A couple things to like about 43 Things

In the world of online social networking, there is about as much to like about it as there is to like about reality television (that is, not much). Between the pedophiles, timewasters, isolation, engendering of false importance, hijacking by poorly disguised shills trying to leverage this new medium, its all gotten a well deserved bad rap.

And then comes 43things.com; a social networking site, of sorts; also a bit of a support group, of sorts; a self-inflicted guilt trip, perhaps. But most of all it appears to be an example of what the personal element of the web can aspire to beyond the valley girl blog entries of MySpace and the shopping mall of Amazon.

Select your 43 things; create them yourself or get inspired by others' goals ("get my abs back", "read Anna Karenina", or "learn how to tie the stem of a marashino cherry with my tongue".

It doesn't matter what it is, as long as it is yours and you are committed to it. So happy New Year. As for me, I'll stick with my entry from a year ago - as it all still holds true.

And good luck with that cherry thing.

Giving the finger to the world

"Everyone hates us, I don't know why, we may not be perfect, but heaven knows we try."

- Randy Newman, "Political Science"

That line, from my favorite songwriter, was written over thirty years ago but it seems that history is repeating itself. According to a Pew survey, global perceptions of the United States continue to worsen. In Britain, our collective favorable rating is only 56%, off from 83% in 2000, and it is worse throughout Europe, where the favorable percentage falls to well below half. Even in Asia, in countries that benefitted from unmatched American generosity following several recent natural disasters, the perception of the United States is dismal.

New Pepsico CEO Indra Noori, quoted in a Septenber US News and World Report article, quipped: "Its time that U.S. businesspeople give the world a hand, not the finger."

All debate regarding current Administration policies and globalization aside, it may be time to work toward a makeover for 'brand America'.

The Bush Administration recently convened a group of 14 CEOs with Commerce secretary Carlos Gutierrez to discuss the issue, of which one of the many recommendations was to create a nationally coordinated marketing campaign. Interesting.

Back in the day, (mid-90s) when I was a Vice President for the Dallas Advertising League, I had the opportunity to share the dais with Roy Spence, President of respected Austin-based advertising agency GSD&M. Prior to his sure-to-be inspiring speech to the local advertising students who had gathered for this luncheon, our conversation had turned to politics. I'll always remember Roy for this illuminating comment: "There are too many unnecessary cabinet members. We just need the president, and a Secretary of Marketing. If the Department of Marketing did the job correctly, they'd be no reason to have any of the others."

And there would be peace in our time. (Hey, a boy can dream.)

Rethink Your Business

Interesting article in Fortune about managing chaos featured these interesting approaches to addressing your business challenges in what is an increasingly unpredictable world:

Tough talk: Force a conversation on how the company will have to operate differently to be successful not now, but two years (or more) out. This keeps navel gazing and self satisfaction of today’s successes at bay. I’ve referred to this as having Crucial Conversations, which is also the title of a book to which one of my former graduate professors contributed.

Yellow flags: Pay close attention tro what your sharpest, most mobile (those who can change suppliers easily) customers are doing. They act as an early warning system. That is, while it is possible to set up barriers to customer churn, ultimately these factors (sticky applications, etceteras) will merely slow the stampede. A few months ago, I finally changed banks even though I had established CDs, safe deposit boxes, checking, savings, online banking, direct deposit and a host of other services with them. The hassle postponed the move, but did not eliminate it, as I was finally irritated enough with high fees and poor service (and a non-committal response from executives to my complaints) that I took the time to make the adjustment.

Remodel early: Start changing your business model when you are most successful. See my earlier post from January: “The time to repair the roof is when the sun is shining.” (JFK)

Abandon yesterday: Maintaining what no longer works draws resources away from the job of creating tomorrow. Any decent financial planner knows that there is a time to abandon all hope that your holdings will rebound. Create a storyline: Your company’s past, present and future is a story: articulate it as such to all stakeholders!

Corporate Self-delusion

According to a Bain & Co. survey, corporate self-delusion is at critical levels, particularly as it concerns perceptions of customer satisfaction. The survey of 362 firms found that 80% believed they delivered a 'superior experience' to consumers. Yet only 8% of customers of those same 362 agreed with that characterization.

So why the chasm? One, companies are defining their own standards of performance. Two, they aren't looking broadly enough at the entire customer experience. It is critical that companies transform quality and service measurements according to customer expectations and experiences, not internal operational standards. Let's look at these two critical issues by picking on, say, randomly, a cable company...

Cableco says it has over a 90% satisfaction rating because they are arriving within a promised four hour window 94% of the time, and addressing the issue on the first visit 97% of the time. Trouble is, customers do not see waiting for half a day as good service, even when that time window is observed. Conscious of the value of their time, they want a narrower service window. Further, after a four hour wait, resolution on the first call is a considered a baseline standard for customers, not an indication of superior service.

Relatedly, if timeliness and first call resolution are the only standards Cableco uses to measure satisfaction, they'll overlook other critical touchpoints that impact customer experiences - from the initial call and ease of use of an IVR (Interactive Voice Response) system, to the physical appearance of technicians, through to the billing system and complaint resolution process.

Then, as competitors recognize the factors that are impacting the customer experience and make adjustments to their own policies to exploit them, Cableco will continue to hemmorage market share as their leadership gazes contentedly at a PowerPoint slide that reveals "90% customer satisfaction".

When it comes to customer satisfaction, measure the right things. Not just the easy things.

Confident Leadership

"The qualities that people look for most in leaders is not infallibility or infinite knowledge but confidence in themselves and in their group's collective ability to find a solution." - Jerry Colonna, Flatiron Partners

You have cash in the bank, a market-leading product, enviable market share, and the attention and affinity of analysts. Yet it is the confidence exposed and inherent in corporate leadership that drives morale. When it is said that companies succeed 'in spite of themselves', it is as equally likely due to this inability of leaders of companies in enviable circumstances to inspire and motivate employees as it is to complement leaders of an otherwise struggling organization with maintaining an environment of enthusiasm and dedication among employees.

If faced with being part of a currently leading organization uncertain of its circumstances, fearful of the future and unwilling to take risks, versus a struggling organization revitalized by a confident, encouraging leader; it is not difficult to determine to where the quality employees and smart investors will be drawn.

Yesterday means nothing, you don't lead from the rear.

720 Hours

I was perusing old Fast Company articles and stumbled across one from 2000 that highlighted a company called etime (I googled the company and discovered they were acquired in 2002 by TradeBeam, www.tradebeam.com).

In the article, it is pointed out that commerce technology's promise is not one way, and as the delivery of goods and services is sped through the introduction of new technologies, and suggests that accepted standards such as the 30 day due date for accounts receivable is a relic.

It sounds at first blush an overstatement, but upon refelection, if the issue were prepayment for goods and services with a thirty day delay before receiving them, it would cripple manufacturing (rendering JIT useless) and slow economic growth. What must be the as-yet unrecognized impact of slowed access to Accounts Receivable?

Treating your vendors well is a reflection on the brand, so this is an opportunity for creative differentiation in the market - at least as it impacts the supply chain. Certainly timely payment would be rewareded by vendors with discounts and better service, which is passed forward to the consumer.

So what argument still preserves thirty days (or more) AR in business to business transactions?

Perhaps this is yet another opportunity to rethink all of the ways the consumer is impacted by business decisions throughout the organization, and then re-create them to impact direct or indirect creative differentiation in the market.

What does it take to be a great marketer?

A great marketer is an individual that works to assure the company knows itself.

To do this a marketer must understand the motivators and measurements that drive activity in all the seemingly disparate functions of an organization and discover the common thread among each. This constancy drives, and is driven by, the vision of the organization, which in turn is incorporated into product and service roadmaps, evangelized by management and employees, communicated to the market, and finally delivered upon to the customer.

A great marketer is a leader in facilitating the discovery of the organization’s vision, a motivator in engendering it among employees, a strategist in building that vision into the delivered goods and services, a tactician in articulating it to the market, and a customer advocate in assuring that it is delivered upon.

Watch Your Behavior

For ages marketers have segmented consumers by age, education, geography, income and gender, or any combination of these descriptors and several other similar segments. More recently, these have been further parsed with psychographics, which segment individuals by beliefs and biases. Today, I advise clients to research and segment consumers by buying behaviors instead, as the other established segmentation methods are increasingly antiquated.

Aging but active boomers, formerly self-involved Gen Xers pushing strollers, computer-savvy grandmas, stay-at-home Dads and other so-called 'anomolies' are blurring long-held views of what defines a generation or gender. Combined with the power consumers have to gather and share information about brands and products, no traditional demographic component is particularly useful in product development or messaging.

Whether retail or business to business, buying decisions follow discrete, established processes of collecting and evaluating information that are far better barometers of what messages and media are most effective.

Reaching out and responding to consumers is most effective as a reflection of common behaviors, not birthdays.

...and in between promotions, a game was played.

In Promo-palooza, blogger David Nottoli recounts the number of promotions (not counting advertisements) to which he was subjected during a recent Padres-Mets game at Shea.

By the numbers:

Sponsored Promotions: 47
Participating Companies: 36
Attendence: 49,979
Final score: Mets over Padres, 4-3

http://davidnottoli.typepad.com/sidewalklife/2006/08/promopalooza.html

Dis-synergy

In the world of mergers and acquisitions, an activity that appears to be going through its cyclical upswing currently, there is much discussion regarding revenue synergies, expense synergies, and to an (unfortunately) far lesser extent, market and cultural synergies.

What is often overlooked are the dis-synergies* inherent in each proposed merger or acquisition. With 70% of M&A failing to reach the top-line synergies promised, and 25% missing the expense reduction mark by 25% or more, perhaps it is wise to give more weight in diligence to potential disruptions - dis-synergies - than the oh-so-appealing potential synergies. While they vary from industry to industry, some of these dis-synergies include:

- Not understanding customer motivations for loyalty, resulting in more customer loss than anticipated.
- Loss of employee productivity during the period of diligence
- Underestimation of the impact of 'onetime costs'
- Loss of quality employees to competitors seeming to offer more stability
- Underestimating the amount of time to address both the external and internal requirements of a merger, including information systems, branding, reporting structures, and all related processes

*Scott Christofferson, McKinsey and Company

For more information on this, contact Strategy180 (www.strategy180.com) for the McKinsey brief.

Channel Surfer

Of the constantly refined and now largely modified "4Ps of marketing", the one that most often is outside the narrowed authority of a business-to-business marketer is "place" (which addresses channels - distribution... the other Ps, of course, are product, price and promotion).

The new business models introduced in the past decade that have revolutionized the way businesses are managed and products marketed forces companies to change many of their long-held beliefs about the role and influence of marketing, particularly as it impacts decisions regarding distribution and margin management.

The requirement for marketing's involvement in distribution is driven by marketing's understanding of the customer. The role of 'place' in creating differentiation cannot be overlooked strategically, as distribution methods are often difficult to mirror by the competition and can be associated by customers with actual product or service offerings. (Dell, for example, is known more for its website, kiosks and direct to customer model as for its products.)

Customers remain the primary concern, but the way these customers' needs are met have already changed manufacturing practices... today, it changes distribution practices... not only will the products be developed as part of "mass customization", so, in a sense, will the manner in which these customers actually get the product. It is now important to identify and promote the most profitable available customer segments (and with the greatest potential) and to serve them with the most efficient delivery model, be it direct sales, catalog, internet, or any other of the numerous hybrids.

Re-evaluating channels is just one of the challenges that the proliferation of segments, brands, messages, media, and channels poses for marketers. You can uncover unserved markets, lower costs, and increase per customer revenue by guiding customers to the most efficient channels. To do so, companies should try to get a clear understanding of their channels and plan proactively with their channels and channel partners. The expanded role for marketing in distribution strategy has never been more important.

Theodore Levitt, RIP

We lost a marketing icon last week, as Theodore Levitt died at age 81. A thought leader and past editor of the Harvard Business Review, Ted Levitt revolutionized the way marketing was researched, taught and conducted.

His 1960 article for Harvard Business Review, called "Marketing Myopia", is the source of the oft-repeated comment that firms that define themselves too narrowly do so at their peril - the example being railroads defining themselves as in the railroad industry and not transporation industry allowed them to be overtaken by upstart airlines, air cargo, and trucking firms.

Globalization is also a term first coined by Levitt as early as 1983, with an equally influential article "The Globalization of Markets," which addressed the new world markets for standardized consumer products and started today's debates regarding globalization.

It is a giant passing and all of us in the industry who work to improve marketing's effectiveness, influence and credibility owe Theodore Levitt a great debt of gratitude.

Big Ben Learns A Lesson

Ben Roethlisberger, the youngest quarterback ever to win a Super Bowl was not wearing a helmet when he crashed into a car that was turning left in front of his motorcycle. But today Roethlisberger said in a statement that if he ever rides a motorcycle again “it certainly will be with a helmet.”

I would have laid odds that a young man like Roethlisberger would have gone the route of so many others, cursing luck through broken teeth while vowing to continue the behavior, defending what clearly was an error in judgement. So congratulations to Ben for doing what so few of today's business leaders seem to be able to do: Admit a mistake, take responsibility, and change direction. Such responsibility saves careers and saves companies.

In this particular case, it may save a life as well.

Good Effort

The boys run off the field after the last out and after allowing four more runs. "Good effort, guys!" shout the coaches.

That's the way you manage boys. Six, seven, eight year olds. Effort is important. Instilling the team effort, good sportsmanship, putting forth your best effort.

But when it comes to marketing efforts, a 'good effort' is never enough. It is too easy today to measure, refine and improve. Too often, 'a good effort' is all that expected of marketing. And far too often, that is all marketing professionals expect of themselves.

No more 'visibility', no more 'mindshare', no more intangible measurements that only serve to give credence to management biases against marketing. Measure marketing performance with home-grown or commercially available marketing dashboard software. Then you can build the credibility that is required for marketing to get a seat in the boardroom and leave the 'keychain and brochure people' characterization long behind.

Related articles

• How CMOs Can Measure Return on Ad Spend with Better Modeling and Conversion Attribution
• Five Questions Every CEO Should ask Marketing
• Why You Need Marketing Analytics, Not Web Analytics

Analysis Paralysis

Inasmuch as I just defended 'process' in my earlier post, at the urging of a reader email (use the 'comment' button, folks, email is so 2002!) I thought I ought to also clarify that the bane of my existence is 'analysis paralysis'.

Analysis paralysis differs from effective process in that my concept of the latter adds value by directing and supporting common efforts in an organization. Analysis paralysis is the polar opposite of this; it represents unnecessary expense as real and opportunity costs are incurred for repetitive, redundant analysis continually applied to a problem (or its proposed solution) without adding any additional relevant data. This can be intentional (as is found in politics as committees are formed for 'further study' in order to shelve controversial issues) or unintentional (lack of confidence in one's ability to reach a decision).

Here's excellent reading on a related subject: Blink by Malcolm Gladwell

Process is not a four letter word.

In the popular cult favorite, The Hitchhikers Guide to the Galaxy by the late Douglas Adams, Vogons are creatures described as "extremely ugly, extremely officious, and generally not much fun to be around... only their stubbornness allowed them to survive. They generally become bureaucrats in the galactic government and their unpleasant demeanour makes them ideally suited to such employment".

Now there's an unappealing profile that you won't find in any Myers-Briggs personality profile, however this caricature rings true due to our generally accepted opposition to useless red tape.

I'll admit that as much as I oppose useless red tape, I am a fan of process. But only those processes that are designed to expedite, measure, and improve actions, not slow and needlessly monitor and approve actions. Too often extremes are found in corporate America - either too many controls, or in order to avoid such lumbering processes, too few. The former processes result in disengaged employees and an organization unable to change quickly; the latter, an organization lacking common understanding and duplicating or negating efforts of others.

Processes are not poison. They simply need to be developed and followed in a way that keeps the end goal in mind, be it customer satisfaction, margin support, or new product development. Processes are meant to free people to do their jobs make decisions and act quickly, not constrain their ability to contribute.

Of plaster and planning

So my bride and I finally decided to start a major remodel last week; the master bath is being turned upside down, with virtually everything new except the ceiling, and even that was repainted.

But it was going to be quick and easy, this remodel, because we researched, we shopped, we planned. We knew precisely what we were going to do.

Of course, we thought there may be a delay in getting the tile, an unexpected foundation problem around the tub, or a mismatched color between the countertops and cabinets. Or something.

We foresaw the unforseeable, and that's not an oxymoron.

Just because you can't see trouble ahead doesn't mean it won't come. Its not enough to have a Plan B or Plan C. Alternate plans only allow for a complete re-boot, and today's competitive environment doesn't allow the time or cost in starting over. It requires that you be able to plan well enough that the best plan is a flexible one. One plan, not alternative ones.

So now we have different tile than we first spec'd, we are painting the existing cabinets, and the closet doors are different than we first envisioned. It's over-budget and a week delayed according to the promises initially offered by the contractor. But its under-budget and currently ahead of schedule from what we had expected, and its still going to be exactly what we wanted.

Now that's a plan.

The check is in the mail...

Here's an oldie but a goodie from the Fast Company archives. The Five Most Common Lies In Business reveals nothing that we didn't already suspect, and for those who have told them, nothing they didn't already know. I'll add another:

Lie #6: "We are investing more into marketing."

Truth: "We hope to have more left over for marketing when we finish our other planning."

B.S. Detector: Until marketing is involved at the outset of planning, consulting on promotional spending and market messages, product launches and the like, sales cannot plan their quotas with any certainty.

I know of a firm where the Sales VP, frustrated at the CFO's apparently arbitrary reverse budgeting and quota-setting (working from a target EPS backward) simply threw up his hands and said, "Make the quota whatever you want it to be. There's no way we can make it with the current product mix, and I have no idea what you are going to give to marketing to support us, but go ahead." This exasperated outburst was mistaken for agreement, and the unrealistic quotas were set, and no doubt marketing blamed when they were not met.

Rule #3: Have sex.

"The speaker wore his usual uniform of a faded black Timberland sweatshirt and jeans; his London audience was all tailored suits and double-cuffed shirts. But as James Montier finished explaining why money shouldn't be equated with happiness, the equity and bond traders rose to their feet in applause. "I don't think they heard much beyond rule 3," Montier quipped afterward. Rule 3 of his 10 for achieving sustainable happiness is, 'Have sex.'"

An article in this month's Fast Company details maverick financial analyst James Montier's rules for investing. I liked these so much I'm listing several here with my corollaries regarding how they address transformational marketing and change management as well.

1. Leaving the trees could have been our first mistake. Our minds are suited to solving problems related to our survival rather than being optimized for investment decisions. My corollary: Buying decisions - even those regarding matching specifications to features as in fulfilling design specs - are made in the self-interest, not the objective fact. Market to the emotion, not the intellect.

2. Why does meeting companies hold such an important place in the investment process of many fund managers? Because we need to fill our time with something that makes us look busy. My corollary: As with investment decisions, many buying decisions are made before we ever review, or complete reviewing, the sponsor's 'factual' message. The access to information is so pervasive today, it must be consistently presented across all communication outlets from mass media to watercooler conversations.

3. Our minds are not supercomputers and not even good filing cabinets. They bear more resemblance to Post-it Notes that have been thrown into a bin and covered in coffee. The ease with which we can recall information is likely to be influenced by the impact that information made when it went in. My corollary: Brevity is good.

4. Don't equate happiness with money. Materialistic pursuits are not a path to sustainable happiness. My corollary: In life as in business, make the process the pursuit. Because until you are 'there', you'll never be satisfied, and if you do get 'there', you've often nowhere to go but back again.

5. People adapt to income shifts relatively quickly; the long-lasting benefits are essentially zero... One of my recommendations is to stop, take note, and give thanks--not necessarily to God but just to reflect on what you've achieved and what you've got. You need to stop and think, "Actually, I'm damn fortunate." My collorary: Really, I can't top that one. (Damn, I'm fortunate.)

Big Search v Big Brand

According to a Harvest Digital study highlighted in a recent article in IT Week, a brand's influence on directing internet traffic pales in comparison to the influence of search engines. 43% of users are likely to click on links simply because they are on the first page of results, now culled not from one or two words but from three or four word search terms. The same UK study indicated a coming fracture in Google's dominance of search. As marketers, the time has passed when we could manage SEO activities with static metatags and homespun tracking tools. Search Engine Optimization is very much front and center of the marketing mix.

Recommended Reading

I just finished reading Bossidy and Charan's latest, Confronting Reality.

Like their last book, Execution, I found the content to be straightforward, intuitive for most. Yet perhaps the authors were told after the success of Execution that leadership was still more about PowerPoint and politics than actual execution - after all, if you don't know where to start you tend to be hamstrung. The message is to start with (get this) a business plan; one consisting of a hard look at internal, external and financial realities. Using many case studies from Allied Signal to Home Depot, the authors illustatrate how an unbiased view of these forces can shape a workable strategy and a thriving - I would say surthriving - organization. The book gets a bit repetitive but perhaps if I confront my own reality - that today's leadership requires this sort of basic business refresher - then it will have an impact on the leaders for whom it is directed who will take the time to read it.

"Some Exec Must've Read An Article..."

A recent article in the New York Times revealed the all too predictable and (if you aren't a GM exec) humorous outcome of a Chevrolet Tahoe viral marketing campaign that allowed consumers to write their own advertisements:

"At first glance, the video looks like a typical 30-second car commercial: a shiny sport utility vehicle careers down a country road lined with sunflower fields, jaunty music playing in the background. Then, white lettering appears on the screen: "$70 to fill up the tank, which will last less than 400 miles. Chevy Tahoe."

The commercial is the product of one of the advertising industry's latest trends: user-generated advertising. On March 13, Chevrolet introduced a Web site allowing visitors to take existing video clips and music, insert their own words and create a customized 30-second commercial for the 2007 Chevrolet Tahoe."

'Shockingly', we find that pranksters and environmental activists are the most likely users of this viral marketing campaign. It sounds suspiciously like a virus alright. Where I've worked, it is usually transmitted to executives on transcontinental or international flights, who, having been bumped to coach and low on laptop power, have no choice but to catch up on their reading. The result is a widespread contagion - a distribution of a photocopied article and a new directive to employ an emerging media, approach, or program without regard as to whether it is appropriate to the marketplace.

From the article, emphasis mine: "Drew Neisser, the president and chief executive at Renegade Marketing, a New Yor (sic) agency specializing in nontraditional marketing that is part of Dentsu, said companies had such a strong desire for user-generated advertising that they were willing to accept the risks. 'There's this gold rush fever about consumer-generated content,' he said. 'Everybody wants to have consumer-generated content, and Chevy Tahoe doesn't want to be left behind.' A spokeswoman for Chevrolet, Melisa Tezanos, said the company did not plan to shut down the anti-S.U.V. ads. 'We anticipated that there would be critical submissions,' Ms. Tezanos said. 'You do turn over your brand to the public, and we knew that we were going to get some bad with the good. But it's part of playing in this space.'"

Ms. Tezanos, one does not 'turn over' a brand to the consuming public. The brand was never yours to give. It is always your public's brand. However, what you do not do is pay for and provide a platform for your brand's critics.

To play Advertising Agency Creative Director yourself, here's the link: http://chevyapprentice.com/

For Every Action There Is An Equal and... Identical Action?

I’ve been in more situations than I can count where a company does far too little in the way of proactive marketing and far too much reactive marketing. The difference between the two is fundamental.

Proactive marketing is marketing where the outgoing message is controlled by your own company. “But aren’t all outgoing marketing messages controlled by the company?” you might ask.

No.

Unfortunately in most business-to-business environments, marketing strategies and their inter-related advertising messages are actually driven by their competition, making for reactive marketing, which necessarily guarantees a marketing message that is both late to market and no longer relevant to the conversation.

I once had a software client who, upon looking at a creative presentation that involved bees and a beehive, commented that her competitors were sure to joke that the product had ‘bugs’. She was more concerned about possible sarcastic comments from competitors than articulating a clear message in her ads – as if the campaign – even a ‘killer campaign’ – would stop competitors from saying things that were, well, competitive. In Marcom, this is also seen in the rationale to participate in industry events, where companies continue to invest money with declining returns just to ‘be present’, or ‘support the industry’. Often this is further complicated by ever-increasing investments in clever and complex booth themes, as if the Griswolds from the movie Christmas Vacation were event planners.

Yet while marcom is most obvious, sometimes the reactive approach encroaches in ways far less obvious. Strategically, it happens when companies look at a competitor’s recent success in product, promotion, or distribution and attempt to copy it outright, opting for guaranteed also-ran status instead of taking chances to find niche differentiation.

The reactive element is often even more insidious than marcom or strategy. Often it is organizational. Many companies do little to discourage employees from entering into a habit of self-effacing navel-gazing, lamenting their opinion that the company is the least among competitors; and yet, whenever a hire is made from another company, it is surprisingly discovered that the other firm deals with the same issues. Proper leadership stems the natural tendency toward corporate self-flagellation and encourages morale and confidence – in employees, customers, and investors.

Competitive actions are part of the environment in which your marketing must operate, not the sole driver for its strategic direction. Other considerations, including, importantly, customer needs, are the real drivers. Anticipating these needs, then marketing to them proactively and confidently will always make you the lead dog. And as the bumper sticker slogan says, “If you aren’t the lead dog, the view never changes.”

That Man Behind The Curtain

So a former colleague tells me this afternoon that the company he works for has just sold an expensive software application, a breakthrough that has been anticipated for months. Trouble is, it is expected to consume all the division's development resources for six months (in spite of claims to the contrary, this product is merely 'slideware', that is, product existing only on PowerPoint slides), and is only the first in what is supposed to be, according to revenue projections, ten such sales over the year. The development is not 'build once, deploy multiple times'. It is largely custom.

So how does a company manage to project annual sales five times greater than their production capacity?

An enormous oversight? Is someone having a 'palm to forehead' moment? Not likely. This was anticipated, in a sense. This company, and many others like it, operate under two major, driving assumptions: One, a defeatest attitude that what they are selling will not be bought but will 'position it' for sales of lesser, more deliverable solutions; and two, that impossible tasks are made possible by sheer force of will.

Of the former, any company trying to market itself on the back of slideware that, if successfully sold, would cripple the company's ability to function efficiently, is self-defeating at best and fraudulent (to investors, customers, employees) at worst. The first rule of sales is to believe in yourself and your product. Continued failure to deliver on promises and sufficiently resource projects will undermine customer, investor and employee confidence. It is a consciously engaged strategy designed to hide unpleasant truths for short-term gains.

Of the latter, this only happens in movies. Excepting perhaps for heroic feats in the early years of the space program, impossible tasks are just that - and expectations of rabbits from hats reveal what is essentially an utter lack of planning and no real understanding on the part of management of the broader organization's inter-related functions, a fundamental disconnect from the laws of physics. Too many companies survive (barely) only because of the efforts of a narrow top percentile of employees that are burdened because they are averse to allowing failure - theirs or others. This leads to stress and burnout among the most dedicated and talented, as their efforts become not recognized, but expected; their eventual financial rewards not exceptional but typical.

Vision, mission, strategic planning is designed to avoid all this; honest concession, compromise, discussion and above all, leadership, drive sales and development plans that work as a cohesive unit, breaking barriers and driving growth. This is a company instead driven for short-term result, employing sycophantic ramblings to investors and employees, and an avoidance of the hard decisions that come with leadership. This is a picture of a company on the decline.

The Smartest Guys In The Room

On a strong recommendation from a former colleague, I added "The Smartest Guys In The Room", a documentary about Lay, Skilling, Fastow, et. al. and the hubris that led to the collapse of Enron, to my Netflix queue and had the opportunity to watch it last night. I am now watching the trials of Lay and Skilling with greater interest (and understanding) than before, and more convinced than ever that the "soft skills" now part of many business programs are critical to operational and individual success.

Enron's culture was driven by hubris, arrogance, and ego - the filmakers try to equate this with greed, but I see only Fastow (who skimmed gains on the questionable off-book partnerships and depositied them in personal accounts) as greedy - the rest saw money - as represented by Enron's market cap - as the scoreboard, evidence of their 'genius' and individual superiority. Being the smartest guys in the room - and being widely recognized for it - was not only their own motivation, but became a driving force for employees at all levels, from Lay to the energy traders working the phones.

An individual that insists on being the smartest guy in the room - especially to the extent that dissention is met with threats and dismissals - is a parasite that eventually devours the host. True leadership not only accepts but encourages individual thought, action, and opinion from all levels.

Illustrating this point, BBDO ad agency creative chief David Lubars was quoted in the September 2005 issue of Fast Company: "I want people to challenge me. I want them to feel they can step up and bring ideas. I insist on not being the smartest guy in the room. But if I hear everything, then I can help craft the smartest idea in the room. Here's the thing: Phil (Phil Dusenberry, Lubar's predecessor) was a genius. I'm not a genius, so I need other people to help me do genius things."

When Bad Blogs Happen To Good People

Great article on the use and misuse of Corporate Blogs: http://www.cio.com/archive/021506/schrage.html

Especially interesting are some of the reader comments, including this HSO: "If you think for a moment that I (and other CXOs) will soon see blogging as an inevitable communication media for themselves, we obviously haven’t been talking to the same people. I am convinced that the next revision of Jim Collins’ "Good to Great" will show that while some Good CXOs do blog, no GREAT CXOs do any blogging."

Lucky for me that no one reads this. Except you. And I thank you for that.

George Costanza: Business Guru

The definition of insanity, we've often heard, is doing the same thing repeatedly and expecting a different result. What are you doing that is significantly different than your competitors - in a way that positively impacts the customer? Is your best response in defending a particular strategy, "Everyone is doing it", or worse, "Its always been this way"?

A popular episode of the TV sitcom Seinfeld finds perennial loser George so fed up with the poor decisions he has made in his life that he spends an entire episode doing the exact opposite that he would normally do: "It all became very clear to me sitting out there today, that every decision I've ever made in my entire life has been wrong. My life is the complete opposite of everything I want it to be. Every instinct I have in every aspect of life, be it something to wear, something to eat... it's often wrong.", states George. Jerry replies: "If every instinct you have is wrong, then the opposite would have to be right." In the end, George ends up dating a beautiful woman and landing a job with the New York Yankees.

Okay, so you don't trust your company with the likes of George Costanza? Then perhaps you'll listen to Dell CEO Kevin Rollins: "If we followed industry convention, we'd be in a mess. We believe that if you find something that's different from the industry norm, you'll be more successful."

Apply Apple's old advertising slogan to your own business: "Think Different."

Buddy, could you spare a Benjamin?

You lose more weight if you cut your food into small pieces and chew thoroughly. I always used that analogy to explain the best way to introduce change. Smaller, easily digestable, short term goals are easier to comprehend.
Building on these 'quick hits', it gets easier over time to sell broader goals, BHAGs - Big Hairy Audacious Goals, as author Jim Collins (Built To Last) calls them.

On a related note, I found this interesting, a study from my alma mater, The University of Iowa, regarding the impact of small denominations on spending patterns: http://www.press-citizen.com/apps/pbcs.dll/article?AID=/20060221/NEWS01/60221004/1079/RSS01

"It appears that money is not just regarded as a medium for transactions. The denomination of the bill plays significantly into a customer's willingness to spend."

M&A In Dim Light

“What are you doing?” asked the stranger to the man, who, lit by a streetlight, seemed to be closely inspecting the sidewalk.

“Looking for my watch,” said the man.

“How long ago did you lose it here”, asked the stranger, starting to help the man search.

“About thirty minutes ago, I guess,” replied the man, “But I didn’t lose it here. I lost it about three blocks that way,” said the man, as he motioned down the street.

The stranger stood up and turned to the man. “Then why in the world are you searching here?” he asked.

“The light is better here.” Replied the man, confidently.


A colleague tells me his company purchased another, smaller rival recently, which on the surface seemed like a positive move as it had been clear for some time that the market they were in was leveling off, even declining.

“So, what do they do?” I asked, expecting to hear about the extension the company now had in the way of offering a new, larger; or perhaps smaller but profitable niche, market.

“Same thing as we do. Same thing”, my colleague shrugged.

“No promising IP (intellectual property)?” I asked. “No vertical markets, new distribution partners, nothing?” I offered, hopefully.

“No, not really. We lost a few deals to them before. Same customers.” He was beginning to see my point. “We’ll just be bigger.” He sighs. “For awhile.”

So it is, another company looking for inorganic growth where the light is better. A market they know, are familiar with, regardless of whether it’s a good fit, because it will, for a time, stave off inevitable decline. To this type of management, to do the right thing - to take on an ancillary product line or enter a new market, is a seen as a bit like dusk… uncertain and just a little spooky. However, I prefer to think of it as a bit more like dawn, as dim and uncertain as dusk, but with far greater promise.

This is a critical difference between management and leadership. My colleague’s company is managed, not led. Leadership would search the right places for something worth finding; whereas management will limit its searches to that with which it is comfortable. When it comes to M&A, competitors and partners are often the first targets (or buyers) that come to mind – vertical integration comes easy. In fact, almost half of such deals are from the sellers' same industry. However, these tend to be strictly buyers seeking financial leverage, and are unlikely to invest significant amounts of additional capital to grow the market or build further on foundations of organic growth. This leads to internal strife and eventual disintegration of even the most modest goals that spurred the initial interest. This is among the reasons most mergers fail. On the other hand, premium buyers, with visionary leadership in place, like many big public companies, invest in potential and pay for it, or alternatively, well-led micro and mid cap companies market themselves to these ideal suitors.

When seeking inorganic opportunities for selling your company or in buying another, be certain of your motivations and goals for the transaction.

And bring a flashlight.

Progress Over Perfection = Design Over Dogmatism

Here's another take on the Strategy180 mantra, 'Progress Over Perfection' that suggests releasing projects/ideas/concepts before they are 'perfect'. This time, the idea is extended to design. Quote courtesy of Fast Company:

"Let's say you have an idea. In a traditional company, given the chance to present the idea to a senior vice president, you're going to knock yourself out to dot all the "I's" and cross all the "T's." The goal is to make it perfect. There's a focus on one solution. We say the better approach is to go and see that person with nine half-baked ideas. Design thinking is iterative. It's okay to be approximate in the beginning and then narrow and narrow. But in companies today the present way of thinking doesn't really allow that to happen. Design thinking is also empathic. Being sensitive and responsive to people at different levels and disciplines will lead to a different kind of thinking. It embraces being intuitive. No self-respecting business thinker takes a creative leap of faith. Everything has to be evidenced based. That's not a bad idea, but creative leaps of faith are part of how innovation happens. So design thinking is fundamentally optimistic. Instead of pulling things down, it challenges everybody to rise up and break through barriers." David Kelley Founder and chairman, Ideo, Palo Alto, California

In 1991, Kelley launched Ideo, the groundbreaking design shop, to help change the way companies like Apple and Cisco innovate. Now, as head of Stanford University's new d.school, he's helping to shape the next generation of designers -- as well as thinkers from other disciplines.

In The Year Of Our Lord

1836.

Unless you live in Texas or are familiar with Mexican history, that year means little to you. To those of Mexican heritage, it reminds them of the year their ancestors lost a lot of their homeland to English-speaking settlers, to end up as what would become the southwest United States. Then again, to some insular rich white guys, its also the year of a great anglo triumph.

1836.

Houston’s new soccer team learned that the year is still a sore subject among many Houston Hispanics, who make up a large portion of the prospective ticket buyers for the new team. Of course, typically, the importance of marketing, marketing research, and understanding your audience was lost on the managers of the new team, as they elected to celebrate Houston’s founding year by naming the team, ‘1836’.

1836.

It’s a stupid name. (And I’m well aware that other franchises tie into years as well, such as Germany’s Hannover 96, or the NBA’s Philadelphia 76ers. But really, they’re stupid names too.) But moreover is the complete lack of consideration given to the prospective audience. For me, it's a nauseating lack of consideration given basic marketing, a clear self-oriented presumption, and the overwhelmingly unrepentant attitude of the franchise. Quoted in the New York Times, franchise president Oliver Luck stated, "We were aware of the possibility of the double entendre, but at the end of the day we believe 1836 is significant because it was the year of Houston's founding.” He goes on to support my contention that this was a very self-indulgent and ignorant choice, emphasis mine: "We spent a lot of time on this internally. By no means was it intended as a slight." Best intentions or not, this team already has a fight on its hands. Unfortunately, it isn’t a sports rivalry, but one with its own fans.

1836.

You could argue that this is political correctness gone too far, but in the end it only reflects the concerns of a community critically important to the franchise. You might think that some ten generations later it would be water under the bridge, but then you could make the same argument regarding historical memories the world over. Try to get a NASCAR team in Georgia named ‘Atlanta 1865’ or a baseball team in Japan named ‘Nagasaki 1945’.

Just add this to the common list of translation and cultural advertising and branding blunders with which we are so familiar. Put the visors back on the money men and give the responsibility for launching a brand back on marketing where it belongs.

Good lord, people, if ‘marketing is easy’, why do you who contend that do it so damn badly?

Humpty Dumpty

The Adrants blog is more direct in their criticism of the Intel brand change than I was, and extended this criticism to the commonnesss of the new egg-shaped logo: http://www.adrants.com/2006/01/intel-joins-three-billion-other-ovallogoe.php.

All the Kings men and all the kings horses can't put this one back together again..."Thanks to Hurt Elbow, we now have visual proof the new Intel logo leaps ahead of nothing and simply joins the 'logo ovalation' crowd. Check out all the unoriginal, copy-cat insanity here in one gigantic, orgasmic ovalistic circular logo-fest that either proves originality is dead or that all these brands used the same focus group"

In the interest of full disclosure, I oversaw the development of the new Intervoice logo in 2002 and armchair pundits criticized the use of the overused 'swoop'. I argued that it's not a 'swoop'. It's a 'Golden Bridge of Communication'. That wasn't a particularly compelling retort in their view so I just moved on...

Medical Miracle

It’s a miracle – though it’s gone largely unnoticed. It’s a miracle of modern medicine that has nothing to do with a new medical device or accidental pharmaceutical breakthrough. No herbs or acupuncture, cryogenics, genome mapping, or aromatherapy.
It cures almost all ills. It prevents many more.

The ‘miracle’ is change.

80% of our national healthcare budget is spent on addressing behavior-related illnesses, according to Raphael Levey of the Global Medical Forum. Yet few of us can avoid excessive smoking, drinking, eating, and stress, or find the time to exercise. And even after coronary surgery when such changes are necessary for life itself, fully 90% of patients cannot make the choices that would prolong their life, according to recent studies.

So what makes you so certain in a change management endeavor that you will inspire these same fallible creatures to work smarter, be more committed, and work as a team to save such an abstract concept as a company, even if their livelihoods are at stake? John Kotter, a Harvard Business School professor and author of many books on the subject reminds us in a recent article, "The central issue is never strategy, structure, culture, or systems. The core of the matter is always about changing the behavior of people."

Why is change so difficult for us? What is it about how our brains work that resists change? Why do we fight our own interests? Conventional wisdom says that crisis is a powerful motivator for change. But this doesn’t seem to be the case, so true to a Strategy180 tenet, we must challenge known absolutes.

The answer is that you cannot frighten people into change. You must instead appeal to the better angels of their collective nature, that is, speaking to people's emotions. Even in organizations that are focused on quantitative measurement, and those who think of themselves as smart in an academic sense, an appeal to emotions is most effective. In successful change efforts, leaders find ways to help others see the problems or solutions in ways that influence emotions, not just thought.

Unfortunately, that kind of emotional intelligence doesn't come naturally to engineers, accountants, managers and other leaders who pride themselves on analytical thinking. There is solid science behind the psychology of change but its insights often seem less than strictly logical.

Consider the cardiac patients asked to change behavior. The best medical minds at have for years been trying to motivate patients with the fear of death, but in the end death was just too frightening to think about, so they'd go back to their old bad habits. A far more effective method, it turns out, is addressing the issue as not a fear of death but a joy of living… considering not the length, but quality of life. Instead of a 90% backslide, patients exposed to this approach only return to bad habits 23% of the time. Joy is more powerful than fear.

When leaders are addressing people who have a similar mind-set and shared values, the message needs to be positive, inspiring, and sincere. Charts, graphs, and compelling strategies have their place. But even when the issue is truly life and death, the gut-check is emotional, not rational.

‘Inside’ Intel’s ‘Leap Ahead’

News item: Intel changes logo and slogan ('Intel Inside') to new design and slogan ('Intel. Leap Ahead.')

Intel is “Inside” more products than ever these days. So why does “Leap Ahead” seem like a "stumble forward"?

Intel purports that their new logo and slogan is a way to convey that their chipsets are used in more ways than just PCs. But if Intel is ‘inside’ more than PCs, does it make sense that 'Intel Inside' has run its course? Or is one of the world’s most well known brands and slogans now dated? And does the new slogan, 'Leap Ahead', really accomplish an association with cutting edge devices?

For a technology component company, the fact that the Intel brand has as much visibility as it does is quite an accomplishment. No other B2B (business to business) brand is in the top five in studies of brand recognition. So to tinker with success is brave, and in line with my earlier post regarding constantly re-evaluating ‘known truths’. Changing up such a successful branding effort, took skill, bravery, and likely, an incredible internal sales job. So congratulations to CMO Eric Kim on making the effort to stay relevant. Still, at what cost? 2.5 billion to start, according to Businessweek. That's the cost of the brand launch campaign and related new product campaigns.

Why the change? Intel itself is changing. Instead of remaining focused on PCs, the ‘new’ Intel looks to play a key technological role in a many fields, including consumer electronics, wireless, and health care. Beyond microprocessors, Intel wants to create chips and software to create platforms. This moves them up the food chain and while still not a consumer brand (you can’t by ‘an Intel’ at Circuit City) it is getting closer to the consumer… especially through new entertainment and other third party alignments that will serve to produce content and applications for devices using Intel's new platform (particularly 'Viiv') over those of their competitors.

Still, the first rule of doctors, marketers and change agents: "First, do no harm." So does this major strategic shift really require a shift in branding?

In a word, yes. When a strategic shift is made, changing the brand identity is critical in not only the new identity created with it, but to get tongues wagging – like mine. It’s a signal to the market that something has changed, and such high profile change spurs conversation.

So with this change and the resultant discussion, can Intel really enhance their consumer-level brand identity through slogans and logos? Not entirely of course. We have to assume product performance, pricing strategy and application relevance will be equally considered. Given Kim’s success at Samsung we can assume those elements of the strategy will be well-covered. But while Samsung remains a successful ‘change marketing’ story, their brand still lacks definition. So what hath Kim wrought at Intel, specific to brand identity?

I think the past work for Intel was brilliant – no controversial statement, that one, given Intel's place in the market as essentially a non-consumer, consumer brand. The challenge is that any follow up would seem at best a bit tepid. So, let’s use a ‘bakery and bedpans’ comparison. How likely is it that bakers and bedpan manufacturers can claim the same slogan? ‘Leap Ahead’ is broad in the same way ‘Intel Inside’ was very specific. ‘Intel Inside’ essentially said, ‘if you love your device then you’ll want to know it is because of Intel’, thus creating demand via pull-through. Can that now be leveraged to trust Intel for an entire platform? Does ‘Leap Ahead’ really convey their role in cutting edge technologies? And critically important, if it does work, will device manufacturers be willing to share ‘ownership’ of the customer’s relationship with the device or content provider? That’s a long term distribution and partnership challenge, as has proven to be the case in the telecom space with customers shared - and fought over - among wireless providers, device manufacturers and content providers.

So, back to our test: Could a baker or bedpan manufacturer use ‘Leap Ahead’? Unlikely. But a host of other technology focused firms could, and for a component marketer, differentiation is critical, thus ‘Leap Ahead’ feels, well, as I warned before, tepid. Intel gets an E for effort. Their new direction required a new identity. But direction requires an objective, a focus, and as much as they’ve articulated that in strategy, ‘Leap Ahead’ is too much a blank page to reflect it in practice. Its fails, in my opinion, to inspire any sort of association with the new technology Intel will be bringing to market. It serves as an uncertain articulation of a far more certain future for this technology leader.

Preventative Maintenance

All too often, management uses the rationale that 'things are not so desperate as to require a change agent' or review of practices - this is particularly true when market share is slipping but the marketplace is growing, shrouding the problems. Yet equally as often, by the time it is clear that help is required, after more cash is burned and more talent has exited the company, the problems are far more difficult to address.

"The time to repair the roof is when the sun is shining." - attributed to John F Kennedy

Look at what Staples CEO Ron Sargeant discovered, as quoted in Fast Company:"The economic slowdown has caused Staples to reexamine every aspect of its business. Over the years, we started catering to the more casual customer. But that's not where the money is, and that's not what we're really good at. Now we've stopped carrying about 600 items that appealed to the casual customer and added 650 to 700 items that appeal to the small-business customer instead. We've improved the quality of the merchandise we offer, because businesses have different needs than the casual consumer. Instead of advertising as much in the Sunday circulars, which businesses don't respond to, we put more into direct marketing, upgraded our Web site, and doubled our direct-sales force in four months. We took the money that we originally put into advertising and reinvested it in training for our associates, and we added more staff to our stores to provide better service. These are important changes. In some ways, I'm not sure we would have looked in the mirror so carefully if not for the slowed economy."

Don't wait until a slowed economy or slowed business model. Make a committment now, at the corporate, departmental and individual level to re-evaluate all the "knowns" and challenge conventional wisdom. Evaluate and focus on core strengths. Look to outsourcing, or look to take services inside. Seek new unexpected areas for growth or divestiture, new target markets. Fire customers by qualifying the most and least profitable accounts. Reset the organization, compensation, performance rewards, costs structures, vendors, payment and contract terms, and personnel policies. In short, have crucial conversations and make necessary changes today, before the clouds move in.Then rinse and repeat... after all, as well stated by another American President, Thomas Jefferson: "Every generation needs its own revolution."