Tuesday, May 30, 2006

Age does matter in the game of musical jobs

Job tenure for senior and middle managers continues to shorten. A study by Greg Welch of Spencer Stuart suggested that the average tenure of a CMO is now down to 23 months. Now I know some who have lasted no more than 3 months, and a few who have been in the job for years. The reality is that a newly appointed CMO is likely to be out of the job quite fast.

The other issue is that over 50, however talented and energetic someone might be, the chances of landing a new position in corporate life are slim. So in the game of musical chairs which is today's job market, a typical CMO who is perhaps in his or her late 40s, is quite likely to find that unemployment strikes just as they reach an age of diminished employability.

Therefore, trite though it may be, itis key that managers in their late 40s take great care to hang on to their jobs.

Sunday, May 28, 2006

The decline in belief in all our institutions

In the past few generations we have seen much which makes us lose faith in our institutions. We see corporate chieftains found guilty of falsifying financials. Politicians seem to compete in taking bribes and we see others do every thing they can to protect colleagues. Doctors hide incompetence, the military engages in cover-ups of incompetence or illegal actions. Enron is not alone.

We wonder why voting turnout keeps dropping, yet we see that a political contribution is more valued than a vote. We are exposed to political ads which tell us that each candidate is corrupt or incompetent. Drug companies withhold evidence of dangerous side-effects. Tobacco companies denied that cigarettes caused lung cancer, energy companies that power generation or gasoline powered cars are causing global warming. Journalists fabricate stories. Perhaps this has always happened, but we now have a constant stream of evidence of it. Our faith in the good intentions and integrity of all the institutions which make our society work has been eroded.

We need to demand higher standards from all who lead us.

You can't make peace if you only talk to your friends

It has long surprised me that so many people who need to work with others will not talk to those whom they dislike or distrust. Whether it is two nations with common borders, or two managers who work on the same team, the only effective way to make the relationship work is to talk extensively with those whom we dislike and distrust. To refuse to talk to those whom we regard as enemies and competitors is self-destructive. This does not mean that we have to acquiesce when we do not want to, but simply talking and discussing the issues is the only way to resolve them.

Friday, May 26, 2006

The prime of your life

Today we heard about FDA approval of a new shingles vaccine for people over 60. Shingles is a devastating illness which hits older people. It causes intense pain, and often the nerve sheath damage is so great that it never goes away. There is no painkiller which works, so news of a vaccine is wonderful.

The phrase "the prime of your life" is applied so often, and it seems to mean whatever age you are now. Parents say it to children when they are twenty, spouses at thirty or forty. The reality is that these days, the prime of your life can easily be in your fifties, sixties or even seventies. People today can have remarkable physical fitness, mental acuity, energy, and a powerful knowledge base as they reach ages at which a hundred years ago they would have been regarded as old.

Yet, society does not make good use of these people. FOr each middle-aged person who is underused because of age perception, we are hurting ourselves and society.

Wednesday, May 24, 2006

The half life of credentials

There is a time for everything. The High school you go to, and the extra-curricular activities in which you indulge will help you to get into a great University. Graduating from a great University helps you get into an "academy" company or organization which is known for quality training. That first job will help you to get a wonderful second job. However, if you step off the ladder for any length of time, it is much more difficult to get back. The older your credentials, the less value they have. The homeless Harvard graduate may be rare, but it is possible. If you were to look at a cross-section of people in each age cohort, it would be clear that as the cohorts age, more members drop to a lower level, while only a few continue to rise all their careers.

Over the past few years, I have been quite involved in company and University alumni groups, and it is unfortunate to see that the percentage of members who have fallen off the ladder rises with age. In fact, the higher the 40 year old rises, the higher the proportion who fall off in their 50s. It is easier to maintain the respectable, but undistinguished career than the shooting star.

Tuesday, May 23, 2006

Loyalty is not for ever

Businesses confuse customer loyalty with the kind of loyalty which we mean in patriotism. Customer loyalty is not necessarily linked to emotional loyalty, but purely to behavior. When a customer switches, he or she is disloyal. Now this may be because he or she moved and has to change, say cable company, or airline most frequently flown. So when companies put a lot of emphasis into measuring satisfaction, they are only measuring one component. Customers are also loyal because of convenience, contracts, exit barriers, peer pressure, and they may outweigh dissatisfaction measures.

Behavioral measures in so many things are far more valuable than perceptions and attitides of mind. This is why such analytical tools as Dunn Humby are so much more valuable than attitudes. This is why anthropology can be more valuable than psychology in that it centers around observed behavior rather than claimed behavior.

Monday, May 22, 2006

The business news is not

The "Business" pages in the newspaper focus on the activities of public companies. This is because the business news is really more about investing in public companies. It is rare that privately owned companies such as Cargill, Bechtel, Mars, SAS, and many, many others are discussed except in the context of public competitor performance.

At least the Wall Street Journal is well named!

Saturday, May 20, 2006

Should we call it "medium band?"

In 1996, while the use of 56.6 Kbps dial up was growing, most people were still using 28.8 Kbps. So when we, in the cable industry, introduced 3.0 Mbps high speed data, we could say that it was 100 times faster than most people were using, and 50 times faster than almost anyone, except for those with access to a T1 line, which worked at about 1.5 Mbps. Now, ten years later almost everyone claims to be offering "broadband." However, this covers a very wide range. The cell-phone companies offer wireless data over EV-DO and similar networks which allow downstream speed of 500-700 Kbps. Phone companies offer DSL at up to 1.5 Mbps. Most cable companies routinely offer 3 Mbps, while Cablevision's "Boost" line provides up to 30 Mbps (with upstream speeds of 2 Mbps, vs. a more typical 256 Kbps).

So now the difference between the fastest and slowest "broadband" is about 50 times - the same difference as between fast dial up and the original broadband. As speeds available to consumers continue to climb, I believe that it becomes inappropriate to describe both by the same word. We either have to create a new descriptor for the 30 Mbps service or abandon "broadband" for services of 3 Mbps or less.

Tuesday, May 16, 2006

Limits to Social Networks

The Dunbar number was first calculated by the anthropologist Robin Dunbar. For most purposes it shows that around 150 is the largest number which can form a cohesive network. This applies to companies, villages, academics, and any other and is based on the capacity of the human neocortex. In order to do this, he calculated that the group has to spend about 42% of its time on social grooming. In theory, computer software allows us to reduce this time as well reduce the dependance on propinquity. However, there is no evidence that this really happens. People with too many people in their social circle simply do not have the closeness and reciprocity of a genuine social network.

As a group becomes larger, smaller sub-groups form and it becomes hard work to build and maintain linkages betwen them.

Sunday, May 14, 2006

The Beginnings of Broadband

MediaOne makes 'broadband' pitch.

Date: 5/19/1997; Publication: Multichannel News; Author: Haugsted, Linda

Continental Cablevision Inc., the cable industry's third-largest MSO, officially changed its name to MediaOne last week, as expected. But, in a surprise move, it branded the new company as a "broadband-services company," with the tag line: "This is broadband. This is the way."

Amos B. Hostetter Jr., CEO of MediaOne and co-founder of Continental, said the operator - which has nearly 5 million subscribers in 19 states - would support the relaunch-and-branding effort with a $20 million marketing campaign for the rest of the year.

MediaOne, a division of U S West Media Group, which acquired Continental last year for $10.8 billion, also relaunched its Highway1 high-speed Internet-access service as MediaOne Express and announced its expansion to the metropolitan Chicago market, along with existing service in Boston; Jacksonville, Fla.; and Detroit. Homes in Atlanta; Los Angeles; Richmond, Va.; and southwest Florida are set to be connected to the service by the end of the summer.

Hostetter said the renamed company would "define a whole new industry - broadband," which he described as a "powerful two-way wire" that can deliver computer, television and telephone services to the home.

Many industry observers were puzzled by MediaOne's emphasis on the term "broadband," but Hostetter strongly defended it. He cited a recent survey of 1,000 Americans commissioned by MediaOne from research firm Roper Starch, which, they said, showed widespread public receptiveness to both the term broadband and its perceived benefits, such as speed and delivery of a wide array of services.

Hostetter said the broadband tag tested "surprisingly well," and he expected MediaOne to "follow the computer-penetration curve in the home" with Internet-based services.

Richard Guha, senior vice president of marketing for MediaOne, who joined the company six months ago after a career as a marketing consultant and manager for Procter & Gamble Co. and M&M/Mars, said MediaOne would not only have to market a new name and identity, but a new category - broadband - as well.

While that represented an additional marketing challenge, he argued that the company would benefit by being able to define the category on its own terms.
"People get it," he said of the broadband concept. "What they get is use of lots of stuff."

The marketing campaign, he said, would include ads on broadcast television, radio, newspaper ads, outdoor advertising, Internet ads and direct-mail and direct-response programs.

Branding and competitive-strategy experts were divided on the wisdom of MediaOne's reliance on broadband as a branding strategy, with some consultants arguing that the term was obscure and uninspiring, while others felt that it was a bold stroke that could truly differentiate the company and help it to gain credibility.

Glen Freidman, president of Los Angeles-based Ideas&Solutions! Inc., said that while there are "magic words" that link customers to technology, "broadband is not one of them."

David Aaker, professor of marketing strategy at the University of California at Berkeley's Haas School of Business, called the broadband strategy a risk, but he said it would be a "worse risk if [MediaOne] did not differentiate themselves."
Aaker, author of Building Strong Brands, said research has shown that a successful "branded component" on a brand, such as "Intel Inside," "Sony Trinitron" or Hewlett-Packard Co.'s "Resolution Enhancement," printer, allows companies to charge more for the product.

While Aaker added, "It doesn't really matter if people don't understand what the term means," he warned that MediaOne did run a risk if technology changed quickly, or if the term broadband "starts to mean something else."

COPYRIGHT 1997 Reed Business Information

Tuesday, May 09, 2006

Is any group doomed to die out?

The "Tragedy of the Commons" states that in any group which shares a common resource, conservation and long term benefit of the group as a whole take a back seat to the immediate benefit of the individual. For example, if ten people share use of a common plot of land sufficient to graze 100 sheep for ever, the logical solution is that each has ten. However, if one has 12, while this may reduce the average results per sheep by 2%, for the greedy individual, he or she can gain a net 17% (+20%, less 2% of the new total). So many of the people will enter an internal competition to use the resources. Those who aim to lead by good example will lose, yet if they join in the process of deterioration will accelerate.

This applies whether the ressources are fossil fuel, clean air, job leads, or anything. Strict policing by an authority which has real power over all is needed to keep the resources from being depleted. In a corporation, people will fight for resources and power, even though this may mean the ultimate end of the company. It does not require that all act in this way, but even one who takes more that their "fair share" can destroy the group. Nevertheless, we must remember that that individual will prosper in the short run, so incentives exist to be selfish.

In fact, many of the "successful" people in our society, from Donald Trump to Larry Ellison have seized what they could. However, we must ask what impact this has on society. Does it hasten the end of the society?

Friday, May 05, 2006

Do not assume others' motivations are the same as your own

One of the assumptions we make as children is that all others around us think like us. As we mature, we do learn that others use logic differently, are influenced by emotion differently, yet most people assume that others are driven by the same motivation. This is not true. Some are influenced by money, others by power, while yet others seek knowledge.
We know this intellectually, but we do not internalize it very well. Managers assume that subordinates are motivated by the same things they are. Understanding what drives others is a key first step in managing others and even more when you have to achieve tasks through others whom you do not control. Even subordinates can sabotage your efforts if you fail to appreciate what drives them and you attempt to use something which actually gets them to act against you - quite possible if you choose money to motivate someone who is motivated by wanting to help others for example.