Is your Social Media Director qualified?

Social Media Directors should know how to do their jobs without having to ask for help every five minutes:

So I look down and the (twitter) DM reads: “Hey, can you help me out? Not sure how to do this. How do I use Twitter to gain traction for my company? Thanks!” I stare at it for a while and decide to blow it off for now, not because I have better things to do (which I do) and not because I don’t really have time to build a Twitter business plan for this person right this second (which I don’t), but because that DM comes from a newly minted Social Media Director at a fairly visible company who basically just asked me to help them hold on to a job they obviously didn’t deserve to be hired for.

I slide my Blackberry Storm into my back pocket and find myself flashbacking to 11th grade: It’s final exams time and I am in hour two of IB Biology. The essay section. One of the kids in my class is behind me, gently kicking my chair, whispering, begging me to move my scrap/notes where they can read them.

And I am almost tempted to do it.

That same conversation starts taking place in my head. I’m in a position to help someone in need.  But wait… cheating is cheating. Don’t do it. But still, I feel that I should help. Arrrgh…

I reach for the blackberry, launch Twitterberry (which is not my favorite app, by the way), and respond: “Wait… You got the job, right? Don’t you know how to do this? Isn’t that why you were hired?”

For hours, no response. And then it comes. “Yeah, but I’m in a little over my head. I’ve never worked with Social Media in a business context before. ;)”

Again. This from a Director-level individual now working for a pretty well known company.

Not cool.

I suffer through similar exchanges weekly now, and I am not happy about it. What does this trend say about what types of people are going after Social Media management jobs – and landing them with alarming frequency these days? At the very least, I am worried about how this is going to end up hurting Social Media’s legitimacy in the business world. (Watch the video for my reasoning on this specific point.)

If the video doesn’t launch, you can go watch it here. Thanks, Viddler).

With this disturbing development weighing on me more and more these past few months, I’ve been thinking long and hard about what is going on in the Social Media “management” world, and I’ve basically come down to two conclusions: The first (which we’ll get back to in a few minutes) is that the qualifications of Social Media Directors may not be entirely clear to the folks interviewing and hiring applicants for those positions. The second is that as a result of this, confusion, we are now looking at three distinct types of Social Media Directors/Managers scampering about in the corporate world, some good, some okay, and some really bad.

The first type is the best type: These folks are super smart, talented, experienced in a broad range of disciplines, have an established footprint in the Social Media space (through blogs, Twitter, Ning, various communities), are recognized as thought leaders (or as emerging thought leaders), and are unquestionably passionate about what they do. Folks like Chris Brogan, Frank Eliason, Amber Naslund, Mack Collier, Beth Harte, Valeria Maltoni, etc. These are folks who are truly writing the book on how to build social media practices and smoothly integrate them in the organizations they work with.

The second type isn’t quite as savvy, but it isn’t lacking in talent, smarts and enthusiasm. These are people who basically don’t know how to be Social Media directors yet, but are learning fast. And most importantly, they are completely open about the fact that they are still in that learning stage, which means that their employers are okay with it. In spite of the fact that they are still very junior, the companies they work for saw in them a lot of potential and decided to hire them toward that end. (I dig people like this a lot.)

The third type is what I would call the bad type. Not bad as in cool, but rather… bad as in unethical, inept and unprofessional. These are the con artists. The shams. The hacks. The folks whose egos and selfishness led them to a moment in their lives when they unapologetically took a job they knew they weren’t qualified for. And now here they are: Social Media Director for Company ABC, soon to move over to Company XYZ, and so on. One position validating the next, one impressive brand on their resume justifying consideration by the next, and so it goes: A perpetual daisy chain of high profile Social Media management job built on unadulterated douchebaggery and thinly-disguised mediocrity.

(Ironically, this third group tends to be the same one that perpetuates the notion that Social Media ROI either doesn’t exist or is “unwise” to try and measure. Yeah. Convenient, isn’t it?)

Before we go on, here are some red flags to help you identify deadbeat Social Media Directors:

Every time you see a major global consumer brand engaging with less than 5% of its active (vocal) customers on a popular Social Media platform like Twitter after 8-10 months of activity, you can bet that their Social Media Director belongs to that third category.

If every time you walk into your monthly status meeting with your new Social Media Director and ask them for the latest, they either talk to you about google analytics, confuse you with endless spreadsheets or launch into a “Social Media takes time” monologue, chances are that they belong to that third category.

If you ask your Social Media Director why their efforts aren’t scaling very fast or producing the numbers you expected and they give you a story about engagement not being a numbers game, chances are that they belong in that third category.*

If when you ask them for real business metrics, impact analysis and (god forbid) ROI and they either give you a blank stare or explain that these things don’t apply to Social Media, they probably belong to that third category.

And when you ask them how they plan to integrate Social Media into customer service, Human Resources, Public Relations, Marketing, Business Development or any other silo in your organization and they schedule a later meeting to address that instead of answering on the spot, guess what category they probably belong to.

The thing about that third category is that they’ll never admit that they don’t know something. Because they get by every day by producing massive amounts of bulls**t, they will automatically default to making something up on the spot or deflecting questions with well crafted excuses. That’s their most damning trait, and what gives them away every time: They always know, and they’re never wrong (except… they don’t, and they are, and now you’re wise to it).

* Simple test to prove or disprove a “depth before breadth” response:

First – On Twitter, look  at the number of brand mentions vs. the number of your brand’s account mentions. Big difference? Ask why. Then ask your Social Media Director what they are doing to raise awareness for your presence in the space. Breadth matters, no matter what your overpaid hack of a Social Media honcho tells you.

Second – Look at the number of comments directly aimed at your account. 20 per day? 50 per day? Now look at how many of these requests for attention were acknowledged with some sort of reply. 100%? 80%? Less than 25%? If your Social Media Director claims that they are focusing on depth of engagement instead of breadth, yet they only respond to less than half of the handshakes thrown at them daily, maybe it’s time you found out what he/she actually does with his/her time.

What should you be looking for in an applicant interested in becoming your next Social Media Director ?

I could go on with my indictment of poser Social Media Directors all day long, but I would rather put this post to a more productive use: Since so many of these hacks are getting through the recruiting filter, why don’t we focus on helping interviewers distinguish good applicants from bad ones, starting with some traits and skills they want and need in a Social Media Director. Think of this as a checklist for would-be Social Media Directors, and please feel free to add your own suggestions by leaving a comment.

• Applicant has developed and managed marketing programs before. Not just campaigns but programs.
• Applicant has had a continuous professional presence in the Social Media space (via blogs, Twitter, Facebook, Ning or other platforms) for at least one year.
• Applicant has managed a business blog and/or business community for a minimum of one year.
• Applicant has built or managed a community for longer than one year.
• Applicant has at least two years of experience managing projects and working across organizational silos.
• Applicant has managed a brand or product line for more than one year.
• Applicant has demonstrated a strong ability to forge lasting relationships across a variety of media platforms over the course of his/her career.
• Applicant understand the difference between vertical and lateral action when it comes to customer/community engagement – and has working knowledge of how to leverage both.
• Applicant demonstrates a thorough knowledge of the Social Media space, including usage and demographic statistics for the most popular/relevant platforms as well as a few niche platforms of his/her choice.
• Applicant has managed national market research projects.
• Applicant demonstrates a throrough understanding of the nuances between Social Media platforms and the communities they serve. (Example: MySpace vs. Facebook or YouTube vs. Seesmic)
• Applicant understands the breadth of tools and methods at his/her disposal to set goals and measure success in the Social Media space. (Applicant’s toolkit is not limited to Google analytics.)
• Applicant can cite examples of companies with successful social media programs and companies with ineffective social media programs. He/she can also argue comfortably why each was either successful or unsuccessful.
• Applicant has been active on Twitter for more than 8 months.
• Applicant knows who Chris Brogan, Jeremiah Owyang and Peter Kim are.
• Applicant is comfortable enough with business measurement methods to know the difference between financial impact (ROI) and non-financial impact. He/she also knows why the difference between the two is relevant.
• Applicant demonstrates the ability to build and manage a Social Media practice that works seamlessly with PR, product marketing, event management and customer support teams within the organization.
• Applicant has managed a work team for more than one year. He/she was responsible for the training and development of that team.
• Applicant has spent at least one year in a project management role outside of an ad agency, PR or other Marketing firm.
• Applicant can tell a personal story involving either Digg, Seesmic or both.
• Applicant has been responsible for managing a budget/P&L.
• Applicant demonstrates a high level of proficiency working with popular Social Media platforms and apps such as FaceBook, Twitter, LinkedIn, Flickr, Ning, Seesmic, YouTube, FriendFeed, WordPress and Tumblr.
• Applicant is capable of mapping out a basic Social Media monitoring plan on a cocktail napkin.
• Applicant is more excited about engagement, building an internal practice and finding out about your business’ pain points than he/she is about firebombing you with the full scope of their Social Media skills’ awesomeness.
• Applicant already has the framework of a Social Media plan for your company before he/she even walks through the front door, and thankfully, it doesn’t involve setting up a fan page on FaceBook.
• Applicant actually knows how to use Twitter to help your company build brand equityonline and offline without having to DM people for help.

Your turn. What do you think is missing from this checklist?

And how do we stop this kind of nonsense?

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ROI vs. “Impact on X” – Understanding what Social Media ROI is and isn’t.

Don’t want to read the post? Watch the video. (It’s faster.) Note: That last little part got cut a little short, but you’ll get the point.

Okay, so it became obvious to me last week that the term R.O.I. has been seriously corrupted in Marketing and Social Media circles lately, and it might not hurt to bring some clarity to the Social Media R.O.I. discussion again.

(I swear I was going to talk about other things this week, but I keep getting pulled back in.) 😀

First things first: You have to understand the difference between Impact and Return On Investment.

Impact can be anything: Increased traffic on a website, more visitors to your store, increased participation on your blog, more mind share, being discovered by people who may become customers, a rise in positive social mention, and even increased sales. There are hundreds if not thousands of potential incidences of impact when it comes to your Social Media activities, and every single one can be easily measured using a variety of tools – from Google Analytics to Radian 6. As a matter of fact, every possible kind of impact you deem relevant should be measured and taken into account when it comes to gauging the effectiveness of a Social Media program. In this, we are all in agreement.

Impact can be measured in eyeballs. Impact can be measured in comments on a blog post. Impact may be measured in conversations. Impact can be measured in responses to a BOGO offer or discount offer. Impact can even be measured in smiles.  When it comes to impact metrics, the sky is the limit and every business has its own mapping to figure out and play with.

But then you have ROI, which is a completely different animal: ROI is a very specific subset of Impact in that it relates specifically to the business’ bottom-line. In other words, Return on Investment cannot be measured in eyeballs, unique visitors, conversations, mentions, impressions or smiles. ROI can only be measured in currency. (Think of ROI as the subset of impact that specifically addresses revenue and nothing else.)

There is no “Return on Impact”.

There is no “Return on awesomeness.”

For the sake of this discussion, there is no “Return on conversations” either.

These things are cool, they’re fun to tweet about, but they don’t exist in the world of revenue, payroll and pragmatic business decisions. “Return on investment” is simply that: A business commits a certain dollar amount to a program and expects to see that program produce just like any other investment. If it doesn’t, it gets cut and a program that will produce better R.O.I. will take its place faster than you can say “huh?”. It’s that simple.

Some businesses are okay with cost-neutral investments: If they put in $100K and get $100K back as a direct result, you’re fine. The program has paid for itself, and the collateral impact was worth it. (More visibility, more conversation, more word-of-mouth, etc.) But many don’t. When I was learning FRY from Microsoft, their R.O.I. expectations for any program they funded in their distribution channel was 10:1. In other words, for each dollar Microsoft invested, they expected to see $10 back.

Trust me: In that kind of environment, you learn how to define and calculate ROI pretty quickly. And while eyeballs, unique visitors and social mention are nice, they don’t fall into the realm of ROI. Nice try, but no dice.

All of this to say that no business will invest in a program that offers a negative return on investment. Conversations, transparency and positive WOM may be the currency of choice for many of us, but unless you can show that they generate dollars, you are not demonstrating ROI. You are only demonstrating impact, and that is not enough.

What everyone needs to start realizing right now is that the business world is not going to change in just a few months just because a few thousand of us evangelize the immense potential of the social web. Business managers are not going to change anything they are doing because you have introduced them to transparency or dialogue or the power of communities. PR directors are not going to suddenly going to stop crafting press releases or relinquish control of the “messaging” they get paid to create. CEOs aren’t going to drop what they are doing and start blogging because you tell them to. CMOs aren’t going to fire their copywriters and replace them with community managers. Customer Service managers are not going to cancel their call center contracts with India and the Philipines and hire US-based Tweeps to replace them. None of these things are going to happen UNTIL you show business owners that Social Media can actually improve their bottom-line, their balance sheet, their P&L, and how.

This starts with a basic understanding of what ROI is and isn’t: If you don’t understand what your client or boss is asking for when s/he brings up ROI, you cannot help them. If they repeatedly ask you for ROI and you keep giving them impact on X instead, how disconnected are you? Think about that.

If you can’t give them what they want, if they don’t get what they keep asking you for, before you know it, they will give up on your Social Media program. And all because you didn’t know how to connect the dots between activity, impact, and ROI.

Likewise, if you are a business manager and your resident Social Media consultant/expert doesn’t understand the difference between impact on X and ROI, it’s probaly time for a new expert.

One last thing:

Anyone who tells you that Social Media ROI cannot be calculated, that the tools don’t exist yet, or that Social Media is about conversations and not ROI is putting up a smoke screen. What they should be saying is “I don’t know how to do that yet,” but it’s a lot easier to perpetuate the myth that Social Media ROI cannot be calculated – for obvious reasons. It’s a terribly self serving and counterproductive thing to do, and “professionals” in the Social Media world need to stop hiding behind that argument before business leaders looking for real traction give up on Social Media altogether. At some point, all that hot air has to actually turn into something real.

The irony in all this is that the ROI calculation process is the same regardless of the medium: Old Media, New Media, Print media, Digital media – The medium doesn’t matter. ROI is ROI. Anyone who talks about Social Media ROI as being somehow radically different from other types of ROI is demonstrating a profound lack of understanding of ROI as a whole. Red flag. BIG red flag. Learn to spot it.

I hope this helped reframe the ROI vs. impact conversation a bit. If so, do me a big favor and pass this on to someone who will get some value out of it. The faster we help people use the right terminology when talking about this stuff (and dispel myths about ROI measurement), the more likely we are to see broad Social Media adoption for business actually happen (and be done well).

Thanks for hanging out with me, and have a great day. 🙂

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Hamthrax Mania – Part 1

Please start the national panic now

Raise your hand if the national epidemic of complete and utter stupidity around the “threat” of swine flu is making you shake your head. Yeah, me too.

Is “swine flu” real? Yes.

Do I want to get it? No.

Will I take precautions to try and steer clear of the virus as much as possible? Of course.

But will I hide in a basement for the next three months? No.

Why? Because with all the talk and hype of pandemics, “swine flu” is still just… well, the flu.

That’s it, people: The flu.

It isn’t the zombie flu, okay? I know watching “Twelve Monkeys” sends a chill down a lot of people’s spines, and we’ve all had nightmares about the zombie virus from “28 Days Later” or Zack Snyder’s “Dawn of The Dead” taking us down… But this is just THE FLU. That’s it.

Yet here we are, in a state of complete and utter panic, shutting down entire school systems, buying surgical face masks by the box-loads, walking around with boxes of sterile wipes, and avoiding handshakes and people altogether. Last week, China considered a ban on all pork imports from Mexico. In Egypt, pigs are being slaughtered en masse… even though this strain of “swine flu” is a human-to-human virus. (You cannot get this strain of swine flu from eating pork.)

This kind of mass hysteria is embarrassing for the human race. Seriously. Stop it.

Everyone settle down for a second, take a step back, and take a deep breath: Every year in the united States, over 35,000 people die of the flu. Really. 35,000+. That is A LOT of people. Way too many, in my book. That number is tragic. And most of the victims of the flu tend to be small children and the elderly.

Yet, as tragic as this may be, no one freaks out. No one panics. CNN, MSNBC and Fox News don’t report on every single new death. The CDC doesn’t hold press conferences to keep people abreast of the spread of the flu. People don’t walk around wearing face masks and carrying sterile wipes everywhere they go. Countries don’t impose travel bans or mass livestock slaughter. School systems don’t shut down and send every kid home for weeks just as a “precaution”.

From November to March, when “flu season” is in full swing in the US, are we supposed to shut everything down and hide in our basements now?

Now that we’ve gotten a bit of perspective on the flu, doesn’t the panic over swine flu seem a little ridiculous? Worse than our overreaction to previous “threats” like African killer bees, West Nile mosquitoes, Avian flu andthe anthrax mailer?

As it turns out, the current strain of “swine flu” doesn’t seem to be all that virulent or particularly easy to pass on. It is no more contagious than any other flu strain, and doesn’t seem to be as potent as other strains that you or I have had the displeasure to run into at some point in our lives.

This is not the bubonic plague, people. It is just the friggin’ flu.

And it has absolutely nothing to do with bacon either, so stop freaking out about the pigs. Maybe we should have called this “CNN flu” instead of “swine flu”. I think that we would all be much better off. Surely, pig farmers and the grain producers who depend on their success to stay afloat would have had a much better week.

So in protest of this complete and utter nonsensical panic over the flu (as if we didn’t have better things to worry about, like… the pirate problem and injuries on “Dancing With The Stars”), some of us have decided to start a little protest of stupidity movement on Twitter. And just to be on the safe side (in case Swine Flu goes viral on the web) we have added face masks to our avatars, effectively turning them into “maskvatars” or “maskatars” (depending on whom you ask) – a term which I think was coined by Columbia, SC’s Mandi Engram – @mandiengram on Twitter (below, bottom right).

Note: As far as I can tell, either @ManFmNantucket (below, bottom center) or @SWoodruff (below, bottom left) were the first Twitterati to done maskvatars. Ther rest of us are just proud copycats.

A few #swinefluwknd participants

Fellow blogger Kristi Colvin (@kriscolvin on Twitter, top right, above) gave our little movement its own clever little hashtag/thread: #swinefluwknd on Twitter. (Implying that the maskvatars will disappear on Monday… though they may not. We’ll see.) If you are on Twitter, please consider joining us. 🙂 (And yes, we will be playing with this until the swine flu terror goes away.)

As for the term “Hamthrax“, I am not sure who came up with it first, but I have Kristi Colvin and Mandi Engram to thank for introducing me to it. It gave me a good laugh last night. Thanks to them, I will no longer be referring to Swine Flu as “swine flu” starting today. Hamthrax seems a whole lot more appropriate.

Oh, and if you need me for anything, I’ll be hiding out in my underground African killer-bee and zombie-proof  fallout shelter until CNN tells me it’s safe to go outside again.

(Oh and yes, there will be a part 2 to this post.)

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Killing America’s brands, one lousy C.E.O. at a time.

How “Black Widow” C.E.O.s and Caretaker Managers are choking the life out of the world’s most profitable brands:

Fellow brand guy Rob Frankel and I don’t always agree on everything, but more often than not, he an I find ourselves on the same side of the fence, shaking our heads at corporate execs who somehow manage to choke the life out of an otherwise solid brand. They are the corporate world’s equivalent of the proverbial black widows – women who marry for money, kill their husband, and then move on to their next prey.

This isn’t to say that black-widow CEOs purposely kill the brands they are hired to manage, but it would be a stretch to pretend that they have any brand’s best interest in mind: By the time these guys leave – usually after just a few years – the size of their golden parachute seems to be in direct proportion to the damage they have caused.

The worst part about this is that in spite of their horrendous track record, they keep getting hired to run more companies and brands into the ground with the efficiency of an enraged elephant trying to muscle its way out of a porcelain store.

Rob Frankel has some pretty interesting things to say about this phenomenon, and looks at it through the cultural prism of the Three Generations of Wealth principle, in which the first generation creates the fortune, the second generation spends it and the third generation loses it. Pretty clever if you ask me.

Per Rob:

Many American brands are victims of third generation “caretaker” managers, who themselves never had to build the very brands they’ve been charged to manage. Living off the fat of the land, they’re complacent managers who fear innovation and risk, the type that figure their brand will always be there, because it was always there for their fathers and grandfathers.

The trouble is it doesn’t work that way. The grandfathers who built the brands knew the power of a brand. They knew how to constantly build and reinforce their value. Caretaker managers, however, spend more time on the golf course than they do building brand value. In fact, most CXOs don’t truly understand what a brand is, let alone how to build its value. And so while the caretaker managers might hold hands, close their eyes and wish real hard, their brands continue to wither from neglect, with market shares shrinking into a mere slivers of what they once were.

But it isn’t enough to just point a finger at ineffective CEOs without looking at exactly HOW they are destroying the brands they should be elevating. There is a method to the madness, and here it is (in its simplest form). Again from Rob:

Year One: Get hired by suckers whose company is hemorrhaging cash and market share to the point that their desperation clouds their good business sense. The Caretaker uses this first year to make promises and “assess the situation.”

Year Two: Caretaker begins sniffing out departments where he can “cut costs”, drastically slashes budgets and tosses out the very employees who built the company. By cutting costs, he hopes to “restore profitability.”

(And on paper, it works.)

Year Three: The costs are cut, but the Caretaker has done nothing to increase revenues. While profits have increased, overall revenue is down and company infrastructure is devastated to the point where any hope of a real financial recovery is gone. But the Caretaker Manager doesn’t care: His deal is done. And by the time the folks who hired him find out how much damage he’s caused, it’s too late. His recruiter has already landed him at another company where he can do the same damage all over again.

The key element of this process is obviously Year Three: a) The black widow CEO has done nothing to increase revenue, and b) the company infrastructure has been severely weakened.Not a good combination.

By then, customer support (one of a company’s most important brand-reinforcing touch-points) has been outsourced, most departments are stretched well beyond their operational limits, and most of the company’s true management talent has left. Meanwhile, because little or no work has been done to enhance or even maintain the brand’s relevance, customers have started to shift en masse to competitors more concerned with creating value than cutting corners… err… costs.

Rob goes on to cite Chrysler’s choice to hire controversial serial CEO Robert Nardelli to take the helm as an example of this process:

According to the Los Angeles Times:

In Nardelli, Chrysler is getting a former senior General Electric Co. executive, who was both credited with overhauling purchasing and technology systems at Home Depot and widely criticized for pay and severance packages seen as excessive.

“This is an interesting choice, and I’m somewhat perplexed by it,” said Erich Merkle, an auto industry analyst with IRN Inc. “There are still things that Chrysler needs long term and I’m not sure Nardelli can provide them.”

Right. Things like vision, direction, purpose or clarity, perhaps? Heck, anything that even closely resembles a strategy beyond growth through acquisitions and further rounds of cost-cutting?

Now we’re on to something.

It should be said that Nardelli’s current annual salary at Chrysler is exactly $1, so kudos to him for at least playing along with Washington theatrics surrounding the spectacular bailout his company is currently benefiting from (especially considering his past history with grossly excessive executive compensation.) That being said, given his history, how can board of directors look at a guy like Nardelli and think “wow, this guy can really turn around Chrysler and get us to the top again?” His track record and tactics are pretty clear.

Is there a forest vs. trees problem going in in the corporate world, or are the boards that appoint these black-widow CEOs that clueless? (The question is not rhetorical. I really want to know.

How to spot a caretaker manager posing as a leader: Look for short-term P&L mirages instead of actual growth:

Something to think about: Efficiency is nice when you’re a CFO or a COO. A CEO’s job is considerably more complex than just hacking off unprofitable divisions and cutting costs to the point of operational anemia, however. (See Year Two, above.) Would Nardelli make a great COO? With the right CEO looking over his shoulder, probably. But CEO? Not on your life. Yet here we are, watching Nardelli accelerate Chrysler’s nose-dive by favoring short term profitability through aggressive cost-cutting over actually rebuilding a limping company and the brand that once made it successful. Sure, efficiency and profitability may look great on paper, but the end result, when not tied to long term strategies is almost always disastrous.

And if you don’t believe that a CEO can resurrect a company by understanding and embracing the value of its brand, just look at Steve Jobs and Apple. Consider for a second what happened to Apple when he left, and how his return a) brought Apple back from the brink, and b) turned it into the powerhouse that it is today. Did Steve Jobs rebuild Apple by cost-cutting and focusing on short term profitability, or did he set out to rebuild Apple’s relevance and culture of innovation again? (No need to think about the answer. It’s a rhetorical question.)

Now compare a black widow CEO like Nardelli and a visionary CEO like Jobs. What kind of CEO builds powerhouse brands and what kind sinks them? (Last I checked, Apple wasn’t applying for bailout money.)

Why is this a relevant topic this week? I’m sure you can draw your own conclusions, but the main catalyst for this post was Rick Wagoner’s precipitous removal from the helm of General Motors over the weekend… and subsequent appointment of GM’s current COO (and former CFO) Fritz Henderson. Now… I don’t know Mr. Henderson personally and haven’t followed is 25 year career with GM, so my questions about this choice as a replacement are completely uneducated and skewed towards today’s argument, but hear me out for a second.

Given what we have discussed today and what we know of corporate America’s habit of rewarding CXOs for short-sighted performance rather than long term growth, ask yourselves for a moment if the best possible choice to lead an ailing company (like GM) is really its former CFO/COO.

Do cost cutting and operational efficiency REALLY impact revenue, or do they mostly help the company’s P&L look good while sales continue their downward trend?

Can a 25-year insider/veteran of GM who has contributed during his entire career to the downfall of a brand really bring new vision and infuse new life into a dying company?

As I was researching this topic for today’s post, I happened to zero-in on a comment Edmunds.com’s Chief exec. Jeremey Anwyl today in an AP story on GM’s move, which he called out as little more than “political theater.”

I couldn’t agree more.

The point here being: Sure, Wagoner being pushed out was a good move considering Chrysler’s horrendous performance and complete lack of direction, but Henderson’s appointment basically negates any kind of forward momentum or positive outcome for GM. He is just another GM exec with absolutely nothing new to bring to the table.

It doesn’t matter how deeply GM and Chrysler cut costs. If neither company focuses on rebuilding their brand(s), they will not be able to rebuild their revenue stream. Period.

More of the same breeds more of the same breeds more of the same, and so on:

Case in point: The AP story makes some good observations about Wagoner’s success in cutting costs and improving operational efficiency at GM, but looking at the big picture, what did the cost-cutting really accomplish?

$82 Billion (yes, with a “B”) in losses in the last four years. That’s what.

Let me say that again: $82,000,000,000 in losses in just four years. (Source)

Does this sound like GM was moving in the right direction with the cost cutting and “restructuring?” In that time period, did GM’s brand as a whole capture our attention the way BMW, VW or Lexus did?

If you find my argument a little weak, ask David Cole (chairman of the Center for Automotive Research in Ann Arbor, Michigan) what he thinks:

“I don’t think you would see any shift or significant change at all with Rick’s leaving. I think the course that they’re on, they’re on.”

You don’t say. Yet Senator Charles Schumer’s (D-NY) comments on the change indicate how deeply rooted our general cluelessness about the value of true leadership and objective change really are:

“Given the history, a change in management could hardly hurt and might do some good.”

No, Senator. Change for the sake of change is just noise. Replacing a caretaker manager with another caretaker manager from the same management culture is not an improvement. It is nothing more than political gesticulation and pointless churn. What we do need, however, is fresh talent at GM. What we need are executives who want to rebuild the GM brand and will attack that task with the passion of a true believer.  We need people who understand GM’s importance to the automotive industry and their millions of fans – both in the US and around the world – and will map out a future for it rooted in clarity of purpose. That kind of leadership looks a lot more like Steve Jobs, Richard Branson, Yves St. laurent and John Mackey than Robert Nardelli, Rick Wagoner, Fritz Henderson or Edward Liddy.

Stop mistaking managers for leaders. Please, for the love of god, learn the difference between the two.

The proverbial fork in the road: How companies choose to either succeed or fail:

Ironically, GM currently owns some of the world’s most more recognizable automotive brands, with Cadillac, Saab, Hummer, Chevrolet and Saturn making the list… So it shouldn’t be all that hard for GM to make a comeback… But unless it learns to embrace the power of the brands it depends on to remain profitable, it doesn’t stand a chance.

(As a taxpayer,) what I would like to hear from Mr. Henderson is a statement affirming a new direction in GM’s strategy. Specifically, one that leverages what Cadillac, Saturn and Hummer have managed to accomplish all on their own: Create unique cultural niches for themselves and build loyal brand followings. Cadillac especially, having reinvented itself over the last decade, could help ailing brands like Buick, Chevrolet and GMC find renewed purpose in a market saturated with banality, derivative designs and watered-down identities. In short, what I would like to hear Mr. Henderson say is that the lesson Cadillac learned in the course of its own successful reinvention will be applied across all GM brands effective immediately. That GM, while continuing its commitment to reducing costs where it makes sense will shift its focus back to making cars that people actually want to drive. That GM as a whole has a plan to completely revamp its design and Q.A. departments (please hire some Germans already) in the next six months. That it will immediately end production of all models with notably low market share. And most importantly, that it will actively seek to bring fresh executives to the table. Not US automaker flunkies from the same stale pool that got GM and Chrysler to the brink (like himself), but professionals from other industries with a talent for actually developing culture-affecting products and building brands from the ground up. And that – to that end – he plans to voluntarily step down from his role as C.E.O. sometime in the next year to give them room to work their magic. I want deadlines, direction, purpose and unwavering commitment. What I don’t want is more hollow posturing and vague rehashes of already failed strategies.

Sadly, hollow posturing is probably all we can hope for at this stage in the game. Even the White House seems content to let heads roll at GM and Chrysler without demanding real change. As a result, what we are likely to hear from both auto giants over the next few months will be the same old song that got us here to begin with: More cost-cutting. More attempts to return to short-term “profitability” by hacking their companies into strategic and operational impotence. More bean-counter promotions to leadership positions. More lame duck partnerships. More requests for bailout money. In short, more of the same. Why? Because expecting true leadership from caretaker managers trying to hold on to their jobs in a tanking economy is about as realistic as expecting my chihuahuas to start quoting Buddha, Mohammad and Ghandi in their native Spanish. (Though sadly, the latter is actually more realistic.)

The most likely outcome of this ongoing corporate FAIL will be an endless circus of caretaker managers taking turns playing C.E.O. musical chairs while their once mighty companies burn to cinders around them.

Let’s face facts: Any idiot with a calculator and a spreadsheet can cut costs to make his P&L look good at the end of the month. You don’t need 25 years of executive experience at the Fortune 500 level to master that little trick. So what exactly qualifies executives like Nardelli, Wagoner and Henderson to run (heck, to rescue) companies like Chrysler and GM?

The question I would like to ask these guys is simple: When you run out of costs to cut, then what? (Besides jumping ship or asking for bailout money?)

Anyone? Bueller? Bueller?

Repeat after me: No major brand ever rose to a position of market dominance by focusing on cutting costs.

Apple. BMW. Starbucks (in its heyday). Microsoft. Cartier. Disney. Newman’s Own. Michelin. Breitling. Cervelo. Oakley. Hermes. Pixar. Assos. The list goes on.

Is it really so hard to grasp these simple concepts? That P&L manipulation through chronic cost-cutting is no kind of strategy at all? That preserving the health of your revenue stream trumps all other business functions? That everything you do in a company should be done with one objective in mind: To create customers? That a C.E.O. can’t just focus on the dashboard or the rear-view mirror while he drives his company forward?

This really isn’t rocket science. Is it?

Is it?

Help me understand how we got here. Two ways you can do that:

1. Be sure to add to the already fantastic series of comments published below.

2. Continue the discussion anytime by engaging me an fellow commenters on Twitter. Use the hashtag #brandbuilder_CEO in your Twitter comment. (You can then follow the threads by clicking here.)

Thanks for bearing with a particularly long post today. You guys are good sports. 😉

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Flashback to December 2005: A letter to Ford

I found this in the vault and thought it was worth dusting off… since it’s still pretty relevant three whole years almost to the day since I wrote it – back in December 2005. (Note: Some of the links are so old that I’ve removed them.) Enjoy:

The slogan used to go “Have you driven a Ford lately?”

Well… I have, unfortunately. I find myself behind the wheel of a Ford vehicle several times per year. Rentals, mostly. My opinion of Ford vehicles isn’t great. It isn’t great at all. As a matter of fact, unless Ford starts making better cars (or making cars better), I will never, ever buy a Ford, no matter how cheap. If someone gives me a Ford, I will immediately trade it in for another brand.

And I guess a lot of people feel the same way because despite a huge advertising budget and aggressive price cuts earlier this year, a lot of people aren’t buying Ford vehicles either.

So now, Ford is cutting 30,000 jobs.

Strangely, you won’t find that little bit of info on Ford’s website. Instead, you’ll read that Texans Love Ford Trucks. You’ll learn that Mustang pedal cars make kids happy. You’ll learn what conferences and trade shows Ford will be attending next. More importantly, you will finally find out who that girl in the Mercury commercials is.

If you really dig, you’ll also get to read a tiny little cryptic blurb about how Ford is all about inclusion and diversity, citing Volvo’s advertising in gay and lesbian markets.

Huh?

Oh yeah, in case you hadn’t heard, Ford has just agreed to pull all of its advertising from gay and lesbian magazines in response to a boycott launched by the American Family Association. The ads were specific to the Land Rover and Jaguar brands. (Thanks to Emergence Marketing for reporting this today.)

So… Let’s recap: 30,000 jobs are going to get sacked because sales are down. Meanwhile, Ford decides to pull out of lucrative markets because of pressure from a gay-bashing religious group.

Brilliant. Just brilliant.

How about this, Ford:

1) Start making better cars. Not more expensive cars, but better cars. Cars that don’t fall apart. Cars with comfortable seats. Cars with decent suspension. Cars that people will actually enjoy driving. It’s called design. The Japanese know about design. So do the Europeans. You can learn it too. (There is life beyond giant pickup trucks.)

Maybe once you make your cars cool, reliable and fun to drive, people will start buying them again.

Don’t believe me? Look at the Hummer brand. What could be more American in spirit than that giant military-like gasoline-guzzling tank on wheels? Even with gasoline prices hitting $3 per gallon and doomsday reports of impending fuel shortages, Hummer vehicles are selling like hotcakes.

Tell me design and passion don’t drive sales. Tell me the car market is all about pricepoints. Just try to make that argument stick.

Make better cars and your sales will increase. Period. End of story.

2) If a significant percentage of gay and lesbian drivers buy Land Rovers and Jaguars, don’t do something stupid to alienate them… Like pull your ads out of their magazines. What are you thinking?!

What’s next? Will a boycott from other right wing groups make you pull ads from magazines geared towards ethnic minorities? How about Jewish and Muslim publications? How about European markets while you’re at it? (Those pesky French people keep saying bad things about us after all. Long live the Freedom Fries, right?)

Why don’t you start targeting white, Christian, straight red-blooded Americans exclusively?

Seriously, Ford. What’s up? It’s like the lights are on but nobody’s home. Do you need a quick lesson in leadership?

30,000 jobs down the toilet, and your next move is to send away a healthy chunk of what few customers you hadn’t yet chased away? Why?

Couldn’t you have told the American Family Association that Ford will advertise to anyone it wants to? Couldn’t you have told them that you will advertise in whatever publications you see fit? Couldn’t you have told them to just mind their own business?

Perhaps you could invite their leadership to start designing your cars. Perhaps you should begin to seek their approval before launching your next ad campaign. (Is it still okay to advertise during the Superbowl? Can you still advertise in anti-family magazines like Esquire, GQ or Cosmo?)

*sigh*

Ford, you’ve hit an all-time low this week. You really have.

Let me let you in on a little secret: The reason that foreign auto makers are kicking your butt is because –

1) They make the best car possible for the money. You make the most easily manufacturable car for the money.

2) Their attention to detail is evident in their design. Your attention to detail is almost an oxymoron.

3) Japanese cars are fun to drive. Yours aren’t. (And no, the Mustang isn’t all that great, and it doesn’t corner very well.)

4) Japanese engines. Ford engines. End of story.

5) Japanese car makers will advertise and sell to whomever loves their cars, regardless of gender, race, religion or sexual orientation.

I’m sorry to say this, Ford, but I’m not sure that you have much of a strategy anymore. Tell me, what are you about? What’s your purpose? Tell me why I should buy one of your products? Tell me why I should choose you over anyone else? (Besides the whole “buy American” thing.)

BMW’s X5 is made in America, just fifteen miles from my house. Japanese automakers are employing thousands right here in the US. Buying their cars is buying American.

Time for some leadership changes at Ford, methinks.

Related posts: Tom Peters’ “The View From Home“

Definitely read the Tom Peters post. It’s excellent.

And we wonder how we got here.

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Why SPAM?

Attempt #36,422:

Dear Sir/Madam,

I find it pleasurable to offer you my partnership in business.

I am contacting you regarding a brief for the Investment of Twenty Five
Million Dollars (US$ 25,000,000.00) in your country, as I presently
have a client who is interested in investing in your country, but have
never done business in your country before. I find it imperative to
solicit for a partnership.

Hence upon receipt of this letter, I implore you to kindly respond and
let me know how possible it is to work with you in mutual partnership
under the conditions that:

. My client’s fund is held in cash.
. My client is willing to invest immediately.
. My client will pay you a commission of 10% of the investment fund for
initial logistics and protocols.
. My client will pay to you a further 7% of profit earned over capital
annually as long as you manage the investment fund.
. My client desires absolute confidentiality in the handling and
management of this brief.

I must draw your attention to the fact that I have kept the
information’s herein this letter stated brief; as I do not know if you will receive this letter and or what your response will be, If you do have the interest and the capability to partner with me under the above stated
conditionality, I will appreciate your response sent back to me by fax or
call me immediately. I will appreciate that you include a brief profile
of your self and your company for me to better appreciate your
personality.

I look forward to your response and our partnership.

Have a nice day.

Sincerely Yours.

Jack O. Shmuck

Seriously. WTF.

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I get twenty bogus stock tips every day…

… and they all go directly to my junk box.

I have to wonder what the point of junk email is. I mean… does this sort of online “marketing” exercise actually generate any business at all? Does anyone who gets a poorly written email about some unknown stock jump at the chance to invest in that stock?

This is my favorite one this week so far:

Tuesdays Trading Could Be Huge!

ww Energy Inc.
Symbol : wwng
$0.02
Already 100% gain today!

WWNG is releasing huge news Tuesday.

Hot news can provide huge profits.  (???)

Set your buy for open and beat the news.

Get WWNG Tuesday. Morn.

Let me set my alarm clock to Tokyo time so I can get in on this before anyone else on the planet!!!!

I just wish I’d bought my one share when it was still worth $0.01 so I could brag about how my latest energy stock split after just one day! Woohoo! Genius.

At least, the English was half-way decent this time around.

photo credit: if you have to ask, you don’t need to know.

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