Tag Archives: Strategic management

Crap Merchants

Maybe John Lennon had the Internet in mind when he wrote “Strawberry Fields/Nothing is real”.  OK, I realize the place in the song came long before the Web was invented, but they both have a decided lack of reality.  Since dishonesty or a lack of transparency seem to be this week’s theme, let me throw out another thought that’s prompted by the interwebs which might be helpful in business.  

There is a column in the Washington Post called What’s Fake On The Internet This Week.  It’s ending, unfortunately.  Like a car wreck, there is tragedy in every column but you can’t turn away.  What’s tragic is that people believe the things highlighted.  You’ve probably seen some of the amazing crap that goes viral.  Burger King refusing to sell Diet Coke to anyone ordering a 2,000 calorie Double Whopper or new flavors of Oreos.  Those are relatively benign.  It’s the junk about race or religion that is treated as Gospel that’s tragic.

How does this stuff get started?  It’s not an accident.  There are fake news sites that spend all day making this stuff up.  I realize that’s not new – the supermarket tabloids have been doing it for decades.  The difference is social media.  People don’t clip and send a National Enquirer article to hundreds of people but they certainly post things on Facebook.  One guy admitted he that tries to invent stories that will provoke strong reactions in middle-aged conservatives. They share a lot on Facebook, he explained; they’re the ideal audience.  Why do they do this?  Traffic equals eyeballs; lots of eyeballs equals revenue.

That really isn’t the business point.  This quote is:

Walter Quattrociocchi, the head of the Laboratory of Computational Social Science at IMT Lucca in Italy, has spent several years studying how conspiracy theories and misinformation spread online, and he confirmed some of my fears: Essentially, he explained, institutional distrust is so high right now, and cognitive bias so strong always, that the people who fall for hoax news stories are frequently only interested in consuming information that conforms with their views — even when it’s demonstrably fake.

We laugh at the fools who believe that Martians live among us and yet we’re all too willing to circulate information in business which confirms our own view of how the business is functioning.  That’s dangerous.  While a reality distortion field might work for a Steve Jobs, it probably won’t for you.  We need to find out the truth and not confirm out own cognitive bias. Laughing about the crap merchants who push this drivel is one thing.  Being one yourself is quite another, even if you’re less public than the folks who publish it on the Web. Besides, who wants to put their hand in the air and admit they fell for something so blatantly fake? You?

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Filed under digital media, Huh?, Reality checks

Posts Of The Year – #1

The post below was originally called Worst. Call. Ever. and was written the morning after the Super Bowl.  Maybe it really resonated with all of you or maybe it was just good SEO, but this became the most-read post of 2015.  It’s the kind of post I love to write: take an everyday event and extract some point that makes us better businesspeople.  Tomorrow we’ll have the year’s top Foodie Friday post (even though it’s Thursday!).  Enjoy.

I suspect you watched the Super Bowl last night. Hopefully, you did so all the way to the end and you witnessed the subject of today’s rant. For any of you who missed it, the Seahawks were driving and were on the 1-yard line, about to win the game. They just had to run it in and had 3 tries to do so (OK, maybe 2 since they only had one time out left). I’ll let the Times explain: 

A team with Marshawn Lynch, one of the best goal-line running backs in football, instead opted for a far riskier option, and Malcolm Butler made them pay, intercepting the ball at the goal line to effectively end the Seahawks’ hopes of winning a second consecutive Super Bowl.

Coach Pete Carroll took responsibility for the call after the game. So did his offensive coordinator, Darrell Bevell. Whoever actually made the call, the decision joins an ignominious list of the worst coaching decisions in sports history.

There is a business point in that decision.  Simply put, rather relying on the proven strengths of his team, the coach opted for trickery.  Obviously, it backfired and they lost the game.  It’s a good lesson for all of us.  We invest a lot of time in building our team and our business.  We come to realize over that time the things at which we excel and which help us win.  Those are the things upon which we must rely, especially during crunch time.  Trying “trickeration” may seem like a fine idea but it usually isn’t as good as doing what is known to work.

It wasn’t absurd to think of trying a pass play when everyone is expecting a run.  What made it such a bad call was that the passing game hadn’t been particularly effective and the Seahawks had lived on Lynch’s running ability all season.  Expecting him to run at you is not the same as stopping him and the Patriots hadn’t done so without at least a yard gained during the game very often.   In business, it’s not about what the competition is expecting.  It’s not about trickery or fooling anyone.  It’s about executing better than they do and producing a better product or service.  Ask Apple.

Thoughts?

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Filed under Huh?, Reality checks

Posts Of The Year – 2015 – #3

I am going to continue an annual tradition this week and repost the most-read screeds of the past year.  I am very grateful to the folks from 91 countries around the world who read them this year, although I’m not sure why I seem to be so popular in Brazil (the second country behind the US in terms of readership!).  This post, the third most-read, non-food post, was from October.  It touches on a subject that came up a few other times this year, and one I expect will be front and center in 2016: cord-cutting.  It was originally titled  Shaving The Cord. Enjoy!

You might have heard something over the weekend about a glitch in the Nielsen ratings system that affected the estimated audiences all the way back to March.  While that is kind of problematic for the TV industry, it was other Nielsen data that presents much more of a long-term problem.  As Cynopsis reported:

The top 40 cable channels have lost more than 3 percent of their distribution over the last four years, according to a Wall Street Journal analysis of Nielsen ratings data. How to account for the decline, which exceeds the loss of subscribers? Pay-TV customers are signing up for less expensive bundles with fewer channels, says the WSJ. “What we are seeing is some cord cutting and some cord shaving,” Nielsen global president Stephen Hasker told the paper. “Consumer time and attention is shifting.”

You can read the Wall Street Journal article by clicking through.  As someone who spent a long time in the TV business, I understand why channels are bundled.  Way back when, the market was far less fragmented and the business model evolved where there really weren’t tiers other than the true premium channels of HBO and local sports networks.  Today, even the “major networks” of ABC, CBS, Fox, and NBC attract audience ratings in the low single digits even for top programs.  Yes, DVR viewing can boost some of their audiences as much as 80% but think about it.  What’s the difference between watching “Gotham” via Hulu (the internet) or on your DVR (the cable bundle)?  Other than being able to skip the commercials on a DVR, not much.  In fact, one could argue that advertisers would prefer that consumers watch in the non-skippable internet interface.

The real point is that how consumers come to content has changed and yet the people who are the middlemen in offering the content – the cable companies – haven’t moved off a business model that evolved in the 1980s.  As the  Journal states:

Data points are piling up to show “cord shaving” is for real. At least two pay-TV providers say about 10% of gross TV subscriber additions are customers who are taking a slimmed-down bundle—in contrast to the bigger ones with hundreds of channels that can cost upward of $100 a month.

So the choice for the providers, as it is for all of us in our businesses,  is to change or to shrink.  They can’t just keep raising prices.  At some point that makes the problem even worse as consumers pay more for channels they don’t watch.  What’s your solution?

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Filed under Consulting, digital media