| Issue 18 |

Being accountable to each other

Mutual Dependency Strategy means fostering a deep and symbiotic relationship with a number of big customers, and focusing solely on them. The idea is to provide long-term devoted and specialized service that is tailored to the customer's unique scale and needs, and thus creating a difficult obstacle for competitors to overcome. The closer the relationship and the more tailored the solutions are, the more the customer becomes "addicted" to the relationship, and will refuse to try alternatives.

For example, when an external consultant develops personal ties with the managers and many key individuals in a large company over the course of numerous years, he learns how to provide them with excellent service and perfectly understands the organizational culture and the changing needs, and makes it very difficult for the organization to let go of his services. In fact, if he does his job devotedly, he becomes an inseparable part of the organization. In such cases it is not worthwhile to replace him with a new consultant that is unfamiliar with the organization. This is definitely a way to obtain a lasting advantage.

Can large organizations also adopt such a strategy? And how is it actually done? Here are a few tips for anyone choosing this strategy:

• What products and services enable a mutual dependency to be created? Mainly those required on an ongoing basis, year after year, which are strategically significant to the customer. For example: legal consulting, computerization services, maintenance of production facilities, and the supply of raw materials or sub-contracted semi-processed products. In contrast - whoever provides office supplies, air conditioners, interior design or catering services will find it very difficult to cause customer senior decision makers to be dependent on them long term.
• What is the right size? Large companies can also adopt a mutual dependency strategy. In order to do this, they must simply find big enough customers. For example, a symbiotic relationship with a large university, with an international hotel chain, or with a car manufacturer - can certainly be sufficient and yield a substantial income for very large companies as well.
• How does this differ from a niche strategy? This is not the development of designated solutions for a group of customers with similar characteristics (for example - children's products or consultation for Non-Profit Organizations), in other words specializing in a niche. Mutual dependency requires a separate specialization for each customer. The customers can be very different from each other (for example - the army and an insurance company). Even if they are similar - how they are handled is not uniform. Fostering the unique ties and solutions for a specific army does not ensure success with another army in this case. Each customer is its own entity and everything must be begun anew with each new customer - personal relations, building trust, learning, continuous improvement, etc.
• Isn't the dependency on a small number of customers risky? There is definitely a risk involved. When a company receives 20% or more of its revenues from one customer, and that customer leaves the company, it can wind up in serious trouble. A company with a small number of customers is more vulnerable to risks. Therefore, a company like this will receive a relatively low valuation by investors.
• How can the risk be decreased? One way is to increase the number of customers so that the desertion of a single customer does not pose an existential threat. For example - if no customer is responsible for more than 10% of the overall revenues, the risk is much smaller. Close relationships with 15 or more customers needs to be fostered for this purpose. Not a simple task at all. Another way is to increase the dependency and the emotional ties of existing customers. This requires investing in ongoing fostering of personal ties, and continuously improving the value provided to the customers (not to become complacent).
• How is the mutual dependency increased? Firstly, a relationship with decision makers needs to be fostered. This means personal connections, gifts, parties and events, friendships, assistance with personal matters, lasting presence, etc. Secondly, ensure high quality service as a central value (including service-oriented employees, customer satisfaction surveys, service mission statement, etc.). Thirdly, you get into the customer's shoes - in other words you learn about him, understand what is truly important to him, and develop designated solutions accordingly. You measure satisfaction again, find more things to improve, and keep on improving.
• Is it enough? Not necessarily. In order to create true dependency you need to think about what will really create dependency and "addiction". For example: providing more comprehensive services (a package deal of production machines, maintenance, and financing); managing inventory for the customers; developing designated applications that the customers become accustomed to using; and even… knowing too much about the customer…
• Does increasing the dependency indeed prevent the risk? Increasing the dependency indeed reduces the risk, but it does not eliminate it, so that customers might stop buying from a beloved supplier even if they want to work with him very much, and even if they don't have a better alternative. For example - when they experience financial hardship, or if they are bought out by another company that is accustomed to other suppliers…
• So why bother? A mutual-dependency strategy allows you to enjoy temporary peace of mind for long periods of time. In addition, the revenues from each customer are very substantial, therefore saving immense marketing expenses. It is possible (and preferable) to also charge a rather high price, since these are specialized services with high added value. The savings in marketing expenses, and the high pricing enable you to achieve fairly high profitability. And as a bonus - you also have fun because you are working with regular customers, which are frequently also true friends.

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Ideas for innovation in popcorn

The following ideas were developed using various thinking tools, and do not exist at present (to the best of our knowledge):

1. Microwaveable popcorn in individual serving sizes (quick to prepare, convenient to hold in front of the television).
2. Seasoned and colorful popcorn (a pre-prepared mixture colored according to the flavor - paprika, pepper, …).
3. Microwaveable popcorn that has a ringing mechanism or the bag changes color indicating that the kernels have popped.
4. Popcorn kernels with a very thin hull that doesn't get stuck between your teeth.
5. Light buttered popcorn - butter flavor with low calorie butter.
6. Popcorn from the movies - advertisements and coupons for DVD movies or cinema tickets on the back of the popcorn package.
7. Popcorn cakes (like rice cakes).
8. A popcorn ring - a circular bag that rotates and doesn't get stuck along the inside walls of the microwave (uniform heating).
9. Mega popcorn - from huge kernels (perhaps from a special and brand name variety of corn).
10. "Healthy" popcorn (with brand name corn that has special healthy characteristics, for example - more nutritional fiber)

• Articles on Systematic Innovation  
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A camera on Messenger

Mobile phones were once a product that required getting used to. Today the webcam is such a product. Many managers and businesspeople are hesitant to use it, but when they get started, they don't understand how they could have managed without it. The actual camera can be purchased at Office Depot, Bug, and at many other stores. Even a webcam that costs 100 NIS doesn't do such a bad job. It is recommended to buy a camera with a relatively narrow base that can also be placed on top of an LCD screen or on a laptop (your face looks better when filmed from above). Installation is very simple (a regular USB connection). When you use the webcam for instant messenger programs (ICQ or MSN Messenger, for example, are recommended and free), that know to automatically identify the camera, life begins to look different:

• You can conduct video chats with businesspeople and customers all over the world. This is an obvious way to break the ice and tighten ties. Non-verbal communication and body language are critical in business, even from afar.
• It is also easier to improve the quality of work with consultants and employees situated abroad. An independent employee abroad will also feel more connected to the organization and less cut off.
• Video chats also require speakers (or at least earphones or an internet phone). It takes time for organizations to be convinced that employees need speakers for their computers. Once they were only used for music (entertainment), which disturbs other workers, and therefore it was not accepted. Today it is a means of communication that saves on telephone expenses. The voice quality isn't always the best, but it is only improving with time. And when the connection is faulty, you can see through the camera, lower the volume on the speakers and speak on a regular phone.
• On certain webcams you can take pictures like with a regular digital camera. Using Messenger you can also send the photos or all types of files instantly, and discuss them with the person on the receiving end. It is nice to see his response on the camera, for example when he is studying the new logo you have sent him.
• You can also see your children and spouse at home when you are working late at the office, or to check during the day how the nanny is taking care of the baby (you can activate the camera without her knowledge). You can also send funny animated clips, included in Messenger, to young children. They really love it. It's also not a bad solution for keeping in touch with friends and relatives that live far away.
• You can also photograph/film and send a greeting or other messages (to a distribution list on regular email). It is more personal, easy to do, and transmits the message more authentically. The graininess and the limited quality of the webcam intensifies the message.
• There are lots of other possibilities, try it and enjoy!

Note: The Computer Dept. Manager in your organization might not love it, because use of instant messenger programs and the webcam (video!) take up bandwidth (slows internet use for other employees), and also exposes the organization to security problems. There are organizations that bock webcam and Messenger use in advance, for these exact reasons. In any case, it is worthwhile to try it even from home, and to be on top of things. What was once forbidden will soon become necessary.

• For downloading recommended Instant Messenger programs: ICQ |  MSN Messenger
• For information on interpersonal communication workshops: click here (PDF, in Hebrew)
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