One must contemplate the distinction between branding and rebranding. Rebranding is often miscast as an exercise in repairing one’s reputation. Some rebranding efforts focus on mitigating a negative image (such as Philip Morris’s name change to Altria or AIG’s move of their advisory business to Sagepoint). Yet rebranding may also represent subtle changes in positioning, or the recasting of visual identify, such as Starbucks recent move to a more contemporary look.

If you’re thinking about rebranding your company, bear in the mind the following considerations:

Seek out simplification-Today’s rebranding efforts are often a function of providing clarity to the marketplace and removing brand confusion. Citi’s recent rebranding removed a single word (if the word bank is in your name, it may not be a bad idea to remove it). Our cluttered market values simplicity.

Leverage Social Media from the ground up- Within our firm, we recently rebuilt our website, refreshed our brand, and printed new business cards (including a QR code). All of our marketing includes embedded social media components, with the intent of driving traffic to our website where prospects can experience various multimedia tools that are featured online.

Use emotional triggers-Google famous Parisian Love ad (when an American finds love in Paris) is a classic example of using emotional messaging to capture the imagination of your audience. All marketing should utilize emotional triggers.

Enter new markets- Pabst Blue Ribbon, perceived as an also-ran in the U.S. rebranded in China as an ultra-premium American lager (PBR) and is selling for upwards of $44 a bottle (the Chinese may not have everything figured out).

Reshape perceptions about quality-Rebranding should not appear cosmetic or contrived. Harley Davidson’s slide in perceived quality in the 80’s was magnified by stiff competition from Japanese competitors.  The company’s drastic repositioning included a return to its core products and the formation of the Harley Owners Group (HOG’s),  which reestablished Harley a bad boy brand.

Identify unmet needs- Your offer may need to change as the utility of your product or the benefits that differentiate it may shift over time.  Marketers will often use a tag line when they wish to preserve their brand equity, and point out new features or benefits.

Use professionals- Rebranding can back fire when companies draw attention to their marketing.  Many smaller companies try to utilize self service template web sites and similar home grown tools that come off as……home grown. Marketing requires constant investment. Hire people who can assist you with both messaging and technology.

Understand the hard and soft costs- Change can be expensive, given the need to reprint, re-sign, change email addresses, etc. Consider all your hard and soft costs (including management team band) with as you refresh your brand.

Organizations often under appreciate the importance of branding. In this world of hyper-competition, the way you communicate the nuances of your brand are more important than ever.

There are many ingredients required to develop and execute a successful strategy; none more important than discipline. Disruptive innovations that reshape an industry are rare. Most innovation is incremental, and successful execution is a function of hard work, time and patience.

Jeff Bezos’s insight about selling books online (which resulted in the formation of Amazon) was conceived while he worked as an analyst at an investment bank. His conversion of strategy into tactics will go down in history, as Amazon took on all the best in retailing, seemingly overnight.

Bezos remains hungry and focused. Amazon’s top 5 managers meet every Tuesday for four hours to review and rebake strategy. Not once a year, not once a quarter – every Tuesday. Twice a year his team has a two day off-site to think about “big ideas” that may require 2-3 years to implement.

Alan Kay once said, “Perspective is worth 80 IQ points.”  Where the rubber meets the road in strategy is maintaining the right perspective – the intersection of strategic thinking and tactical execution.  Business owners can easily lose perspective when they spend too much time muddled in solving day to day operational problems.

To maintain strategic discipline:

Create a strategy committee, task force or executive management team (EMT).

Each member should have a role in strategy formation and implementation and be accountable for key initiatives of the company. Meet with the EMT monthly to review progress versus goals.

Engage mid-management in strategy formation and execution

Mid-managers are often insightful in identifying latent needs as they are often closer to the customer than their senior counterparts.  Many entrepreneurial companies lack management depth. They are well served to include mid-managers in executing strategy.  Provide learning opportunities for junior managers by delegating tasks for them to complete.

Hold your teams accountable

Results oriented organizations are built from the ground up to support execution, rigorously using scorecards that drill down to individual performance. Best-in-class organizations orchestrate goal setting for individuals that align with the broader goals of the organizations.

Include outside variables in your dashboard

While most successful companies measure internal activities, few score external variables. Seek out external metrics that may be predictive of future demand. Leverage the data to plan capacity, labor, facility expansion, procurement of equipment, etc.

Bezos said, “We are willing to plant seeds and wait a long time for them to turn into trees. Every new business we’ve ever engaged in has initially been seen as a distraction by people externally and sometimes even internally.”

Great strategies convert into initiatives that become the unifying vision of the strategically successful organization. Ideas that lack resources, energy and concentration are just a distraction.

As evidenced during the Arab Spring, and earthquake in Japan, we are often unable to recognize the magnitude of events as they unfold. Such could be true of the Occupy Wall Street Movement.  Are world-wide protests an indicator of momentum into a global revolution of the people, or will it fizzle into a clash between local police and a group of poorly organized discontents? What effect will all of this have on the business climate?

Many remain skeptical. One analyst said that a friend of hers had mused that she could, “smell them through the TV.”

Yet this is no ordinary protest, and to dismiss “the movement” on its face would seem shallow and naive. Regardless of ones political leanings, we must all be conscious that the movement on Wall Street has struck a nerve on Main Street. It is clear there is a faction within America who believes that significant reforms are required, and they believe they represent 99% of Americans.  It is hard to know if Wall Street CEO’s are paying much attention, but  one must assume that legislators are watching the 6 o’clock news with some discomfort.

The most direct effect will be the influence all of this has on the Presidential election, not only in terms of the selection for President, but of the agenda, which will define his term. Seemingly, the protestors will embolden those who seek higher taxes on the rich and broader controls and regulations.  The inability for the Republican Party to provide a clear front-runner, with a populace message could only further the left’s ambitions to reallocate American wealth.

Regardless of the winner, it would appear that laissez-faire capitalism is the institution under greatest attack. There seems to be a belief that the corporation itself is an instrument for evil.  A tentacle of the movement seems to be that government should legislate or guarantee employment, a concept with deep implications for labor law, unions, and taxation.

In the year ahead, the executive branch will continue to drive on tighter regulation. While there are streams of regulations under review, some of the most noted include[i]:

• Stricter interpretation by the IRS on expenses related to meals and entertainment, and a new tax on self insured health plans.
• A revamp of the SEC, including greater oversight of “broker/dealers”.
• Labor Dept. enforcement on the use of “contractors” and more restrictions on the use of minors on farms.
• Environmental controls on “fracking” and similar activities.
• The revamp of Medicare by the “deficit panel, including the potential of extending the Medicare eligibility age.
• New rules by the Equal Employment Opportunity Commission that crack down on discrimination against disabled workers.
• The Occupational Safety and Health Administration focus on violence in the work place and protections required in “high risk” work settings.
• A push by the Consumer Financial Protection Bureau for new rules on banks offering high-interest direct deposit loans.

The spread of protests in Europe is of particular concern, as the degradation of fragile economies there could provide fuel to the fire.  Those feisty Europeans are not new to protest, and their governments are not immune to violence. One thing that is hard to reconcile is that governments (such as Greece) are completely broke, yet their residents seem to expect a preservation of services, a zero sum game for all.  The failure of banks in Europe poses a much greater threat than in the U.S. It is a situation ripening quickly.

The fact that tax rates will escalate for the wealthy is somewhat inevitable. The President is calling for an unfathomable increase in corporate tax rates to boot.  Let us hope that such impetus does not create much in the way of immediate stress on the U.S. economy in the short term.

Batten down the hatches; it could be a long winter.

And now for my very favorite quote of the year, offered by Nissan CEO Carlos Ghosn.  In reference to the Nissan Leaf, a zero emission vehicle, Ghosn said “this is the future, and everything else is going to look obsolete, like sending messages with pigeons”[i].

As Gnosh put it in an interview in Fast Company, “if you already have an emissions problem with 700 Million cars, what problems are you going to have with 2 Billion?”. In the case of Nissan, Ghosn is looking beyond the defined needs of customers and is anticipating the needs of the global market in a decade or more. It is not good enough to solve problems we can see, the strategist must seek to solve problems that are not readily apparent. To consider such scenarios, strategists must consider Social, Technological, Economic, Ecological and Political trends and consider how various combinations may change the landscape of an industry.

In my book and blog“ Intended Consequences”, I predicted remarkably volatile prices for fuel and the potential for oil to reach prices of far north of $100 a barrel. The predication which became an eventuality was based on an evaluation of “converging factors”, independent trends that combine to create a tipping point. The automobile industry is on the cusp of such a fundamental shift. Toyota has been selling the Prius since, 1997 but the initial curve for adoption was remarkably slow. What we see in evidence today are converging trends that will provide the impetus to create disruptive change in the form of rapid adoption of alternative vehicles:

Political: The U.S. government’s recent announcement of an agreement with thirteen automakers that will reset the Café fuel economy standards to require an average of 54.5 miles per gallon by 2025.[ii] The willingness of OEM’s (original equipment manufacturers), to work with the government in a race to dramatically improve fuel efficiency illustrates their understanding of radical changes in their operating environment.

Social: Shifting sensibilities towards sustainability will drive adoption. Electric cars are somewhat impractical for working people who may not have time to charge them (up to 8 hours) providing a leg up to hybrids.

Technology: The new Prius plug in will offer up to 87 miles to the gallon illustrating explosive improvement in battery technology. Many of the world’s top scientists are working on batteries that could expediently improve performance, size and cost.

Ecological: In Nissan’s case,  the rapid growth of highly polluted Asian markets is viewed as a driver for future demand. Recent disasters in the gulf and elsewhere have heightened awareness of the risks of oil exploration.

Economic: Americans are still fearful of OPEC’s influence and the ability of the cartel to manage worldwide oil prices. As battery prices decline, the value proposition of hybrids will only continue to improve, and the total cost of ownership for such vehicles will be drastically reduced.

Businesses are well advised to review such variables as to develop scenarios about their industry. It may not be possible to look into a magical crystal ball to predict the future, but careful study of trends provides us context on what products and services to develop in order to create disruption.

Many CEOs feel that they are the victims of a lackluster economy and a government that is ineffective at offering any meaningful stimulus. In fact, 79% of CEOs fear that the fundamentals of our sluggish economy will remain the same or get worse.[i]

Economists have long understood that our thinking about the economy is governed by emotion. U.S. history is riddled with periods of growth and decline steered by the mood of the nation.

My generation grew up with a relative level of stability. We are simply not accustomed to the notion of “economic uncertainty” and we are not very happy about it. As a result, we have the tendency to overreact to stimuli in the form of collective euphoria or collective despair. This emotional response explains the nature of bubbles, as we all race to adhere to the conventional wisdom of the moment.

Today’s wisdom is that we should be scared…about sluggish growth, high raw material prices, health care costs, China, the Federal deficit, taxation and lots of other things. You know our psyche is a bit fragile when people are worried about inflation and deflation at the same time.

Our thinking often crystallizes around “the economic cycle,” which is something of a misnomer. Every business participates in this broader cycle, as well as a monetary cycle, industry cycle and company life cycle. The economy itself is merely a component in a spider-web of stressors that can be triggered by a myriad of forces from around the world.

Our expectations seem unrealistic, framed during a time when banks over leveraged, real estate was overpriced and stock market multiples were in the stratosphere.

The reality is that our economy is still growing (although perhaps in tepid fashion). Forecasts are for GNP growth of 1-2% for the remainder of 2011. When our GNP is growing at 4% we are bulls, but at 2% we are bears.  This meager difference illustrates that our fear is based on perception and is somewhat irrational. It is like the fear of flying: one knows that statistically there is virtually zero chance of a crash, yet to some, the fear is quite real.

Perhaps what we really have to fear is fear itself.  We should not be scared of a 2% variance, we should embrace it. In many instances, it will be the confidence of the CEO that will drive the level of investment businesses make, which will in turn either be the impetus for growth or maintain mediocrity.

Of the CEOs recently surveyed, 41% believe that prices of their products or services will rise next year. The potential for rising raw material and energy prices in 2012 could actually be a boon to vendors who are posturing to raise prices.

It is time to reset expectations with our customers, vendors, employees and ourselves. Within this data, there is plenty of salt, but perhaps there are a few grains of sugar as well.

A good leader must exude confidence in his or her business every day. If you don’t see the value in your products and services, no one else will. When the competition is weak, it is time to attack. Let your competitors have the scarcity mindset, while you focus on the strategic gambits that will grow your business and create sustainable competitive advantage. We will get our 2% back some day—we just need to be a little patient.

[i] Vistage CEO Confidence Index

There has been the occasional business leader whose reign has been magical (Welch and Jobs come to mind).  Yet their business often fall to sustaining enterprise value after they leave. GE’s revenue and stock appreciation has been stuck in neutral since Welch’s departure, as the 20^th century’s most profitable company tries to find its way.  Apple has been trading all over the map in the last few weeks as the market tries to reconcile a world without the imagination of Jobs and his fancy gadgets.

A systemic problem for private companies is that a lack of management and bench strength.  This dearth of talent goes deeper then inhibiting productivity in the short term; it is a significant barrier to value creation for the entrepreneur.  If an exit is an objective (as is often the case), buyers generally want to see a strong management team and bench that can support future growth. If it is the business owner and his brother-in-law that possess all of the tribal knowledge (intellectual capital) about how a business operates successfully, the enterprise can lose luster with investors.

There are similar problems when one or two employees within a company are technically superior to those around them. Often, feeling their power and value, they are unwilling to teach, document, and delegate. When management and boards allow such conditions to persist, they are doing a disservice to the shareholders and are putting the company at risk.

Organizations should:

1. Require that every manager have a delegate – Identify and develop strong number twos that can eventually step in and take on the job duties of every manager. If people can’t attend conferences or go on vacation, because no one else can cover their desk, it is a sign that they have not developed the talent around them. To develop others takes time and investment including focus on performance reviews, career pathing and training.
2. Institutionalize activities, duties and best practices – Develop thorough documentation. Companies must maintain policies and procedures if they are going to be operationally excellent. When a supplier errs, it is usually because an inexperienced junior staffer doesn’t do something the way his senior counter-part would have. Often the junior staffer is criticized, even though it is their management who put them in position to fail.
3. Teach - Great leaders are usually great teachers; they aspire to develop others through daily interaction, and the sharing of information. The inability to teach is often a sign that a manager views themselves as the only person competent enough to complete certain tasks, and makes excuses as to why they can’t find other people to step up.  Great companies have development plans for every key employee, and make resources available for their continuous improvement.

Organizations that formalize these practices in their companies will maintain a long term strategic advantage over those who do. The talent war has only just begun.

Everybody likes to think of themselves as a strategic thinker.  From advisory board members, to CPA’s and marketing consultants, lots of people list “strategic planning” within their list of competencies. Yet, there is a big difference between thinking broadly about strategy and creating a functional, tangible, strategic plan.

Strategy is somewhat esoteric, and theoretical. It deals with broad decisions that must be made about a business such as what products to offer; in which markets, using which core capabilities. The carefully crafted strategic plan has tactics woven into it, in the form of goals, objectives, initiatives, and action plans.

Unfortunately, some companies have a strategy and no strategic plan (and vice versa). If the strategy is stored solely within the confines of the thinking of the entrepreneur, there is no strategic plan.

There are books written about preparing a strategic plan in an hour and writing a marketing plan out on the back of a napkin. The napkin’s evil cousin is the one page business plan, which may tout simplicity as grand, but lacks depth, scope and detail. As the thinking goes, anything as important as the future of a business (and the implications for its employees and investors) should be explained in a few paragraphs. Using the same mindset, an airline pilot’s flight plan could be drawn on a napkin.  A cancer researcher’s thesis should be able to fit on an index card. Perhaps we can cut a few corners and keep the design of that skyscraper to a minimum. Who has the time?

The other problem with the napkin analogy is that it suggests two guys sitting in a pub dreaming up the grand strategy over a Guinness. Some of history’s most ingenious strategies may have been dreamed up that way. Yet the grand strategies do not always translate into a functional strategic plan based on research, thought, prodding, challenge and development of core capabilities such as supporting human capital and technology.

Most importantly, the people who will be responsible for buying into the grand scheme need to be included in the process of developing it. If a board of advisors or two guys in a bar craft and develop the strategy void of management’s input, they are likely to sabotage it or at least slow down its momentum.

Thus, the distinction between being a closet strategist and creating a thorough strategic plan is an important one.  The finer things in life, like a great cabernet or scotch, take time. Building a strategic plan requires patience and a level of expertise that you would expect out of a CPA or intellectual capital attorney.

Take the time to convert your strategy into a tangible strategic plan that you can share with your investors, employees, vendors and even customers (when appropriate). Isn’t the future of your company worth it?

In Outliers, Malcolm Gladwell asserts that one needs to invest 10,000 hours in an activity in order to become an expert. I take solace in knowing that I am evidently both an expert in Strategic Planning, and overcoming the drama induced by teenage daughters.

The rapid escalation of global competition has brought about a new round of hyper-specialization.  The concept of specialization is nothing new; the division of labor has been a key tenant of economics since the birth of capitalism. Yet sites such as Guru or eLance, have propelled specialization to a new art form, where one can access dozens of specialists from around the world in any conceivable competency in a matter of minutes.

Specialties that do not require any special education (other than what is readily available on the internet) such as graphic arts have quickly commoditized. You can hire a graphic artist online for $15 an hour.  In cases where greater technical aptitude is required, specialists still out-earn generalists. The median Internist in the U.S. earns $176K per year, while Cardiologists earn a median of $403K (some make $800K or more). [i] If you had a heart attack, which would you see?

Perhaps the most common strategic blunder I observe within entrepreneurial companies is a penchant for addressing overly broad targets. Marketers, seeking the largest audience cast too wide a net. In their need to satisfy the largest number of prospects, they become de facto generalists. That is, instead of addressing a niche market with specific solutions, they try to satisfy a larger audience with a multitude of products and services. At some point, the value they can provide suffers from diminishing returns.

The more crowded a space, the more difficult it is to differentiate, and the greater the need for expertise. Before its bankruptcy filing, GM attempted to sell within every segment, from sub-compact to Hummer. GM experienced what is often referred to as the peanut butter effect; the wider you spread something, the thinner it gets. GM’s branding was diluted and ability to control quality constrained.

Many small businesses may employ generalists because of their lack of talent depth. To have one IT professional manage a network, build the company website, select an ERP package and fix all the desktops is an archaic paradigm worthy of recalculation.

The reason that specialists are worth more than generalists is that they have a deeper subject matter expertise that drives:[ii]

Quality-Processes replicated over time promote less deviation, less defects and fewer errors.  The specialist thinks deeply about an area of expertise in which they have experience and are less likely to make mistakes.

Speed- Specialists do not need to reinvent things. Cycle times on proposals and product delivery is faster. If a company offers 50 stock products instead of 500, they can manage less inventory and ship items quicker. For every new project outside the boundaries of a company’s expertise there is resource draining learning curve that costs time and money.

Relationships-As the specialist is highly respected, their opinions are sought after by the media and people who want to know them, hire them and refer them to others.

The realities of outsourcing and off-shoring are driven by these phenomena. It is inherently inefficient to participate in activities that are not within a firm’s core competency and do not directly contribute to the bottom line. Thus, the migration of labor (outsourcing) will rise at a fervent rate.

In fact, the entire concept of the corporation, with its multiple functional departments (such as accounting, sales and marketing, design, operations, engineering, manufacturing, etc.) is under some attack. Social norms around what constitutes a working environment are shifting quickly and enabling greater specialization. Collaboration tools make the world of work far more virtual, which will continue to feed the frenzy.

Think about how to specialize as to optimize your revenue, margin and profit.