doing business with "westerners".
The book "Chinese
Market" attempts to bridge those gaps, and was
written with Israeli business people in mind. It achieves
its purpose, and we consider it to be
a must-read for everyone planning on operating in
China. Among other things,
it describes the though Chinese
negotiation tactics (demanding higher-than-usual expenses and stay,
and refering to time as a tactical weapon),
the behind-the-scenes political activity (making a local
representative with contacts a necessity), the Chinese's loose
interpretation of a written and signed
contract as a mere working-paper, changeable by circumstances, and
even - how to deal with their
expectation to be compensated by every negotiating Israeli
because of the failure of the Falcon
deal (even if you have nothing
to do with military
"Chinese Market" offers an in-depth view of the Chinese
business and organizational culture and mentality, and provides tried-out
solutions and tactics to negotiation in China. In
the 6 months
sinces it initial
print, it has become a best-seller, and busniness people
who used it report that it has been invaluable
in their endeavours. We, too, embrace
Methods and tools for managing innovation processes
The Reduction thinking tool is quite a surprising one - instead of adding something in order to innovate, it involves the (full or partial) elimination of one of the product or service's components, or of an apparently inferior product/service, but with unique new benefits.
The steps for performing Reduction are as follows:
1. Choose an existing product or service
2. List the components and resources of the product or service
3. Remove one of the components/resources (fully or partially)
4. Visualize the new product or service, and identify its benefits and uses
- Existing product: Book
- Components of the product: hardcover, pages, text, publisher, words, letters, chapters, ending...
- Improvements that have already been made:
Pocket books (soft cover - partial reduction of cover)
Reader's Digest - a collection of popular book synopses (partial reduction)
- A gift book "What men know about women", with blank inner pages
- Improvements that have not yet been made (as far as we know):
- Sample book – containing only the first chapters from a selection of books (if you liked the first chapter you can buy the entire book)
- A student workbook with only a back cover - the completed exercise pages may be removed
- Existing service : taxi service
- Components of the service: driver, car, seats, transport of passengers and luggage, pick-up point, desired destination, price…
- Improvements that have already been made:
- Motor-taxi service (partial reduction of car, and reduction of 3 seats)
- Free shuttle service (reduction of price - for hotel VIPs, to and from airport)
- No-passengers taxi (for package deliveries only)
- Improvements that have not yet been made (as far as we know):
- Driverless taxi (a car for rent delivered to your chosen location and picked-up wherever you choose to leave it)
Pick up from any location, with a single destination (e.g. airport)
An innovation which
surprised the world market and competitors
Accor, the owner of cheap hotels in France, faced a
problematic market and some fierce competition, and
therefore decided to make a strategic change. It
consisted of building the Formule1 hotel chain, which
offered a new previously unheard of 1-2 stars hotel
service. These hotels offered very small rooms, with minimal furniture (no wardrobes), limited service hours (12:00 to 14:00 - check-out and check-in times), no restaurant and no view. The money that was saved in these reductions was used to buy top quality beds, for maintaining the rooms meticulously clean, and for acustic isulation in the rooms - all in order to ensure that guest have a good and pleasant sleep. The price of the rooms was 90 francs, similar to other 1 star hotels, and about half the price of 2 star hotels.
Formule1 hotel chain was a great
success thanks to its innovative service-mix, and grew
bigger then the next five cheap hotels competitors
combined (!). It expanded to many other countries
as well. In addition, its set up and operation costs
were significantly lower than those of its competitors.
Formule1 hotel chain succeeded in providing unique
added-value to its costumers (good sleep) and even in expanding the market itself (it catered to truck drivers on the one hand, and business men on the other hand, which rarely attended cheap hotels before that). The process demonstrated by the chain's strategy is typical of value-innvation strategy, described in the Focus section of LaZOOZ 1.
Innovation ideas not yet realized
following ideas were developed using various thinking
tools, and do not exist at present
(to the best of our knowledge):
microwave with a smoke detector - with auto shut-down when a fire is detected (and perhaps a water sprinkler)
2. A microwave with transparent walls (esthetic and content visible from all sides)
3. A microwave with detachable inner walls - for easy cleaning
4. A microwave with a food-attachable thermostat - heating up to a desired temprature
5. A microwave with a sound sensor - halting when the popcorn stops popping
6. A microwave with
radiation leak and other malfunction warning
What's new at ZOOZ
Planning A to Z
Abraham Lincoln once said that if he was given a axe and an hour for chopping down wood in the forest, he wood spend 50 minutes sharpening the axe and ten minutes cutting the wood. How much time do you spend on planning?
offers inner-organization workshops on planning. The
workshops allow participants to become familiar
with basic planning principles (including
strategic planning and tactical planning), to practice
useful planning tools (such as SWOT and PEST analysis,
SMART goals setting, GANTT tables, task-prioritization,
backward-planning, and planning for uncertainty), and to
develop control mechanisms (such as control junctions and report channels). The workshops (usually spanning 2 days) are customizable for various management levels, and are unique due to the fact that participants develop actual workplans and control systems for their own work.
A tip on effective management
Management in Excel
Excel worksheets are normally
used for financial and accounting applications, rather for keeping track of and managing textual content. Nevertheless, we recommend using them for idea-management. To be more spsecific - for managing a "bank" of ideas - a database of future product or service innovation ideas, collected from a variety of sources - employees, costumers, competitors, suppliers and...organizational innovation workshops.
Let's suppose you have over 100
ideas for innovations (a typical output of an innovation
workshop). Where would you go from there? You should
start by giving each idea a serial number, and rating
the ideas according to relevant criteria (feasability,
expected income and profit, benefit for firm's image,
fit with overall strategy, etc.). The rating
is done by an internal innovation committee, usually comprising managers from Marketing and from R&D. You may, for instance, rate each idea from 1 (very bad) to 5 (excellent), taking into account all of the determined criteria. The rating of ideas by members of the committee (including the idea's serial number, its rating by each member, the average rating and the standard deviation) are easily done in excel.
Now, ideas are easily sorted in descending order of their average rating, and the sorted list is copied to a new sheet, labeld "Discussion". This sorted table is then supplemented with a short textual description of the ideas and these other columns: "Date of discussion", "Decision", "Responsibility", and "Due date" (see example below).
innovation committee can discuss each idea seperately
(begining with the top-rated ones), and then make
practical decisions on every idea, and move the idea to
other sheets as required (see example above):
- No Go - ideas that have been
ruled out, with the reasons fo doing so
- Check - ideas that require a specific check in
order to continue
- Form - ideas that need to be specified further
- Concept - ideas that should be examined with
market concept tests
- Go - ideas that should be
implemented, including development and
In such a
way, the entire idea bank is dynamically and easily
managed in Excel, allowing for new ideas to be added,
existing ideas to change status (=moved to a
different sheet), follow-up be done on tasks,
and preservation of the "organizational
- To download an idea
rating form (Hebrew pdf file): click here
- More information on Systemtic Innovation
workshops (including developing and screening of
ideas) is available here
advertisement and its logic
So far we
have presented in this section several patterns (or
logics) that fall into the type of the advertising
(i.e. "If you do X you'll get Y").
This time, we present a totally
different type of advertising and of sophistication.
pattern of Moral Message, the
advertiser uses the ad in order to preach and advance
core its values, that are not necessarily related to a
certain product or service it is selling. Thus, the
advertiser tries to arouse awareness and induce social
change, on the one hand, and to gain sympathy from those
who identify with the message, on the other hand.
Although the advertiser is not a political party or body
- it is saying to the readers: "Choose us (=
buy from us), and support social change".
which has been consistently using social message
since 1989, is the most prominent representative of this genre.
The amazing ad you see above, has such a sharp
and clear anti-racism message, that any comments
on it are hardly necessary. We will only point out the fact
that the message complements well the slogan
United Colors of Benetton, aimed against racism, but also indicating the
colorful clothes sold in their stores.
Another ad by Benetton, from the same year, shows
a black horse mounting a white mare. Naturally, such ads
become the talk of the day, create wide public responses
and result in excellent public relations. At the end of the day,
Benetton achieves a prominent position thanks to these ads, and
its costumers are willing to pay more to
a company that uses its
advertising budget to promote moral values.