Archive for April, 2008

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Shop Talk Podcast #7 – Ford Harding on Rain-making

Wednesday, April 30th, 2008

rain-mak-er n. a person (as a partner in a law firm) who brings in new business.

On this edition, we talk to Ford Harding, author of “Rain Making: Attract New Clients No Matter What Your Field.” Ford’s book presents very practical and complete advice on selling professional services. He is president of Harding & Co., a consulting firm that helps companies improve their selling performance.

Among Ford’s observations in the podcast is that most professional services people are hired for their native intellgence, critical thinking skills, etc., and not for their sales competence. Which results in an often painful transition when these folks are asked to start selling.

It was a fun chat. I hope you enjoy it. Click here to download.

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Posted in business development, professional services, rainmaking, sales, sales improvement | Comments

Why does Hershey need to be global?

Tuesday, April 29th, 2008

I don’t envy the executives at The Hershey Company or at the Hershey Trust today. The news that Mars is acquiring Wrigley’s (with Warren Buffett’s help) has led to the question, “Who’s next?” and caused all eyes in the business world to focus on Hershey (along with its oft-mentioned potential partner, Cadbury).

It’s easy to understand why the business press focuses on acquisitions. The primary readers of the Wall Street Journal, Forbes, etc., are investors in the public stock markets. And nothing moves a stock like an acquisition (or even rumors of an acquisition). Shareholders of Hershey Foods, downcast because of the 40% slide in the share price since 2005, can’t be blamed for looking for a way to claw back some of their losses.

More elusive is the strategic benefit of merging to the companies concerned. “Achieving global scale” is a mantra running through all the Mars-Wrigley coverage. And being primarily focused on the US market does mean that Hershey is more exposed to the swings in the US economy than other, more global producers–like, say, Nestle (headquarters: Vevey, Switzerland).

But the US ain’t Switzerland. The US confectionary market is the largest, and arguably the most diverse, in the world. If you’re going to be “stuck” in one market, this one isn’t so bad. A fascinating article in the Harvard Business Review a few years ago asserted that it’s easier to attain competitive advantage–and therefore sustain margins–in tightly-focused regions than globally (“All Strategy Is Local,” September 2005 – $$), and points out that Wal-Mart’s margins were never higher than when it was a regional player one-third the size of kmart.

And until someone articulates the clear benefits of being global versus being regional, Hershey shouldn’t feel they need to rush into a deal with anyone else–no matter what the newspapers say.

Related:
Hershey: the end of an era approaches

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Posted in Uncategorized | Comments

The beginning of the end of the oil crisis

Monday, April 28th, 2008

It may very well be a stupid statement. John Cassidy contended in a recent issue of Conde Nast Portfolio that oil prices would begin to drop as the high price spurred more exploration and production–and that was when oil was a relatively cheap $100 per barrel–not near $120, as it is at this moment.

But there’s no doubt that the oil replacement/carbon-reduction innovation machine has swung into high gear. Two articles caught my eye recently. In yesterday’s New York Times, reporter Michael Fitzgerald wrote about a new home still that can create ethanol from sugar, reducing carbon emissions (the owners say) by seven-eighths. And in Saturday’s Times, Matthew Wald discussed A123 System’s power pack that converts the Toyota Prius into a plug-in hybrid.

These projects very well may end in failure. But they are but two of thousands of important initiatives around energy diversification, conservation and carbon reduction. And that’s a recipe for dramatic change. As Rosabeth Moss Kanter wrote in Harvard Business Review in November 2006 (link – $$), “an organization is more likely to get bigger ideas if it has a wide funnel into which numerous small ideas can be poured. One of the secrets of success for companies that demonstrate high rates of innovation is that they try more things.”

And so it is with industries. More ideas at the top of the funnel means more, bigger successes at the bottom. The energy innovation pyramid is well-stocked, which means, sometime in the future, when petroleum is just another niche chemical, we can say it all started today.

Related:
Kanter’s Innovation Pyramid
Chevy Volt: automotive revolution or flavor of the month?
What in hell is the Electron Economy?
Shop Talk Podcast #6 – Todd Mittleman on Honda’s Fuel Cell car

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Posted in automobiles, energy, environment, green technology, innovation | Comments

Central Penn Business Journal features The Mistake Bank

Monday, April 28th, 2008

My hometown business paper, The Central Penn Business Journal, did a story on The Mistake Bank in its current issue. The story, written by David Dagan, was very well done and is worth a read.

There was also a hilarious editorial cartoon about the project by artist Gene Suchma:

Reprinted by permission

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Posted in mistake bank | Comments

WorldBlu 2008 List of Democratic Workplaces released

Friday, April 25th, 2008

WorldBlu, the organization headed by friend of this blog Traci Fenton, has unveiled its second annual list of democratic workplaces.

Workplace democracy is still a rare concept, but a growing number of companies are allowing workers a voice in their company, encouraging dissent, and otherwise involving the entire employee base in shaping and running the organization. WorldBlu evaluates companies on these factors:

1. PURPOSE AND VISION
A democratic organization is clear about why it exists (its purpose) and where it is headed and what it hopes to achieve (its vision). These act as its true North, offering guidance and discipline to the organization’s direction.

2. TRANSPARENCY
Say goodbye to the “secret society” mentality. Democratic organizations are transparent and open with employees about the financial health, strategy, and agenda of the organization.

3. DIALOGUE + LISTENING
Instead of the top-down monologue or dysfunctional silence that characterizes most workplaces, democratic organizations are committed to having conversations that bring out new levels of meaning and connection.

4. FAIRNESS + DIGNITY
Democratic organizations are committed to fairness and dignity, not treating some people like “somebodies” and other people like “nobodies.”

5. ACCOUNTABILITY
Democratic organizations point fingers, not in a blaming way but in a liberating way! Democratic organizations are crystal clear about who is accountable and responsible for what.

6. INDIVIDUAL + COLLECTIVE
In democratic organizations, the individual is just as important as the whole, meaning employees are valued for their individual contribution as well as for what they do to help achieve the collective goals of the organization.

7. CHOICE
Democratic organizations thrive on giving employees meaningful choices.

8. INTEGRITY
Integrity is the name of the game, and democratic companies have a lot of it. They understand that freedom takes discipline and also doing whatÕs morally and ethically right.

9. DECENTRALIZATION
Democratic organizations distribute leadership and power across their enterprise.

10. REFLECTION + EVALUATION
Democratic organizations are committed to looking in the mirror and asking, “How can we be better?” — not just quarterly or annually, but daily.

Notable new names on the list this year include Pandora, the personalized internet radio site; BzzAgent, which creates viral marketing programs; and DaVita–the first Fortune 500 corporation that’s made the list. Holdovers include 1-800-GOT-JUNK and Linden Lab (with a brand-new CEO, will they be able to maintain their democratic principles?).

You can check out the whole list here.

Related:
Shop Talk Podcast #3 – Traci Fenton on democratic workplaces
Free information -> lateral networks -> less authoritarianism
The Utopian Company

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Posted in democracy, leadership, management, organization, organizational behavior | Comments

Move to Intel chips helped Mac hit the jackpot

Thursday, April 24th, 2008

When the Mac’s move to Intel chips was announced almost three years ago, it seemed like a good, practical move. The PowerPC chip was falling behind Intel, performance-wise, and Apple wanted to leverage Intel’s much larger investment in performance and capability. Intel, for its part, wanted the sexiness of being associated with a cooler brand than Dell, Lenovo, etc.

But the full impact of the processor swap is only now becoming apparent. Yesterday Apple stated that its latest quarterly earnings rose 36% over the same period last year, powered by a 51% increase in Mac sales. The Wall Street Journal buried this telling passage into its article on Apple’s earnings release:

Apple’s computers now also easily run Microsoft Corp.’s Windows operating system, which has helped Apple in a long-running campaign to persuade Windows users to switch to Macs.

Precisely. The Intel processor was a Trojan Horse hiding Windows compatibility–the real value of the switch from PowerPC. Eons ago, people in companies used Macs all the time (it was on my desktop in 1989). Then Windows 3.1 swept through the business world, and Macs retreated to schools, graphic designers and filmmakers.

Now, people who require some Windows programs (because of work or other reasons) can retain that compatibility and get the benefits of OS X and all the interesting applications that run on it.

One of those people is me. The Mac returned to my desktop in August 2007 after a 12-year hiatus. It’s good to be back.

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Posted in Wall Street Journal, apple, personal computers, strategy, technology | Comments

Wall Street Journal is discarding its identity as the business newspaper

Wednesday, April 23rd, 2008

I’ve frequently talked in this blog about things I first read in the Wall Street Journal. [I've subscribed to the Journal since I got a discounted subscription in grad school, twenty years ago or so.] But over the past several months, there has been a noticeable falloff in articles I find useful. It occurred to me last week that I very rarely see anything in the first section of the paper that is interesting to me as a general business reader. There’s lots of politics, a fair amount of finance, international affairs… and that’s it.

And then, earlier this week, I noticed that they’ve taken another page out of section one to devote to opinion. This may make some subscribers happy, but to me it’s another page to turn past.

The Marketplace section feels unchanged, but that’s small comfort. Now there are maybe eight to ten interesting pages in a typical issue of the Journal. And that’s not enough.

Finally, the reasons for this are clear. New owner Rupert Murdoch is imprinting his stamp on the paper. Yesterday’s news that the managing editor, Marcus Brauchli, was stepping down, was credited to Murdoch wanting his own people making the editing decisions. “Now that the ownership transition has taken place, I have come to believe the new owners should have a managing editor of their choosing,” wrote Brauchli to the newspaper staff. [Which begs the question, whatever happened to the "hands-off" agreement that the Bancrofts supposedly negotiated?]

Murdoch apparently wants to build a general-interest newspaper to compete with the New York Times (with political views he likes better). He may reach that goal, but at the cost of losing what was distinctive about the Journal–a high-quality, daily look at business.

In which case, he’ll lose at least one long-term subscriber.

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Posted in Wall Street Journal, management | Comments

An almost mistake story about hiring

Tuesday, April 22nd, 2008

From The Mistake Bank.

[This story is from Mike Southon, Chairman of Beermat, an online resource for entrepreneurs, and founder of Instruction Set Ltd., a UK computer-services firm sold to Cap Gemini in 1989.]

I remember one story when Instruction Set got to about twenty-five people, and I was running sales. I hadn’t really done sales before. I thought, “I’d better hire a grown-up.” So I went to a recruitment agency and these CVs arrived–people with fantastic credentials. There was this one particular gentleman, and his motto was “Give me the bullets, and I’ll fire them,” because he said he’d doubled revenue everywhere he’d been. So I thought he was a good guy. He came in, extended a big handshake, made eye contact, and said, “Yes, give me the bullets; I’ll fire them. Michael, I’ll double your revenue. That’s what I do.”

So I asked him to meet everybody. His body language with different people was fun. With all the ladies, he was staring at the cleavage. With other directors, it was the big handshake and “Give me the bullets; I’ll fire them.” I thought that must be what salesmen are like. Then I took him to lunch, and the waitress made some error–I can’t remember what it was–and he tore off a strip of her in front of me, to show how tough he was. I thought, “What an idiot.”

I went back to the office and thought, that’s what you have to do; you hire people like that. And I decided that no, I was not hiring him; the man’s an idiot. People were knocking on my door, asking what I thought of the guy. And I said, “Sorry, I should hire him because he’s brilliant and he’d double our revenue, but I didn’t like him, so I’m not hiring him.” They said, “Thank God for that. We all thought he was an idiot as well.”

So instincts were right. I sent him an email saying that I was really sorry, that we were a bit strange at the Instruction Set, that we didn’t behave like normal companies, and that he’d probably be brilliant elsewhere, but here he wouldn’t be perfect, but best of luck. I got a week of abusive emails from him.

Reprinted by permission of Harvard Business Press. Excerpted from Lessons Learned: Straight Talk from the World’s Top Business Leaders–Starting a Business. Copyright (c) 2008 Fifty Lessons Limited; All Rights Reserved.

For more information about the “Lessons Learned” series, including a showcase of 50 Lessons video stories, please follow this link.

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Posted in hiring, interviewing, mistake bank, narrative, recruiting, sales | Comments

"Greater Good": a good, but not great, book on marketing and democracy

Monday, April 21st, 2008

“Greater Good: How Good Marketing Makes For Better Democracy” is a book that promises a lot. Inside the front flap it charges that “marketing is more democratic than politics.” Its co-author John Quelch is a renowned expert on consumer marketing and professor at Harvard Business School, the author of a thoughtful and incisive blog on marketing. By aiming at dissecting and improving democracy, Quelch and co-author Katherine Jocz seek to elevate marketing to a level currently held by economics–i.e, a discipline that can drive progress of entire nations.

And, while it has many virtues, the book doesn’t deliver on that promise. Partially this is because of the very broad topic it takes on. Its scope is the strength and weakness of the book. The book’s first part, “Marketing as Democracy” is as good a survey of consumer marketing–its aims, faults and practice–as you could fit into 150 pages. But this means that there’s four pages on fairness, six on advertising. As a result, it’s a great book if you want to teach people all about marketing at a high level, but not so great if you want to galvanize readers to make their democracies more effective and citizen-focused.

There are sections of the book (for example, the chapter on consumer engagement or the one on marketing government and NGO programs) that could become strong books themselves if they dove more deeply. There are also some important insights, such as this:


…Coke and Pepsi don’t sling mud at each other, because if they did, consumer purchases would eventually shift away from both of them to alternative colas and beverages. Both brands want to enlarge the market, not reduce it. However, in politics, market share, and not market size, matters. Negative campaigning may turn off a sizable number of the electorate, but if George Bush sicceeds in making John Kerry marginally less acceptable to the voters who show up on Election Day, Bush comes out ahead. (p.171)


Quelch and Jocz are onto something in terms of using what marketing’s good at to improve democracy. While “Greater Good” isn’t a home run, I hope they don’t give up on the topic. There’s more there to study, and, even more interesting, to try out.

If you want a comprehensive introduction to consumer marketing, buy “Greater Good” and read the first 150 pages. If you want to fix what’s wrong with democracy, you’ll have to wait for another book.

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Posted in democracy, marketing, reading list | Comments

The new media onslaught is making entrepreneurs out of creators

Thursday, April 17th, 2008

An article from the New York Times earlier this week (”Bridging The Gap, The Sequel“) starkly illustrated that venture capitalists from Silicon Valley and creative types from Southern California are having difficulty cooperating to create financial and partnership models for new media.

One of the biggest obstacles, according to the articles, is the Southern Californians’ focus on upfront cash rather than long-term equity.

How this situation came to be is easy to understand: when the means of production of creative property were expensive, there was a distinct separation between the “suits,” who raised needed capital, and the “talent,” who wrote, acted, sang, directed, etc. The suits financed productions and paid the talent, who worked job to job. It was in the talent’s interest to get as much of their payment upfront as possible because (1) they didn’t know when their next job would come through and (2) the suits could, and wanted to, maintain full ownership of the property.

Now production costs can be much smaller, for music, video, text, etc. Prices for distribution are coming down too as new outlets emerge for digital distribution. And media companies are looking to hedge their risk as the old moneymakers (CDs, DVDs) erode.

As a result, an entire new entrepreneurial class has emerged, between the suits and the talent, combining the ability to raise money, cut deals, etc., with songwriting, producing, or acting. Around this “middle class” is a new set of technology and business enablers that are providing key pieces of the production and distribution infrastructure for these creators. (This edition of the radio program “Fresh Air” discusses some of the new models and companies emerging in the music business. Companies like Indieflix provide distribution services for video/film producers.)

Here’s an example of the new world order for music: the LinkedIn profile for Fran Ten of the LA band West Indian Girl:

oversee and run all the departments of the west indian girl business – management, marketing, new media, touring, merchandising, promotions, licensing, legal, accounting, art, etc etc.

music is a business and musicians that dont understand this are at a disadvantage.

this job is just as much a blue collar job as the one i had in high school working at a brake factory in grand rapids, mi. sometimes i think it’s even dirtier.

Technology advances have made internet video and mobile entertainment accessible to consumers on a wide scale. The business models are lagging behind. The old way–suits and talent–isn’t going to be able to work them out. The “middle class” will have to do it.

(Photo: a still from “Fields of Mudan,” the all-time best-selling DVD on Indieflix.)

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Posted in New York Times, alliances, business models, media, mobile, music, technology, video | Comments

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