Green: To Begin or To Become

Last week, HP made public a list of its largest suppliers as part of their annual Global Citizenship Report. According to Judy Glazer, director for HP's Global SER Operations, the greater transparency is intended “as a mechanism for accelerating the effort to raise standards across the industry.” HP hopes to create greater accountability for their vendors to become green, no doubt, in an effort to uphold HP's own environmental responsibility.

As I thought about the potential impact of this report, I couldn’t help but become skeptical over the prospect of actually catalyzing change on such a large scale. I began to wonder, is it more practical to become green starting with an existing product design, components, and manufacturing processes... or would it be easier for people like Judy Glazer to simply strike out on their own with a new start-up green business? Or, better yet (for HP, that is), for HP to spin off a new company to meet the demands of green manufacturing.

Without a doubt, starting up a new company presents many challenges of its own. But, each of these HP suppliers will have to make dramatic changes to their own well-developed products individually. Then, one must also ask the question, if HP went back to the drawing board and redesigned their products to be eco-friendly, wouldn’t their component specifications change entirely, thereby requiring a new vendor list altogether? Is reforming each individual component of an existing system without changing overall business operation really the way to bring about monumental change?

A friend of mine recently launched Symphony Motors—an electric car company in Indianapolis—and expects to have a product on the market by 2009. He is using components and suppliers that are rarely seen in the Detroit industry. Many of his engineers and vendors were dismissed from major automobile manufacturers for thinking “too creatively” and threatening to "rock the boat." Today, Symphony Motors is well on the way to being a part of what could be the biggest market disruption in history.

So, where does your company stand today? Can you become green? Or, will you go back to the drawing boards in order to begin green?

Avoiding Commoditization with Hi-Tech Solutions - Part III

Part III - What’s your company made of?

It is true most managers recognize the effect internal culture and innovative thinking have on the success a company experiences. However, it is also true many companies lack deliberately implemented strategies which connect the two. The development of an internal climate, in businesses like these, is left to chance — with an assortment of values, attitudes, and beliefs battling for supremacy. If we understand that culture plays a role in helping a company set itself apart from competitors offering similar products or services, wouldn’t it make sense to invest in its development and differentiation?

It is important to understand that innovation is more than just creativity. Hiring creative thinkers is certainly an important step in the process, but innovation requires the execution of creative ideas in profitable ways. Companies skilled at this distinguish themselves from competitors and avoid commoditization by providing customers with valuable and unique offerings. Carrying out creative ideas depends largely on the environment they are pipelined through.

World renowned innovator Google has taken steps to protect the culture they have developed. The circulation of employee happiness surveys, company-wide ski trips, and transferable stock options—which can be sold via online auction for immediate profit—are all unique benefits designed to boosts Google’s employee retention and maintain their established culture. But from a market standpoint, the net effect is a customer perception of Google that sets them far apart from their competitors.

It is also important to consider the role employees play in a company’s quest to avoid commoditization. Take Southwest Airlines for example, which provides employees with a weekly message recorded by CEO Gary Kelly, a monthly newsletter, employee spotlight awards, and a daily company news e-mail. According to Senior Vice President of Corporate Communications Ginger Hardage, the goal is to provide employees with enough knowledge and information to act like partial owners of the company and understand how their behavior contributes to customer perceptions of the company. In this case, the connection is clear. In highly competitive industries, where differentiation between competing products or services is small, employees are the “X-factor” with the ability to set your company apart.

Finally, remember the “fun factor” is important to many employees. Many successful companies have created opportunities for employees to interact and connect with each other. At Cxtec, a computer network hardware company, new hires push around a doughnut cart on the first Friday of each month in order to meet fellow employees in every department. Besides promoting an environment of improved communication and support, an approach like this also helps to strengthen a company’s internal culture by explicitly exposing new employees to the atmosphere and norms they will be part of.

The goal of any company looking to thrive in a competitive market is avoiding commoditization. Once the connection between internal culture and differentiation is made, a company can begin developing and managing the atmosphere which guides company practices on a daily basis.

Avoiding Commoditization with Hi-Tech Solutions - Part II

Part II – “Dare to be Un-Shopped”

The phone rings. “Carter and Company, this is Nick.”

“Hello,” the caller avoids pleasantries and gets right to business, “I’m trying to get quotes for…”

Calls that begin this way may invoke excitement for salesmen, but it’s a frightful indicator of a commoditized market. Last week, we looked at how customer perception is the primary factor that drives once-vibrant and profitable markets into the doldrums of price-warring competition. This week, we’ll focus on changing those perceptions and generating leads interested in your sharp mind more than your sharp pencil.

Innovation by differentiation

Distinguishing your product or service from those offered by the competition is primarily a function of marketing. Consider Starbucks, which charges considerably more for a cup of coffee than the rest of the industry. How is this elevated price accepted by the customer? Think package design, product styling, and customer experience. Starbucks hangs pendent lights over their bar and features local artists on their walls to create an environment favorable to positive customer experiences.

In high-tech markets where retail visits are rare, the sales approach itself can also be a marketing tool. For example, deliver “proposals” to potential clients instead of quotes. This allows for elaboration of the standard features of your solution sale.

Innovation by addition

The simplest method of offering a “solution” sale is to bundle services or auxiliary products with a commoditized product. Tech support and training, for example, are add-on services which are commonly offered. General Motors has effectively achieved innovation by adding On-Star to many of its vehicles.

Innovation by innovation

Finally, there is innovation by innovation alone. Companies like Apple redefine common products all the time. Their business approach results in products priced higher than comparable products and their sales are not affected. Similarly, you might recall when Autodesk realized their need for this type of innovation in the mid-90’s. Although AutoCAD had been their flagship for over 20 years, they expanded their product line through acquisition and spawned a new era of growth for the company.


Regardless of the strategy for avoiding commoditization, for manufacturers and suppliers, the desired result is the same. When a consumer perceives your product or service as beyond compare in its total offering, they won’t have the luxury of shopping it around. If you want to restore your profit margins to the levels they once had, you must dare to be un-shopped.