Friday, December 28, 2007

The situation in Pakistan shows how complex South Asia really is

Whether it is Bangladesh, India, Pakistan or Afghanistan, understanding history and culture is critical to being able to foresee possible outcomes. The assassination of Benazir Bhutto was always a foreseeable possibility, yet it seems to have caught most by surprise. Did leaders, diplomats and journalists simply not want to believe it because of the potential catastrophic consequences? Why is Pakistan, with such superficially similar roots to India taking such a different path? Did the character of Jinnah, so different and yet so similar to Nehru result in such different results? How did Subhas Chandra Bose impact Bengal, even to this day? What is the history of Afghans and Western invaders?

Saturday, December 15, 2007

History often makes us feel good - but is it truthful?

The purpose of history as taught in schools, shown in movies and mentioned in the press is ofter to reassure us that we have a proud heritage, are on the side of truth and justice as well as to reinforce civic lessons. In order to succeed at this, liberties with the truth are often taken. One way to see this is to read history as in the text books of two neighboring countries, such as Canada and the United States, or Germany and France. While it serves an apparently noble purpose, it can also separate neighbors who have more in common than the history books show, and often fails to let us really understand the real differences which do exist. This has created many conflicts, in Africa, South Asia, Eastern Europe and even Western Europe.

Wednesday, December 05, 2007

Why do so many in authority withhold information when questioned?

We see that it is an instinct in so many managers and politicians to withhold information when under pressure. Perhaps they really believe that they can keep the secret, but it is rarely true and then they suffer from the exposure. Openness is always the better policy, whether it is when the flight will really leave or tampering with product.

Wednesday, November 14, 2007

The Microsoft dominance is going - fast!

When a company the size of Microsoft can leave thousands of customers in distress and not resolve the issues, then it has the seeds of failure within it. Recently, many users of its "Office Live Small Business," which provides website hosting and email to thousands of small businesses stopped working correctly. Thousands of users were unable to access their email and contact database. This has continues for over a week now, and Microsoft has not only been unable to fix it, but continues to give totally unhelpful replies to customers who contact customer support. Even a small ISP would do better than this. No one in senior management seems to care at all either.

Sunday, November 11, 2007

The need for Nuance

Most people feel so uncomfortable with uncertainty that they will sacrifice accuracy for comfort. As a result, they are not prepared to consider nuances in situations. We force-fit new situations into the solutions to old ones. We over-simplify analyses. We make generalizations about people and things.

In so doing, we do ourselves a disservice. Many situations are complex and need to be examined as such. People are not uni-dimensional. When we compress a complex situation into a 30 second sound-bite, we short-change ourselves.

Monday, October 29, 2007

So GM is building a hybrid research center in China?

I do not understand how any company does not understand that any technology passed to China will be used against it. Carrying out research in China which uses US knowhow inevitably leads to it being passed to China. Some people are slow to learn this.

Friday, October 12, 2007

Can online gossip hurt your career? Ask Stephanie Fierman

With the spread of the Internet, we find that so many people use it to look into the past of individuals we want to date, hire, or marry. Yet, so much on the Internet is at the very least unsubstantiated, and often totally untrue. Gossip has always been a poor basis on which to make important selections, but when it is on the Internet, it has even greater danger. It is sensible for each of us to know what is being said about us. Frequently, we cannot change it, but being prepared is essential.

Tuesday, October 09, 2007

How can Airlines continue to be so out of touch?

I was booked on a United Airlines flight from New York to Los Angeles. At JFK, waiting for the flight, which was scheduled to leave at 8.45pm, it was 8.35pm and the plane had not yet arrived. Then an announcement was made that the plane had not yet landed so departure had been delayed to 8.55pm. This was an absurd announcement and clearly a lie, as there was no way that would happen. As time passed, more announcements were made, with departure steadily being for 20 minutes ahead. All this did was irritate passengers. While clearly designed to keep passengers in the gate area, it was completely unnecessary since the plane had not even landed!

This illustrates how airlines continue to fail to connect with and understand their customers.

Monday, September 24, 2007

GM continues on its slide to death

I have stated here before that GM is dead even though the body moves on. The latest strike is yet another nail in its coffin. Yet, neither GM nor the UAW have much choice. Since GM has not succeeded in designing enough cars which consumers prefer to Toyota cars, it has to reduce costs. Yet, one of its largest costs, accounting to, by its own calculation, $1700 per car, is the cost of health insurance. Given the inefficient and expensive system used in the US, this is inevitable. However, reform of the healthcare system, while necessary, would not save GM for long as the company still cannot make cars which are in sufficient demand.

Tuesday, September 18, 2007

Is anything too extreme to save humanity?

I am not optimistic that humans will be prepared to make the changes required to ensure the continued survival of the human race. While environmental and global warming concerns are accepted as real by the majority of scientists, there are other concerns too. For example, we are rapidly approaching the stage when the global consumption of oil exceeds our ability to extract oil from the earth. We are using up the natural resources, and this is still accelerating. Currently, a small part of the world's population consumes the majority of natural resources, and as others become richer, this will only accelerate and all the negatives will increase.

How can we achieve change? Only by the most strenuous means possible - after all the survival of the human race and our children's children is at stake. Should we be genteel and moderate, or strident and demanding? I suppose it all depends on how urgent we think the problem is.

"Times Select" another failure to make revenue from content

The New York Times has stopped its effort to charge for content. Following on from failed attempts by the Los Angeles Times and others, it suggests that Internet readers are not willing to pay for content. With the growing ability to block advertising through software such as Ad-Block, it does make one wonder how online news will be financed.

Some form of micro-payments system is inevitable as it cannot be financed by subscriptions in most cases and advertising is unlikely to be sufficient.

Saturday, September 15, 2007

Pros and Cons of Regulation

Regulation is not a simple thing. Having seen it on the outside and inside in several industries, I know you cannot generalize. In most cases regulation of health and safety has been beneficial to consumers and employees. It has even been helpful to corporations as it shields them from lawsuits to a large extent.

On the other hand regulation of prices and capacity rarely benefits consumers. It transforms the regulators and legislators into the "target market" for the company. Price "collusion" becomes mandatory, and the law of unintended consequences leads companies to become inefficient as that is rewarded.

Each instance of regulation has to be evaluated and "quis custodiet custodies" will probably apply, in that regulators and legislators need to be supervised.

Tuesday, September 11, 2007

Let's talk Strategy

I love Business strategy. One of the fundamental moves I always enjoy is to force my competitors to drain their resources while I spend sparingly. The United States lost that game in Vietnam, and seems to be losing it again. As a result of an expenditure of a few $'00,000 to fly planes into the World Trade Center and Pentagon, the US has spent approaching $300 Million in Afghanistan, and much more in Iraq. That is not to speak of the lives lost, and disabilities suffered (at a rate of almost ten for each death). I wonder how we keep on failing over many years to learn that basic strategic effectiveness is not dependent on spending levels.

Has LinkedIn peaked already?

Few businesses last very long these days. In the Online Social Networking space a number have been and gone - Tribe, Friendster, Ryze, were all strong for a period of time. AOL, with AIM pages, missed the opportunity. Orkut waited too long. Bebo became a geographically limited one, as are so many of the foreign language ones. At the start of the year, MySpace and LinkedIn seemed unassailable, with FaceBook in a very secure niche.

Now, increasingly, in a world where change is critical, LinkedIn seems static, and even boring,while FaceBook has acquired more adult users and allows them to have a window into the life of the people to whom they link. The acceptance of third party Widgets is allowing them to avoid the mistakes which others have made. No one company can develop all the cool widgets which people want, so by opening up the environment, it can ensure that it always stays at the leading edge.

It may not last, but FaceBook has the best strategy for now.

Monday, September 10, 2007

People think they are more ethical than they are

Research at Harvard Business School has found that people predict that they will behave more ethically than they so, and that they look back on past behavior and think of it as more ethical than it was.

This is an important lesson for companies which want to make sure that they behave ethically. The detailed rules of behavior have to be laid out, not just a pious intent.

Sunday, September 09, 2007

Is the CFO missing the valuation of the company?

An article in today's New York Times pointed out that there is nothing immutable about the way a company values its assets. Even today many will recognize that it misses intellectual property such as technology and brand value.

Friday, September 07, 2007

Are most companies unethical?

It is typical these days for many companies to delay payment of invoices to smaller suppliers as long as they they can. They do this thinking it is simply being clever. However, a few years ago many companies thought that backdating stock options was being clever. Others thought that null trades, where nothing really changed hands, but revenue was booked in both directions, was exceptionally clever. So how clever is it to avoid paying legitimate debts until you have gone past agreed terms?

One of the Principles of Mars, Inc., a company which is a passionate believer in ethics, is prompt payment of suppliers. In fact, it is also good business since other companies want to do business with such a company. Therefore, the manager who initiates a policy of slow payment is not only acting unethically, but is doing his or her company a disservice.

Sunday, September 02, 2007

Why are the people who know the least, the least likely to ask?

As someone who has spend all his career moving between line management and consulting, I have seen again and again, that the really capable individuals have the self confidence to admit when they do not know something. This means that they will ask for help and learn. No one knows what they do not know, but the smart people will recognize that there is a lot which they do not, and will check to find out. As both a participant and an observer, I have become fairly good at predicting which managers will fail, and which will succeed, simply based on their attitude to learning.

Tuesday, August 28, 2007

Health Insurance will get worse before it gets better

While the US is the only wealthy western country without universal health care (even Brazil has it), and the number of uninsured continues to climb, it will continue to get worse until far more middle class people feel the pain. Most of what has been proposed simply applies Bandaids to the problem. Few are prepared to blow the current system up and start from scratch. Few are prepared to take on the very strong lobbies of pharmaceutical companies, health insurance companies and health care providers simultaneously. Whether the country uses a single payer system like the UK and Canada do, or a tightly regulated insurance company managed one as in France or Germany, it will require major change. Even in France and Germany, insurance companies cannot turn anyone down, vary price by pre-existing conditions or age, or refuse reimbursement, which makes them the same as a single payer system in effect.

Monday, August 27, 2007

The "black hole" of leads management

In every industry, in every company, it is difficult to track the progress of leads through the sales process to closing. However good the CRM system, the issue is always a human one. While it may be in the company's interest to track leads, for most sales people it is not in their best interest to complete the data entry. They have little to gain and they lose time and perhaps information which they would rather keep for themselves. In many industries, a sales person's Rolodex is their biggest asset, so they would rather build their own personal database than the company's.

Sunday, August 12, 2007

The Education Business

Visiting colleges with my daughter this summer has been an educational experience. It is clear that higher education in the US has become more and more of business, much like health care. While this change is happening in other countries - just note how aggressively they court foreign students who tend to pay higher fees - it is less so. The reason is that as in health care, the US is the only Western country in which higher education is so divided into private and public. Even Universities like Oxford and Cambridge, which American perceive as private, actually receive about one third of their funding from the Government. This enable the Government to exert much more influence over them than it can over a US private university. So the salaries of star academics, star administrators, and star fund-raisers continue to climb as do the fees.

Saturday, July 28, 2007

Insurance guy moves to CMO of Coke

I regularly hear that nless you fit the spec precisely, you will not get the job interview. What the client wants is "someone who has done the identical job for the leading competitor for the past ten years - but can think outside the box." Yet, I see regularly that companies hire Chief Marketing Officers, and indeed CEOs who have quite eclectic backgrounds.

Wednesday, June 27, 2007

What you measure drives what you do

Sometimes we see a particular standard being used to measure quality. The result is that the provider begins to focus on that. For example, horse power tends to be the measure of performance for cars. Yet in fact, torque is a better predictor of acceleration (more important for most us in an age when top speed is academic). While many people can tell you the bhp of their car, few can tell you the torque, or even the units of measurement.

Similarly, most people judge the speed of their broadband connection by downstream speed. Few realize that in some situations, such as sending large files, or IP telephony, upstream speed is more important. As a result, few know the upstream speed of their connection, and few providers advertise it.

Sunday, June 17, 2007

Doctors the last hold-outs to the Internet

Today, we make airline and restaurant reservations online. We work with lawyers, priests, ministers and mullahs by email. Email and the web pervades our work life and personal lives. Except when it comes to doctors. With rare exceptions, you cannot make appointments online or ask questions by email, even though the evidence suggests that it improves efficiency as well as effectiveness. It seems that the structure and psychology of medicine drives it to waste time and money. Just one of the many things which has to change, but I wonder why the industry has this mindset.

I suspect that doctors are still very much of a producer driven mentality. While they do want to serve patients, they believe that they are the experts on how to do that, not the patients. Also, most doctors are not completely comfortable with technology.

Monday, June 11, 2007

Serious about energy policy?

We are so driven by preconceptions that we are moving too slowly towards a sensible energy policy. I have commented before about unwillingness and inability to make good decisions. Too many people have different opinions. Opinions arrived at without any objective analysis. The fact is that energy conservation is a must. We are running out of fossil fuel while the world, except Western Europe continues to accelerate its use of energy. Alternative sources each have disadvantages or risks, though many are less than coal or oil. Yet we have to pick one or more and make them safe and non-polluting.

Lobbyists tend to not allow this to happen, entrenched interests and people with their minds already made up. This must change.

Friday, June 01, 2007

Baby Boomers - a generation like no other.

This is the 40th anniversary of the release of "Sergeant Pepper's Lonely Hearts Club Band." I think many who are younger than the Baby Boomers do not realize how much has changed. All young people in the Western world eagerly awaited each new Beatles record - or the Who, or Jefferson Airplane. The entire generation too on the older generation with passion and energy which often turned into violence as in the Paris student riots. Anti-war protests were full of fury - not just in the US where the young faced being sent to Vietnam, but in other countries as well. Confrontation was the norm. Now I am quite prepared to recognize that young people today are just as intelligent, creative and involved as those of 40 years ago, but the group dynamic is different just as the Baby Boomers were different from their parents.

Wednesday, May 16, 2007

Grumpy people who work for charities

In the past month, I have given a number of things to charities such as Goodwill Industries and the Salvation Army. Now, I know that the people I meet in the course of this are not the idealists who run the organizations, but most likely paid employees working for not very generous pay. Sadly, I have found that many of them are rather bad-tempered and rude. I get a feeling of resentment that they have to do this. When trying to donate the contents of a house, worth many thousands of dollars to the Salvation Army, no-one said "thank you," but only issued peremptory orders, about "if you are not there when we tell you to be, we will drive on and you will have to reschedule!"

Overall, the experience has been unpleasant enough that I would hesitate about doing it again. I think that the charities should stress good manners more to their employees.

Tuesday, May 15, 2007

Death and Taxes - failure in business and better decision-making

The inevitability of each is legend. However, so is failure in most business situations. Most new products fail. They need not in many cases. It is often clear to observers that the product is going to fail, but "the emperor has no clothes" syndrome takes over and no one says anything. Thus everyone watches in silence as the product rushes to inevitable failure and most effort goes into working out how to avoid blame. The same applies to acquisitions, new technologies. Yet as H.G. Wells said, "all progress is due to unreasonable men." People keep taking risks even if very foolish. Sadly, they do not use the simple tools which can reduce risk.

Friday, May 04, 2007

Why are Brands often less well understood today than twenty years ago?

In the search for business opportunity we have allowed the essence of what a brand is to become more complex. So many people claim expertise in understanding brands. Designers, copywriters, even accounting firms, now claim expertise. This is knowledge from a narrow perspective. The old idea from Procter & Gamble in 1929 that a Brand Manager, is the General Manager of a brand has long gone. A brand is often seen as being made up of smoke and mirrors, with graphics being more important than product or price. As a result, most companies do not do the best things to optimize the financial value of the brand.

Friday, April 27, 2007

Is the AARP guilty of age discrimination?

The AARP recently posted a VP, Marketing position which called for "10-15 years experience." This is frequently code for someone under 40. Whether or not the AARP meant this, it is surprising that it was not more sensitive to the issue. Given the job description, it was clear that while someone with this level might be able to do the job, someone with 25 years experience would probably be better qualified. So why did the AARP eliminate someone like that, perhaps a youth of 50?

Monday, April 23, 2007

Is Google going the way of Wal-Mart?

I recently took a look at a few Google job descriptions. They looked as though they had been written by children. The job description for a Product Manager had nothing in it about understanding the consumer or customer. The very clear impression was that they wanted a bunch of smart, creative kids who would run about and create new products without any sense of process. This was the way in which Google and many successful new businesses are started. The success of Silicon Valley is based on the thousands of businesses which do not succeed. However, the founders do not see them in the context of the thousands of businesses which fail miserably. So when they grow their business, they do not understand that within a corporation, throwing ideas against a wall to see what sticks is incredibly inefficient. While I do believe that top management at Google have a clear vision, I see that this is not understood at lower levels. Most of the people in Google, seeing the company' s success, have come to believe that it is easy. When a company comes to believe that it is so smart that they do not even have to understand what made it successful, nor have a process to replicate it, then the company is getting into trouble, much as Wal-Mart did.

Sunday, April 15, 2007

Can't see the wood for the trees - buried in data?

With the enormous growth in computing power over the past 25 years, businesses have many magnitudes more data than they used to. Yet, human brain power has not changed. So management is faced with more data than it can process to make decisions. As a result, many decisions may be worse than they used to be. Companies have not spent enough time on improving human analysis and decision-making vs. on IT and data collection.

Sunday, April 08, 2007

Don't be ahead of your time

There are many risks in being ahead of your time. In 1945 Arthur C. Clarke proposed the geostationary satellite. A satellite at an orbit of a bit more than 42,000 km from the center of the earth will remain stationary with respect to the earth. However, in 1945, the rocket technology did not exist, and would not for another 20 years, so there was no way that he could patent the idea. There are many other ideas such as heavier than air flight, solar energy, television, which were "invented" before the technology existed to produce them. Of course, this is what people have thought for years about many products such as the videophone or fresh prepared meals, so they keep being introduced and keep on failing. Sometimes an idea is just ahead of its time, but sometimes, they are just flawed.

Saturday, April 07, 2007

Wilful ignorance

It is one thing when you are ignorant when you are ignorant because you never had the opportunity to know better. Someone who grew up with no education may not know how a jet plane or the Stock market works. This is no reflection on intelligence or personality. However, if someone has the information presented, but ignores it because it does not agree with preconceptions, demonstrates something clear about intelligence and personality. Few things are as difficult as preserving an open mind and curiosity.

Yet more great inspirations - Amos Hostetter and Frank Perdue

For a long time I advised Perdue Farms. During most of this time, Frank Perdue was the CEO. Frank had some very important attributes. Among these were:
  • Fanatical focus on the customer - he really was interested in hearing what they had to say.
  • Belief that if he gave the customer the best that he could, he would make money.
  • Passionate conviction that however good the product, the consumer had to know about it.
Amos Hostetter was the founder of Continental Cablevision. His strengths were a fundamental integrity, a humanity towards all and a belief that as a successful business man he had obligations to others.

Friday, April 06, 2007

Ignoring data does not make the situation go away.

It disturbs me when I see people ignoring data because they do not agree with preconceptions or ideology. This happens with global warming, evolution, health care, and many other key issues. It occurs in business, in academia and in government. I am at a loss to understand whether the individuals involved genuinely do not understand or believe the data, or whether they simply reject it because it goes against a deeply held belief. This behavior can lead to major, as well as many minor, disasters. This is the kind of thing which leads to the collapse of bridge as well as the launch of a product which consumer research has shown than no one likes!

Exhorting people to have respect for facts seems to make little difference. Few people seem to be prepared to put data over wishful thinking.

Thursday, April 05, 2007

Pricing - the least professional element in marketing?

While Phil Kotler in 1970 identified pricing as one of the four "P's" of marketing, it has probably received less imaginative attention than any of the others. While some work has been done on the passive management of pricing of products and services, very little has been done on changing all the moving parts to optimize price. The reality is that quite often, some "added value" can justify a higher price. Sometimes the added value even saves the company money. In the early days of touch tone dialing, the consumer would happily pay an extra $ per month for it, even though it saved the phone company money by reducing the load on the network. Dell computer's "build to order" process provided the consumer with a more modern computer, faster while saving the company huge inventory costs. Of course, now with the shift away from desk tops to lap tops, ergonomics are more important and consumers want to handle and try out a machine before buying, so the value mix has changed. When rice is parboiled it becomes less sticky, easier to cook, but also more resistant to infestation and with fewer broken grains after hulling and milling, so yields are higher. We have seen many apparently commodity products which have succeeded in taking prices up by providing added value to the customer.

Wednesday, April 04, 2007

More great bosses - John Coady and Dave Allen

As I consider what made any one boss great, I have concluded that instead of simply issuing orders and telling people what to do, they were all patient and exceptional at asking questions. Recognizing that ownership of an idea is critical for great execution, and that the first good solution may not be the best, they probed and challenged. John Coady, former Group-President at Mars, who sadly died in his sixties, was outstanding at doing this. He would listen, never show anger or impatience, and then ask just the right question.

Another who was wonderful at this was Dave Allen, who also died in his sixties. Dave, at Marketing Corporation of America, was superb at getting people to work together to come up with the best solution. He avoided giving any shoot form the hip answers himself, but helped others to achieve their best.

Sunday, April 01, 2007

Criticized for sharing the credit

One of the most important elements in successful management of people is to share the credit. I once had a boss who stunned me by telling me that I should not share the credit with subordinates, and he expected me to take the credit for anything they did for myself. Sadly, this was more of a reflection on him than on me. He felt so insecure that he would not allow his direct reports to meet without him being present. He assumed that all his subordinates were out to get him, and that the mark of a good manager was to suppress all their subordinates so they could never threaten.

He used to do anything he could to divide and conquer. For example, he used to tell each manager that the others disliked them, and he was their only protector. As I discuss good bosses, I will also flag such dangerous behavior.

The Best Bosses and Business Role Models I have had

As I look back upon great bosses and role models I have had, I realize that they have certain characteristics in common. The biggest single one is that instead of issuing orders from on high, they asked smart questions. From John Coady, for whom I worked at Mars, Inc. to Dave Allen at Marketing Corporation of America, they encouraged me to stretch by asking me the right questions. From Don Campbell at Procter & Gamble and Heinz Ivo at Mars, to Frank Perdue, they made sure I did worry about the details. A great plan, poorly executed may be worse than a poor plan.

For every weak boss I have ever met, I have had several good ones, and a few great ones. I will go into more detail one by one in later posts.

Friday, March 30, 2007

Paying for a superior US public school education

While we like to think in a country with equality of opportunity, people will pay more for housing in areas where schools are better. In a system where schools are primarily locally funded, parents will pay a premium to live near good schools. This still is cheaper than sending children to a good private school because it relies on the tax payments from people who do not get any benefit from it - people with no school age children.

As a result, schools in some areas, which also benefit from higher standards set by parents, outperform schools in the average area, and of course, many schools under-perform the average. This results in many being poorly educated and never reaching their full potential.

Thursday, March 29, 2007

Sports do not built character, they reveal it.

One of the main reasons why sports movies can be so gripping, even if the viewer is not interested in the sport is that sports can be a metaphor for life. People often say that sport builds character. In fact, like many other endeavors which put people under pressure, sport show what character people have. Much as leadership cannot be taught, so we cannot teach character. People who have it will show it.

Friday, March 23, 2007

Extracting money from the desperate and needy - getting more common

There are activities today which focus on getting poor and desperate people to pay money to get hope. This ranges from state run lotteries, to companies which guarantee to find you a job for a substantial fee - even though they rarely deliver. There are groups who offer to fund start-ups, but which charge them to present, even though they provide little chance of funding. They may make more money by their charges to people who have no money than by the business enterprise in which they theoretically specialize.

Thursday, March 22, 2007

Darwin's dilemma

Charles Darwin was a very conventionally religious man. He agonized over the existence of Evolution. It seemed to conflict with his understanding of and belief in the Bible. However, he did not reject the evidence of his scientific research. Nor did he lose faith. Instead he used his scientific learning to modify his understanding of the Bible. To the end of his life, he remained a believer in both science and God, rejecting neither. he would have been surprised and shocked by people today who reject the evidence, whether or evolution or global warming.

Wednesday, March 21, 2007

Does "overqualified" equal "too old?"

Many people over 50 have experienced being told that they are "overqualified" for a job. On the face of it this is ridiculous. If you have more skills and experience than they originally envisaged, then they should be over the moon that they have you as a candidate - right? If you are rejected then it is clearly age discrimination - right?

It is not so simple. In many cases, managers feel insecure about supervising someone who may be older or better qualified than they are even though perhaps their subordinate does not want their job. In other cases, hiring managers may feel that the person is only taking the job as a temporary step and will move on. In fact, older people tend to stay longer than younger ones. A few years ago, when pension plans were defined benefit, it cost more to hire an older person. so there are other reasons that age alone, even though there is a growing shortage of skilled and experienced people, is not the reason for turning someone down.

Sunday, March 18, 2007

Menu Foods and Product Recalls

Companies have a huge opportunity to become heroes when they handle a product problem with openness and integrity. J&J's management of the Tylenol product tampering problem is still the text book case. Now we have Menu Foods, co-packer of many well known brands of canned petfood, including some items from Iams, Eukanuba, Science Diet, Nestle-Purina, apparently released some product which has killed some dogs and cats. If any evidence surfaces that they withheld or hid information (and if they did, it always does), the company will be in trouble. I also feel sorry for companies which relied on Menu Foods. If a company puts its brand on a product, it takes responsibility for it.

While a tragedy for the animals and their owners, it will be interesting to see how the companies involved handle the situation. It will tell us a lot about them.

Thursday, March 15, 2007

Are private companies moral or immoral?

With the growth of Private Equity funds, much has been written about whether or not they should be more closely regulated. The press, public, and legislators are often suspicious of privately owned companies, which are not bound by the same disclosure rules as public ones. Yet, we forget that the purpose of disclosure is primarily to protect shareholders, not simply to address the prurient curiosity of the uninvolved public.

I could argue that it is the public company which is immoral in that it is a form of ownership which takes control away from the owners and gives it to a self-perpetuating group of managers. In the case of a private company, ownership and management are more closely linked - in some the same. Owners know all that they want to - often much more than shareholders in a public company. Those who are not involved do not need to know, and certainly competitors are kept in the dark more effectively.

Wednesday, March 07, 2007

Do Powerful people always realize when they are getting favorable treatment?

While every day it seems that we hear about an abuse of power or fame, this may be misleading. When Henry II said "who will rid me of this turbulent priest," four of his knights overhead him, and thinking to anticipate his orders, went to Canterbury, where they killed Thomas a Beckett. So often, people who want to impress the high and mighty try to do what they imagine they would like done. While often they are right, in a few cases they are doing something which was not expected.

Also, people in authority can become so removed from the real world that they do not even realize that they are getting special treatment. They may come to believe that everyone gets it. So when you see someone who declares that they did not ask for, nor expect something, they may be being truthful.

Sunday, February 25, 2007

How to make more money - get customers to give it to you!

companies often make it difficult for customers to give them money. Any prospect want to buy. They are interested because they want to buy something. Companies make it difficult to get the information they need to justify the decision. Companies put barriers in the way by, for example, forcing prospects to "register" in order to get product information. Companies make it difficult to buy also. Many retailers make it difficult to find a payment point, and then make customers wait in line.

Friday, February 23, 2007

Chrysler should learn some lessons from the British Motor Corporation history

In the 1950, the British Motor Corporation was the third largest car company in the world. It suffered from a similar lack of dynamism to the old line Detroit companies now. However, it kept postponing the inevitable by merging with Triumph-Rover, and then sustained itself by licensing designs from Honda, then peeling off the more desirable brands such as Mini and Land-Rover, following its acquisition and divestment by BMW. Does this sound like Chrysler is heading this way? By then the only brand which had not been tainted was MG, so it relaunched all its cars under that name, and seemed to have a future. One day, it simply closed its doors, with unsold cars on dealers' lots, and no way of honoring warranties.

It is clear that this will one day be Chrysler's fate.

Monday, February 19, 2007

Does democracy end when the number of voters becomes too large to fit into the town square?

There are many systems of voting to get something close to "the people's will." However, none really get to the kind of democracy which is possible when all the citizens can gather in one meeting and come to a conclusion. In a "first past the post" system, so common in English speaking countries, there are frequently two main parties, as an third party, even getting 20% of the vote, will get far fewer than that as a % of elected representatives. Other proportional representation systems may do better, but tend to lead to coalition governments. Any democracy is better than the alternative, but sometimes the worst thing we can do is to oversell it.

Executive Recruiting is such an inefficient Process

We see a job market where at any point in time there are many people looking for jobs, and many employers looking for people. Job-seekers complain that they cannot find jobs, and employers that they cannot find people. The current system is not working well and creates huge impact on productivity. The online job listings and applications overwhelm all involved and executive recruiters end up relying on serendipity and subjective judgment. This is the same problem as dating sites and services. As software improves, each will improve, but we should recognize how inefficient today's system is.

The role of Marketing has diminished in Business

In the 1970s more CEOs came up the Marketing ranks than today. These days more CEOs have financial backgrounds. The latest issue of Business Weeks talks about the state of customer service and calls for a Chief Customer Officer. Now this should be the role of the Chief Marketing Officer. That it is not obvious speaks to the credibility of the discipline. Furthermore, too few CMOs can talk to the CEO and CFO in the language of business - finance. Marketing needs to re-invent itself to regain credibility, and then it can do what clearly still needs to be done.

Saturday, February 17, 2007

Chaos at Jet Blue - no surprise

I have never been a great fan of Jet Blue compared to Southwest. I have flown them twice, and find that their terminal at JFK is a zoo devoted to selling overpriced food to passengers. Reliability is easily fractured in poor weather, or any other circumstance (both my flights, a year ago, were almost two hours late in taking off). I found the information to be late in coming (unlike Southwest), and the staff to be surly and poorly informed. I also was not impressed by the on board accommodations. I know they have done many innovative things to reduce costs, but I avoid them. I suspect this will happen again.

Friday, February 16, 2007

Is Dell in a state of panic?

It seems that each day there is another change at the top. This alone gives the impression of a company which has lost control and is panicking. Dell created a model which was a major breakthrough. While keeping inventory down, it also ensure that only the latest technology machines were sold. However, in the past few years other companies have shortened their supply chains so that they do not hold large inventory, but consumers do not have long waits for their machines. Also, the market moved from desk-tops to laptops, and Dell was weak in that category. Lastly, consumers want to see, touch and try out these laptops, so computer retailers, including Apple's stores, have taken share. Dell was resistant to change until the company was in serious trouble. While Michael Dell has come back, there is no reason to believe that he can change the system he created. We have seen a rapid departure of top executives and just as fast an influx of new ones. These situations tend to be self-perpetuating, and can even accelerate. I suspect that the problems as Dell are worse than they appear, and the worst is yet to come.

Thursday, February 15, 2007

The Rebate Rip-off

Apparently, a significant number of rebates are refused for bogus reasons. The use of rebates is based on dishonesty, so we should not be surprised. They are designed so that "slippage" occurs by putting in hurdles which discourage the consumer. Then to make matters worse, some are simply refused for fabricated reasons. This happened to me when I purchased a Fujitsu hard drive from Fry's electronics. Fry's gave me a print out of a rebate receipt, and I sent this in with the original UPC code. It was refused because, the reason given was, it was not purchased within the period of the rebate. Except that according to the Fry's receipt, it was. This happens a lot. Sadly, it hurts the company in the long-run. Sadly, most executives do not get compensated based on long-term customers, only on immediate ones. So executive compensation systems encourage unethical behavior which hurts the company.

Wednesday, February 14, 2007

GSM3 started in Barcelona today

GSM3 is the world's leading mobile phone industry convention. It started today in Barcelona with the announcement of the Global Mobile Phone Industry Awards. Unnervingly, none of the products or services given awards, including a few from India and Bangladesh are available in the USA. The US mobile device market has been held back by a lack of true competition and embedded obsolete technology. This is one of those situations where the size of the country is a disadvantage. Steam locomotives in the 1930s were built to last 100 years. That resulted in the stagnation of technology, which prevented advances being made in steam engine technology (the steam cycle is the most efficient), and allowed the introduction of early and fairly inefficient diesel and electric locomotives.

Sunday, February 11, 2007

Will conservatism hold us back?

The US likes to think of itself as a young country, yet it has one of the oldest constitutions on Earth. American consumers have resisted abandoning the dollar bill even though it is worth little by the standards of a century ago, and every other Western country has dropped equivalent value bills. People resist change in these ways even as they adopt new technology at a greedy pace. Why does the US have this dichotomy between conservatism in ideas and ways of life, yet eagerness to see new technology?

I suspect that in a world where technology moves at a bewildering pace, it is important to have a psychological anchor. People need something to hold on to. If we want consumers and citizens to adopt new activities and concepts we have to allow them a stanchion to hold on to.

Wednesday, February 07, 2007

The "new" Taurus - putting lipstick on a pig?

Ford announced today that it would rename the Ford 500, a poorly seling car, the Ford Taurus. Perhaps the company feels that consumers are idiots. If something as simple as changing the name can fix a failure, then we would have solutions to many business problems. It is sad that experienced executives know so little about marketing and the principles of branding that they believe that this is the answer to the company's decline.

Sunday, February 04, 2007

"Friendly fire"

This week, a coroner's court in England is looking into the "friendly fire" death of a British soldier in Iraq. It seems that the US military is withholding evidence. Whatever the truth of the matter, it is clear that hiding evidence suggests a cover-up in the minds of people. J&J showed us the way to deal with crisis - complete transparency! Government bodies, particularly the military do not seem to have learned this. It ends up hurting those who are holding back.

Thursday, February 01, 2007

When little things cause panic, have the terrorists won?

When a device with flashing lights, looks like a well known cartoon character, is hung in prominent places, and a city panics, have things become absurd? Is anything new or unexpected to become illegal? We always seem to be behind the terrorists, and the reactions are not proportional to the risks.

Wednesday, January 31, 2007

Should we curb high salaries? If so, how?

Very high salaries for top executives is harmful to so much. It is said that companies have to pay so much to get managers to take the job. This is nonsense. Furthermore, the huge gaps between the top and the lowest paid disturbs society. It seems to be unfair to all. The answer is transparency. If the light of day is shone on every aspect of CEO compensation, it will encourage greater consideration.

I am somewhat surprised that the press has not picked out very highly paid executives and staked them out to photograph their houses, their cars, their planes, and their spending. At some point, I am convinced it will happen, and that will be harmful to society.

Tuesday, January 30, 2007

Resigning when a subordinate is guilty

In many culture, the ultimate boss is expected to resign when a subordinate commits a crime or is simply guilty of unethical behavior. An honest mistake is OK, but when it is an intentional breach or law or trust, the boss goes of his or her own volition. In Japan, until recently, the boss paid with his life! While few cultures go that far, resigning is the honorable way to go.

However, we see many examples of a boss proclaiming his or her responsibility, but then continue as though nothing had happened. This is a sad cultural reflection.

Sunday, January 28, 2007

Age discrimination in hiring is alive and well

It is interesting that while the average life expectancy has gone up over 20 years since Social Security started, average retirement age has not. In fact, we can see that a company seeking a 45 year old in 1950 was looking for someone two thirds of the way through his or her life, that now translates to someone close to the midpoint. Yet, while pundits keep on proclaiming that America will have to find new ways to make better use of people in their 60s, companies persist in excluding them from opportunities.

The average age of the Iraq Study Group was 74, yet, most position specs will talk abut seeking people with 10-15 years experience (or 35-40 in the case of an executive). I have never seen a spec which calls for 30 years experience (a 55 year old), and would collapse if I saw one for someone with 40 years experience. Yet, why not? If today's 65 year old is like a 50 year old of a generation ago, companies should be eager to hire energetic, smart and very seasoned executives.

Cable to Cars - incomplete numbers

We seem to have such a drive towards simplification of everything that we expect one fact or number to encapsulate all we need to know. Whether it is an SAT score, a bhp number in a car, or download speed in a broadband connection, they only tell us part of the story. BHP tells us little without torque, and even then, we need to know the respective curves. Download speed needs to be complemented by upload speed, error rates, etc. An SAT score may be a misleading predictor of success in later life.

This habit leads people to not only seek, but to assume that everything can be measured by one number. Perhaps this is why the US News & World Reports ranking of Colleges and Universities, although criticized, is relied upon by many.

Saturday, January 27, 2007

complete cast lists

I have always found it interesting that in the US it is difficult to get the complete cast list for a TV program, whereas in other countries it is normal to show it. I can understand that it eats into TV commercial time, but even on websites, it is difficult to get one. I can speculate that in other countries minutiae may be more important, or that in the US viewers do not want to be reminded that drama shows are fantasy. However, I really do not understand it.

Looking at the world through tinted lenses does not help

The US has long officially believed that Cubans were only waiting for Fidel Castro's grip on power to loosen to replace him. Yet, even though it has, nothing has changed. The US Government assumed that Iraqis would welcome US troops as liberators. However, they did not, or if any did, it was not for long. Sadly, US officialdom and corporate management have for years continued to believe that all other countries see the US the same way Americans do. This has not served America well. Empathy for others is underdeveloped.

Many Americans believe that Americans are somehow more patriotic and love their country more than citizens of other countries. Yet, citizens of countries with even the most odious regimes do love their countries. This patriotism allows them to put up with a lot.

Nevertheless, ordinary citizens of other countries do have affection and respect for much in the US - it is simply not always what Americans expect. Citizens of other nations respect America's creativity, energy, economic freedom, as well as Hollywood movies, Levis and Coca Cola. However, they may not always admire the politicians, economists, and philosophers whom we do.

Many citizens of other democracies believe that the US' "first past the post" electoral system, and constant partisan gerrymandering of boundaries is far from democratic. Some other countries have charters of rights which are more modern than the US, which has one of the oldest constitutions in the world. Whether you agree with it or not, it is important to know it.

Friday, January 26, 2007

The US loses by discouraging citizens from living overseas

One in ten United Kingdom citizens live outside Britain. The number continues to grow. Yet only about one in seventy-five Americans live overseas. There are many reasons for that - size of the country, large tax disincentives (the US is one of very few countries which taxes non-resident citizens) - but the largest may simply be lack of knowledge of the world outside. In turn, this leads to a country with very little understanding of other countries and empathy for citizens of other countries. As a result, the US is at a disadvantage when creating and managing foreign policy, or growing international businesses.

It would benefit the US immensely if there were a large pool of US citizens who have experienced other countries, languages and cultures through immersion rather than simply visits, however lengthy.

Thursday, January 25, 2007

TV shows us that Bullies always win

Every day we see on TV that bullies are in charge and that they always win. Whether it is Donald Trump, Dr. Phil, Simon Cowell, or Judge Judy, the role models we see are bullies. Even in the business press, we see that so many of the role models are described as loud, bombastic and egotistical. This means that people are asked to respect and emulate individuals who are by no standards effective managers or leaders.

Wednesday, January 24, 2007

Superstar CEOs in a collaborative age

We talk a lot about teams and collaboration. Yet, whether we see CEOs, Chefs, College Presidents, Orchestra conductors, or Sport Team Coaches, we see the pay gap between the star and the rest of the team constantly growing. This was not always the case. I wonder how much of this is actually an abdication on our own responsibility. If we can hold the leader responsible for success or failure then we cannot fail. As John Holt realized in his studies of children, if we do not try then we cannot be held responsible for our inevitable failure. If we try and take responsibility, then if we fail, we can be blamed. Perhaps if the leader takes a greater share of the money, he or she absolves us from responsibility for failure - except it seems that they are even faster to dump their subordinates.

Tuesday, January 23, 2007

Ethics continue to be an issue in business

While we make much of how much we have learned from the ENRON, Worldcom, and many other situations, I continue to be stunned that unless precisely the same situation arise, there is an ethical blind spot in the minds of many business leaders.

For example, the Association of Executive Search Consultants recently recommended a firm to help people find jobs. This is so counter to the normal ethics of executive search, that I found it stunning. It represents a major conflict, and furthermore, most of these firms exploit desperate and frightened executives by over-promising and under-delivering.

As Chairman of the Marketing Executives Networking Group, I see this dynamic a lot. Ethics are in short supply so often.

Monday, January 22, 2007

Who should suffer from a CEO's mistakes?

Today Pfizer announced that 10,000 people would be laid off. Motorola announced that it would lay off 3,500. However, I have still to see an announcement that because a CEO allowed the hiring of 10,000 more people than was needed, who now have to be fired, the CEO will be joining them in the unemployment lines. Not only are the rewards often out of proportion to the effort, but so are the penalties.

Sunday, January 21, 2007

CEO of Mesa Air - shows that bad CEOs can be lauded in the press

Jonathan Ornstein, CEO of Mesa Air, was recently the subject of an article in the New York Times. It said that he is in a bad mood around 60% of the time - and he does not hesitate to take it out on his subordinates! So what kind of person would work for him - probably people who lack self-respect.

“He’s loud, volatile, insulting, doesn’t listen to the other perspective.” -- Scott Kirby, President, US Airways.

Do we need CEOs like that?

Saturday, January 20, 2007

Optimism while being aware of issues

Today we face many issues which are serious and seem intractible:
  • Global Warming threatens our quality of life and perhaps life itself.
  • Continued and growing use of oil in the US hurts the US and finances its enemies.
  • The Iraq war seems to be a quagmire with no easy solution.
  • Islamic fundamentalism and other extremism is a threat to freedom.
  • Religion continues to divide many in the US.
  • Race is an ongoing issue. Not just black and white, but between other groups too - Hispanic and Asian.
  • Wars and genocide across the globe do not seem to diminish. Even though fatalities in Iraq seem to be much lower than in Vietnam, much of this is due to improved medicine so that injured soldieers who once would have died, survive.
  • Globally democracy is not making gains, and over the past few years has even retreated.
  • The US Balance of payments stubbornly refuses to go down in spite of a declining $.
  • The US Budget deficit is growing.
  • 45 Million Americans are uninsured, even though the US spends twice as much per capita on health care as any other country in the world while getting poorer health care than many other Western countries. It hurtd global competitiveness.
  • Income inequality in the US is increasing.
  • Education in the US is failing - local funding and control hurts schools while Universities and Colleges are performing poorly although costs continue to climb faster than inflation.
  • Illegal immigration is an issue in every Western democracy.
However, morale is high and continues to be so. We sometimes forget that while the above are true, we have the means to fix each of them. We have amazing technology, a greater knowledge of the world and great energy from the population, including most of the immigrants. I certainly believe that we can achieve much.

Friday, January 19, 2007

Is Marketing attracting Tacticians rather than Strategists?

There are far fewer CEO now who came up the Marketing ranks than in the 1960s and 70s. More started in Finance. Perhaps it is because of the information explosion, but more Marketing functions seem to revolve around details of execution that issues of strategy. during the 60s and 70s, even relatively junior marketers were expected to be involved in, and contribute to strategy. This is less so. Therefore, when someone becomes a Chief Marketing Officer, they have not had the preparation which enables them to step into a Strategic role. I have spoken at the Wharton Alumni/Gunderson CMO Bootcamp, and found the response to strategic issues to be bewilderment. As long as this is the case, business will continue to be anything but market driven.

Thursday, January 18, 2007

The financial experts at Barclays have no clue about brand equity

Today Barclays Bank announced that it would be paying $300 Million for naming rights to the new Nets stadium in Brooklyn. Barclays is the bank whose exchange-traded funds business is widely regarded as a standard setter. In the Wall Street Journal today, Robert E. Diamond, Barclays's president, said the deal with the Nets will improve the brand recognition of Barclays's retail and investment-banking offerings. "We knew it was time to invest more in our brand," he said in an interview Thursday. "I don't buy the fact that branding is only for retail products."

Wow! They may be some of the smartest financial people in the world, but do not understand that staium is extremely inefficient for brand equity building. I have been involved in this twice. Once, I succeeded in preventing the purchase of rights in Boston, and then I failed to stop the naming of Reliant stadium in Houston. It is almost always an ego-trip on the part of the CEO. It is inefficient in targetting the market, and the positioning it communicates is rarely appropriate unless you are in the sports business.

Wednesday, January 17, 2007

Is the New York Times building the brand it wants to?

The New York Times is one of the few newspapers in the country which makes it very difficult to provide feedback directly to the writer of an article. Papers such as the Wall Street Journal, Washington Post, L.A. Times and many others encourage this. There are times a reader simply wants to say "well done," correct or add to a fact. I have seen errors in New York Times articles, but other than a letter to the editor, there is no way to email the journalist. I wonder if the New York Times fully appreciates the implications of this on its brand equity.

Monday, January 15, 2007

Building a personal brand is hard

We are told so much about the need to build a personal brand. However, it is not easy to build brand awareness and even more difficult to shape your positioning.

Friday, January 12, 2007

So the new AT&T is dumping Cingular!

AT&T, which is not really the old AT&T, but the old Southwestern Bell, itself a spin-off from the original AT&T, is going to drop Cingular, which itself incorporates the old AT&T wireless. How confusing! But does it make sense?

Other than the fact that well over $1 Billion has been spent building Cingular as a well-known and differentiated brand, does it make sense to go back to a brand whihc represented "Ma Bell," reliable, but resistant to change? Many argue that AT&T is a name which only means something to older people, whereas Cingular means much more to younger people. Cingular's "raising the bar," tagline is also going to go, as its its distinctive orange logo. I understand that much consumer resesrch has been done to verify that this makes sense. I would be fascinated to see that research.

I wonder if any of the research was used to calculate brand values and to perform a financial payout calculation. If so, it would be unusual. Few companies ever measure their brands on a $ basis. This is a missed opportunity.

Thursday, January 11, 2007

Does "iPhone" belong to Apple? Does it matter? You bet!

Cisco has announced that it will sue Apple for use of the iPhone name, that Cisco owns, was registered in 2000, and used since 2006. Now legally there seems no doubt that Cisco owns the name, but in the consumer's mind, Apple has for a while. So Cisco becomes the "bad guy" in the minds of many consumers, and Apple gets invaluable publicity whatever the outcome. In the end, even if Cisco gets financial compensation, the loss in value of the Cisco brand name will be much greater - the company which took on a "cult brand!"

Wednesday, January 10, 2007

"Experts," shooting from the hip

Any newspaper article, or TV story, would not be complete without the obligatory quotes from "experts." All too often, we have not heard of these experts before, and we have no idea about their credentials to be experts. Usually, they are people who are shooting from the hip for a chance at personal publicity. We should take their advice with some scepticism. Today the papers are full of stories about the new Apple iPhone, with experts being quoted to "prove" it will be successful or a failure. It is clear that many of the quotes are based on little thought or evidence. Instant analysis is demanded by the media to feed their publications, and there are always people who are eager to provide it.

Tuesday, January 09, 2007

If, as the Tao says, the best leaders are unknown those they lead, how can we find and judge leaders?

According to the Tao, the greatest leaders are unknown to their subjects. When a leader organises matters in harmony with the Tao, the subjects go about their work and believe that their projects are accomplished entirely through their own efforts. Therefore everyone is content.

Next best are leaders that are loved and praised,
then those that are feared.
The worst are hated and despised.

A.G. Laffley of Procter & Gamble may be one of the rare examples of a great leader. He does not thrust himself to the forefront. Colleagues and subordinates have said repeatedly that they do not know how he does it, but he always gets good results. I believe that had he left P&G and left his career to the power of self-promotion, he would not have been so successful. However, he spent his career in a company which carefully and accurately measures results. Most of the "great" leaders promoted by the business press are at best those in the 2nd category. People who are great leaders are likely to go unrecognized and unrewarded.

Sunday, January 07, 2007

How can we trust people who will tell us what they think we want to hear?

Many people fear upsetting others, or perhaps fear their anger. It does not matter which. If you have a peer, a subordinate, or someone important in your personal life who does this, watch out. People like these will get you into trouble. Eventually, they will withold some key information from you because you will be upset by it. Then you will make a wrong decision, and you will be hurt far more. Expect everyone around you to tell you the truth, and make sure you do not punish them for telling you what they believe to be true, even if it turns out to be wrong. You need to hear it.

Also, be one of the people who is open and honest with those around you. Do not allow someone to make a poor decision because of lack of information.

Saturday, January 06, 2007

Cultural differences we do not see

Ethnocentricism blinds us to differences. It is to some extent obvious that Americans are different from Chinese or Indians, though we often fail to see them accurately, or the similarities. However, we are particularly poor at recognizing differences between nations and cultures with much in common. For example, while the majority of people in the US believe in God and practise a religion (usually Chirstianity), in the UK, a Guardian poll a month ago showed that 82% believe that religion does more harm than good, and 63% describe themselves as not religious. This has a huge impact on many of the activities of daily life. So much in politics, education and business reflects implicit beliefs, that a culturally different underpinning will change how people live.

Friday, January 05, 2007

Some companies are completely clueless

I have written before about how people do not know what they do not know. One interesting example is Indymac Bank's expansion of retail banking. In a market which is becoming eincreasingly competitive, they have decided to expand their retail banking presence. However, in a classic expression of "build it and they will come," the new branches are undifferentiated and all but invisible. They have failed to learn from the existing leaders in the marketplace and do not seem to even know how weak their "stores" are.

Thursday, January 04, 2007

Conflict avoidance is not conflict resolution

If there is a disagreement, it does not go away if you simply do not address it. Often, taking the bull by the horms results in a solution and agreement which is far easier than you imagine. Avoiding it is likely to make it worse.