Beer Mat Strategy

A few ideas can be better than a lot.

What was Steve Jobs first strategic call when he returned to Apple in 1997?

According to biographer, Walter Isaacson, he slashed 90% of existing product development. On a whiteboard he drew a simple alternative plan.

It was a two-by-two matrix. The columns were Consumer and Pro; the rows were Desktop and Portable. Four market segments; four products. Everything else was eliminated. Apple was reborn.

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What you are thinking is not what will happen

The problems with planning.

Do businesses turn out exactly like the business plan? None of mine did. Even my most sophisticated spreadsheets never produced anything like the numbers I forecast. Personal plans were not much different.

Some have gone worse, some have gone better, but none mirrored the profile I had so carefully constructed. The late John Lennon was not far off the mark: “Life is what happens while you are busy making other plans.”

Does that mean planning is a wasted exercise?

I don’t know whether Lennon lived by that quote or was just making an observation.

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Gold medal sponsorship

Make it last longer and matter more

Sponsorship chews up a lot of dollars. The London Olympic Committee raised around one billion dollars for the 2012 event. All the big global names were there – Pepsi, Samsung, MacDonald’s – but so were domestic brands and smaller firms, even local businesses.

The principles of sponsorship apply at all levels. For large corporations, it’s a given. It extends name identification and keeps a brand entrenched. Research suggest that firms engaged in sponsorship grow net income more quickly than those who don’t.

It also boosts valuation. The value of brands like Coke, IBM or Microsoft is estimated to be in excess of $60 billion.

Is it a game worth playing?

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Has anyone noticed the good news?

What is this historic stock market chart?

It’s looks like a nice ride for any investor. It moves higher over time but not in a straight line. It does so with the usual higher tops and higher bottoms. It covers a period of several years.

What is it? It’s the Dow Jones Industrial Average, the traditional proxy for the US market. This was one of the best performances in US market history. Over the 40 months covered by this chart, it doubled.

When did this happen?

It was the last three and a half years. In March 2009, the DJI stood at 6,595. When I made this chart yesterday, it closed at 13,275. Up 101%.

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When you don't know what to do

Sometimes it’s better just to make a decision.

We learn the theory of momentum early. Sit on a bicycle that’s not moving and it falls over. Pedal a little and it stays upright. You don’t have to go that fast to get some control. Once you are moving, you can go straight ahead or change direction.

You can go faster, but when you do, it gets riskier.

Neither extreme is much help when nothing is clear. In times of uncertainty, to paraphrase Pink Floyd, there’s no one to tell you when to run. Do nothing and you miss the starting gun.

On the other hand, going fast can build up momentum in the wrong direction.

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