PGA Tour has lost its sense...of branding

Sports marketing has been careening toward the cliff of excess for some time now (the wall-to-wall corporate sponsorship depicted in "Talladega Nights" was more verisimilitude than parody). But the recent revolving door of sponsor-named events in the US PGA golf tour is seriously damaging the history and heritage of US professional golf.

The latest example is something called the PODS Championship, held this past weekend in Florida. (PODS stands for Portable On-Demand Storage, in the form of a shipping container that this company drops in your front yard for you to fill with stuff, where it sits till your house project is done, much to the delight of your neighbors.)

The PODS Championship used to be the Chrysler Championship, and was held in the fall, not in early March. It's always been in the Tampa area, but you wouldn't know that from any of the communication surrounding the event. In fact, for all I knew (and I'm a golf fan!), this was a brand-spanking new event.

I could have said the same thing about the Wachovia Championship, the Fry's Electronics Open, the Buick Classic, the Buick Open or the Buick Invitational, not to mention the late, great 84 Lumber Classic. (Some of these were events with history, and some were new. See if you can guess which!)

What ever happened to the Westchester Classic, the Western Open, or the Firestone Tournament of Champions? At least AT&T was smart enough to retain part of the historical name of its tournament (the AT&T Pebble Beach Pro-Am).

Exclusive naming rights bring tens of millions of dollars yearly to the PGA Tour, helping purses to grow tenfold between 1986 and 2006, according to GolfWorld. But at some point they'll be ruing the day the good old Greater Hartford Open became the Travelers.

branding, marketing, sponsorship, sports

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Yahoo-AT&T: an alliance under pressure

Nothing cures end of the week writer's block better than a front page Wall Street Journal article on one of my favorite subjects: alliances. Today's article about the shifts underway in the Yahoo-AT&T partnership contains lessons for any company in an alliance or contemplating one.

AT&T is seeking to renegotiate the terms of the alliance, under which it pays Yahoo a revenue share for each DSL customer it signs up via Yahoo, and funnels traffic to Yahoo services through its home page. Simply put, the world has changed since the original deal was signed in 2001, and so has the power dynamic in the alliance.

AT&T has made two gigantic acquisitions and now is a behemoth with 12 million broadband customers and a strong nationwide brand. Yahoo has fallen to number two in internet search and advertising to Google. Add the fact that Google is paying people for placement on computer screens and home pages, and Yahoo will have to take a serious haircut as the alliance is recast.

The lesson for those striking alliances--monitor changes in the landscape and be prepared to make adjustments (or have them thrust upon you) as your business and your partner's change. No good thing lasts forever.

(Update: in a tantalizing blog post, the Journal speculates that the endgame of this alliance could result in AT&T acquiring Yahoo.)

Voice-to-Screen messaging - powered by SpinVox

strategy, alliances, negotiation, Wall Street Journal

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Cold calling with dignity (yours and the prospect's)

I had to do some cold calling today, so naturally I worked from Jeff Thull's script. It's simply the best approach I know to keep the dignity of the customer intact while you're interrupting them with an unsolicited pitch. And since I hate getting cold calls, when I do my own cold calling I try to keep that in mind. Here's Jeff's 20-second pitch, outlined nicely in his new book Exceptional Selling.

Convey professionalism by identifying yourself and your company straightaway. "I'm John Caddell with Caddell Insight Group." (Don't ask how they are doing today.)

Give the prospect an easy way out, and show respect for his/her intelligence by admitting that you don't know if they need or want what you're pitching (note: you should have done sufficient preparation and qualification to believe they very well might need your solution). "I'm not sure if it's appropriate we should be talking."

Show relevancy by connecting what you do to companies like the prospect's. "We work with companies like yours who are developing breakthrough technology products..."

Connect more deeply by referencing a generic problem they might be facing. "...and occasionally have difficulty getting their sales forces to embrace the new product."

Ask for permission to continue. "Do you have a moment to talk?"

There's lots more to the method, especially if they say, "Yes, I'd like to talk more." But you'll have to read the book for the rest.

Voice-to-Screen messaging - powered by SpinVox

psychology, sales, spoken post, reading list

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Public radio's Ira Glass on storytelling

Two of my favorite bloggers have posted on Ira Glass' (This American Life) videos on storytelling.

Shawn Callahan of Anecdote discusses the video here and connects it to the work his team does with businesses. (There are still a few days left to register for Shawn's narrative in business workshop in Boston on March 29.)

And Garr Reynolds of the great Presentation Zen blog breaks down the video and summarizes each section.

Storytelling is everywhere.

storytelling, narrative, presentation

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Are CEO's powerless to lead?

That might be the conclusion you draw from an article from last week's Wall Street Journal Business Insight section entitled "Leading from Below" (free link). The authors, James Kelly and Scott Nadler of consultancy ERM, write:

...The truth is that at most companies, senior managers are increasingly hamstrung by the demand from investors and analysts for immediate results. If change is going to come about at these companies, it will be because the managers below the CEO (and below the whole "C suite"...) take the initiative and risks to drive the company in a different direction. Change will have to come from those leading from below, rather than relying on leadership from the top.

Excuse me, but in this scenario, what are the "C levels" doing every day? Going to Davos or TED, I guess.

It sounds as if the authors have seized on a point discussed by Bower and Gilbert in their recent HBR article (link) "How Managers' Everyday Decisions Create - or Destroy - Your Company's Strategy," but, in the case of "Leading from Below," middle managers crafting and executing their own strategy in large companies is a feature, not a bug.

The point of the article may be that senior leaders should foster leadership throughout the ranks, and not micromanage. All well and good if that's the case. But if that's what they meant, I wish they had written it.

Voice-to-Screen messaging - powered by SpinVox

(Picture by lckidwell via stock.xchng)

leadership, strategy, Harvard Business Review, Wall Street Journal, spoken post

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Dispositional innovators -- however you say it, they're not afraid to try something new

This thought didn't fit in yesterday's post on Private Label Strategy, but authors Nirmalya Kumar and Jan-Benedict Steenkamp brought up a fascinating and new (to me) concept with the unwieldy name listed in the title. As defined in the book:

"Dispositional innovativeness is the predisposition to buy new products and brands at an early stage, rather than to remain with previous choices and consumption patterns...." (p. 171)

Yeah, so what? So what is that these types of people (we'll call them DIs) are very important in the success of radically new products and services. Find and reach the DIs, say the authors, and your new product has a chance. Waste your marketing on the rest of us, and you might as well pull the product off the shelves now.

And even more interesting was Kumar and Steenkamp's assertion that different countries have very different levels of DIs. In Europe, the UK is 24 percent DIs, where Spain is only nine percent.

So, if you're trialing a new product, pick the UK over Spain every time. And the best test market of all, at least at the moment? The US of A. We'll try anything once.

(Picture by digital_a via stock.xchng)

innovation, adoption, marketing, product development

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Know a great innovator?

Well, don't just sit there reading blog posts! Nominate them for the Product Development and Management Association's (PDMA's) Outstanding Corporate Innovator award.

innovation, awards, PDMA, product development

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Everything you ever wanted to know about private labels: What I'm reading now #3

Unless you're a consumer-packaged-goods marketer or retailer, you probably have no idea how pervasive private labels have become in the stores you frequent. But the next time you go to the drugstore, see if you pick up a bottle of Aleve or the CVS naproxen sodium placed right next to it.

Professors Nirmalya Kumar of London Business School and Jan-Benedict Steenkamp of Duke University have satisfied the curiosity of everyone who ever wanted to know about private-label goods by writing Private Label Strategy: How to Meet the Store Brand Challenge.

According to the authors, the opportunities for private labels are vast, and the challenges to branded goods are daunting. Private label goods provide a point of differentiation for the retailer (such as Target or Tesco), and they create powerful leverage when negotiating terms with brand manufacturers.

Leading packaged-goods companies, like Procter and Gamble, Unilever and Nestle, are responding to the challenge. How? Four main ways:

1. partnering with retailers to produce exclusive specialty offerings
2. innovating like crazy to stay ahead of copycat private-label offerings
   
3. divesting laggard brands
   
4. increasing investment in advertising and marketing for the brands they retain
   

To point (4), the authors point out a most interesting development: as a result of the increasing size and scale of retailers, brand manufacturers' marketing dollars have been drawn away from advertising and other brand-building activities toward point-of-purchase and promotion investments. The latter help the retailer and sales (in the short term), but at the cost of the long-term value of the product--and as a side effect improving the prospects for private-label copycats.

The book is essential reading for any consumer-packaged goods companies or retailers, and for anyone else who wants to study up on a dimly-lit corner of the marketing world.

innovation, branding, marketing, retail, private label, reading list

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Alliances: the importance of seeing the end before beginning

When negotiating a strategic alliance, few companies take the time to think about and discuss with their partners a plan for what happens when the alliance comes to an end. And they all end, sooner or later.

In an article in today's Wall Street Journal Business Insight Section, authors Ranjay Gulati, Maxim Sytch and Parth Mehrotra (link - $$) urge companies to set out the rules for disengagement with enough detail that when time comes to dissolve the alliance, most of the important questions--who retains the intellectual property, how will customers be supported, who takes ownership of tangible assets--have ready answers. Leaving these items undone, the authors argue, adds significant conflict and risk to an alliance.

From my experience, the contemplation and discussion of breakup items are the last large issues on the table before closing. The psychology of negotiations has a lot to do with it. It's hard to talk about endings when you're just getting to know each other.

But deferring the discussion till after the agreement is signed doesn't work. Then, everyone who isn't overcome by deal euphoria is working on closing business. And the shifting power dynamics of alliances make pinning down criteria post-signing a very difficult task.

So, as unpleasant as it may seem, negotiate that prenup before getting married to another company.

(Picture by rovaro via stock.xchng)

strategy, alliances, negotiation, Wall Street Journal

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Spoken blogging in action

Last month, I wrote about a new speech-to-text service that allows you to speak your blog posts into an ordinary telephone. Now I've got the service, SpinVox Speak-a-Blog, set up with my own blog, and I used it to create today's earlier post.

Some results:

The translation service worked very well. I had to make a handful of very minor corrections--the spelling of a name, a couple of capitalizations, one verb tense problem. But these took all of a minute to do.

I retitled the post, did some slight line editing, and added Blogger labels and Technorati tags. (Note to product management: it would really be something to speak your tags and have the code appear magically in the post.)

I'm going to try to do one spoken post a week to see how they evolve and compare to the written posts. There's enough time to speak about 75 words. Most readers would say that's plenty!

mobile, blogging, technology, blogs, spoken blogging

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Salespeople as Parents - prescription for failed sales

Have you ever spoken to a sales person & felt they were treating you like an idiot? We, as sales people, tend to have these types of conversations when we're trying to close a sale, even if we don't realize it.

Jeff Thull, in his book Exceptional Selling, calls these Parent/Child interactions. We as parents treat prospects like children, persuading, lecturing, pleading. The prospects, sooner or later, shut down. (Like me talking to my six-year-old.)

An adult conversation, where we and the prospects could talk like businesspeople, would be more effective, wouldn't it? (Sorry--didn't mean to lecture. Strike that last sentence.)

Voice-to-Screen messaging - powered by SpinVox

psychology, sales, spoken post, reading list

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US MVNOs - what viable concepts remain?

The US MVNO market has passed through infancy. Some MVNOs are entering adolescence (Virgin, Boost) while others are just starting to walk on their own (Helio, Amp'd, Disney). Discount prepaid operators are beginning to see a shakeout (see this news item). Which all begs the question: are there any new MVNO types that still have life? I think there are two:

1. The "store-brand" MVNO - if you are a large enough retailer, with a devoted clientele, and don't already stock other cellphones, a prepaid offering can be profitable. The prototype operator is Tesco Mobile in the UK.
   
   
2. The cult MVNO - how do you lure customers away from the large mobile operators? One way is to have a powerful, long-lasting bond with a segment of customers. And tell them: "Buy cellphone service from us. It may cost a little more, you may have to give up a little service, but it's worth it to support the community." One very recent example is the launch of the Planned Parenthood MVNO.

Store-brand MVNOs will be larger, but fewer in number, since a limited number of retail channels will fulfill the criteria to host a successful MVNO. Cult MVNOs, by contrast, will serve smaller subscriber bases, but could be much more numerous.

And, of course, one significant question remains: will the operators want to enable them?

(Photo: the LG225 phone offered by Planned Parenthood Wireless)

wireless, mobile, marketing, MVNO, retail, private label

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Story v. Essay

It's becoming conventional wisdom that stories are a superior form of communication for complex information, such as strategies, value of technology products, business knowledge, brand attributes, etc. (Don't believe me? Read these: 1, 2, 3, 4, 5, 6, 7, 8.)

Here's a simple way to distinguish a story from another form of communication, the essay (which works well in other situations):

Story	Essay
engages the senses	engages the mind
concrete, detailed	abstract/conceptual
specific	general
contains moment-to- moment action. (“Thomas flicked his finger, causing his pen to twirl around his thumbnail until he caught it again.”)	summarized (“Students are often bored in school.”)
suspenseful, surprising	linear
uses action verbs	“is”

Wait, you're saying. Don't some stories have the same characteristics as the essays you're referring to?

Yes. But they're rarely good stories.

(Picture by kaliyoda via stock.xchng)

storytelling, narrative, sales, management, change management, branding

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Proposing a value-adding middleman for innovation

In March's Harvard Business Review, Professors Mohan Sawhney of Northwestern Unversity and Satish Nambisan of Rensselaer Polytechnic Institute define a valuable emerging role in the open innovation process--what they call an "innovation capitalist." (Free link to article.)

An IC firm would identify and license ideas and technology from various sources, and sell them to an established companies looking for new and innovative products. Yet it would do more than simply broker the idea between inventor and acquiring company.

The IC would develop prototypes, conduct market research, perform initial branding and packaging--but would stop short of fully developing or commercializing the concept. That would be left to the acquiring company.

The acquiring company pays less than it would for a market-proven product. But it also gets to observe and assess products well past the idea stage, and thus increases its innovation yield.

Product marketing consultants, you have a new job title: Innovation Capitalist.

(Disclosure: I am an RPI alumnus)

innovation, open innovation, marketing, Harvard Business Review

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An innovator in government communications passes away

Like seemingly everyone else, I'm reading Made to Stick by the Heath brothers. So today's New York Times obituary of former CIA analyst Richard Lehman practically jumped off the page as I read it. Mr. Lehman crafted an intelligence briefing memo (the President's Intelligence Check List, or PICL) for President John Kennedy in 1961 that replaced an assortment of confusing, redundant and often omission-filled documents.

Says the Times:

Mr. Lehman recalled how “Kennedy was blindsided a couple of times” because he had not received important briefings. The president complained to Attorney General Robert F. Kennedy, who, Mr. Lehman said, “came down on” the senior White House military aide, Maj. Gen. Chester Clifton, “like a ton of bricks.”

Mr. Lehman said General Clifton told him to produce a daily memo that would fit into a breast pocket so the president could carry it around with him. What the general wanted, Mr. Lehman said, was “a single publication, no sources barred, covering the whole ground, and written as much as possible in the president’s language rather than in officialese.”

If that isn't following the Heaths' simple and credible rules., I don't know what is. And this document has remained in use for forty-five years, through eight succeeding Presidents.

Also, I must point out a very good use of concrete description in the next paragraph of the Times article: "On a Saturday morning in June 1961, President Kennedy read the first PICL while sitting on a diving board at a hunting farm in Virginia."

Rest in peace, Mr. Lehman.

innovation, communication, obituaries, New York Times

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Jon Miller's list of B2B marketing blogs

My fellow Futurelab contributor Jon Miller has published a list of important B2B marketing blogs.

Jon, Shop Talk should be on your list!

promotion, blogs, lists

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Even if you're superstitious, dates are arbitrary

A Friday-afternoon rantTM

Here comes 07/07/07. A very lucky day--ask Tony and Eva or other engaged couples--no? Well, no!

What about 06/06/06? Wasn't that supposed to be the devil's day? No again.

When will we realize that each of the numbers that makes up a date is an arbitrary creation of man, lacking any consistency or objective meaning?

AD 2000 wasn't 2000 years after the birth of Jesus (various sources place the date between 7 B.C. and 2 B.C.). And if you don't follow Christianity, what meaning would that number have even if it were accurately counted from Jesus' birth?

The month/day numbers have changed as recently as 1582, when the Gregorian calendar was adopted.

It's time to stop worrying about what's going to happen on a specific date. Truth is, if there are fateful dates out in the cosmos, we wouldn't be able to pinpoint them anyway. So savor the present moment.

(Picture by shadowkill via stock.xchng)

Friday afternoon rant, dates, superstition

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Cherish those distant connections

The new book "Firing Back: How Great Leaders Rebound After Career Disasters," excerpted in the January Harvard Business Review, says something important about personal networks.

The book, by Professors Jeffrey Sonnenfeld of Yale and Andrew Ward of the University of Georgia, cites a Stanford University study finding that far more job-seekers found positions though distant acquaintances (27.8%) than through close contacts (people whom they saw at least twice a week--16.7%). Distant contacts are more likely to know people new to you, and thereby able to create connections that didn't exist already.

Meaning: you should cultivate acquaintances with people you meet who move in different circles. And you should keep in touch, at least once a year, with most everyone you've met (ask Keith Ferrazzi).

A lot of work? Yes. But your next job may depend on it.

relationships, networking, careers

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MVNO market awakens, for a day at least

If you're an MVNO fan and tired of reading about Helio's and Amp'd's subscriber projections, today was a day to celebrate. Two very interesting MVNO announcements hit the wires today.

First, Planned Parenthood announced an MVNO running underneath Working Assets Wireless' Sprint contract (significant because Sprint has been very reluctant to allow their MVNOs to re-resell their service).

Second, Titan Holdings bought one of the existing prepaid MVNOs, Ready Mobile, a part of a rollup strategy that might bring some clarity to the rat's nest that is the US prepaid MVNO market--excepting Tracfone, Virgin and Boost.

wireless, mobile, marketing, MVNO

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Listen to stories to assess organizational change

Picture this. You're VP of sales, six months into the implementation of a new sales process, and you haven't moved your numbers one iota, after spending hundreds of thousands of dollars on systems and training and at least that much in lost productivity.

Everyone rated the classes highly, the staff uses the new lingo, the surveys indicate things are OK. But no results.

Awake late at night, by the glow of the alarm clock, you are comparing yourself to the worst sales VPs you've ever known, to see if you might in fact be worse than any of them.

What do you do?

First, take a deep breath. Or two, or three. Then it's time to get the story, the real story, from the people on the front lines.

Here's how you do it:

1. You select a diverse group of people from across the organization who in some way affect or are affected by the new sales process.
   
2. A team you select works with the individuals to ask them how they do their jobs, in detail, using concrete examples. The team records and transcribes the stories.
3. You get the group together. Using Anecdote's sensemaking methodology, the group finds the motives, values and assumptions underlying the stories. From there, the group discovers the several key issues that are causing the biggest impediments to the new process.
   
4. You work with the group to develop interventions to help address the issues and help the new process do what it's designed to do.
   
5. You put the interventions into practice. Some are big, others are small, seemingly insignificant.
   
6. You monitor the team's rising performance. That sales process wasn't such a lousy idea after all.
   

Getting the real story, and figuring out how to act on it, can be done. It will take some work and a willingness to try something new. Start off by taking the "Narrative Techniques in Business" workshop March 26 in Seattle or March 29 in Boston. Click here for registration information.

(Picture by drrivky via stock.xchng)

innovation, narrative, sales, management, change management

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Somebody out there realizes how goofy software marketing is

While preparing the prior post on HP, I came across this very sensible rant by Jeff Ventura on his blog Graceful Flavor. Jeff should be hired immediately by every software vendor to improve their marketing.

software, marketing

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HP's decision to change software product names a bad idea

On the face of it, HP's announcement yesterday (reported in the Wall Street Journal - link $$) that it was combining its various enterprise software products under the umbrella brand HP Software seems perfectly logical. But, rather than unifying customers' view of the software, to the benefit of all products, this type of name change blanches out product distinctiveness and existing brand equity, to the detriment of all products. The whole becomes less than the sum of the parts.

In HP's case, the names OpenView and Mercury will be retired. And with that goes the decade or more of value built into those names via the thousands of companies that have used them, referred them, considered them. And jettisoning that value is simply a waste of money.

Software buyers purchase a product to do a job. (Remember this Harvard Business Review article?) They need to get rid of spyware, or manage a network, or store their source code. The product names connect to that job.

It's rare that a good name in one product area translates into another--how many people buy Microsoft's security software over Symantec or Norton? And corporate brand names, especially ones that span different product types (such as HP, covering hardware, software and services) add little value to a software product--primarily that the company that supports it won't go out of business.

HP Software Marketing VP David Gee must be confident that things will work out differently for HP (here's an interesting take on HP's overall software strategy). But, Mr. Gee, a piece of advice. Hold onto those old names. You may need them again in the future.

software, naming, marketing, branding, Harvard Business Review, Wall Street Journal

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What I'm reading now #2

When I got two recommendations in a month's time to read a book about comics, I couldn't resist. And Scott McCloud's Understanding Comics is about more than comics. It's about communication, graphic and written; about icons; and about the spaces between words and pictures, where yet more communication occurs.

Did I also say it's funny and entertaining? And in the format of a comic book?

P.S., Scott has a new book out, and is writing a blog about his current book tour.

reading list, communication, comics, visual, graphics

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Toyota: the inevitable decline starts now

It's Toyota's PR person's dream: a front-page story in the Sunday New York Times magazine (by Jon Gertner), depicting your company as a comic-book superhero, slaying its competitors amid exclamatory sound effects (VVRRRMM!). And the article's teaser hailing your company as not only "not only the best automaker in the world but also maybe the best corporation."

The PR dream is the executive's nightmare. Not only is it difficult to build from the pinnacle Toyota has reached; it's impossible. The life cycle of industry titans lasts decades, but a life cycle it is. Ask NCR, Kodak, Xerox, Western Union, Sony.

Ask General Motors.

Forces beyond those under the control of any corporation conspire to bring it down, once it's reached such an apex. The forces are shifts in demographics, culture, science--more than technology. Somewhere out there, those forces are at work, humming below the range of hearing, undermining the business model that Toyota has perfected over the past fifty years.

And, no, it won't be a combined GM-Chrysler that eventually humbles Toyota. The US auto companies are deader than dead as far as the future's concerned. Instead it will be a new company, perhaps born in a rural area not unlike Toyota's home, failing humbly, learning lessons, remaining persistent, getting better, creating a vision for the far future, a vision far beyond the passenger automobile. Not unlike what Toyota itself once did.

Who are they? We'll know in twenty years' time.

(Illustration by Nathan Fox for the New York Times)

strategy, innovation, Toyota, automobiles, New York Times

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More Chrysler

The Chrysler partnership saga gets curiouser and curiouser. After yesterday's news that anything is on the table regarding Chrysler's future, today brings several reports (including from the Wall Street Journal-$$ and New York Times) that Chrysler has been contemplating an alliance with, of all companies, General Motors, to build super-sized SUVs (the Tahoe, says the Times; the giganto Suburban, says the Journal).

Which brings up a question: do American car companies really need to make more large SUVs? And do we really need to be driving more of them?

strategy, alliances, automobiles, Wall Street Journal, New York Times

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More on strategy from Bower and Gilbert

Earlier this week I posted on the article by Joseph Bower of Harvard Business School and Clark Gilbert of Brigham Young University Idaho entitled "How Managers Everyday Decisions Create - or Destroy - Your Company's Strategy" (free link). Here are more interesting tidbits from the article.

The overarching theme is the tension between corporate decisionmakers, business unit managers, and operational managers when it comes to creating and implementing strategy. Corporate leadership can create strategy, but has very little direct involvement in carrying it out. Hence the plaintive cry of many CEOs when visiting their divisional offices: "What the hell happened to our strategic plan?" Followed by stammers, shrugs from management and a suggestion to break for lunch.

Similarly, general managers have authority to allocate resources in service to (or counter to) the corporate strategy, but have great difficulty working across divisional boundaries--which is frequently required to implement real strategic change.

Paradoxically, according to Bower and Gilbert, lower-level operations staff can easily work across divisional boundaries--because their work is highly related across the divisions. (I found this to be true when I worked as a product manager at a large company--I could utilize development staffs from other business units, and in some cases my division president might not even have known his counterpart.)

The authors' prescription is for top management to

1. carefully monitor how strategy is implemented
2. intervene when fundamental differences in strategic viewpoint arise
3. "use operational managers to get work done across divisional lines"
   
4. create space outside the formal strategy process to nurture disruptive ideas
   
5. actively manage the resource allocation process, rather than leave it to a system
   

(Picture from zenpixel via stock.xchng)

strategy, Harvard Business Review

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DaimlerChrysler: Last Year's Model?

DaimlerChrysler CEO Dieter Zetsche announced yesterday his plan for restructuring the Chrysler division, once part of the US auto industry's Big 3 (featuring the Model 300 sedan, as recently as two years ago a rousing success story). As reported in the Wall Street Journal, Zetsche was looking at more than job cuts and plant closings:

While implementing the restructuring plan, he and his top aides will look for partnerships to help Chrysler expand into fast-growing international markets, he said, without ruling out a sale.

Possible partners include the auto industry's favorite hookup, Renault, or, everyone else's favorite, a private equity buyer. The key structural issue is, of course, the US unionized auto industry's issues with pensions and health costs for a huge base of retired employees. The business issues are almost too numerous to mention (channel difficulties, inventory forecasting and management, building cars that people want to buy, etc.).

Daimler's seriousness about splitting off or partnering up Chrysler was evidenced in this quote from the Journal article:

Mr. Zetsche ruled out platform-sharing between the mass-market Chrysler unit and Mercedes, which builds luxury vehicles.

A deeper entanglement between Mercedes and Chrysler, which a platform-sharing arrangement would indicate, would make a splitoff or other partnership that much more difficult. So it won't happen.

(Picture: Chrysler 300, via Wikimedia Commons)

strategy, alliances, automobiles, Wall Street Journal

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Can you make money with free software?

Open-source projects like Linux, Firefox and others are easy to understand from a community standpoint. Generous and interested people get together and help create, maintain and enhance a piece of software that people can benefit from. The larger the community of contributors, the more robust the software becomes, and the more features are added.

But what are the motivations of companies like IBM and Sun, who have each committed many millions of dollars of investment (as well as bequeathing once-proprietary technology) to the open-source movement?

It's not their communitarian instincts, that's for sure. If there wasn't money to be made, these companies wouldn't participate. Harvard Business School professor Marco Iansiti and consultant Gregory L. Richards have published a fascinating paper on the topic ("The Business of Free Software"), which was discussed in a recent article at Harvard's Working Knowledge web site.

The authors group open-source software projects into two segments: the "money cluster" and the "community cluster." Projects in the money cluster received 99% of the corporate investment. To the authors, the reason is simple: these projects (Linux, OpenOffice, Firefox and others) helped drive revenues to the companies' core businesses. For IBM, the increasing adoption of Linux helps drive customer purchase of their servers (not just Intel-based, where Linux competes with Windows, but up to and including mainframe-class machines).

Simply put, free software is the razor, and companies' core products (hardware, services, etc.) are the blades.

technology, open source, strategy

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Web 2.0 helps sales & product insight flow and grow

By now, anyone who's acquainted with Web 2.0 tools realizes how peer-to-peer, bottom-to-top, and diagonal information sharing can greatly increase insight. Yet, in corporate America, top-down information flow remains the rule. And nowhere is that more true than in the sales department (check out a salesforce.com user hierarchy to see what I mean).

And it's hurting businesses, especially when they sell complex products. Salespeople and sales engineers typically pair up and work together on opportunity after opportunity. (I once tried instituting a policy of frequently rotating sales engineers among salespeople--and did the salespeople ever complain!) Information silos develop, and deals are lost because one team didn't have access to the information from the others.

So how does the critical information gathered from each sales call get to other salespeople, sales engineers, product management? More importantly, how can dialogue ensue that helps evolve the product, adjust the positioning and counter negative selling information? Simple Web 2.0 tools, like RSS readers and blogs, can show the way. Shawn Callahan of Anecdote suggested a straightforward application of these tools to solve the sales information problem. Take a look.

(Picture by Rodolfo Clix via stock.xchng)

knowledge management, innovation, sales, marketing, web2.0

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We've made Todd And's list of Top 150 Marketing Blogs

Well, almost made it. Shop Talk is #156. Nevertheless, it is thrilling to almost be in the same category as Duct Tape Marketing and Seth Godin (I love everything he does), never mind RepMan and Pothole on the Infobahn.

It's an excellent list. If you check it out, you'll find a lot of blogs worth reading.

Thanks, Todd!

blogs, business blogs, marketing

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A brief definition of strategy

This month's Harvard Business Review features an article (free link) by Joseph Bower of Harvard Business School and Clark Gilbert of Brigham Young University Idaho on corporate strategy. There's so much good stuff in the article that it will take two or three posts to note the key points.

So, to start off with, I wanted to share their working definition of strategy, which is so straightforward and simple that I initially thought it had to be incorrect. Yet the more I've thought about it, the better I like it. So here goes:

[Strategy is] deciding which opportunities a company will pursue and which it will pass by.

That's it. Nice, eh?

strategy, Harvard Business Review

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Michael Wesch's "Web 2.0: The Machine is Us/ing Us"

OK, OK, this has been posted in a hundred places (I've seen it in two blogs I subscribe to). Nevertheless, it is a work of art and should be posted in a thousand more.

Very simply, the most accessible, elegant and profound description of the new way of the internet and what it can do. From Professor Michael Wesch of Kansas State University.

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Top 5 HBR Breakthrough Ideas

Harvard Business Review's annual look at hot new ideas is something to cherish, but who has time to digest all twenty ideas? So, here are the five you most need to know about:

1. "When to Sleep on It," Ap Dijksterhuis. The most effective decisionmaking happens when you take some time and let your unconscious mind weigh in.
   
   
2. "The Accidental Influentials," Duncan Watts. En garde, Malcolm Gladwell! According to Watts and his associates, new trends take root not when small numbers of highly-influential people latch on, but when large numbers of easily-influenced people do.
   
   
3. "In Defense of Ready, Fire, Aim," Clay Shirky. Open-source software projects are not threats because they succeed more often, but because they "outfail" their commercial competitors.
   
   
4. "The Folly of Accountabalism," David Weinberger. We are damaging business and "eating our young" with a focus on measuring everything, seeking conformance and blaming individuals when anything goes wrong.
   
   
5. "Brand Magic: Harry Potter Marketing," Frédéric Dalsace, Coralie Damay, and David Dubois. Rather than create brands that have fixed characteristics for their entire lifetime, it may be better to have them evolve and grow with their target market, from youth to old age, just like a particular children's book hero.

psychology, accountability, marketing, product development, innovation, trends, Harvard Business Review

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Home Depot's newest product: customer service

Since the schadenfreude has died down after Bob Nardelli's ouster as CEO of Home Depot, a significant question has arisen: now what happens at America's home-improvement icon?

Nardelli's successor, Frank Blake, is a bit of a blank slate, having kept a low profile at Home Depot (and, seemingly, everywhere he's worked). He didn't even grant the New York Times an interview. But they wrote about him anyway.

And among his many changes at the Home Depot is a focus on the basics of retailing. Says the article, written by Michael Barbaro, "[Blake plans] to improve the retail business by single-mindedly focusing on employee morale and customer service in the chain’s 2,000 stores."

Which brings me to a story. I went to my Home Depot the other day around noontime and I noticed something funny. There were workers everywhere. Cashiers standing in front of their register aisles. Staff poised at desks, and in the aisles, looking for people to help.

If you wanted to ask someone a question, the biggest problem was deciding whom to ask.

And if you've shopped in a Home Depot before, you know how unusual that is.

It was so unusual that I asked one of the cashiers what was going on. She said that they always had a lot of staff to help people. (Um, not in any of the Home Depots I'd shopped at before.)

The Times article implies that it may be an intentional change. Good. At any rate, here's one Home Depot customer who's happy with what Mr. Blake has done so far. Keep it up, and I might decide on orange more often.

retail, customer service, marketing, leadership

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Dave Stein recommends "Exceptional Selling"

Dave Stein, one of my selling and marketing mentors, recently reviewed the book "Exceptional Selling," by Jeff Thull, president of Prime Resource Group. [You can download the first chapter free from the Prime Resource website.]

Says Dave:

Most books on selling are cookbooks of selling process. Exceptional Selling differs in two ways. First, it explains as much “why” as “what,” examining the psychology of selling. Second, it focuses on the conversation between buyer and seller, reflecting the cultural changes in selling resulting from socio-economic and technological changes in today’s business world.

I haven't read the book yet, but I did take a sales course from Jeff Thull a few years ago. I found his methodology and approach very effective and different, as Dave observes. Some of the things I learned in Jeff's course are discussed in this post.

psychology, sales, sales training, books

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Airbus' Quiet Giant

The Wall Street Journal's Daniel Michaels writes today (link - $$) about a sneak-preview flight for reporters on Airbus' massive A380. While recent news about the airplane has focused on the wiring problems causing lengthy delays in production, the plane is nearing readiness for commercial flight.

The biggest news in Michaels' report wasn't the size of the plane, or the design of its interior (where are they shoehorning those 853 seats, anyway?)--it was the noise inside the cabin--or lack thereof.

Writes Michaels, "Its cabin remains far quieter than almost any jetliner flying today. Even seated by a window, passengers can hear conversations rows away, a feature which can be disconcerting."

What will we do without the roar of engine noise filling our ears on an overseas flight?

(Photo courtesy of Airbus media center)

innovation, product development, aviation, Wall Street Journal

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The Entrepreneur's Succession Plan

I have a friend who, in a few years, has built a profitable, growing business with over $10 million in yearly revenues.

He has several employees, but still does much of the work and all the strategy and planning himself.

I had coffee with him last month. I asked him, "What happens if you get hit by a bus tomorrow?"

He said, "I've made arrangements. I have lots of life insurance, to take care of my wife and kids if something happens to me. And, I've given my wife the phone number of a guy who will liquidate all our remaining inventory."

He paused. At that moment, we both realized the same thing: if he goes, the business goes with him. It ends as soon as the liquidator's truck pulls away from his loading dock with all that inventory. And he's worked too hard, and built too much, for it to end that way. It's time to start building his legacy. And that means, paradoxically, doing less.

entrepreneurship, strategy, succession planning, leadership

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At Gap International's "Breakthrough Intensive"

I spent the last three days at Gap International's "Breakthrough Intensive" course - getting educated.

This class was a "friends and family" edition, and was served the purpose of training and developing Gap's less experienced consultants. As a result, there was a more diverse (and, to my mind, more interesting) group of participants than you would find in a full-priced session targeted at businesspeople. The participants included:

• A linguist
• A painter
• A cabinetmaker
• A teacher, a principal and an assistant principal
• A teacher and writer
  
• Two officers of a national association of private schools
• The development director of the Armenian Church of America's Eastern Diocese
• A college senior
• A recent graduate
• A recently-hired Gap consultant, originally from Hong Kong

To brutally summarize a very wide-ranging and complex course, we learned how the barriers to personal achievement are obstacles we put in our own way--assumptions, past experiences, prejudices, fears--and to overcome them we need to put ourselves back in the position of a beginner, set the obstacles aside, outline a goal that is meaningful and powerful to ourselves, and commit to achieving it.

It sounds very Tony Robbins, but--believe me--it's much more grounded and substantial than that.

A quote where President Kennedy paraphrased the Irish writer Frank O'Connor touches on some of the points we learned this weekend:

O'Connor wrote how as a boy he and his friends would make their way across the countryside. When they came to an orchard wall that seemed too high and too doubtful to traverse, too difficult to permit their voyage to continue, they took off their hats and tossed them over the wall-and then they had no choice but to follow them.

What does this have to do with innovation, you might ask? Just about everything.

(Picture from vierdrie via stock.xchng)

innovation, education, achievement, personal mastery, resourcefulness

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Friday comix - Cartoon Network Guerrilla Marketing Stunt in Boston Goes Awry

Read more about it:

New York Times
Boston Globe
Washington Post

marketing, public relations, guerilla marketing, errors, Boston, Friday Comix

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New Toy, O-E-O (apologies to Thomas Dolby and Lene Lovich)

I've been playing with a neat technology for mobile blogging. It allows you to phone in your blog post--literally. Using speech-to-text recognition, it transcribes your voice into text, then posts it to a blog. A preproduction demo of the system is available here. It's based on the same technology that powers the SpinVox voicemail-to-text-message system.

To test it out, I Skyped "speakablogblog" and, after a prompt, spoke out loud the just-prior post on broadband (I discarded three takes as I learned the system, and posted the fourth). You could call a phone number as well--they're listed on the test blog page.

Five minutes after hanging up, my post was online. If you'd like to read it, here it is. You'll notice that it is not a perfect capture of the written post, but it's not bad--especially for a first go.

Here are some things I'll have to do to get the best use of the tool:

Shorten the posts--I had to cut about two-thirds of the information on the post to get it to fit in the 30-second time limit (which I'm sure is configurable). A two-minute limit would allow me to fit in any of my posts.

Simplify the language somewhat--the system had the most trouble with slang (brand instead of bang) and acronyms (it couldn't understand WiFi and WiMAX--but many don't!). It translated woefully as roughly, and misspelled oligopoly. Speaking a bit more slowly would help, I'm sure.

Also, the difficulty of indicating punctuation results in a more casual post than one composed at the keyboard.

But I see a lot of potential in this technology. The sheer simplicity of dialing a number (or selecting a contact), speaking your message, and having it appear on your blog is really cool.

It would be easy thereafter to edit the post online, or simply create an idiom expressly for the spoken posts.

I can't wait till I can use it for this blog.

mobile, blogging, technology, blogs, innovation

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US consumers need third broadband option

What do BPL, municipal WiFi and WiMax have in common? Besides being three more acronyms inscrutable to most of the population, they also represent US consumers' best hope to get more bang for their broadband dollar.

The US is woefully behind much of the rest of the world in broadband price-performance. (According to the OECD, New Zealand, for one, is worse.) The following table demonstrates the vast disparity in megabits/second delivered per dollar in different countries.

Country	Price Per Mbit (USD)	Source
Japan	$0.37	OECD, September 2005
Korea	$0.42	OECD, September 2005
Sweden	$0.87	OECD, September 2005
France US – cable US – fiber	$1.75 $7.15 $3.33	OECD, September 2005 Comcast web site, Jan 2007 Verizon web site, Jan 2007

Clearly, we in the US have a long way to go. And, let's face it, two broadband providers are not a competitive market--but an oligopoly. Now, with three vibrant competitors, maybe we have something. Four would be even better.

So, electric utilities, municipalities, advanced wireless spectrum license holders--let's get busy! Tens of millions are waiting.

innovation, broadband, internet, pricing

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P&G market research becoming insidious

It's not enough that Procter & Gamble is studying hotel chambermaids' work habits to learn how to sell more industrial-strength Spic 'n' Span--now, in order to market their heartburn medicine Prilosec OTC, they've cornered the game of Bunco.

A dice game played regularly by 21 million American women, according to the Wall Street Journal, bunco is an excuse to socialize, often a weekly affair complete with rich food, drinks... and heartburn.

The Journal, which broke the story (or was tipped off to it by P&G PR) credits an enterprising product manager, Clarissa Niese, with discovering the vital link between Prilosec and Bunco. She found a P&G employee whose wife played regularly, and got invited to a game. Said Ms. Niese: "I could immediately see the relevancy to heartburn."

Now Prilosec is the exclusive sponsor of the Bunco World Tour.

This is getting downright creepy. Is there no activity or pastime which cannot be tied to some consumer product? Not if P&G has anything to do with it. It's enough to give you a stomach ache.

marketing, market research, health care, Wall Street Journal

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The Pigou Club - count me in

Economist Greg Mankiw, former member of Pres. Bush's Council of Economic Advisors and now a professor at Harvard, has been patiently advocating for a simple increase in the gas tax as the best, most efficient means of increasing the US' energy self-sufficiency. (His consistently interesting blog is required reading if you're at all curious about economics.) He's dubbed the people who've signed onto this approach the Pigou Club, for reasons explained here.

My main objection to a tax rise has been that a pork-addicted Congress and an administration lacking in financial discipline would squander these newfound billions.

But alternatives (such as the Rube Goldbergian Bush administration proposal recently announced), full of side effects and unintended consequences as they will be, would be worse, in my view.

So, while gas prices are relatively low, let's start phasing in a new gas tax, to perhaps $1.00 or $1.50 a gallon, and commit the revenue raised toward deficit reduction.

My two cents.

(Picture from bubbels via stock.xchng)

environment, economics, taxation, government

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Orange or blue? The power of brands

Today I had to go to the store to buy a new toilet seat and a portable electric heater. I brought along Charlie, my almost-4-year-old.

As we neared the store, Charlie started saying, "Orange or blue. Orange or blue. Orange or blue." (Like a good marketer, Charlie knows the value of repetition.)

I told him, "We are going to Home Depot." (For non-US readers, the two predominant DIY stores in the US are Home Depot, the orange store, and Lowe's, which is blue.)

"Orange or blue?"

"Home Depot is the orange one."

"I like the blue one better."

And there, in a nutshell, is the power of great brands. Charlie knew that we were going to Home Depot or Lowe's. He can't read more than a few words, hasn't ever bought anything at these stores himself, and probably hasn't even seen a commercial for them. Yet he knows that Lowe's is the blue store and Home Depot is the orange store. More than that, the color is his shorthand for the entire store and the experience of shopping there.

When I asked him why he liked the blue store better, he said, "I don't know." But something about the decor, or the lighting, or the shopping carts, or the signage made a difference to him, and made him place the Lowe's brand at the top.

Brands are elemental.

retail, brands, marketing

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