Thursday, February 28, 2013

Email and Your Personal Brand

Fast Company's Jonathan Rick has written a terrific column titled "What Your Email Says About Your Brand."  Here's Rick's main argument:

It’s something you take for granted, something seemingly trivial, even mundane. When executed thoughtfully, however, it makes a splash. It says, “This guy is sharp--I want to work with him!”  What is this opportunity, obvious but overlooked? It’s the bookends of your emails: your address and signature block--often, the first and last thing your recipients will see. For better or worse, your email bookends are powerful purveyors of your brand. What are yours conveying about you?

Rick goes on to offer some solid advice about what to do, and what not to do, when it comes to email.  Along the way, he offers several great examples for us to emulate... or not.  Among his nuggets of advice, he cautions against email addresses that will make it difficult for others to take you seriously.  A funny nickname may sound great with your pals, but it will make you sound highly unprofessional if you are trying to land a job or win over a client for your small business.   

Brad Pitt's Chanel Ad

You never want your high-priced advertising campaigns to end up parodied in this manner on Saturday Night Live!  Knowledge at Wharton has a good article about how these types of marketing campaigns can backfire for companies. 

Wednesday, February 27, 2013

Career Advice from Chris Stevens of Keurig

Source: Notre Dame
Last week Chris Stevens, one of the Keurig co-founders, gave a speech at the Bryant University Collegiate Entrepreneurs Organization conference.   He offered a tremendous mix of practical advice and emotion-packed inspiration.   Chris has a fascinating background.  He played basketball at Notre Dame, worked at Proctor & Gamble and Anheuser Busch before joining with several others to make Keurig a resounding success.  He currently serves as an adjunct faculty member at Notre Dame's Mendoza College of Business.  He also still serves as VP of Corporate Relations at Keurig.  Beyond his business accomplishments, Chris has done tremendous philanthropic work over the years.   He's also faced more than his share of personal adversity, including the death of his wife and two brothers in 2004. 

Chris offered some terrific practical advice for students searching for jobs.  He recommended that each student build a portfolio that they could take on job interviews.  That portfolio should include examples of the type of work that the student has done.  What projects have they completed at school or during an internship?  What presentations have they made?   Beyond simply putting the portfolio together, he recommended customizing it for the particular company at which a student was interviewing.  He told students to put the company name and logo on the front of the portfolio, and even the name of the executive with whom he or she would be interviewing.  Then they should offer to leave the portfolio with the interviewer.   It makes great sense.   Students (and all job applicants) need to be prepared to SHOW people what they have done, not just tell them about it. 

Monday, February 25, 2013

Marissa Mayer and the End of Telecommuting at Yahoo

The Wall Street Journal "At Work" blog has a terrific post about Marissa Mayer's memo to all Yahoo employees essentially ending telecommuting at the firm.   Some people reacted very negatively to her announcement.  How could she ban working from home given the proliferation of technologies that enable virtual collaboration?  What type of message did this move send to working parents trying very hard to juggle professional and personal commitments responsibly?  Would this announcement scare away some terrific talented people? 

The blog post points out, however, that there are significant downsides to extensive telecommuting at a firm.   The bottom line:  Face-to-face interaction does promote more effective collaboration and information sharing in many instances.   People do lose the ability to read nonverbal gestures if they are not physically present at meetings.   Moreover, many ideas get shared when people bump into one another in the hallways or at the cafeteria.   As Saul Kaplan of the Business Innovation Factory argues, innovation occurs through the "random collision of unusual suspects" in many cases.  We can't design or plan those interactions.  However, the right type of working environment at a firm can promote that type of interaction.   If many people work from home, they don't have those opportunities to engage with others in unplanned ways.  

The challenge, though, is that many people may interpret Mayer's move as a belief that telecommuters are simply not working hard enough outside the office. That interpretation may cause a drop in morale at the firm.  In addition, some very talented people may simply not be willing to engage in a lengthy commute each day.   Finally, not all jobs are alike.  While some tasks require intense collaboration and may benefit from having people in the office together, other jobs may not require frequent interaction with colleagues.   Does a blanket policy make sense when work comes in many different forms, and jobs differ significantly in terms of interdependence?  

Friday, February 22, 2013

Mattel, Moms, and Hot Wheels Cars

Mattel has chosen to tackle a very interesting problem with regard to its Hot Wheels line of toy cars, according to Business Week.  Sales have been sluggish in recent years.  The company believes that the lack of sales growth may be due to a "moms" problem.  Specifically, Mattel believes that moms don't really appreciate why young boys like to play with cars, nor do they understand how boys play with them.  According to Mattel Vice President Matt Peterson, "She doesn’t get why cars, engines, and all the shapes and crashing and smashing are so cool."  On the other hand, Peterson argues that mothers do understand how to play with a Buzz Lightyear toy, because the type of play is somewhat similar to how they might have interacted with dolls as a young girl. 

The company chose to gather together a group of bloggers - specifically moms who wrote influential blogs read by fellow women with small children.   Peterson conducted a lengthy discussion with the moms, to examine why they chose not to purchase cars for their sons... as well as to talk about why boys do like to play with cars. 

I have two reactions to this story.  First, I'm not sure if Peterson's hypothesis is correct.  Is his diagnosis of the sluggish sales of Hot Wheels correct?  Does he really have a "moms" problem?   Presumably, he has more data than provided in the article.  Hopefully, he has explored alternative hypotheses as well.  Second, a focus group might be helpful here, but Mattel will have to go well beyond a discussion such as this one to understand how to recharge sales for this product line. 

I would argue that they should consider two types of additional research.  Mattel needs to find some other categories of toy, analogous to cars, that have achieved strong success with moms.  Is there another category that might, at first, have been hard to understand for the typical mother, but in fact did achieve strong sales.  Why did that product take off?  What made moms purchase that product?  Furthermore, Mattel needs to engage in some anthropological research.  My wife plays cars a lot with my five-year old son.  Mattel needs to understand how some moms do play cars with their sons.  Does their play pattern differ from the way dads play cars with their kids?   How might understanding that play pattern help drive more sales to mothers?   Watching kids and moms at play will be helpful in answering these questions. 

Thursday, February 21, 2013

Should You Examine All Your Options At Once?

Stanford Professor Baba Shiv and Columbia Professor Sheena Iyengar have conducted some interesting new research about consumer decision-making processes.  They created a series of experiments to examine whether consumers were more satisfied when they examined all their options at the same time, versus looking at the options sequentially.

Their experiments involved the purchase of products including wine, chocolate, and nail polish.   The research findings showed that, "Sequential choosers were less satisfied with their chocolates than were participants in the simultaneous group. And, when offered the opportunity to switch to a different chocolate — a randomly selected one, they were told — more of the sequential choosers opted to do so, even though they knew virtually nothing about it."

What explains the higher satisfaction on the part of those examining all their options at once? The researchers argue that hope and regret play a significant role.  People in the sequential situation worry about possible future options (subsequent and unknown) that they may forgo by making a choice now.   People don't seem to have that worry when they examine a wide array of alternatives simultaneously. 

Tuesday, February 19, 2013

OfficeMax and Office Depot Merger

The Wall Street Journal reports that OfficeMax and Office Depot are in advanced discussions regarding a potential merger.   The article, by Anupreeta Das, Ryan Dezember, and Ann Zimmerman cites many of the benefits of the deal.  For instance, the authors note that experts estimate roughly $500 million in synergies may emerge from the deal.  The article also cites Staples founder Tom Stemberg, who says, ""This should have happened a long time ago.  It's healthy for the industry. It takes out excess capacity.''  (note: I worked at Staples in the mid-1990s, when Stemberg served as CEO). 

I would agree that the merger will yield some significant cost synergies, provided merger integration is  managed well (a major caveat).  Moreover, the industry does have excess brick-and-mortar capacity.   Online players such as Amazon have taken a significant bite out of the traditional office supply industry in recent years.  The companies have closed some stores in response to the shift toward e-commerce, but more rationalization of the store base needs to occur.   The article points out that many experts think the three major office supply retailers have not downsized their brick-and-mortar footprints fast enough. 

I do have some concerns though.   I would ask the following question: Why will a merger drive out more excess store capacity than otherwise should have been eliminated by the companies individually?   The answer: Perhaps the merger's promises of cost synergies will create the public accountability that will drive necessary rationalization.   In other words, maybe you need the merger to push management to do what they otherwise have been slow to do. 

I also have a second question to pose:  How about the issue of taking on the e-commerce challengers?  Does the merger make these companies more formidable competitors relative to the Amazons of the world?  Perhaps, but I'm not so sure.  Again, the question for management is clear:  Why will a merged entity do the things to be successful against online competitors that the two firms have not otherwise been able to do to this point?  

Finally, I would offer one other concern.   In many industries, mergers that drive out excess capacity can help prop up prices.  When excess capacity exists, price wars often occur as firms try to fill that capacity and cover fixed costs.  However, in this industry, removing excess capacity may not yield major price gains.  Why?  The competitors setting the price level are not the brick-and-mortar players;  Amazon and other e-commerce players are pushing down prices.  That pressure won't change due to this merger.

Friday, February 15, 2013

Carnival Cruise Ship: Public Relations Mess

We have all watched the amazing story unfold on that Carnival cruise ship over the past few days.  Overflowing toilets, irate customers, and an explosion of criticism via social media... Carnival executives have their hands full with this incident.  Many people have been offering suggestions regarding the near term public relations strategy that Carnival should employ.   I would like to offer one point that is a bit more long term in nature.  Carnival has to conduct a highly transparent after-action review.  I would recommend bringing in reputable outside experts to help conduct a review of safety and operational procedures.  Moreover, Carnival needs a clear communication plan associated with that after-action review process.  How will the various stakeholders be kept informed of the process and the findings?   How will potential customers learn about the corrective actions that result from this lessons learned exercise?   Having a transparent and legitimate/credible after-action review process will go a long way toward rebuilding the company's reputation.   Yes, they can do some things in the short term to manage the public relations crisis.  However, salvaging the brand in the long run requires a clear demonstration that the firm has done everything possible to insure that this type of incident does not happen again. 

Thursday, February 14, 2013

Maker's Mark: Is Diluting the Boubon a Good Idea?

I have to admit that I was very surprised when I heard this week's news about Maker's Mark bourbon.  The company announced that they cannot keep up with customer demand, and therefore, they are cutting the proof from 90 to 84 to boost availability.   As Roger Dooley points out in his column at Forbes, the move risks damage to the brand.  Even worse, Dooley cites a statement by the company's chairman emeritus, Bill Samuels, Jr (son of the company founder).    Here is an excerpt from a news report by the Louisville Courier-Journal:

In an interview Monday, Chairman Emeritus Bill Samuels Jr. said he failed to foresee a worldwide surge in demand for premium bourbon when he was still in charge of the brand about six years ago. As a result, Maker’s Mark is being diluted to 42 percent alcohol by volume, from 45 percent, so more of the whiskey can be bottled to meet demand. That’s a cut from 90 proof to 84 proof.“I was the forecaster in chief around here. ... I must have been asleep at the wheel,” Samuels said.  Samuels and his son, Maker’s Mark Chief Operating Officer Rob Samuels, insist consumers won’t notice the change when the slightly weaker bourbon hits shelves in the next few weeks. Even Maker’s Mark’s professional taste testers couldn’t tell the difference, Rob Samuels said.

Wow... as Dooley rightfully points out, why makes things worse by claiming that your loyal customers won't know the difference!   Perhaps it is true, but should you really say that?   The bigger question is whether Maker's Mark has put short term revenue and market share goals ahead of what is good for the brand in the long run.  Does this move really fit with a company whose historic slogan was:  "It tastes expensive... and is." 

How does a firm handle scarcity?    Should it try to capitalize on the excitement and frenzy that scarcity can create, or should it move to rapidly expand supply?   One other interesting note:  Beam Spirits now owns Maker's Mark.  Would the company have made the same move if it was privately held?  Does being part of a publicly traded company put too much pressure on management to make up for this supply shortage? 

Tuesday, February 12, 2013

Abraham Lincoln: Leadership Lessons

Today we celebrate President Abraham Lincoln's birthday.    In honor of the great 19th century leader, I thought that I would take a look at one important leadership lesson pertaining to him.    Doris Kearns Goodwin spoke to Harvard Business Review several years ago about her research on Lincoln.  She talked specifically about how he made the decision regarding the Emancipation Proclamation:

For example, for months Lincoln let his cabinet debate about if and when slavery should be abolished. Finally, though, he made up his mind to issue his historic Emancipation Proclamation to free the slaves. He brought the cabinet together and told them he no longer needed their thoughts on the main issue—but that he would listen to their suggestions about how best to implement his decision and its timing. So even though some members still did not support Lincoln’s decision, they felt they’d been heard. And they had been. When one cabinet member suggested that Lincoln wait for a victory on the field to issue the proclamation, Lincoln took his advice.

I take two key lessons away from this example.  First, Lincoln appears to have led a decision-making process that most advisers felt was fair, i.e. he not only gave them voice, but made them feel that their views had been considered genuinely and thoughtfully.   Second, Lincoln still gave them room to have input after he had made the final decision.  However, he didn't give them an opportunity to undo the decision or revisit the choice.  Instead, he brought them back into a dialogue about how to best implement his decision.  It turns out that they had a good suggestion regarding the relationship between his political move and a battlefield victory in the late stages of the Civil War.   Many leaders could use the time of announcing a decision to pivot the conversation with their team, away from WHETHER to do something to the issue of HOW to do it.  In that way, you can give them voice once again, and you can make others truly own the implementation process.  

Monday, February 11, 2013

How Things Go Viral

Over the past few years, I've become a fan of Wharton Professor Jonah Berger's research.   He now has a book out titled, Contagious:  Why Things Catch On.   Fast Company has profiled his book, and they offer a summary of the basic steps he has outlined for making something go viral.  Berger refers to it as the STEPPS method: 
  • Social Currency: We share things that make us look good (even if that means pictures of our cat).
  • Triggers: Easily memorable information means it's top of mind and tip of the tongue.
  • Emotion: When we care, we share.
  • Public: Built to show, built to grow.
  • Practical Value: News people can use.
  • Stories: People are inherent storytellers, and all great brands also learn to tell stories. Information travels under the guise of idle chatter.
I'm really looking forward to reading the book.  I'll put together another blog post once I'm done with the book.

Friday, February 08, 2013

Collegiate Athletic Success as Advertising: Is it Effective?

Harvard Business School Professor Doug Chung has written a new working paper titled, "The Dynamic Advertising Effect of Collegiate Athletics."  He explores the impact that athletic success impacts the quantity and quality of a university's applicant pool.  Here's an excerpt from the abstract to his paper:

I estimate the impact of athletic success on applicant quality and quantity. Overall, athletic success has a significant long-term goodwill effect on future applications and quality. However, students with lower than average SAT scores tend to have a stronger preference for athletic success, while students with higher SAT scores have a greater preference for academic quality. Furthermore, the decay rate of athletics goodwill is significant only for students with lower SAT scores, suggesting that the goodwill created by intercollegiate athletics resides more extensively with low-ability students than with their high-ability counterparts. But, surprisingly, athletic success impacts applications even among academically stronger students.

The findings surely will provoke some interesting debate.   Note that Chung finds that going from good to truly great in NCAA football, for instance, can cause applications to rise by nearly 20%.   It takes a significant move in other areas of a university to achieve a similar impact.  For instance, Chung estimates that a college would have to reduce tuition by nearly 4% to get the same rise in applications, or it would have to recruit higher-paid, higher-quality faculty.  What's interesting about this analysis is that some will say that the cost of athletic success outweighs the positive effect on applications.   That's potentially true.  However, Chung shows that there is a cost to other ways of driving applications higher as well... so it's not immediately clear what methods are most cost effective to increase application quantity and quality.  Of course, we have to remember that athletic success can be very difficult to achieve, and it can be fleeting at times.  Schools may spend a great deal of money and never get to the "great" level required to get this type of increase in applications. 

Thursday, February 07, 2013

Planet Fitness: Making Money in a Tough Industry

I ran across this excellent article by Judith Ohikuare in Inc. magazine.  The article is titled, "The Secret to Planet Fitness's Success."  Here's a quote from the company's CEO in the article:

It's very, very difficult to make money in the fitness industry. In order to thrive, you really have to have a niche and sell it. You've either got to be at the high end or at the low end; otherwise, you're not in at all. We're at the very low end: Members have access to a great club for 10 bucks a month, and I don't see that changing. We keep it as simple as possible, so that there are as few areas to disappoint as possible. When we started out, we included perks that everyone else had, such as day care and yoga classes, but none of that made sense for us.

Having read that quote, now check out the commercial below, a creative follow-up to the famous "I lift things up and put them down" ad which I featured on the blog awhile back. (Thank you to student Meredith Soper for pointing me to this commercial).   What you see is a company that is clearly trying to identify its niche... and clearly specifying what it is not (and who it does not seek to target).  In a very tough industry, leaders must pay particular attention to the clarity of their target market and the boundaries of their strategy.  Making clear choices becomes all the more important when you have fewer potential profits because of an unattractive industry structure (such as in the fitness center industry).  

Wednesday, February 06, 2013

Business Plans: useful or not?

Over the past few years, we have heard a great deal of conversation about the inadequacy of traditional business plans.   The lean start-up movement has argued that we should focus on developing a basic business model, testing out our ideas, and then refining them through a process of enlightened trial and error.  We should not over-emphasize a lengthy, drawn-out planning process.   The lean start-up movement emphasizes the notion rapid prototyping.   This approach has many merits.

On the other hand, I think we can go too far in diminishing the importance of a business plan.   Dwight Eisenhower once said, "Plans are useless, but planning is indispensable."  In other words, the process of thinking through an issue and developing a strategy can be very useful. 

The mistake that many people make though is becoming too wedded to that original business plan.   A process of research and analysis can be productive, but it must lead quickly to a rapid prototyping phase.  We have to take action, and learn from that action.  However, we can't just leap without any spade work. 

For the Wall Street Journal, London Business School Professor John Mullins has written a great column exposing some of the many problems with traditional business plans.  For those interested in learning more about this topic, I strongly suggest reading his essay. 

Tuesday, February 05, 2013

Oreo: The Power of a Nimble Social Media Strategy

By  now, many of you have heard of Oreo's social media grand slam during the Super Bowl.  While all of us sat through that lengthy delay due to the power outage, Oreo's social media team unleashed the tweet heard round the world.   The tweet read:  "Power out, No problem."   The tweet included the photo shown here.
15,000 people retweeted that simple message.   More than 20,000 people "liked" it on Facebook.   Oreo's Instagram followers mushroomed from 2,000 to 36,000.   

Forbes reports on the most interesting part of the story - namely, how they managed to engineer such a rapid and highly creative response.  Apparently, Oreo's brand team had set up a "command center" at advertising agency 360i’s offices in New York City.    All of Oreo's advertising agency partners set up shop together at those offices, with Lisa Mann, an executive from Oreo's parent company on the  phone.   Mann explained how they moved so quickly:  “Because everyone was together, they had everyone in place to jump on a real-time marketing opportunity, which was, how would Oreo see the blackout? And Oreo saw the blackout as an opportunity to dunk in the dark.”

What a terrific story!   I love the fact that preparation yielded such a great result.  They knew that the Super Bowl represented a unique opportunity.  While so much attention is focused on the television ads, social media represents a huge opportunity at low cost.  With the blackout, everyone took to Twitter.  The volume of tweets exploded.  That posed a challenge for many firms though. How do you stand out when the Twitter world suddenly became so crowded.   Being prepared and ready to move so quickly turned out to be a tremendous advantage.   

Notice that Oreo did not try to be controversial or outlandish.  They stayed true to the brand.  So many social media and television advertising efforts associated with the Super Bowl yield poor results, because they emphasize being funny or controversial at the expense of communicating an authentic and consistent message about the brand.  Think about some of the ads you saw this weekend.   How many times did you think to yourself:  While that ad was funny, I'm not sure I know what it has to do with that product or brand.  

Friday, February 01, 2013

Peripheral Knowledge & Breakthrough Innovation

My former graduate school classmate, Martine Haas (now a professor at Wharton), has written a new paper exploring how peripheral knowledge might impact breakthrough innovation.  Haas describes peripheral knowledge as information and ideas that may not seem pertinent to a particular task, that are outside of that technical domain.   Haas argues that that peripheral knowledge drives innovation through two mechanisms:  transplantation and perspective shifting. Haas defines transplantation as "the direct transfer of artifacts, technologies or practices from peripheral domains into core domains, with or without some modification."    Perspective shifting means that " expertise or experience in a peripheral domain leads work group members to see a problem in a core domain differently, thus revealing new solutions." 

Haas and her co-author, Wendy Ham, go on to argue that having more one person exploring a peripheral knowledge domain can be helpful, but of course, that takes scarce attention away from the specific task at hand.  In short, it's a balancing act:  How much time should we spend focusing narrowly on the task at hand versus moving outside of that area to explore potentially, but perhaps not very useful, topics? 

One last challenge:  Which peripheral domain will be most useful?  Well that's a tough one.  It's difficult to know in advance.  However, I do think groups can be purposeful about peripheral knowledge accumulation.  At leading design firms, they think carefully about related domains that are worthy of exploration.  They examine industries or products that might be in some way analogous to their current project, and then they explore those areas.   Stepping back at the start of a project to think about potentially useful peripheral knowledge could be a key step in an innovation team's work.