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How to Stop Worrying about Quiet Quitting and Turn it into an Opportunity for Growth and Change

2023-08-29T00:00:00+02:00

How to Stop Worrying about Quiet Quitting and Turn it into an Opportunity for Growth and Change

This phenomenon represents a risk for the organization, but also an opportunity for growth and change. It could be you, the person able to seize this opportunity.

Concern about the growth of the Quiet Quitting phenomenon is justified because it is growing in Italy. Gallup research on the state of work in 2023 indicates that, in the world, the majority of workers (59%) are in this state. Italy ranks second to last in Europe (37th out of 40) for employee engagement (only 5% feel engagement at work), in Gallup's research.

Even more than the minimal contribution to organizational productivity and a hindrance to change, it poses a risk because it can spread to other employees and demoralize the organization, being contagious.

Published on 2023-08-29

Quiet Quitting entered the Human Resources vocabulary at the end of the pandemic when workers returned to the office and something fundamental broke. People started questioning the meaning of life, and of their work, and began approaching their professional commitments with resignation and emotional detachment, avoiding engaging beyond the minimum.
But in some organizations, this attitude was the norm long before the pandemic.

What can you do?

Quiet Quitting is a new term for an old phenomenon. In the Anglo-Saxon world, the term "Italian Strike" refers to a work slowdown, a form of protest where employees strictly adhere to the rules and tasks explicitly stated in their contracts and refuse to do anything more.

What can you do to turn this risk into an opportunity for growth and change?

The first thing you can do is to acknowledge it and avoid judging, or falling into stereotypes. It's a phenomenon rooted in cultural change, and the responsibility to change and turn it into an opportunity lies with both the company and the employees. Assigning Quiet Quitting to the younger generations ia a harmful simplification, it should be clear that it also affects experienced employees who have lost their attachment to work, and others struggling to find satisfaction in the workplace.

In its research, Gallup suggests that a solution to the problem can be achieved by changing the leadership model, and bringing in individuals who are capable of encouraging and inspiring.
In my opinion, this approach is correct, but I believe it's a challenging path to pursue. In my experience, many managers believe that subordinates should only know the bare minimum required to complete their tasks and nothing more. Perhaps they fear their decisions might be questioned, and their authority could be undermined. This clearly is antithetical to employee engagement.
You can download Gallup's research here: State of the Global Workplace 2023

Cover of Gallup's 2023 research on the state of the global workplace

Bottom-Up Approach

What we did, with FORTYTWO, and what you can do as well, is to focus on the employees, and our experience in changing organizations from the bottom up. We learned how to change the behavior of individual people, encouraging the organization to change.

It's a wonderful experience: seeing the change in posture and expression, hearing enthusiastic discussions about projects, and witnessing the shift in the atmosphere.

The approach we adopted integrates our experience in bottom-up innovation with lessons from two important books: Drive by Daniel Pink and The Ministry of Common Sense by Martin Lindstrom. I recommend reading them, if you also want to counter the phenomenon of Quiet Quitting.

Cover of my copy of Drive by Daniel Pink

The Re-Powering Project

We start by engaging human resources to identify individuals who are no longer engaged, and understand their situation. You will need to take this step with care because you don't want people to feel judged, but rather understood. We also make sure to have the authority to have the time of these individuals available: between 5% and 10%. We don't want those participating in the project to have issues with their manager because they are dedicating time to activities that are not part of their responsibilities. This is precisely what we want to happen, given the definition of Quiet Quitting.

Now, the challenge you will have to solve is to engage and convince the people you have chosen to participate in the project. Take a moment to think. What approach would you adopt? What arguments would you use?

Engagement

We create customized communication for each individual that includes a promise, introduces the project, and asks them to commit only to having a confidential 30-minute conversation, and then decide whether to participate in the project or not.
Have you noticed that we are minimizing the use of Coercion and instead offering Autonomy and Control! Autonomy and Control are two essential factors for reclaiming one's work and generating engagement. Paradoxically, providing the possibility to choose not to participate increases the likelihood of acceptance, and asking for only a small initial commitment enhances motivation.

Now, it's possible to start the project on the right foot.

Facing the problems

Cover of my copy of The Ministry of Common Sense by Martin Lindstrom

This is the first step we take in the Re-Powering project. We invite all participants to create a list of all the issues they encounter at work, that bother them, that represent an obstacle. These are problems that the participants care about, problems that directly involve them, and that they would gladly do without. Participants are willing to make an extra effort to get rid of them. It's a primary step towards improving engagement.

This is a highly critical phase because it's necessary to gain the participants' trust, who are usually skeptical about projects and corporate initiatives they are involved in. Their perception of these events is that, even though they contribute, it's not taken seriously, and things in the company won't change anyway. It must be clear that they individually have the mandate to solve the problem they have chosen and that the company is giving them a serious opportunity that will have a follow-up.

In this phase, we assist the participants in choosing the problem to address, ensuring that they have a high probability of success.

Designing a Solution

Now that each participant has identified a problem to solve, we can move on to the next phase. In this stage, they analyze the problem, identify its characteristics, and try to understand why it arises. In most cases, the problem exists because the organization has not adapted to the changes that have occurred, and procedures, processes, and customs that no longer make sense are still in place. You must ensure that there are no insurmountable obstacles to change that would cause attempts to overcome the problem to fail. Once this is verified, the solution to the problem can be designed. Each person freely chooses the solution they consider most appropriate and, if desired, can seek opinions from other project participants.

This phase generates a lot of enthusiasm as participants take control of solving a problem that concerns them personally. They discover that they can apply their specific job-related skills in a context that goes beyond their routine, and they become passionate about the project. In fact, they themselves have chosen the problem to solve, understood its causes, and created a solution.

Understanding the Impact on the Organization

Like all changes within an organization, these solutions will also have an impact on their colleagues, managers, other departments, clients, suppliers, and more. That's why we analyze these impacts, aiming to anticipate any problems that might arise. This effort helps us understand who might be supportive of the changes introduced by the solution and who might not. It's the right time to modify the solution with the goal of avoiding insurmountable resistance that could derail the proposed solution.

In addition to increasing the likelihood of the solution's success, this phase allows participants to experience first-hand why it's so challenging to implement changes in a company, even when these changes seem beneficial at first glance.

This is a return to reality for the participants, and they should be encouraged and reassured to continue their engagement in the project.

Verifying Economic Sustainability

Now that we have identified a problem, created a solution, understood the impacts, and mitigated resistance to change, we address the topic that will be used to convince the final decision-makers: the cost of the solution and the economic benefits it will bring. We assist each participant in developing a Business Case that compares costs and revenues, establishing a breakeven point for the proposed solution, which we will submit to the Management Control for verification and validation.

During this phase, participants gain a lot of confidence. Typically, the solutions they have created are highly advantageous for the company, as most of the problems are related to unnecessary time losses, error-generating situations, redundant steps and approvals, and inefficient work tools.

This phase is exciting because individuals realize that their solution will have a significant impact on the company, and they become proud of the work they have contributed to the project. They also understand that with a strong economic argument, it will be challenging for the company to ignore their solution and not implement it.

Repowering Canvas created by FORTYTWO: recaps all the project steps. All steps have their specific Canvas.

Preparing a Persuasive Presentation

We're almost at the end, and all that's left is to put the icing on the cake. Prepare a persuasive presentation that can lead the decision-makers to adopt the solution and approve its implementation. When done well, this phase also achieves another outcome: it changes how the organization views the person proposing the change. If previously the person's supervisors and colleagues considered them unenthusiastic and argumentative, now they see someone who, aware of a problem, takes ownership of it and proposes a creative and advantageous solution for the company. This also changes the self-image of that person.

Meeting the Decision-Makers

This is the phase where the change becomes a reality. We work with human resources and ensure that we have the authorization from the management to have the time and attention of the individuals who have the power to decide and oversee the implementation of the proposed solution.

In some cases, we come to this meeting with a solution that has already been implemented because it was so advantageous, reasonable, and cost-effective that the involved parties took action instantly, and the meeting is merely a recap of what has transpired. In cases where the commitment is more significant, the approval of the decision-makers will be required to allocate the necessary resources. In any case, proposals shouldn't reach this phase incomplete, with limited economic benefit, or excessively demanding.

The Final Result

Thanks to this pragmatic approach, we are able to help between 80% and 90% of individuals regain engagement in their work, confidence in their ability to bring about change, and trust in their own capabilities. Participants learn, through practical application, how they can effect positive changes in their work environment, gaining a greater sense of control.

Conclusions

Too many individuals have distanced themselves and become disengaged from their work. Even if they do it to avoid suffering, this strategy is counterproductive as it eliminates the possibility of finding satisfaction and fulfillment in their work. It drains a significant part of life of its meaning.

In organizations experiencing low employee engagement, productivity suffers, and changes are resisted.

This is a situation where everyone loses.

As you have read, it's possible to do something to regain engagement: offer a genuine opportunity to regain control and exercise autonomy.

By following the example you've read in this article, you can succeed in reengaging individuals who had disengaged. Following the example, you can effect changes and generate economic benefits while recovering individuals, for both their well-being and the company's benefit.

You can organize a structured project like the one you've read about, or you can ask us to do it for you. We can help you transform a problem into an opportunity for growth and change.

Good luck with your work!

The best product mistery

2023-05-17T00:00:00+02:00

The Best Product Mistery

Why is product performance not enough?

One of the mysteries of business and the market is: why is this product, that has the best performance, not successful? In this piece I will tell you a true story that will help you understand something new about the value of a product, think beyond performance, and think differently about business competition. At the end of the story, we will draw conclusions, and you will gain a new point of view.

Published on 2023-05-22

The beginning

The Vallée de Joux is immersed in an uncontaminated and wild natural landscape, in the Jura mountains, in the Vaud canton of the Swiss Confederation. This valley is the cradle of an important element of Swiss identity: watchmaking. The most famous and old watch manufacturers in the world were born in the Vallée de Joux and Neuchâtel: Audemars Piguet, Blancpain, Breguet, Patek Philippe, Vacheron Constantin and Jaeger-LeCoultre . The oldest in the world is Blancpain, founded in 1735.
The craftsmanship and inventiveness of Swiss watchmakers is legendary and has helped shape the values that are attributed to Swiss products: quality and precision.

Here we are, at the end of the Second World War, and Swiss watchmaking had no rivals in the pocket and wrist watch market, also thanks to the neutrality of Switzerland which avoided the conversion of factories from civil production to war production. In the 1960s, the 1,600 Swiss watch manufacturers represented 50% of the world market; a de facto monopoly.

Patek Philippe wirstwatch
Kent Lâm

Evolution

Watch makers competed to make the most precise and accurate timekeeping watches, and the most accurate watches could have an error of 2-4 seconds a day. A clock precision relies on the ability to divide the time unit, the second, into as many parts as possible, exactly the same as with length measures. A ruler with inch notches only is less accurate than one with millimeters and less precise than a caliper with tenths of a millimeter. With clocks it is the same, only that the seconds get divided.
At the time, wristwatches were able to divide the second into 3, 4, or 5 parts and watch mechanics for finely dividing the second were more difficult to be craft.

Watch manufacturers organized, and enrolled in chronometric competitions, in order to have better commercial arguments for gaining a competitive advantage: my watch is more accurate than yours! For the purpose of comparing the competing clocks, having a higher quality time measurement was necessary, therefore the chronometric competitions were refereed by astronomical observatories, using the position of the stars as a reliable measure of time and a reference for comparing the competing timepieces.

Mauna Kea Observatory, Waimea, United States
Conner Baker

Until the day when the competition to make a more precise timepiece takes a sharp turn, and a Swiss engineer, Max Hetzel, invents a system for dividing the second into 360 parts , 100 times more than traditional mechanical systems. We are in 1954.
The system is called Accutron, and it is an electromechanical device based on the vibration of a tuning fork, such as those used to tune musical instruments. This new system will be marketed by Bulova, a US company, in October 1960 and will be used during the Apollo 15 mission. The accuracy of this movement, Accutron, is 0.8 seconds per month, about ten seconds per year : more than 100 times better than the best wristwatches of its period.

The Menace

Seiko Quartz-Astron 35SQ
Deutsches-uhrenmuseum, CC BY-SA 4.0

During the 1960s, research for improving accuracy and precision was conducted by a consortium of Swiss companies and, separately, by Seiko. The goal was to use properties of quartz to create an even more precise wristwatch and to switch from electromechanical to electronic technology. Several prototypes were introduced, until the day that changed watchmaking history.

On December 25, 1969, in Tokyo, Seiko unveiled the first quartz wristwatch: the Seiko Quartz-Astron 35SQ. Astron was able to split the second into 8192 parts, had a gold case and costed as much as a medium sized car. The first 100 pieces of this gold watch were sold in one week and made history.

A False Hope

Swiss watch makers were aware of the superiority of quartz technology for measuring time, yet they did not adopt it. At the time, mechanical watches still dominated world markets, and manufacturers were proud of their finely crafted mechanical jewelry. Furthermore, watch making mastery was part of the Swiss identity itself. They believed that new technology would not make a difference. But they were wrong.

Casio A168WA
Olga Nayda

Over time, the situation became more and more worrisome and the number of companies who were forced to close grew. Many well-known brands became insolvent and disappeared.
Between 1970 and 1983, the number of Swiss watch manufacturers went from 1,600 to 600 and the workers employed in the industry went from 90,000 to 28,000.
The situation was serious.

Meanwhile, the Japanese and the United States had deployed quartz watch mass production, and invested in research; the quartz watch market was booming

1983 will mark the nadir of Swiss watchmaking, when a group of banks appointed a consulting company for handling the liquidation of two of the largest watch manufacturing companies: ASUAG and SSIH. The banks named Nicolas Hayek responsible for this operation.

Nicolas Hayek was the founder of the consulting firm Hayek Engineering, faced a disaster: the Swiss watch industry was devastated! The two companies he was handed were flagships of Swiss industry and insolvent. SSIH, a French-Swiss company, had become arrogant and greedy. It squeezed out and consumed the value of one of his most important products: Omega. It expanded the range to make it more affordable by flooding the market with an inordinate number of models for all price points, 2,000 different models, making the product irrelevant. Then there was ASUAG a Swiss-German origin company. A manufacturing company that supplied components to everyone in the industry. When more and more small brands were going bankrupt, those knocked on ASUAG's door begging them to buy and save them, and by 1982, ASUAG owned more than 100 distinct companies.

In order to save the industry, Nicolas Hayek led the merger of ASUAG and SSIH into the new company SMH (Société de Microélectronique et d'Horlogerie), rationalizing resources use, and the organization, invested in automation, standardization of processes and components, and managed to reduce costs, increased quality, and kept production in Switzerland.
Then, Nicolas Hayek and his team, engaged into understand the situation. They produced an in-depth study to understand where they were in world markets: the Hayek Report.

A highly controversial report. The report segmented the market into 3 different levels. Out of the 500 million watches sold worldwide, 450 million were in the price range up to $75, 42 million in the price range up to $400, and 8 million in the price range over $400. Swiss watchmaking had a 0% share of the bottom market, 3% of the middle market and 97% of the luxury market. They were on the ropes!

Rebirth

Despite this, Nicolas Hayek believed that the Swiss watch industry still had a chance. It was crucial to regain a large presence on the market and to do this it was necessary to own at least one global, profitable and growing brand in every segment, including the lower-end one. Hayek had a brand available, potentially suitable for the intermediate segment: Tissot. But he had no idea about how to take care of the low-end market.

Searching through the shattered pieces of his own ramshackle kingdom, Nicholas Hayek stumbled upon an unlikely and crazy project. A project ignored by everyone, that was sketched by two engineers, Elmar Mock and Jacques Müller, under the guidance of Ernst Thomke, managing director of ETA. The project was about making a watch made out of 51 components, instead of 150, with a quartz movement and a plastic case. The watch could be built by industrial robots on an automated line.

Nicolas Hayek understood that this was the product he was looking for to take care of the lower end of the market, and introduced the project to the banks that had commissioned him. The banks, however, were not at all convinced and looked at his strategy with suspicion: it could cannibalize Tissot's market shares! Hayek and the banks managed to find a deal: the new watch would go on the market, but Hayek would have to take on a part of the risk, bringing new investors into the capital of SMH and Hayek would have to buy a majority stake, 51%.

Swatch
Analia Baggiano

This plastic quartz watch with hands will be launched on March 1, 1983 with a bombastic advertising campaign. Two years later, Swatch will sell 4 million watches, and in 1988 it will sell 50 million. The Swiss watch industry was safe! Nicholas Hayek will later change the name of the group from SMH to The Swatch Group.

Today, The Swatch Group is the largest watch company in the world!

Conclusions

There are many things to learn from this story, which I hope has inspired you, and I'd like to share what I've learned with you.

The value of a product

If you think about it, you may remember how some industry have been swept away by competition due to new technologies, better performance and lower prices and this is what was about to happen to Swiss watchmaking: the entire national industry was about to disappear. Competitors had arrived, with quartz movements, digital dials and a sub-$75 price tag. Much more precise watches than mechanical ones, at a lower price.

Try to imagine what could happen if a new product or service comes to the industry you work in, and performs 10 times better at a quarter of the price. What would happen? Yet in the case of our Swiss watchmaking story, it was not the new entrants and the new technologies that won the game, the tradition keepers did, instead. But how is this possible?

You can understand how this was possible if you visit a Swatch store and look closely at the watches on display. You will notice that, surprisingly, many of their watches have a dial that makes it difficult to read time. I, for instance, right now, am wearing the BBBLACK model, completely black: black hands, black numbers, black dial. It certainly doesn't make reading the time easier.

So what is it? In the words of Nicolas Hayek: We are not simply offering a style to people. We're delivering a message. The Swatch X Factor is a message. Swatch reinvented the watch and changed its meaning. Sure, a Swatch is able to measure time with quartz precision, but that's no longer the point, that's not the value the customer is purchasing.

The Swatch customer no longer buys a watch to know what time it is, she can look at her cell phone or computer, but she buys it for another reason and this is something that is very hard to copy. Here's how Hayek did it: he overtook the concept of performance and on top of that he built new value that is completely intangible, that cannot be measured, which cannot be captured in a precise and scientific definition. He performed a spectacular miracle.

The value of a product is defined by the perception of the people who buy it.

Competing for performance is dangerous

In a given industry, it will always be possible to find someone who performs better. Investing to outperform competitors leads to an escalation that can continues without end, and eats up a company's resources until it goes out of business. Furthermore, the offered features can be copied by competitors and make the investments for creating innovative products or services worthless.

The performance must be there, but it must not be the one and only value of the offering. The proposition must also offer immaterial, intangible value. Intangible value is almost impossible to copy.

If you liked this piece, share it because people will appreciate, and thank you.

Why we love WeTransfer

2020-08-28T00:00:00+02:00

Why we love WeTransfer

How a startup could successully bootstrap and become a leading player in the file transfer market.

Published on 2020-08-28

Everyone knows WeTransfer as a friendly cloud-based file-sharing service, and as a great startup. But after Googling around a little bit, I actually couldn’t find one good article about it. So I decided to write one.

Why should you care about the WeTransfer story? Because it’s an excellent example of how to successfully start a new business, bootstrap it, get it profitable, and fuel rapid growth. We can draw quite a few lessons from analyzing WeTransfer as an innovative service and as a great business model.

In this article, I am going to explore WeTransfer by first traveling through the service as a user (taking the customer journey) and then we will analyze it from 4 different innovation perspectives (The 4 lenses of innovation®), and finally we will draw some conclusions.

Introduction

WeTransfer was founded in 2009 by Bas Beerens, Nalden and Rinke Visser in the Netherlands.
The company and the service purpose is to help people send large, GigaByte-size files, such as movies, pictures, or music.
Today, WeTransfer has more than 30 million unique users per month, and this user base is growing at a steady clip. The service received funding of $25 million from Highland Capital Partners in February 2015.

"We love what we do and we think it shows."

WeTransfer has a clear mission: "We like to keep things simple. And so we transfer your files from A to B. Free of stress and of charge." It’s worth noting how clear and understandable their mission is. It immediately states what's in it for you: you get your files transferred for free without any stress.
Ah, and they stick to that.

Here is a snapshot of their service page.

Let’s all get on the same page by doing a customer journey.

The first thing the user sees when landing on the home page is an advertisement for the company’s paid service WeTransfer Plus. By skipping this ad the user is already on the service page. She has to accept the terms of service and the privacy policy.

Let’s imagine our user wants to check the legal stuff: she clicks on the link to try to understand what she is accepting. She lands on a friendly and entertaining page where she finds the links to the legal documents. Since she is here, she wants to read the terms of service and opens the “Terms of service” file. She finds out that the document is written in two columns: one in “legal speak” and the other in friendly and entertaining “simple speak”.

Here are some examples of what she finds:

“We treat your stuff with respect. We don’t let anyone search for anything on the website, and we only check transfers if you send us a support request.”
“Be excellent to each other, don’t transfer illegal stuff or stuff that isn’t yours.”
“We do our best to make WeTransfer tick real smooth. If anything goes wrong, we’ll run as fast as Usain Bolt to fix it.”

If you want you can find the legal documents here: https://www.wetransfer.com/legal

Ok, now our user is satisfied (and entertained) and is ready to accept the terms (otherwise we won’t be able to continue the journey. Thank you, user!).

Let’s suppose she wants to send some pictures to her mother, so she clicks the “add file” button and loads the pictures. She inputs her mother’s email and her own email address and she is ready to send her files.

While the files are loading, the interface shows a progress wheel and the background changes regularly, showing beautiful illustrations, photos and advertising.

Once the process is completed, she will receive an email stating that the file was sent. Her mother will receive an email with a download button that will take her to We Transfer. A progress wheel and a changing background with illustrations and advertising welcomes her.

Interesting insights!

Ok, now we will look at WeTransfer through Rowan Gibson’s “4 lenses of Innovation” to see if we find something interesting (and we will!).

Understanding Needs

Let’s start with the “Understanding Needs” lens.

What is truly remarkable is that our user did not have to register for the service! Normally, free services trade whatever they are offering for free in exchange for the user’s time needed to fill in forms and thinking of a password they will remember the next time they will use the service.

Not registering is valuable for the user and serves the “free of stress” part of the company’s mission statement. The only data needed to provide the service are the files, the recipient’s address and the sender’s address. That’s it. No extra work or time – or stress – for the user.

Moreover, the service is totally vertical. The purpose is to transfer files from A to B. It is not about backup; it is not about sharing; it is not about storage. After a few days the files will be deleted and no longer available. In other words, WeTransfer is addressing just one specific user need and they want to do it better and less stressful for the user than anyone else.
Here is where the confirmation email fits in: the user wants to know that the files reached their destination safely and were downloaded.

Another great insight around “Understanding Needs” is that humans want to see progress but they also get bored. Ah, and humans value beauty.
Uploading 2GB of files can take quite a time. The user wants to check how it is going from time to time and WeTransfer provides a gratifying experience with not just the progress wheel but the changing display of beautiful backgrounds – each one appearing for 45 seconds alongside advertising.

Leveraging Resources

Now let’s look at WeTransfer through the “Leveraging Resources” lens.

Here we will examine the most important resource that enables new ways of creating value for users and customers: pixel space. If we look at the service interface we notice that most of the pixels are occupied by the background. The user interface is small and out of the way at the left of the screen.

It’s the exact opposite of any other web service. Here the user interface is where the other services place their advertising! Even a minimalist user interface like Google search is placed right in the center of the user screen.

The pixel real estate is leveraged for pleasing the user with beautiful content and for pleasing the advertisers with a big dedicated space that can be leveraged to move their target. According to WeTransfer, the big size of their advertising format performs way better than any other. I believe them: that’s why I prefer watching movies in a theater rather than on my smartphone: I’m much more involved if the screen is big.

Challenging Orthodoxies

Next, let’s look at WeTransfer through the “Challenging Orthodoxies” lens and see what we can see (In fact, both of the above examples are also illustrations of challenging common ways of doing things, as I will explain below).

Let’s return to the matter of pixel real estate. WeTransfer’s advertising format challenges the status quo. The most popular digital advertising format is the medium rectangle: 300x250 pixels.

All those banner formats are placed in web pages and each displays a different brand or product. The web page is cluttered with conflicting messages all trying to attract the user’s attention and that distract the user from the content she came to see in the first place. By contrast, WeTransfer’s advertising format is the content and it is used to entertain the user while she is waiting for her file to upload. Clever!
Even the meaning of advertising is transformed from distraction into entertainment. They are leveraging the user’s waiting time.

We can also see the absence of registration as a challenge to industry orthodoxy. The orthodoxy states that if you don’t own the user, by assigning her an ID and a password, then you will lose her. Oh, really? This is what we read in WeTransfer’s Media Kit: “We have a great customer loyalty and advocacy that caused fantastic growth.”

Harnessing Trends

The last lens we want to look through is “Harnessing Trends”.

Obviously, one of the major trends today is file-sharing – and those files are getting larger and larger as our media needs evolve to include videos and TV shows, full-length movies, large amounts of high-resolution digital pictures, music files, as well as business documents such as large Powerpoints presentations or PDFs.

WeTransfer is right there when we need it – providing us with a friendly, reliable, enjoyable and stress-free way to send our files from A to B.

Another trend is the rapid growth of online advertising. Today’s advertisers are looking for ways to create meaningful online media connections with their audiences, but small banner ads on Google or other sites do not give advertisers the opportunity to stand out in a differentiated and memorable way – as they have traditionally done in offline media such as magazine advertising or billboards. WeTransfer’s large advertising space provides a way for advertisers to reach their audiences online in a format that is more effective and more coherent with their brand image.

Business Model

Let's put all toghether and summarize WeTransfer Business Model.

The Business Model is a blend of the "Multisided" and a "Freemium" patterns.
It targets two main customer segments: file transfer service users and advertisers. The file transfer users can be both free and paying users who receive different service levels.
WeTransfer serves the free user with outstanding service experience and limited transfer. On the other hand, paying customers can enjoy premium service level. For advertisers, WeTransfer offers a digital billboard targeted ads. The offer is monetized by selling premium subscriptions and selling adv real estate. We transfer partners with indie artists to offer a beautiful and unique experience.

Here is the Business Model drawn on the Business Model Canvas:

Conclusions

Together, we have analysed a great company, offering a great service we all love.

Using the perspectives of “The 4 lenses of Innovation” we have been able to unpack what’s so special about WeTransfer. We can see how they approach what could easily be just a generic service in an altogether meaningful and differentiated way:

They value the user’s time by saving her registration steps and transforming her boring waiting time into entertainment time.
They serve the user by committing to their focused and bold mission: being the best and least stressful free transfer service in the world.
They please their customers - and their advertisers - by offering a billboard-size advertising format. A unique offer in the digital advertising industry.
The growing file sharing trend assures that their service will still be relevant in the future.

We can unpack our own businesses in the same way, too.
We can look at our products and services through different perspectives and find out how to make them more relevant and valuable to customers – using the resources we already have – and how to differentiate our offerings from the competition in ways that are not just highly relevant for today’s customers but also positioned to take advantage of future trends.

Links

WeTransfer home page: https://wetransfer.com/

WeTransfer advertise page where you can download their beautiful media kit: https://ideas.bywetransfer.com/category/advertising

The 4 lenses of innovation page where you can download a free sample chapter http://www.4lenses.it/en/

A clever IoT and data driven Business Model

2019-03-12T00:00:00+01:00

A clever IoT and Data Driven Business Model

How a home automation company went from start up to world class

Published on 2019-03-21

Netatmo weather station with accessories.

Photos: Masaki Okumura, Marion Leflour and Fred Raynaud

Arguably anyone knows the Internet of Things (IoT) can transform your business model and that “data is value”. Read on to discover one of the smartest Internet of Things and Data Driven Business Models.

You will discover that IoT is not all about predictive maintenance, the importance of setting a clear strategy before connecting your products, and which blocks of your business model you should focus on when thinking about connecting your products.

Netatmo - a French company founded in 2011 by Fred Potter and Jean-Pierre Dumolard - is all about home automation. Here is how their mission statement goes by:

“We develop groundbreaking, intuitive and beautifully-designed connected consumer electronics. Truly smart, our innovative products provide a seamless experience that helps users create a safer, healthier and more comfortable home.
We carefully design the mechanics, electronics and embedded software of all our products to the highest standards. Our mobile and web applications are designed to be simple to operate, yet deliver a rich user experience.”

To date, the company employs nearly 225 persons of which 130 are engineers and generates annual sales around €45 million. Netatmo manages 1.3 million active connected products. Netatmo announced late in 2018 that they will be acquired by Legrand group a company in the electrical and digital building infrastructure business, present in 90 countries selling more than €5.5 billion.

Here I portray the business model of their Smart Home Weather Station.

Netatmo weather station: internal and external modules.

Photos: Masaki Okumura, Marion Leflour and Fred Raynaud

Now, let’s get into Netatmo’s cunning business model!

Customer segments and Value proposition

Netatmo’s weather station is a consumer product. It’s a product that suits a person like me, and you. With Netatmo’s weather station we can monitor our home’s temperature and air quality as well as outdoor.

Both units, home and outdoor, are designed by Philippe Starck and are minimalistic, easy to use, beautiful and they fit in a home environment. The weather stations measure temperature, humidity, CO2, air quality, sound level and barometric pressure. The stations send the data to the cloud, and we can view the data in real time from our smartphone and computer.

It is at this point that the connected product creates value for other customer segments. First off: the weather forecast companies. Those companies can benefit from high frequency ultra local weather data for meeting the needs of special customers. Netatmo receives data from weather stations globally. Looking at their weather map online, you can find weather stations from the Svalbard Islands to Cape Town. Netatmo has built one of the largest weather station network on the planet.

Channels

Take the case of Mary who buys the weather station online or in a consumer electronics store, yet the connected product enables new interesting channels. To use the weather station, Mary, needs to register to Netatmo’s platform to access her weather and home data from her computer or smartphone. When Mary opens up her app on the smartphone, she notices a red dot on the menu. It’s signaling that something is happening in the news section, such as a smart smoke sensor advertisement or a voucher for Father’s Day.

Moreover, the connected product creates a channel that can be offered to Netatmo partners and enables them to deliver value to Mary. For instance, the weather station is used by Velux - the notorious electric shades market leader - to drive their roof windows. Using the data coming from the CO2, air quality, humidity and temperature sensors the roof windows can change the air and shade at home.

Customer Relationship

For the customer, connecting the product, also represent a new type of relationship, compared to a non connected weather station. The connection enables direct and fast customer support and access to manuals, FAQ and videos that help the user to get the most out of his product and receive quick assistance to fix problems.

Netatmo weather station Business Model

Revenue Streams

The weather station is sold in consumer electronics stores and through the dedicated online store, generating the usual product related revenue streams. Further, with connecting the product, new revenue opportunities arise. The first stream is generated by selling the weather data, and the second one is generated providing the cloud infrastructure to partners and customers. So that the business benefits both from transaction revenues, from selling the products and recurring revenues from selling data and infrastructure.

This also helps selling the weather station at an affordable price of €170 which in turn contributes to the network with more weather stations in a positively reinforcing circle.

Key Resources

Now the installed base and the actively connected products, represent a tangible asset that creates value. The company can take advantage of the direct channel and relationship with the customer to cross-sell and up-sell. On the other side, the size of the installed base is linked directly to the value of the data and to the value it can provide to partners.

Another key asset is the infrastructure and its API which enable many opportunities for creating value for partners and enterprise customers.

Key Activities

Owing to the connection, taking care of the relationship with the customer, designing the user experience and data skills are very important. Netatmo has a real time feedback about how and when the user interacts with the product, enabling the fine-tuning and improvement of the product and the user experience. Thus, greatly reducing the risk of failure in introducing new features and creating new products. Data collection, storage, analysis, synthesis and display are also crucial for delivering value to all the customer segments.

Key Partners

The connected product is a real “foot in the door” for mutually fruitful partnerships with other home automation companies. In the Channels section you could see how it plays an important part of the partnership with Velux, which promotes sales of the weather station along with the motorized roof windows.

It is worth noting that Netatmo has a high ratio of engineers to employees. A strategic decision to own the technical knowledge to ensure the long term sustainability and growth of this business model.

Cost Structure

Here we will find additional costs compared to a plain product cost structure. This is the reason why you need to have a clear strategy in mind about how, by connecting your product, you will create value for your existing customer segments and better more how you will create new customer segments.

On the bright side, you can look at Netatmo from a different perspective. Imagine it was a weather data company. Its business model would be more than clever.

Take a conventional weather company who would have the ambition of creating a worldwide network of weather sensors. This company would have to think about building and deploying a great number of weather sensors and then connect them and manage the infrastructure. A costly upfront investment. The financial architecture would have to account for covering the investment and the operation costs through recurring revenues generated by selling the data. A risky business.

Netatmo, on the contrary, relies on the weather enthusiasts for buying the sensors, thus financing the deployment, while also cashing recurring revenues for the data; as if Google sold the cars for mapping the world’s routes for Google Maps, instead of buying them and paying drivers to drive the cars through the streets of the planet.

Netatmo weather station connection strategy

Conclusion

The Netatmo Smart Home Weather Station’s Business Model cleverly exploit the opportunities of connecting the product to create a valuable network of weather sensors. First it could enrich its customer segments portfolio beyond the weather enthusiast and reach weather forecasters, energy companies, home appliance companies … Then you have seen how it could put to good use the new channel created by the connection for up selling, cross selling, and providing a channel for their partners and enterprise customers. Furthermore, the connection represents a valuable way to create a fast and satisfying customer relation. Then how Netatmo enjoys a variety of revenue streams with different properties in terms of volume and timing. In the key resources block they have created new valuable assets and in the key activities they need special competences. In the key partners block they could create new win win deals and they limited outsourcing for owning valuable knowledge. Last in the cost structure you could see how clever their business model is.

So here are a few key points to bring home:

Key Points
The internet of things (IoT) is not only useful for predictive maintenance, but assists in exploring new business opportunities.
A clever IoT business model enables a data driven business model for cashing recurrent revenues.
Before connecting a product, it’s wise to have a clear business model; it’s useful to offset the extra costs. Have a strategy before connecting a product.
When connecting a product look for opportunities of creating new channels and building close and effective customer relationships.
Look out for opportunities for building mutually fruitful partnerships enabled by the infrastructure.

The 16 billion euro business model

2014-12-17T11:35:04+01:00

The 16 billion euro business model

Somewhere this Business Model generated 16 billion worth of euros. It’s astonishing. Which factors made that difference? Read on. Make possible, the impossible.

Imagine being a small Italian clothing manufacturer. Your factory makes clothes for everyone, you have an affordable price, sold to the public through mono brand shops. Now imagine that you want to get better results and go global. What would you do? Think about it …
Would you move the production to a low wages country? Would you increase advertising? Would you create a franchise? Right. You’ve chosen. What method did you employ?

Take a step into number one’s Business Model

Let’s take a real example how the number one‘s business model, the best in the world. Then we will start to ask ourselves: why? We’ll discover important things driving a successful business development.

A few lines about a company who knows a thing or two in clothing. It’s Inditex. ( and Here is Forbes list of the world’s biggest companies )

Inditex has humble origins. The story starts in Spain in 1963. Where Inditex was just a clothing manufacturer.

In 1975 the first Zara shop is opened. Between 1976 and 1983 nine new Zara shops open in Spain. The eighties are a hard time for textile and 40% of the workforce will loose it’s job in Europe. This is the moment when the most powerful business model in clothing is born. May 23rd 2001: Inditex goes public. At the time I am writing this post the shares are worth 523% in respect of the initial value. From 2000 to 2013 sales and profits grew 8 fold: in 2013 it was 16.7 billion euros sales and 2.4 billion profits. In 2013 Amancio Ortega, the founder, was the 3rd richest man on the planet. The future, for him, is still bright.

If you want to explore what’s in it for you, read on again, the top line.

The Business Model

Customers

Inditex's Business Model is about the mass market. Customers are mostly women, though the offer for men isn't missing.

Value Proposition

Inditex actually has a wide offer thanks to it's numerous brands: Zara, Massimo Dutti, Bershka, Stradivarius, Oysho, Uterque, Pull and Bear.
Those brands all have in common the offer of trendy clothing. Fashionable, the collections change very frequently. Prices are affordable.

Channels

Inditex leverages two main channels. The shops and the online channel, which is recent (2007).

Customer Relationships

The main relationships mean is the mono brand shop. The shops follow the specific brand format and are thought as an advertising and branding media. Inditex's shops are located in the center of big cities around the world. Today the relationship is also managed online. Inditex doesn't advertise.

Revenue Streams

Inditex generates revenues selling it's products at affordable prices.

Key Resources

Inditex's key resources are: the shops, owned by Inditex, and the production and logistics plants.

Key Activities

Key activities are interdependent. By one side, Inditex is very clever at discovering trends. On the other side it's very fast at creating, producing, delivering always new clothes. The production model is Lean.

Key Partners

Inditex tends to keep strict control over it's production chain. It leverage less on outsourcing than the competitors. Key partners are geographically near to Inditex.

Cost Structure

Inditex doesn't advertise, so no adv costs. Inditex has low prodution costs since it follows the Lean production model. Inditex has low inventory, less unsold garments. It doesn't employ stylists, design is done internally.

How it works?

This Business Model is born out of a precise strategic choice: to offer the customer the clothes she wants, when she wants them. It seems bullshit, but this choice leads to consequences that have made Inditex the best in the world. The fact is that, beyond saying it, they believe in it and they do it. For Inditex, speed is the number one priority above and beyond even production costs.

The strategic choice to offer clothes the customer wants, when she wants them, has led Inditex to adopt the Lean approach to prodution. To speak, it's Toyota's approach. The one that brings to continuous improvement, small production batches, and pull logic. Pull logic is the one that mandates starting producing an item only if it has been requested by the customer: only when the order arrives. For instance, Dell produces a laptop only after the customer has bought it. The same for Inditex. They produce clothes only when it's shops request them and make an order. Inditex is able to ship and deliver in 24 hours from the order in Europe and in 48 hours in the rest of the world. On average, a shop receives new goods and new clothing models twice a week. This explains why, for Inditex, it is important to keep a tight control over all the production process. In fact the group owns the majority of the production plants, raw materials included. The partners that saw and finish Inditex's garments, are in general geographically near to Inditex's headqarters and they receive almost all the raw materials from Inditex. So we have better explained why, in the key resources block, there are production and logistics. H&M, who is a competitor and is the second in the world, doesn't produce the garment it sells. Another important feature of the Lean approach are the small prodution batches. Every collection is produced in small quantities, then when a collection doesn't sell, because the customer doesn't like it, the inventories are low. Only 15% - 20% of Inditex products are marked down, as opposed to 45% of H&M.

Small production batches are also key to producing much more collections so that the garments are always new and aligned with trends. In 2013 Inditex created more than 50,000 garments, designed by 500 designers, inspired by major trends and by customer feedback. The competitor's average is 1,200.

The most important consequences are that customers are tempted to visit the shops more often because there are always new collections and garments. Moreover the customer learns that she should immediately buy the garment she likes. In fact, because of the small production batches and of frequent collections, the garment that the customer is trying today will probably be sold out in two weeks never be sold anymore.

This is an important point for understanding Inditex's success. The customers visit the shops more often, from 4 to 5 times more often than competitor's average, and they buy more under the pressure of scarcity: I buy the garment I like now because in few days it will be sold out.

Inditex's second key resource are the shops. Almost all are owned by the group. At the end of 2013 Inditex owned 6,340 shops, that in general are located in the center of big cities, and 832 shops in franchise. Why are the shops important for Inditex? Obviously for selling the products, so we find them also in the Channels block, but also because they are the main customer relationship channel and Inditex wants to keep a strong control over it. For Inditex, the shops are the main sensor of customers taste and trends. The collections are relentlessly adapted according to sales results measured at the shop and according to customer feedback. All the information gathered in the shop are communicated to the headquarter, where existing collections are modified and new ones are created.

Adopting this point of view, it is clear how the e-commerce fits into the strategy and into the Business Model. They represent another source for collecting information about trends. E-commerce statistics help learn what's liked with higher accuracy. Moreover, both shops and e-commerce are considered by Inditex as an advertising channel. The only one. Inditex doesn't advertise. No billboards, no adv in the magazines, no tv spots. It's a cost brought down to zero.

(Link to Inditex's investor relations page)

Conclusion

Now that we have understood the meaning of Inditex's Business Model, it's time to draw some lesson. The first lesson to learn is that the Business Model should come from the mission, the purpose of Inditex: "To offer the customer the clothes she wants, when she wants them". Choosing the Lean approach, choosing to own the production and logistics plants, choosing to own the shops, etc. are a consequence, that serves the mission. Also choosing not to advertise is coherent with Inditex's purpose. It doesn't make sense trying to push garments, and influence the public's taste, when your purpose is to understand which are the customer's tastes. Inditex's CEO says that their Business Model is the opposite of the traditional one. The traditional model is to design the collections in advance, usually 12 months earlier, and then try to sell the garments whether or not the customer like them. Inditex, first of all, tries to understand what is liked, then designs it, then produces it, then sells it. Fast.

The second lesson is that Inditex Business Model is hard to copy. Inditex success is sensational and in plain sight. But competitors are not copying it. Why is it hard? Because Inditex does somethin new and different from the competition also in the left hand side of the Business Model Canvas: Key Resources, Key Activities, Key Partners and Costs. Those blocks are their barrier to entry.

The third lesson is that Inditex does something new in almost all the Business Model Canvas blocks. But the strength of the model doesn't rely on product innovation. On the contrary, the garments are the less innovative thing of all, actually they are copied from trends and by consequence also from competitor's garments. The innovation in the Value Proposition, in Inditex's business model, relies on other factors. In the Business Model Canvas, the Value Proposition means much more than the product.

The fourth lesson is that relocation and outsourcing aren't necessarily useful. To commit production to partners or relocate production in low wages countries does mean lose direct control on part of the value chain and can be detrimental.

The fifth and last lesson is that it is possible to build a business model that leads your company, your business, to be the number one in the world. Even in your country. Inditex started from Spain in the Galicia region, where there is nothing exceptional, on the contrary. You too can do it.

Good Business Modeling to Everyone

The Business Model explained to my Grandmother

2011-05-10T17:08:56+02:00

The Business Model explained to my grandmother

What is a Business Model? Why is it important? Explained in a simple and useful way so to better understand the world we live in.

The business model tells how a company's economics works.

It is not only useful for companies. We all have an economic model; we earn money by selling our skills and we spend money for our needs. We are small businesses too.

Why is it important to know what's a Business Model?
Because it helps us better understand the world we live in. For instance: why do phone companies give us a phone for 1 €?The phone certainly costs more than € 1. The telephone company is selling us a phone at a price below the cost. They lose money. It's their business model: to lose a bit of money now, and then earn money later, thanks to our phone calls and internet traffic.

Here is a brief presentation that explains, in a simple way, what Business Model is. The presentation shows a method for, simply and quickly, sketching out a business model. The sketch fits all in a single sheet of paper! This tool is called: Business Model Canvas.

The Business Model Explained to my Grandmother from Ugo Mendes Donelli

Who uses the Business Model Canvas?
The Business Model Canvas and other tools for business model innovation are used by IBM, ABB, Ericsson, 3M, ... The Business Model Canvas, and other tools, have been invented and published by Alexander Osterwalder and are spreading through the world.

What can we do now that we know what a Business Model is?
We can download the template of the Business Model Canvas here. The template is designed to be printed in large format and is perfect for writing and drawing on it. We can use it for describing our business model, our company's, competition's, etc.. We can use it to sketch our project's business model.

If you want to know more about the business model, you can contact us to arrange a workshop or to design and innovate your business model: info@hugowiz.it

I recommend you to buy the book by Alexander Osterwalder: Business Model Generation. You can download 70 pages from the book here.

Here are some useful links about this topic:

Alexander Osterwalder's Blog
Alexander Osterwalder's site Book's
web site and application for iPad

2011-05-10 17:08:56, Ugo Mendes Donelli

Hugowiz

How to Stop Worrying about Quiet Quitting and Turn it into an Opportunity for Growth and Change

How to Stop Worrying about Quiet Quitting and Turn it into an Opportunity for Growth and Change

What can you do?

Bottom-Up Approach

The Re-Powering Project

Engagement

Facing the problems

Designing a Solution

Understanding the Impact on the Organization

Verifying Economic Sustainability

Preparing a Persuasive Presentation

Meeting the Decision-Makers

The Final Result

Conclusions

The best product mistery

The Best Product Mistery

The beginning

Evolution

The Menace

A False Hope

Rebirth

Conclusions

The value of a product

Competing for performance is dangerous

Why we love WeTransfer

Why we love WeTransfer

Introduction

Let’s all get on the same page by doing a customer journey.

Interesting insights!

Understanding Needs

Leveraging Resources

Challenging Orthodoxies

Harnessing Trends

Business Model

Conclusions

Links

A clever IoT and data driven Business Model

A clever IoT and Data Driven Business Model

Netatmo weather station with accessories.

Netatmo weather station: internal and external modules.

Customer segments and Value proposition

Channels

Customer Relationship

Netatmo weather station Business Model

Revenue Streams

Key Resources

Key Activities

Key Partners

Cost Structure

Netatmo weather station connection strategy

Conclusion

Key Points

The 16 billion euro business model

Take a step into number one’s Business Model

The Business Model

Customers

Value Proposition

Channels

Customer Relationships

Revenue Streams

Key Resources

Key Activities

Key Partners

Cost Structure

How it works?

Conclusion

The Business Model explained to my Grandmother