Tuesday, February 19, 2008

Facebook - A Disruptive Innovation


In the last couple of years, Facebook has gone from a college photo-sharing site to a burgeoning business- networking platform for self-promotion, advertising and multimedia interaction. With new apps and add-ons, Facebook users can send each other a virtual drink, create and host events, advertise their businesses through social ads, and more.

There are now over 66 million “active” users, with an average of 250,000 new registrations per day. Facebook claims over 65 billion pages views per month, and that people spend an average of 20 minutes on the site every day.Recently, Facebook began working on translating the site into different languages in order to make the site available internationally. This will increase its reach to more global audiences, and make it even more valuable target for marketing campaigns.

According to Hitwise, over 72% of all U.S. social network traffic in 2007 went to MySpace. Although, Facebook’s traffic increased 50% last year and MySpace traffic decreased 8%, these numbers remind us of there is still tremendous value in MySpace and its eyeball reach.One of the questions we are often asked in supporting our clients develop stronger business innovation strategies leveraging social mediated technologies is how do we make sense of how these new toolkits can be applied to reach our customers, employees and suppliers differently.

Facebook is one of literally thousands of social networking toolkits, Linked IN, Google’s opensocial, Twitter, Spock etc…all are examples of potential social networking solutions. It is important to have an overall strategy and architecture vision to ensure you are using

Below is an excerpt from the Facebook 100 tools and Tips to Tap the Facebook Customer that we thought was exceptionally, good published on January 23, 2008 by the Editors of CRM.Why Facebook?Why has Facebook become the go-to networking site for marketers? Check out these articles to read up on the rise of this networking giant.
1. Inside Facebook: This blog is devoted to “tracking Facebook and the Facebook Platform.” You’ll find useful stats, marketing tips and more.
2. Facebook’s Ads Page: This page explains how Facebook provides business owners with self-service solutions, market-research solutions and integrated solutions when it comes to advertising.
3. Should You Advertise on Facebook?: This article helps U.K.-based businesses decide whether or not they should advertise on Facebook.
4. The Value of Facebook: Even in its earlier days, Facebook was considered a hot commodity in the industry. This post uncovers why there’s good reason for all the hype.
5. What’s the Big Deal About Facebook’s Social Ads?: This article discusses why Facebook’s social ads are such a hit.
6. $240 Million! Think of All the Beer We Can Buy!: When Microsoft shows a $240 million interest in your company, you know you’ve made it. Advertisers will also want to take note.
7.Why Is Facebook Suddenly So Popular Among We Geezers?: A CNET blogger wonders how Facebook’s popularity has stretched from its original base of the under-25 crowd.
8. Ten Reasons Why Facebook Is So Popular: This tongue-in-cheek article explains exactly why Facebook is such a popular site.
9. How Did Facebook Become So Popular?: This blogger tracks Facebook’s rise to social-networking stardom and its technique of “utilizing one of the most powerful viral marketing strategies ever conceived.”
10. Facebook: More Popular Than Porn: Time magazine’s Web site discovers that Facebook is more popular than porn sites among college students.
11.Fifteen Reasons Facebook May Be Worth $15 Billion: Back when Microsoft decided to invest $240 million in Facebook, it also declared the social-networking site to be worth around $15 billion total. The reasons for the site’s popularity still hold true in 2008.
12. The Impact of Facebook’s Platform: This article from ReadWriteWeb compares Facebook founder Mark Zuckerberg to a young Steve Jobs and applauds Facebook for opening up its company to developers and advertisers.AdvertisingLearn about current and future advertising opportunities on Facebook by reading these posts.
13. Sponsored Groups: Sponsor your own group on Facebook by purchasing a link that hosts ad content, message boards and more.
14. Mini-Feed: When it first came out, members weren’t sure if they wanted to be updated each time a friend added new photos, changed their status or even wrote on someone else’s Wall. As an advertiser, though, you can track your Mini-Feed to find out what your friends have been up to and more closely study your target audience.
15.AceBucks: Facebook users earn AceBucks by playing games and taking surveys, then cashing them in for real-life prizes like Wii systems and iPods. Create your own survey or game to promote your business, then invite others to play.
16.Five Moneymaking Opportunities on Facebook: Mashable! lists several moneymaking strategies available on Facebook, advertising and otherwise.
17.Facebook’s Secret Rate Card: This article explores which Facebook advertising methods are worth your money and effort, and which aren’t.
18. Could Facebook Change Web Advertising?: Listen to this NPR (National Public Radio) report to uncover the newest trends in Web advertising.
19.How to Effectively Advertise on Facebook: Trendcatching’s post explores some of the more lucrative strategies advertisers have used to tap into the Facebook market.
20.How Does Facebook Figure into Your Online Advertising Campaign?: This article is a must-read for business owners who are thinking about incorporating Facebook marketing into their own advertising campaigns.
21.Social Networks Find Ways to Monetize User Data: Learn how to make money off of your Facebook friends (it’s not as sleazy as it sounds) with the tips and analyses provided here.
22.Digging into Facebook’s Ad Future: CNET News.com believes that Facebook has the capabilities to become an “advertiser’s paradise,” despite some social-networking sites’ inability to make serious profits.
23.Promote Your Cause on Facebook in Six Easy Steps: TechSoup shows nonprofits how to use Facebook for self-promotion.
24.Facebook Ads: Facebook’s official advertising page strives to prove how social ads, profile pages and paid ads can increase a company’s business.
25. Free Marketing OpportunitiesThe beauty of using Facebook as a marketing tool comes from the endless ways in which you can advertise your business for free. Once you’ve set up a free account, use your creativity to maximize these features.
26.Profile Page: All Facebook members get their own profile page when they sign up. Use this as your canvas to upload pictures, logos and other information about your company.
27.Groups: Use the site’s Groups feature to network with your target audience. You can join existing groups or create one just for your business to amp up the buzz about its services.
28.Facebook Marketplace: College kids use the site’s Marketplace to scout out used couches and find roommates, but a savvy business owner can advertise services and product sales, as well as search for new employees.
29.Networks: Ignoring the Networks question when you create your company’s profile could lose it a lot of business. List your business’s city, industry, neighborhood and any other relevant information to let potential customers and business partners know where they can find you.
30.Facebook Badge: Facebook describes its Badge feature as “a customizable way to share your Facebook information on other Web sites.” Creating your own Badge will link Facebook friends to your company’s Web site.
31.Events: Instead of printing out flyers and mailers the next time you want to advertise an event, use the free Facebook Events app to get the word out.
32.FunWall: Mass emails are so yesteryear. If you want to keep in close contact with your Facebook friends, use the FunWall to create a message or send a greeting to everyone at once.
33.Top Friends Network: Reward your top friends by sending them a virtual drink or writing on their FunWalls. As a marketing tool, the Top Friends network serves as another way to group your contacts, keep an eye on your target demographic, and quickly and effectively reach out to your company’s best customers.
34.Inbox: Send secure, private messages to your clients on Facebook with the Inbox app. You can still send out mass messages, but only to the contacts you select.Notes: Mashable! calls Facebook’s Notes application a blogging feature because of the way users post links, messages, photos and other information that they want to share with friends. Even if you maintain a blog elsewhere, give your Facebook friends an exclusive peek into your company’s news and behind-the-scenes schedule by posting here.
35.Contact Importer: The contact importer helps you “find your friends on Facebook.” If you want to find out if your clients or other work-related contacts use Facebook but think it’s a little lame to come right out and ask, upload your contacts from AIM, Gmail, Outlook, Apple Mail and more to find out if they’re online.
36.Share Partners: When you publish updates to your company blog or Web site, add the link or a link and a photo to your Facebook profile using the Share Partners app.
37.Tools and ApplicationsFacebook add-ons allow you to customize your profile page and build up virtual relationships with clients and customers. Check out these tools and applications that will give your marketing plan a boost.
38.Facebook Social Ads: Pinpoint your company’s Facebook friends and friend wannabes by creating a social ad that reveals itself to visitors of your profile and friends of friends of friends … you get the idea.
39.Facebook Pages: A more business-savvy name for Profile, the Facebook Page now includes all kinds of add-ons so that you can post videos, logos, pictures and other marketing info.
40.Facebook Polls: Businesses can effectively find out what their target audiences are thinking by utilizing this polling service on Facebook.
41.Facebook Beacon: Connect your company’s Web site to your customers’ Facebook profiles with the Beacon action alerts. By integrating just three lines of code, your customers can choose to let their friends see what they viewed and bought on your company’s Web site and more.
42.Facebook Insights: Through charts and mapping devices, companies can accurately track their “presence and promotion on Facebook.”
43.Facebook Platform: If you want stand out from the thousands of other Facebook advertisers, create your own tools and applications with Platform. This system helps Facebook users design interactive apps so that visitors and friends can easily explore what your company has to offer.
44.FeedBurner: Advertise your company’s blog or podcast with the FeedBurner app for Facebook. A feed will appear on your profile, so visitors to your page are instantly updated with new postings, videos and more.
45.Gydget: Small companies, bands, nonprofit groups and other organizations should try out Gydget, “a stand-alone viral-promotions tool” that you can add to your Facebook page and also encourage others to integrate with their own pages Update fans and clients with details about upcoming events, networking opportunities, sales and product launches.
46.Ether: Charge by the phone call when you list your Ether number on Facebook with this ingenious app. By adding the button to your Facebook page, you can advertise your expertise and invite friends to call you for advice.
47.Jobster: Attract new talent from the Facebook pool by integrating a Jobster button with your profile. Your company can build its own job network, submit a listing in the Jobster network and more.
48.QOOP: QOOP helps you create promotional items like T-shirts and mugs from digital photos. Facebook users can use the QOOP app to share the items by letting friends view and purchase your marketing creations.
49.Oodle Classifieds: Organize your company’s advertisements, job postings and classifieds on Facebook with the Oodle app.
50. Targeting the Right DemographicBefore you decide to tackle the entire Facebook market, try narrowing down your strategy by researching each of Facebook’s demographics.
51Big Brands and Facebook: Demographics, Case Studies and Best Practices: This slideshow from Forrester breaks down Facebook’s primary demographics by age, country and other dividers to give advertisers insight into effective marketing campaigns.
52.Facebook Polls Launches Tonight: Marketing Research Paradise: This article details the ways in which Facebook’s Polls app can help your company get in touch with its target demographic.
53.Could Facebook Become the New MySpace: Many have speculated over the relationship between Facebook and MySpace.com, and this article explores the specific demographics of each.
54.Facebook by the Numbers: This article is from May 2007, but readers can still use the post as a guide to study Facebook’s age demographics.
55.Facebook Users Up 89 Percent Over Last Year; Demographic Shift: Find out how Facebook’s overall demographic has changed from its inception to today.
56.Facebook’s Most Popular Apps So Far: Want to know where to slip in ads and find your company’s audience? Find out which apps people are using the most on Facebook.
57.Facebook Goes Beyond College, High School Markets: Even if your company’s target audience isn’t made up of college students, Facebook is still a viable marketing platform. This article explains why.
58.Facebook Market Research Secrets: Discover the sneaky way to perform market research by using Facebook’s tools.
59.Facebook: The Future of Market Research?: This market research analysis holds that “sites [like Facebook] are providing useful business solutions not only to advertisers, but also to market research companies and marketing services companies.” Read the whole article to find out why.
60.Facebook Provides Fascinating Glimpse Into Society, Media Demographics: This analysis of Facebook’s advertisers also gives tips on how to look for marketing clues from your target audience.
61.Social-Networking Demographics: This article tracks the general demographic stats of social networking sites like Facebook.
62.Exercise for the Reader: Facebook Member Stats: The author of this post decided “to pull together some stats on relative numbers of members from each country.” Find out the results by reading the entire article.
63.How-to GuidesFollow these how-to guides to navigate the limitless marketing possibilities and tailor your own Facebook marketing strategy.
64.Six Ways to Market on Facebook: This article should help those business owners who are still relatively new to the Facebook world. Simple tips include “host an event and post it” and “post news articles.”
65.Inside//Out: Facebook: This blogger gives great tips on how to effectively market your company on Facebook without disrupting the advertiser-customer relationship.
66.Tips to Marketing on Facebook: Writer Janet Meiners considers some of the basic but effective marketing tools that Facebook has to offer.
67.Facebook Marketing. It Can Be a Good Thing: BusinessWeek’s article about Facebook marketing considers the pros and cons of placing ads on the networking site.
68.Eight Marketing Ideas from Facebook Groups: The Influential Marketing Blog dissects seven different Facebook groups and general event groups to find out what works and what doesn’t when promoting your event or business.
69.Ten Killer Facebook Marketing Tips: From sending virtual gifts to adding friends, this article explains why certain Facebook actions are great self-promoters.
70.Facebook Usage and Marketing: Check out this guide for tips on how to make Facebook’s apps work for you and your business.
71.How to Create a Successful Facebook Group: If your business wants to create a group on Facebook to reach a bigger audience, use these tips to gain a large following of fans.
72.Target Niche Audiences With Facebook Advertising: AllBusiness.com publishes this post to help advertisers understand the pros and cons of using Facebook as a marketing platform.
73.How Marketers Use Facebook: This upbeat article has some useful tips to introduce marketers into the world of Facebook.
74.Facebook Marketing: Social Networking at its Best: You don’t have to go all out with social ads and beacons to use Facebook as a marketing tool. This article explains the benefits of setting up your profile page and networking with new friends.
75.How to Use Facebook Status for Marketing Purposes: Instead of letting friends know that you’re “sleeping” or “at work,” use the Status feature to clue customers in on what big business idea you’re working on.
76.Small Business StrategiesEven if you don’t have the budget to promote a presidential election with ABC, your small business can benefit from Facebook’s marketing strategies. Find out how with this list of tools and tips.
77.Networking: Use Facebook as a Marketing Tool: This article focuses on how entrepreneurs can use Facebook as a self-promotion tool and turn social networking into professional networking.
78.Top Five Viral Facebook Techniques: Learn how to make the most of referrals, giveaways and other simple apps with the tips in this article.
79.Web 3.0 Marketing with Facebook: Find out why Facebook is great for small businesses wanting to tap into a large, global market.
80.Facebook as a B2B Marketing Tool: This article chronicles how ordinary Facebook users have begun to use the social networking community as a place to self-promote and improve business.
81.Top Ten Ways to Use Facebook to Promote Your Business for Free: If your company doesn’t have a huge marketing budget, don’t worry. This article gives tips on using Facebook’s free features to reach consumers.
82.Entrepreneurs Need Both Facebook and LinkedIn: This article from the Small Business Trends website details why entrepreneurs should take advantage of the many self-promotion and networking opportunities that Facebook offers its members.
83.Time for Facebook?: This author tries to figure out why Facebook, not just e-mail, is a useful tool for keeping contacts. Readers will also find tips on how to become more savvy at online networking.
84.Make Money with Facebook Applications: Web designers and developers are encouraged to create their own Facebook applications as an on-the-side moneymaking project.
85.Using Facebook for Business: A Real Life Example: The analysis of a real-life Facebook marketing strategy will help other small-business owners determine if a similar technique is right for their company.
86.Facebook Platform: This page includes “everything you need to get started building a Facebook Application.” Ready, set, design!
87.Facebook, a Marketer’s Friend: This article from The Wall Street Journal tracks a small-business owner and her lucrative, profitable adventures with Facebook marketing.
88.Five Ways Small Business Can Benefit from Social Media/Networking Sites: Small-business owners will find ways to use Facebook to meet their unique marketing needs.The Danger of FacebookBefore you invest all of your company’s hard-earned marketing budget into Facebook advertising, check out these guides that discuss some of the negative challenges you might encounter.
89.Why Facebook Is Not a Viable Marketing Platform: Blogger Muhammad Saleem considers the reasons why Facebook marketing isn’t always a good idea. From lack of focus to lack of visibility, he argues that there are several reasons to avoid this strategy.
90.Facebook Grooming Us for Intrusive Marketing?: A blog at CNET News.com suggests that Facebook’s cozy relationship with advertisers treads on the dangerous concept of intrusive marketing.
91.Facebook Marketing Stunt Backfires: This article reveals how careless marketing tactics can lead to controversial, shady ad campaigns and bad public relations.
92.Five Things That Could Kill Facebook: From inbox contamination to application noise, learn how not to overdo your Facebook activity.
93.A Failed Facebook Marketing Campaign: Discover why Wal-Mart Stores Inc.’s Facebook marketing campaign wasn’t a success, and what your company can learn from its mistakes.
94.Facebook’s New Ads: If You’re a Good Person, Why Should You Want Privacy?: Can advertising on Facebook backfire? This article thinks that it can, if members are annoyed that big businesses prey on social- networking sites just to spy on their consumers.
95.Facebook Beacon: A Cautionary Tale About New-Media Monopolies: This article condemns certain Facebook marketing opportunities like Beacon by calling the technique “a classic case of overreaching.” Read this post before setting up a Facebook-oriented marketing strategy.
96.Madison Avenue Stampedes Onto Facebook: This video/article combination warns Facebook users against huge corporations that are “using Facebook … to exploit the site’s functions for their own business-networking pursuits, personal expression and just plain goofy fun.” Make sure you steer clear of these sketchy techniques if you want to attract new customers via Facebook.
97.Ten Reasons Why Social-Media Marketing Sucks: From undefined goals to all-around randomness, see why this blogger thinks social-media marketing sucks.Miscellaneous ResourcesThese resources provide even more insight into the many ways that advertisers can capitalize on Facebook’s popularity.
98.Social-Media Marketing in a Nutshell: Dosh Dosh introduces the concept of using social-media sites as venues for cutting-edge marketing techniques.
99.Facebook is the Marketing Story of ‘07: According to Influxinsights, “Facebook emerged from college dorms late in 2006 and then exploded onto the cultural scene in the U.S., U.K. and Canada in 2007.” Read the rest of the article to learn why 2007 was Facebook’s year.
100.Facebook Lets Advertisers Reach Members Via Free Apps: To reach customers on a “deeper level,” get tips on utilizing Facebook’s many applications.
101.Employers Reach Out to Recruits with Facebook: Besides marketing your business to consumers, why not market it to fresh recruits? This article shows you how.
102.Inside Facebook: The Facebook Book: This blog provides analyses and excerpts from the book “Inside Facebook” to help businesses understand what the social-networking trend can do for them.
103.Facebook Members Sell Their Own Ads: Though it’s currently against the rules, “more than 1,500 Facebook users have started placing advertisements on their own profile pages.” Find out how selling ads on your profile eventually backfires.
104.Why Your Company Needs to Be on Facebook: Harvard Business School’s Conversation Starter site publishes this article from Forrester’s Charlene Li.

Check out the many reasons above why all companies should consider joining Facebook or some form of social media stimulation technique to reach customers and employees in new ways. In the increasing war for talent a perfect storm is brewing. Getting your organization ready for the shift will be important to your organization's success.

If your organization is interested in investigating Facebook as a marketing channel further, the following resources may also be helpful:·

The Facebook Marketing Bible: 24·
The Updated Unofficial and Smartass Guide to Using Facebook·
CIO: Facebook CEO Appearance on 60 Minutes Leaves Many Underwhelmed
Facebook as a B2B Marketing Tool
How to Market Yourself & Your Company on Facebook
Facebook Marketing: Articles and Resources
Wikipedia: Facebook
Mahalo: Facebook


Facebook is a solution that will continue to evolve and have impact on your future business models. Is your organization prepared to take advantage of these new forms of social media tools?

Friday, February 15, 2008

Yum Brands - Opportunity for Business Innovation

Post Summary

This blog post is relevant as it highlights a stark example of Yum Brands, a leading food chain company which runs KFC, Taco Bell, and Pizza Hut—announced disappointing U.S. results in early February.

To restart growth, the company plans to aggressively introduce new products and attempt to refresh existing brands. Its best chance of success will come if it stages experiments, considers introducing new brands, and also considers business model innovations.

This article below has been written by Scott Anthony, Innosight Partner and Innosight is known for their Harvard case study roots as their founder Clayton Christensen is a world renowned professor there. In the work we do at Helix on helping our clients develop effective innovation business strategies leveraging Web 2.0 - we view Innosight as one of the best practice research firms on Innovation.


Although this case is geared to the food industry – it also is applicable to many organizations that are in crisis – need growth but have not developed the corporate culture that enables them to evolve. This is one area where we have expertise at in Helix to have robust transformation change methodologies to support our clients innovate. The number one enemy is corporate culture in executing effective innovation and change practices – many solution providers do not understand cultural diffusion and complexity science techniques that can help “unglue” an organization to respond to new attractor mechanisms.

Enjoy reading this case below and at the end of it – we pose some questions that any organization can reflect upon as well?

When a company CEO states, “In all candor, the best thing I can say about our weak U.S. performance in 2007 is that it sets us up for growth in 2008,” it is a pretty clear sign that a company needs a shot of innovation. Yum Brands Inc. CEO David Novak will have to act carefully if he hopes to achieve the growth he seeks.Yum has three of the most recognized fast food brands in the world: KFC, Pizza Hut, and Taco Bell. Its international sales are surging. However, while McDonald’s hit its stride with new products like its chicken snack wrap and its high-quality coffee, Yum’s U.S. operations seem to have stagnated. Same-store sales, a critical metric in retailing, were flat in 2007. Operating income dropped 3 percent from 2006 to 2007.To address these issues, Novak told investors that the company was considering a range of changes.

For example, KFC will be re-branded to be “more youthful and contemporary.” The chicken chain could be restructured around a “nonfried chicken platform.” Yum plans to roll out a series of new products across the chains, and will seek to make its restaurants “destinations” throughout the day.Innovating out of stagnation is a very difficult task. A wholesale change in a company’s core formula can fail to land new consumers. Worse, it can drive away core consumers that are critical for long-term success.

A past Innovators’ Insight detailing jewelry retailer Zale Corp’s efforts to master this problem raises a cautionary note. The company felt stuck in the middle tier of its market. Zale’s flagship Zales Jewelers division couldn’t command the price premiums enjoyed by competitors like Tiffany. Neither could the division effectively compete against low-cost attackers like Wal-Mart. So the company sought to move up-market to reach more upscale consumers.On February 18, 2005, then-Zale CEO Mary Forte told investors, “We’re in the process of really kind of tearing everything apart now.” The stock jumped close to 10 percent on the news. But the effort bombed. Zale failed to attract new customers and drove away a significant portion of its core budget-conscious consumer. Since Forte’s announcement Zale’s stock has declined more than 40 percent, and it has changed CEOs twice.One lesson from Zale’s struggles is that a lack of growth is not always synonymous with a lack of loyal customers. On the contrary, a company with stagnant sales could very well have built a solid group of customers that absolutely love the company’s core offering. Companies seeking to innovate out of stagnation need to avoid the double whammy of failing to attract new customers while killing core customer loyalty.We have three pieces of unsolicited advice that we think would help Yum Brands successfully escape its U.S. stagnation.

1. Stage investments carefully

Yum is sure to do substantial market research before it implements any changes to its existing stores. Market research is a useful tool to help companies create and execute a winning strategy. But what customers say they will do and what they actually do can be two different things. Also, execution-related challenges sometimes only appear after implementation exposes unpredictable interdependencies between processes.Moving full speed down a transformative path oftentimes is a strategic mistake. If the consumer research turns out to be faulty or execution turns out to be trickier than anticipated, companies can end up “stuck” with a flawed model that is difficult to adjust.McDonald’s has thoughtfully approached its innovation efforts. It starts with experiments in a central test kitchen. Then it trials products in select geographies. The in-market experience allows McDonald’s to figure out if stated purchase intent from consumers translates into actual purchases. If the experiments succeed, McDonald’s can then scale the offering.Yum might be tempted to make a “bold move” to show how serious it is about change. It has a far greater chance of creating long-term impact if it precedes a big splash with a round of careful in-market testing.

2. Consider introducing new brands

Companies always feel tempted to “leverage” existing brands as a cost-effective way to enter new market segments or reach new customers. After all, those brands have legitimate strengths, and it seems cheaper to build on what you have than to create something new. But those brands can bring baggage that outweighs projected benefits.It is difficult and expensive to change the meaning of an established brand so it appeals to more upscale—or for that matter more downscale—customers. Companies seeking to branch into different market tiers need to consider establishing new brands.For example, think about how Toyota managed its move from a bare bones low-cost competitor in the 1950s and 1960s to the automotive titan it is today. It didn’t seek to bring its Corona brand that appealed to budget-conscious consumers to new market segments. Rather, it introduced a series of new brands, like Avalon, Camry, Lexus, and Prius.Perhaps Yum can transform the KFC brand into a more hip, healthy, chicken provider. But in the long run Yum might have more strategic impact creating a new brand (or buying an emerging company).3. Explore new business modelsThe basic fast food business model hasn’t changed a tremendous amount since McDonald’s broke through in the 1950s. Offer a straightforward, reliable selection of food at reasonable prices. Seek to attract a steady flow of customers, especially repeat ones. Franchise the concept to local owners. Profit.There have been new food concepts (Mexican, sandwiches, frozen yogurt), attempts to introduce higher-quality food (Panera Bread), and providers that have experimented with selling branded food in other retail channels (Boston Market), but the basic model has remained relatively static for 50 years.If Yum really wants to drive change, it could consider both incremental and radical business model innovations.Incremental business model innovations could include increasing self-service options in stores, developing branded vending machines, bringing new food products to non-meal day parts to increase utilization, dramatically lowering the space requirements for stores (opening up new locations that have smaller square footage), or further developing delivery offerings.More radical moves could include finding ways to create entirely new revenue streams in existing stores—imagine revenue sharing arrangements where other vendors could use pieces of Yum’s store front during quiet parts of the day—or rethinking the entire retail model. Food trucks are derisively called “roach coaches” or “gut chucks.” What if Yum figured out a way to offer good, reliable food via a convenient, mobile delivery mechanism?Yum has a lot of things going for it. Despite signs of stagnation, its stock price has tripled over the past five years. It has highly recognized brand names and a strong group of loyal customers. By testing and iterating, considering new brands, and exploring new business models, Yum will maximize the chances that it successfully soars through its current stagnation.


Although all these ideas posed by Scott are excellent one in balancing incremental and radical business innovation models, additional approaches could be to:·
  • Assess the organizations’ culture in terms of innovation capacity and resilience using proven methods to assess cultural risk and adoption·
  • Apply complexity science techniques identifying the ecosystem dynamics for growth requirements and putting out attractor change interventions to evaluate the speed and diffusion for innovation capacity·
  • Developing a focused change leadership program that motivates and recognizes innovation and growth results·
  • Putting in place new infrastructure for increasing collaboration and knowledge sharing using Web 2.0 technologiesIn conclusion, what is important for any organization that has disappointing results is to understand the basic operational facts of when went wrong and where and if a pattern for solving the problem exists then execute flawlessly.


However, often results that are declining are due to much deeper problems that require surgical precision to test multiple approaches and learn from them. In some respects, one needs to look at an organization as a perpetual beta product, constantly iterating and learning. In today’s complex world – organization’s need to be adaptive, agile and resilient and at their core value root be developed a strong foundation of collaboration where knowledge sharing and risk taking are balanced with a learning outlook.

People today and increasingly in the future will move with the law of gravity of their two feet – and in the food industry this is extremely true as turn over ratios are continually high (25-30% turn over rates – and sometimes higher). Winning organizations have to compete for scarce talent and ensure their talent management practices (attract, retain, develop) are balanced with the strategies for innovation and growth. If the people are not motivated or prepared to innovate – setting higher performance targets or reducing operating costs – will not turn around a business.

What will Yum’s do?

For more information on Helix’s business innovation or change transformation offerings, you can reach us at info@helixcommerce.com or (647)477-6254.


“KFC Tries to Teach an Old Chicken New Tricks,” by Richard Gibson. The Wall Street Journal. 6 February 2008. (http://online.wsj.com/article/SB120227503488747205.html)10 Rules for Strategic Innovators by Vijay Govindarajan and Chris Trimble. Harvard Business School Press, 2005.

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