Game-change: Moneyball and the reality of social business.

Moneyball - Courtesy of Sony Pictures.

I finally watched Moneyball over the weekend. I’m not a big baseball fan but it held my interest, partly because it was based on a true story and partly because the movie really wasn’t about baseball at all. It was about old thinking vs. new thinking, about industry politics vs. the heresy of innovation, about dinosaurs desperate to hang on to a failing model that sustains their livelihood even when that model is clearly broken, ineffective and no longer relevant.

The scenes in which Oakland As’ general manager Billy Beane (Brad Pitt) locks horns with his cadre of coaches and scouts over how to do more with less, about how to break the cycle of mediocrity plaguing their organization, about how to get results again is brilliant, not because of the writing or the acting but because it is spot on target. How do I know this? Because I have been in that meeting hundreds of times. Well, not that particular meeting, but in others exactly like it. And every week that goes by, I find myself sitting in that meeting again and again and again.

In the US, in Europe, in Asia, the same meeting goes on almost daily. The conference table is always basically the same, the fluorescent lighting too. The players, they’re the same as well, everywhere I go. Only the vocabulary changes, the industry lingo, but the meeting, it’s the same and it goes pretty much like this:

Billy Beane: Guys, you’re just talking. Talking, “la-la-la-la”, like this is business as usual. It’s not.
Grady Fuson: We’re trying to solve the problem here, Billy.
Billy Beane: Not like this you’re not. You’re not even looking at the problem.
Grady Fuson: We’re very aware of the problem. I mean…
Billy Beane: Okay, good. What’s the problem?
Grady Fuson: Look, Billy, we all understand what the problem is. We have to…
Billy Beane: Okay, good. What’s the problem?
Grady Fuson: The problem is we have to replace three key players in our lineup.
Billy Beane: Nope. What’s the problem?
Pittaro: Same as it’s ever been. We’ve gotta replace these guys with what we have existing.
Billy Beane: Nope. What’s the problem, Barry?
Scout Barry: We need 38 home runs, 120 RBIs and 47 doubles to replace.
Billy Beane: Ehh! [imitates buzzer]

What we see in this scene is a roomful of insiders with a century and a half of industry experience between them, and yet they haven’t figured out that their model is outdated, that their “experience,” is no longer enough to keep moving forward. They carry on day after day, season after season, doing the same thing over and over again, half-expecting a different result, but then again, maybe not. Worst of all, most of them have no idea what the problems plaguing their organizations actually are. A lot of it is just operational myopia. Some of it is also ego: they couldn’t possibly be wrong. All that experience and intuition, the entire industry’s decades-old model… how could things have changed that much, right?

And yet they are wrong, the model isn’t working anymore, and instead of listening to the guy in the room who sees it and knows how to fix it, they treat him like a punk. When he wants to do something about it, they push back. Hard. In Moneyball, he’s their boss. Imagine when he is just a Director or a VP, or even just an account manager. Imagine how quickly he gets overruled then. I’ve seen amazing people get shut down and pushed out of organizations over this sort of thing. I could give you names and dates. I could make you ill with true stories of stupidity and petty politics, of wasted opportunities and complete operational failures that turned what could have been huge wins for companies that needed them (and customers who demanded them) into case studies in wasted potential. And as tragic as  these stories would be, they are no different from the opportunities that will be wasted this week, and the next, and the one after that, always for the same reasons, always because of the exact same thinking and business management dynamics.

I see that scene, that meeting, that discussion being played out almost everywhere I go, especially when it comes to social media and social business: guys sitting around a table, treating social like it is just an extension of the same old traditional digital marketing game they all understand and desperately want to stick to. And so they make strategy decisions based on models that don’t apply at all to the social space, they insist on using measurement schemes that aren’t the least bit relevant to it or the business as a whole, and worst of all, they make hiring decisions that absolutely make no sense at all for the new requirements of social communications. Why? Because even though the game has changed, no one in the room wants to accept that it has. No one in the room wants to adapt. No one in the room wants to look reality in the eye and do what needs to be done to actually win. Talk about it, sure. Use cool new words like earned media and engagement, definitely. But actually change anything and adapt to a new model? Nope. Not happening. The change management piece that comes with social business integration, the piece that is absolutely vital to it actually working, that piece is still DOA.

Here’s another conversation that also goes on “offline” at every company (agency or brand) around the world right now in regards to hiring decisions that touch on social media management. Here it is again, through the filter of Moneyball:

Peter Brand: There is an epidemic failure within the game to understand what is really happening. And this leads people who run Major League Baseball teams to misjudge their players and mismanage their teams. I apologize.
Billy Beane: Go on.
Peter Brand: Okay. People who run ball clubs, they think in terms of buying players. Your goal shouldn’t be to buy players, your goal should be to buy wins. And in order to buy wins, you need to buy runs. You’re trying to replace Johnny Damon. The Boston Red Sox see Johnny Damon and they see a star who’s worth seven and half million dollars a year. When I see Johnny Damon, what I see is… is… an imperfect understanding of where runs come from. The guy’s got a great glove. He’s a decent leadoff hitter. He can steal bases. But is he worth the seven and half million dollars a year that the Boston Red Sox are paying him? No. No. Baseball thinking is medieval. They are asking all the wrong questions. And if I say it to anybody, I’m-I’m ostracized. I’m-I’m-I’m a leper. So that’s why I’m-I’m cagey about this with you. That’s why I… I respect you, Mr. Beane, and if you want full disclosure, I think it’s a good thing that you got Damon off your payroll. I think it opens up all kinds of interesting possibilities.

Every company has a Peter Brand either on staff or sitting in a stack of CVs. Not necessarily in the sense that they are geniuses with statistics  but in the sense that they see the forest from the trees, that they see what needs to be done, but every time they open their mouths, they get shot down. Worse, if they open their mouths too much, they’re gone. And if their CV doesn’t have the bullet points and keywords that hiring managers were trained twenty years ago to find relevant, they don’t even get considered for the position.

If I see one more social media leadership position go by default to candidates with “big agency digital experience” or “big brand digital experience,” I am going to throw my pencil at somebody’s head. There is the medieval thinking in action, right there. There’s the primary reason why almost every social media program on the planet is failing to produce results, why three fourths of companies still can’t figure out how to calculate the ROI of their social media programs, why most brands see less than 1% of engagement from their followers and fans after the first touch, why “content is king” is failing, and why increasingly, “social media” strategy and budgets are shifting to ad buys on social networks. That’s right: For all the talk about earned media and engagement and conversations, social media account roles are starting to go to media buyers now. (Here’s some insight into it.) Everyone loves to talk the talk. Almost no company is willing to actually walk the walk. That sound you’re hearing is the banging of traditional marketing hammers pounding nails into social business’ coffin.

You want to know why most big brand social media programs aren’t gaining real traction? Why they don’t work without a constant influx of ad spending? Why nobody sticks around when the “free iPads for likes” promotions are gone? Start there: no one in the room gets it. No one in the room wants to get it. And when someone in the room does get it, he or she doesn’t keep their job for very long. You think most companies are going to hire, promote and support change agents all on their own?

So the real question is this: Do you want to actually score some real wins or do you just want to spend big marketing budgets and play at being a digital big shot?

It’s a real question. In fact, it’s the most important question you might ask yourself all year. Because the answer to that question will determine whether or not you still have a job in two years. No wait… I misspoke. The answer to that question will determine whether or not you have the job you want in two years, and yes, there’s a difference. A big one.

When you find yourself looking for your next gig (and you will eventually,) do you want to just be the guy who was SVP digital at (insert big brand/agency here) or do you want to be the guy who took (insert big brand/agency here)’s theoretical social media and social business programs, and turned them into the new industry standards, into the business model that everyone will be copying and basing theirs on for the next decade? It’s a real question. Which guy do you want to be? The dinosaur or the pioneer? If the answer is the latter, then are you going to have the huevos to go against the grain? To take chances on whom you hire, what kinds of programs you launch, where and how you invest your budgets? Are you willing to stick your neck out and do it right? Or is it more likely that you’ll just play it safe, hoping that the system will just carry you for another decade or two, that the CEO or CMO you will interview with next won’t notice that your job was basically to spend ad dollars and shuffle digital board pieces for the CEO’s monthly show-and-tell meeting?

Who do you want to be? What do you want to build? Do you want to just wear the jersey or do you want to win? Hold that thought. Here’s another key piece of dialogue from the movie, after Billy Beane’s gamble has paid off, after he has started turning some wheels in a big way. He responds to an invitation from John Henry, owner of the Boston Red Sox, who tells him this:

John Henry: I know you’ve taken it in the teeth out there, but the first guy through the wall. It always gets bloody, always. It’s the threat of not just the way of doing business, but in their minds it’s threatening the game. But really what it’s threatening is their livelihoods, it’s threatening their jobs, it’s threatening the way that they do things. And every time that happens, whether it’s the government or a way of doing business or whatever it is, the people are holding the reins, have their hands on the switch. They go bat shit crazy. I mean, anybody who’s not building a team right and rebuilding it using your model, they’re dinosaurs. They’ll be sitting on their ass on the sofa in October, watching the Boston Red Sox win the World Series.

And a couple of years later, they did.

So let’s talk about our world again for a minute. Let’s talk about what’s coming, about tipping points, about momentum: Ford not only hired the right guy (Scott Monty) a few years back but gave him the authority to build a solid program there. The result: some serious wins on just about every front, from customer perceptions to purchase intent to customer loyalty and recommendations. Even car design was impacted in 2010 by the importance of social communications in the Ford organization. Edelman Digital seems to be doing something similar (I keep running into some pretty solid folks there, notably Michael Brito and David Armano). Want to see something cool? This is one of the things they’re working on. Starbucks caught an early train with that too. So did Dell. What sucks is that in 2012, virtually no one else has even tried to keep up with them. For all the money being spent and all the “case studies” being pushed around the conference circuit, most companies are still fighting it, still refusing to accept that the game has changed – worse, trying to keep playing with old methods, with old thinking, with old, outdated skills and CV bullet points. But there will come a day when someone will be given the authority to build out this new model, when it will blow everyone out of the water, and when the blindfolds will have to come off. That day is coming. What side of change do you want to be on then?

Old thinking will not score wins here. Old tactics, old hiring, old measurement, they’re all wrong for these new marketing, communications and business models. They just don’t work anymore. If you don’t believe me, that’s fine. Keep watching your margins erode. Keep watching your digital dollars go to waste. Keep laying people off and outsourcing every last business function you can’t afford to keep in-house anymore. Keep pretending the world is the same today as it was five years ago, and that what you were doing five years ago will still be relevant five years from now. Whatever makes you feel better. Keep doing the same old thing that used to work, back before people carried smart phones and iPads. Keep thinking that the guy you just hired because he spent ten years managing digital for a fast-food brand knows fuck-all about building capacity and traction for a social media program, let alone produce concrete business results for you. Keep coloring the same old boxes with the same old crayons and see how far you’ll get.

_ Okay good. What’s the problem?

We need to fill a VP Digital role.

_ Nope. What’s the problem?

All right… Whatever. We need to fill a VP social media strategy role.

_ Nope. What’s the problem?

We need to hire someone with proven global digital management experience, Billy. Someone with Disney or Nike on their CV. Someone with serious digital campaign experience.

_ Nope. What’s the problem, Barry?

The problem is, we’re not growing our Facebook community fast enough, and our content isn’t seeing the numbers we want. We need a…

_ Nope. [Imitates buzzer]

Get unstuck. Watch Moneyball and let the light bulb go off in your head. Then go find your Peter Brand and hire the shit out of him before someone else does. If you’re lucky, you’ll save both your career and your company in the process.

*          *          *

Here it is. A whole book on how to make social media work from a business standpoint. ROI is covered, along with a lot of process elements that tie back to it. If your favorite social business “expert” doesn’t seem to get this stuff yet, don’t feel bad about sending them a copy. Knowledge is never a bad gift.

CEO-Read  –  Amazon.com  –  www.smroi.net  –  Barnes & Noble  –  Que

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Cutting Through The Noise: Tying Social Media Program to Business Objectives

The debate over whether or not social media programs should show positive ROI (a financial outcome) or not is kind of silly. It’s a dogmatic argument: People who believe social media activities shouldn’t be about making or saving money for the organization can articulate with conviction why they shouldn’t be. They will use terms like “engagement” and “conversations.” Their measurement methodology will shun terms like ROI (return on investment) in favor of terms like ROE (Return on Engagement) and ROC (Return on Conversations).

Conversely, people who believe social media programs should focus on the P&L and the bottom-line have their own set of valid arguments to support their point of view. They tend to use terms like “net new customers” and “buy rate.” Their social media programs’ measurement methodologies tie ROI to net new revenue, customer acquisition and retention, cost efficiencies, and various types of conversion funnels.

Both sides of this argument have been fighting over the same piece of turf for going on three years now, and with little to show for it. In the end, the argument itself is rubbish. The simple truth is this:

1. An organization’s social media program doesn’t have to focus on generating positive ROI, but it can. That is why professionals who work in the Social Media program management space have to understand the ROI piece.

2. An organization’s social media program can (and should) serve more than one purpose. One purpose may be to generate revenue for a particular group, or cut costs for an existing program. (This increased revenue/cost savings type of objective, being financial at its core, is the basis of the ROI issue in Social Media programs as it is with all business programs.) Injecting ROI and business justification into a Social Media program, however, does not mean social media activity cannot also serve PR, marketing and business intelligence functions. Generating positive ROI and pushing non-financial outcomes can coexist perfectly within the same social media program. Most successful Social Media program managers don’t make the mistake of taking sides in this pointless profit vs. “purity” debate.

3. Whether a Social Media program should generate positive ROI is really up to the organization’s leadership. The CEO is the ultimate arbiter here. Every organization has different sets of goals and objectives. Social Media is merely a tool kit. How it is used – and in support of what types of objectives – is unique to each organization. There is no universal right or wrong way to apply Social Media to an organization’s business model. There is only the way that best benefits each unique organization. Sometimes, monetizing Social Media is relevant. Sometimes, it is not.

Take the example of a fully funded NFP (Not-For Profit organization) or a government program. Such an entity isn’t looking to acquire new customers because it doesn’t have customers. It may not even be interested in recruiting donors or benefactors. Its sole purpose in creating a Social Media program may be to increase its reach, educate the public, and improve awareness about an issue – like teen pregnancy or the health risks of smoking cigarettes. ROI may not ever be a factor, yet Social Media can be integrated into the organization’s communications mix with potentially powerful results.

Likewise, a for-profit company may realize that at some point, it will have to deal with a major PR crisis that will involve consumer outrage in the social media space. Companies whose PR departments find themselves both unprepared and out-gunned in the social media space on the day a crisis hits tend to take a brutal beating by angry digital denizens that leaves a lasting stain on their brands, at least in the world of search engines. Among them recently were BP, United Airlines, Southwest Airlines, Nestle, and more recently Kenneth Cole. Digitally-savvy PR professionals understand that the faster a crisis can be defused in the social media space, the smaller the footprint both in consumers’ collective psyche and in the world of Google. To this end, new digital PR functions such as keyword monitoring, online reputation management, and digital crisis planning and management form an invaluable insurance policy against sudden unpleasant (and potentially damaging) situations. This takes planning, diligence, and a lot of front-end work in terms of building relationships with consumers through social media channels, participating in the activities of various communities (digital, in this case),etc. Some companies may decide that building this type of digital protection mechanism should be the primary focus of a Social Media program, and that is perfectly fine if that is what they want to focus on.

For other organizations, the focus of their Social Media program seems to naturally fall into any number of business functions like customer service, marketing, lead generation, advertising, market research, customer retention, consumer insights management, etc. Every business is different. Coca Cola and Pepsi don’t use social media in the same way in spite of the fact that they have very similar business models. In the same way, GM and Ford’s both use social media in their own unique way, and each works well for them. An organization’s decision to focus on financial outcomes and non financial outcomes (or the degree to which they focus on both) is entirely up to the leadership of the organization.

As advisors, program managers, social business directors, consultants, agencies or partners, our job isn’t to steer companies towards financial or non-financial outcomes. It isn’t to push our own skewed dogmatic beliefs about what Social Media and Social Business should be about. (The term “social media evangelist” suddenly comes to mind.) Our job is to first understand all of the ways in which Social Media fits into our organization – in other words, how it can benefit the organization, – and second, properly implement its use in support of key business objectives.

If an organization then wants to only focus on using social media to guard itself against a PR crisis, so be it. If it only wants to use social media to push out promotions and special sales, that is perfectly fine for them to start there. (It worked well enough for Dell.) If it wants to focus on combing the Twitternets for potential customer service opportunities, start there. (Comcast didn’t fare too badly in this area either.) If it feels most comfortable using social channels to simply extend its digital marketing efforts and make them more interactive, that works too (Old Spice, Pepsi and Coca-Cola come to mind). Likewise, if a company decides that it wants to build a more robust, operationalized program that plugs social media into every department and business function, then be ready to build that type of program as well. (Companies like Ford, GM, Starbucks and Best Buy are well on their way.)

 

Whether an organization starts out with one area of focus and naturally gravitates towards expanding social media into other areas of its business, or starts out looking to build a comprehensive social media program that plugs into every facet of its business, the basic process of turning a social media program into what my friend Brian Solis calls “Social Business” is at its core fairly straightforward:

1. Take a step back and look at your entire organization, talk with your department heads, and together figure out how social media might fit into every single business function and process, from marketing, sales and customer service, to internal collaboration and data analysis. This is primarily a strategic discussion.

2. Follow the “how does it fit?” discussion with a “how do we make it fit?” series of sessions. These will be operational discussions rather than strategic ones, so you may want to invite a different set of people to participate in this phase of the process.

3. It isn’t enough to vaguely attach facets of a Social Media program to business functions. You also have to identify specific goals proper to these functions that your social media program will be tasked with supporting. There is no need to create a different set of goals for your social media program. Start with existing business goals. In regards to sales, this could be increasing sales by 13% YoY. In regards to marketing, it might be to reach 300,000 net new households in Q2, or generate 5,000 new leads. The PR department’s objective may be to both create a digital crisis response plan and improve its media outreach efforts. Each function has its set of objectives. Identify them, understand them, and make sure that your social media program supports these objectives.

Note that whether or not those objectives are financial or non-financial doesn’t matter. The distinction is irrelevant to the purpose of the Social Media program’s activities. It can support both financial and non-financial objectives with equal effect and fervor.

 

4. Once you have established what business functions your Social Media program will support, how it will plug into each of these functions from an operational perspective (who does what and how, who do does everyone report to, etc.), and what objectives the program’s activities will focus on achieving, specific goals have to be set. This is the process of converting sometimes vague objectives into specific numbers. “More sales” is thus turned into “$20,000,000 net new revenue in Q2.” “Improve brand perception” becomes “increase positive sentiment for the brand by 20%.”

The question this step aims to answer is “How will I measure my program’s success for each of those objectives?” Measuring the ROI of a Social Media program may be tied to specific increases in net new revenue or cost savings so this part is important. Having said that, measuring a Social media program’s value to an organization beyond financial justification requires an equal degree of accountability. PR, for example, is rarely asked to show ROI. Like Customer Service and Human Resources, it is a function whose purpose touches on aspects of the business that do not directly impact sales. As Social Media becomes integrated into the PR function, ROI (financial justification) may not be nearly as relevant a topic as focusing on properly measuring its impact on the PR department’s effectiveness.

You can see how setting adequate targets is pretty crucial at this juncture. PR is just one example. The same reasoning can be applied to every business function: If the business function is not generally asked to show ROI, introducing a social media element to that business function may not necessitate an ROI discussion. A discussion about how adding a social media component to its activities will help it hit specific targets (in this case non-financial) may be more appropriate. If, however, the business function or program is tasked with showing a positive financial return on investment, then an ROI discussion is appropriate when it comes to assigning resources to social media roles in support of those financial targets. What setting targets teaches us is that the ROI question is case-specific.

What this part of process also teaches us is that the effectiveness of a Social Media program should not only be tied to typical social media metrics like the number of followers, fans, likes and subscribers, but also to the program’s ability to help each business function it supports hit its targets. In fact, the latter should be your priority. Each business function has its own set of objectives, and each of these objectives must have its own set of targets.

 

This is how you start to build functional Social Media programs, by the way. Not by treating social media as a 5th marketing wheel or a vague consumer “engagement” engine, but as a fully-integrated competency deployed across every department in your organization.

So the lesson here is this: Don’t get all tied up in the philosophical arguments regarding social media and business, the ROI question, or even the pros and cons of monetizing social media. debating personal opinions can be pretty entertaining, but from a practical standpoint, these types of discussions don’t lead to either answers or solutions.

Instead of picking a side or arguing over conjecture, look at Social Media’s role in business from a practical perspective: Understand all of the ways the Social space, with all of its tools and capabilities, can help an organization improve everything it does. Figure out how the organization you serve can use Social Media to become safer, smarter, faster, friendlier and more successful in every way that matters. Some of it will hinge on financial outcomes and some of it won’t. Learn to be equally comfortable with both and you will find that building and managing social media programs that bear fruit will become a lot easier.

I hope I didn’t confuse anyone with this.

Cheers.

PS: You can find a lot of this stuff in Social Media ROI: Managing and Measuring Social Media Efforts in Your Organization (Que Biz-Tech / Pearson), due out in March, but available for pre-order now on Amazon.com and at Barnes & Noble. Order it now:

Additional reading:

Vadim Lavrusik’s The Evolution of the Social Media Manager – Social Monetization Manager? (Mashable) – Finally, businesses are beginning to look past the “it’s really about conversations and engagement” evangelism and into a more complete approach to social media operationalization. Vadim’s post made me realize it was finally time to start sharing some of this with a broader audience.

Sean McDonald’s Dell – A Leader in Social Media Innovation (Ant’s Eye View) Hat tip to @RichardatDELL for pointing this one out. The statement that “You will never fully scale your operation by just adding more headcount to a central social media team. You scale smartly when you enlist your existing employee population to listen and engage on behalf of the brand” echoes my sentiment exactly. Social media isn’t a department or a function. In order to yield the best results (whatever they may be, based on the organization’s needs) it must be a fully-integrated competency deployed across every department in an organization.

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You want results? Time to start re-investing in people

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

Today is a writing day, but not here. I have a deadline looming – a sizeable amount of content to transfer to the page one tap of the keyboard at a time – so the next few posts will be drawn from the vault. Yes, we will resume our Psychology of Failure series, but not today.

Today, let’s instead talk about how to really get a competitive edge by hiring the right kind of people. Edelman Digital’s David Armano would call them T-shaped people, or even Sun-shaped people. He isn’t wrong. The point is: A company is only as good as the sum of its parts. And by that, I don’t mean equity, technology or assets. I mean people. Invest in people, really invest in them, and your company will soar. Hire on the cheap and treat them like asses in seats, and your company will falter. It’s that simple.

What do you think makes Apple great? Trust me, it isn’t their servers or cool offices. It’s people. People come up with the ideas. People turn concepts into reality. People fight for their projects and make sure they happen. People invent, design and perfect the iPod, the  iPhone and the iPad.  People explore new ideas and figure out what the next big thing is.  People make customers feel special. People either make or break companies and brands, from the CEO to the greeter, and from the designer to the cashier.

It’s always been like this. Social Media didn’t invent anything. “Putting the people back in business?” Why did you ever take them out to begin with?

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

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 from 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.

The next big product won’t be a completely original idea. It will be an original take on a dozen old ones. What was the first iPod: A portable CD player without the CD. What’s the iPhone: A phone that does more than other phones. What’s a venti latte from Starbucks: A 20 oz cup of coffee with a Starbucks logo on it. What was the first light bulb: A candle without the candle.

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

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? That’s how it works. You go out into the world and get inspired by other things. To take bits and pieces of things that work somewhere else, and you adapt them to your needs, then piece them together to create something better.

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? In a meeting? During a powerpoint presentation? At the end of a RE:RE:RE:RE string of emails?

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.

If you’re too busy to do this yourself, then make sure the people who work for you get to do this. Give them permission to. Send them out into the world. They aren’t going to learn anything new sitting at a cubicle all day, filing papers.

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

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.

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

You don’t get to be a market leader by playing it safe.

“Let’s see what our competitors do first” is not the path to market leadership.

“Can you show us some case studies first?” is not the path to success.

Every time I hear executives speak enthusiastically about the crazy projects their junior teams are working on, I smell success. Whenever I hear career administrators dismiss ideas from junior members of the organization because they’re too bold, because they’re unproven, because they haven’t been tested by the market, because they aren’t guaranteed to work, I smell failure.

Success – just like good ideas – doesn’t emerge from a vacuum. Success is nothing but the final intelligent outcome of a thousand purposeful failures. The light bulb wasn’t invented overnight by a major technology company based in Palo Alto. Neither was the automobile.

Success is a process. It has its own architecture. Its own unique elements. Its very own DNA. Think about the quality of people you hire and promote. Are they just there to be asses in seats? Does their job consist of spending a third of their day responding to emails? Are they merely “head count,” as some companies call them? Do you truly encourage and reward initiative, innovation and courage, or do you make a process of crushing them out of your organization?

Here’s a tip: If you feed your organization average, don’t expect to get anything but average results. If you only feed your business “safe,” don’t expect to get anything but “safe” results (which means no results at all). If you surround yourself with suck-ups and cowardly little self-serving tyrants, don’t expect a whole lot either.

Fortune does favor the bold: Apple takes chances and wins. You could say the same of Pixar. Google didn’t get where it is by playing it safe. Look at what Ford has been doing for the last two years. How do you think Zappos got to be Zappos? Even Old Spice, for that matter, took a chance and scored big – turning a tired, irrelevant brand around with a few deliberate strokes of genius and a healthy dose of courage. Where do you think all of this started? With decisions. Decisions made by people. People who were willing to take calculated risks in order to win. People who were willing to go where no one had gone before and see how far the rabbit hole went.

Imagine where those companies would be today if they had hired unimaginative desk jockeys whose idea of advancement was to fly under the radar long enough to get promoted and just “do their jobs and go home.” Your company should be a hotbed of ideas, not paperwork and reports.

Invest in your people. Treat them like kings. Give them what they need to make you next year’s success story. If there ever was a secret to gain a definitive market advantage, it’s this.

But hey…

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

Here are a few additional tips from some people far smarter than I am:

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

“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

“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 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

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

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

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

“Nothing is just one thing.” – Carrie Fisher

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

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Greenpeace vs. Nestle: How to make sure your Facebook page doesn’t become a PR trojan horse – Part 2

In Part 1 of this post, we did a quick recap of how Greenpeace and hundreds of outraged environmentally-conscious web denizens turned to Nestle’s Facebook wall to air grievances on Friday March 19, and essentially turned the company’s Facebook embassy into a battleground. If you missed it, check out the post (and the comments) here.

Today, we’re going to look at ways that this Social Media management disaster (and PR black eye) could have been handled by Nestle, had their Social Media team (internal or outsourced) been prepared for that kind of crisis. We already covered some of the major points of how to avoid this yesterday (hiring professionals to manage your Social Media outlets, planning for crises, training in crisis management and real-time PR, etc.), so – for the purposes of today’s post – let’s assume that Part 1’s advice was taken to heart and that trained, experienced professionals are now in charge of all of the company’s Social Media properties, including Facebook.

Some comments from nestle's wall

What to do if your Facebook Page comes under attack by an activist organization and/or scores of angry commenters:

1. Be there. You can’t gain control of the situation if you aren’t there, monitoring and ready to take action. So monitor keywords. Monitor channels. Expect attacks and crises to come, and be ready to act. In case your boss forgot to tell you, if you are charged with managing a company’s Facebook presence, you’re N.O.R.A.D. for them on Facebook. Keep your eyes on that radar screen at all times, and have a well-thought-out yet flexible plan of action if you spot missiles heading your way.

Recap: Nestle’s team was painfully absent when its wall was attacked on march 19th, and the result was a bloody trouncing of the brand that lasted not only hours but days. Whomever was being paid to manage that page essentially sat on their hands while it was taken over by hundreds of facebook users with – in many cases – legitimate concerns that needed to be addressed. Not exactly a stellar display of skill, professional savvy, or… presence, for that matter. Someone should have been there to at least try to manage the complaints.

2. Carefully but quickly gain control of the situation. (See 3 to 6.) Why is this here? Because it is important to realize that “response” isn’t enough. in order to be effective, you have to be more than simply reactive. You have to regain control of the situation. You have to regain the initiative. If you don’t, you will find yourself in a defensive position for days, and nothing will get resolved.

3. Introduce yourself. Put a face, name and role to your official presence. Don’t just reply from behind a faceless corporate identity and avatar. Be a human being. Talk like a human being. Feel like a human being. Engage on a personal level with commenters. Look at what Scott Monty does for Ford, for example, and how he does it.

Recap: Nestle’s “presence” on facebook on March 19th was remarkably corporate. This didn’t help establish the kind of rapport needed to begin a real discussion. Even if Nestle’s engagement had been stronger, its faceless approach put them at a disadvantage from the start. Humanizing its presence would have been a great first step.

4. Make a point to welcome the comments. Invite them. Keep it up. See number 3, above. This is important. Popping up with a comment every three hours won’t cut it. Get in there, ask your boss to go on a Starbucks run, and brace yourself for a long day/night. Like it or not, this is where you earn your pay, so strap in and enjoy the ride. Think Marathon, not 5K.

Once you get into the game, be cordial, be kind, be professional, and assume your role as the custodian of facts. Not propaganda: facts. If someone claims something about your company or products that is inaccurate, politely respond to their comment with a link to factual information that will help them reconsider their position. That infant formula comment in the screenshot of Nestle’s wall (the one about no nutrients) should be addressed. Without getting defensive or getting drawn into an argument, the facts need to be stated.

Recap: Nestle’s first attempt at “engagement” seems to have focused on the improper use of its corporate logo in commenters’ avatars. Not exactly an inspired way to get things rolling in the right direction. After a few unfortunate exchanges, Nestle backed off and went relatively silent, allowing a free-for-all of anger and in some case, inaccurate information that is now searchable on the web. This was not the most effective strategy.

5. If you haven’t done it already, create an area for Discussions on the Facebook page. This will give discussion topics their own tab on the page, and a place for people to go to start and participate in discussions that isn’t necessarily the wall.

Recap: Nestle did not have a Discussions section on its Facebook page on March 19th… and still doesn’t. And still doesn’t. And still doesn’t. (Nestle: You still don’t have a discussions tab on your facebook page. FYI.)

Why is having a Discussions area important? Several reasons:

First, it helps move a lot of the traffic and activity off the wall, which isn’t a bad thing – for obvious reasons. (Not all of it, but a good amount of it.)

Second, it helps keep all of the conversations focused. Instead of a mess of anger and random grievances, you can create a discussion thread for each specific grievance. In the case of Nestle, these individual discussion topics could be: Saving Oranguntans. Preserving Borneo’s rain forests. The health impact of using palm oil in candy bars. Baby Formula. Etc. When the mess of noise can be turned into specific discussion threads, the company can better listen and better respond. Now you’ve created order out of chaos for both the company AND the angry commenters. It works for everyone.

This is one of the first tangible ways that you will regain control of the situation: Manage the influx of comments. Organize it. Redirect it. Refocus it. Give the discussions purpose and focus.

Notes on tone, self control, and gaining control of an unstable crowd:

A) DO NOT GET DEFENSIVE. Ever. Don’t get drawn into an argument, don’t argue. Listen. Acknowledge. Treat every commenter with respect. Be professional. A lot of angry commenters just want a fight. Don’t give them one. Offer them your ear, a platform, and hopefully a solution.

B) Don’t be a push-over either. Don’t let the angry numbers fool you: You’re the community manager. You can and must  assert your authority when people get out of line. Do it calmly, do it politely, but let commenters know when they are out of line. Don’t worry too much about the improper use of logos or “rules,” the way Nestle did early in their ordeal. It’s a weak position to try and defend, it serves no purpose, and it may only add fuel to the fire with a mob looking for weakness. (So pick your battles carefully.) That said, threats against company employees, deliberate personal insults, etc. should be met with a courteous but firm response. Example:

C – “Your executives should be hanged for what they’ve done! Baby killers! And you’re a soul-less sellout!”

R – “I understand your anger. I really do. (I wouldn’t be here talking to you if I didn’t care, and if my bosses didn’t care. We WANT to have this dialog with you.) But please let’s keep things from turning into… that. It’s just not constructive. Let’s talk about what we can do to fix these problems: What’s the first thing we should focus on?”

What you have to understand is that an angry mob looks for two things: Strength, and weakness. Show strength and they will respect you. Show weakness and they WILL tear you apart. Any loss of control (fear, anger, not knowing how to manage a Facebook crisis, etc.) is weakness. A calm, collected, confident, patient, open to dialog, knowledgeable attitude is strength.

6. Recruit your detractors’ help in fixing the issues they are angry about. Don’t just give your angry commenters lip service. “Thanks for your comments. We will review your suggestions and share them with management” doesn’t cut it anymore. Instead, ask your audience for advice and suggestions. Right there and then. Don’t wait. They want to express themselves? Great! Redirect their energy: Shift them from anger to deliberate empowerment. They’re angry at your company? There are specific things they want you to stop doing? Perfect. Take the discussion a step further and ask them to give you better alternatives to what you’re doing now. No, really. Do it. Keep probing. Keep asking. Make them think about practical solutions together.

If Step 5 gave the conversation order, Step 6 gives the conversations purpose. Do this, and you’re already half way there.

Why is this important? Several reasons:

First, it refocuses the angry mob’s energy. The passion that drives their anger and outrage is still, at its core, passion. Use that. Remove anger from the equation and channel that passion to a more constructive end. Lead them from the path of anger to a path of passionate, constructive discussion. In a matter of hours, the traffic to your facebook page will no longer be an endless churn of insults and angry attacks, and that’s a pretty important objective to accomplish.

Second, refocusing the mob’s mood and energy further shifts control of the conversation to you, the community manager – and by default to the company/brand as well. How? One word: Initiative. The moment your questions begin to drive the discussion, you’ve gained the initiative. You’re finally in the driver’s seat. You can safely land that previously unmanned 747 anywhere you want. Lose the initiative and you lose control. You don’t want things to go back to a mob of angry comments and insults, do you?

Third, you aren’t arguing anymore. You aren’t fighting or protecting or defending. You’ve potentially turned your enemies into allies. Even if that good will is tentative, it sets the stage for what could come next, and there is tremendous value in that. Very good things can come of it if you follow that path. Plant that seed, prove that with trust and good will, good things can happen, and build on that proof of concept.

Fourth, in the case of Nestle, an army of environmental conservation experts is right there, screaming to be heard. Why not benefit from their combined expertise and their willingness to share? Maybe the mob of activists can provide you with ideas that will help you adopt cost-neutral, sustainable methods and processes that will solve some of your resource management challenges, make your company more environmentally-friendly and improve your position in regards to consumer sentiment. There could be a huge practical win in this kind of dialog.

Fifth, the way your Social Media team turned an explosive and completely chaotic situation around in a matter of hours will not go unnoticed. Instead of being another case study in failure, you could be one of the still rare case studies in “this is how it’s done” success.

7. Follow-through. What starts on facebook or twitter or wherever doesn’t stop when you get to the other side of the activity bell curve. Once the crisis is averted, you have to take advantage of that little bit of trust and collaboration you’ve helped your detractors (and your bosses) glimpse.

Step 1: Once the crisis is over, thank the commenters for their help and invite them to continue what they started. Continue to be a good host. Build the community as a community, not as a fortified brand embassy.

Step 2: Convince management to let you turn the feedback from your new virtual think tank into something a little more formal. Form a team to look into how to take those ideas and make them happen. That kind of review process will identify what ideas have merit, and what ideas don’t. It’s a valuable exercise in that alone.

Step 3: Consider creating a crowd-sourcing mechanism like BestBuy’s Idea-X and Starbucks’  My Starbucks Idea. In the case of Nestle, a specific category, tab, or even separate microsite focusing on sustainable and responsible environmental practices might not be a bad idea. Don’t just rely on Facebook discussions to take care of it. Give solid feedback the home it deserves.

Step 4: Invite your detractors’ chosen experts and think tanks to the table. Recruit their help to propose solutions. This is a more professional and official extension of the crowd-sourcing element of the follow-up, and one that obviously needs to happen at a much higher level than Social Media management. (So yes, this requires real buy-in from the C-suite.)

The idea here isn’t just to pacify your opponents and get good press out of the effort. It’s to leverage their expertise and resources to actually find solutions to the business challenges that were at the root of the attacks to begin with. In the case of Nestle, this would mean inviting Greenpeace and key environmental action think tanks to work with senior Nestle supply chain execs on finding realistic alternatives to current methods of production.

Is there a PR component to this? Of course. You can turn anything into a media circus if you want. (That’s what conferences, summits and ground-breaking ceremonies are for.) But sometimes, less is more: Focus on finding solutions, focus on genuinely doing the work, and let the PR department do its thing. If you do that, it’ll all pretty much work out.

Step 5: Build on the momentum and trust you’ve earned, and keep going.

Is all of this difficult? Does it require A LOT of hard work and tireless effort? Yes. It does. I’m not going to tell you any of it is easy. It’s incredibly difficult to do all of this, and the bigger the organization, the more corporate, the more vertical the hierarchy, the tougher it will be for everyone. There’s no magic pill, no cool new app, no bit of enterprise software that will transform your organization overnight for you. Success requires hard work. It requires dedication. It requires vision, leadership, courage and A LOT OF WORK. But it also isn’t brain surgery. From crisis management to community management to change management, it’s all pretty simple, really. You can map it all out on a cocktail napkin. The trick lies in a) deciding to make it happen, and b) making it happen.

The alternative is… well, going through what Nestle just went through. And going through it again and again and again, until something finally gives. Not exactly a golden plan.

So remember:

Be there -> Monitor -> Introduce yourself -> Acknowledge -> Engage -> Take charge -> Redirect -> Manage -> Follow through.

Cheers,

Olivier

Update (25 March, 2010 – 21:15GMT) : For a similar perspective expressed in white-board “war room” format, check out Jeremiah Owyang’s Social Warfare Analysis here. (image) Really nice exercise that, remarkably, touches on many of the points we discussed in parts 1 and 2 of this feature. Consider it a solid “second opinion.”

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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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What really makes A-list brands different – and recession-proof.

The difference between winning and just being in the game – Thinking about ‘NEXT’ instead of just ‘NOW’:

Some words of wisdom from Tom Asacker:

“When they asked Wayne Gretsky, arguably the greatest hockey player of all time, what made him more successful than other players, he replied, Most players tend to play where the puck is, whereas I play where the puck is going to be. Or as the professional trend-spotter may explain, Gretsky smartly followed the “drift” or “general course” of the puck. Now, to anyone who has played a game in which hitting or catching a moving object is essential, Gretsky’s insight is absurdly obvious.

And to anyone who has developed a successful business from the ground floor up, so is trend-spotting customer behavior (regardless of the fact that major corporations spend a ton of money to frequently have it done for them). Because the truth about trends – and staying ahead – is that it has nothing to do with the future. It’s about being intimately involved with your audience today! Being part of the dynamics of change now!”

This is something that I have found profoundly lacking in Corporate America, with, of course, some notable exceptions. That elite club of A-list brands seems to always be the same: Apple. Whole Foods. Starbucks. Virgin. Volkswagen. Canon. Target. Nike. Pixar. Disney. On a smaller scale, you can probably find local, regional, and niche brands that seem to always be a step ahead of the game. Pioneers. Innovators. Trend diviners.

Interestingly, the only difference between companies which, like Wayne Gretzky, focus on where the puck is going to be instead of where the puck is now is frame of mind. Actually, no. Let me rephrase that. The difference is twofold:

1. These companies’ leaders makes a conscious decision to be forward looking. To be where the puck will be. (As Microsoft’s Rob Moyer told me earlier this year, “we live in 2008, but we’re already thinking about 2018.” Perhaps not the greatest example in light of Vista’s less than stellar year, but Rob was talking about “the cloud,” which is a completely different thing.) Being where the puck is going to be requires a conscious and deliberate decision to be there, not as an occasional thing (quarterly planning sessions and whatnot) but 24/7/365.

2. These companies’ leaders make sure that the companies they run atually operate in a forward-looking manner. Take Apple for example. Did Steve Jobs create a business culture that simply waited to see what competitors were going to make before releasing an “i-” version of it? Nope. Apple forged ahead with brand new products or entirely new interpretations of existing products they decided to push through a radical evolution. i-Pod. i-Phone. Apple looked 5-10 years into their own future, saw what types of products they thought people would want to own and play with, and they designed them. Whole new concepts, whole new interfaces, whole new hardware, software, accessories, etc.

How lackluster management can (and will) destroy a brand, while inspired leadership creates market icons:

So to recap, the difference between brands that always seem to dominate markets and those which struggle to remain competitive is simply this: They attract and empower a certain type of leadership – Visionaries. Pioneers. Innovators. Folks who, like Wayne Gretzky, look at business as an organic, fluid entity. Folks who seek new ideas. New points of view. New ways of transforming their business into tomorrow’s indispensible brand, not just today’s.

Struggling or slow growth companies instead tend to rely almost exclusively on the health of their P&L to make strategic decisions. They tend to hire people with exactly the same type of experience everyone else in their organization already has instead of cross-pollinating their culture with insight from other industries. They also mostly live in a frenzied cubicle version of Groundhog Day, where every day blends into the next and very little ever truly changes. At every level, risk-adverse managers (not leaders) talk about “incremental growth” instead of shooting for game-changing growth.

And without a game-changing growth frame of mind, you are setting yourself up for failure. Maybe not today, maybe not tomorrow, but someday. And that someday may be a lot closer than you realize.

I was reminded of this yesterday, as “the big three” automakers were on Capitol Hill, begging for help from taxpayers. The question that bounced around in my head was simple: How did we get here? How did it come to this?

The question, of course, was rhetorical. The problem comes down to leadership. What is Apple without Jobs? What is Virgin without Branson? What is Ralph Lauren without Lauren?

Who drives the vision of a company? Of a brand?

Who creates the company culture that either forges ahead with innovation and genius (like Apple) or decides to play it safe?

Who watches trends, invites customers to participate in the product ideation process, and decides to lead the way? (Or conversely, who decides to ignore serious global energy and environmental challenges for years and puts all of their baskets in ever-larger gas guzzling SUVs?)

Who decides to pump out product after product that no one really cares about?

Let me tell you something: Put someone in a car for ten minutes and they’ll tell you everything they love and hate about it: The seats feel weird. The dashboard is too busy. The reading light is in the wrong place. If I buy this truck, I’m going to spend more on fuel each month than on my mortgage. There’s no mp3 plug-in. The interior is too plain. There’s no place for my daughter to stow her toys. The seats won’t last with my two labs. I can’t put a bike rack on the roof because of the way the trunk opens. There’s no room in the trunk for my guitar. Where the hell are the cup holders?

We’re talking about simple anthropology here: Who are you building this product for? A demographic? A set of statistics? Or maybe… people? People with hobbies and lifestyles and passions? People who look to your product to fit into their lives like the perfect puzzle piece. The kind that blends style, utility, value, and awesomeness? (Yes, “awesomeness” is a word here.) Are you just building products because you need to produce something that fits in a specific category, or are you building products that people will crave and want to show off because they complement their lifestyles so damn well?

Translating all of this to Detroit – How the American auto industry could have saved itself every day for the last five years:

Since we’re on the subject of American automakers, here’s a bit from a post I wrote earlier this year, long before the credit collapse on Wall Street:

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?

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 – most still look like Korean knockoffs of competitor’s designs.)

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.

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.

This really isn’t brain surgery. If you want to be the kind of company that seems to score more often than everyone else, you have to commit to doing things differently. You have to commit to understanding where the puck is going to go next so you can be there to hit it first.

You have to be willing to be that company. You have to be willing to both recruit and empower innovative, visionary talent. You have to get out from behind your four walls and actually reach out to the world outside. The more time you spend in your office doing the same thing over and over again, the less opportunity you have to discover what will make your company great next quarter. Next year. In the next decade.

And please, do us all a favor and stop blaming the “economic crisis” on Wall Street for every business failure. The big three were already losing ground last spring, long before the Wall Street meltdown several weeks ago. Why? 1) Rising gas prices, 2) uncertainty about the future (buying a car is a big investment), and 3) for the most part, boring, uninspired design. Check out this interesting little US auto industry time capsule from back in April to understand how we really got here. (Again: Don’t blame Wall Street for poor leadership.)

For automakers, being where the puck was going to be instead of where they thought it was wasn’t too much of a stretch: Climate Change + Rising energy costs + seeing the beginning of the end of oil = START FOCUSING ON FUEL EFFICIENT VEHICLES. This would have meant opportunities for new mechanical design, opportunities for new aesthetic design, opportunities for new user interface design, and yes, an opportunity for automakers to redefine their brands for the next decade plus – all things they desperately needed. Surprisingly, some of the most highly paid executives in the world couldn’t do something as simple as that.

To be fair, Japanese automakers in the US market haven’t been doing too hot either. (Even fuel efficiency can’t make up for bland design and an absence of ca-ching value, but at least they get the fuel efficiency part.)

Still don’t believe me? Let the numbers speak for themselves: Even as every American Automaker was experiencing a frightening drop in sales, some foreign brands which focus on design and value were doing extremely well:

BMW: The highest-volume luxury-car seller in the U.S. market managed to generate an increase of nearly 10 percent in April sales of its BMW and Mini brands. The company said that a raft of new products launched this spring – BMW M3, X6 and 1 Series, and the Mini Clubman – helped its April results.

Mercedes-Benz: C-Class models posted a 34 percent gain for April and a 38 percent jump for the year to date. Mercedes-Benz also bucked trends and posted increases for its SUVs, both the M-Class and GL-Class models.

Subaru reported record sales for April (a gain of 22 percent over year-earlier levels).

Mazda North American Operations (MNAO) reported a double-digit increase in sales for April with 23,760 units sold in the U.S., a 12.8 percent increase over previous year.

Meanwhile, most American automakers were looking at double-digit declines in sales back in April compared to same month sales a year before. (Chrysler: -23%. GM: -16%. Ford: -12%.) The only American models with growth were either those which offered superior fuel efficiency or those which offered very clear value.

Simple.

Yet…

Alan Mulally, Ford president and chief executive officer, whose total compensation in 2007 was $21,670,674 (salary, bonuses, the Company-recognized expense for stock options and other stock-based awards, as well as all other compensation) couldn’t figure out what most ten-year-olds in the US could clearly figure out from either riding in a Ford or just… you know… being part of the conversation. -12% already back in April

General Motors’ Chief Executive Rick Wagoner’s salary and other compensation rose 64 percent in 2007 to about $15.7 million. The GM compensation committee cited significant progress over the past few years in reducing the automaker’s health care cost burden, increasing growth internationally and improvements in its cars and trucks in the 2007 awards to executives. -16% already back in April

Robert Nardelli, Chrysler’s current CEO (you may remember him from his days at Home Depot, from which he managed to very publicly walk away with a $210M exit package) hasn’t discussed his compensation package for 2007, but we can infer from the 10,000 jobs he cut in his first year that it must have been hefty. -23% already back in April

My point: These guys couldn’t read the writing on the wall? Really? They couldn’t figure out what anyone behind the wheel of a car – let alone someone with a modicum of marketing savvy – could plainly see?

They couldn’t, for one instant, even try to play where the puck was going to be? Or at least hire someone who could help them play there?

At that level in the game?

Watching them begging for cash on Capitol Hill is just sad. And scary. How many companies today are run by executives with the same myopic management style? The same lack of vision? The same absence of insight? And the same looming problems? Executives who, in spite of every tool at their disposal still won’t take the necessary steps to redefine their markets and ensure their companies’ success through the next decade or two?

Leadership matters.

The choices companies make (or choose not to make) matter.

The right combination of vision, focus and drive matters.

Now more than ever.

If you own or manage a business, the choice is simple: Either learn to play where the puck is going to be (and choose to be there), or follow thousands of other lackluster companies down the path of obsolescence and failure. That’s it. Those are your only two options in today’s economy.

If the latter doesn’t appeal to you (and it shouldn’t) but you don’t know how to transform your business into a forward-looking one, find someone who can help you. More often than not, you probably have a small group of talented people inside your organization who can give you guidance and help you make the best out of the current reality. If you don’t, hire someone with the right blend of talents and skills. (I know a few, so get in touch and we’ll get you hooked up pronto.)

Before I move on to my projects for the day, let me leave you with one last thought to tie all of this together (again courtesy of Tom Asacker):

“Easy times are the enemy, they put us to sleep. Adversity is our friend, it wakes us up.”
– The Dalai Lama

Time to wake up. (Hey, better late than never.) Have a great Thursday, everyone. 😉

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Today’s BrandBuilder Conversations

1. Bad Customer Service

As a follow-up to my US air travel rants of yore, this piece by Joseph Jaffe (also a follow-up to his own rants on the same subject – his being specific to Delta Airlines):

A bunch of my colleagues experienced the delta skelter.

About 10% of the Microsoft people travelling from Atlanta to Brussels on july 21st couldn’t find their luggage in Brussels. Some of the luggage are still missing today. Among the retrieved ones, the suitcases of my lovely colleagues Valérie and Virginie… in  very bad shape (see picture). Valérie called Delta today to discuss a compensation but they asked her to call again within a week.  They obviously don’t have the time to handle her complain.

Bad goes around.

Wow. Check out the picture of the bag here. Imagine if you took your car into a mechanic’s shop for service, it came back with a huge dent in the hood and grease stains all over the seats, and the customer service manager told you “uh, yeah, sorry ’bout that… Why don’t you come back later this week when I have time to talk to you.”

Imagine any company outside of the airline industry doing this. “Sorry about your suits sir, the dry-cleaning machine must have malfunctioned. Come back later this week and we’ll see what we can do for you.” I don’t think so.

2. Bait & Switch Tactics

Seth Godin also focuses on the airline industry today with this:

I feel badly for the airline industry. They are caught in a never-ending price war due to online websites and their own commodification. Pick the cheapest flight to get from here to there…

The natural short-term solution is bait and switch. Advertise the lowest price you can imagine and then require add on fees so you can actually make a profit.

Air Canada, which my readers generally concur is the single worst major airline in North America, has a fascinating policy. No oversized duffel bags, regardless of weight, unless they contain hockey gear. No shin guards, you pay $80 a bag.

Of course, you can have whatever rules you want, even if they’re only designed to help defensemen. The problems with bait and switch are:

1. You have to be very careful to apply them equally, because people hate being treated worse than everyone else.

2. You have to be prepared for anger, resentment and brand disintegration.

 See what his answer to pain vs. pleasure is for companies like Air Canada here. (Hint: Disney has a pretty good system in place.)

3. Community Managers

Chris Brogan has a great piece on the essential skills of a community manager, which ties in nicely with the Tribalization of Business post from Monday. Some of these skills include being experienced communicators, being ambassadors and advocates all in one, being bodyguards and protectors, etc. Great post, but the real gold here is found within the comments. Here are two of my favorite:

“The great community manager is able to match the importance of the bottom line with the requirement of providing customers with a feeling of being #1. He or she is an advocate for the customer while being able to discern what is realistic ahead of time.” – Sol Young

“Not a skill, but an essential for a good community manager is to be empowered by their organization. They need to have very public, spontaneous conversations; sometimes shiny happy ones, sometimes trickier ones. Not an easy string for many companies to cut, but the only way for real conversation and communities to evolve.” – Pamela O’Hara

Join the conversation here.

Chris Abraham follows suit with this post about the importance of Community Leaders:

I woke up to an amazing article written by Jonathan Trenn, The fallacy of community, and I responded in a comment to a pretty passionate article and a passionate comment string, and here’s what I wrote — and I have expanded the argument below, so it is an expansion:

Gosh, I don’t know what to say here… there are so many different types of communities, many of which can surely be manufactured. What every successful community requires is community leadership. Community leadership can be organic and emergent or they can be hired in the form of online community managers or facilitators. A strong leadership — people who have skin in the game — is more important than a good web application; also, these community leaders are often the main draw to the community and can be the difference between keeping or losing your members when a competitor comes to town.

Read the full article here. It’s good. (Why the focus on communities all of a sudden? Whatever the reason, I like that it is on so many people’s minds.)

4. Starbucks, design, and the future

John Moore gives a sneak peek at the design of future of Starbucks stores. (kind of cool, but will it work?)

5. The writing on the wall finally gets the attention of Ford execs.

CNN reports that Ford Motor Co., faced with its largest quarterly loss ever, is finally planning to “shift product line, bringing European-made vehicles to North America.” Duh.

The company said it will make big changes to the vehicles it sells domestically – bringing six small cars made in Europe to the North American market.

Ford said that three large truck and sport utility vehicle plants in Wayne, Mich., Louisville, Ky., and Cuautitlan, Mexico would be switched over for the manufacture of small cars. Re-tooling will begin in December, the company said.

In addition to converting the three plants in North America, Ford said it will ramp up production of small utility vehicles at its Kansas City, Mo., assembly plant, including the Ford Escape, Escape Hybrid, Mercury Mariner and Mariner Hybrid.

Check out Ford’s “new” Euro offerings here. Better late than never, I guess.

6. Back to work already!

Okay, lunch break over. I have to get back to work now. Have a great Wednesday, everyone.

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