Tuesday, December 23, 2008

So what happens to all the cars the US government is paying to produce?

We hear about all the cars piling up on the docks and at dealerships since consumers can't or won't buy. Now that the Federal Government is paying the Detroit companies to continue to make cars, who will buy them? Many consumers are scared to buy, and others cannot get loans. It seems to me that the fix is on the demand side rather than the supply side. If consumers would buy cars there would be no need for a "bail-out." Perhaps the Government should pay car companies to pay workers and suppliers, but remain with idle factories. Better still demand stimulus may be the way to go.

Tuesday, December 16, 2008

Blagojevich or Madoff, can you really trust anyone?

Year after year, we see a succession of people in positions or trust and authority who let us down. Whether they are politicians - see the number of ex-Governors or members or Congress who get sent to jail - or business people - from John Rigas to Stephen Gardner; Ken Lay to Conrad Black - it never ends. In all probability more people get away with it than get caught. Furthermore, many who do get caught manage to rehabilitate themselves, and few show any shame.

Sunday, December 07, 2008

How do we blend wisdom, energy, creativity and technology understanding?

One of the issues with leaders and managers in any field is that there are often conflicting requirements. Youth can bring creativity, tech-savvy, energy, while age and experience can bring wisdom, perspective, and knowledge. However, many older people also have energy, creativity (half of all entrepreneurs are over 50), and are very technologically up to date. A 60 or 70 year old can be more effective than a 30 or 40 year old - but individuals need to be looked at as such, not just as a category.

JFK's team when he was elected was stunning in its intelligence and energy. "The Best and the Brightest," as Halberstam called it sardonically. Yet this was the team which led the US into a deeper and deeper quagmire in Vietnam and huge social as well as economic unrest at home. Companies led by unusually young CEOs underperform companies led by CEOs over 60 - though not always.

Saturday, December 06, 2008

George Fisher, lead Director of GM, shows he still does not get it!

He was quoted in the New York Times as stating that the reason GM is in trouble is that it made "business decisions" vs. "marketing ones." 'We were late on hybrids,”George M. Fisher, the lead outside director on G.M.’s board, said in an interview this week. “Why were we late? We made a business decision as opposed to a marketing decision. That’s probably a mistake, in retrospect.'

The fact that the man who ultimately leads GM, and former CEO of Kodak, thinks that marketing is somehow antithetical to business, is horrifying. There is no way that GM will survive in the long haul as long as it is not market-driven.

Tuesday, November 25, 2008

Studying "talking heads" - how can you become a media star?

I find it interesting to Google many of the "talking heads" on new programs. Frequently I find that they have no qualifications whatsoever to be experts. Malcolm Gladwell points out that you need 10,000 hours to be expert in anything - about 5 years of uninterrupted study and practice. Yet many of the experts on TV have barely achieved 100 hours. This also applies to politicians talking about business, or business people talking about social policy. It also suggests that someone with, say 15 years total experience cannot have the breadth to be a CEO, General or other leader. Yet we too readily anoint individuals as experts whose opinions we value.

Saturday, November 15, 2008

Business people as heroes - Harold Geneen to Vikram Pandit

At any point in time, the press anoints a few business executives as heroes. From the days of Henry Ford, through Harold Geneen at ITT, Jack Welch at GE, to modern heroes such as Carly Fiorina, to Vikram Pandit. A very few are considered to be specially talented in retrospect, but most are seen to be far from perfect. This should not surprise us we do not often see what the CEO really does. Furthermore, a large organization is a group activity, and the leader does not know or influence most of what happens in it. Middle management who have been at the company a long time are often adept at preventing any change from taking place even if the leader pushes forcefully. Thus, while A.G. Lafley probably is one of the great CEOs of all time, he could only acheive his objective because he has a superb organization in place.

There are very few really great leaders, and even they are often flawed. Alfred Sloan thought that the Allies would lose to Germany because of its superior organization! We need to scale back our expectations of CEOs and also recognize that middle managers are critical to any successes or failures. Assigning star status to a CEO is counter-productive. Robert Nardelli was pushed out of Home Depot (with a $210 Million severance - it was cheaper to pay him that than keep him in place), so was hired to run Chrysler, a dying company in an industry which he knew not at all. Few middle managers would ever be hired on that basis.

Sunday, November 09, 2008

Saving GM - throwing good money after bad?

For many years now, the issues facing the US auto industry have been known to all. The Big Three have many intelligent executives, yet market share has continued to drop for the past three decades. Back in 1995, Hedrick Smith, in Rethinking America, discussed how Ford and GM had finally seen the light and had started making changes. However, over the time since, none of them have succeeded in digging themselves out. Few long-established companies can ever really change the fundamentals. It might be more productive if the Government simply takes the money that it is going to lose, and uses it to start a completely new car company with none of the baggage of the old ones!

Saturday, November 01, 2008

Cerberus' hubris - not so easy to turn around Chrysler

So many people think it is easy to turn around a company, change culture, cut costs without hurting effectiveness. Many Private Equity executives have never run a manufacturing company or consumer services company. Yet, they think it is easy to be done. Any thinking and experienced executive has known for years that the US automobile companies have been dying and will be almost impossible to save. So why did Cerberus buy Chrysler? Why did Mullaly move to Ford - a consumer products company, completely unlike Boeing?

The answer is partly hubris, partly lack of understanding of what it will take, and also partly lack of objective and deep thought.

Having the last laugh - Erin Callan and others

It is amusing that Erin Callan was demoted from her job as CFO of Lehman Bros and pushed out. She must now be laughing uproariously!

Sunday, October 26, 2008

Do pundits ever really know what they are talking about?

"Often wrong, but never in doubt!"

Each day we see "experts" on TV holding forth on various topics. In most cases, the most expert people are least in demand, as TV needs people who are great communicators who have no hesitation or self-doubt. The true expert is often very aware of the fact that no one knows everything about the topic. Even in hard sciences, it was not so long ago that "experts" thought that heavier than air flight was impossible! In topics such as economics or interpersonal relationships, there are many self-proclaimed, or even widely recognized, experts who are quite wrong. If you hear an expert or read an article by an expert, go to the original source. Frequently, you will find that it is far less definitive that it is later presented. Also, it is often less clear or relevant. Even "scientific"studies can be poorly constructed or analyzed.

Perhaps we each seek simple answers and assurance. It may just not be possible.

Tuesday, October 21, 2008

The changes being made for this crisis will not really change our economic system

There have been many, particularly in the US who have screamed that the introduction of government money into banks and a share of ownership means Socialism. This is not correct. Socialism requires long term ownership of all means of production and distribution as part of the economic system of a country. What is being done now is simply the injection of government money to sustain the current capitalist system and this will be withdrawn when the businesses are stable. Just as the New Deal did not mean socialism, neither does this. Furthermore, in US history, full nationalization even by President Eisenhower, is not uncommon as a temporary solution.

As we emerge from the current economic crisis, however long it takes, we will return to a strengthened private enterprise system in which regulation is more balanced. The only danger is that there will be an overreaction in which the law of unintended consequences could have reign.

Saturday, October 18, 2008

The American Exception - making it difficult to vote

The US is the only democracy in which it is the citizen's sole responsibility to register to vote. It is not the citizen's responsibility to sign up for jury duty - government seeks them out. In other democracies, it is the government's responsibility to register voters, though individuals have the right to register. In over 30 countries it is compulsory to vote on the basis that it is a duty. In other countries it is a right, but not a duty. Nevertheless, government reaches out to find potential voters - except in the US. As a result, while voter turnout is close to 100% in Australia, where voting is compulsory, and in the 60-70% range in the UK, where it is optional, it is in the 40s in US General elections, where registration is the obligation of the voter and it is often made difficult. As a result of the difficulty, many Americans are never registered. In 2006 only 67.65 of eligible voters were registered to vote, and 47.8% actually voted. This varies by ethic origin, with 71% of non-Hispanic whites registered, 61% of Blacks, 54% of Hispanics, and 49% of Asians. Voting followed similar patterns. Voting rates also climb as income goes up, ranging from 31.3% for people with family income below $20,000 to 64.2% of people with family income above $100,000.

If GM and Chrysler merge, it will only accelerate both their demises

So GM and Chrysler are talking about a merger. The bringing together of two struggling companies has never been successful. You are doubling the problems while increasing the bureaucracy and trying to bring together two competing organizations. GM needs to simplify its operations - from brands to manufacturing; dealers to union contracts. A radical rethink of what is a GM car is also needed. Sadly, GM is running out of time and wasting it talking about a merger with Chrysler is typical of the myopic lack of professionalism the company has shown over the past 30 years.

Thursday, October 16, 2008

Are prediction markets the way to replace voting?

My friend Jonathan Palfrey commented on a recent post that perhaps the seeds of destruction of democracy lie in the fact that so many voters are uninformed. If that is so, perhaps something more like prediction markets could be used to replace the traditional vote. Prediction markets, such as Intrade.com are better at predicting the outcome of events than polls are. The main reason is that instead of simple opinions,m which may be delivered without thought or knowledge, they are more like bets on an outcome. The "voter" has some real money at stake. Much as has been found that people will lose weight more reliably when they have money at stake, so do they become more accurate in prediction when they have something to lose by being wrong.

Tuesday, October 14, 2008

30% of US bridges are unsafe

Infrastructure is a real problem in the US. Not only are bridges and roads crumbling, but so are power grids - most of the wind farms being built today have no way to transmit all the power they will generate. Drinking water and irrigation systems are atrophying, public hospitals being closed down, and airports are unable to handle the demands on them. Schools are in poor physical shape, railroads inadequate, and telecommunications systems behind the need. Yet, the country is so fixated on keeping taxes low that the investment falls behind what is required. Not only is the country not building new infrastructure, but it is allowing existing infrastructure to deteriorate.

Monday, October 13, 2008

Market Research has become only slightly more reliable than crystal ball gazing

Too many companies rely solely on focus groups, whereas they are unreliable for multiple reasons. Market research is only valid if it is replicable. Focus Groups rarely are. They are useful for identifying attitudes, but not for quantifying them. Internet research is always skewed slightly, unless you want to understand the attitudes and behavior of Internet users. In all research claimed behavior is usually different from actual behavior. For example, people claim to take a shower more often than they do, or to wash their hands with soap. Response rates are dropping, sometimes down to single digits. So, even when you ensure that the sample is demographically balanced, you are getting responses from people who have time on their hands.

While we continue to believe that market research is essential, any business person has to be aware of the limitations of the data collection so that it is not over-analyzed, and ends up driving the wrong behavior.

Thursday, October 09, 2008

Do 28% of Americans vote for the "wrong" candidate?

Many people vote on the basis of incomplete, misunderstood, or irrelevant information. Richard Lay and David Redlawsk carried out research, published in 2006, which showed that there are four different kinds of voter. These are the "rational voter," who seeks out so much information that they can get confused. Then there is the "passive voter" who tends to vote by party affiliation. The "frugal voter" picks candidates on the basis of few or one issue. Finally the "intuitive voter" picks a selection on the basis of as little information as possible. As a result, many voter pick candidates who do not stand for the same views as the voter. Thus some people who will vote for John McCain will do so because they believe he is pro-choice, which he is not. Others may vote for Barack Obama because they believe he stands for withdrawing from Afghanistan, which he does not.

The result of this is that so many people vote for a candidate for the wrong reason that a candidate is quite likely to win an election because of personality or looks. Given also the very low turnouts in General elections in the USA, there is considerable room for error. Improved voter education is part of the answer, but not all. Voters have to take more respnsibility for making the right choice.

Tuesday, October 07, 2008

Regulation comes back in energy, financial services. Can airlines and telecommunications be far behind?

As we look back on the boom decades of deregulation - in financial services, energy, airlines - they do not seem to have worked. Unfortunately, in most cases, deregulation was carried out without deep thought. The deregulators did not understand the unintended consequences since they did not understand the industries. As a result, actions were taken which were more for the short-term benefit of the managers than was ever intended. Not surprising really, but unforeseen.

As a result, we are seeing regulation creep back. Inevitably, it will be as poorly thought out as the original deregulation was, so in a few years we will be dealing with the consequences.

Wednesday, October 01, 2008

Why must Congress act?

In the 20s and 30s, even into late last century, consumers used banks to keep their money. It is easy to understand that if a bank fails, you risk losing your money. That risk is reduced with FDIC Insurance, and today a major purpose of financial institutions is to lend money - not only to consumers to buy cars, houses and plastic surgery, but to businesses to build new facilities, build inventory to meet anticipated demand and hire more people. There is much less awareness of this even among people who use this extensively. Therefore, many do not immediately understand that if there is no more credit, their employer could be forced to lay them off, or even go out of business. If they are entrepreneurs, they will not be able to get investment or borrow. If they are securely employed, they may not be able to make many of the purchases which they expect to. It is seen as "their" problem, not "mine." Most of the people who took advantage of the system are out of reach - their bonuses socked away securely. When I hear about the end of Lehman, I think not of the very few at the top, but of the thousands who lost their jobs and retirement. I saw it at ENRON. It is happening again. The people at the top will suffer much less from collapse than everyone else who simply work hard and do the best they can. If there is no plan to bring stability, many of those who are now complaining most about "bail-out" will lose their jobs and much of their net worth.

Monday, September 29, 2008

Can we ever trust the system?

While it may not be the majority, it is clear that all too many people in any branch of "the system" are ineffective or harmful. Legislators often pass laws without considering the unintended consequences or which are driven by lobbyists for special interest groups. Neither they nor their staffs have the deep expertise to address all the key issues of today - from finance to technology. Meanwhile regulators are also influenced by the industry they regulate or lack the tools, expertise, and resources to be effective. Business, if uncontrolled, will sell unsafe food, pour toxic chemicals into lakes, falsify accounting to ensure large bonuses, or take advantage of the consumer. The justice system is seriously flawed. Education and health-care systems do a poor job of serving their consumers. Journalists have done a poor job of investigating and explaining many of these issues.

As a result, there has to be a balance of power, Civil servants cannot run business, but business cannot operate without oversight. Ultimately, the best oversight is that which we ourselves exercise. We can only do that if we have transparency and can see what is happening in each area. Shining a light on these activities is the only way to ensure that this happens.

Tuesday, September 23, 2008

How the Marketing Executives Networking Group is seizing the Web 2.0 initiative

The Marketing Executives Networking Group, founded in 1995, had its first web presence in 1999, when Yahoo Groups first became available. Since then there have been two steadily more powerful web-sites, with the latest hosting an immense amount of information. As the organization has become first National and now International, technology has become critical in allowing members to connect and share information. For the past couple of years the group has been working on a new Web 2.0 site which makes interaction much easier. When it is implemented at the start of 2009, it will be superior to that in use by any other, for profit or non-profit membership organization in the world.

Keeping ahead of technology is critical. MENG recognized the day that the current web-site was implemented three years ago that we had to plan to have a new web-site.So the first year was spent identifying improvements which the members would like, the next on sketching out an outline of how to get there, and the last on identifying technology and resources to implement it. This kind of pre-planning is required.

Monday, September 22, 2008

How to make a business online community succeed when most fail

Deloitte carried out a study of 100 corporate online communities. 35% had fewer than 100 members, and only 25% had more than 1,000. Many businesses, and that includes non-profits find the allure of an online community for customers or members irresistible, but they actually rarely succeed.

They usually do not fail because of a failure of technology, but a failure of genuine community. If there is no community in the first place, it will not get better just because there is an online mechanism. However, if there is a strong community, whether a Remedy User Group or the Marketing Executives Networking Group, then technology can play to reinforce the existing characteristics of the group.

Sunday, September 21, 2008

Fixing the financial crisis - what is the next crisis?

There has been an epidemic of forgetting of the fundamentals. So much has become one big shell game. It seems likely that Washington and New York will, at least for a while, recognize that without focus on the basics, else is just an illusion.

However, there are other crises looming. Most recognize that health-care is one such. Why does the US spend more on health care as a % of GNP than any other Western country, fail to cover so many, and get worse results than virtually any other? Beyond this, the US has a failing infrastructure. We need roads, bridges, power transmission lines, railroads, airports, and schools. This country has failed to keep up. Politicians have continues to mortgage the future and it is essential that they get out ahead instead of only reacting to circumstances.

Business people have to know that ultimately, it is their own actions which make success or failure. Whatever the situation, some businesses prosper and some struggle.

Thursday, September 11, 2008

Six ideas to change the game and succeed in the current economic malaise

Most people are well aware that the US, and indeed, Global, economy is under pressure. In the US unemployment is rising, the budget deficit, both Federal and for most states, is growing, the balance of trade is moving increasingly negative, and income inequality is growing. Companies are responding by hunkering down. While some of this may be necessary, there are steps, which during each cycle, only a few companies take. Here are six ideas to position a company for the future:
  1. Invest - in technology which will improve quality or reduce costs in the long-term
  2. Retain the best people by being generous, not by assuming that they have no-where to go.
  3. Hire managers over 55. As Baby Boomers retire, there is a looming shortage of managers. Older managers stay longer, take less time-off and fewer sick days, and need less training and supervision.
  4. Solidify vendor relationships. Make sure that when the economy booms again, your best suppliers are not tempted away.
  5. Build your brand. Your brand or your reputation are vulnerable, but good management and judicious investment will return much more than you anticipate.
  6. Fill the innovation pipeline. After an economic slow-down, demand for existing and new products increases dramatically, Position your company to meet this demand.

Monday, August 25, 2008

There will be more older Entrepreneurs - Col. Sanders, James Dyson will be some among many

John Sperling, founder of the University of Phoenix was 65 when he founded it. Not all entrepreneurs are 20 year olds - far from it! Colonel Sanders was the same age when he founded Kentucky Fried Chicken. Momofuku Ando, who introduced the "Cup Noodle" when he was 61, was one of many older entrepreneurs around the world who have consistently created businesses. The first portable computer was introduced when Adam Osborne was 42, perhaps under 50, but far from a 20 year old.

By 2012, people over 55 will constitute 19 percent of the labor force, up from 14 percent in 2002. The AARP recently found those age 50 and above account for 40-percent of the self-employed in past years. This will grow and implies that more entrepreneurs will be over 55 in future.

Friday, August 22, 2008

Why do people refuse to learn or take advice? Is this why executive turnover is so high?

It is a cliche that teenagers do not listen to parents. We make jokes about how they do not ask for or take advice. Yet, there is truth also in the saying, "you can't teach an old dog new tricks." As people get older, they genuinely do resist change. So many learn a really bad habit. They ask for advice, yet never take it. Worse still, they do not respond and engage in a discussion, but behave in a passive-aggressive way by asking for advice, yet simply ignoring it. They do not want to change the way they do things.

I have never understood why people do not take pride in seeking advice and then really changing the way in which they do things. They think that if they simply ignore it, it will go away. You see it in the TV programs in which an expert goes into a failing company and provide the solution. Yet, usually, the management or owner simply ignore it. As a consultant, I see it every day - executives are in trouble, they know they are in trouble (or perhaps not, which is one reason why executive turnover is so high), but they will not ask for help and take it.

Punching above your weight in Busimess and the Olympics

In these Olympics, Jamaica and New Zealand won about as many medals as Brazil, and far more than India. So two countries with much larger populations did not perform as well as they should have on that basis. The same can apply to companies. Often, huge companies disappoint. When we look at the best performing countries, they each do well in certain sports, and have training programs and incentives for those sports. In the same way, large companies can do well if the people in those companies understand their own objectives clearly, and get rewarded for performance.

Sunday, August 17, 2008

What you measure changes what you do

Today, in the New York Times and other US newspapers. the USA leads China 65 to 61 in the Olympics medal table. However, in the Uk, newspapers such as The Times (of London) puts China (with 35 gold medals) ahead of the US (with 19). So it depends on what you measure. So the US way of measuring national success at the Olympics gives the US reason for self-congratulation, whereas the UK way, leads to change in behavior. Incidentally, the US way puts Britain at 5, while the UK way puts it at 3. So in business, or political strategy what you measure results in different strategies. When two business competitors are measuring different things, it is possible that either each considers that it is winnung, or that it is losing.Thus the Vietnam war become prolonged because both the and North Vietnam believed that it they were winning. In business, one company may be focusing on market share, while the other maximizes profitability - Dell vs. Apple; Ford vs. BMW.

Thursday, August 14, 2008

Gordon Ramsey teaches us a lot about management and business

The celebrity chef Gordon Ramsey has a TV program called "Ramsey's Kitchen Nightmares," in which he spends a week at a failing restaurant helping to turn it around. Interesting, while the kitchen and the food are usually important, the most important are typically those of people management and marketing. Gordon Ramsey goes into the community to do market research by talking to prospective customers. He ensures that the team running the restaurant works well together, and carries out much word of mouth marketing to get new customers into the restaurant. While his advice is directed at a restaurant, most of it is equally applicable to any business.

Tuesday, August 12, 2008

We are "patriots," they are "nationalists." Semantics can break bones

Words have incredible power. Our choice of words in how we describe something or someone tends to have influence in how others see it or them. Thus words change history. Advertisers know this, politicians do, and so do journalists. Yet most of the people who read them do not recognize how they are being manipulated. Greater awareness of this would help voters make better choices, consumers buy better and even diplomats create better relations between nations.

Monday, August 11, 2008

Why do voters believe politicians when they misrepresent their opponents?

Time and time again, politicians put words into the mouths of their opponents. Many voters believe these. Why would anyone believe what an opponent claims that an opponent says? This is powerful, and is very carefully restricted in commercial advertising. Truth in advertising laws do not apply to political speech. Perhaps they should. Factcheck.org steadily identifies claims made by politicians which would not stand up in business advertising.

Wednesday, August 06, 2008

Too many online social networks, and now corporations want you to join theirs?

Online social networks are a great idea. But there are too many, with more to come. No one can reasonably manage all of them, and I find the same people connect to me on multiple ones - Why? Are we simply viewing the number of connections we have a status symbol?

corporations are now setting up social networks to connect users of their products. Usually, this has little effect. Why on earth should I join a Marriott social network, when I am already a member of several broader ones? Corporations are not being realistic about how important their brands are to consumers if they think that they will put this above general networks.

What will replace online the current online networks, Something will, much as The Well was replaced by Compuserve, which was replaced by AOL, then Ryze by LinkedIn. What happened to Wikis as a way for groups to interact? Will the next generation be cell-phone driven rather than computer? I will pout forward some speculation in weeks to come/

Sunday, August 03, 2008

The tendency to distrust others'motivations leads to separation

It is always amazing how people can think the worst of others' intentions. So people can think that a Presidential candidate is not patriotic. Or that a certain ethnic or religious group can really be traitors. Or that a colleague is out the sabotage the company. A friend is out to undermine one. This creates and accentuates differences between people. There may be an evolutionary advantage to a caveman, but in a world where most activities are carried out in groups, we must learn to compensate for them.

Tuesday, July 29, 2008

Walking on Main Street - slightly worrying

I have had occasion to walk several main streets and shopping malls in the Los Angeles metro area the past few days.I notice that parking is much easier than it used to be, and that stores are quite empty. Perhaps this is because people are at the beach, but given the number of empty retail spaces, and the lack of crowds even at Universal City Walk, I sense an economic slowdown at work. Lots of Sales, but few people shopping.

We are heading into an election with an ongoing set of issues which must be worrying people.Real incomes are not climbing, but costs - gas, utilities, health insurance - very much so. This has to impact what any business person does over the next twelve months.

Wednesday, July 23, 2008

Has equal pay for men and women really come? Is this what the MENG survey says?

A recent survey by MENG (Marketing Executives Networking Group) the largest not for profit group of senior marketing executives showed that among the members who responded, women were earning comparable, or even slightly higher salaries than men. So is this grounds for self-congratulation? Are women in marketing now earning as much as men?

We need to remember that this is a selected universe from a group to which entry is at least partly, based on salary. It is a group of senior executives. In all probability, salaries across all levels, even in marketing, are not as even as the survey suggests. There are more women than men at junior levels, and far fewer at Board and CMO level. So there is still progress to be made. However, it is encouraging that the possibility now exists that women can earn as much as men, which is a big advance from a generation ago.

Saturday, July 19, 2008

How can consumers control medical costs when they cannot "shop around" because they do not know what the costs are?

We keep on hearing that by putting the onus of payment upon the consumer, he or she will be more aware of costs and will negotiate them more carefully.

In case those people have not noticed, not only do doctors, unlike MacDonalds, not post their procedures and prices, but in many cases are prohibited from discussing their prices by the contracts they have with health insurers. Even if they were to, how are laypeople to decide what tests, procedures and treatments are medically necessary when even doctors do not always agree. Then, even if you have discussed prices with a family practitioner, how are you to know what are the prices any specialist, to whom you may be referred, will charge. Lastly, if you are really ill will you sit down and negotiate prices before seeking treatment?

This seems to be a system which is designed to penalize the consumer in all ways.

To what extent are Political and Business leaders Narcissists?

Do you have to have an unhealthy focus on yourself to stand for high political office? Is that a healthy self-confidence or unhealthy narcissism? Do people who aspire to run a company or country have a sense of mission and service, or is it insecurity and hubris? When we talk about "public service," is it simply that, or do the individuals crave attention and admiration? Do people who start off as idealists get changed by isolation and success? How balanced is a spouse who really believes that the individual really is qualified to run a country or huge organization? Do they really believe that, or are they simply hungry for power, money, and recognition?

I am not sure that there is a simple answer, and each of these may be true for different people. However, I do not believe that many, if any, can really lead a huge organization or country infallibly. Yet, we continue to want to believe that someone can. Perhaps the fault is that so many keep looking for perfection and find it easy to select someone who seems to provide that.

Saturday, July 12, 2008

Fannie Mae and Freddie Mac - a case study in atrocious crisis communications

Now that Freddie Mac and Fanny Mae are in trouble and getting severe criticism, they are making the cardinal mistake so many companies make. They are hiding from the press while politicians and journalists are having a clear field to tear them apart.

In fact, the smartest thing they could each do is to come out with all guns blazing and shout from the highest rooftop that they were only doing what their masters, politicians, wanted, which was to make home ownership easy for all Americans, and if they trod on risky ground, it was only at the behest and expressed wishes of the leaders of the country. They have failed to ensure that the best interests of the people attacking them are aligned with theirs and will probably take the fall for the things they have done, and much else besides.

Thursday, July 10, 2008

In the year before Apple introduced the first iPhone over 300 phones were introduced by mobile phone companies

Companies which had been making cell phones for many years, and which were experts on cell phones and how consumers wanted them, introduced over 300 new phones in the year before Apple introduced the iPhone. Yet, none succeeded nearly like the iPhone. What price "industry experience?"

As with the rescue of IBM, it took an industry outsider to really make the needed changes. If someone has grown up in an industry or company, it is rare for them to change what is needed. A.G. Laffley of Procter & Gamble has done so, but the company has a culture of constant re-invention, where managers are rewarded for innovation.

Social Networking must be multi-party to really spread the work

Barack Obama's campaign has discovered what the Scion car brand is also implementing. To be truly effective in spreading the word, you have to give up control. This means that you have to be prepared for participants to say bad thinks about you as well as good.

This is the major reason why few businesses will ever be really successful at this. Their instincts, like any dictator are to completely control all the messages. This ends up hurting the company more than it helps. Companies have to learn that in order to spread the good word, they have to risk some negative comments, or the mere suppression of them will reflect poorly on the company.

Monday, July 07, 2008

Is there a continued need for the US cent coin?

I grew up in the waning days of the British farthing (it was tiny, and the old penny was huge, thus the "penny-farthing" bicycle). A quarter of a penny, it could buy little, but still existed because people rather liked it (it had a Robin red-breast, a completely different bird to the North American Robin, on its obverse). Eventually, it went, but the half-penny survived until the introduction of decimal currency. At that time, there was a half new pence, worth 1.2 old pennies, which has slowly faded out and the new penny is worth 2.4 old pennies, or 9.6 farthings. The reality is that the US nickel is worth less than one cent was before WWII, so do we need it? Until 1859 there was a US half-cent, but it was abandoned because of declining value. If we are to look at inflation since then perhaps the smallest coin should be the dime, since 10 cents now is worth what one cent may have been back then. Of course, there is no logic for retaining the dollar note. It should be a coin. While many say that notes are cheaper to produce than coins, they do not realize that notes may only last 6 months, whereas coins last for many, many years, and even then can be re-cycled.

Friday, July 04, 2008

Are Frequent Flier Miles Programs dead - $675 for a "free" flight on British Airways!

A month ago, it cost me $260 to get a "free" ticket to London with American Airlines. A couple of days ago, British Airways on its website, wanted to charge me $675 for a "free" ticket to London. When I called the airline to ask about this, I was told that this was because of taxes, charges, and fees. When I checked online for a purchased fare, the airline's website showed these as $174.40 on a fare of $880. So cashing in frequent flyer miles results in a fairly modest savings as British Airways charges such a high premium for doing so. Clearly, with shorter and shorter expiration times, less availability and hidden charges, these programs will become not loyalty generators, but creators of immense resentment.

London art sales this summer go over $1 Billion, up 19% vs. year ago

This is one of the few times when although economies in the West are troubled, unemployment is rising, as are foreclosures, yet the ultra-rich are reveling in their wealth. Over the the history of economic times, the rich have suffered along with the poor. However, this past decade, in many Western countries, the rich have prospered while the poor have lost. Whether it is the most expensive homes or the most expensive luxuries, their prices continue to soar, while the routinely expensive have dropped and the poor are losing their homes. It is unlikely in any democracy that this can continue for ever without a backlash at the ballot box.

Thursday, July 03, 2008

An old constitution

While the USA likes to think of itself as a young country, it has the oldest written constitution in the world. Perhaps uniquely, its framers are seen as demi-gods, its strictures almost immutable. Even though it was merely a development in a long line of documents from the Magna Carta in 1215, and the English Bill of Rights of 1689, the mythology around it is that it sprung fully formed from the mind of Thomas Jefferson. In fact, while he wrote the first draft, about 25% of that was dropped and new material introduced. There is little recognition that circumstances change. A few days ago, on the radio, I heard someone say that the government could ban cars, or the Internet, without any challenge from the Constitution, whereas, it could not ban guns, even though the very nature of a gun and society had changed dramatically since it was written. Only a few centuries will tell whether this view of a Constitution, or the alternative view of one as an ever changing and evolving philosophy will be better.

Tuesday, July 01, 2008

Is fixing healthcare a social, business, or political problem?

In the US, the only Western country without universal health-care, there seems to be little progress. With over 46 Million without health insurance, a similar number with inadequate insurance, and 100 Million without dental care, a train wreck is inevitable. The resulting reduction in working days, it is an economic problem as well as a social one. However, no one seems to come to terms with the fact that delivering health-care requires a compromise between universal access, quality, and cost. No society can deliver all three to the maximum extent. Some area or areas have to be sub-optimal. Eventually, the bullet will have to be bitten or the consequences for the nation will be catastrophic, as the problem gets worse. It is indeed a social, business, and political issue, but those who are slowing down the resolution also come from each of these three factors. However, it does seem to be taking too much time to resolve. If government cannot resolve this, how can it be expected to resolve other major issues, such as Global Warming, Infrastructure, Energy, and Education, each of which is essential to our children's future?

Sunday, June 29, 2008

Received Wisdom - how the memory works

A recent article in the New York Times summarized how we now know that memory works and why there are so many incorrect pre-conceptions in peoples' minds. Apparently, when we hear a fact, whether it is of the type that "the earth revolves around the sun," or "Barack Obama is not a Muslim," we put the concept, without distinguishing between "not" and "is"or whether it is false or true in a compartment of the brain, and use knowledge of context to qualify it. Over time, it is transeferrd in pieces to another part of the brian, but context can become separated. So some people become convinced that the sun revolves around the earth,

This means that whatever we do, misconceptions will arise. Furthermore, it will be very difficult to correct those misconceptions. So to tell someone who believes that Barack Obama is a Muslim, that he is, in fact, not, becomes an uphill battle. The same applies to misconceptions about products and services.

Saturday, June 28, 2008


Ever since the creation of PowerPoint, we see that documents and presentations continue to get longer. It is so easy to create a visually attractive presentation, but reduce the number of coherent words. The discipline of writing down your thoughts in a sequence of sentences is becoming rarer. Where would we be if Shakespeare had used PowerPoint, or Ernest Hemingway? Yet, were they poor communicators? Probably not. So while PowerPoint is a powerful tool, it can be used as crutch to attempt to disguise the weakness of the thinking. We need to avoid this or we will see a deterioration in communications rather than an improvement.

Saturday, June 21, 2008

Do kids know what their fathers do?

The other day I got involved in a conversation with my daughter, who has just graduated from high school about what her friends' parents do. I was interested when she told me that most of her friends have no idea what they do. Having grown up very close to what my father did, and having had my kids in to my offices on numerous occasions, I was surprised. Her response was that as long as the money kept on coming in, what they did was not very important. I wonder what effect this will have on the kids' own career choices. I see that kids in the US and other Western countries are reluctant to take on tough academic challenges, and I wonder if this is because earning money is not associated with hard work.

Thursday, June 19, 2008

Today I drove past Glendinning Place

In 1959 Ralph Glendinning, an ex-P&G marketer founded Glendinning Associates in Westport, CT. By the late 1960s the company had re-created sales promotion with its scratch off gas company promotions and invented Marketing Consulting. It spawned many spin-off companies, and many imitators. It grew strong and powerful as a consulting firm. It had offices in several countries and a reputation as a repository of some of the smartest brains in business. One of its spin-offs, Marketing Corporation of America waxed strong as Glendinning waned. During the 1980s it dominated marketing advice to many Fortune 1000 corporations. Yet, it too faded into the past, although alumni of both can be found in many places.

So too do businesses grow and fade unless they are very careful and disciplined. These two companies, made up of many very smart people did not survive.

Tuesday, June 17, 2008

In defence of self-doubt

People who have no self-doubt have the makings of dictators, religious zealots, and persecutors. On the other hand, a measure of self-doubt allows people to learn, to adapt and change. Hamlet is seen as weak because of his indecision, but the intelligent person does consider all options. Self-doubt is a powerful tool to enable growth and progress.

Monday, June 16, 2008

New York & Company - why so far ahead of other cities?

The city of New York is prospering in terms of visitors and even jobs. It is also one of the very few cities in the US which has a unified marketing arm. Since this was established over a year ago, it has continued to demonstrate that it works. Yet other cities such as Los Angeles or Houston continue to put internal politics ahead of the city's success.

Friday, June 13, 2008

Businesses rarely re-invent the market, even though this is the best way to prosper

Companies are prisoners of received wisdom. It is very difficult for them to have an open enough structure and mind to really look at any business in a different way. It took Starbucks and Peets to reinvent how consumers drink coffee, not Folgers or Maxwell House. Apple reinvented the way consumers listen to music, not Sony. Companies have to be able to let go of pre-conceptions, and few can.

Thursday, June 12, 2008

Perspective on changes in society - from Organization man to Plural marriage

In 1960, middle class life was ostensibly cheerful, energetic, and while men strove to succeed at work, their wives took care of home and children. As the 60s moved on, young people questioned everything, from segregation to sexual repression, from the Vietnam war to opportunities at work. Martin Luther King Jr. and Bobby Kennedy, Kinsey to Hugh Hefner, all influenced society - not just in the US. As society has slowly liberalized in some ways, in others it continues to be conservative, not always consistently. The death penalty continues to be applied in the US, along with passionate devotion to freedom speech, but less to other civil liberties, yet with same-sex marriage clearly on its way. In all probability this consistency will continue, with some issues changing and others not. In the next 25 years we will look back and be amazed at how important conservation has become, how routine universal health care is, and how common plural marriage, whether polygamy or polyandry has become!

Wednesday, June 11, 2008

Shopping cart distribution in parking lots prove the law of the commons

Every time I go to the store, I see shopping carts spread around, many only a few steps from a cart return. Are people that lazy? That inconsiderate? Sadly, the law of the commons has struck again. When everyone shares the responsibility of ownership, no-one does. This means that no-one feels responsible for the carts even though they can roll and damage cars, and that employees of the store are put to extra trouble rounding up stray carts. It seems that the only way to make people feel responsible is to give them some individuals "ownership."

Tuesday, June 10, 2008

Do not ascribe to malice that which can be explained by ignorance

When people have to work together or socialize together, we increasingly rely on email. This allows for more errors to be made in any kind of interpersonal relationship. Sadly, we make mistakes. All too often others interpret this as motivated by malice, when in most cases it is out of ignorance or thoughtlessness. This is a loss to all. So when you think you have been insulted, imagine how this could have been simply a clumsy communication. If you do this, it is certain that you will discover many improved or more effective relationships.

Sunday, June 08, 2008

Tax the Rich even more, say the majority!

According to an FT/Harris poll well over 60% of Americans believe that the rich should be taxed more. This is actually higher than the proportion of Chinese, Italians, Britons or French. It suggests that US business has failed to convince the majority of the electorate that top executives really justify their compensation. This is an attitude which eventually politicians will take into account.

It is an absolute need that executives share their achievements as openly as they are increasingly having to share compensation packages. Yet, this is something which business has not yet absorbed, in particular such industries as health-care and private equity.

Thursday, June 05, 2008

Today the funeral of Yves St. Laurent was attended by the President of France

I suspect that it is unlikely that a President of the United States would attend the funeral of a fashion designer whom he did not personally know. Yet, in France it seems unremarkable. Perhaps this is yet another difference which illustrates that countries do think differently about the priorities of life.

Tuesday, June 03, 2008

Do politics have much in common with business?

In some countries people move seamlessly between government, politics and business. This happens less in the US or other English speaking countries than in many others. The fact is that it rarely works as well as expected. In any sphere of influence there is learning and outsiders rarely appreciate it. Anyone's job looks easy to someone who has no idea how to do it.

It is nevertheless interesting that Carly Fiorina is playing such an active and visible position in John McCain's election bid. I suspect that it takes someone without much self-doubt or introspection to think that they can move seamlessly from business to politics.

Monday, June 02, 2008

The RFP process rarely ends up with the best product or service

So many companies think that it is more professional or scientific to use an RFP process. This is only true when dealing with commodities or quantifiably similar products. Yet, in many cases the products or services being compared are not identical, and if variable, an RFP process will discourage a potential supplier from quoting for the best and possibly most expensive product. So an RFP process encourages the success of undistinguished products. How do you compare two products which have very different features. It is like comparing the proverbial apples and oranges.

Why does Global Brand Harmonization make sense?

I can plead guilty to participating in global brand harmonization as long ago as 1972 with Crest toothpaste in the UK, and leading it with Uncle Ben's rice in 1980. Since then, I have carried it out many times for many companies, and it has always resulted in improved results. Brand Harmonization does not mean making brands and products identical in all countries, but it does mean developing a common "meta-meaning," which allows for greater efficiency and greater effectiveness.

I have been surprised at how some well-regarded marketing companies do a poor job of this. I suspect that it is because few have a real global world-view. They neither have the information, nor the mindset, since few, if any, CEOs and CMOs are truly world citizens. I suspect that this will not change as perhaps to be a world citizen you have to largely abandon the idea of nationality, and that is very difficult to do.

Saturday, May 31, 2008

The latest resolution over Michigan and Florida illustrate the "Law of Unintented Consequences"

Today the DNC showed that its directions mean nothing. When it told Florida and Michigan that by holding their primaries early, their delegates would not be seated it laid down a rule which was impossible to keep. When the "superdelegate" system was set up, it was in response to one problem, but set up another. So often when business, government or any institution seeks to resolve a problem it initiates another. This is, in every case, because few have really thought it through - a very common human trait. We tend to jump to conclusions and make poorly thought through decisions. Much which goes wrong, from a failed new product to a lost war, is foreseeable, yet we do not think enough to realize that this is predictable.

Thursday, May 29, 2008

So Anheiser-Busch may go Belgian. Any problems with that?

Whether it happens or not, it is inevitable that more US icons of business will fall into foreign hands. This is inevitable and desirable if we believe that large companies can do things smaller ones cannot. If we do believe this (and remember that large companies die or are broken up every day), then inevitably, the majority of these will not be US ones. The US may have the largest in some industries, but in other businesses, other countries will house the largest - and house is the operative word. Increasingly, these companies are becoming genuinely multi-national. The new CEO of Vodaphone, a British company, is Italian, and he replaces an Indian-born US citizen. Even faster than seeing US companies being acquired by non-US ones, we will see CEOs of US companies who come from overseas. a reasonable move if we want them to pick the best available, and many Americans have shown that they can be a strong managers in non-US companies.

Monday, May 26, 2008

Ethnocentricism - barrier to understanding and business growth

So many organizations fail to grow outside their heartlands because they do not realize that many of the things they take for granted are just not valid elsewhere. This goes beyond such obvious issues as language or religion, but down to attitudes towards work, whether one wants to fit in or stand out, attitudes towards patriotism, social class, education, what kinds of foods are acceptable, or how you behave to loved ones. I have found whenever I have moved to a new country, that I need to re-discover where to shop for obvious items. How to socialize with people. Visiting a country, however often, is not enough. Even living in a country may not be adequate, particularly for people who live among expats. The most important ability is the one to recognize that cherished assumptions about anything may not be true.

Sunday, May 25, 2008

In a globalizing world why are foreign languages not stressed?

In a globalizing world, we have to be able to communicate better with people in other countries. I have seen that Europeans since the Second World War have improved to the extent that many younger people have the ability to talk to millions of their peers. Yet in the US we talk and write much about doing business with China, India, Russia, and Brazil even though very few young Americans can speak their languages. It is difficult to to persuade so many to work hard at learning a language, but we have to do it. First, we must start by believing that it is important though.

Friday, May 23, 2008

Older is wiser. So why do we reject wisdom?

Current research shows that while younger people can retrieve items from their memories faster than older people and concentrate better, this is largely because they have fewer memories to access. So while young people often do have great flexibility and can focus better, older people genuinely do have more wisdom. Yet, American business continues to provide fewer opportunities for older people. It is clear that doing so is as harmful to the business as eliminating people because of race or sex - yet it is routine. I suspect that a company which went out of its way to hire more experienced people (who are probably older) would outperform a company which concentrates on recruiting young people and encouraging older ones to move on.

It's so easy, just look at Southwest and a few others.

There is no secret to running a business well. Many managers, academics and thinkers have identified them. It is well known that delivering an excellent product to consumers is one of the keys. Procter and Gamble realized this well over a century ago. In the case of a service industry, Jan Carlzon defined the "moment of truth" as that time when an employee has contact with a customer. Southwest Airlines has always believed that if you treat employees well, they will treat customers well. Fred Reichheld proved that customer loyalty is directly correlated to employee loyalty.

Since all of this is known and proven, why would the management of any company treat its employees badly? Employee theft, or "shrinkage," at Wal-Mart is higher than at Costco. Again and again we see that companies which treat employees well prosper as a result. While this is only one of many issues, it shows that management continues to make predictable and known mistakes.

Incidentally, Southwest is one of the only airlines which has consistently hedged against rising fuel costs even though increases in fuel prices have long been predicted.

Thursday, May 22, 2008

The business model of Government - we set it up, and then we complain about it!

We have established a system in both Federal and State government that pays people little or nothing (interns), but in a world where money is needed, leaves them with only their connections to sell. Then we complain when politicians grow too close to lobbyists. There is so little difference between the two as so many move backwards and forwards between the worlds. The Law of Unintended consequences typically strikes again, and we created a system about which we now complain.

Wednesday, May 21, 2008

It's the story which made Frank Perdue, Body Shop and Barack Obama so successful

For so many, it is not the rational benefits, but the emotional story which makes for success. The story of John McCain is a critical part of his appeal, Stories about businesses, brands and products make them different and appealing. The Hewlett-Packard garden shed is part of the mythology of H-P, just as the personality of Howard Hughes contributed to much of his early success. Whether it is Starbucks or FedEx, there is an imagery and perception which drives success. When the story is lost, even if awareness remains, the business faces problems.

Now these stories can be intensely personal as much as general. The Ford Mustang holds different memories for different people, but they are usually strong. An effective management will nurture and farm them, much as Harley Davidson has. That is part of the magic of the James Dyson brand, whereas "hired gun" CEOs rarely work, unless your name is Lee Iacocca!

The cost of entrepreneurialism is allowing lots of failure

While we praise and laud entrepreneurs, they exist because so many fail. Most entrepreneurs approach their businesses with no real rationale or effective management. Yet some succeed anyway. We should be grateful that so many are prepared to take such risks, but over the years, I have seen that many successful entrepreneurs were in the right place at the right time. Many of them go on to think that instead of being lucky, they were smart - smart in a way which does not allow of analysis. Large corporations can also suffer from this, but individuals are more likely to. Yet there is an inexhaustible supply of new entrants to the race, and a very few do make it.

Tuesday, May 20, 2008

When everyone has a blog will a blog mean anything?

Almost 40 Million adult Americans have a blog and still climbing. When that number exceeds 100 Million, will almost all blogs be anything other than the rants and raves of someone with an opinion to share? Already, "letters to the editor" mean a lot less, when the number of people who comment on an article may run into the hundreds. The impact of one letter is far less than it used to be. On the other hand, by allowing greater expression of different perspectives, we have the opportunity to surface more ideas than ever before. But there are so many that we may need specialized search engines to find, sort and analyze all the ideas which are out there. Of course, how we can adapt the human brain will be the big question as electronic prostheses will not be enough for the new world in which we will be living.

Saturday, May 17, 2008

What did AdAge say about the future in 1980?

It talked about how different the world of advertising would be in twenty years, but missed almost all the changes. All the articles, even one by Isaac Asimov, only talked about technology and viewing habits that already existed in 1980 - videodiscs, cable TV, ad specialties, and the new science of "advertology." It completely missed all the real changes which have taken place in society and technology - the Internet, fragmentation of the family, energy crises continuing, cell phones, and email. It even did a poor job of prediction ten years out.

We can assume that any predictions we make now will be equally wrong. Even the few who do get it right are viewed as crazy. People are innately conservative.

Thursday, May 15, 2008

The handling of the Chinese earthquake has made China more popular in the world

China has moved from a secretive, closed treatment of disasters to an open and human handling of the latest earthquake. This has contrasted to the Myannmar treatment which has viewed foreign aid workers with acute xenophobia. China has been open about showing what has happened and how it has tried hard to save lives. The human face this shows along with the suffering of the people has made China seem so much less foreign and so much more like all other people. It has gone a long way to defuse the harm which China's treatment of Tibet did earlier this year. This lesson also applies to companies. If there is a mistake or other disaster, be open about how you handle it. J&J showed this with Tylenol years ago, yet companies as well as countries continue to hide bad things even when they do not reflect blame on the leaders.

Is P&G the only risk-taking major corporation?

Procter & Gamble has changed its culture to encourage and reward risk taking. This is rare. Even though it is clear that unless a company takes reasoned risk, it will eventually fail. The average life of a Fortune 500 company is 18 years and dropping. Yet, in most companies risk taking is not rational as the punishment for failure far exceeds the rewards for success. This has to change if we are to remain competitive in the long run.

Wednesday, May 14, 2008

The Chief Marketing Officer - a flawed concept?

Chief Marketing Officers turn over with accelerating frequency. Spencer Stuart tells us that longevity is on average down to 22 months, and I have known many who lasted fewer than 3 months. It is rarely their fault. Is the CMO job an impossible job? Is it one with responsibility but no authority? All too often the CMO has little power other than charisma and force of personality, and is even set up as a target for the other C-level executives.

Is Marketing even a function on the same level as Finance or Operations? Is Marketing at Senior levels not really General Management? Is the CEO not really the CMO? In that case who takes care of the purely executional aspects of Marketing? Is it is C-level position? I suspect that Marketing cannot be completely separated from General Management without setting up the CMO for a big fall.

Tuesday, May 13, 2008

Myanmar vs. Katrina - rejection of foreign aid

Much has been made of the reprehensible behavior from the junta which rules Burma for refusing all foreign aid. Yes, it is selfish and callous. Sometimes we may have also forgotten that after Hurricane Katrina struck, all foreign aid was refused by the US government. Of course, it was not as badly intentioned, but the results hurt the recovery effort.

Is traditional Market Research valid?

Response rates are going down. The idea of a statistically random sample is more and more difficult to achieve. When we moved from door to door, to telephone and mall intercept we lost much. Moving to the Internet has compounded the problem.

New ways to understand consumers have to address a new paradigm. People want to express themselves - but not by completing questionnaires. They want to be able to talk in ways which are not constrained by forms. Yet companies are reluctant to listen. Improved techniques allow business to really listen to consumers and customers. Our Wise Window tool is one of these.

Saturday, May 10, 2008

Are Corporations too scared to succeed?

Many corporations are getting slower and slower and trying new things. To many managers it is clear that taking any risk is not the way to advance, or even achieve job security. Ideas from outside or challenges are threatening. Yet P&G has transformed itself and created a culture in which there is a thirst for ideas from outside. The key - it comes from the top with great force and consistency.

Thursday, May 08, 2008

A Window into the mind of the consumer

The Internet allows us to move beyond traditional research. Traditionally, research asked consumers to answer questions about hypothetical actions - "would you?" Later anthropological techniques were used to study observed behavior. Now we can watch people's minds at work in a stream of consciousness way. Powerful new tools allow us to understand consumers in new ways.
Technological tools such as Wise Window TM allow marketers to look into the "inner dialog."

Tuesday, April 29, 2008

Forced to defend your country's ideas?

Back in the days of the Vietnam war, I noticed that Americans traveling abroad were forced to defend US foreign policy even if they did not agree with it. This is happening now. So should Americans be blindly loyal and defend something they may hate, should they be totally honest, or something in between?
It seems that there is a middle course, defending the intentions and goals of the nation while acknowledging that you might have done it differently.

Saturday, April 26, 2008

Are payments to Interviewees unethical or required?

One of the tenets of journalism is that journalists should not pay interviewees for news information. It is regarded as unethical "check-book" journalism to pay news sources. Yet, often the news gathering organization makes considerable money from its news gathering, while the news sources are poor, or even dying. In Africa, for example, should a journalist who interviews someone who is dying of malnutrition or disease, refuse to pay for food or medicine?

There is no easy solution, as no one wants money to influence the story. However, we probably need clearer and more sensitive rules, as no one should put life above news gathering.

Friday, April 25, 2008

Fly the friendly skies of United US Northwest American Continental Delta!

It looks as though competition in the US skies will soon be between one mega legacy carrier, and a multitude of smaller, low-cost carriers. Can't you just wait to fly from LA to London on a Southwest 737?

In the past 20 years, although flying has become cheaper, it has become extremely unpleasant. It is clear that passengers are voting with their wallets to save money over all else. They may complain about the service, but they have again and again shown that service is not as valued as money. So while customer satisfaction has dropped, that is by public demand, and most cannot complain - though they will.

It shows how totally the airlines have failed to communicate value in anything they do other than ship warm bodies from A to B. Air travel has become a total commodity whatever passengers may say about preferred airlines.

Thursday, April 24, 2008

Healthcare and education are investments

Too many in the US think of Universal Healthcare and Education as purely costs. Yet, for the US to be competitive, it must recognize that all other countries regard them as investments in the future. The health and education of people from pre-natal care onwards make the greatest contribution to the productivity and prosperity of the nation.

Tuesday, April 22, 2008

The high price of gas. Ease the pinch?

The growing price of gasoline in the US, driven by the high price of oil, has consumers angry, frustrated and scared. The natural reaction of politicians is to promise ways to ease the burden. Yet the US uses too much oil. The price of gas in the US has long been the lowest in the Western world. If we want to reduce gas consumption, which we must, we have to either ration it, or take its price up. Given that, is it responsible for politicians to promise price reductions?

Sunday, April 20, 2008

Fiddling while Rome burns.

We may be approaching the point at which oil consumption exceeds the production of oil. We could be running out of food for a world population which is still growing. As global warming continues, floods and droughts will make living more difficult for most people. On a more parochial level, the US faces a worsening balance of payments deficit, a falling dollar, more people without health-care, fewer people who can afford a college education, and less and less mutual understanding between people.

Yet, many people just cannot internalize the issues. So those who can postpone the day of reckoning are doing so by not facing the facts.

Saturday, April 19, 2008

Ford listening to Customers? Now read this...

Today's New York Times carried a story in which the following statement occurred:"In January, Mr. Farley brought dozens of Ford dealers to Michigan for an experiment. He split them into groups of five and had them discuss Ford’s marketing challenges while Mr. Farley and his managers watched from behind a one-way mirror."

What is so amazing is that listening to the market seems to be such a new idea. One of the most basic elements of a successful business is to listen to end-users and distribution channels. Find out what they think, though be very wary when a customer tells you what an end-user/consumer thinks or does. Sadly, many companies do not listen to consumers or customers. The successful ones do not always do what customers ask, but they always use market input as the key driver for their businesses.

Sunday, April 13, 2008

Do "the good times" depend on which nation you are from?

In the USA, the good old days tend to center on the 50s and 60s. Those were the "Happy Days." TV programs and movies, from "Mad Men" to "American Graffiti" are frequently about those days. In England, it often goes back to WW II and the years before - the 50s and 60s were rather grim. In France, it goes back several hundred years. Each country has a different version of the "good old days." We need to be aware of these differences as we travel or do business.

Friday, April 11, 2008

Cellphones have restructured thinking

"Just in time" has hit the world. We do not have to plan ahead any more. My undergraduate son, if he wants to get involved in something social, just steps out and starts calling friends to see who is available and what they want to do. When I was a student, we had to arrange meetings and activities in advance. Even if you decide you want to go somewhere new, a GPS capability lets you find it.
Now with the new generation used to this, how will it affect business meetings, when someone can set up a meeting on the fly as they walk, and much prefers to do that.

Monday, April 07, 2008

Confrontation - rarely the best way

Frequently, the first reaction when faced with behavior we do not like, whether it is in nations, corporations or individuals, is to confront. If we feel we have power, we may try to bludgeon the other into better behavior, yet we rarely consider how we would react to such pressure. While clearly it should be available as a last resort, humans tend to believe that they can force others to behave better, whether it is an occupying army, or a government which is behaving immorally. Sadly, we react badly to others who try to force us to behave differently. So unless you are prepared to invade or use extreme force, threats may well backfire.

Thursday, April 03, 2008

What are the implications of an out of office message?

To be able to access email wherever you go is the norm these days. With "smart phones," near universal wireless broadband access, and other options, What does an "out of offfice" notice imply. Now if you are on vacation, it may mean you are taking a well-earned break. However, traveling on business may not be seen as a legitimate excuse and a pure generator of unwanted email.

Saturday, March 29, 2008

The law of unintended consequences strikes the environment

As the world has become obsessed with bio-fuels, we forgot that in order to produce it we have to both take resources away from food production and accelerate deforestation to grow the crops. This results in a rising cost of food, and greater carbon emissions fron deforestation - as well the the potential extinction of species of animals, birds, and plants. This is likely to prove as destructive, in a different way, as fossil fuels.

Wednesday, March 26, 2008

Do Journalists understand science enough?

Science is not like politics where there may be several legitimate points of view. In science there is often only right, or wrong. Yet journalists feel obligated, when presenting a perspective on global warming, or evolution to present the opposing point of view also. This is harmful, as it seriously misleads by allowing people to think. for example that there is serious debate about the topics among scientists.

Saturday, March 22, 2008

What inadvertent damage we do by verbally supporting some dissidents without following through

The US has a long habit of verbally supporting dissident groups in other countries so strongly that they believe that they will get material help from the US. Then when they rebel the US stands by and watches as they get crushed. This is happening now in Tibet. The US awarded the Dalia Lama the Congressional Gold medal, but is not prepared to be active in supporting the Tibetans who demonstrated against China. The US did this to the Kurds under Saddam Hussain and as far back as 1956, verbally encouraged the Hungarian uprising, but had to watch its brutal suppression by Russia. It is critical that the US understands how words of support may be read by oppressed people around the world, or many more people will die.

Friday, March 21, 2008

A system is only as good as the people who run it

Every now and again we hear about IRS employees looking at taxpayer's individual tax records out or curiosity. Recently, we hear about State Department employees looking at Senator Barack Obama's passport records. The New York Times carried a story about potentially thousands of immigration agents demanding sex or money in exchange for favorable consideration for a green card. We constantly forget, when we put in a system, that people have to run it. People are fallible and corruptible. Therefore, the more complex the system, and the more dependent it is on people who run it, the more likely it is to become corrupt.

Tuesday, March 11, 2008

What makes us think that most politicians get caught when they step over the line?

We wring our hands over politicians who get caught in illegal or immoral behavior. Yet there is no reason to think that those we hear about are the only ones. It is clear that there are many politicians who are not caught, but are guilty. Of course, that then begs the question of whether behavior which is licentious, but not illegal nor involved theft or bribery, necessarily hurts their ability to govern.

Friday, March 07, 2008

Is the fact that 25% of the time, the US is obsessed by presidential elections a national handicap?

No other democracy spends so long a time carrying out elections. While one can argue that this means they are thorough, it is both a major distraction of time for politicians and it means that they have to spend as much time fund-raising as they do governing the country. This has to hurt the US

Thursday, March 06, 2008

Is a faked autobiography any less literature for being faked?

There have been several scandals recently when the author of an "autobiography" turns out to have made it all up. It is a novel rather than fact. Now does the artist have to be ethical to be talented? The same question was asked about Leni Reifenstahl, the Nazi filmmaker. In reality art does not change according to the views or behavior of the creator. So if a book is outstanding should it really be removed from shelves if it turns out to be fiction?

Do "loyalty marketing" programs discourage loyalty?

So many "loyalty" programs essentially try to trap the customer. Then they apply "bait and switch" by changing the rules. Now perhaps the company gets "loyal" behavior for a while, but the moment the customer has an opportunity to leave, he or she does - with glee!

Wednesday, March 05, 2008

Why is it that obituaries can be so fascinating?

A well written obituary is a work of art. It can be instructive, thought-provoking, and touching. It is not merely the obituaries of famous people, but often those of people who lived otherwise ordinary lives who, perhaps, once in their lives, did something extraordinary. Whether that is an act of heroism, creativity, or selflessness, the contrast shows us that we each have within us, the ability to become special, even if only for a moment.

Tuesday, March 04, 2008

Tesco's Fresh & Easy stores - simple to fix

I have written much about the new Fresh & Easy stores since shortly after they opened. I predicted failure based on careful study. While others were initially favorable, more and more observers are now pessimistic. Yet, most of the problems are easily, though not always rapidly, fixable. Yet, the more criticism which is directed at them, the more they dig their heels in and refuse to change. One of the great advantages a retailer has is that of instant feedback, yet Tesco's reaction has been to attack the symptoms rather than the causes. Perhaps the company has become so used to adulation, that it just cannot accept and learn from problems.

Saturday, March 01, 2008

5.3 million sane and free adult Americans do not have the right to vote

In many states, once someone has "paid their debt to society" they may not be allowed to vote ever again. Of course, this depends on the accident of which state in which you live. While some people claim that this dates back to medieval days, when forfeiture of propery and of civil rights was part of conviction. However, this was largely abandoned in all English Common Law when many Southern States re-introduced it. This was probably motivated by a wish to restrict voting by African-Americans in a back door way. While about 17 states have some form of this, no one seems to be outraged by the inequity of it.

Medical records - medical wasted costs

Three years ago I moved and changed doctors. To this day, in spite of repeated requests and mailing a check for $20, the files have still not been mailed to my current doctor. In most Wesdern countries almost all files are electronic. This not only reduces cost, but improves treatment and reduces error. In the US, this is rare. In most Western countries, appointments and follow-up are made electronically. There seems to be no incentive in the US to reduce cost, which is simply passed on, but also there is apparently no incentive to reduce error.

Tuesday, February 26, 2008

Cultural Ethnocentricism

Each time I go into a US drugstore, I wonder why no one seems to find it strange that a store which sells remedies to make you well also sells tobacco and, in some states, alcohol. It would be regarded as quite bizarre in most other countries.

Tuesday, February 19, 2008

They say one man's terrrorist is another's freedom fighter!

A few days ago, Kosovo declared independence from Serbia. Western European couutries and the US were quick to recognize it, while Serbia and Russia denounced it. Yet, the West denounces Turkish Cypriots' efforts to have an independent state, while Turkey, which recognizes is, will not allow Kurds or Armenians to have self-determination. Basques, may not have it, while The forrmer Yugoslavia is now in 17 parts!

Perspective really does affect one's idea of right and wrong.

Friday, February 15, 2008

School shootings - the focus is on response, not prevention

There is a constant thread of school violence in the US, yet all the reactions relate to rapid response - warning systems, armed police being able to get there fast. In every other coiuntry which has had such incidents - from Australia to the United Kingdom, the response has been uniform, but very different from the US. Prevention has been the key tool addressed.

Thursday, February 14, 2008

Infrastructure issues are holding the US back

You don't have to drive across the United States and see the crumbling Interstates and bridges to realize that US infrastructure is deteriorating faster than it is being repaired. All you have to do it live in many big cities, not just rural areas, and suffer the inevitable blackout from time to time - an unheard of occurrence in most other developed countries. Airports are in a state of constant rebuilding, and the rail system,which still carries a large share of freight, it in near collapse. Cell-phone service is poor, and even broadband networks are slower than in other nations.

In the 1950s and 1960s the USA was ahead and the lead was growing. The Interstate road system, the phone system, the utilities and other services were the envy of the world. To remain more competitive, this needs a major program to re-create the US lead.

Tuesday, February 12, 2008

As Baby Boomers move out of the workforce, there are not enough people to replace them.

We cannot help observing that companies are having difficulty hiring senior managers, yet many talented senior executives are seeking positions. Companies have not yet become accustomed to a scarcity situation. As Baby Boomers move out of the work force, companies also continue to push out senior managers over 50 and seek to replace them with managers in their 40s. But the next generation is far smaller than the Baby Boomer generation, so companies will eventually have to get used to working hard to retain and hire managers over 50, even in their 60s.

what have top management turnover and "branding" to do with each other?

"Branding," as so many people define it, is part of the same impatience which results in high top management turnover. Today, management wants instant results. Too many expect the new person to sprinkle marketing pixie dust over everything and make the business fly. "Branding" is the result of such an attitude. A brand is defined at each and every point of touch, so how can a superficial change in look and feel change all that has to be? How can someone be fired only a few months, or even a year after joining a company?

Saturday, February 09, 2008

National cultural differences are hard to measure, but the results are there to be seen

In the US, car companies know that when your fuel gauge reads Zero miles to go, you want to have a few miles left. In Germany, consumers want it to be precise. In the US, consumers routinely eat and drink in the car, hardly ever in France - no wonder cup-holders came late to European cars!

In Europe, in the 1970s consumers went straight from manual washing machines to front-loaders with glass doors. In the US, they stayed with top loaders with opaque doors. In Japan, they consumers will pay very high prices for feature loaded cell-phones and use them heavily for M-Commerce (instead of a credit card). In Brazil, the most common pets are birds. Argentina has the world's highest consumption of psychotherapy as well as meat. The Japanese rarely have headaches, Germans can say the same about stomach-ache.

I could fill a book with the different behaviors, but the point is that while it may be a challenge to figure out why people behave so differently, they do, and when someone who has lived all his or her life in one country assumes that people in another country will react the same way, that can be dangerous. In Italy, focus-group participants go out of their way to please the moderator, while in the Netherlands, they will disagree with most of what the moderator presents.

Friday, February 08, 2008

Executives do not take the time to foresee the end-result

It is not easy to foresee the unintended result. If it were not, there would not be any. Yet in many cases it is possible. It is just that Managers do not spend the time to examine what could happen. The best approach is to assume that there will be a result which is not expected and spend some time with colleagues and subordinates considering the possibilities. Then planning for possible contingencies can take place.

Sunday, February 03, 2008

Local news misleads

Even in the LA Market - clearly one of the top few markets in the US, each time I watch the local news I hear one or more major factual errors. From statements such as "the 911 system was invented in California" - untrue, to "the guerilla group trying to overthrow the government in Sri Lanka is called Tamil" - whereas it is the Tigers, known as the Tamil Tigers, with the prefix referring to the ethnic group which it fights for.

If many Americans get their news from local news, with even network news being quite superficial, how well informed are voters and even the decision-makers in the US. To make matters worse, when I have emailed the local station to point out the error, I have nver even receied an acknowledgement.

Saturday, February 02, 2008

Are Liberals and Conservatives simply wired differently?

Recent research suggests that Liberals and Conservatives have very similar consciences. They are equally interested in "doing the right thing." However, conservatives tend to put the group over the individual, whereas liberals believe that individuals have primacy. So Liberals are more likely to be anti any war, because casualties come first, while conservatives will put honor and supporting the "team" first. Liberals will support programs which help the poor, while conservatives are more likely to allow some members to society to go under because they believe it strengthens society. So each cares about an ethical imperative, but it is simply read in a different way. Understanding this in others may be a huge step towards genuine bi-partisan actions.

Friday, February 01, 2008

92 miles of Wall and guards with orders to shoot to kill

could not entirely stop East Berliners fleeing to the West. Each year thousands of illegal immigrants die trying to enter the EU, then more die trying to reach England. Whether for freedom or economic necessity, people have always tried to reach lands which are seen as better. No one has yet succeeded in stopping it completely. The reality is that however tough we make it for people who immigrate illegally, those who make it will have a better life than if they had stayed in their home countries. The solution is not easy. No one wants to reward people who break the law, but penalties are likely to be less severe than the cost of staying at home for many.
All the evidence shows that it is impossible to stop immigration. Therefore, the key is to ensure that legal immigration is possible. When the difficulties of legal immigration, the risks of illegal immigration, and the needs of employers are balanced, then we reach the optimum balance that maximizes the benefits to the individuals, the employers and the country.

Sunday, January 27, 2008

If failure on Wall Street is simply bad luck, then is success only good luck?

Today's New York Times carries a story about Top Wall Street executives who have lost $ Billions becoming hot properties once they have been fired, sometimes being offered even better positions than those they lost. While middle ranking managers get fired and have problems being re-hired, top executives are assumed to have merely been unlucky. It seems that Wall Street sees them as smart simply because they have been in proximity to so much money.

It is rather surprising that failure on an enormous scale is seen as the result of bad luck, whereas success is never ascribed to good luck, but to skill and intelligence. History tells us that this is more so today than at any time in history.

Wednesday, January 23, 2008

The economy - wild guesswork?

While it is well known that economics is inexact, it is surprising to me that leaders - of companies and countries - put enough faith in it to make "bet your life" decisions on the basis of recommendations by a few economists. Sadly, the life they bet is not their own, but that of employees and citizens. Usually, they stretch as far as they can, and then, when there is trouble, they try to correct. Any engineer will tell you that a common problem with control devices is that of over-correction. Economies and businesses may be too large for any one person, or even small coterie to manage.

Since we are usually wrong about economic prediction, and correct too late, this is as bad as over-correction. Perhaps you have to be old and lived through multiple cycles to put everything in perspective.

Tuesday, January 22, 2008

Processes for good execution are more important than much expert knowledge

Strategy must be easy. After all if someone with an MBA and 5 years experience can devise a strategy for a large company, how can it be that hard. However, failure is usually the result of poor execution, monitoring, correction, and ability to learn from success and failure. Yet, so many senior executives move on after they have become comfortable with the strategy and spend little time on execution. The grizzled veterans who are so good at execution are forced into early retirement. There is little institutional memory from which middle and junior managers can learn. Business schools spend far less time on execution than on strategy. It is left to Engineering and Vocational schools to teach the tools of execution.

This is why, while over the past fifty years more and more management education has taken place, we do not see the performance of most companies in the long-term to be better than they were fifty years ago. They do not execute well and do not learn from their successes and failures.

Saturday, January 12, 2008

National Identification Cards are on their Way

As we see more and more pressure for action against illegal immigrants, we are headed towards a national identity card for everyone. Since we will not be able to make illegal immigrants carry identification showing that they are illegal, we can only make citizens and legal residents carry I.D.
Therefore as the demand for more controls on illegal immigrants and terrorists grows, the inevitable requirement is that everyone, of all ages, will have to carry ID. After all, if we make it everyone over 16, how do we know that a young person without ID really is only 15!

Friday, January 04, 2008

Networking Groups can be extremely valuable

Over the past few years the idea of Networking has taken off. However, it has changed from a process of people making friends and helping each other into a more aggressive, "what's in it for me" approach. As a result, one of the few places where people can meet others in a safer environment is a Networking Group. Organizations such as the Marketing Executives Networking Group foster an environment where members are under a moral obligation to "pass it on." As a result for most people, joining a networking group is a very productive solution.
We may wish for the good old days, but as new technology speeds up the world, it makes sense to adapt.

Thursday, January 03, 2008

Do we over-emphasize strategy and ignore execution?

There is so much emphasis on strategy in business today. Often it is flawed. Sometimes this is because it is based in incorrect or incomplete knowledge, sometimes because it is based on faulty logic. Yet, most of the business failures may be rooted in inadequate execution of strategy rather than the strategy itself. This applies whether the strategy is for new products, acquisition, expansion to new geography or re-alignment of product markets.
Business schools find it difficult to teach execution. Most corporations do not train managers in it effectively. Yet, there are principles of execution which can be learned. However, they are best learned by a combination of experience and process.

Tuesday, January 01, 2008

So much hope for the new year - 2008! A mark of humanity?

At the start of each new year, we all have so much hope. Perhaps this is because we have been so disappointed in the old one. But almost all humans look forward to what the new year will bring. We make New Year resolutions, expect completely different experiences, and have a party to celebrate the new year. This is a mark of humanity. We are optimists. We hope and even expect change and improvement.