Every day is November 11th.

I observed November 11th this year by having a few beers with a long-time Army buddy who will soon be redeployed overseas. Without revealing too much about his job, let me just say that he isn’t in the rear with the gear: Wherever he goes next, he will be in the forefront of the fight, outnumbered, surrounded, and very isolated from the main force that could shield him from harm. He does this not just because it’s in his blood to do it or because he likes to challenge himself (though both these things are true) but because he feels that it is his duty to put himself in harm’s way so others won’t have to. It’s a calling. He is a soldier and that is all there is to it.

He and I didn’t talk about war though. We talked about things like purpose and integrity. About dealing with the annoying fact that we can only control so much, that our impact on the world cannot always be what we would like it to be. We talked about the inefficiencies of overbearing bureaucracies and the scourge of poor leadership. We talked about the epidemic of bullshit plaguing every facet of both the private and govt sectors, driven by the same breed of self-serving morons with delusions of grandeur that seems to breed in equal measure everywhere around the world. We talked about our dreams and frustrations, about what we would like to change and what we know cannot change, and about the need to do the right thing even when no one else (perhaps especially when no one else) will. Chatting with someone who understands that “the effective range of bullshit is exactly zero meters,” someone with the kind of integrity, quiet pride and hilarious honesty that is seldom found in the marketing world these days, was refreshing. It made me realize how much social media, marketing, PR and advertising – if not the business world in general – needs to swap some of its hordes of bullshit weavers for just a few handfuls of warrior poets, if only to even-out the scales a bit.

This year, I didn’t think as much about my grandfather, who fought in both World War I and World War II, or the sacrifices made for my country on and after D-Day, or my own military service. Not as much as I usually do. I didn’t even slip into my old uniform to march around the house and scare the pets half to death. This year, I thought about the men and women who serve in today’s wars, about the soldiers, first-responders, law-enforcement, and intelligence officers who were killed, injured or otherwise impacted by the post 9-11 conflicts, as well as their loved ones, who serve and sacrifice as much as they do – and often sacrifice much more. I thought about my buddies who are in theater now, putting their lives on the line – not bonuses or promotions or potentially lucrative contracts – Their lives. Perhaps for the first time in the last twenty years, I thought only about the veterans of my generation’s wars rather than veterans of the wars that came before my time. And perhaps for the first time since becoming aware of Armistice Day (the reason it falls on this date every year), I thought about it more on November 12th than I did on November 11th, and chances are that the 13th and 14th won’t be any different.

 

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The Psychology of failure – Part 1

On madness, models of failure, and the mythology of past successes

I have been thinking a lot about success and failure in business this past week, and about behavioral patterns and common cultural factors I invariably find in organizations that breed either one outcome or the other. I will dive deeper into this topic over the coming weeks, but for now, today, I want to show you something. Something that, at first glance, I found funny. Not knee-slapping, LOL-inducing haha-funny, mind you. Something funny yet tragic, because it illustrates not only the stupidity of the way some organizations cling to anachronistic models of failure, but the absurdity of it in its whole.

We’ll get to that in a minute, but let’s just say that what I received today, what prompted this post, made me wonder about the sanity of the person who thought it wise to send it to me. And this made me think about why some managers insist on never letting go of strategies and tactics which they know don’t work.

Point #1: Knowing full well that a method, tool or model no longer yields the desired outcome (assuming it ever did), some organizations will continue to bet on it, in the hopes that the laws of the universe will shift in the night and miraculously turn a completely ludicrous project into success.

The partial email I will share with you may make many of you chuckle, as I chuckled when I read through the first few sentences, but in truth, there really isn’t anything funny about it, and here’s why: As extreme as this example of stupidity may seem, the principles which guided the hand of a business to drive this campaign, to assign resources to it (writers, staff, computers, software licenses, chairs, desks, office space, electricity, lights, etc.) are no different from the principles that guide tens of thousands of companies to also cling to their own proven methods of failure.

That organizations, then, would cling to such ill-advised models in the face of logic, in the face of common sense even, I can almost understand. Not every organization or department is helmed by the sharpest mind of its generation. I get that. But more shocking to me is that this type of absurd behavior – this level of abject stupidity when it comes to discerning between effective and ineffective models – occurs in face of facts, and by that, I mean hard data and history, ignored, pushed aside in favor of a mythology of past successes.

Let the notion sink in for a moment. Mythology of past successes. The myth that the organization was once successful, and the further notion that the methods it employed then, if employed now, will restore it onto its successful path. A past success, mind you, that more often than not only exists in the minds of those who cling to its dream, therefore invalidating the very methods which they so revere.

Point #2: Imaginary past successes and glories are potent illusions – they aim to set the stage for future ones after all – but as poisonous and lethal as memories of painful lost loves: Embellished over time by the mind’s gentle healing hand, polished to a high sheen that grows brighter in magnificence with every passing year.

A man, in the embrace of weakness, can find himself trading the inconvenience of reality for the comfort of such an illusion, and as the mind is trained to do in order to help us survive tragedy, begin to turn the pain and reality of failure into something seemingly beautiful and pure. Faced with the prospect of further failure, facts go out the window. Reality seeks to be disproved. The mind begins to look for safety and comfort.  All that eventually remains is the legend of “the good old days,” and the notion that a higher power (even in the form of abstract “business cycles”) will come and make things right if only one perseveres in holding on to the past long enough.

Fisher Kings, organizational dysfunction, and engineering cultures of failure

This is something a C.E.O. told me years ago, when he and I were discussing the future of his company: “This is how we’ve always done it. It’s always worked for us. We’re not about to start doing it differently now.”

Except it hadn’t worked in twenty years, everyone knew it – as I suspect he did as well – yet there he was, defending the sanctity of a model that had already begun to fail a full generation ago and showed no promise of deliverance whatsoever. Embattled and failing, the company yet refused to let go of a past it had turned for itself into legend. Religion, even. This man, this grown man, clung to the safety of a myth of success the way an anxious child in the face of uncertainty clings to the hand of his mother.

The reality of the company’s past “success,” (the basis, in his mind, for the inevitable return of fortune as foretold by his internal narrative – the myth he created for himself over years of wishful thinking) was that the company had never, in fact, been all that successful. It had struggled, as all companies do, for market share, for growth, for loyal customers. What success it had enjoyed for a time had been hard-earned and modest at best.  There had never been glory. There had never been true sustained market leadership. The man sitting across from me was operating under a spell of denial which he had – over time – infused into his organization. The Fisher King retold.

One doesn’t have to be clinically insane to act like a madman but this one, afflicted as he was by his fears, by his bitterness, by his anger, by his own inner demons of self-doubt and shame, in retreating into a world of make-believe, was in fact acting like a madman: Working against all reason and common sense. Rather than steer his ship to warmer waters and favorable winds clearly discernible just ahead, he chose to keep to the murky, brackish waters he now believed had once been a glorious ocean. He painted himself the C.E.O. of a successful company, whose brand would someday regain dominance. A dominance to be regained again as its birthright, or so the tale went inside his head. This in spite of inaction, of denial, of stupidity and a surprising level of arrogance.

The places we allow ourselves to drift to and die, out of fear and out of shame. Both one and the same.  (If you hate your job, consider this a tap on the shoulder: How long do you intend to wait there in misery?)

This was the company I had been hired to rescue. I almost did, but only almost. I don’t always succeed. I managed to drag it back from the brink, to show them the way, even to pave it for them, but the last step, they had to take for themselves: Making the decision to change. To let go of their ghosts and commit to a fresh start.

Not everyone, though, has the courage to unfurl their sails.

The Greek perspective, and methods of failure

If I were an ancient Greek, I would talk about fear and anxiety in terms of spirits and possession. Not spirits as in demons, the way we think of them now, but the spirits of love, anger, hatred, fear, cowardice, envy… Emotions given life and will and power over our lives by us, their willing vessels.

The Spartans believed that blood lust in the middle of battle, for example, was possession – and something to avoid at all cost. Despair can be possession. Fury. Jealousy. Terror. Love. Enthusiasm. Every type of feeling can take us over. Overwhelm us. Crimes of passion are the result of possession. Brawling with fans of a rival football team is the result of possession. Understanding this is understanding something about human behavior, not just 3,000 years ago but today as well. Perhaps especially so.

We yet have much to learn from the Greeks.

Looking at human behavior from that perspective, whatever spirit possessed this man, this unfortunate C.E.O., I have met many times since. Different offices, different cities, different letters on the doors and the lobby walls and the business cards, but always the same madness. The same visceral need to create then cling to myths of success, and along with them proven methods of failure: Decisions and actions that led to their ship remaining in irons, year after year, in the false safety of a cove that in fact had become its grave. Cultures of failure start here. In this manner. Engineered by the dysfunctions of an individual ill-suited to lead an organization.

When mediocrity and failure are hailed as glory and success, take a bearing: Relativism doesn’t apply to victory. It only serves to paint defeat into something more palatable. It is the fuel of denial. Flipping success and failure on their heads so that one suddenly becomes mistaken for the other is madness as well.

Point #3: Failure in organizations, in business, in projects and campaigns isn’t always the result of luck or fate or circumstances. Sometimes it is (though I would caution against looking at obstacles and challenges, even the most seemingly insurmountable odds as anything but opportunity), but just as often, failure is engineered, constructed from within, given birth to and shaped, fostered, nurtured, encouraged and fed daily – like a creature.

The truth of failure, true failure, is that it lies not in circumstance but at the intersection of weakness and method. In the weakness that drives some men to shun the fight and the challenge which are the price of both success and victory, and to instead embrace illusion, relativism (characterized by endless strings of excuses) and the type of insanity that makes them act against their own best interest: Ignoring facts. Declaring success when none exists. Continuing down a clear path of failure. Adopting failure as a method.

Symptoms vs. Disease: Digging beneath superficial absurdity to find its cause

However extreme the following example may seem to us, scores of companies insist on clinging to equally ridiculous and completely ineffective methods of conducting business, albeit not quite as spectacular in their awfulness. Yet… outside of execution – or the manifestation of this type of nonsense, as seen below – compulsive adherence to methods of failure is in no way different in its path to what led to this example, and remains equally absurd.

Here it is, the first paragraph from an email like millions of others just like it, which we consider spam, yet someone, somewhere considers marketing:

I sincerely ask for forgiveness for I know this may seem like a complete intrusion to your privacy
but right about now this is my best option ofcommunication. This mail might come to you as a
surprise and the temptation to ignore it as frivolous could come into your mind, but please
consider it a divine wish and accept it with a deep sense of humility. This letter must surprise you
because we have never meet before neither inperson nor by correspondence, but I believe that,
it takes just one day to meet orknow someone either physically or through correspondence.

Ridiculous? Of course it is. It’s spam – and bad spam at that. But you know what?  The company that paid for it thinks this works, that this utterly ludicrous bit of email content is the best way to get me to click on a button or surrender personal information. And while we laugh at the stupidity of it, wondering in the backs of our minds what kind of manager or business owner would believe, in this day and age, that something like this is a method of success, it is in no way different from a manager or business owner in Kansas City, Charlotte, London or Chicago believing that their own brand of ineffective, outdated, business development method will somehow yield better results than it has until now.

Point #4: The absurdity of embracing methods of failure is not measured by the depth of stupidity characterizing their execution – like really awful copy, as seen in the above example,- but rather by the fervor with which failure-blind managers cling to their own delusions in spite of everything they know.

It’s tragic.

I don’t say this lightly. It is soul-crushing to see professional men and women – not organizations but human beings of flesh and blood, like me – so blinded, so possessed by layer upon layer of bullshit that they are no longer able to tell up from down, right from wrong, smart from stupid. Confused and lost in the wilderness of a world that has outpaced them, they cling to a made-up version of it, one they can feel comfortable and safe with, even if it doesn’t actually exist.

In this world, what they know, what they believe, even if it is completely absurd, holds more truth for them than the reality they refuse to accept. This shielding mechanism, this search for comfort and security in an idealized version of the past, of the “good old days,” makes every new idea alien and dangerous. A threat. They begin to regard progress at best as suspect, and at worst as a betrayal of their “ideals.”

In the same way that children invent for themselves imaginary worlds in play, adults sometimes invent for themselves worlds in fear. We see this with religion and politics, with extremism. We also see it in the business world: Some of these adults apply this mechanism to their professions, often with dreadful consequences.

When I hear a C.E.O. scoff condescendingly at Social Business, aiming to belittle and ridicule it as “something the kids do,” something legitimate businesses don’t need, a waste of time, a fad, a pile of crap, I don’t feel frustration anymore. I feel pity. Pity for the man, pity for the organization, pity for its future. Hell, I feel sadness because I know the fear that lives at the heart of the attitude that nurtured the opinion behind the comment. More importantly, I know instantly that the organization “led” by this person is crippled by methods of failure. And because the pattern of such dysfunction doesn’t deviate all that much from company to company, I can start mapping it out on paper without having to hear another word.

Point #5: When you understand a leader’s weakness, you know how his organization is failing.

Organizations that shun rather than embrace progress, whose default position is to embrace new ideas in meetings but somehow never manage to implement them, organizations that refuse to acknowledge or enable change from within or without, these organizations are all the same. Every single one. Identifying them is the first step. Understanding them follows. Beyond that, expect a bumpy ride.

Word to the wise: Not everyone is cut out to be an agent of change. If you can visualize your career, imagine the path of least resistance. Now imagine the complete opposite. More often than not, change is war.

Time to revisit the definitions of insanity and failure

It’s been said that the definition of insanity is to repeat the same action over and over again, expecting a different result each time.

I disagree.

Perseverance, then, would be insanity. Tenacity also. I reject that definition. Conditions change: The same action repeated enough times can and often does yield different results, and we intrinsically know it. From adaptation to probability, we know that results may vary. We put it in fine print on just about everything.

The exact same spin of the ball in a game of roulette will have it land on a different number each time. The same lotto numbers played week after week will yield a different relationship to the winning numbers arrived at elsewhere. The same degree of effort on the field of practice will result in physical and mental changes over time. And so it goes. Because conditions vary, repetition in the face of failure alone does not constitute insanity. What I propose instead is this, that the definition of insanity is to repeat the same action you know cannot yield the desired outcome over and over again, expecting a different result.

Insanity is deliberately choosing a method of failure over a method of success (or even an infinite range of experimental methods) because in spite of all logic, it fits within a world view -an ideology – borne out of anxiety and false nostalgia rather than experience and reality. THAT is insanity.

Failure – systemic failure, that is – is engineered. It is built from the ground up, much like success, one broken brick at a time.

Point #6: Just as surely as a culture of success can take root in a company (Zappos, Apple, BMW, Google, and many more) a culture of failure can take root as well: Characterized by internal dysfunction, the utter absence of loyalty among its staff, low morale, a poisonous work environment and an absence of fire and passion even at the helm, cultures of failure are tough to turn around. And you know what? they are as tough to rescue as a drug addict who, while begging for help, still clings to the needle and the gutter as if his life depended on it. It’s heart breaking.

What I do: Light, shadow and the need for both

Helping businesses succeed is often a lot of fun. It can be easy. You come along at the right time, get to know them well, give them a little push, and there they go: Back on track, rocking it out. Those are the good ones. The ones that make me feel like a million bucks. The ones in which everyone clicks and has fun. It doesn’t even feel like work. I secretly wish that all of my clients were like this, but I know that this is weakness as well. For every perfect client, I need an imperfect one. We all do. We wouldn’t be professionals if all we did all day constituted play.  We wouldn’t learn much. We wouldn’t improve. Delight is possession as well.

Just as often, helping a company succeed begins by teaching its management to stop failing. To stop mistaking mediocrity for success. To stop acting against their own self-interest. In some cases, the process boils down to dragging them out of their predicament, kicking and screaming the whole way. I’ve been insulted, threatened and even fired by clients who promptly offered to re-hire me the next day, only to fire and rehire me again. I’ve endured abuse at the hand of awful little children in adult bodies. What I do isn’t always pretty. It is intervention, pure and simple.

Dealing with a C.E.O. or manager possessed by the form of madness we’ve discussed today is no different from dealing with an addict fighting for his soul.

Point #7: Whatever we like to call “personal demons,” they destroy businesses too. As surely as what brought about a mid-life crisis can destroy a marriage or career, so can it shatter a business. It isn’t something we talk about much, but we should.

We can’t not talk about this. Companies don’t get fixed. Companies don’t win or lose. People do. What I end up doing, more often than not, is fixing people. Helping them find their way and be whole again.

Bad marketing and bad business decisions often find their roots in more than incompetence and accidental human error. In order to make sure they don’t happen again – or never happen at all – you have to go a little deeper than that. “Best Practices” are only the surface. Stopping there isn’t enough. You can’t stick to the edges and hope for the best. Sometimes, you have to go deep. Sometimes, you have to go all in.

What has been on my mind lately: Some clarification before we continue

I’ve been giving this and a dozen other related topics a lot of thought this past week, and how my chosen profession fits in all of this. How experience, knowledge, talent and insight have led me to become not only an advisor and educator, but also now a confidantz and a friend to individuals who don’t understand why their companies are stuck, unable to move forward as quickly and fluidly as they know they should. The human element to it above all questions of processes and best practices and clever ideas. How important to me this has become. The problem with becoming emotionally vested in something like this, in trying to effect real change, is that it consumes you. Theres no way around it. You have to let it.

While it sometimes seems that my job consists of coming up with cool ideas and helping companies divine insights from the fog of business, the reality is that I am more often than not a therapist. A business therapist, one might say, but there is no such thing: A business is a dream brought to life by a company of men and women who form its limbs and organs, and whose love for what they do is its lifeblood.

When I am called upon to help a company, an organization, a business, I end up helping people. Why? Because every dysfunction at the root of a problem with a business invariable finds its own roots in a personal dysfunction – sometimes, clusters of personal dysfunction.

In order to do what I do – and do it well – you have to be ready for that. You have to be ready to know when to bear the weight of it all, and when not to. You have to know your way around the human mind and the human heart. You have to know exactly what to do when someone with a serious problem tries to draw you into their drama. It can be emotionally exhausting. This line of work is not for everyone.

And I guess that is why I don’t like to call what I do “consulting.” Now I know why the term never sat well with me: “Consulting” is only a small portion of what I do, just like R.O.I. is only a small aspect of what I help shine a light on. Calling myself a consultant just doesn’t work. I don’t yet have a name for what I do, and I’ll admit that it’s a bit annoying.

I am telling you this because over the course of the next few weeks, I may write more about the role that human nature plays in adopting “best practices,” pursuing excellence and creating cultures of success than I have before, and I want you to know where all this is coming from, why these topics even matter, and how I came to want to discuss them from this unusual perspective. My mind is behind the curtain this week. Under the surface. I am looking directly into the nature of leadership, courage, curiosity, insight and the spirit of victory, which are at once timeless and very specifically connected. And if we are going to make any headway, it’s time we stopped focusing so much on the superficial aspects of business and brand management, and turned our attention to some pretty core elements without which Twitter, Facebook and all of the things we love to discuss here and on other blogs are little more than salon chatter.

And I hope this helps give you a tiny little glimpse into what makes me tick, why the way in which I approach certain topics might seem a little different from other blogs. Ultimately, everything comes down to people: Understand people, and you understand everything. It’s where every one of my blog post begins. At the core of every discussion we have here about brand management, Social Media, communications, R.O.I., etc. is human behavior in all its reality and relevance.

More to come.

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Because this is really all about life, not Marketing.

Neither my posts, my wisdom nor my ideas emerge from a vacuum. Everything I have learned until now and everything I will ever learn in my life will come from doing, learning, experimenting, and listening to people who tried to do the same thing in different ways before I came along.

I often hear people lament over the fact that there are no truly original ideas left. They’re completely missing the point. The importance some people attribute to the originality of an idea is completely overblown. It’s an ego trip. They’re just disappointed because they couldn’t be known as the guy who came up with it.

Truth: What makes an idea good isn’t how original it is. It’s how good it is.

Who cares if you were inspired by a dozen things other people did? Who cares if you borrowed from artists and designers and engineers who solved a problem or created something great twenty years before you became the precious little center of your mother’s world? Great ideas, real innovation, the next big thing, no one is going to come up with them sitting at their desk, brainstorming with a roomful of  suck-ups.

Great ideas, real innovation, the next big thing, they’re all out there, waiting to be pieced together like a puzzle. And the puzzle pieces, they are scattered all over the place. How are you going to find them?

You want to find out how to get better at customer service? Take off the suit, get in your car, and go talk to your customers. Better yet, become a customer all over again. Heck, do both.

You want to find out how to design better products? Start looking at every product out there a little more closely. Things that have nothing to do with your industry. Dog toys. iPhone applications. Action figures. Tennis rackets. Bicycles. Sunglasses. Mechanical pencils. Media players. Faucets. Swiss Army knives. Even cat food is designed to look, taste and feel cool. Learn what works.

You want to find out how to become a wiser business leader? Go out and talk to people who have suffered under some really bad ones. You’ll learn very quickly how to avoid becoming the next mediocre suit with a big title.

You want to generate great ideas on a regular basis and execute on them the way Apple and Nike do? Surround yourself with creative thinkers who will challenge groupthink, uninspired corporate obstacles and collectively work together to figure out how to rock the As all the way to the Zs.

Inspiration and wisdom are everywhere. Whatever unbeaten path you may find yourself on, it’s still a path. People have been there before. Maybe the path looked very different then, but it’s still the same path. Find these people and learn from them. Since you probably didn’t have time to clear your schedule today, let me bring a little bit of that wisdom to you… but after that, you’re kind of on your own.

Very few of the little bits of wisdom below were meant to be used as business advice, which is precisely why I selected them. They’re all really about life, about decisions, about integrity, about the choices we make. But it doesn’t take a genius to see how some can be applied to customer service, to hiring, to innovation, to career management, to choosing whom to work with, and to coming out of this recession a market leader.

Rule #1: Just because someone has had more downs than ups doesn’t mean they don’t have a lot to teach you. Success, just like good ideas, doesn’t emerge from a vacuum. Success is nothing if it isn’t the final intelligent outcome of a thousand purposeful failures.

But hey, don’t take my word for it:

“Nothing is just one thing.” – Carrie Fisher

“I never knew what I wanted, except it was something I hadn’t seen before.” – Robert Altman

“Change is not threatening.” – Steve Wynn

“I love discourse. I’m dying to have my mind changed. I want to know, you understand? I like listening to everybody. This to me is the elixir of life.” – Jack Nicholson

“Take a bit of the future and make it your present.” – Andy Grove

“Courage is doing something you need to do that might get you hurt.” – Bobby Bowden

“If you’re not nervous, you’re either a liar or a fool. But you’re not a professional.” – Jerry Lewis

“Hire people who will treat the switchboard operator as friendly as they’ll treat the managing director.” – Sir Richard Branson

“My definition of evil is unfriendliness.” – Muhammad Ali

“Tell the truth. sing with passion. Work with laughter. Love with heart. ‘Cause that’s all that matters in the end.” – Kris Kristofferson

“Never accept ultimatums, conventional wisdom, or absolutes.” – Christopher Reeve

“If you don’t go, you’ll never know.” – Robert DeNiro

“If you want results, press the red button. The others are useless.” – Homer Simpson

“Hypocrisy is a detriment to progress. There’s always a hidden agenda.” – Larry Flint

“Money doesn’t make people happy. People make people happy.” – Steve Wynn

“If the dark is dark enough, light flares.” – Esky (New York City mascot)

“A nickname means you belong.” – Buck O’Neil

“Risk means guessing at the outcome, but never second-guessing.” – Mel Brooks

“I don’t regret anything.” – Bryan Anderson

“If a guy doesn’t have a little gamble in him, he isn’t worth a crap.” – Evel Knievel

“Wisdom is knowing when to shut the f*ck up.” – Adam West

“The measure of achievement is not winning awards. It’s doing something that you appreciate, something you believe is worthwhile.” – Julia Child

“If I complain about a traffic jam, I have no one but myself to blame.” – Steve Wynn

When you’re 70 and retired, trust me on this, you don’t want to look back and wish you had done it differently. Do it differently now, while you actually can.

This post was written to “Rhino II” by the Stereo MC’s, on DJ Kicks (From my Massive Attack channel on Pandora)

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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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Defining your purpose: Love is the lifeblood of your brand

Buying a product. Bringing it home. Taking it out of the box. Pressing PLAY. Turning the first page. Pulling the cork. Clipping-in. Hitting the ignition. Biting into the first slice. Slipping into it. Walking into the new store. Spraying it on. Plugging it in. Connecting the pieces. Reading the owner’s manual. Shifting up. Writing your name on it. Clicking SEND on the order form. Taking it for a spin. Just looking at it. Sharing it with a loved one. Holding it in your hand.

It should always feel like this.

It doesn’t matter if you’re a restaurant, a store, a website, a bank, a doctor’s office, a manufacturing plant or a creative firm; ask yourself this: Is the work you are doing today going to have that kind of effect on your customers? On your clients? On your fans?

Is your work really going to connect with the people you are doing this for?

Are they going to fall in love with it? Is it going to impact their lives? Is it going to inspire them? Make them smile? Wow them?

When they talk to their friends about you, will it be with awe? Will they be singing your praises?

Are you a lovebrand? (Incidentally, check out Lovemarks.com. Interesting little concept.)

If not, stop what you’re doing. Put your pen down. Look around you. Think about why you’re there, sitting at your desk. Think about the project you’re working on. It could be a product launch. It could be a new menu. It could be a new floor display. A promotion. A party. A speech.

It could be anything.

Remarkable always hits the mark. Lovebrands always win.

The key to becoming a lovebrand is simply to love your customers first. I mean… seriously. Love them. Fall in love with them.

I’m not kidding.

Read Peter Drucker’s words in yesterday’s post about purpose.

If you’re a coffee shop, love them enough to give them the best cup of coffee they’ve ever had. If you’re a retail outlet, give them the best shopping experience they’ve ever had. Love them like you love a best friend. Do what you know will make them happy. Get to a point where you truly feel joy and pride when they love what you’ve done for them. When it enriches their lives. When you truly become part of it in some way.

Everything you do should be for them, not for you.

What you do, what your company is about, how you design your products, how you interact with your customers, none of it isn’t about like. It’s about love.

Either you’re involved in a wonderful love affair with your customers and clients, or you aren’t.

That is what fundamentally sets great brands apart from the rest of the crowd: Love.

Talk to a graphic designer about their Mac. Talk to a driver about their BMW. Talk to a photographer about their Canon lenses. Talk to a foodie about their favorite dessert. Love.

So, once again…

Buying a product. Bringing it home. Taking it out of the box. Pressing PLAY. Turning the first page. Pulling the cork. Clipping-in. Biting into the first slice. Slipping into it. Walking into the new store. Spraying it on. Plugging it in. Connecting the pieces. Reading the owner’s manual. Taking it for a spin. Just looking at it. Sharing it with a loved one. Holding it in your hand.

It should always feel like this.

photo copyright olivier blanchard 2005

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Make way for a whole new type of Business Leader

Great post from Gavin Heaton over at Servant of Chaos this week about the changing face of business management. Gavin mentions an emerging new breed of business leader that might sound a little familiar if you’ve been paying attention to what our little community of Marketing+ bloggers has been talking about these last few years. Check this out:

By far, the most radical transformation will be the one thrust upon us by the generational change that is now under way. With 60 million baby boomers about to be replaced by 60 million Millennials, the workplace will never be the same again. Managing the “knowledge transfer” that needs to take place over the next 5-10 years will be a fundamental responsibility of the Business Designer.

What is a Business Designer, I hear you ask? Per Gavin:

The Business Designer does not sit in a creative studio. Rather, she operates across business units — touching marketing, customer service and new product design. The BD has a finger on the pulse of finance and lives cheek-by-jowl with the legal team. There is the touch of the management consultant in the way that the BD navigates the org chart — but also the fervour of the evangelist. She may be T-shaped. She may be a green egg. But above all, she is an experienced business professional. That’s right — she knows how to get things done.

The BD will perform the important role of “change manager” or perhaps “transformation manager” — for the domino-like changes that will occur in every facet of a business will change the nature of the enterprise. What has been rough and ready in the consumer space will become refined and repeatable in the business world for the BD will select and orchestrate the practices, tools and approaches that correspond with a company’s business strategy. Of course, this will breed a whole new round of innovation in the technology space — we have already begun to see this with Yammer, the business version of Twitter.

And there will be a corresponding transformation in the process of business, and the goals and approaches of groups charged with managing brand touch points. This goes without saying.

What’s the difference between a Business Designer and a traditional business manager? The way I look at it, the difference lies in a handful of subtle yet crucial traits exhibited by this new biz whiz breed:

1. The T-shaped trait: These folks combine a strong mix of Marketing Management and Experience Design, and understand the importance of storytelling, Brand Strategy, and Experience Design. They are gifted strategists with extremely well developed creative, communications and context-building skills. They are intellectually curious, deeply entrepreneurial problem solvers.

2. The Green Egg trait: Process improvement, an eye to new markets and a passion for Innovation are their biggest professional drivers. These folks are agents of change. These are the people who will take your company to the next level in its evolution (if you let them).

3. The “good enough” aversion trait: These folks are way too passionate to tolerate a “good enough” mentality. Their job is about much more than turning a crank and picking up a paycheck. They’re change agents – not for the sake of change, but for the sake of driving to necessary leaps in a business’ evolution.

4. They ideation trait: These folks bubble over with ideas. They sketch a lot. They prototype. They like to test out their ideas. They seek out peers who can help them bring their ideas to life. They tend to be gadget and accessories freaks, even if they only own a few. They are designers at heart, if not technically in practice.

5. The connected trait: These folks have connected with their time. They understand the underlying strategic shifts going on right now that will change the landscape that your company operates in. They are good at connecting the dots: By being plugged-in to the world today in ways that most are not, they can clearly see what the business landscape will look like in two, five and ten years. This gives them the ability to be the architects of your company’s future. You may frown at their interest in social media tools like Twitter, Seesmic, Yammer and Facebook, but these are the tools of their trade: This is how they connect with their peers, with information, and with the shifting tides that will drive the market changes that will either sink or remake your business in the next decade.

Here’s more on that from Gavin:

We are also reaching a certain maturity in the way that marketers work with social media. There are now case studies on the effectiveness of social media, there are tools that help us measure and react to conversations and there are an increasing number of corporate roles for “community managers” or even “directors of social media”.

In this environment, the focus is no longer on learning the tools, but on refining the way that we interact with them. It is about bringing social media into our businesses, integrating it with our other marketing efforts and focusing efforts in a way that deliver business results.

Read the whole post here.

I am glad you brought up the notion of this new type of business leader, Gavin. I’ve been trying to put my finger on this for a few years now. Still not quite there yet… But for those of us living at the intersection of Business Management, User & Community Engagement, Marketing Communications, Product Design, Innovation, and the evolution of Social Media tools, starting to put a name to the thing is way overdue. With most business leaders spending at least 85% of their time turning the crank and making sure their businesses run properly, who is in charge of actually driving the business to its next evolution? Department managers? Sales? The COO? The CMO? 15% or less of a business leader’s day potentially devoted to improving – not just running – their business. Scary. In a rapidly changing world/economy/market, it pays to have at least one person (better yet, a whole team of them) a) focusing on what’s next, and b) getting the business ready for it.

Does the opportunity for such folks exist as a layer between the CEO and the other C-suite execs (CMO, COO, CFO, Manufacturing, Design Engineering, Sales, etc.)  Is the role better suited to function as a team-based cluster of upper-mid-level Business Directors? Perhaps a Brand Czar who provides direction to all departments but answers directly to the CMO? Is there a better name for the role? Can this type of individual force an overhaul of the traditional corporate org chart?

Big tip of the hat for getting that discussion started, my friend.

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I just wrote a genius post about the auto industry, but my computer ate it.

So instead, I will just post this haiku:

GM US sales dropped 18% in june.

Toyota US sales dropped 21% in June.

More imagination is needed.

Source: CNN

With every car and truck and van in the US looking essentially the same and absolutely no effort whatsoever by major car manufacturers to create sexy, well-designed, fuel-efficient, compact cars to give the overpriced mini Cooper and gender-limited VW Bug a run for their money, we are left with a sea of cars no one wants.

Problem #1: Wallet share is tight. Buying a new car in the current economy is already a tough proposition.

Problem #2: Buying a car is an investment. Resale values of vehicles with weak mileage efficiency are dropping fast. Investing in a car today with gas prices looking the way they do (+ market insecurity) means consumers aren’t likely to fork out big bucks for a new car anytime soon.

Problem #3: Our “bigger is better” supersize-me attitude needs to change. The days of the macho-by-horsepower association are coming to a close. Deal with it.

Problem #4: Auto manufacturers are not reacting quickly enough to the oil crisis. (As if it wasn’t always coming. Didn’t anyone have a Plan-B? Really?)

Problem #5: Most cars don’t have a purpose or an identity. Nissan’s X-Terra’s success 8 years ago was due to the fact that it had a very clear place in the pantheon of vehicles. Same with the H2, the Mini Cooper, and the VW bug. Today’s contenders are Toyota’s FJ Cruiser and to some extent the H3, but that’s about it. Every other SUV is just another copy of a copy of a copy. Ford’s Mustang GT fills the muscle car void fairly well, but we aren’t exactly talking middle of the bell curve here. Crossovers are a nice concept, but I have a tough time getting excited by any new design – they’re all the same. Ergo: I’m bored just trying to think of an interesting or unique car i am jonesing for under $30K.

There is a clear absence of imagination in the auto industry, at least in the US. derivative designs create an “also-in” design culture that offers no clear value to anyone. Sure, I can get excited about Aston Martin or Bugati’s latest supercars, but when I look at cars I can actually afford – the middle of the bell curve – what am I left with? Where is the sexy, smart, well designed sub-$20K car with great gas mileage and suite of electronic interfaces I have been asking for? Where are my power outlets for laptops and media player recharges? (Real outlets, not cigarette lighter outlets.) Where is my built-in hands-free system for my phone? Where is my media player plug-in?

I’m not saying that we should all adopt the euro supercompact-car concept (although if you live in the city, don’t have any kids, and absolutely need a car, perhaps you should consider one), but there is a healthy compromise that can be met. Why is it that we aren’t seeing it yet? Every compact car on the market that isn’t a mini or a bug is manufactured on the cheap and designed on the quick. This needs to change.

Cars should always be cool. They should always be more than just a set of wheels to go to work or to the store. I’m not sure when the industry shifted to a zero personality model, but auto makers need to turn this around. Cars with personalities sell. Period. They sell because they stand for something. They help their owners express who they are. Identity development needs to become part of every new car design – not just at the brand level (a BMW is a BMW /a Mercedes is a Mercedes) but at the level of the individual model. Scion has adopted the concept 100%, but its designs look like someone got a hold of ten-year-old early concept drafts from 2-3 automakers and actually turned them into production cars without making any changes. (Right idea: Unique models for unique uses, but horrible execution: Not a whole lot of curb appeal, and heinously derivative designs.)

Is it really THAT hard to get this right?

Here’s what the next big auto hit looks like:

1. It has so much personality, it could be a Mac. (Sorry, I’m supposed to be the PC guy, but we all know where “cool” lives these days.)

2. It looks GREAT. Not just good, but GREAT. People want to rent it from hertz and budget and Avis. Your friends want to drive it when you show it off at your next together. People on the street stare at it when you drive by.

3. The interior is a mix between the cockpit of a 1930’s rallye speedster and the cabin of a brand spanking new custom Leer jet.

4. Real power outlets. Media player interfaces. Hands free wireless interface. Just do it.

5. MPG superstar status. Make it part of the car’s identity. Not an afterthought, but at the very core of the car’s purpose.

6. $12K-$18K is the sweet spot. It’s a compact.

7. But make it look, feel and perform like a $30K+ car.

8. Invent something smarter than a cool cup holder. Like a built-in passive cabin ventilation system for really hot summer days. Or a slot for a portable hard drive inside the dashboard. Or a fully insulated trunk compartment for laptops, cameras and other electronics. Or accessible + concealable storage compartments for passengers. Or a new seat adjustment interface. Or yeah… a better cup holder.

Europeans have been designing very cool, high performance compact cars for decades. Look to Renault, Citroen, Opel and Peugeot, for starters. Even mercedes sells compact cars in Europe now.

Think, guys. Dream a little. Invent something that brings value to the market. More importantly, make your brand, your designs and your every conversation with us, the people who should be dreaming about driving your cars, stand for something. Give us something to desire and crave and get excited about.

A 20% drop in sales might be great for your car lease units, but that isn’t where you want to be. Wake up and do something.

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