Friday, May 20, 2016

The Budweiser Rebranding Campaign

By now you probably have heard that Budweiser plans to rebrand itself as "America" for the summer and fall.  The Wall Street Journal reports on the move, and it explains the rationale:

Budweiser has been making a concerted effort to shake up its image in recent years with bold marketing campaigns. The brand has been losing market share for more than 25 years as younger drinkers increasingly opt for pale ales and cocktails over the King of Beers. The company’s “Brewed the Hard Way” ad, launched during the 2015 Super Bowl, criticized craft brewers for making beer to be fussed over while Bud brewed beer “for drinking.”  This summer’s packaging builds on that by framing Budweiser as more American than competitors. “This is bold and new,“ said Ricardo Marques, vice president, Budweiser. He added that the brand needs “to surprise” consumers, especially during the key summer sales month.

Budweiser clearly is searching for ways to combat the loss in market share.   The brand has lost share both to light beers in the mainstream portion of the market, as well as the emergence of a strong craft beer segment in the industry. Bud Light displaced Budweiser as the top beer brand in the U.S. in 2001, and Coors Light overtook Budweiser for the second spot ten years later.   Meanwhile, craft brews accounted for more than 10% of the market for the first time in 2014.  

What are the risks of this rebranding campaign?  The Financial Times reported on a few potential downsides in an article this week.  Here's my take.  First, it might seem odd to actually take your brand's name off of the product.  Will people still recognize it on the shelf?  I don't think that is a problem at all. The Budweiser can is iconic.  People will easily spot it on the shelf.  Perhaps more seriously, one has to wonder whether some customers will complain since Budweiser is no longer owned by an American company.  AB Inbev is the parent company, and it's based in Belgium.  Finally, how might the rebranding play out on social media?   Could the campaign shift in unexpected directions, particularly as an incredibly unpredictable and perhaps tumultous US election campaign unfolds?  The rebranding is a bold effort to jumpstart a slumping brand, but it does have some potential risks. Executives might feel that they have no choice.  Miller's core brand was once Miller High Life.   Look what happened to that once iconic brand.  

For more on this issue, check out my Facebook Live chat with The Great Courses.  

Tuesday, May 17, 2016

Advice for College Graduates As Commencement Approaches

For the past several years, I have re-run this old post with some advice for new college graduates.  I hope my students at Bryant University, and seniors at other institutions, will read and ponder these thoughts. Congratulations to the Class of 2016!  May you achieve great personal and professional success.  

A few words to those graduating from college this year...

As you leave this place, you will become builders. You will build a career, a home, and hopefully a family. For many of you, life will take on a certain rhythm eventually. Routines and rituals will mark your days. You will experience a measure of comfort with the familiar – familiar people, places, and activities. As you grow older, the unfamiliar will jar you, unsettle you, at times. You will want to retreat to that which is comfortable and familiar.

My advice to you today: Do not become wedded to the old and familiar in your lives. Cherish the past, but always look ahead. Seek out novel experiences. Keep breaking new ground, even as the hairs become gray. When in his 80s, Michelangelo, the great Renaissance painter and sculptor, once said, “Ancora imparo.” – I am still learning. I hope that you will live to such a ripe old age, and that you will utter those same words. Researchers have shown that novelty stimulates the brain. So, I tell you know: Exercise your minds throughout your lives. Memories do not nourish the brain. New challenges do. They say that you cannot teach an old dog new tricks. Do not listen to such rubbish. I’m confident that you have the ability to transform yourselves, to make yourselves new, time and again throughout your lives.

As you experience the new and unfamiliar, you will feel discomfort, even fear, at times. Do not let that apprehension get the best of you. Dr. Peter Carruthers of Los Alamos National Laboratory once said, “There’s a special tension to people who are constantly in the position of making new knowledge. You’re always out of equilibrium. When I was young, I was deeply troubled by this. Finally, I realized that if I understood too clearly what I was doing, where I was going, then I probably wasn’t working on anything very interesting.”

As you learn and grow as individuals, do not keep your new knowledge and skills to yourself. Share your knowledge and insight with others. Do more than that; serve as an exemplar to others. Mentor young colleagues, teach your children well – through actions as well as words. Your impact on the next generation will become your enduring legacy.

Singer and songwriter Ben Folds once wrote to his daughter Gracie, “One day you’re gonna wanna go. I hope we taught you everything you need to know.” I love that song, but I know that we have not taught you everything you need to know. I sincerely hope, though, that we have cultivated your intellectual curiosity and nourished your love of learning. May that spark of youthful curiosity remain with you all the days of your lives.

Monday, May 16, 2016

Leader Self-Awareness: Do You Understand Signals You Are Sending?

I continue to be amazed by the extent to which many leaders fail to recognize the signals that they are sending through their actions.   Consider the following situation.   A leader gives a variety of speeches and presentations in which he says XYZ is the highest priority for his or her organization. That particular leader then spends a disproportionate amount of time and energy focused on another objective/activity of the organization.   He or she recognizes accomplishments with regard to the letter, while offering few moments of celebration or recognition for those who are achieving progress now what was allegedly the highest priority of the firm.  

Employees pay attention to how you spend your time, what you celebrate or recognize, what you are passionate about, and even the order in which you address topics during speeches or presentations.  You can't say one thing and do another without someone noticing.  In fact, a lot of people will notice. As the disconnect becomes apparent, you lose credibility as a leader.  In many cases, leaders simply do not have the self-awareness to understand the extent of this disconnect.  The signals they are sending are indeed rather subtle.  Nonetheless, people notice.  You have to understand the symbolic nature of your actions.  You have to put yourself in the shoes of your workforce and understand how they might interpret your actions.   

Friday, May 13, 2016

Why Do We Stick with Poor Hiring Practices?

Iris Bohnet wrote in Harvard Business Review last month about the hiring process. She asked the question: Why do employers continue to use unstructured interviews as their primary method of evaluating candidates when this technique has many known flaws?   She points to many studies showing that unstructured interviews are not effective predictors of on-the-job effectiveness.  Biases plague the unstructured interview methodology.  Bohnet writes:  

Why do we stick with a method that so clearly does not work, when decision aids, including tests, structured interviews, and a combination of mechanical predictors, substantially reduce error in predicting employee performance? The organizational psychologist Scott Highhouse called this resistance “the greatest failure of I-O [industrial and organizational] psychology.”

The unwillingness to give up a much-loved evaluation approach seems to be driven by two factors: Managers are overconfident about their own expertise and experience, and they dislike deferring to more structured approaches that might outsource human judgment to a machine.

Bohnet argues for much more emphasis on procedures such as work-sample tests, structured interviews, and comparative evaluation.  These procedures help overcome many of the biases inherent in the unstructured interview process.    

Jimmy Kimmel on Uber's New Late Fee

Thursday, May 12, 2016

Lands' End: Another J.C. Penney Scenario?

Columbia Business School Professor Rita McGrath asks an interesting question on her blog this week. She ponders whether the situation unfolding at Lands' End may be eerily similar to the fiasco that took place at J.C. Penney when Ron Johnson was hired as CEO. She's commenting about a Wall Street Journal feature story about the culture clash taking place at Lands' End as new CEO Federica Marchionni attempts to revitalize the apparel retailer. The former Ferrari and Dolce & Gabbana executive has taken over as CEO of the Wisconsin-based retailer, and she's trying to make the brand more fashionable. She tells the Wall Street Journal that her goal "is to evolve Lands’ End into a meaningful, global lifestyle brand.”  The key question:  Can she reignite growth at the firm without alienating traditional customers as well as her long-tenured employees?  

Why has a culture clash emerged? For starters, Marchionni has decided not to work primarily from the corporate headquarters. The Wall Street Journal reports:

As part of her contract, the Lands’ End board agreed to let Ms. Marchionni work primarily from an office in New York’s garment district—an arrangement that rubbed some in Dodgeville the wrong way, according to former employees. Her employment agreement says she must be in Wisconsin for holiday parties and other social events that the Lands’ End CEO “historically has attended.”  Joining her in Manhattan is a small group of fashion veterans including Joseph Boitano, a former Saks executive who serves as the company’s chief merchandising and design officer.

Marchionni has also been critical of some of her own company's clothes, describing certain traditional Lands' End items as "ugly" in one presentation.   There are other changes that have made some waves:  

The CEO ordered up a slate of new ads to run in the September issue of Vogue and other fashion titles. She commissioned celebrity photographer Bruce Weber to shoot a major holiday campaign. The full-page newspaper and magazine inserts showed patrician-looking models in coastal settings. Spiked red heels now featured alongside comfy slip-on moccasins.

Professor McGrath acknowledges that Lands' End faces substantial challenges and needs to change.  She wonders, however, whether Marchionni can lead in a way that brings her people along.  Can she create an inclusive vision for the key employees?   Or, will culture eat her bold new strategy for lunch?  I don't know the answer to these questions, but I cannot imagine how leading a company from 1,000 miles away makes much sense.  It creates problems at two levels.  First, symbolically, it sends a message to employees that you don't want to engage with them, be available to them, etc.  Second, substantively, it isolates you from the rank-and-file, making it more difficult for critical information (including bad news) to reach you in a timely manner.  

Wednesday, May 11, 2016

20 Years Later: The Mount Everest Tragedy

Source: National Geographic
This week marks the 20th anniversary of the tragedy that took the lives of Rob Hall,  Scott Fisher, and other members of their expeditions. Many of you may have read Jon Krakaeur's book, Into Thin Air, which chronicled the events of May 1996 in detail.  Others may have watched the Everest movie that came out last year.  Still others have seen the tremendous documentaries produced by David Breashears about the events of May 1996.  

As most of my blog readers know, I've conducted extensive research on the decision-making processes of Everest climbers.    As part of that research, I've spent a considerable amount of time learning about the events of May 1996, including through multiple conversations with the leaders of the IMAX expedition team, Ed Viesturs and David Breashears.   Ed and David turned around, while the Hall and Fisher teams continued up the mountain.   Later Viesturs and Breashears helped rescue the survivors of the tragedy that took place when a blizzard occurred.  

What are some lasting leadership lessons from that tragedy?  

1.  Great leaders exercise restraint.   As David Breashears has told me, the best leaders don't simply order you up the mountain no matter what.   They listen to others' ideas before expressing their views.  They must be willing to gather input from a variety of people.  Unfortunately, he says, some leaders are not willing to listen to dissenting views.   The best leaders create a climate of psychological safety, where everyone is willing to speak up.   After gathering input and advice from multiple sources, the leader can make a more informed and thoughtful decision.  

2.  Great leaders don't attribute all their past success to their own qualities and choices.  Instead, they acknowledge that past success hinged upon favorable environmental conditions, a strong team to support and assist them, an effective support network back at base camp and at home, and a significant dose of good fortune.   When leaders begin believing that past success is all about their own excellence, and fail to recognize other contributing causes, they get in big trouble.  

3.  Great leaders recognize how cognitive biases can impair decision making, particularly in stressful situations.  They don't escalate commitment to failing courses of action in the presence of substantial sunk costs.   In other words, climbers don't simply keep climbing because they have put so much into the expedition (money, effort, time, and other resources that they cannot get back).   You can't look back; you must look ahead.  Don't keep moving forward simply because  you don't want to waste the investment you have already made.  Don't throw good money, or good effort, after bad!  Other biases include confirmation bias (looking for data that confirms what you already believe) and compensatory behavior (taking more risk because you know a safety mechanism or system redundancy is in place; in Everest's case, carrying supplemental oxygen can create a false sense of security according to Ed Viesturs).  

4.  Great leaders don't build rigid plans.  As Dwight Eisenhower once said, "Planning is everything.  Plans are useless."   In other words, be incredibly prepared.  Be ready for all scenarios.  Prepare meticulously.  However, once the execution of your plan begins, be ready to adjust and adapt to conditions on the ground.  Don't build a rigid plan in a turbulent environment.  Retain flexibility.  Don't just try to work harder to "get back on plan" when things start unfolding in ways you did not predict.  In fact, great planning is not about predicting the future.  It's about preparing for multiple scenarios that might unfold in the future.  

5.  Great leaders build a team around a shared vision, not simply a common goal.  What do I mean by that?  The Hall and Fisher expedition team members certainly all had a common goal: to reach the summit (we might argue that the more appropriate goal is to return safely to base camp).  The problem, though, is that each person was focused on their own personal attainment of that goal.  They didn't strive necessarily to achieve the summit as a team.  Contrast that with the shared vision of the IMAX team there in May 1996.  They strove to put a fifty pound camera on top of the mountain.  They wanted to create a great documentary.  It was not about individual accomplishment; it was truly a shared vision to create something extraordinary.   

For more of my work on the 1996 Everest tragedy, see the HBS case study that I wrote, as well as the California Management Review article that I published.  In recent years, I also co-created (with Amy Edmondson) the Everest Leadership and Team Simulation, available from Harvard Business Publishing.