Category Archives: Reality checks

Bad Boys And Brands

Happy Foodie Friday! There’s been a food-related story making the headlines this week and I think it reflects something that can be useful to any of us in business. The founder and chairman of Papa Johns Pizza had to step down this week after he admitted to using the N-word in a company conference call. It has sparked a public relations crisis and it’s not the first one his actions have caused. You might remember that he also weighed in on the controversy surrounding NFL players and their kneeling during the national anthem. While he certainly wasn’t the first sponsor to criticize a league, doing so over an issue that went way beyond the league itself resulted in a public relations issue for the brand.

While I’ve never been a fan of Papa John’s pizza, his bad behavior made me all the more certain I’d never eat it again. One person whose food I am a fan of is Mario Batali. Even so, I’ll not be going to any restaurant associated with him. His bad behavior caused him to “step back” from his restaurant empire following the first public allegations of sexual misconduct. That was followed up by a 60 Minutes story. Even so, he hadn’t completely divested himself of a financial interest, and that certainly affected the brand, so much so that three of his restaurants on the Las Vegas Strip are set to close even though they were doing well.  The local partner in these restaurants, Las Vegas Sands Corp., decided to end the relationship with Batali’s organization.

Why do I bring this up? Because every one of us in business is a celebrity on some level. We might be nationally known or maybe it’s just our customers, partners or employees who consider us famous. Our actions can enhance or damage our personal and corporate brands every day and we need to remember that no incident remains quiet or hidden for very long. Nearly every person is holding a camera and a video recorder in their hands and bad behavior rarely goes unnoticed or unpublicized.

There was a restaurant I patronized on a regular basis. The food was OK if unextraordinary, the prices were reasonable but the owner was a great guy. I loved spending a little while with him every time I went and I kept going back because he took great care of me as well as did good things in our community. We are our brands, and how we act can damage that brand as badly as a misplaced ad or a faulty product. Enjoy your weekend!

 

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Filed under food, Helpful Hints, Reality checks

Quit Nagging Me To Death

I’ll state at the outset that I’ve always had a thing about being nagged. It’s probably a mother issue that stems from my tendency to procrastinate or maybe I’m just a rebel at heart. Either way, I don’t like being nagged. You probably have some sensitivity to it yourself.

With that in mind, I’m here to remind all of us that nagging is just as bad as a marketing tactic. Instead of the desired result (a sale), it might lead to the exact opposite (a cancellation, a return, or a vow never to do business with you again). Let me give you an example.

I received yet another email the other day from one of the golf publications to which I’ve subscribed for at least a decade. The email said in big bold letters that

This is your LAST CHANCE to renew your subscription and give a FREE gift.

OMG! I don’t want to miss an issue so I’d better renew right now! Except it’s a lie – my subscription doesn’t expire for well over a year. I went back and looked in my email trash and on average, they send me an email every 3 days urging me to renew. This is on top of the physical mail they send enclosed in an envelope with each month’s magazine as well as the occasional piece of stand-alone snail mail. Enough! Basta! Genug!

Fortunately for them, I enjoy the publication so I’m not going to cancel, but there are a few things any of us can learn from their constant nagging. First, I’ve become numb to whatever they send me. I toss the snail mail and I delete the emails, unopened. I can read the mailing label to see when my subscription really does need renewing. Second, the offer they’re extending really doesn’t benefit me. It’s not a particularly different renewal rate and none of my golfing friends are musing that their lives would be better if only they had a subscription to this magazine. It only benefits the publication – they get a renewal and a new subscriber at a low cost of acquisition. Presumably, they’ll start nagging my friend soon after the first issue arrives.

This publication is far from the only nagger in my life. Amazon’s daily emails, several golf schools, and many others continue to send me nagging messages every day. I do unsubscribe, of course, but new naggers seem to take their place. The messages seem cold and impersonal to me since most of them aren’t personalized beyond the name. I appreciate that people who put things in shopping carts and leave your site might need a little reminder to finish their order or that when you truly have something special going on it’s to the consumer’s benefit to know, but the daily barrage of crap just makes people numb at best or angry at worst.  Deliver value to the consumer. Educate them about your product without nagging them to buy. Explain the benefits in their terms. And don’t nag. After all, nagging is the leading cause of divorce and you can’t have customers divorcing you! What do you think?

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Filed under digital media, Huh?, Reality checks

Can We Distinguish Fact From Fiction?

How good are you at distinguishing fact from fiction? As I’ve written before, I think that is one of the two most important things anyone can learn in their professional (and personal) lives, with the ability to express your thinking clearly orally and in writing being the other. The folks over at The Pew Research Center studied whether members of the public can recognize news as factual – something that’s capable of being proved or disproved by objective evidence – or as an opinion that reflects the beliefs and values of whoever expressed it. The results aren’t particularly surprising but they also are a good reminder to any of us in business.

First, the results. I’m summarizing here but you really should read the entire study – it’s fascinating and gets to a lot of what’s going on in the country today:

The main portion of the study, which measured the public’s ability to distinguish between five factual statements and five opinion statements, found that a majority of Americans correctly identified at least three of the five statements in each set. But this result is only a little better than random guesses. Far fewer Americans got all five correct, and roughly a quarter got most or all wrong. Even more revealing is that certain Americans do far better at parsing through this content than others. Those with high political awareness, those who are very digitally savvy and those who place high levels of trust in the news media are better able than others to accurately identify news-related statements as factual or opinion…Republicans and Democrats were more likely to classify both factual and opinion statements as factual when they appealed most to their side.

In other words, confirmation bias comes in quite a bit of the time.  I raise this because I think it happens all the time in business as well. We receive data that doesn’t support the direction in which we’re taking the business but we reject it as biased. We get complaints from customers but dismiss them as opinion even when there are facts to support the customer’s unhappiness. It all comes back to what the study measured – many of us can’t distinguish fact from fiction.

We need to pay attention to the source of what we’re hearing. Does the data come from an unbiased, third party or is it an opinion? Is the person who is telling you something doing so based on first-hand experience or are they just repeating something they’ve heard elsewhere? Do multiple sources independently report the same information (not quoting one another, in other words) or are you basing a business decision on a single source? If you’ve spent any time in business, you know that even “trusted” sources – your analytics, your financial reports and others – can be manipulated. Always seek the unvarnished, fact-based truth and learn to ignore opinion unless it’s labeled as such. It’s hard to do that, but you’re up to the task, right?

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Filed under Consulting, Huh?, Reality checks

Facebook, Sears, and Kodak

When I was a lad several decades ago, many Americans did their shopping at Sears and took their pictures with Kodak film (I can explain “film” to you youngsters if need be). More recently, my kids might have shopped at American Apparel or Claire’s. What all of those formerly huge companies have in common is that they are all nearly dead. The reasons for that range from bad management to dumb financial deals to changing tastes to the digital revolution. In every case, however, I think there is a common thread of a failure to understand their customers in the context of the customers’ changing world.

We have something similar going on in my mind with Facebook. It’s huge and seems invulnerable but one might have said the same thing about Kodak or Sears 50 years ago. First, think about how the world is changing for their customers. Privacy has moved from something that digital folk like me were babbling about many years ago to something that is on everyone’s mind. In an April survey of 1,051 US adult internet users by Janrain, most respondents said they are not in favor of websites or apps using what they learn about them online to target ads. In fact, 70% of them want some very restrictive laws, similar to the E.U.’s GDPR, passed here. I don’t think there is any doubt that a tech backlash is going on and the more consumers and lawmakers find out about the sloppy (at best), invasive, and maybe criminal (at worst) data use by large tech companies, the greater that backlash is going to become.

Facebook’s entire business is built around invading your privacy. Two points from eMarketer:

More people are becoming suspicious of sharing data through third parties. In a March 2018 survey from Raymond James, more than eight in 10 US internet users said they were at least somewhat concerned about how their personal data is being used on Facebook. Similarly, in a Gallup survey of 785 Facebook users in April 2018, 43% said they were very concerned about invasion of privacy. That’s an increase of 30% in 2011.

What has resulted is that people, especially young people, are sharing less content. The entire reason Facebook is valuable for most people is that content that their friends, classmates, and family post. It’s the network effect – that value of the network relates to the number of people on that network.

I’m not shorting Facebook stock today but I’m not so sure that unless they get their privacy house in order that won’t be a bad play down the road. Less content means fewer active users which leads to less revenue. Will they all move to Instagram (a Facebook company)? Maybe, but probably not since that’s not what’s occurring now. As each day brings a new headline involving a bad actor and data, another nail gets pounded into the coffins of companies that don’t respect their customers’ privacy and wishes. Privacy and data use are no longer just food for geek chats. They’re on the front page. How long can Facebook or any company last if they don’t figure this out? Longer than Sears or Kodak?

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Filed under Consulting, digital media, Reality checks

No Applause, Please

There is a solitaire game that I play on my phone. When you “win”, you get a round of applause most of the time. Sometimes, you don’t. There is just silence, probably because you didn’t solve the hand quickly enough. In a weird way, the lack of applause feels as if you’ve not won if that makes any sense.

That, in microcosm, is a very dangerous thing, both in business and in life. Expecting applause for work well done creates expectations that are infrequently met, and that leads to all sorts of bad places. Anger, frustration, and jealousy all begin to rear their ugly heads as some members of the team begin to compare the applause they receive with that others receive. It may not be literal applause but everything from mentions in a staff meeting to promotions to raises all count.

I’m not against giving applause – far from it. I’ve worked for bosses who made it clear that almost no applause would be forthcoming because they believed that employees were fungible. When applause was given, either literally or figuratively, it generally went to the higher-ups and not to the folks who really were responsible for the good work. As managers and teammates, we need to do what we can to support those who deserve recognition (I’m not in favor of “participation awards” for everyone, though). What I do approach with caution is the expectation we have that we’re going to receive some figurative love when it’s warranted.

Doing what you do for the applause creates false expectations. It makes us buy into a belief system that may not be our own. For example, you may not care about making a lot of money but when you see others doing so who do less or inferior work, you may wonder why you’re not getting rich too. People get “rich” in all sorts of ways. Teachers, ministers, first-responders and many others generally aren’t well-paid nor do they get much applause on a daily basis. Most of the folks I know who work in those professions have adjusted their thinking to take satisfaction in their own accomplishments and not in others’ recognition of those things. They spend their lives doing good work and not seeking applause. How about you?

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Filed under Reality checks, Helpful Hints

Why Is Right So Hard?

A long post today – please bear with me. I’m sure you have heard about the cancellation of Roseanne after the show’s namesake sent out a racist tweet. There was about a two-hour delay from when the tweet went public until ABC pulled the plug on the program. During that time, I wondered if ABC and parent company Disney would do the right thing. They did and it’s a great example to any of us in business about something that I’m passionate about.

You know we don’t do politics here. This isn’t political – it’s all business, people. Let’s look at this from a business perspective and let me explain why I’m so proud to be an ABC alumnus today.

First, the business background. This piece from Variety explains the issues ABC has had for years on Tuesday nights. In Roseanne, they finally had not only a hit program but a show around which they could build a solid night of programming. While they had not reaped a huge financial windfall from the show (it was a midseason replacement), they were poised to use it in the negotiations for ad time during the upcoming season. The way things work is that if you want to buy a hit you generally have to buy other programming too to get the best pricing. In other words, the loss is more about what might have been rather than existing dollars. Still, it is a financial hit.

Which leads me to the point about which I’m passionate. ABC made a decision to do the right thing no matter the financial cost or how disruptive it may be to their business. I’m sure they also looked to the potential cost to the Disney brand if they were to give tacit approval to what Roseanne tweeted by doing nothing. They looked to the long-term and to take action in accordance with their own principles and not the easy road. While there is never a good time for something like this to take place, this is probably about the worst possible time, given that the upfront selling season is beginning and ABC just announced their schedule, which will now have to be remade, two weeks ago.

Why is it so hard for companies to do the right thing? A heck of a lot don’t. Insurance companies who spend more effort finding ways to deny claims than to pay them.  Oil companies who fund fake studies to promote climate change denial rather than working to find clean energy. Food and tobacco companies that know about the problems with their products but who fight efforts to make the public aware. Those are just a few examples and I’m sure you can think of many more.

Contrast ABC’s quick, decisive action with other media companies who protected bad behavior by big-time talent. It didn’t require multiple meetings or in-depth analysis. The right course of action was obvious. I’d argue it was as well in other recent cases where the company failed to do the right thing. Equifax knew they had a hacking problem months before they told the public. In that time, executives may have sold $1.8 Billion in shares. Someone at Wells Fargo must have come up with the plan to charge half a million consumers for insurance they didn’t need. Why didn’t someone say “oh hell no” and fire the person on the spot? Even Apple failed to do the right thing by not telling customers it was slowing down their phones even though customers asked.

Any of these things could have been prevented if the businesspeople involved had acted honorably. By that, I mean in a way that would stand up to public scrutiny when measured against ethical and moral standards. Someone knew, someone could have nipped it in the bud, and someone could have used it as a teaching moment to explain why doing the right thing is important.

I know not everyone shares exactly the same standards, but I do believe that placing customers’ needs about profits, thinking long-term, and behaving as if the customer were your Mom or Dad rather than a “mark” is better than maximizing revenue. Shareholder value comes from long-term customers with high lifetime values and a sterling reputation. You get those by opting to do the right thing.

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Filed under Reality checks, Consulting, What's Going On

What Are Your Limits?

What can’t you do? If you’re a child of my children‘s generation, you’ve probably been told since you were born that you can do anything. You have no limits. Does anyone really believe that’s true – that there isn’t anything we can’t do if we try really hard and practice a lot?

As you know if you’ve spent any time in this space, I play golf. I’m not horrible at it although I’m far from really good. I do practice and I might just try too hard. That said, there are shots I just can’t hit and never will be able to despite knowing how to do so and practicing them (you go ahead and hit that 225-yard shot over water and a bunker into a tight pin on a narrow green without landing in trouble).

Knowing your limits is important both in life and in business. We all want to help the team but learning to say “no” when you’re asked to take on more work than you can possibly do well really IS helping. Everyone hits the wall at some point and taking on too many projects or work that you’re not qualified to do well is a great way to hit it bang on.

Many ski areas have signs that remind you to ski within your limits. There is a sign at Bethpage Black, a golf course which has hosted the U.S. Open, that, in essence, asks you to know your limitations as a golfer and respect them.

Many people want to learn and to grow. Most people want to take on a new challenge. While you do need to push your limits to do this, at the same time, you need to be conscious of your abilities and approach any new goals appropriately. In golf or skiing, we can take lessons. How many businesspeople invest in courses to improve their skills?

In skiing and riding, we wear protective gear. The problem is that sometimes we get a false sense of security and push too far. In business, we rely on data from dodgy sources or only those surveys that tell us what we want to hear to give us that same false sense. Instead of recognizing the limits of the information, we believe it.

I’ve been playing the guitar since I was 10. I still can’t play like Clapton or Page despite well over 10,000 hours of practice. It may be some sort of physical ability I don’t have which they do. Then again, I probably have some mental abilities that have let me learn many skills they don’t have. Learning what you can and can’t do even with practice, instruction, and perseverance is key, and accepting those limitations, disheartening as it can be, can help make you better, not worse. Does that make sense?

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Filed under Helpful Hints, Reality checks, Thinking Aloud