Trying to Understand the Riots in France

Two articles from BusinessWeek on the trouble in France:
– “Sarkozy Googles as Paris Riots” and
– “The Economics Fueling the French Riots
The articles are written from a “US viewpoint.” A comment left behind the second article is worth noting:
I did not expect BusinessWeek to come out with such a biased article, very pro-American. Very hypocritical as well. France’s social politics is set up to not “leave people behind” and give them an opportunity instead of straight poverty. The only thing that America does offer unemployed youngsters a job in the Army to support their own politics/shake-up/disrespect of Muslim countries; that attitude fuels Muslims worldwide with anger towards all Western societies, including France. The problem isn’t just unemployment but it’s more about France’s ancient “social class differences” and the non-white immigrant population doesn’t like to be called “scum” (a French minister’s outraged response to the first riots). This was written by a white guy from the Netherlands.
Another view from Parapundit: French Muslim Rioting Hits Yet Another High
I’m not sure what to think about all this craziness. The “white guy” in the Netherlands pretends he lives in a color-blind society. The BusinessWeek folk think it’s about unemployment rates. And the french politician is just covering his behind. I should ask Doug Smith.
UPDATE: Economist article

Oil Industry: Profits Happen

Do you buy this? The WSJ reports:
The chiefs of five major oil companies defended the industry’s huge profits Wednesday at a Senate hearing where lawmakers said they should explain prices and assure people they aren’t being gouged.
There is a “growing suspicion that oil companies are taking unfair advantage,” Sen. Pete Domenici (R., N.M.), head of the Senate Energy and Resources Committee, said as the hearing opened in a packed Senate committee room. “The oil companies owe the country an explanation,” he said.
Lee Raymond, chairman of Exxon Mobil Corp., said he recognizes that high gasoline prices “have put a strain on Americans’ household budgets” but he defended his companies huge profits, saying petroleum earnings “go up and down” from year to year. Exxon Mobil, the world’s largest non-state-owned oil company, earned nearly $10 billion in the third quarter.
COMPANY- PROFIT- REVENUE
BP $6.46 billion, +34% $97.73 billion, +46%
Chevron $3.59 billion, +12% $54.46 billion, +34%
ConocoPhillips $3.8 billion, +89% $49.7 billion, +43%
Exxon Mobil $9.92 billion, +75% $100.72 billion, +32%
Royal Dutch Shell $9.03 billion, +68% $76.44 billion, +8%
Smells like Enron to me. Maybe we need a 10% environmental tax and fight global warming, which of course doesn’t exist.

If the CEO can’t blog, should they still be CEO?

“The PR department must take its hands off the blog in order for it to work properly – no fake blog entries written for the CEO, and no vetting posts before they go live. (If your CEO cannot be trusted, even after being trained in how to blog legally and sensibly, not to drop clangers in the posts he writes, then he should not be blogging.)” – posting at CEO Bloggers Club
Also: “In order to blog well, they also have to be the right CEOs – straight-shooters, engaging and with interesting things to say. Sun Microsystems’ Jonathan Schwartz is a great one, as are Thomas Nelson Publishers’ Michael Hyatt and Five Across CEO Glenn Reid.”
Schwartz isn’t the CEO at Sun, but he does have his own views – published recently in HBR: “If You Want to Lead, Blog.” Says Schwartz:
Many senior executives at Sun, including me, have blogs which can be read by anyone, anywhere in the world. We discuss everything from business strategy to product development to company values. We host open letters from the outside, and we openly respond to them. We talk about our successes. And our mistakes (if you don’t believe me, go to http://blogs.sun.com/roller/page/jonathan?entry=dear_john).
That may seem risky. But I’d argue that it’s riskier not to have a blog. Remember not long ago when CEOs would ask their assistants to print outtheir email for them to read, and then they’d dictate responses to be typewritten and sent via snail mail? Where are those leaders now? (Thelast of my contacts of that breed just retired.) Ten years from now, most of us will communicate directly with our customers, employees and the wider community through blogs. For executives, having a blog is not going to be a matter of choice, any more than using email is today. If you’re not part of the conversation others will speak on your behalf, and I’m not talking about your employees.

So the question is this: if your CEO can’t blog, should she still be CEO? What I’m asking is if your CEO cannot communicate in real time, but needs a PR machine to do her messaging, is she really CEO material?
Now there are CEOs who could blog, but don’t. I’m sure Bill Gates would love to blog, but I suspect his lawyers won’t let him.
Blogging is becoming, in some ways, a test for company transparency. Speaking of which, why aren’t the big boys at Google blogging yet? Bill Gates- you can beat them to this one!

Sears: Are they going the way of K-mart?

Sears, Roebuck and Co. this week launched what it is calling its first fully integrated campaign in years. The effort, “Wish Big,” includes television and print advertising, event marketing, in-store signage and cross-promotion activities, in-mall advertising, direct mail, online programs and public relations. [in Brandweek]
Maybe they need to just work on their strategy. Here’s what a recent article in the Chicago Sun Times had to say about that:
A Wall Street analyst gave voice Monday to rumors that Sears’ ballyhooed strategy of building new stand-alone stores is in trouble.
Sears is counting on its newest store, Sears Essentials, to compete with big-box rivals such as Target, Kohl’s and Wal-Mart, while also selling refrigerators, treadmills, lawn mowers and patio furniture.
Sears has denied reports that it is slowing or halting its plans to convert 400 Kmart stores into Sears Essentials stores within three years — at a cost of about $3.5 million per store. But Sears hasn’t yet announced how many Sears Essentials stores it will open in 2006.
Furthermore, two top Sears executives integral to the strategy have left or are leaving the Hoffman Estates-based retailer, Gregory Melich, an analyst at Morgan Stanley & Co., said in a note to investors Monday.
Catherine David, a former Target executive that Sears named to oversee Sears Essentials and two other stand-alone stores, left the retailer in September.
Sears hired David in July 2004 to turn around the struggling Great Indoors home-decor chain, which Sears had downsized a year earlier to 17 stores.
Sears also is losing Luis Padilla, another former Target executive and a merchandising whiz credited with putting the “chic” in Target’s “cheap chic” reputation. Padilla is leaving at month’s end, following Sears Chairman Edward S. Lampert’s decision to install his own top strategists.
Furthermore, Sears is investing less than its retail rivals in its stand-alone stores, and has cut its advertising by more than 40 percent, Melich wrote.
More than 50 percent of Sears Essentials stores are within five miles of a Target, a Lowe’s or a Home Depot, giving them tough conditions under which to compete, he said.
Other analysts have questioned the Sears Essentials format as unfocused and underwhelming.
“The store seems a hodgepodge of everything, and there’s no clear message to consumers about what to expect,” said Kim Picciola at Chicago-based Morningstar.

Maybe they need to outsource their management…

Advertising ROI: Google Changes the Game – “Pay-for-Listing” to a “Pay-for-Performance”

CEO Eric Schmidt: “I have this fantasy that goes like this. You are the C.E.O. of a large company, and I come to you and say, ‘Give me $1 million and give me your Web site, and we will guarantee you will get $100 million in sales.’ Which C.E.O. would turn that down?” from paidcontent
Google continues to push the advertising ROI envelope. This time it’s the classifieds:
Classified Intelligence Editorial Director Jim Townsend told internetnews.com that making classified ads available through an organic Google search would definitely change the game, but exactly how remains to be determined.
There are two schools of thought, he said. On the one hand, search provided additional distribution of the ad.
“If someone pays to place an ad in a newspaper, wouldn’t it make sense to throw that paper on as many streets as possible? It’s distribution, distribution, distribution,” he said.
On other side of that coin, Townsend said, ads that are freely available through search could destroy the pricing model used by print and online classifieds publishers.
Adds John Zappe from Classified Intelligence:
“Commercial classifieds sites such as CareerBuilder, Cars.com and others have to weigh the additional audience Google could deliver against the potential loss of revenue. Analysts, including us, predict that advertisers will move to free sites if they become convinced that they will reach an audience as large – or larger – on a search engine than on a paid advertising site.”

Talent War: China’s Woes

JSB and JH3 are right:
“Where value originates and who captures it will increasingly depend on the evolution of talent markets and the relative capability of firms (and nations) to rapidly develop and amplify the value of this talent. Product markets and financial markets will of course still matter, but the center of gravity for value creation and capture will inexorably migrate to global talent markets…” see The Only Sustainable Edge
The global talent war continues. Now, a McKinsey Quarterly article “China’s looming talent shortage” backs up Seely Brown and Hagel, making the following points:
– If China’s economy is to go on growing and its base is to evolve from manufacturing to services, it will require a huge number of qualified university graduates.
– While university graduates are plentiful there, new research shows that only a small proportion of them have the skills required for jobs further up the value chain—and competition for these graduates is becoming fierce.
– China must undertake a long-term effort to raise the quality of its graduates by changing the way it finances its universities, revamping curriculums to meet the needs of industry, and improving the quality of English-language instruction.
– China could emerge as a base for IT and business process offshoring, but unless the country addresses its looming labor shortage now the global ambitions of Chinese companies will probably be stymied.
It’s all about quality! The paradox:
China’s pool of potential talent is enormous. In 2003 China had roughly 8.5 million young professional graduates with up to seven years’ work experience and an additional 97 million people that would qualify for support-staff positions. Despite this apparently vast supply, multinational companies are finding that few graduates have the necessary skills for service occupations. According to interviews with 83 human-resources professionals involved with hiring local graduates in low-wage countries, fewer than 10 percent of Chinese job candidates, on average, would be suitable for work in a foreign company in the nine occupations we studied: engineers, finance workers, accountants, quantitative analysts, generalists, life science researchers, doctors, nurses, and support staff.
Read the article here. (registration required)

NYT Refuses Sun Ad Bashing Dell

I must say I loved this ad from Sun. It’s actually fairly brilliant because it:
1) states Sun’s case in a humorous way,
2) highlights the different strategies the two companies are allegedly pursuing (innovation=Sun, low-cost=Dell),
3) beats Dell at its own game- price,
4) has an environmental angle,
5) tells us about the best server in the world!
6) trumpets open source messaging via Solaris…
I could go on and on.
Lucky for Sun that the NYT refused to print the ad, giving it even more buzz… All the news that’s fit to print, eh? They can print Judy Miller, but not an ad?
Well, the ad is on Jonathan Schwartz’s blog– which gives it that much more authenticity!
One more thing- will design and innovation rule the future of global competition? Sun thinks so.
I do too.

Video-on-Demand: Here it is, says Forrester

Interesting analysis from Forrester:
“The iPod video player doesn’t matter. Downloading episodes of Lost and Desperate Housewives to computers barely matters. What does matter is the crack in the traditional television business model opened by the Apple/ABC deal to allow consumers on-demand access to current hit TV shows. Unwittingly, Apple is building the proof of concept for the video-on-demand (VOD) business model. Demands by cable operators to put the same deal on the VOD tier, rebellion by network affiliates, and greater availability of niche content will fracture the old business model.”
The story here.

Less Fat, So You Can Eat More


Proteus Industries used a special animal protein to create a coating for fried foods that prevents excess oil from penetrating beyond the breading or batter during cooking. The cooked food stays crispy on the outside, but it’s not greasy on the inside. That translates into real fat busting: the overall content in fish sticks, for instance, goes from 14 g to as little as 4 g — a 70 percent drop.
Proteus’ process is making its debut in fish sticks from the company’s collaborator, Good Harbor Fillet.
Why can’t we just eat less fried stuff?

The Rise and Fall of Brand America

When we express a preference for French holidays, German cars or Italian opera, when we instinctively trust the policies of the Swedish government, comment on the ambition of the Japanese, the bluntness of the Americans or the courtesy of the British, when we avoid investing in Russia, favor Turkey’s entry into Europe or admire the heritage of China and India, we are responding to brand images in exactly the same way as when we’re shopping for clothing or food. But these are far bigger brands than Nike or Nestlé. They are the brands of nations.
Nation brand is an important concept in today’s world. Globalization means that countries compete with each other for the attention, respect and trust of investors, tourists, consumers, donors, immigrants, the media, and the governments of other nations: so a powerful and positive nation brand provides a crucial competitive advantage. It is essential for countries to understand how they are seen by publics around the world; how their achievements and failures, their assets and their liabilities, their people and their products are reflected in their brand image.
Simon Anholt has developed the Anholt-GMI Nation Brands Index – the first analytical ranking of the world’s nation brands. This report: Nation Brands Index – Q3 Report, 2005 tells us how nations view each other. Good stuff.
But even more critical, perhaps, is Anholt’s book: Brand America: The Mother of All Brands.
Here’s how the book is advertised on Anholt’s website:
Q: When is a country like a brand?
A: When it’s the United States of America.
America is more than just a country: it’s the biggest brand in history. Launched as a global brand, managed like a global brand and advertised like a global brand since the Declaration of Independence, America has deliberately marketed itself – as well as its products and culture – with skill, determination and sheer, hardnosed salesmanship.
But today, it’s a brand in trouble. Brand America shows, for the first time in print, how the world’s most successful brand grew to greatness, how close it now is to throwing it all away, and how it might win back those disillusioned ‘consumers’.
For anybody who has ever wondered what was the secret behind America’s greatness, and what happens next to the world’s sole superpower, Brand America is essential reading.
It’ll change your mind about brands, about countries and about America for ever.
Here’s what Phil Kotler had to say about the book:
“Anholt and Hildreth are to be congratulated for raising the issue of why Brand America is suffering a strong decline around the world. They trace American history, the values of Brand America and the growth of anti-Americanism, and offer stimulating suggestions for how to repair our broken image.”
Read it. That’s Brand America: The Mother of All Brands.

Why “Customer Service” is a Joke

Most companies assume they’re giving customers what they want. Usually, they’re kidding themselves. When Bain & Company recently surveyed 362 firms, they found that 80% believe they deliver a “superior experience” to customers. But when they asked the firms’ customers, they found that only 8% are really delivering.
Talk about delusion. Why this huge discrepancy?
The folks at Bain found two reasons for the gap:
“The first is a basic paradox: Most growth initiatives damage the most important source of sustainable, profitable growth-a loyal customer franchise. To increase revenue and profits, businesses do things like raising transaction fees that end up alienating their core customers. Efforts to pursue new customers compound the problem, distracting management from serving the core.
“The second is that good relationships are hard to build. It’s extremely difficult to understand what people really want, keep your promises and maintain a dialogue to ensure you meet customers’ changing needs. Even initiatives to “better understand” customers can backfire, drowning firms in a sea of data.”
I’ll give you the third reason: management confuses actions and activity with outcomes. Just because you have a customer feedback program in place, doesn’t mean it’s effective. The appearance of virtue is not virtue.
More from the report: “Even initiatives to “better understand” customers typically backfire. A company can get so engrossed in collecting and sifting through data on patterns of use, retention, purchases and other transactions that buyers become numbers rather than people, segments rather than individuals. Companies become deaf to the real voices of real customers.” [emphasis added]
Download the report here.

How We Buy: Search!

Yahoo and Compete, Inc., recently announced key findings from a new study which tracked Internet search and transaction activity specifically related to retail apparel Web sites over one year.
The study found that search was used by 20% of the 25 million unique monthly visitors engaging in apparel activity on the sites Compete tracked.
For the study, “Search and the Engaged Customer: An Apparel Study”, Compete analyzed the online shopping behavior of its panel of two million Internet users and conducted a survey of over 400 apparel shoppers who used search, visited one of 49 apparel retailer or manufacturer sites and subsequently purchased apparel offline. The study observed both Web search and sponsored search activity across Yahoo!, Google, Ask Jeeves, MSN, Lycos and Hotbot.
Key findings from the study include:
Search Influences Offline Purchasing. According to the findings, 78% of people who purchased apparel offline after using Internet search reported that search influenced their store visit and purchase. Nearly half (47%) of these buyers have also purchased apparel online and spend 26% more on apparel annually than those who do not use search.
Apparel searchers are highly engaged shoppers. The study found that, over a 60-day shopping period, apparel searchers spent more than 30% more time when visiting retail sites than non-search visitors and were more likely to engage in site activities such as customizing a product image, viewing shipping methods or return policies and submitting an email name. The research also showed that apparel searchers were also more likely to make a purchase (online or offline). Apparel searchers generated an average online conversion rate of 21%, compared with the 18% average conversion rate generated by non-search users.
Consumers use search throughout the buying cycle. Consumers conduct multiple searches and use search throughout their purchase decision, with 21% reporting they use search to find out about new styles and brands, 27% using search to find out about sales and deals and over 50% using search to find a store address, phone number or website.
“It’s clear from these findings that consumers are using search for multiple objectives throughout their apparel shopping process,” said Diane Rinaldo, retail category director, Yahoo! Search Marketing. “Search provides retail marketers a way to reach their customers in a comprehensive manner that allows them to effectively tie together their online and offline sales, enhance brand awareness and increase market share.”
Hmmm. All roads lead to Google. It’s funny, but I’m beginning to feel sorry for Microsoft.

Google’s Product Development & Management Process Revealed

From Marissa Mayer via Evelyn Rodriguez. Download here>>
Thanks for taking notes, Evelyn!
Some highlights:
Small, Agile Engineering Teams
• 3-person units (like start-ups!)
• Unit is a project – they don’t have departments
• Unit is co-located (sit next to each other) also with PM
• Engineers work on project for 3-4 months, then transition to next project
• Very fluid
• With 180 engineers, they can work on 60 projects – so they can afford to invest
on high-risk, high-return projects as well. (They call high-risk projects “Googlettes”)
• Each project manager works with 9-10 people across units. For example, maybe a category such as “Enterprise Infrastructure”
• The technical lead in each unit of 3 is responsible for technical excellence of project.
• Documentation
– Very sparse, only what is needed in Product Requirements Document
(PRD)
– Eric Schmidt: “Late binding decision-making process”
– Evolves based on feedback
– Includes information on general market size, revenue in PRD but believe that “if you build something users use, there will be a way to make money”
• Large Projects
– Example: Enterprise Product – broken into logical modules, thus 4 units
(of 3 people) = 12 people
• Monetization teams
– Larry Page: “No such thing as a successful failure; if it is useful to people, later we can make revenue from it in a logical way.”
Focus on providing value to user first.
– Then create team to execute the “monetization” of most useful products/services.
• Marissa (speaker) was on team to monetize search
– Created AdWords, etc.
This is very, very interesting. Beeg trouble for moose and squirrel, er, Microsoft!

Microsoft: Flawed On-Demand Business Model

” Advertising isn’t enough to fund on-demand” says Phil Wainewright in his ZDNet blog, and he’s right:
“I am frankly bemused that anyone seriously believes Microsoft or anyone else is going to fund their on-demand applications from advertising revenues. The idea is complete bull, on two counts.
“First up, ads in applications don’t work. All the evidence from the past ten years of online services is that the more engaged the user is in pursuing an activity, the less likely their attention will be diverted by an ad. The sole exception, which of course is why Google AdWords has been so spectacularly successful, is search, for the simple reason that clicking on relevant ads is a natural extension of the search activity.”
So, what’s wrong with Microsoft?
I think they’re trying so hard to play catch up to Google, they are now resorting to launching stupid “me-too” business models which try to one-up Google. This is typical geek-panic.
What they need to do, is sip some tea, listen to JSB and John Hagel (aka JH3), and build a future “beyond-Google.”
What do I mean by this? Simply that they should build for the future without the shadow of Google crimping their thoughts. Seriously. If Microsoft would spend a little less time blogging and a little more time thinking, they could get their groove back.
Just ask JSB and JH3 what to do, MS!
And listen.

The Fortune Under the Pyramid


From the Economist:
“For workers from poor countries who venture abroad to earn a better living, sending money home to relatives can be hugely expensive. Such remittances have become an important source of income in many developing countries, dwarfing other inflows of capital from overseas such as foreign direct investment and multilateral aid. But if the money is being sent, say, from America to Venezuela, charges can amount to as much as 34% of the sum involved, according to Dilip Ratha of the World Bank.
“Why are the poor so badly served? The easy answer, that people who have little money do not make suitable clients for sophisticated financial services, is at most a half-truth. A better explanation, this survey will argue, is that the poor have been hurt by massive market and regulatory failure. Fortunately that failure can be, and increasingly is being, remedied.”
Read the article here.
All I know is that when money trickles down to the poor, it usually gets siphoned off by a middleman, or the neighborhood mafia.

Daniel Yankelovich: Poll This, America

A great interview from S+B.
Daniel Yankelovich – the “father of the public opinion poll” – says:
“…attitudes were replaced in the 1960s and 1970s by unenlightened self-interest: Win at any cost. Strip away regulations and constraints. Anything that isn’t illegal is OK. Conflict of interest isn’t a real issue, except for a few straitlaced dummies. Everybody bends the rules, and you have to do so to survive. Someone caught in an ethically
questionable situation might say, “Well, I didn’t do anything wrong. I didn’t break the law.” For someone from my generation, ethics doesn’t have anything to do with breaking the law. Essentially, there was a dumbing-down of morality that came in with the baby boomers in the 1960s.”
Hello! Maybe he’s been reading On Value and Values!

The Advertising Saturation Point

For every automobile, and maybe every product, there’s a threshold beyond which your ad budget is wasted.
That’s the premise of this startlingly clear analysis from Evan Hirsh and Mark Schweizer from Booz Allen Hamilton’s Cleveland office. They ask:
“…What if there was an optimal level of advertising spend for any given product — beyond which the money was completely wasted?”
And explain:
“Economists often speak of “price elasticity”: When prices rise or fall, consumers respond by changing their purchase strategies. That is why price increases do not automatically lead to equivalent rises in revenues. The same kind of elasticity exists with advertising. For any given brand in any given market, there is a saturation point for advertising spend. Up to that point, increases in the ad budget will generate results; but once the market for a product or service is saturated, no matter how much a company spends on advertising, it will not produce enough added sales to justify the cost. The best possible budget places just enough ads to reach the saturation point, and not a dollar’s worth of advertising more. Companies that follow this principle will optimize their overall profitability because they will spend on advertising only what they can recoup in revenues.”
An important wake up call for marketing and advertising strategists everywhere. Download here >>

Diego Maradona vs. George Bush?

The lead article in this week’s Economist: “Tired of globalisation” has a skewed view of what’s happening in Latin America. The article even takes a pot shot at Maradona (maybe they’re still upset at that “hand of god” goal in the World Cup).
Globalization cannot ignore the consequences and effects on people. This is the lesson that business never learns. That’s a fact. And so Maradona and Hugo Chavez have fun at the expense of the US.

Douglas K. Smith: On Value and Values

Doug Smith’s latest blog entry: “Thick We’s” takes a hard look at how we’ve lost track of what matters:
“We lead dual lives — pursuing value over values from 9 to 5 and the reverse during the remainder of each day.”
and
“Today, the vast majority of those organizations pursue value over values. Others — and the less powerful ones — pursue values over value. Neither of these strategies are sustainable. Churches, schools, non-profits and so forth cannot sustain themselves by ignoring and being blind to value. But — and this is by far the more serious challenge — neither can for-profit organizations (whether Wal-Mart or GM or Roche — or a small bookstore or cleaners or barbershop) sustain itself if value — if profits, wealth, shareholder value or winning — is the trump card for every single serious issue and question on the table. Eventually, that approach eviscerates and hollows out the values — social, political, spiritual, environmental, medical, legal and others — on which the very value pursued rests.”
Want to know more? Check out Smith’s book.

Catfish as Large as a Grizzly Bear?

Fishermen in northern Thailand have netted a fish as big as a grizzly bear, a 646-pound Mekong giant catfish, the heaviest recorded since Thai officials started keeping records in 1981.
Unfortunately, the fish did not get away:

The fish was caught and eaten in a remote village in Thailand along the Mekong River, home to more species of giant fish than any other river. Local environmentalists and government officials negotiated to release the record-breaking animal so it could continue its spawning migration in the far north of Thailand, near the borders of Thailand, Laos, Myanmar and China – also known as the “Golden Triangle.” But the fish, an adult male, later died. The species is declining, which fishermen in the region blame on upstream dams and environmental deterioration. And that’s the real story.
More from the WWF here.

Dragon, Tiger and Mouse: China, India and Me


A while back BusinessWeek devoted an issue to the issue of China and India.
I particularly liked “Asking The Right Questions” because it looked at new non-western business models being built in India. In India, that’s called being non-aligned!
John Hagel has an instructive blog post on China and India titled: “Patterns of Business Innovation in China and India”. Read it!
Where does this leave us? You, me, and our kids? What are we going to do for a living? What options are there for kids who go through our stellar educational system?
I decided to look up the high school curriculum in a) Kansas and b) India. Here’s what I found:
– Kansas: A Guide to Kansas Curricular Standards [high school]
– India: CBSE [12th grade] – Mathematics, Physics, Chemistry, Biology, Political Science, History, and more.
Looks like we lost the race before we even got started!
So, what are our kids going to be doing? Are we destined to be a nation of used-car salesmen? One nation-under-E-bay…
What would poor Ben Franklin say if he saw us now? How would he earn his living today? Join the military? Wal-Mart? a band? a gang? an evangelical church?

How it Works: Double Loop Marketing™

I keep getting emails asking me how “Double Loop Marketing” works. Here’s a quick explanation.
Let’s say a company like Texas Instruments wants establish itself as a thought-leader in the RFID marketspace.
In the traditional PR world, they could issue a few press releases, give a few speeches, write a few whitepapers, and then hope the media would cover them.
But what if TI decided on a “Double Loop Marketing™” approach?
What if Texas Instruments brought together its partners, industry thought-leaders, R&D professionals, VC shops, and senior executives in an online thought-leadership-based “double-loop” site to:
– Learn about the latest trends and technologies in RFID
– Define and understand the specific factors that contribute to improving strategy
– Develop recommendations for creating a RFID management discipline within your organization
– Present sample business justifications supporting strategic and learning investments in RFID
– Foster discussion of lessons learned from early adopters
– Disseminate news, events, and thought leadership articles on a monthly basis
– Create a framework for measuring performance and ROI
– Build a worldwide community of interested senior executives and target them w/ e-mail bulletins that include messages from TI and its partners
– Develop industry-specific campaigns promoting the community – including offline events, publications, and more.
– Build a members-only community of practice around the gurus and leading implementors
The site would include blogs as well, from industry experts and TI subject-matter experts.
Of course the cost of something like that is far higher than funding a blog or two, but its impact on the marketspace is far more potent.
By building a thought-leadership hub on RFID, TI establishes itself as “the one to learn from” and as I like to say: moves from “mind share” to “wallet share”
Blogs on the other hand are better suited to the voice of an individual. So if TI doesn’t have the resources to build the “big” site I mention, they can still play by allowing one or more of their subject matter experts to start blogging on the ins-and-outs of RFID.
Of course, great care must be taken to make sure that the expert actually does have something to say, and is not the mouthpiece for a veiled PR initiative. Scoble at Microsoft and Schwartz at Sun come to mind instantly, right?
Not enough? Here’s a slightly longer explanation of Double Loop Marketing.

Family Values: Costco vs. Wal-Mart

Let’s compare some workplace statistics, as reported by the companies…
Employees covered by company health insurance
Costco 82%
Wal-Mart 48%
Insurance-enrollment waiting periods (for part-time workers)
Costco 6 months
Wal-Mart 2 years
Portion of health-care premium paid by company
Costco 92%
Wal-Mart 66%
Annual worker turnover rate
Costco 24%
Wal-Mart 50%
Read more about this here.
The Wal-Mart people need to go read Doug Smith’s On Value and Values.
Why does Wal-Mart want this? This is not a PR problem, Wal-Mart. It’s a values problem. Again, read Doug Smith.

The Long Tail in Print: Buying Books a Page at a Time

The Amazon “Pages program” would “unbundle” books, by allowing customers to purchase and view the pages they want or need.
Amazon “Upgrade” will give customers the option to purchase a physical book and perpetual online access to the book. [I do like this idea- now I won’t have lug all my books around the world.]
When will this happen? Sometime next year… read about it here.
How does this compare with Google’s “Print Library”?
Here’s what the bloggers are saying:
“Suddenly the reason why publishers and authors are so pissed off at Google becomes a little bit clearer. They think that they’re going to be able to slice and dice their books, selling little pieces of the book as people want them. They’re taking a page from the entertainment industry — and, like that industry, they’re going to discover this plan won’t work very well. They’ve just added friction in the form of additional transaction costs, both mental and monetary to finding information.”
Techdirt
“Ultimately, it’s a very Long Tail idea, isn’t it? Allow people to buy stuff the way they want to, so that you can wring every last cent out of your content, by earning $1 from someone who isn’t willing to spend $10 for the entire book.”
Yellow Handman
“It’s figured out a way to please authors and publishers, spread around the money for everyone, and do the right thing for readers. Google should sit up and take notice.”
Konnecke.com
“It sounds intriguing – especially to folks who conduct research or who cite information. For example, I might want to cite a book in a blog post or an article or something, but not wait for the entire book (or even buy it). But to pay a nominal amount for access to a few pages – well, that might well be worth the cost.”
Walloworld

Google: Revenues from Dead Authors’ Works

I’m kidding, but hey- now you can read Jane Austen and click on Google Ads at the same time!
Here’s the official line: “One of our goals for Google Print is to change that, and today we’ve taken an exciting step toward meeting it: making available a number of public domain books that were never subject to copyright or whose copyright has expired. We can show every page because these books are in the public domain.” more>>
I like it. They thought of it before Bill Gates.
Is this the “democratization of knowledge” Larry Prusak talks about?

Adrian Slywotzky: Brand Investment Traps

“Brands have become increasingly fragile and difficult to sustain. Failure to invest in the right mix of activities at the right time risks eroding the brand. On the other hand, those companies that anticipate and avoid the common investment traps can reap superior growth in brand value over a long period of time.”
This from Andrew Pierce and Adrian Slywotzky in MMJ. Download here.
So what are the traps, you ask?
1. Failure to invest over time
2. Wrong investment mix
3. Wrong sequence
4. Myopic focus
5. Wrong touchpoints
6. Wrong positioning
7. Failure to adapt
8. Spending too little on too many brands
9. Overstretching the master brand
10. Dilution
11. Wrong metrics
12. Trying to turn around a dead brand
13. Failure to follow through
I’ll add #14: Executive-Ego-driven branding!

Forrester: It’s Still About Content

Forrester’s Chris Charron notes:
“Now that two-thirds of North American households are online, and broadband has reached 72.5 million US households, value has begun to shift from the business of connecting pipelines and selling products to the market for content. Home networks and cheap devices free media content from the shackles of space and time, opening up distribution, and creating the opportunity for new business models. Fasten your seat belts: The content explosion is only beginning.

Charron predicts:
“As video content breaks free from the constraints of space and time, executives should take some lessons from the music industry. Content executives who are looking at the risks and opportunities of online video distribution should take note:
– TV networks, movie studios, and cable and satellite operators will need to jettison the notion that revenue should derive from a single source, and embrace alternative ways of thinking about making money from video.
– To make alternative video distribution profitable, content producers should begin to focus on the small(er) screen and the creation of unique content that consumers will pay for to use on their mobile phones or iPods.
– Internet video — with its ad-supported model — will increase in quantity and improve in quality. Some of the currently free content will make the leap to fee-based offerings as the video iPod and similar devices prove their worth to content owners and consumers.
– Consumers will begin their own video explosion of video podcasts that will let them be seen AND heard, some with hopes of recognition that would mirror the mainstream success of Internet-goofball-turned-MTV-star Andy Milonakis.
– Traditional TV advertisers will be forced to find new ways to market their wares in portable video: Look out for sponsorships, product-placement, and long form showcase-style ads to become more prevalent.”

Measuring Knowledge Management: OECD Report

The results of an OECD survey on Knowledge Management practices in Canada, Germany, Denmark and more. Interesting, but not earth-shattering.
What they state as findings:
● KM practices have spread across the economy, just as technology diffuses;
● KM practices are implemented to deal with a great variety of objectives
(static efficiency, innovation, co-ordination);
● Size matters: firms manage their knowledge resources differently,
depending upon their size, and with little regard to industrial classification;
● KM practices matter for innovation and productivity performance;
● Cluster of practices: although this is a bit premature to make this kind of
statement, cluster of practices makes it possible to see the two main
strategies: codification and personalisation;
● Survey respondents showed a high level of interest, which in fact increases
as the size of the firm grows.
PDF download here.
I’ve always thought that different cultures view knowledge differently. Some cultures value knowledge more than others. In India, for example, I classify people into two groups- the devotees of Lakshmi and the devotees of Saraswati.
Lakshmi reminds me of Aphrodite. She’s the goddess of beauty, fortune and prosperity. Gold coins fall from her hands. Two white elephants, symbols of luck, accompany her everywhere. During Diwali, the festival of lights, people light up their houses with candles (or electric lights) so Lakshmi will find her way to their house.
And Saraswati reminds me of Athena. She’s the the goddess of wisdom, the arts, and eloquent speech. She’s seen as the mother of the Veda, creator of the Sanskrit language and Devanagari letters. The protector of fine-arts and sciences. In her hands are a Vina (a musical instrument symbolising the arts) and a lotus (or a parchment – symbolising learning) and a rosary . Her Vahana (vehicle) is a swan (or sometimes a peacock).
My dad used to worship Saraswati once a year (on her “feast” day) in a very modest ceremony. His wealthy friends used to worship Lakshmi in much more elaborate (and expensive) rituals.
To me this works across cultures- either you worship money, or you worship the truth. The numbers of Saraswati followers are dwindling fast.

Blogging Youth: A Report from Pew

The Pew Internet & American Life Project finds that over half of all teens have their own blog or have contributed photos, text or artwork to a blog or other Web site.
“American teenagers today are utilizing the interactive capabilities of the internet as they create and share their own media creations. Fully half of all teens and 57% of teens who use the internet could be considered Content Creators. They have created a blog or webpage, posted original artwork, photography, stories or videos online or remixed online content into their own new creations.
“Teens are often much more enthusiastic authors and readers of blogs than their adult counterparts. Teen bloggers, led by older girls, are a major part of this tech-savvy cohort. Teen bloggers are more fervent internet users than non-bloggers and have more experience with almost every online activity in the survey.
“Teens continue to actively download music and video from the internet and have used multiple sources to get their files. Those who get music files online believe it is unrealistic to expect people to self-regulate and avoid free downloading and file-sharing altogether.
Download the PDF here.

How to Spend your Marketing and Ad Budget

Kathy Sierra’s blog post should make you think twice.
Even someone as mainstream as Sergio Zyman says: “The problem in marketing today is that we spend 95% of our time and money on advertising and 5% on the rest of the stuff. What I propose to you today is to flip it around: Spend 5% of your time and money on advertising and 95% on everything else. If you do that, you’ll sell a lot more to your customers.”
I agree. That’s how I discovered Double Loop Marketing.

Car Makers Shoot Themselves in the Foot, Again

Apparently “employee discount pricing” isn’t exactly helping GM, Ford, and DaimlerChrysler.
Forbes reports that “the ultimate result of the promotion was the widening of an already-existing gap in perceived quality between Detroit’s Big Three and their Japanese counterparts.”
“After spiking during the summer, sales at the Big Three tumbled in September. Also falling were consumer scores for brand image, quality, credibility and perceived resale value, among other attributes, according to Brandimensions. GM and Ford, in particular, saw sales growth lag behind Toyota, Nissan and Honda by an even greater margin than they did in the spring, before employee pricing was implemented. Sales at both automakers dropped more than 20% from their September 2004 levels, while the three Japanese carmakers increased their sales at double-digit rates.”
Note: The promotion hurt GM the most as the leader in starting the program… ouch!
John Hagel talks about the auto industry on his blog: Delphi, Detroit and Dead-Ends.
Good news for Toyota and Honda. Hybrids, anyone?

Paper Television

Siemens has announced a new color display screen so thin and flexible it can be printed on to paper or foil, and so cheap it can be used on throw-away packaging.
Prediction: ads on toilet paper… aargh, what are we coming to?

The Blog of the Eternal Return

Well, here it is. I’m blogging again. The old christiansarkar.com site is still available here.
One thing about blogging: once you start, truly start, it’s hard to stop. I took over a year off, but I’m glad to be back in the blogosphere.
The danger with blogging is, of course, that you might take yourself too seriously.