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Posts tagged with Winning

Strategy? Why do we need that?

Posted on November 21, 2013 by 10 Comments

I went to a wine event today in New York for the Bordeaux wine region.  While there, I asked the representative of one of the wineries, “What’s your strategy for the U.S.?”  She responded, “Strategy?  Why do we need that?”  I gave her some reasons but the conversation didn’t go very far.

When I returned to my office, I got an email from the Pew Research Center titled “Experts rank the top 10 global trends.”  When I clicked on the link, I found a report from the World Economic Forum on the 10 most important global trends based on a poll of 1,592 leaders from academia, business, government and non-profits.  Here’s the list:

  1. Rising societal tensions in the Middle East and North Africa
  2. Widening income disparities
  3. Persistent structural unemployment
  4. Intensifying cyber threats
  5. Inaction on climate change
  6. Diminishing confidence in economic policies
  7. A lack of values in leadership
  8. The expanding middle class in Asia
  9. The growing importance of megacities
  10. The rapid spread of misinformation

So what do these trends have to do with something as everyday as buying a bottle of wine?  Plenty.

It’s great that a provider of any product or service believes theirs is the best but neither consumers nor b2b markets think in linear terms.  Every decision is made in relation to another.  If I’m nervous about the state of the world, that will effect how I make decisions, and what and when I buy.  If I’m an importer or distributor and concerned about unemployment and the impact of economic policies, I may want to hedge my bets with tighter inventory control.  As people focus on the macro trends that affect us all, how companies approach the environment, social responsibility and their own governance (ESG) effects our perceptions of their brands.  It goes on and on whether you’re a consumer or corporation (remember, somebody once said, “Corporations are people, my friend.”)

If you don’t have a strategy that helps you wind your way through this maze or a brand with values that reassure consumers and customers, you’re dead in the water and it won’t matter how many fancy events, e-newsletters or facebook followers you have.

5year copy copySomething else was interesting to me at today’s Bordeaux event.  As I went around and asked people about their wines and what makes their winery better than the rest (to which there were a lot of blank stares), nobody asked any questions about me, about my tastes, concerns, or needs.  They may as well have been Enomatic wine dispensers with an information rack underneath.  Most handed me a sheet of paper about their wines in answer to my questions anyway.

There was neither strategy present nor any attempt at customer engagement.  I imagine the woman who asked me why her company needs strategy poured a lot of wine today.  At the same time, it wouldn’t surprise me if at the end of the day, she moaned about some of the trends on the list and how they were making life more complicated.  That’s too bad.  Strategy is the direction that helps us wind our way through and around those trends and we all give our loyalty to those that help us do that.

FutureShift asks a lot of questions and listens carefully so that brands and strategy resonate with customers to increase their engagement and loyalty.  It works.

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Where does good strategy begin?

Posted on November 11, 2013 by 1 Comment

There’s always a rush these days to get plans into action.  Action is what we value, just as we’re always looking for someone who “can hit the ground running”.  But what if they’re running in the wrong direction?  And how do you know in which direction to run?

The answer to that mistakenly comes in businesses doing what they’ve always been doing and whenever possible just running faster.  In the accelerated competitive environment of New York City, we’ve become accustomed to stores, restaurants, professional services and even hospitals suddenly disappearing.  These businesses failed even though they worked harder and ran faster than anyone around them.  Why did they fail?

Most likely, they never asked their customers whether the direction they were going, the products and services they were offering or the benefits they perceived internally met customer needs.  It’s the rare manager or entrepreneur who can intuit what the market is looking for.  Otherwise, there would be a lot more people like Steve Jobs around.  Businesses have to get feedback from their customers and understand how to match their offerings with what customers are seeking.

Not surprisingly, customers often see product plusses and minuses in completely different terms than the companies selling them.  The best advertising campaign in the world won’t convince customers that they should be seeking something different.  We’re just not in that linear world of the 1950s and 60s when we could be told what detergents make our clothing cleaner and then march in lockstep to the store to buy them.

Of course, businesses don’t always listen to their customers because internal beliefs are so strong as to refuse to change their strategy to meet customer needs.  Here are three examples to consider:

  1. Several years ago, we were asked by the Chilean Pisco industry to provide a strategy that would open up the U.S. market for them.  If you don’t know Pisco, it’s an eau de vie, somewhat like a refined grappa, that’s made in Chile and Peru.  Our research found that bartenders believed it made most vodka-based cocktails more interesting and one of our key strategic recommendations (futureshiftpisco.com) was to unleash the creativity of bartenders with a series of tactical programs that would challenge them to develop great Pisco-based cocktails that their customers would love. But Chile is a country where perfection in planning is highly valued and established.  That works when building bridges, tunnels and skyscrapers, of which you’ll see many in Santiago these days but not when variable decisions are involved as with bartenders and their customers.  The Chilean Pisco industry decided to design several “perfect cocktails” that they could then promote in the U.S.  The result?  Peruvian producers who gained a better understanding of the U.S. bartender now dominate the market.  There’s still time for Chile to adapt as Pisco still is not well known in the U.S.   They simply have to acknowledge that their customers have more power than they do.  Easy, right? Ad campaign #1
  2. While we’re on Chile, let’s move to technology.  This time the Chilean technology industry told us they wanted to sell their growing tech industry to U.S. companies.  Chile had already achieved tremendous success in establishing itself as a successful place to locate an offshore tech center.  Now, they wanted to have a presence inside the U.S. to provide SaaS and enterprise integration products. Again, we spoke to prospective customers for these talented Chilean companies and were told that if they could establish partnerships with Chilean companies in Latin America, a piece of their U.S. business would likely follow.  (FutureshiftChileIT.com)In other words, help us in your territory and then we’ll reward you in ours.  U.S. companies wanted to understand the Chilean miracle and how it had become an export powerhouse. But just as with Pisco, the forces that worked internally in Chile were too strong to persuade them to adopt a market-oriented strategy in the U.S.  Six Chilean IT companies came to the U.S. trying to sell their services based on low prices.  But why go to a company thousands of miles just for low prices when that can be found down the road?  Today, there is only a small amount of programming work going to Chilean companies, as talented as they are. Ad campaign #2
  3. Most recently, we conducted a research and strategy project for the Maine lobster industry.  Following 200+ interviews, there were a number of findings in that report that showed how Maine lobster possesses attributes to restaurant and hotel chefs that were not being considered within the industry.  There is ample opportunity for the Maine industry to differentiate its brand from all competitors.  However, lobstering is a traditional industry and change does not come easily.  Like the two Chilean examples, internal beliefs in Maine are strong.  Most lobstermen are focused on their first transaction with a dealer when they bring their catch to the dock.  The needs of restaurant and hotel chefs can be perceived as a distant concept and there is little patience for the time it takes to raise the foodservice market’s demand.  The local dealer and summer tourist who loves to sit at the water’s edge, even though they both pay rock bottom price, is more concrete.  It’s been that way for more than a hundred years so change, despite market feedback, isn’t easy.  There’s cause to remain optimistic but it remains to be seen whether Maine’s lobster industry adapts.

In each of the above cases, the right strategy began with listening to customers.  That helped set a direction for the industry to go.  But at that point, industry members often put up obstacles to change.  After all, it’s far more difficult to do something new than the things you’ve been doing for dozens of years, even though they may not be working.

FutureShift develops brands and rebranding programs by understanding how customer decisions can increase engagement and loyalty.

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Objectives, strategy, tactics and goals: A recipe for confusion

Posted on July 23, 2013 by 9 Comments

Business managers and their consultants often talk about strategy, yet they frequently misunderstand what strategy is, why it’s important, and how objectives, strategy, tactics and goals are related. The confusion seems to exist because our business culture values action.  “I’m looking for someone who hits the ground running,” is a common refrain from CEOs who believe action is what creates results.  But the real question is “what direction are they running?”  Action without direction is meaningless or even harmful to the potential success of a business.

It’s simple enough to say that “objectives are measurable, strategy is direction, and tactics are actions.”  Yet, the question still asked is: “How many strategies should we have?”  Of course, if strategy is direction, how many directions can you go at the same time?  No wonder we’ve become accustomed to business plans underperforming. Marketing departments and their agencies often don’t know what direction they’re going or they create separate strategies for each tactical execution. Consequently, tactical programs may have no clear direction or consistent messaging and the result is that they get lost in the competitive clutter.

Building a business is like crossing the ocean

A clear example of an objective, strategic options, and tactics may help clarify the confusion. Suppose, for example, we decide to sail a boat across the Atlantic Ocean. This isn’t something most of us will ever do but objectives, strategy, tactics, and goals as well as research, even management teams, become crystal clear when setting out to cross the ocean and they’re no different than they are in business.

For fantasy purposes, we can become part of the idle rich and plan to sail our boat from the Chesapeake Bay area to the mouth of the Mediterranean in late June.  Why not?  The Mediterranean is a nice place to spend the summer.  Since we’re in a hurry to get there in time for party season, we’ll set an objective of reaching the Mediterranean in 20 days.  So now, we’ve set an objective and it’s measurable.  We can break it down further to measure our progress along the way.  It’s about 3,800 miles in a straight line across, which means we’ll have to average about 190 miles every 24 hours.  That will require an average speed of 7 nautical knots per hour (a little more than 8 miles per hour).  That may sound slow but we’re dependent on the vagaries of the wind and weather conditions as we sail across.  More importantly, we now have a set of metrics by which we can measure our progress, a key component of objectives.

To take our fantasy voyage further, we’ll need a boat and considering our objective, we might want one that’s about 60 feet long, something like the one in the photo.  This boat is called a Swan 60 and is made by Nautor in Finland.  Nautor makes safe, fast and beautiful boats and we’ll pay a pretty penny for the privilege of owning one.  Fully equipped, we’re looking at around $3.5 million but hey, it’s only money!  The good news is that the Swan 60 has what’s called a hull speed of about 10 knots (approx. 11.5 mph).  Without going into a technical definition, hull speed is the approximate maximum speed a boat can go.  The exception to hull speed is when a boat surfs in high winds on top of the waves.  If we can get our Swan 60 surfing, we can probably sail at speeds well over 15 knots.  So averaging 7 knots across a 3,800 mile span of ocean does not seem out of the question.

Now we have our boat and you can think of it the same way as we might a business.  It has an owner (a wealthy one) who may or may not be “skipper” (no jokes please) or managing director.  We’ll need a navigator, who can be compared to a combination of a Chief Technical Officer and Chief Strategy Officer, and a Tactician, our Chief Operating Officer to keep us going at maximum speed.  Then we’ll need some specialists, people who excel in working in different areas of the boat and handling a 60-foot yacht’s large sails.  Also, we’ll need an experienced sailboat cook who knows how to keep a crew happy while being tossed around in large waves.  We’ll want experience all around as ocean sailing is not for novices.  In all, our team may total 14 people.  Our boat only sleeps seven but we’re sailing non-stop 24/7 so we’ll need enough people to manage the boat while others sleep.

Selecting a strategy

You can see by now that we’re building a small company that has an ambitious objective.  Now, it’s time to select a strategy, a direction we’ll take to reach the Mediterranean on time.  We have some difficult choices to make.  It’s time to do some research.

We’ll study historical weather patterns, learn the prevailing winds, ocean currents, note the islands or hazards we might see along the way and course taken by other boats making the same crossing.  We learn that there are three optional courses across, each with its strengths and weaknesses.  We can devise a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) for each of them.  The map below shows our choices.

  • Course 1:  High-risk; High-reward

This is a strategy that has some clear risks but also enticing opportunities.  It takes us northeast along the U.S. and Canadian coastlines.  As the prevailing summer winds are out of the southwest, we’ll be sailing downwind, which should give us more speed.  We’ll also be assisted by the Gulfstream currents, which run along a path from the Bahamas northeast into the Atlantic at an average rate of 3 knots.  Then, if weather patterns hold, we should have good winds reaching down the European coast to get to our destination.  The risk is that we’ve added about 1,000 miles to our course, which means we need to average 9 knots, which is pretty aggressive.  Another risk, more precisely, a threat, is the possibility of sailing among drifting icebergs, once we’re off the Labrador coast.  Our research has told us that iceberg fields breaking off from the Greenland glaciers are common during the summer months.  That’s not a problem for us during good weather but it’s difficult to see an iceberg at night (memories of the Titanic).  So in the end, we have a potentially fast crossing to meet or exceed our objective but with some significant risks.

  • Course 2:  Shortest Distance

This is a strategy that takes the shortest possible course using the curvature of the earth to shorten our path. It still has the potential risk of icebergs but it is more manageable if this becomes a problem.  We’ll gain less of a push from the Gulfstream and may find ourselves stuck with low or no wind for days in a mid-Atlantic high-pressure system, but it seems to strike a middle ground that still makes our objective within reach.

  • Course 3:  Nice & Easy

This strategy is the most conservative.  It enables us to stop along the way in both Bermuda and the Azores, enabling us to replenish our supplies 700 miles east of the U.S. and about 1,000 miles west of the Mediterranean, with a gap of about 2,000 miles in between.  This course reduces the risk of being exposed to extreme weather along the way and allows us to spend a night or two in safe harbors along the way.  The risk is that high-pressure centers regularly sit in the middle of the ocean in late June and we could have to drift windless or move at low speeds for days.  This may make it difficult to reach our objective on time.  (BTW, this course appears shorter when viewed as flat surface but is longer when going around the diameter of a sphere.)

Our three strategies are not too different from what we may see in business, one that is high-risk, high-reward, one that is safe but potentially slow and one that is a middle ground or compromise between the two.  Which should we choose and what happens if we recognize that we’ve made a mistake?

Suppose we’re aggressive and have tremendous confidence in our abilities to manage the boat and navigate the seas. Past success might even blind us to some of our weaknesses.  When hubris takes over decision-making can be reckless (memories again of the Titanic…or hundreds of failed businesses).  Let’s assume we select the high-risk course that takes us far north but in doing so, we either find the hazards of icebergs to be too many, the seas to be too rough or even the winds to be less than we anticipated.  As a result, we decide to change strategies and move mid-course to another direction.  One look at the “course change” on the map shows the cost of making this correction, which is likely to make our objective much more difficult to reach.  The lesson, of course, is that selecting the wrong strategy and making a change has costs, which can be significant.

Tactics and goals

What about tactics and goals?  How do they factor in and how should we think of them.  During any period of time, we’re going to take specific actions to increase the speed of our boat.  We might put up different sails, larger or smaller, to better take advantage of changing winds. Or, we might want to be on a slightly more advantageous course to gain speed.  These are tactics but are not strategy, as they don’t alter our overall direction in reaching our objective.

Imagine a boat (or a business or someone who hits the ground running) that is all tactics but has no strategy.  It would always take every possible action to increase its speed regardless of the direction it is heading.  It might even go in circles and get nowhere very fast.  Tactics will not reach a productive objective without strategy to provide guidance.

Finally, where do goals fit in?  Goals are long-term milestones that you want to achieve.  (e.g. “I want to be a better sailor/manager/person.”).  Objectives are fixed and have specific requirements, which can be measured.  Objectives have structure; goals do not.  Goals can never be accomplished without objectives but objectives without goals won’t create the long-term change you desire.

Hopefully, that clarifies things.  Following college, I crewed on a large sailboat crossing the Atlantic.  Our owner chose “Course 3: Nice & Easy” and we paid a price for it.  It was slow, slow, slow – 27 days across.  But one of my strongest memories of that trip was listening to our marine radio and hearing reports of sailboats dodging icebergs in high winds only a thousand miles to our north.  It was an example of how the wrong strategy can have its costs, either going too slow or too fast, but it cemented the concepts in my mind forever.

At FutureShift, we provide research-based strategic services, but are often asked to run workshops that help clarify the confusion around objectives, strategy, tactics and goals.

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Dancing on Michael Porter’s grave

Posted on January 15, 2013 by 3 Comments

No, Michael Porter is not dead.  Only the consulting firm that he co-founded in 1983 is gone.  Today, the global accounting giant, Deloitte, announced that it had completed its acquisition of Monitor, which had filed for bankruptcy this past November.  As reported in The Economist last November 14th, the once proud firm, was able to compete with the likes of much bigger McKinsey, the Boston Consulting Group and Bain.”

No mention was made in the announcement of what role Porter might play in the newly formed division of Deloitte but he remains a highly regarded professor at the Harvard Business School.

Businesses come and go all the time and acquisitions are a daily occurrence.  What is of note here is that Monitor was founded by a man acclaimed as one of the great business strategists of the past century, and more importantly by his principles, best known as “Porter’s Five Forces”.  Under the guidance of the Five Forces framework and Porter’s fame, Monitor’s legions of consultants found millions of dollars of billable work among foreign governments, multi-national corporations and commodity boards.  That work began to dwindle in 2008 when Monitor had to seek a series of loans from its partners and venture capital firms in order to stay afloat.

In the November issue of Forbes, contributor and business author, Steve Denning, uses his rapier-like writing skills to tear apart both Monitor and the philosophical approach behind it.  In other words, he does some dancing on Porter’s grave.  While the article is now two months old, it makes for compelling reading if you were a believer or doubter of Porter’s framework.  Put me in the latter camp.

I first read Porter’s seminal article in the Harvard Business Review, “How Competitive Forces Shape Strategy” in 1979. I was one year out of business school and a loan officer in a commercial bank.  My mantra was a phrase coined by another business guru, Peter Drucker, and known as “Managing by walking around.”  The idea is that by engaging with people both inside and outside an organization, managers can best understand how their companies, products and management styles are perceived, how they perform and what to do about them.  That’s a simple concept that one could explain in an elevator between the first and second floors.

It served me well then and has since as I’ve made the practice of engaging with both internal and external audiences to find the intersection between internal capabilities and external needs as the place to find the sweet spot for successful strategy.

Porter’s Five Forces, on the other hand, require a much longer elevator ride. The idea is that by managing a framework of five market forces, a company or industry could find sustainable competitive advantage.  “The state of competition in an industry depends on five basic forces…The collective strength of these forces determines the ultimate profit potential of an industry.”


I can’t say I fully understood it in 1979 and I can pretty much say the same today.  I looked at the model then as I do now and ask, “Why is the competition at the center?  Why not the customer?” Drucker taught that the only valid purpose of a business is to create a customer.  Yet, here was Porter, saying that it’s all about dominating the competition.

I had a memorable meeting at Monitor’s Cambridge headquarters in the early nineties.  At the time, I was doing some consulting for the government of Chile on export promotion, inbound investment and tourism development.  Monitor had built up a practice in consulting in these areas and proposed a partnership.  I felt this might add some prestige to the project.  At our meeting, one of their senior consultants explained how they would apply the discipline of the Five Forces to the project.  He drew lots of squares and circles on the board labeling them various types of competitive clusters and argued that it was winning against competing countries, not customer perceptions that would win the day for Chile.

I left there confused and unconvinced that the focus should be on “competitive clusters” rather than matching what Chile offered with customer needs.  If you spend your time focusing on rivalries, you’re losing time creating more innovation to meet growing market demands and before you know it, your competition will be your problem.  As the famous baseball pitcher, Satchel Paige, said,  “Don’t look back.  Something might be gaining on you.”

As Steve Denning notes about Monitor, “Its consultants were not people with deep experience in understanding what customers might want or what is involved in actually making things or delivering services in particular industries or how to innovate and create new value.”

Today, factors such as globalization, the Internet, and the growth of social media have heightened the importance of building strategy around customers.  Now that the world is flat, customers decide who wins in every industry and political arena.  As Denning ends his article, “Monitor was crushed by the single dominant force in today’s marketplace:  the customer.”

It’s hard to argue against the man who is one of the most cited scholars in economics and business and whose ideas are widely used by business and government leaders around the world.  But we are in a different time where the key is satisfying customer needs for innovation, whether they be in features, quality, service, or value.  Companies like Apple, Amazon, Fresh Direct, and Kayak are just a few of the examples of how our flattened world has given power to customers.

Our consulting approach is to put customers at the center and to understand their frustrations.  After all, a frustration is simply an unmet need.  Find the innovation to serve that need, erase the frustration and you’ll find a successful business — that’s a short speech in any elevator.

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3 social media/research enhancements you’ve never seen before

Posted on October 25, 2012 by 3 Comments

In the mad dash to build Facebook and LinkedIn communities, something has been missing.  Companies have been campaigning for as many Facebook “likes” as possible but now, they’re asking, “How do we know if our message is getting through?” and “Is there any way to tell whether (1) awareness is being raised; (2) brand loyalty is increasing; and, (3) social media is having an effect on sales?”

They’re good questions to ask and now there is a way to answer them.  With a simple link on your social media page, you can gather comments and get key strategic questions answered by your social media network.  With our DirectLink™ software, you can ask them questions about their understanding of your brand, unmet needs and the information they’d really like to have from you.  They can be open-ended questions that allow people to write as much as they want and then you can apply these three new tools:

1. See what they’re writing in real time – as they write it!

Now, you can actually monitor what your community is saying about you and how they’re answering your questions.  Take a look at the example below for one of our clients that is a wine producer.  The question asked is “Please describe the qualities that you find in our wines that differentiate them from other wines at any given price level.” With one click on the button on the upper right that says “Get Verbatims”, everything written in answer to that question immediately appears.

And if you want to see all of the text responses quantified, you simply close the verbatims screen and bar charts appear showing how all of the answers have been categorized.

In other words, we’re quantifying qualitative information – conversational text – and enabling you to see the actual words behind the data.  It’s like listening in to hundreds of conversations about all the questions you want answered about your brand.

2. See the key words they use while they’re using them.

When considering the key needs among your customers to address, it helps to know their top-of-mind thoughts.  Word clouds can provide a quick look at what any customer group is saying about your brand.  With one click on the “Word Cloud” button, you’ll see your word cloud develop before your eyes.

DirectLink™ automatically throws out the meaningless words such as articles, pronouns and other common words that might improperly skew the response.  Still, there will be words you’ll see in the word cloud that get through the screening process but don’t provide insights.  DirectLink™ enables you to quickly toss out those words.  For answers to the same question as above, “Please describe the qualities that you find in our wines that differentiate them from other wines at any given price level.”, we tossed out seven additional words to get the picture above.  It’s as easy as clicking on the words you don’t want and the word cloud quickly reforms.

With this feature, you see the top-of-mind thoughts your customers have and the descriptive words they use.  Every product or service creates its own lexicon of words that both the trade and consumers use.  Now, you can see what those are and use them to talk to your customers.

3. Segment your customers instantly and respond immediately.

A common reaction to seeing what people say about you is to think “if only I could talk directly to these people about their beliefs.  Then, I could convince them.” Now, you can!

To the same question above, we wondered if the media that follows the wine and spirits industry might have different topics on their minds.  So, we quickly selected only the media respondents, clicked on the Word Cloud button and this picture appeared: 

Whereas the top-of-mind words used by the larger audience were “food, fruit, price, friendly, oak, aging”, the media has prominently added “complex” and “smooth”.  If we were to speak about these wines to a journalist then, we might stress both the complexity and smoothness of the wines as being key factors that make them so good with food.  It’s this type of parsing that can enable you to tailor your response to any particular trade or consumer group based on factors that you define.

Now, let’s go a step further because DirectLink™ makes a seamless connection between survey responses and direct marketing.

Among the DirectLink™ features on the control panel, you’ll see that there is another button on the upper right that says “Get Emails”.  Clicking this button immediately downloads an email list of only those people who responded to the question or multiple-questions you selected.  You can send them an email using the words they’ve used in response to your question that is specific to their ideas, perceptions and beliefs.

Who can use these 3 features that come with DirectLink™?

  • Brand marketers trying to understand what people think about their products.
  • Sales managers who want to improve and tailor their sales pitches.
  • CEO’s who want to test a new strategy with their customers.
  • HR managers who want to assess employee morale or improve internal services.
  • Trade association managers who are seeking ways to raise awareness and open doors for their members.
  • Foreign trade development officers who want to better understand what makes their country attractive.
  • Tourism departments that want to know what will motivate consumers to visit.
  • PR and ad agency account executives who want to know what’s on their client’s customers’ minds so they can address them in marketing communications.
  • University and college administrators that want to understand and respond to student or alumni views.
  • Non-profit development directors seeking the keys to increased fund raising.
  • Political campaign managers who need to understand what voters want.

The list goes on and on.  All of the above have used DirectLink™ in the past and now these new features make it even more effective and faster.  We can make your social media programs more effective and improve the ROI of research or direct marketing programs.  If you’d like to know how DirectLink™ can help you and see an online demo, let us know.

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Political Myopia: Piercing through the nonsense and casting your vote

Posted on October 22, 2012 by 2 Comments

It’s “silly season” – so sayeth the politicians.  It’s time to throw every piece of mud at the opposition simply because a lot of people will believe it.  Fox, MSNBC, pundits who claim to know everything but in reality know nothing, and thousands of horrid political ads – it’s all a lot of noise that provides no reliable indicators on which is the best way to vote.

Can we look at some of the realities of the situation and some of the facts?

REALITIES:

  • Romney:
    • We don’t know what Romney would or would not do. Unfortunately, he’s changed positions so many times, it’s hard to figure whether he’s conservative or moderate.  The “etch a sketch” metaphor has been mentioned and fair or not, it was created by his own campaign manager.
    • Yes, he did a great job with the Olympics.  He had support and money from the government that he says isn’t working.  It’s unclear how he did as governor of Massachusetts but one would think that if he did a great job, he’d easily win the state this time.  Polls show he’s 15 points down.  You want to tell me that’s meaningless?  Please explain.
    • The only thing Romney has been consistent about is that he is a social conservative.  He’s supported the idea of overturning Roe v. Wade, favors DOMA and won’t take a position on the Lily Ledbetter Act.  If that’s what you want and you’re okay with his other murkiness, you should vote for him.
  • Obama:
    • Four years ago, we were headed toward a full-on depression.  We’re not now.
    • Corporate profits had risen more than with any other president.
    • The stock market has risen 14.7% a year under Obama.
    • Housing values had fallen one-third on average at the end of the Bush administration.  They’re rising again and have recovered much of the loss.

Now that we’re here, who can take us further?

FACTS:

  • The U.S. economy has done better with Democratic presidents than with Republicans.
  • Personal disposable income has grown nearly 6 times more under Democratic presidents.
  • Gross Domestic Product (GDP) has grown 7 times more under Democratic presidents.
  • Corporate profits have grown over 16% more per year under Democratic presidents (they actually declined under Republicans by an average of 4.53%/year).
  • Average annual compound return on the stock market has been 18 times greater under Democratic presidents (If you invested $100k for 40 years of Republican administrations you had $126k at the end, if you invested $100k for 40 years of Democrat administrations you had $3.9M at the end).
  • Republican presidents added 2.5 times more to the national debt than Democratic presidents.
  • The two times the economy steered into the ditch (Great Depression and Great Recession) were during Republican, laissez faire administrations.

Don’t believe me?  Why not read the self-proclaimed “Capitalist Tool”?  The above facts can be found all over the Internet but click here to read this article from Forbes magazine.

Investment managers always point out that there’s no guarantee that past performance is an indicator of the future but given the choice between uncertainty and past negative performance versus a record and past positive performance, logic should say to select the latter.  But when did logic and facts determine a U.S. presidential election?

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2 contrasting days in America

Posted on October 13, 2012 by Leave a comment

It has been several days now that we watched the Vice Presidential debate and have been subjected to a discussion that’s more about whose demeanor and facial expressions have been better than about their policies.

Depending on from which side you see things, President Obama has either brought the economy back to a place where it can now recover or he’s brought us to a Leninist-Marxist precipice.  Governor Romney is either the biggest liar that has ever run for president or he is just the man we need to help America get back to its revolutionary roots.  It’s that extreme and it’s that myopic.  We’re losing sight of the big picture.

Yesterday, I attended the annual shareholders’ conference for The Baron Funds, a group of mutual funds led by Ron Baron who believes that it’s the quality of people who make great companies and that investing in them is a long-term bet on America.  The event is held each year at New York’s magnificent Lincoln Center. 4,000 shareholders attended.

During the morning, you get to listen to presentations from CEO’s of companies the funds have invested in.  Then at lunch, various entertainers perform in one of the many auditoriums at the Center.  Yesterday, the choices were British rock singer Joss Stone, Broadway star Kristin Chenowith, or jazz stylist Harry Connick Jr.  After returning from lunch, the senior analysts from each of the Baron Funds engages in a panel discussion about the past year’s performance and how they pick stocks.  When this ends, there’s a musical performance from a big name headliner.  In the past, it has been people like Rod Stewart, Bon Jovi, Elton John and others who you’d pay a lot of money to see elsewhere.  Yesterday, the headliner was Celine Dion – more on Celine later.

I don’t know if Ron Baron chose the CEO’s who made their morning presentations to make a point about the country’s economic stewardship.  I want to believe he did.  Here’s a brief encapsulation:

  • David Rubenstein, Co-Founder & Co-CEO of The Carlyle Group showed a different set of values for private equity firms than we’ve seen during the past year from Governor Romney’s turn at Bain.  From its start in 1987, Carlyle now manages $160 billion in investments with the goal of supporting good companies that create jobs and prosper for their shareholders AND employees.  For all his success, Rubenstein exhibited an amazing self-deprecating sense of humor and stressed the importance of giving back to America.  He has put his money where his mouth is by joining Warren Buffet in giving his fortune away.  What came across more than anything is that good values build great companies.  By the way, he said he has no problem with the regulations imposed by Dodd-Frank, which some politicians want to remove.
  • Steven Spinner, CEO of United Natural Foods was a little more meat and potatoes in his presentation…well actually, more tofu and bulghur… but he expressed a need to be more conscious about our environment and both the chemicals we put into our environment and our bodies.  The company is now the largest distributor in the U.S. and Canada of natural and organic foods and has become a $4.5 billion company with 65,000 sku’s and 23,000 customers.  Healthy foods raise our awareness of our environment and build successful businesses – quite a contrast to the right wing preaching that the government (and in particular, Michelle Obama) is trying to force feed us healthy foods we don’t like.
  • Robert Katz, CEO of Vail Resorts showed how a sizable business ($1 billion +) dependent on nature can prosper when it focuses both on good environmental stewardship and helping people enjoy all the recreational possibilities that enables.  What’s interesting is that they don’t own the land their resorts sit on.  They lease it from the National Forest Service, and have to work with the Service to show they are deserving of both permits and leases – a great example of how government helps improve our lives, supports business and is worth the investment we all make in it.
  • Frank Coyne, CEO of Verisk Analytics is all about Big Data.  This company dominates the insurance risk assessment business.  I have no idea of his political leanings (or most of the others for that matter) but he’s a former Marine who grew up in a lower middle class family from Scranton, PA.  There was not a trace of ego in his presentation.  He is clearly an American success story who rose from the middle – no trickle down there.
  • Kevin Plank, Founder and CEO of Under Armour, a $2 billion company that began in his basement in 1996, told an amazing story of how his experience as a college football player took him on a search to find better performance athletic clothing.  He displayed optimism, competitiveness and personal charm in telling his success story.  There was not a hint of dismay in his approach to the future.
  • Rich Barton, Co-Founder & Executive Chairman of Zillow, Inc. was the moderator of the analysts’ presentation so he wasn’t really focused on his or his company’s story.  However, he founded both online travel giant, Expedia, and Zillow, an online real estate search site.  He’s another American success story who displayed extraordinary optimism.

The last presentation of the day came from Ron Baron, CEO of Baron Capital Group.  Baron founded the funds in 1982.  Today his enormous success has made him a billionaire.  I’ve never met the man but in every conference I’ve attended, he always stresses his middle-class roots in New Jersey, his optimism about American business and his belief in America.  He doesn’t hesitate to mix patriotism into business.  As in past years, Broadway star Kelly O’Hara came out to sing America The Beautiful as everyone sang along.  This year, there was an additional treat of Kristin Chenowith singing the national anthem.  She raised the roof and 4,000 hearts with it.  (That girl has pipes!)

Baron gave his outlook on the economy, the stock market and reminded us why a long-term investment philosophy in good people who build great companies pays off .  He praised Federal Reserve Bank Chairman, Ben Bernanke for his stewardship of the economy to a smattering of applause.  He showed how the stock market has climbed 60% since the days of doom and gloom four years ago to wild cheers.

Then, came the part that left me stunned.  He noted that we’re soon to have an election between President Barack Obama — maybe 20% of the audience applauded — and Mitt Romney to loud, enthusiastic applause that drowned out anything that had preceded it.  It left me wondering whether anybody had been paying attention all day.  The contrast to private equity investing with the Romney approach from David Rubenstein ‘s Carlyle Group couldn’t have been clearer.  Protection of our food sources and environment have helped businesses succeed, not fail due to over-bearing government regulation.  The economy never fell off the cliff.  Businesses and the stock market prospered and now they’re cheering for an uncertain change that promises to strip away a lot of the government support and regulation that has contributed to both success and fairness?  I don’t get it.

I grew up in a family that was firmly Democratic, although I believe I am more fiscally conservative than my parents.  While I live in New York, I continue to vote in Maine where I still own property.  There, like many Mainers, I’ve settled into a mode of independence, voting for moderate Republicans like Bill Cohen and Olympia Snowe, independents like Angus King and Democrats like George Mitchell.  The contrasts to me this year couldn’t be clearer.  While I’ve lost some of my love for President Obama, I think he provides a healthier direction for America.  We have serious problems to fix but I don’t believe those will come from cutting everything except defense and frankly, I have a problem with disingenuousness.  Neither party can claim sainthood in this regard but I saw Romney claim himself as “severely conservative”, heard his campaign manager say they could just take out the “etch a sketch” and remodel him once the Republican nomination was secure and now he’s transformed himself into a moderate.  It reminds me of that famous Lincoln quote:  “You can fool some of the people all of the time, and all of the people some of the time but you can’t fool all of the people all of the time.”

In the end, just like Ron Baron says and practices, it’s about people and their values.  Not only do good people build great companies but they also build great countries.  I left the conference a little dismayed at the shareholders’ reaction to the election but still optimistic about the long-term.  To that, I can thank Ron Baron for this annual event.

This brings me to Celine Dion.  I’m not a fan and never have been.  She’s too kitschy for me.  Yes, she’s talented and a professional song stylist who’s benefited from great writers but in one song, Kristin Chenowith blew her away.   After all the great rock stars I’ve seen at this event, I was surprised at her appearance.  “Las Vegas East”, Ron Baron called it.  It certainly was.  Her big band, violins, lots of costume changes and a self-aggrandizing video were all on display.  Like so many other successes — only in America.

I thought of staying for a few songs and then leaving but then I thought of my daughter.  She’s a fledgling comedy writer in LA and she loves Celine.  She’s dreamed of going to Las Vegas to see her and has even asked me to foot the bill for the $250 ticket.  You can imagine how far that went.  But as Celine came on, I texted her knowing that she would be excited.  It was only the texting banter between us that kept me there for the duration.

Here it is:

So the afternoon entertainment is Celine.

SHUT UP!

Here she is:


You are breaking my heart.

HOW IS IT THAT YOU GET TO SEE CELINE DION PERFORM AND I NEVER HAVE?

Tell me everything!  WHAT IS SHE WEARING?  How many costome changes?  How many times is she fake crying?  AHHHHH

Is she amazing????  OF COURSE SHE IS!!!!

I guess because I own $30K of Baron Funds.  I wish you were here.  She’s too sappy for me.  I don’t know how long I can last.

OMG omggggggg!!!  Just revel in it.

Oh, here come all the big hits!  “I’m your lady” oooh la la

OMGgggg!!!!

Imagine her an alien from a special planet where the wind is always billowing her hair and dresses!

A lot of eyebrow action and the motions.  WAIT!  We have violins!  It’s a costume change!

AHHHHHHHH.  WHAT IS THE NEW COSTUME?

This is so unfair.

We’re waiting with bated breath.  Maybe she went out to pee.

Slinky, black and silver.


It’s cabaret time.

She’s magnificent!

I’ll record Titanic if she goes there.

OH SHE WILL AND YOU  BETTER.

She tucks her 3 little ones into bed and there’s video to prove it.

Stop it.

I think I’m going to throw up.

Me too.

It’s “Beauty & The Beast” time.

Oh, I love that one.  This is so unfair, it hurts.

I feel your pain.

It’s another costume change.

What will it be?  There’s James Bond music.

Ughhhhhhhhh

No, she just went to pee.  She’s singing “Goldfinger.”

A medley of 007 songs.  She’s got her fist in the air.  The audience is in a state of rapture.

Now, she’s patting her hip and swaying.  This Québécois lady knows how to have a good time.

She sure does.

This all sounds glorious!

A little piece of heaven.

I’ve run out of responses.

I’m just really jealous.

It’s “All by myself” now.  I know how she feels.  Carla left to go to a meeting.  So sad.

Double fist pounding on her chest.  Serious stuff.

Now, she’s singing “Spinning Wheel”.  Am I back in college?

Costume change!


This is amazing.  Never forget how amazing she is.

Elvis is in the building!

Here we go:  I’m sinking.  There’s an iceberg and the ship is going down.  I’m recording this.


It’s over.  I’m exhausted.

Holy crap!  Me too.

The Baron Funds Annual Conference is one of my favorite days of the year.  I am reminded of why I am in business and what I tell my clients through my consulting business.  I’m entertained in this incredible city and my belief in America is always restored.  This year, it also provided some fun with my daughter.  Is there anything better?

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My new friends

Posted on April 25, 2012 by Leave a comment

I’ve been receiving a lot of emails from people who say they know what I need and want and I never knew that they were so close to me.  The funny thing is none of them have ever asked me about what I need.  Actually, they’ve never asked me anything at all.  Well, that’s not true.  They’ve all asked for money.

Four years ago, I made a political contribution to Barack Obama’s campaign for President.  I expected that they would ask me again.  What I didn’t expect is that they would ask all their friends to ask me too.  I suppose that’s a good thing.  We can all use new friends.

During the past six months, not only have I received many, many emails and letters from President Obama but also from Michelle – that’s sweet, we’ve never met.  Also Joe and Jill Biden have written me, together and separately.  Obviously, I project a lot of charisma to attract all these important, new friends.  They told their friends about me too including Elizabeth Wilson, Patty Murray, Diane Feinstein, Debbie Stabenow, Sherrod Brown, Debbie Wasserman Schultz, Charles Rangel and many more whose names I’ve forgotten, although I know none of them have forgotten me because they keep sending me emails and letters.

I know I probably sound overly suspicious but sometimes, I think the same person is doing all the writing.  They all say they know my needs, wants, dreams, aspirations and desires and it seems the same answer for all of them is mo’ money.

Yesterday, my son received a letter from Mitt Romney.  (I’m really upset that he didn’t write me.  After all, we went to the same elementary school in Detroit.)  But I guess he thinks my son likes him.  He must feel that way because he wrote, “you are one of America’s most notable Republicans.”  That’s something I didn’t know.  But never mind my son’s political persuasions, if that is indeed what they are.  I was really interested to read this letter because someone else had to have written it.  I don’t think the same writer who works for all the Democrats is writing letters for Mittens (my affectionate name for him – when you grow up nearby, you do those things).

So, I was really excited to see what gems Mittens was going to offer that might change my mind about the course of politics and all my political friends.  Here are a few tidbits:

  • “I believe in America.” – I feel so much better to know that.  I’m sick and tired of all these people who run for office and say they believe in Turkmenistan.
  • “Bigger government does not equal better government.”  That’s a tough one for me to take because I grew up singing, “The bigger the burger, the better the burger.  The burgers are bigger at Burger King.” And I thought Mittens believed in corporations.  That’s a rude awakening.
  • “I know how jobs are created.” And this is followed by his story of how he got the Olympics in great shape.  I guess we need more games in America.
  • “It could be worse.”  Now, he’s sounding like my grandmother although she usually followed with “You should be so lucky.”
  • Here’s my favorite:  “Washington is suffocating the American Dream.  We must save it.  How do we do that?  By believing in America…our future depends on it.”  Two quick flashbacks come to mind.  The first is Gerald Ford’s WIN (Whip Inflation Now) campaign where if we all came together and just believed, everything would get better.  He even wore a button that said “WIN” on it.  That helped.  I think I saw that in a movie once about a little girl who lived in Kansas.  She met a wizard who got her to believe but I don’t recall that his name was “Mittens”.  The second is Jimmy Carter’s famous “Malaise” speech.  His message of buck up sonny, stiff upper lip and all that never got off the launching pad.  All we had to do was be confident, he said.  Romney says all we have to do is believe.  I’m sure he can explain the difference.

Okay, so in many ways, the letter is a parody of itself.  Yet, it’s not much different than any other political letter, Republican, Democrat or Tea Party (yes, I got one of those.)  It ends with another request for money and you know what?  I know that money is the answer but it’s not money for anybody’s campaign.  It’s money for poor people, middle class people, education, research, healthcare, etc.  Oh, now I’m sounding like a Democrat.  I suppose I should toe the Republican line since I’m reading their letters and say that the solution is money for the moneyed few.

What’s most striking to me about this particular letter (and I’ll now have to start reading the others more closely) is that there is not one solution or proposal for how to actually make things better.  Not one.  Lots and lots of problems but no ideas, proposals or solutions, only a request for money.  They could at least get creative about it.  How about emailing me the Money song from Cabaret?  That certainly gets the point across with more élan than any of these politicians.

Or if you’re not a fan of Liza Minnelli and Joel Grey, how about picking one of the top 20 rock songs about money. You can find them at http://power98fm.radio.com/2011/04/25/top-20-songs-about-money-money-money/.  I’ve got to believe that Mittens is an Abba fan.  How about this one:

I mean how can a Republican refuse Abba asking for money.  They’re white, clean-cut, at least in their day, and they’re Swedish…oh, never mind.

I guess there’s no hope.  You’d think that some fund raising genius (and remember that a percentage of what you give goes to them) would come up with the idea of “let’s ask people what they think, what ideas they may have and then, after we’ve listened to them, we’ll ask them for money.”  It’s funny how when you ask people what they think rather than telling them, how they often respond better.  It’s called human nature but why would we expect our politicians to be human?  Come to think of it, doesn’t Mittens often get criticized for being robotic?  I wonder.

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A funny thing happened on the way to Romania

Posted on August 5, 2010 by Leave a comment

I spent last week in Romania, not exactly where most people I know travel, but it was a business trip.  It hadn’t been on my list of places to go but I’m glad I went for a couple of reasons.  First, it’s different and different is good.  We need to see places and meet people who are unlike us, who have a different view and see the world from a different angle of the world.  In the U.S. we tend to be too internally focused and while we make a pretty big impression on earth, it’s good for us to see that the planets don’t revolve around the good old US of A.  I know that’s anathema to some, but more about that in a later post.

First, before I got to Romania a funny thing happened on the way.  As I was walking through the aisle for my flight from London to Bucharest, I looked to my right and saw someone who looked familiar.  I looked again and was sure that it was Rich Hodapp, a consultant I had seen…oh…maybe fifteen years ago.  Now, what are the chances on that particular flight, on that day, heading to Bucharest of all places that we would be on the same flight…after fifteen years?  I don’t know how or why these things happen.  Is it fate?  I doubt it.  More likely, it can be explained by statistics and probabilities, but still, it is mighty strange when these things happen.  (Rich later said to me, “I was waiting for you to show up.”)

Now, why is meeting Rich important to a blog called Corporate Myopia?  Well, Rich, who remembered me right away, is the inventor/creator of Decision MAPping® (http://www.decisionmapping.com/) and when I met him fifteen or more years ago, I had the good fortune to be trained in Decision MAPping® by Rich.  I can say that it has influenced me ever since and it’s principles are pretty much part of my way of thinking about the world and how we work with clients.  You could say that Decision MAPping® teaches you to see the forest for the trees.  It is a myopia prevention machine.

We wander through our daily lives passing all kinds of signs that tell us what’s important to our co-workers, friends and family and to our clients and customers, and we often don’t see them.  They are signs that tell us what’s important to them in making their decisions about us, and all of our clients, customers and constituencies make important decisions that affect us everyday.  They decide whether to listen to our sales pitches, sign and renew contracts, monitor our progress and evaluate whether to continue to work with us.  It’s not about showing them all the great features we offer but about what concerns them and what keeps them awake at night.

Decision MAPping® teaches you to turn the telescope around and learn how they see you.  It also teaches you that there are two components in every decision that they make about us.  They look at both the content or tangible benefits of what a relationship offers and at the process or nature of our relationship.  Like every good marriage, how we engage with each other and manage our processes with others determines whether the relationship will last, but remember it’s they, not us who make that determination.  The decisions that others are going to make about us can be put on a map.  The map tells us where we are, where we’re headed and how best to get there.  For those who learn this process from Rich, it is a sure course to winning and has been used by successful companies and countries for years.  You should check it out.

At futureshift, we’ve taken the general principles of Decision MAPping® and added our DirectLink® system that enables us to learn what is keeping thousands of people awake at night.  Our strategic planning process asks both what your internal capabilities are and matches them with what your target market says it’s looking for.  It provides you with insights that either could not be obtained or were just cost prohibitive to do so.  We don’t put decisions on a map.  You need to see Rich for that but we give you an understanding of what your customers’ and non-customers’ frustrations are.  A frustration is simply an unmet need.  Meet the need and you’ll have a loyal customer.

That flight to Bucharest and seeing Rich was a good reminder to me of what’s important in our business — meeting the needs and solving the business problems of others.  Rich and I have begun to exchange ideas and maybe we’ll solve some problems for each other without having to wait another fifteen years for a mutual flight to some far-flung place.

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