The “Debate”

If you have any interest in presidential politics or are the kind of person who can’t look away from a trainwreck, then you probably tuned into the shouting match between Donald Trump and Hillary Clinton last evening. It was billed as a debate but as we’ll see in a second, it was anything but. It did, however, teach us something about business.

Debates between presidential candidates have been going on for centuries. You’ve heard of the Lincoln-Douglas debates of 1858. While those weren’t about a presidential election, they are fine examples of classic debating form. This is an excellent definition from the International Debate Education Association:

Debate embodies the ideals of reasoned argument, tolerance for divergent points of view and rigorous self-examination. Debate is, above all, a way for those who hold opposing views to discuss controversial issues without descending to insult, emotional appeals or personal bias. A key trademark of debate is that it rarely ends in agreement, but rather allows for a robust analysis of the question at hand.

Was that what we watched last night? I think not. But it’s something to keep in mind as you bring together people in business to debate ideas. How often are ideas discussed freely and openly in your place? When a boss is in the room, how free do the subordinates feel to oppose his or her point of view? Do facts surface that allow for the robust analysis which is the goal, or are people entrenched in the positions with closed minds?

Imagine if last night had been a moderated discussion, based in fact, of how to fix a problem our country is having. The goal isn’t to convince people to vote one way or the other but to surface the different, well-reasoned points of view about approaches to an issue and allow the voters to make their minds up on that basis. Nice dream, right?

Now think about trying to do that in a business setting. Maybe it’s the person or persons who need to make the decision that moderate. I suspect the decisions taken after such a debate will be sounder than those that follow free-form arguing, politicking the boss, or emotional exchanges. Maybe we should debate it?

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Filed under Helpful Hints, Huh?

The King Is Dead

It would be impossible for me to let the passing of Arnold Palmer go by without comment. This isn’t another golf screed. It’s some thinking on a great businessman who used golf as a jumping off point to demonstrate some behaviors all of us ought to try to emulate as we go through our business lives.

English: Arnold Palmer, taken by Hospital staf...

(Photo credit: Wikipedia)

Arnold Palmer passed last night at 87. A lot of what you need to know about him was captured in something Time Magazine wrote in 1962:

“When God created Jack Nicklaus and Arnold Palmer,” it wrote, “He turned to Nicklaus and said, ‘You will be the greatest the game has ever seen.’ Then He turned to Palmer, adding, ‘But they will love you more.’ ”

Palmer’s achievements on the course were substantial. He won 62 times on the PGA Tour and those wins included 7 major championships. He did so with an “everyman” swagger, a swing that was uniquely his (and was far from classic), and an attitude of going for broke on every shot. But it was off the course where Mr. Palmer’s lessons for all of us begin.

He considered golf a personification of basic life principles. As he wrote:

“Golf resembles life in so many ways. More than any game on earth, golf depends on simple, timeless principles of courtesy and respect.”

He was legendary for taking time to sign autographs for fans. Each of those signatures was legible because he felt that he should show respect to those who asked for one. You won’t find a picture of him shaking hands where he isn’t looking the other person in the eye. In short, he was beloved because he reciprocated that love.

He was able to turn all that love into a business empire. It’s often said that Mr. Palmer didn’t invent sports marketing but that he perfected it. Endorsement deals with Pennzoil, Arizona Beverages, drug companies, and dozens of others, along with his golf course design business generated a lot of money. But he gave back, and his charity work was an important part of who he was. He also mentored younger golfers and wrote a note every week to whomever won on the Tour. He also answered all of his fan mail. In short, he was among the best on the course and unequalled off the course.

What can you learn from him? First, performance counts. The basic product needs to be among the best to make all the other activities important. Second, show respect for your customers and reciprocate their affection. We talk a lot about engagement, and Mr. Palmer engaged the fans, speaking to them directly and not through press conferences. Third, never let anything you do potentially harm your brand. If you lend your brand to another via licensing or joint venture, be sure that the end result enhances what you do and can’t possibly denigrate your good work to that point.

I know of very few people in the sports business who are universally beloved. Mr. Palmer was at the top of that very short list. Rest easy, sir, and thank you for a lifetime of excellence.

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Filed under What's Going On, sports business

Following The Competition

This Foodie Friday I’d like us to think about something you’ve probably seen happen in your town. A restaurant will offer a dish that becomes insanely popular and suddenly everyone is offering their take on it. Cronuts, dishes with foams instead of sauces, or even stuffed burgers (Juicy Lucy’s) are examples. It’s not just restaurants either. One soda brand goes “clear” and suddenly everyone has a “clear” or “crystal” or something similar. The supermarket is stuffed to the gills with innovative products and the several follow-ons produced by competitors.

What does this show us? That businesses pay attention to their competition and are tracking what the other guy is doing. That’s good and important. After all, listening is a fundamental skill. Listening, however, isn’t necessarily reacting. Tracking isn’t following.

It’s not just in the food business. When Ecco had huge success with their hip spikeless golf shoes, suddenly every shoe company had a version. Of course, what the other guys missed was Ecco’s fashion sense, and some of the products were as bad as just wearing tennis shoes to play golf. Microsoft wasted a lot of time and money following Apple everywhere and producing their own versions of Apple products. Still using your Zune?

If you’re going to do your version of a competitor’s product, the impetus for that should be your customers’ expressions of need and not some knee-jerk reaction to what the competitor is doing. First, you might not understand how well the product is selling for the competition. Second, you don’t know what their costs are to produce the dish. Third, even if you do know the previously mentioned data points, you might produce an inferior version which damages your reputation and enhances that of the competition. Finally, and most importantly, follow your customers. Are they defecting to some other brand? Why? Is it to the new product or because you’ve taken them for granted in your haste to follow the other guy rather than them?

Paying attention to what the competition is doing is important but following them can be fatal. Follow your customers, not your competitors.

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Filed under Consulting, food

Winners Rethink

At one time in my life, I had aspirations to do music as a career. Even though I no longer have either the band or the hair required to be a rock star I still listen to music and follow industry developments. Because of that, an article on the music industry caught my eye this morning. It comes from MediaPost and its headline reads “Streaming Music Enjoys Revenue Uptick to $3B.” It goes on to report that:

Revenues from streaming services continued to grow strongly both in dollars and share of total revenues. During the first half of the year, streaming music revenues totaled $1.6 billion — up 57% year-over-year. This accounted for 47% of industry revenues, which compares positively with 32% in the first half of 2015.

Impressive growth and reflection on how the business has changed. Spotify, Pandora, Apple Music, and others have changed how people consume this product. What hasn’t changed, however, is how the music business works. In fact, a business model that was written into some laws a century ago still governs how the business operates for the most part. As a result, as Fortune reported a couple of months ago:

Based on almost every metric that matters, Spotify is the most successful streaming music service in the world, with almost 90 million subscribers and close to $2 billion in annual revenues. Yet its recently-released financial results show that despite its massive success, it is still incapable of making a profit—and because of the way the music business works, it may never make one.

You won’t have to search very hard to find many articles detailing how little money artists make from digital music either. So where are these record (pun intended) revenues going? You can probably guess. The people at the record companies wrote the business model, and there are still payments to those companies for things such as “breakage”, physical discs (fragile vinyl when the clause was written into standard agreements) that didn’t make the trip to retail intact. Recently, “New Technology Clauses” were added which charges the artist to ready an album for digital distribution and which are completely unnecessary.

The point today isn’t to rage against the record machine. It’s to point out that this industry and almost every other business has been totally disrupted over the last 20 years. Middlemen serve very little purpose other than to act as legally-protected gatekeepers. Rather than rethinking the business model with an eye toward how to provide value to the customers (the artists and consumers) they serve, the record companies dig in further. They haven’t quite figured out that if they starve the artists and bankrupt the new distribution systems, they too will die.

So ask yourself if the business model in which you operate has been rethought in the last few years. You can watch it happening (finally) in the TV business and countless others if you need inspiration. Winners are rethinking everything. Losers dig in. You?

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Filed under digital media, Huh?, Music

Who Is Smarter Than You?

One thing that I’ve found over the years is that it’s impossible to stay on top of my game if I’m not continuously learning. I make a concerted effort to do so. I have an RSS reader that’s loaded up with the feeds of dozens of sites. Many are tech sites so I can stay on top of the latest technical developments for my clients. Others are media sites so I’m aware of changes in the marketing world. Still others are more personal – golf sites, food sites, sites that report on social media changes, sites about the analytics world and the sports business. The reader fills up with over a thousand new articles every day and each one is an opportunity to learn something new.

Despite that volume of information, one thing that helps me more than anything else is when I can find a person who is better informed about a topic than I am. I also seek out people whose minds I respect. Many of us don’t like it when we realize they’re not the smartest person in the room. I welcome it with open arms.

That philosophy needs to carry over to hiring. Obviously, the earlier in a candidate’s career we encounter them the less knowledge of the technical aspects of a business they’re going to have. The won’t have a ton of real world experience either. What they can show you, however, is basic intelligence and the other things that we can’t teach. They should demonstrate a capacity to synthesize information and if they’re really smart, they’ll end up making you smarter too.

So who is smarter than you? Ideally, you know many people who are, since interacting with them will make you smarter. I’m sure you’ve run into people who need to believe that they are the smartest person in the room. I certainly have, but it’s a lot more interesting when you encounter someone who clearly smarter than anyone else but never makes anyone feel that way. Better informed is a stepping stone to smarter, but well-informed with an ability to develop new ideas and express them clearly is what’s smart in my book. Yours?

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Filed under Helpful Hints, Reality checks

When Is A McDonald’s Not A McDonald’s?

It’s Foodie Friday and our Fun this week is an issue that concerns every brand. It comes to us from the good folks at McDonald’s (they seem to be Foodie Friday Fun regulars, don’t they?). According to an article in LeFigaro (h/t Eater), McDonald’s has opened a McDonald’s in Paris under the McCafe name that doesn’t serve burgers or fries. No McNuggets either. In fact, all it will serve is club sandwiches, salads, soup, and other typical cafe food. You know – the sort of stuff that’s sold by hundreds of other Parisian places which are really French and not an American company’s version of French. Yes, McCafes are nothing new but the lack of classic McDonald’s fare is.

Logo of McCafé (McDonald's).

(Photo credit: Wikipedia)

I’ve written before about how McDonald’s is trying to get beyond the burger/shake/fries branding and into everything from kale salads to rice bowls. This isn’t about finding a way to be successful in France either. MickeyD’s already has 1,300 stores there and France is a hugely profitable country for them. Honestly, I’m not sure what they’re thinking. I can give you a brief anecdote from personal experience, however, which might be helpful.

Several years ago, my daughter was studying in Italy. I went over there to bring her home and we were walking around Rome, my favorite food city in the world. We passed a McDonald’s and my child begged me to go inside. I asked her why, as we were surrounded by wonderful unique trattorias, ristorantes and tavernas and she wanted something that she could find everywhere once we got home. That was precisely the reason – she wanted to feel, just for a few minutes, as if she was home and not in Italy. By turning the all-American McDonald’s experience into something French, they just might be negating one reason people like to go.

The more obvious issue for any of us is what our brands stand for. It’s one thing to open a different type of restaurant under a different name,as countless brands have done with many line extensions. It’s quite another to change the meaning of the brand by changing the core product. I’m not a fan of that and think it should be avoided at all costs.

When you think of McDonald’s, you probably think of Golden Arches, Ronald McDonald, Big Macs, and fries. When you slap the McCafe name on a place that contains none of those things, you dilute the brand. Diluting a brand in its second-most profitable market is, well, not smart. I’m not loving it. You?

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Filed under food, Huh?

Politics And Your Product

Labor Day once marked the beginning of the Presidential race here in the US. That’s not true any longer as it seems we’re in a state of permanent campaigning. It does, however, mark the start of the final push for the candidates as much of the electorate is really just beginning to focus on the issues that will help them decide the results of this job interview process. Early voting begins in many states quite soon and the airwaves are filled with ads and with pundits trying to sway voters.

As you know, we don’t do politics here on the screed but we sometimes will point out a business lesson we can learn from that world. As I was watching a few of the news channels over the last few days, one issue came up over and over again with respect to the two candidates: transparency. Mr. Trump accuses Secretary Clinton of hiding information about her health, her emails, her foundation, and other things. Secretary Clinton accuses Mr. Trump about hiding his taxes, his business deals, his health, and other things as well. As an aside, I’m not quite sure how any of those issues, help do the most good for the most people, but let’s not digress. The campaign is starting to sound like the old game show: Who Do You Trust?

Both candidates haven’t been transparent and I think that’s led to a “hold your nose and vote” mentality on both sides, at least from what I can tell in speaking to my friends of all political beliefs. Neither side seems particularly enthusiastic about their candidate even if they’re supportive, and even among the ones who are excited there seems to be a recognition that their candidate has some trust issues. I think any observer would say that a lack of transparency is one of them on either side.

There is an expectation that brands – and candidates are brands – will be transparent. This is borne out by research, the latest of which was specific to the food world but I think carries over into any category. Coming from the Label Insight folks it found that:

  • Nearly all consumers (94%) are likely to be loyal to a brand that offers complete transparency.
  • Almost three in four consumers (73%) say they would be willing to pay more for a product that offers complete transparency in all attributes.
  • 81% of consumers say they would consider a brand’s entire portfolio of products if they switched to that brand as a result of increased transparency
  • 56% report that additional product information about how food is produced, handled or sourced would make them trust that brand more

Maybe in the candidates’ minds there is a thought that it’s better to ask for forgiveness than for permission but I don’t think that brands have that luxury. When we know that we’re far better served by transparency than by hiding information that’s critical to consumer decision making, why wouldn’t we choose to open up?

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Filed under Helpful Hints, What's Going On