Organization

What is the Snob Effect?
What is the Snob Effect? Jonathan Poland

The snob effect refers to the phenomenon of a brand losing its prestige and exclusivity as it becomes more widely available or popular. This can happen when a brand engages in aggressive discounting or when it begins to appeal to mainstream culture, leading some individuals or subcultures to view it as less special or desirable. Luxury brands often try to avoid triggering the snob effect by carefully managing their brand image and avoiding mass production or discounts. However, the snob effect can also be driven by customers feeling that a brand is no longer a good value at full price when it becomes more widely available or heavily discounted.

Some examples of Snob Effect:

  1. A high-end fashion brand that starts offering frequent sales or discounts may see its prestige diminish among its core customer base, leading to the snob effect.
  2. A luxury car brand that introduces a more affordable model may risk losing its status as an exclusive and prestigious brand.
  3. A luxury home goods brand that starts selling its products at mass market retailers may see its exclusivity and desirability decline among its original customer base.
  4. A high-end beauty brand that starts offering its products at discount stores may see its prestige decrease among its core customers.
  5. A luxury watch brand that starts producing lower-priced models may risk losing its status as a top-tier brand.
  6. A high-end restaurant chain that starts offering cheaper menu options or discounts may see its prestige decline among its original customer base.
  7. A luxury hotel brand that starts offering discounted rates or packages may risk losing its status as an exclusive and high-end destination.

Organizational Capital
Organizational Capital Jonathan Poland

Organizational capital refers to the intangible assets and resources within an organization that support its operations and enable it to achieve its goals. It includes the systems, processes, policies, and culture that are in place within the organization, and is independent of individual employees. As a type of intellectual capital, organizational capital represents the knowledge and expertise that is embedded within the organization, and can be accessed and utilized by multiple individuals.

Organizational capital can play a key role in the productivity and creativity of employees, as it provides the structures and support needed to enable them to work effectively and efficiently. It is often overlooked or undervalued compared to tangible assets such as physical capital and financial capital, but can be a crucial source of competitive advantage for an organization. The following are common examples.

Mission & Vision
A documented mission and vision that serve as a purpose and direction for a firm.

Organizational Structure
The structure of a firm as represented by an org chart. For example, a flat organization with few levels versus a tall hierarchy.

Principles
Guidelines designed to direct decision making and strategy.

Policy
Policies such as a code of conduct.

Stories
Documented stories designed to create a culture or explain a firm’s legacy.

Training
Training materials such as onboarding documentation and media.

Tools
Tools that are relevant to organizational culture such as a knowledge management system or anonymous feedback tool.

Social Capital
Social Capital Jonathan Poland

Social capital refers to the networks, norms, and trust within a society that facilitate cooperation and coordination. It is the glue that holds societies together and enables individuals to work together towards common goals.

There are several dimensions of social capital, including:

  1. Bonding social capital: This refers to the networks and relationships within a small, tight-knit group, such as a family or community. It can foster a sense of belonging and commitment to others within the group, but can also lead to exclusion of those outside the group.
  2. Bridging social capital: This refers to the networks and relationships that connect different groups or communities. It promotes cooperation and exchange of ideas across diverse groups, but can also be more fragile than bonding social capital.
  3. Linking social capital: This refers to the relationships between individuals and institutions, such as government or businesses. It can facilitate access to resources and opportunities, but can also lead to inequities if some individuals or groups have stronger connections than others.

The level of social capital within a society can have significant impacts on various outcomes, such as economic development, political stability, and public health. Higher levels of social capital are often associated with higher levels of trust, civic engagement, and overall well-being.

However, social capital can also have negative effects if it reinforces existing power dynamics and exclusions. For example, strong bonding social capital within a particular group may reinforce discrimination against other groups.

In summary, social capital plays a vital role in shaping the functioning and cohesion of societies. It can facilitate cooperation and promote social and economic development, but it is important to ensure that it is inclusive and does not reinforce existing power imbalances.

Knowledge Capital
Knowledge Capital Jonathan Poland

Knowledge capital refers to the resources and capabilities that enable a nation, city, organization, or individual to engage in knowledge work, which refers to the production, distribution, and use of knowledge. These resources and capabilities may include education, health, safety, well-being, and culture, which all contribute to the development of knowledge, talent, and ability. In other words, knowledge capital represents the potential of a society or entity to create, share, and apply knowledge in order to solve problems and create value. The following are common types of knowledge capital.

Leadership
The ability to get people moving in the same direction towards common objectives.

Influencing
The ability to sell and influence decisions and actions.

Know-how
Practical knowledge that allows you to complete tasks.

Creativity
The ability to create new value such as designs and art.

Strategy
Identifying goals and objectives and effective plans to achieve them.

Problem Solving
The ability to solve problems.

Decision Making
The ability to make decisions that are likely to work out well.

Intellectual Capital
Intellectual Capital Jonathan Poland

Intellectual capital is the intangible value of an organization that is derived from the knowledge, skills, and expertise of its employees, as well as its intangible assets. It includes both human capital, which refers to the knowledge and skills of individual employees, and structural capital, which refers to the processes, systems, and intellectual property that support and enhance the organization’s operations.

Intellectual capital is a key source of value for organizations, as it can drive innovation, increase efficiency, and improve decision-making. It is also a key factor in the success and competitiveness of an organization, as it enables the organization to differentiate itself from its competitors and to adapt to changing market conditions.

There are several ways in which organizations can manage and leverage their intellectual capital to drive value. These include:

  • Developing and investing in employee training and development programs to enhance the knowledge and skills of the workforce
  • Encouraging collaboration and knowledge sharing among employees to foster innovation and drive efficiency
  • Identifying, managing, and protecting intangible assets such as patents, trademarks, and copyrights
  • Implementing systems and processes that support and enhance the organization’s operations

Overall, managing intellectual capital effectively is an important aspect of business strategy and can help organizations to achieve long-term success and competitiveness. The following are the primary types of intellectual capital.

Human Capital
The knowledge, know-how, abilities and creativity of employees. In many cases, people don’t like to be referred to as “capital.” Terms such as talent or human resources are common alternatives.

Structural Capital
Intangible elements of a firm’s organizational culture, business processes and ability to innovate. This includes documents, media, processes, systems, applications, data, intellectual property and trade secrets.

Relational Capital
A firm’s relationship with the outside world including investors, customers, employees, partners, regulators, communities and other stakeholders. This can include both informal relationships such as business contacts and formal contracts.

Intangible Assets
Intangible Assets Jonathan Poland

Intangible assets are non-physical assets that have monetary value and are expected to generate economic benefits for an organization. They are also known as intellectual property or intangible capital.

Examples of intangible assets include patents, trademarks, copyrights, trade secrets, licenses, and brand value. These assets can be created, developed, and acquired by organizations, and they can provide a competitive advantage by enabling the organization to differentiate itself from its competitors.

Intangible assets can be difficult to value and manage, as they do not have a tangible form and are often not reflected on the balance sheet. However, they can be a significant source of value for an organization and should be managed carefully to maximize their potential.

There are several ways in which organizations can manage and protect their intangible assets, including:

  • Conducting regular assessments to identify and quantify intangible assets
  • Establishing processes for tracking and protecting intangible assets
  • Developing strategies to monetize intangible assets, such as licensing or selling intellectual property
  • Implementing appropriate legal protections, such as patents, trademarks, and copyrights

Overall, intangible assets are an important component of an organization’s intellectual capital and can play a key role in driving innovation and growth.

Business Strategy Examples
Business Strategy Examples Jonathan Poland

A business strategy refers to a long-term plan that outlines the future direction of a company and how it will use its resources to achieve its goals. Factors that influence the development of business strategies include competition, technological changes, and market trends. There are various types of business strategies that can be implemented, such as product, pricing, promotion, distribution, technology, and management strategies. These strategies help a business to differentiate itself from its competitors and achieve a competitive advantage in the market. The following are common types of business strategy.

Strategy Basics
Basic strategy considerations.

  • Business Goals
  • Business Objectives
  • Cost Strategy
  • Critical Success Factors
  • Point Of No Return
  • Strategic Communication
  • Strategic Drivers
  • Strategic Planning
  • Strategic Vision
  • Strategy Monitoring
  • Strategy Risk
  • Tactics
  • Types Of Strategy

Competitive Advantage
Establishing valuable positions that your competitors can’t match.

  • Bargaining Power
  • Business Scale
  • Cost Advantage
  • Digital Maturity
  • Distinctive Capability
  • Economies Of Scale
  • Information Asymmetry
  • Know-how
  • Price Leadership
  • Relative Advantage
  • Strategic Advantage

Strategic Thinking
The ability to achieve goals in an environment of constraints and competition.

  • Capability Analysis
  • Concrete Goals
  • Organizational Resilience
  • Organizing Principle
  • Productive Assumptions
  • Strategic Dominance
  • SWOT Analysis
  • Systems Thinking
  • Thought Experiment

Generic Strategies
Basic strategies that aren’t specific to a domain.

  • Business Of Impermanence
  • Camping Strategy
  • Cut And Run
  • Do Nothing Strategy
  • Economic Moat
  • Embrace, Extend And Extinguish
  • Win-Win

Business Models
Strategies for capturing value that serve as the basis for a business.

  • Added Value
  • Arbitrage
  • Bespoke
  • Bricks And Clicks
  • Club Goods
  • Collective Business System
  • Complementary Goods
  • Consumer Collective
  • Cutting Out The Middleman
  • Designer Label
  • Long Tail
  • Market Maker
  • Product-as-a-Service
  • Razor And Blades
  • Two Sided Market

Market Research
Analysis of target markets and customers.

  • Business Environment
  • Competitive Intelligence
  • Customer Analysis
  • Marketing Experimentation
  • Target Market
  • Test Marketing
  • Voice Of The Customer

Marketing Strategy
Strategies for product, pricing, promotion, advertising and distribution.

  • Advertising Strategy
  • Algorithmic Pricing
  • Branding
  • Business Development
  • Channel Strategy
  • Communication Strategy
  • Customer Service
  • Distribution Strategy
  • Market Development
  • Marketing Economics
  • Mass Customization
  • Positioning
  • Price Discrimination
  • Pricing Strategy
  • Product Strategy
  • Promotion Strategy
  • Sales Strategy

Technology Strategy
Strategies related to technology products or internal information technology functions.

  • Decision Automation
  • Decision Support
  • Digital Transformation
  • Gamification
  • Information Visualization
  • Integration
  • Knowledge Management
  • Modernization
  • Process Automation
  • Process Improvement
  • Process Integration
  • Process Orchestration
  • Self Service
  • Service Management
  • Statistical Analysis

Management Strategy
Strategies related to directing and controlling organizations.

  • Action Items
  • Benchmarking
  • Best Practice
  • Business Transformation
  • Capability Management
  • Change Management
  • Delegation
  • Facilitation
  • Goal Setting
  • Job Rotation
  • Management By Exception
  • Preventive Action
  • Principles
  • Process Reengineering
  • Risk Management
  • Target Operating Model
  • Turnaround Strategy

Cost Reduction
Eliminating waste and improving productivity.

  • Automation
  • Complexity Cost
  • Operational Efficiency
  • Productivity
  • Retrenchment
  • Technical Efficiency

Innovation Strategy
Strategies for inventing significant new value.

  • Creativity Of Constraints
  • Design Thinking
  • Fail Often
  • Fail Well
  • Innovation Culture
  • Prototypes
  • Ship Often

Intellectual Property
Developing creative works, inventions and brand symbols.

  • Defensive Publication
  • Inventive Step
  • Trade Dress
  • Trade Secrets

Organizational Structure
The design of organizations.

  • Core Business
  • Core Competency
  • Line Of Business
  • Mergers
  • Restructuring
  • Strategic Partnership
  • Structure Follows Strategy
  • Vertical Integration

Strategy Failure
Common patterns of strategy failure.

  • Creeping Failure
  • Failure Of Imagination
  • Measurement Balance
  • Plateau Effect
  • Pyrrhic Victory
  • Resistance To Change
  • Technology As Magic
  • Unknown Risks

Strategic Planning Techniques
Strategic Planning Techniques Jonathan Poland

Strategic planning is the process of defining an organization’s direction and making decisions on allocating its resources to pursue this direction. It involves setting goals, analyzing the competitive environment, and identifying external and internal factors that are favorable or unfavorable to achieving the goals. Effective strategic planning requires strong leadership, clear communication, and a commitment to continuous improvement. It helps organizations align their resources and efforts towards a common vision, and can lead to increased efficiency, competitiveness, and success. The following are techniques that are commonly used to plan a strategy.

Benchmarking
Benchmarking is the comparison of your metrics with a competitor or industry average. For example, a firm may consider how much its spending on innovation or technology relative to its industry.

Budget Planning
In many cases, strategy formation is closely tied to an annual or quarterly budget planning process.

Business Analysis
Validating the assumptions that underlie your strategy with business analysis techniques such as voice of the customer or statistical analysis.

Business Cases
A business case is a formal proposal for a strategy that includes analysis of benefits, costs and risks.

Business Models
A business model is the framework that an organization uses to capture value. In most cases, a strategy adds products, services and capabilities to an existing business model. Occasionally a strategy may also seek to transform a business model or enter new industries.

Business Plans
A business plan is a proposal for a major new initiative such as entering a new market or transforming a technology platform. Business plans are most typically targeted at investors in new businesses but can be developed internally where due diligence is required.

Capability Analysis
Describing your organization as a set of capabilities and identifying gaps that represent a competitive weakness or new capabilities that represent a potential advantage.

Competitive Intelligence
The practice of gathering information about competitors, markets, products, industry trends and customers. Competitive intelligence is a fundamental input for strategy planning.

Estimates
Developing preliminary estimates for strategic plans using a high level estimation methodology such as reference class forecasting.

Financial Analysis
Analysis of financial metrics such as return on investment and payback period.

Forecasting
Strategy planning often requires forecasts such as predictions of market demand.

Goal Planning
A goal is a desired outcome. Strategy is primarily driven by goals in the context of the opportunities and threats that exist in the market. It is common to define goals as a starting point of strategy planning.

Goal Setting
Goal setting is a means of strategy implementation that sets goals for your organization, departments, teams and individual contributors.

Management Accounting
A collection of accounting techniques that support management decision making and optimization.

Market Analysis
An analysis of market conditions such as size, growth rates, demographics, influencers and trends. Important to industries such as technology and fashion that experience a high rate of market driven change.

Mission and Vision
Mission and vision are fundamental statements of why you exist and where you are going. Organizations with a strong sense of identity and purpose tend to develop more effective strategies.

Prioritization
In most cases, an organization develops far more strategies than it’s possible to execute due to constraints such as budget and time. As such, prioritization is a critical strategy planning step that decides what gets done. A strict ranking of priorities typically achieves more than a rating system.

Risk Identification
It is common for strategy planning to involve early phases of risk management such as risk identification with estimates of impact and probability.

Scenario Planning
Scenario planning is the practice of planning tactics in advance.

Strategic Drivers
Strategic drivers is a broad term for everything that influences a strategy including mission, vision, goals, values, principles, competition, regulations and markets. Listing out strategic drivers is a basic step in strategy formation.

Structured Decision Making
The use of a process for strategic decision making such as steps that allow your entire organization to provide strategy proposals with a system of prioritization and approvals.

Structured Planning
The use of a process for strategic planning that might include information gathering, strategy formation, estimation, business cases, reviews, decision making points, budget approvals and goal setting.

Swot Analysis
An evaluation of current strengths, weaknesses, threats and opportunities.

Target Operating Model
A vision for the future capabilities of your organization.

Mission Statement
Mission Statement Jonathan Poland

A mission statement is a statement of purpose that defines the goals and values of an organization. It is a statement of what the company stands for, and what it aims to achieve. A mission statement should be clear, concise, and memorable, and should provide a sense of direction and purpose for the company and its employees.

The importance of a mission statement cannot be overstated. It serves as a guiding principle for the organization, and helps to define its values, goals, and purpose. A mission statement helps to communicate the company’s vision and direction to employees, stakeholders, and customers, and helps to create a sense of purpose and meaning within the organization.

There are several key elements that should be included in a company mission statement. These include:

  1. Purpose: A mission statement should clearly articulate the purpose or reason for the company’s existence. This should go beyond just making a profit, and should include a sense of social or environmental purpose.
  2. Values: A mission statement should reflect the values and beliefs of the company. These values should guide the company’s actions and decision-making.
  3. Goals: A mission statement should outline the company’s goals and objectives. These should be specific, measurable, attainable, relevant, and time-bound.
  4. Customers: A mission statement should identify the company’s target customers and describe how the company aims to meet their needs.
  5. Differentiation: A mission statement should differentiate the company from its competitors and explain how it is unique.

In order to create an effective mission statement, it is important for a company to carefully consider each of these elements and create a statement that reflects the company’s values, goals, and purpose. A mission statement should be reviewed and updated periodically to ensure that it remains relevant and aligned with the company’s direction.

Overall, a company’s mission statement is an important tool for defining the purpose and direction of an organization. By clearly articulating its values, goals, and purpose, a company can create a sense of meaning and purpose for its employees and stakeholders, and differentiate itself from its competitors.

Internal Branding
Internal Branding Jonathan Poland

Internal branding involves creating a strong brand identity within the company itself, rather than just focusing on marketing to customers. By aligning the company’s actions and messaging, internal branding helps to create a sense of authenticity and coherence within the organization. This can lead to increased employee engagement and a more cohesive company culture. By building a strong brand from the inside out, companies can create a more authentic and genuine brand identity that resonates with both employees and customers. The following are common types of internal branding.

Brand Strategy
Involving employees in branding. For example, ask all teams or individual contributors to submit a short statement of what the brand means to them.

Communication
Get insiders talking about the brand. Communicate brand initiatives to employees and encourage them to share it openly.

Corporate Culture
Work to align your norms, rituals, expectations and habits to your brand.

Training
Training that goes beyond the technical details of how to do a job. Explain why work is important and how practices connect to your identity and values as a firm.

Customer Experience
Design and deliver experiences that live up to your brand in areas such as customer service, communications, websites, tools, products, services and environments.

Quality
Quality control and the design of quality products beginning with product development.

Operations
Aligning operations practices in areas such as sustainability to stated brand values, mission and vision.

Recruiting
Recruiting people who match your culture and brand. If your brand claims to be obsessed with sports, hire people who are obsessed with sports.

Performance Management
Performance management that reflects your brand. If your brand is about diligent and friendly customer service, this would be reflected as goals for any employees who meet customers.

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