Wednesday, November 19, 2014

The inside story off how transformational leadership created “Broadband”

Most people are wrong. “Broadband” has not been around forever. It was first introduced to the public at the beginning of 1997. Most people do not realize that the word still has no formal definition in the way it is used most often today. Fewer still realize the part that Crosby, Stills, Nash and Young played in it. This discusses how I, as Chief Marketing Officer of MediaOne/US West, popularized it, and how I have codified the thinking process so that experts can apply it to their business.

I had many years of, in retrospect, relevant, but seemingly unconnected at the time, experience. CompuServe had been founded in 1969, and I became a user in 1984 when I bought a Radio Shack TRS 100 laptop computer, which came with a free one month trial subscription. I became a customer. I later advised CompuServe in the late 1980s when it faced attack from AOL, but it refused to recognize that the company was at risk. Management kept on saying “the people who know, use CompuServe, while the masses use AOL” – the kiss of death for CompuServe, of course. I had also advised AT&T, Sprint and Deutsche Telekom in telecommunications and GTE on its “Main Street” interactive video trial. So, having experienced the best in voice, video and data, I was well aware of the potential power of convergence.

When I joined Continental Cablevision in 1996 as CMO, as it was about to be acquired by US West for $10.8 Billion, I knew the company faced many challenges. Amos Hostetter, the founder and Chairman of the company, whose baby it was, had just sold it to US West Media Group, whose CEO, Chuck Lillis, had a vision to transform the company into a multi-pronged communications company - convergence. He needed the company’s fiber-optic network, the most extensive in the country then, but still in the process of being fully built out. At that time, Cable companies provided around 50 analog video channels, and no one even thought of them as Internet access or Phone providers. Yet the technology was on us, but the plans for commercialization were not. In the first few months of my tenure, I developed specific plans for hundreds of digital video channels with new content, high speed Internet access (when most consumers had 57.6 kbps dial up modems), and IP telephony. Consumer research told us that the claims were not believable – “50X current speeds, you’re nuts.” Nor were they seen as relevant. Most consumers used the Internet only for email, and saw no benefit in reading emails 50 times faster. There were no online videos, which only became possible with the introduction of High-speed data, and consumers did not understand why they would want them. Yet we enabled Netflix and many of the services we take for granted.

We had the additional disadvantage that most people hated their cable company. I remember well that I was visiting our Jacksonville office and while I was there, the Jacksonville Jaguars were playing the Denver Broncos in the playoffs. At a critical stage, there was a cable outage in the cable feed and several important minutes were lost to local viewers. On my way out, at Jacksonville airport, the security screeners realized for whom I worked from the logo on my carry-on, and put me through so many extra screenings that I missed my flight!

This meant that we had to move away from the name “Continental Cablevision” to one that screamed “convergence.” We could not just be a cable company any more and have any credibility. US West had been using the MediaOne name in Atlanta, and research showed that it would be a powerful way to signify that we could offer voice, video and data. A new logo was designed that symbolized that we offered an enormous pipe into the home, and we “only” had a “promise” to develop. The “O” in the logo was designed to represent a pipe carrying the new services to the home.

So, initially, we were offering something that few saw the need for, used new technology, and for which no products existed that would fully use its capabilities. The biggest challenge was to create an overriding theme and way to manage the “How,” the “when” as well as the “what.” There was a clear need for a “magic ingredient” in the same way that laundry detergents once used the “blue speckles.” It needed to be a term that was not in wide use, but that could be used to explain the benefits we offered. An intense search, in conjunction with our advertising agency, Margeotes Ferttita, led us to one word – “Broadband.” We had found only 15 uses of the word in the previous year worldwide, and that was in technical wireless journals. As mentioned, there is still no formal definition of it as applied to communications other than radio.

Now this was neither easy nor obvious. Many of my colleagues felt uncomfortable with it. Typical conversations ran somewhat like this:

Me: “We need to create a “Magic ingredient” that no one really understands, but sounds scientific enough to create believability for our claims.”

Executive Committee (in unison): “You must be crazy. No one will understand it, and it will never work. Why should we bet the entire future of the company on your plan?”

Me: “We have to change the game completely. We have to show people what they will be able to do with this – video, voice and Internet – while giving them a reason to believe us.”

Executive Committee: “Even our own people won’t understand or believe it.”

Me: “We have to create and execute an intensive program to train and educate all our own people.”

I must admit that neither I nor anyone else foresaw that the word would catch on so strongly, that like “Aspirin” it would become almost generic. We only encountered skepticism in the media that it would not catch on, and that I was making a huge mistake. In fact, it encapsulated everything that consumers came to understand that we were going to offer. In no small part this was due to the extraordinary advertising that our agency created. It has now become so commonplace that few realize that it was introduced by an advertising campaign. George Fertitta went on to become CEO of NYC, Inc., the entity that grew New York tourism and business so successfully in the past decade.

Our advertising agency was a strong believer, and so was I. I did convince everyone, so I rebranded the company as “MediaOne,” and launched it, with the new services and used the slogan, “This is Broadband. This is the way.”

The very first commercials in the world that mentioned “Broadband,” featured a re-working of the CSN&Y song, “Our House.” Seventeen years ago these were visionary commercials, offering a new view of the world - one that came to pass today. These commercials can be seen at the following link: . Subsequent follow-up :30 commercials focused on specific aspects:

Human Capacity:
The Future Arrived:
House of the Future:
Future Vision of House:

At the time, the reaction was shock and disbelief in the business press and from pundits. Many called me personally crazy, and that it would never catch on. This umbrella term was so successful that it is now globally and universally used. We were named “Marketer of the Year” in the Cable industry. This was all accomplished in six months, with the result that US West sold it two years later for $62 Billion, based on subscriber value - a “turnaround” of a company that was not failing, but that could have sunk into decline instead of into explosive value growth. I still remember well, attending all the shoots and staying at the editing studio in Manhattan well past midnight to approve the commercials so that they could go on air immediately.

I continue to preach that while most companies are “maintained,” often even quite well, re-invention is the key to real value growth. Leadership has to be transformational. The secrets to this are:

  1. Having breadth of experience in multiple industries, technologies and customer/consumer populations.
  2. Having the ability to tie together multiple strands of knowledge, as I have done in many places, including Reliant Energy or Remedy software.
  3. Welcoming and embracing change with passion instead of fearing it. This can be threatening to many as old knowledge becomes irrelevant and new learning is essential.
  4. Looking for optimization instead of step improvements, that are never transformative.

Friday, April 04, 2014

How "best place to work" could have helped GM avoid its problems.

GM is only the latest company to get into trouble and struggle to get out of it. Preventing and dealing with a crisis is, however, not merely a PR problem. Really effective companies have a culture that makes getting into a crisis far less likely, and dealing with one, far easier. Companies that are principle driven, such as Mars, Inc, are far less likely to get into trouble. We have found that one of the measurable attributes of such companies is that they qualify to get onto one or more "Best Places to Work" lists.

We at Max Brand Equity have found also that top executives do not know that companies that qualify for such lists achieve value growth at least twice that of peer group companies.

Friday, March 28, 2014

How to be a good networker - one key

Perhaps you know it, but there is one thing you do that few do - you provide feedback on introductions - that make you much better than most. Even though I always ask people to let me know how they got on, most do not. I make a lot of introductions, including several yesterday and giving me feedback is a good thing for them:
  1. It's polite
  2. I'm curious
  3. I know more so that I can make further introductions
  4. I know who is unhelpful and I can not introduce anyone else to them
For example. someone who never gives me feedback afterwards on the introductions I make for her misses opportunities for new introductions. There are people I have been making a few introductions a year for over many years, and someone who never gives feedback is losing out. You don't have to push, just make it easy for me to think of people you might like to meet.

Tuesday, March 18, 2014

What was it like in Houston, energy capital, during deregulation? How is it applicable elsewhere?

In the late 1990s, energy deregulation was seen as the solution to rising energy prices. As a result, while regulation was not completely lifted, there was to be freedom to compete on price and geography. As President of Reliant Energy's Retail Business I had an inside seat from within the third largest combination utilities in the world. It was a heady atmosphere in Houston at the time. Consultants and lawyers were making $ millions assisting most of Houston's energy companies devise plans to prosper in the new environment. Outsiders who had succeeded in other rapidly changing industries were brought in to bring new thinking. The dining clubs of Houston were full of people making deals over lunch, from top executives at the Petroleum Club (where I was a member) on the top floor of the Exxon Building, other top executives and politicians at the Coronado Club, and more lunching in the fading elegance of the Houston Club (Houston's oldest, from the 19th century) and attending evening events at the River Oaks Country Club. You could see Dick Cheney or Ken Lay, comfortable in the company of their peers. Now, any change in rules represents great opportunity, as well as great danger. I brought to that a record of success in transforming the cable, Internet and phone by introducing the first "Broadband" service a year or so before. It is not unlike, part way through a soccer game, it suddenly changing to basketball - except you may be able to influence the rules of the new game! My success in building the most profitable deregulated business without feeling the need to resort to the tactics of our cross-town rival, Enron, was the result of much analysis, experience and thought. The company pioneered a number of activities, many of which can be applied to any changing business or network based one.

Thursday, February 27, 2014

Will Silicon Valley ever grow up?

Silicon Valley is dominated by companies that are innovative, fast growing, ambitious and intense. They face the need to be efficient, keep growing and stay ahead of newer competitors. Yet, these challenges have been faced by companies for hundreds of years. Henry Ford, Thomas Edison and Harley Procter had to overcome them long ago. They did. Procter and Gamble is over 180 years old. Ford Motor is almost 100 years old. Many companies in Silicon Valley act as though they are the first organizations to have to deal with these old issues in Management. They tend to spend much effort and relatively little time (shooting from the hip) in re-inventing the wheel. So you get stupid interview questions such as: "how many golf balls fit inside an airliner?" Decision and implementation processes are not thought through and are sometimes ill conceived. Executives at all levels in many companies have not experienced being in a more mature, effective company. There are exceptions, such as Intuit, of course, but too many are unlikely to last a fraction as long as P&G.

Yet, until Silicon Valley does develop some maturity and balance, there will continue to be cycles, poor predictability, and bubbles. The smart companies make sure that they hire experienced executives, even from outside the industry. They also make sure that they have the processes and thinking such as that required to get on a Best Place to Work list.

Tuesday, February 11, 2014

When Westport, CT was the center of the Marketing World

Following 14 years in Brand Management at Procter & Gamble, Ralph Glendinning moved to Westport, CT in 1962 to start Glendinning Associates, the first Marketing Consulting firm in the World. Early clients included consumer giants like General Foods, Lever Bros., Ogilvy & Mather and H.J. Heinz. David Ogilvy once wrote that "when it comes to sales promotion, Ralph Glendinning is a true genius."Glendinning became a powerhouse, with offices in London, Paris and Frankfurt. It also spawned many spin-offs in the Westport area, as well as copycats and other Marketing Service firms. The most successful spin-off company, Marketing Corporation of America, was founded by Jim McManus in 1971, and grew to be a behemoth of Marketing Services, with Strategy Consulting, Sales Promotion, Market Research, Advertising Agency, Couponing, and even a Venture Capital Arm. At the time of this article in 1982 M.C.A. was still growing rapidly, and ended up also owning car dealerships, restaurants as well as the largest regional airline in the North-East. Just as Glendining had other spin-offs such as the Weston Group, Connecticut Consulting and New England Consulting, so M.C.A. had its own such as the Ryan Partnership, Main Street Partners and others. Quite separately, other Marketing service firms such as Greenfield Consulting, Clancy, Shulman and others, set up shop in the Westport area. Westport still has many Marketing services in the Area, but one could argue that the Hedge Funds and Private Equity firms have taken the pre-eminent position now.