Financial incentives are the best motivator for behavior you want the least, such as self-serving attitudes, destructive greed, and internal competition that demotivates other employees. If you want an employee who has low loyalty, makes other employees distrust each other (and the company), and will try to leverage you continually for more money for doing less work, then financial incentives are great.  The truth is that employees who work for you despite a lack of special financial incentives that are designed to motivate specific behavior are more loyal, more focused upon the good of the company overall, and more supportive of other employees.  In short, they are great team players… something that almost every company says they want to hire.

So, what motivates the type of employee you want better than money?  Sadly, they are the very things that most companies are loath to give: trust, empowerment, and appreciation.

Ask almost any corporate employee what they hate the most about their job (and would desperately like to change jobs to get), and they will most often answer with things like, “trust, personal empowerment, and appreciation for work well done.”  Interestingly, despite this overwhelming unmet need, if asked what they want the most, they will most often answer, “more money.”

Why the disconnect between what they say they want and what they would change jobs to get?  It’s something I have seen in market research thousands of times.  People will say they want something that is far different from what they would give almost anything to get, because they don’t think they can get it or they don’t believe the person asking would give it to them.  So they answer with something they believe the questioner will understand and accept.

As an employer, I have always been amazed to discover that the employees that have provided the lowest return on investment have typically been those demanding the most money and the most financial incentives for things that will grow the company.  The best employees have typically been ones who want a chance to prove themselves and who are less concerned about short-term financial incentives than long-term growth potential.

My advice:  Forget the financial incentives except as “appreciation.”  Focus upon making employees feel more trusted by including top performing ones in strategic planning and other long-range planning activities or problem-solving.  Invest in employees who show potential or who demonstrate the “right” attitudes” with training and by giving them special opportunities to prove themselves.

You will find that everyone on your team is more motivated and more more focused upon the things you really need from employees.

If you have examples of this at work in your company, I would love to hear about them.  It’s about time that corporate managers realize that negative motivation and weak financial incentives won’t work, but showing more respect, trust, and appreciation to employees will.

Wes Ball is the author of The Alpha Factor.  Although he spent the last 20+ years growing companies ranging from the Fortune 100 to small local companies, he is focusing almost exclusively upon medium-sized businesses who he believes have the most potential to rejuvenate our economy and to become tomorrow’s market leaders.  You can reach Wes at 717.799.3395 or w.ball@ballgroup.com.

You can bet that Steve Jobs is not whipping his team at Apple to create more value or quality.  No, he is entreating them to discover what people really want to buy and how they can provide that in a way that will make new customers pay almost anything to get it.

What’s wrong with “Value” or “Quality?”  Just about everything that makes a company capable of dominating its markets and becoming an Alpha (or even gaining some of the benefits of being an aspiring Alpha).

“Value” is undefinable in useful terms.  It is fine in concept as a final outcome that can be recognized in a product’s sales. But do you or your employees know what it really means to customers in your industry who are evaluating your products?  Can you or your employees define “value” from your customers’ perspective that doesn’t include the word “price?”  The problem is that “value” in its traditional definition means far too many different things to far too many people.  And the rule is: If you can’t precisely define what it is, you can’t hope to create it.

“Quality” on the other hand means nothing, if it is not what a customer wants to buy; and in most industries quality has not proven itself to be the critical factor people wish to buy.  Even more devastating is the fact that the pursuit of quality is a process that limits variance or change.  Typically this is applied in the manufacturing process, but it is all too often carried over into the “value-creation” process, as well.  The result is that predictability and efficiency become more important than the flexibility and creation of greater potential that has to be at the core of every Alpha company (or company that desires to become an Alpha).

So, what’s the alternative to using the word “value?” Start focusing upon discovering and defining what people wish they could be buying.  The best way to discover that is by understanding what experience people wish they could have, when they buy and use products sold in your category.  People don’t buy products for the product’s sake, except in survival situations.  And they REALLY don’t buy “price” (no matter what you have heard throughout your life).  They buy an anticipated experience and a set of internalized feelings about themselves.  The product is only the functional conduit that can deliver that experience or set of feelings.  (If you are new to the Alpha model concept, then you need to read The Alpha Factor in order to understand how these are the core elements of innovation that drive predictable, self-sustaining growth.)

Turning “quality” into “growth potential” also requires changing your perception of how customers buy.  Limiting variance is fine in manufacturing, but customers don’t like limitations or lack of change.  The marketplace thrives and feeds itself upon change… in products, attitudes, perceived needs, and behaviors.  The company that locks itself into limiting change in its approach to the marketplace is dead before its starts.

The Alpha company (or the aspiring Alpha) focuses upon understanding the core experiences and feelings customers desire and then drives change that constantly focuses potential customers on the next change.  When Apple introduces a new product, it only feeds the desire to know what the next new product might be.  When MacDonald’s introduces a new menu item, customers try to guess what the new trend being set is and what might be next.  What makes these work is that customers recognize a logic behind each new introduction that is a continuance of the constant striving toward delivering better and better experiences and self-feelings.  The Alpha “owns” this process, while competitors can only copy or try weakly to compete against it.

Make your New Year’s resolution now.

Drop the word “value” from your company’s vocabulary. Instead, start discovering what people wish they could be buying (in terms of experience and feelings about themselves).  Then discover how you can fulfill those desires with the “things” you offer in the marketplace.  The result will be far greater “value” perception that can demand much higher prices for longer periods of time with greater control over competitors.

Drop the word “quality” from your concept of innovation. Focus upon driving change.  Create a process for constantly delivering the next logical step in fulfilling the experiences and self-feelings your potential customers want.  The result will be an increase in your control over the market and greater profit than you could ever have expected before.

My wish for you is that 2010 will be the most profitable year you have ever had.

Want to learn more about how you can apply the Alpha model to your company, so you can create more profitable, more dominating innovation?  You can get in touch with me either through the website at www.thealphafactor.com or by emailing me directly at w.ball@ballgroup.com.  I would be happy to talk with you further about how you can make yourself into an Alpha and sustainably grow your profits and sales.

What is Alpha innovation?  It is the process of discovering what people really want to buy both in function and in ego-satisfaction, how they want to buy that, and then providing that to them.

Truth is, almost any company in almost any industry could be growing right now, no matter what the economy seems to be doing or what prospective customers believe about their futures.  There are real needs among all customer groups.  You just need to understand better how to discover what they want to buy and how they want to have it presented to them.

I’m not going to take you through the entire Alpha Factor model, which provides you with the template for finding such growth opportunities.  But I will share the core tool that will determine whether or not you even have a chance to become an Alpha.  I will also share three steps to making yourself more capable of becoming an Alpha.

The #1 secret to creating sustainable growth in any economy at any time is to create a “culture of research” in your organization. All Alpha companies use market research to define growth opportunities.  So do many non-Alpha companies. Understanding the difference between effective research that leads to (and sustains) Alpha dominance and typical non-effective research is key to making your organization self-sustainingly successful.

• Step #1:  Start by recognizing and believing that you don’t have all the answers… no matter how long you’ve been in the business.

The biggest barrier to becoming an effective “learning” organization is the self-delusion that you know how your market works.  Here is the truth:  you may know how it has worked in the past; but you have little or no idea what tomorrow is going to look like.  I know, that’s hard to hear.  But here’s why it is true: tomorrow will be created by someone you don’t know, using information and insights you don’t know.  That is how industries are revolutionized and real sustainable, disruptive innovation comes about.

If you can recognize and admit your own inability to think beyond what you currently know, then you have a chance to really find new answers.  I have been doing innovation-focused research for more than two and a half decades, and I still am surprised at what I discover in our research that neither I nor my clients knew or, in many cases, even guessed.  Customer needs and expectations are constantly changing, adapting, and being transferred from one part of their lives to another.  What was a critical driving factor last year may have little impact after new expectations are created.  Those new expectations could have come from the efforts of a competitor or from a completely unrelated area of the customer’s life.

You will only discover these new insights by constantly listening to people who may someday buy what you wish to sell.  You won’t discover these insights from within your company’s walls.  They aren’t going to be found in a conference room.  Your employees don’t know.  Your suppliers don’t know.  Your distributors don’t know.  The answers are outside.

The next time you have a meeting to figure out what to do, call off the meeting and go outside.  Talk to prospective customers.

• Step #2:  Learn how to really listen

I don’t just mean to stop talking; rather you also need to eliminate the self-talk that convinces you that you understand what prospective customers are saying or meaning.  Most market researchers (and their clients) hear through their own filter of how they believe decisions are made, which is often far different than how their target customers actually make decisions.  I am continually amazed that most research into drivers of buying decisions still comes up with function or price factors rather than the self-image factors that truly drive decisions.

When you think you understand what prospective customers are saying and why they say it, make them explain it to you so clearly that you can repeat it back to them in different words and they agree that you understand. Then go further and prove that both you and these potential customers understand how they make decisions by suggesting different ways someone could address the things they described until you hear them agreeing that you really have it.

But don’t stop even there.  Go beyond that to understand what the next step might be in the continuum of needs and expectations.  No one ever stops at the current needs or expectations described.  They will always change those needs and expectations over time.  While you can’t always define what will change as a result of another marketer’s efforts or changes in the economy, you can better understand where these customers think they are going with their expectations and what the logical end result might be.  Understanding this can provide far greater insights into longer-term strategic considerations.

• Step #3:  Stop ignoring your greatest source for more profitable new growth

This is one that always amazes me.  Most companies spend far too much money talking to current customers.  The real growth opportunity is among those persons who currently won’t buy from you.

Non-customers who are either buying from a competitor or who don’t buy at all (but have the potential to buy) are the fastest way to create dramatic new growth.  In fact, the most spectacular growth I’ve ever seen always comes from attracting completely new customers.  And when using the Alpha model to drive higher expectations that in turn drives higher price leverage, profit also skyrockets.

The huge trend toward driving “organic” growth by major marketers has even further blinded most companies to the opportunity avaialbe by talking to non-customers.  Even a company with 30% share of customers has a pool of 70% of the market as potential.  Even eliminating the 10% (approximate) of people who say they are committed to buying low price (even though I have proven many times that most of them are lying), there is obviously a monstrous potential for almost any company to grow.

I am always surprised that I have to convince a marketer who wants to grow to include non-customers in our market research. Yet, it is typically from those non-customers that we discover the biggest opportunities for creating new growth strategies.

So, can you grow now?  Absolutely.  Can you do it by sitting in your offices? No.  Can you do it by listening to your self-talk.  No.  Can you do it “organically?”  Probably not.  Use the Alpha model to understand what people really want to buy, how they want to buy it, and how you can address those opportunities.  You will find yourself leading the way out of this recession… no matter what the rest of the economy is doing.

Get your copy of The Alpha Factor at www.thealphafactor.com. Visit www.ballgroup.com and discover research toold you can use to apply the Alpha model to your business to grow right now.

GO AHEAD… DOMINATE YOUR WORLD!

Big surprise, huh?  Yet you would believe this was revolutionary new thinking, if you look at what most of the marketplace is doing.

Most businesses are creating their own personal recessions right now that will follow them for years. Discounting (because they think they need to in order to survive) is killing their futures more certainly than any government policies can.  The cost to overcome this “devaluing” that they are creating for themselves will far outweigh any possible gain they think they might have generated during the last year.

Creating “value” has been the subject of conversation around boardroom tables for decades.  Sadly, in most cases, that conversation gets no deeper than adding more “features” or adjusting price for a product or service that really needs to be rethought.  Consumers and corporate buyers are more interested than ever in value, but their definition of that term is being modified to demand more Alpha-style fulfillment than our economy has experienced in a long time.  As consumers feel more pressed and corporate buyers feel more threatened with lack of job security, both are looking for more evidence that they are not just OK, but also  valued.

Here are two critical things Alphas know about creating value that will drive growth (or limit loss) in any economy:

• You have to understand who assesses the value of your product, and
• Discounting is the quickest way to increase your pain rather than decrease it.

Sound simplistic?  Then why is it that well over 90% of all companies get these two things incredibly wrong.  Even those who start off handling these correctly and build both market share and Alpha influence eventually fall into the trap of incorrectly assessing value and believing that discounting can save them from decline.  We are seeing it all too clearly right now throughout the marketplace.

• Critical fact #1:  VALUE is in the eye of the beholder (that’s the customer)
  

“Value” is an estimate by a potential customer of how much he thinks he will gain by purchasing what you offer minus the “pain” he thinks he will experience in purchasing it.  This “gain” vs. “pain” formula is critical to understanding how to strategically make your product or service more attractive.  The potential customer is making critical judgments about what you sell vs. what they want to improve in their lives.

Psychologists have long held that people typically act either to move away from pain or to move toward gain.  It is the individual’s perception of what creates pain or gain that really comes into play in creating strategic differentiation and market growth.  Without this understanding, you don’t have a prayer of selling “value.”

• Critical fact #2:  the “beholder” is not you

More important to remember is that this pain vs. gain “valuation” is done by the prospective customer, not you.

Businesses of all sizes are notoriously guilty of thinking that they know what customers want.  Sadly, that self-assessment is almost always proven to be false.

This only gets worse during tough economic times.  As cash flow and profitability are pressed, the pain at the corporate level gets translated into movement away from strategic sanity and toward self-destructive tactics that actually work against the company.  More pressure is placed in panic upon “making the sale” with little regard to how what is being sold can become more attractive in ways that mean something to the customer.

What means something to the customer is often far different than what means something to the marketer.  As customers move away from pain and toward gain, they make many assessments and judgments.  On the “pain” side is certainly monetary cost, but there are also many other factors, including how hard it is to get it, how hard it will be to work with the people selling it, etc.  Monetary cost only becomes a real factor when the buyer doesn’t have money and can’t get it.

Luckily, we are still in an economy where that is not a significant factor.  Most companies and consumers are more careful about spending in order to preserve what they have, but most have money to spend on the things they believe they really want, need, and will fulfill core ego needs.

We all know that if we were to discover that we have a fatal, but curable disease, we would find a way to pay for the cure, even if we did not have medical insurance.  In much the same way, we will find a way to get the things that overcome even less critical needs.  To a lesser extent, we will find a way to fund the purchase of something that increases our self-image and self-perceived value to others.  In the Alpha model, these ego-satisfaction needs are referred to as “Self-Satisfaction” and “Personal Significance.”  After these are satisfied, other monies available might be used to buy other things.

So, here’s where the conflict comes in:  most marketers make their assessments of what customers will buy based upon THEIR avoidance of pain and desire for gain.

There is little real understanding among the typical corporate marketer (other than Alphas and emerging Alphas) about what people really want to buy.  The result is that they try to create more value by adding features, adding amounts included, and/or lowering price to “increase” value.  The trouble is that customers just want to satisfy the basic functional need with something that also fulfills their all but insatiable need for self-satisfaction and personal significance.  Features, amounts, and pricing do little to address those emotional, self-perception needs in ways that cannot easily be overcome by a competitor who recognizes real buyer needs.

If you want to increase value, you have to really understand more than the functional needs being addressed.  You also have to understand the core emotional needs customers want to fulfill with almost anything they buy.

• Critical fact #3:  DISCOUNTING is almost all pain and little gain

Why do most marketers fall into the trap of price reduction as a means to “increase value?”

It’s easy, even if it is self-destructive.  It certainly doesn’t take much creative, strategic thinking to suggest discounting.  It’s also what most salespersons have been brainwashed into believing by buyers who manipulate them.

Price only becomes a factor when all other things are equal OR when the buyer thinks he can get away with demanding a lower price.  So, the typical marketer gets lots of feedback about how they need to lower their price, simply because they have not differentiated themselves in ways that mean anything to real customers.

The problem is not just a matter of poor marketing; it is also a matter of bad business management.  Profit is the lifeblood of a company.  Without it, the company fails.  People lose their jobs.  Suppliers feel the pain.  The economy falters.  More companies fail.  And a death spiral begins.

A drop in price of just 5% across the board can mean a drop in profit for the company of anywhere from 10% to 50% depending upon the benchmark net profit.  In order to compensate for that drop in profitability, drastic cuts must be made on the cost side.  On the contrary, minor changes can create value that could drive prices upward by 10% to 25%.  In many cases, I have seen minor changes in value perception generate value increases of 30% to 100%, which drives even greater sales growth (which only increases net profit further).

I know.  It’s easy to say, but much harder to do.  That’s only true if you hold to the premise that price is a critical factor in creating value.  Eliminate discounting from your vocabulary, focus upon self-satisfaction and personal significance fulfillment for your customers, and it is amazing what changes will be wrought by your salespeople, your marketing team, and even your administrative team.

People naturally want to sell and buy real value.  Forget your old perceptions of value, and you will be shocked at what your people and your company can do.

Wes Ball is president and founder of The Ball Group, a strategic innovation and growth creation company.  He is also author of The Alpha Factor – a revolutionary new look at what really creates market dominance and self-sustaining growth.  Find out how you can use the Alpha model to create dramatic, sustainable growth for your company no matter what the economy is doing by calling Wes directly at 717.627.0405 or email him at w.ball@ballgroup.com.

Here’s what I mean:

Motorboaters need to have all the fuel on board necessary to reach their destination before they start off.
Sailors only have to have the tools and knowledge to take advantage of what they find along the way and stay out of serious trouble.

• Motorboater businesses worry about moving forward without a clear view of how they are going to get there and confidence that they have enough “fuel” to make it without problem.
• Sailor businesses move forward with the confidence that they can navigate to the resources they need, as long as they are creating sufficient demand which “floats” their vessel.

Motorboaters expect to take a straight line path to their destination.
Sailors expect to take a constantly changing course to reach their destination.

• Motorboater businesses believe that they should somehow get to their destination smoothly and predictably.
• Sailors know better and count on using the surprises along the way to help them.

A motorboater expects to get to his destination as quickly as possible, with the fewest detours, and is upset if he misses the cocktail hour at the other end.
A sailor enjoys the trip and doesn’t need the cocktail hour to have enjoyed the journey, because the joy was in the process of getting there.

• Motorboater businesses hold on to an entitlement attitude.
• Sailors enjoy the ups and downs and the detours along the way without the need for further gratification.  Look at the offices in sailor companies: they are trim, minimal, and functional.

Motorboaters get extremely worried and begin to panic when their boat tips and water is rushing along one of the the gunwale.
A sailor knows he has the opportunity to go faster and gain more ground when his boat tips and water is rushing along one of the gunwale.

• Motorboater businesses panic easily and start “bailing” persons necessary to their future success as soon as they see difficulties ahead.
• Sailor businesses make sure everyone knows their job and helps them work together to gain success.

When a motorboater believes his fuel to reach his destination is below the minimum required, he starts to call for help, slows things down, and wallows in the sea.
When a sailor starts to lose the wind he needs, he moves to where better wind is or simply waits patiently for the wind to come back, as it always does.

• Motorboater businesses are victims of the economy.
• Sailor businesses are opportunists.

A motorboat must maintain power to sustain itself in a heavy storm, otherwise it wallows and is soon capsized.
A sailboat can maintain itself in a storm without any sails and choose to either run before the storm under “bare poles” or turn bow into the wind and ride it out using a “sea anchor” to make it go slightly slower than the oncoming seas.

• Motorboater businesses require too much investment to sustain themselves during economic downturns.
• Sailor businesses can keep moving or just survive with far less investment.

When the seas get a bit rough and the boat begins to rock, a motorboater will most often either run for port or just hold position, get seasick, and wait until things get better.
When the seas get a bit rough and the boat begins to rock, sailors know they can make even better speed; they just shorten sail a bit.

• Motorboater businesses require far more exaggerated responses to difficulties in order to survive.
• Sailor businesses can reduce their response and still move faster.

Most large businesses act like “motorboaters.”  That’s why they have to cut people and budgets as soon as they see potential trouble ahead.  They head for port and ride out the difficulties.  They are victims of the economy, not drivers of it.

The most successful entrepreneurs are “sailors.”  They know how to spot new wind, how to take advantage of changing tides and currents, and they drie their businesses based upon what they come across.  They are the drivers of a new economy, because they are the ones out front discovering what’s ahead.

Sadly, far too many small businesses try to emulate large “motorboater” organizations.  During tough economic times, they make the same mistakes, but they don’t have the resources to survive as long while doing the wrong things.

The secret is to make your organization more of a “sailor” organization.  Watch for the wind.  Move to where it is.  Don’t panic when things look tough, but recognize the opportunity to accelerate while others founder or run for port.

Wes Ball is the author of The Alpha Factor.  He has sailed for more than 30 years in both cruising and racing boats on both coasts and in the great lakes.  He is also a business owner, executive coach, and business turnaround consultant.  He has created growth for businesses in three recessions, even while their competitors are foundering.

Mistake #1:  Believing that price discounting will overcome the problem

Discounting only makes things worse.  Every time you discount your product, you prove that it really wasn’t worth what you originally said it was worth.  It takes a lot longer and requires a lot more investment to raise your prices than it does to lower them.  So it is worth finding ways to sell why you are worth more rather than taking what looks like the easy way out and cutting prices to try to attract customers.

Mistake #2:  Following big companies

I continually wonder why small to medium-sized companies are so infatuated with large companies.  Perhaps the fact that I have worked as an employee in two of the largest and have consulted with more than 50 of the Fortune 500 on creating growth helps me keep a more rational view.

The fact is that larger companies are not as profitable, not as flexible, not as nice to work for, and not as capable of creating dramatic growth as smaller companies are.  So why do so many smaller companies try to emulate what big companies do?

During tough times most big companies hide out.  They cut costs, often eliminating the very things they need to create future growth.  They make their employees miserable and demoralized.  They make suppliers dislike them.  And they generally behave like angry pouting children.

Don’t follow that.  Use your strengths to be aggressive and visible, while the big guys are hiding.  Invest wisely in the things that will make you stronger and more attractive when things turn around.  (These things will also make you more attractive now.)  Make employees glad they work for you.  Make suppliers so happy to work with you that they will turn down calls from larger companies to help you instead.  And act like an Alpha – confident, calm, and controlled no matter what the marketplace seems to be doing.

Companies that follow this model invariably take share from their larger competitors.

Mistake #3:  Following competitors

Leading is the key to long-term success and greater profitability.  Every time you follow what a competitor does, you make that competitor look better than you.  You should be looking for something different that you can do that makes you look smarter and better.

Finding that “something different” requires an understanding of what customers really want to buy, not just what they have been forced to buy.  You need to discover what will make people feel better about themselves (smarter, more knowledgeable, more appreciated, more powerful, etc.) and what will make them believe that other people think better of them (envied, more attractive, smarter than they, etc.).

Mistake #4:  Believing that leadership during tough times comes from the top of the company

Contrary to popular belief, success does not come from the top.  Great leadership at the top may make it easier for a company to thrive and grow, but long-term, self-sustaining success comes from much further down the corporate ladder.

The most successful companies of any size know that it is much easier to be successful and to create growth when every employee becomes a leader of positive innovation and growth.  The best thing a manager can do is to engender a “leadership” and “innovation” attitude among all employees.  They should believe that you want new ideas to lead the company into a leadership position and they should be rewarded for helping that be accomplished.

While other companies are trying to get more out of terrified, demoralized employees during tough times, you should be engendering a more positive attitude of teamwork to move forward.

Mistake #5:  Believing that you can’t affect change until the new market defines itself

Right now is the best time to invest in growth… before things get better.  Why?  Because while almost everyone else is holding back, the companies that confidently define what the market will become will be the leaders coming out.

It happens in every recession.  But in this one, this may be more true than ever before.  Large companies may never be the same after the government has terrified both corporate boards and stock holders with their heavy-handed tactics of government control.  Many smaller companies have the opportunity to make huge, sustainable strides right now, while larger competitors are wondering how to even run their companies in the future.

Don’t miss this opportunity.  Become the definer of the future and you can be its leader.

Mistake #6:  Believing that product or technology innovation is the secret to success

Products and technology are the things that you may sell, but they are not what people buy… except when there is no better alternative offered.  People want to feel better about themselves.  They also want other people to think better of them.  You can innovate in these areas for far less investment and greater return on investment than you can with any product or technology innovation.

New products or technology drive entire new markets or business models.  These can occasionally create dramatic growth, if sufficient investment in made.  Innovation in helping people feel better about themselves and better about how others think of them is far less cost intensive and drives far greater ROI more consistently.

Mistake #7:  Believing that you must improve on product quality or performance to demand a higher price

Actually, most of the highest-priced products in the world are not superior in either quality or performance.  People prefer to buy ego-satisfaction above function. In fact, in my 15 years of research into how to create dramatic, self-sustaining success, I discovered that people will pay almost anything to feel better about themselves and to make other people think better of them… even when the product or service being offered is of lower quality or performance than competitive products.  At least as long as “minimum” functionality is provided.

Harley-Davidson, Victoria’s Secret, Mercedes, Tiffany’s, and John Deere are just a few of the Alpha companies I studied that sell more for higher prices despite lower quality or performance than many competitors.

You can sell more by innovating to provide greater ego-satisfaction than by innovating to create greater functionality.

Mistake #8:  Believing that cost-side management alone can save you from trouble in a tough economy

You can’t “save” your way to sustainable success or growth.  Cost-side management has created many spectacular failures, but revenue-side management has always been the key to real growth.

If you wish to grow (especially with sustainable growth), you must focus upon the revenue-generation side.  And right now is a better opportunity for revenue-side growth than there was two years ago.  Customers still have needs, even if they may be looking for things to put off until later.  The winners will be those who address the most burning needs with believable promises of ego AND functional needs satisfaction.

Mistake #9:  Believing that growth cannot occur during tough economic times

While the press and other media focus upon the failures and the reasons for fear, there are a few companies in almost every product or service category that will create sustainable growth without discounting during a recession.  There is no better time for significant, sustainable changes to occur in markets and product categories than during an economic downturn.

This is your chance, so take advantage of it.

When the marketplace gets tough, all that means is that someone has a chance to define a new future for the category.  If it’s not you, then it’s someone else who you will end up having to follow once things get better.  If you’re happy with following behind someone else, picking up whatever is left over, then ignore everything I’ve said.  However, if you want to take control of your market or category and make others follow your lead, then avoid these nine mistakes and watch yourself grow.

If you would like to understand how to overcome these nine mistakes and grow your business no matter what the economy is doing, you need to read my book, The Alpha Factor – a revolutionary new look at what really creates market dominance and self-sustaining success. You can get your copy for just $24.95 at www.ballgroup.com, or you can buy it through any online bookstore.

“There has always been an unjustifiable admiration of large companies by smaller ones.  Simply because it appears that large companies MUST be smarter (due to their success at getting large), smaller companies fall into the terrible trap of following their example…”

See the entire post at… alphadomination.blogspot.com/

Growing in a recession is often the LAST thing corporate managers are thinking about, yet it is the best time to take growth steps.  The real secret is in recognizing how to apply Alpha thinking in order to attract the customer demand that still exists during a downturn.

Many managers forget that demand is not “dead” in a recession.  In fact, some businesses are UP this year (a fact that the news media seems to keep missing).  Surprisingly, generating gains can actually be cheaper in this type of economy.  But there are some secrets that help make growth a lot easier when things get tough.  

Here are some Alpha principles that create growth when everyone else is hiding:

Leadership comes from the entire company, not just the top person

Top managers tend to forget the real source of growth ideas, when times get tough.  In an effort to manage costs (a necessary activity), they often close off creative thinking among the ranks (a dangerous result).  By over-managing processes and by making it clear to employees that the company is in a “holding” pattern, the possibility of creating growth is significantly reduced.  It becomes a self-fulfilling prophesy of stagnation or decline.

The typical reaction among employees to recessionary management tactics is to become fearful about job security or even about the economy in general.  This kind of stress reduces risk tolerance (even among persons who are not directly at risk), which directly affects the ability of a person to think creatively. 

The greatest value of an employee is that he (or she) is not directly at risk of loss at the level the company might be, so he is more likely to be able to think creatively than top managers who are more closely linked to company losses.  It is critical for top managers to use these creative assets fully and wisely.

Managers don’t have to accept all the creative thinking that comes up from the ranks, but it is unwise to close off that source of potential growth.

Fear is the real enemy – it makes for really stupid decisions

In much the same way, the more fear that exists in an organization, the dumber the decisions it makes.  Anyone who has gone through tough times at an organization that was fearful rather than confident has seen this at work.

We have all seen the very employees who had the experience to carry the organization through the tough times fired, because they had the largest salaries.  Many of us have seen cost cutting that took away the very things the company needed to create strong profitability coming out of the recession.  Anyone in any larger organization has experienced many examples of really stupid decisions being made all due to the fear among middle or upper managers.

It is healthy to recognize danger.  It is unhealthy to allow fear to overcome recognition of opportunity to the point that the future of the company is undermined.  Far too many publicly held companies are being run by managers who are fearful, because they believe their futures are at serious risk (and they usually are).

It takes an Alpha manager to be able to manage well in a climate of fear, because it takes great self-confidence to be able to continually spot the opportunities available in the midst of what others see as chaos and collapse.  The Alpha manager maintains calm assertiveness (as Cesar Milan, “The Dog Whisperer,” would say) that allows others around him to function more effectively and more creatively.  The result is that movement is possible, where the fearful manager creates a fear of any movement.  And we all know that a moving truck without brakes (which is what the economy is) almost always hits an unmoving pedestrian.

No matter how “down” things get, an Alpha does better

While few companies are “doing well” right now, a few are doing much better than their competitors.  Just look at the current Alphas, and you can see how resilient they are. 

Apple is one of the newest Alphas to emerge.  Their sales are finally down slightly, but not nearly as far down as their competitors.  They continue to defy market logic, as they sell more product at significantly higher prices than their competitors.

Mercedes and BMW have both faired far better than even top dog Toyota (who is still not a true Alpha, but has the potential to become one soon).  And it’s not only because the very wealthy are buying from them.  Actually much of their strength has been at the low end of their lines, and from people who are trading up.

Wal-Mart continues to outstrip its discount competitors (many of whom regularly are priced lower).  Although hated by unions, Wal-Mart delivers more of what customers want to buy in terms of Alpha ego-satisfaction than any of its competitors.

Even John Deere, which is one of the few Alphas right now in a growth sector, continues to grow at levels that dwarf its competitors.

Even the worst hit areas of the U.S. still have 90% of employable persons working.  Yes, we are in a short period where the government’s actions are frightening more than half of the population to significantly slow their spending.  That cannot last unless the government completely destroys our economy and puts everyone on the street, which did not even happen during the 1930s.  

Following Alpha principles, any company can do better in a recession.  I have proven over three previous recessions that most grow dramatically at the expense of their more fearful competitors, and with less cost to generate that growth.  It just takes knowledge of the Alpha model and the confidence to stay focused upon that model to find the success most managers believe is impossible during tough economic times.

Check out this post on Dominate Your World – becoming an Alpha company in a world of followers.  You might be surprised to see how the Alpha model works.

Here’s the link:  http://alphadomination.blogspot.com/

Have you wondered why advertising to young persons is so consistently outrageous (and often all but pornographic), yet seldom drives long-term sales success?  Wouldn’t you think the companies buying these ads would recognize their mistake, when Alpha companies continually beat them?

“Madison Avenue” obviously doesn’t know how to make you an Alpha… no matter what they say works.  The problem is that most ad agencies have recognized the power of “emotional” marketing; but they have missed the fact that pandering to low-level drivers of decisions (most often meaning “sex” or “abuse of others”) has little long-term benefit.  In fact, it makes them vulnerable to competitors who don’t use such tactics.

This mythology about how younger persons make buying decisions is creating great harm to the marketplace.

Someone recently asked me if what they saw as the “ego-satisfaction” focus of most of the TV commercials on the Super Bowl is an example of the Alpha Factor model applied to advertising.  What we saw was breasts being bared, people being hit in the crotch with glass “snow balls,” and a series of people making themselves feel better than someone else by being mean or coarse or both. 

The answer is, “NO.”  What we saw was a lack of any understanding of the Alpha model and how to create long-term self-sustaining success.  These commercials were more like something high school boys come up with at two in the morning after chugging six-packs of cheap beer followed by vodka chasers.    

The real ego-satisfaction elements

The Alpha model that is at the root of Alpha-dominant company thinking has at its core two elements of ego-satisfaction (“self-satisfaction” and “personal significance”).  These are the core benefits customers are buying, even though functional product attributes are often cited as the competitive differentiators.   

These two ego-satisfaction elements are played out by helping people feel… 

• smart, 
• appreciated, 
• empowered, 
• knowledgeable, 
• cared for, 
• envied (in a positive and healthy way), and 
• more in control of themselves or their environment (without the aspect of harming others in the process).  

The kind of advertising we saw in the Super Bowl commercials pointed to none of those.  

Correlation of function and ego-satisfaction

Beyond that, these commercials missed a critical factor in successful marketing:  a correlation between function and promised benefit.  

The key to successful Alpha marketing is the clear correlation of ego-satisfaction and functional attributes.  Function (product attributes or product performance) proves that the ego-satisfaction being promised will be fulfilled.  

Consistency of buying process

Obviously, many otherwise smart marketers have become more than a little confused.  The truth is that there is little difference in the buying process that leads to loyal purchasing behavior, whether you are talking about persons in their early 20s or in their late 50s.  The kinds of things they buy may differ, but young people want ego-satisfaction proven by functionality eery bit as much as do older buyers.

Apple’s line of products is a great example of how a company following the Alpha innovation model attracts both young and old.  It has never pandered.  It has instead designed a line of products that fulfill ego-satisfaction through their design, functionality, and communications.  The young were the first to embrace it, but older purchasers have made it the success it is.  They were not alienated by wrong-headed communications, and the result has been that Apple has finally become the Alpha it always had the potential to become.  

In reality, there is far more similarity between even the types of things the young and old buy now than there was even 25 years ago.  They like generally the same kinds of music.  They are familiar with most of the same cultural media and content.  Food tastes are very similar.  And, most importantly, they make buying decisions in basically the same way.

Study after study (even with audiences in their late teens to mid-20s) shows that persons under 30 are far more motivated to loyal purchasing behavior by Alpha-style marketing communications rather than this kind of pandering.  For anyone older than 30, Alpha-style advertising is even more effective in motivating long-term purchase loyalty.

In fact, there is so little difference in core thinking between persons born in the 50s or 60s and today’s youth that differences have had to be created.  For instance, the so-called “post-modern” thinking of youth today is nothing but a new name for exactly what the 60s were all about. Before that it was in the twenties.  Before that, it was in the late 1800s.  And so on, back as far as recorded history can take us.  

In the buying process, it is and always will be a process of finding something that meets at least minimum functional performance and then weighing how much various qualifying products provide “self-satisfaction” (how I feel about myself) and “personal significance” (how I think others perceive me).  That is the essence of the Alpha model for marketing and innovation.  

The only noticeable difference in buying process is in the level of influence peers have upon decisions.  Younger persons are far more likely to be swayed by peer pressure (especially in things that are purposely designed to seem “weird” or “wacky” to anyone older) than are older persons.  The trouble for marketers is that the things that create interest among younger persons only seldom translate into long-term loyalty, while marketers who recognize the universally common Alpha principles are able to attract both young and old (albeit at different points in the life of the product).  

I feel sincerely sad for those leaders who have cheapened their products with the money they could have used to strengthen them and to give them sustainable success by understanding the Alpha model.  I hope that some of those advertisers might discover the real path to success in creating self-sustaining loyalty, because some of the products being advertised were viable ones.  They just got lost in the mythology of how people buy things.