"Trouble Don't Last Always": Mother Wit for Tough Marketing Times

Erik Deckers over on Twitter shared this link with me earlier today. Here's a taste of the article (a quick and good read):

Good news for marketing agencies, printers, and direct mail companies from B2B Marketing magazine. According to their “exclusive” survey, only 25% of all business-to-business marketers are going to cut their budget. But nearly one-third of them are actually increasing their marketing budget, while another 44% are leaving them intact. That’s good news for anyone in TV and radio advertising, digital marketing/advertising, and, of course, direct mail.

As I’ve been speaking to other marketing professionals around Indianapolis, they’ve all been saying the same thing: marketing spending is staying flat or increasing.

Increasing? In a down economy? Absolutely.

That may seem counterintuitive to some, especially the bean counters, but spending more on marketing now is smart. That’s because the 25% of marketers cutting their spending are your competitors. They’re hiding with their heads in the sand, which means their message isn’t reaching customers, which means customers aren’t buying, which means income is shrinking, so they bury their heads a little further. (Read on)

Here's what I offered as a comment:

Right on! I'd also add R&D and strategic planning. Here's why.

My Great Grandmomma was a woman from the American South who came North to escape the oppression of Jim Crow and find economic opportunity. Not educated past the 6th grade, she was filled with what the old folks used to call "Mother Wit," a kind of smarts that can't be taught in school. Momma Lena would look at the times we're now living in and remind me that "Trouble don't last always." She'd tell me to do everything I could to get ready for my blessing, adding "be ready to be found." That last bit was in her attempt to get me married off (Momma Lena, my Hubs is a marvel and I'm sorry you never got to meet).

Now, my spiritual path is one that this church-going lady would scratch her noggin hard over (I call myself a BaptiBuddhist Yogini), but her message keeps ringing in my head as I talk with fearful clients.

But, I digress: This won't last.

If we continue to freeze our spending completely, when the clouds pass, we'll be left in the ditch...by those companies that invested in (wait for it...wait for it...) marketing, R&D and strategic planning.

We see examples of firms that invested deeply even when they didn't have the sales figures to back up that investment.

A few years ago, when Apple's sales were sluggish and their customers spoke hushed tones about the Apple gospel of "not a PC," they invested--mightily. They learned more about themselves, their customers and the market. They created new products there weren't even names (or desires) for yet. They studied trends and created a few of their own. They created knowledge centers and centers of learning for customers and employees. They crafted their message. They created communities and systems in which those communities could interact. They cemented their brand. They became evangelists.

Apple and many other companies have succeeded by not giving in to scarcity and fear, but this says more about their strong, adaptable culture than, perhaps, anything else. That company's marketing systems are built to flex. Having gone up against the Microsoft Machine since their inception, they're accustomed to being the underdog with far less in cash reserves than their Redmond-based cousin.

That means that they had to get smart in whole new ways. Having proven that they could build a brand, largely, by word of mouth, they used their Mother Wit to design marketing systems that grabbed the attention of their customers--both those present customers and those who would have never thought to buy anything from Apple. We all know people who own PC's and iPods or iPhones, or shop at the iTunes Music Store.

I do think, however, that spending the same money on the same things is a no-go. The markets are fluid, malleable things. During this downturn, companies can--and should--be taking a close look at their knowledge systems (training, R&D, etc.) for ways to beef-up knowledge sharing and folding new learnings into development. Companies can also be looking (as they should have been along) at who their customers are, what they want, how they want to get it and how they want to be interacted with.

In short, this downturn is a "teachable moment," speaking volumes about continuous improvement in marketing, communication, product design, planning and execution--all the systems that make up a company.

The statement in the post about nonprofits and not cutting marketing or mailings is pretty brilliant. The recent presidential campaign is a testament to the power of marketing and of the creation of new, flexible systems for communication of messages to customers (in the political sense, voters). These nonprofits (Obama, Clinton, McCain, Romney, etc. for President) told us quite a bit about scalable messages and scalable marketing systems. And let's not forget, while the Obama campaign was raising money by the semi-load in its last month, we had already been in a recession for the better part of a year!

It Continues to be the Economy, Stupid

The airlines are clearly struggling. House members are trying to figure out how Southwest Airlines could have for so long violated safety rules and how the FAA, the agency responsible for oversight, could have missed these safety violations. Planes have been flying with cracked fusilages (one of which cracked open in the 1980's, sucking a flight attendant out of the plane to her death), inspectors being told to "hush up" missed inspections of fusilages and rudder systems...

Horrible.

Now ATA, like many other low cost airlines like Aloha which pulled up stakes, are shutting their doors. As fuel prices keep going up and discretionary travel is drying up, the smaller players are going to continue to disappear, either filing bankruptcy or being absorbed by other businesses. Even the bigger players are feeling the pinch, particularly with domestic flights (they make more money from international flights). Fewer flights, more crowding and higher fares. What an unholy mix.

This from MSNBC on ATA's collapse:

ATA Airlines shut down operations and stranded thousands of travelers Thursday when an unexpected loss of key charter flights and soaring fuel costs forced the carrier into bankruptcy.

Once the nation’s 10th-largest air carrier, ATA entered bankruptcy for the second time in just over three years. The company had more than 2,200 employees, and “virtually all” were told that their jobs were gone, company spokesman Michael Freitag said.

Many passengers learned of the collapse at ticket counters, where advisories were posted in the handful of cities ATA still served. About 10,000 passengers flew ATA each day before operations were shut down, according to the airline.

Oh, and while I was tapping out this post, I read a report on NPR which extolled the failures of the newly revamped Heathrow Airport in London in doing the little things--say, like keeping track of baggage. Turns out they're having to send the mountain of misplaced luggage to Italy to be sorted and processed.

(sigh)

Starbucks Hopes to Restore the Buzz

Howard Schultz has returned as Barista in Chief six weeks ago. First thing on the menu? Staff reductions. This from Howard (emphasis added):

Dear Partners,

Since I returned as ceo six weeks ago, we have experienced a lot of change in a very short period…with our renewed focus on the customer experience and the return to our core—all things coffee--as evidenced by our decision to discontinue warmed breakfast sandwiches in U.S. stores by the end of Fiscal ’08; unprecedented Art of Espresso three-hour training for U.S. store partners on February 26; free Wi-Fi for partners and customers beginning in the Spring, and more to come. I hope you view these changes as positively as I do. Together, we have created a blueprint to transform the company, and I sincerely appreciate all that you have done and will continue to do every day on behalf of Starbucks.

I pledged to communicate with you about our efforts to improve the current state of our U.S. Business, reignite the emotional attachment with our customers and make foundational changes to our business; and I have done so in six previous emails. However, this is my most difficult communication to date.

As I have mentioned in previous communications, in order to reinvigorate our company we must continually analyze and review every part of our company operations. This rigorous look at our business will ensure that we are managing and optimizing our resources as effectively as we can in order to improve the Starbucks Experience.

We realize that we are operating in an intensely challenging environment, one in which our customers and partners have extremely high expectations of Starbucks. And we have to step up to the challenge of being strategic as well as nimble as our business evolves. Unfortunately, we have not been organized in a manner that allows us to have a laser focus on the customer.

Over the last several weeks, we conducted a thorough organizational analysis, which was, at times, very emotional and extremely stressful. But as I sit at my desk and think about my responsibility to over 170,000 partners and their families who rely on me and others to preserve and enhance our company, I know that I am responsible for ensuring the success of the company for the long term, which means that difficult decisions must be made. Personally, I continue to struggle with the outcome, because I realize how painful it will be for some partners.

As the result of our review, which was done with great thoughtfulness and respect for everyone concerned, organizational changes have been made. These changes will restructure the company, but they will also result in a decrease of both the number of positions and partners by approximately 600. This total includes the elimination of existing positions and open headcount, as well as the reduction of our current workforce. Within this context, approximately 220 partners have separated from the company. Nearly all were U.S. partners serving in non-retail support roles. We are thankful and proud of the contributions our departing partners have made, and we are committed to treating them with respect and dignity.

Today, we are announcing the following modifications to our organizational structure that are designed to strengthen our focus on the customer in our U.S. field operations, and centralize and/or consolidate many of our support functions to drive functional excellence and reduce redundancies:

U.S. Field Operations
Effective Monday, February 25, the U.S. field organization will begin transitioning from two divisions to four, with full implementation completed by March 24. The new divisions are: Western/Pacific, Northwest/Mountain, Southeast/Plains and Northeast/Atlantic.

Not only will this organizational structure create more capacity for our field teams, it will enable the company to align our leaders closer to our customers and partners. This will ensure a stronger level of support in partner development, coaching and accountability in the field. Establishing a customer-centric field support structure in the U.S. Business enables our field teams to focus on our partners, customers and our coffee.

Each division will be led by a senior vice president, reporting directly to the U.S. president. Within each division, partners supporting Store Development, Marketing, Partner Resources and Finance will report directly to their respective functions while still being accountable for results at the divisional level. These teams are being centralized to create an infrastructure with global span, capability and effectiveness. Senior leaders in the U.S. Business will provide specifics in their individual team Town Hall meetings that will be held later today.

Support Functions
The reorganizations of Starbucks support functions are designed to consolidate functional activities into teams that have a shared vision and goals to support the business.

The following support functions are being reorganized and/or consolidated:

• U.S. Store Development
• U.S. Licensed Stores
• U.S. Finance
• Partner Resources
• Marketing
• In-Store Experience
• Global Supply Chain
• Global Communications
• Partner & Asset Protection

As a result of these organizational changes, some partners may have new roles or new managers. Senior leaders in these areas will provide specifics to partners in their individual team Town Hall meetings that will be held later today.

Partner Care and Support
As I said earlier in this communication, while these decisions were necessary to move our business forward, I fully recognize the personal and professional impacts these actions have on individual partners, and we are committed to making the transitions as smooth as possible.

Once again, I would like to thank all of our dedicated and passionate partners for their numerous contributions to the company.

Onward,

Howard

Bad news for Starbucks partners who served the company well during it's mindless growth phase. Good news for Schultz:

Scientists Create Coffee-Making Robot - Scientists in Italy this week unveiled a robot barista named Justine. She's part of a European project to develop robots that can use two arms together.

Maybe he can get rid of those pesky barista's altogether.

Now, I'm not sure how this impacts Starbucks' immediate issue--Consumer Reports found that a cup of brew at McDonald's is preferred to a cuppa joe at the Bucks.

LNB 048: Just Say "No?! (Pt. 4, Cleaning Up the Slop)

No.
Nein.
Nyet.
Non.

Little words in whatever language we speak. Big mischief if we don't use them when we should. We end up half-committed to projects and other decisions we know we really don't support, taking precious time away from other priorities, working without the focus that comes from commitment.

Resentfully wasting time.

Search Amazon.com and you'll find a staggering amount of books in getting to "yes" but nary a one on getting to a "no" or saying "no" for that matter. Curiously, most of the ones on saying "no" were written with children in mind. Truthfully, some of those books purport to be sales manuals, but are little more than cheap verbal manipulations designed to satisfy us. Funny enough, I can't tell you how many salesfolk I've met who hate being "sold to." They hate when someone doesn't take "no" for an answer. We all do. And still their bookshelves are lined with books that keep spreading the magic.


In this business 2.0 world of relationships we find ourselves on a collision course between two sets of desires: theirs (customers, partners, vendors, suppliers, employees) and ours. Doing untold damage to their chances for the further collaboration. A half-hearted "yes" becomes the low-hanging fruit.

Clean, concise, authentic communication is always the ticket. We end up with less to remember when we stick to the plain, unvarnished truth with little embellishment.

On the show, I talked about the four options you have in responding to requests made to you. They are:

Yes
With us committed to an action either immediately or in the future. Ever heard a prospect say "I'd like to do it in January at the top of the budget year?" Our training has us inclined to try to get them to do it now when they might really mean "I want to sign up in January." Here, you can tell them that you're going to take them at their word...and get your proposal ready for them to sign now with a January start date. You can even make sure that they meant it by calling a spade a spade: "I want to be clear that you are commencing in January. So, I'll take you American Express number so I can run the agreed-upon amount on January 1."

No
Onlineorganizing.com maven Ramona Creel suggests that there are 20 Ways to Say No; however I find that, given some of the equivocations she suggests, people are liable to enter into a tussle with us, believing that those equivocations are up for negotiation. If it doesn't work, isn't consistent with your commitments--whatever--stop trying to be "nice." A clean "no" will save you from trying to manufacture a reason (which isn't nice, by the way). You don't need one (unless you've trained your business associates that you do).

Counter-Offer
You may, in fact, want that project, but with some clear caveats. Tell them so: "I'd like to commit here, and I have a few changes that will have it really work for our team. Take a look and see if we can work those in and then I'm all in." Here, they can say yes or no--they can even counter your counter. This is called a negotiation. Have fun and be clear in you communications.

Commitment to Commit Later
You may be racing out the door. Keep moving. We sometimes say things to people to placate them and hope we can dig ourselves out later. If you don't have time to carefully consider an offer now, resist the pressure to commit right away. Giving people a clear date and time you want to discuss the merits of their request with them will satisfy most. Putting it on your calendar will satisfy even more. Really racing out the door and can't stop. Ask them to email you a request with some suggested dates and times for your talk...and then keep moving.

...and now some Zen from the epic movie, White Men Can't Jump:

Rosie Perez: Sometimes when you win, you really lose. Sometimes when you lose, you really win. Sometimes when you win or lose. you actually
tie. Sometimes when you tie, you actually win or lose.

Woody Harrellson: I hate it when you talk like that.

We hate it, too. Woody. So get this: Some of us sound eerily similar when we say "Sometimes when they say yes, it's really yes. Sometimes when they say no, it's really yes. Sometimes when they say yes or say no it's actually maybe..." You get the point (and probably a headache, too.

Resources
Simplify Your Work Like: Ways to Change the Way You Work So You Have More Time to Live...some of these suggestions are stunningly simple and effective.

On my list to read is Saying No: A User's Manual by Karen Bading. It purports to helping people say "no" without wrecking their relationships. I'll let you know.

Listen Now: 24.01

Coal fired power generation - etc.

The recent events have underlined one of the unmeasured impacts of coal fired power generation, especially the huge uptick in demand sourced by China firing up a new coal fired power plant every week!!

In 2002, compliance coal, that met certain specifications cost the University of Cincinnati $28 a ton. UC now paying about $90 per ton, after negotiating with a utility to supply coal. (Prior to that it was significantly even more expensive. The utility would only recently start to sell coal to 3rd parties ).

Regrettably it appears that the 6 miners trapped 11 days ago are probably not alive, and now several more are know dead and more injured. Work will progress in some manner to try to find the first 6 but the MSA will work to reduce any more risk to rescuers.

Coal is abundant in the US. It's probably one of the biggest energy assets we have. But to use it we have to mine it either underground, or surface strip mining. We have to ship it constantly on barges in rivers, by rail and by truck as it is consumed on a very large scale. And not only by power plants. Coal is used to make coke (not that kind) and that coke is the pure carbon source for addition to steel to produce carbon steel for industry.

Looking at energy and alternatives, one needs to look at the whole picture. When nuclear power construction was stopped in the US 30 years ago that shackled us to fossil fuels. The industry needed a new source of energy that was cost effective and could be rapidly developed. That lead to the rapid growth of the sale and installation of combustion turbine generators across the country and even to foreign markets. They use natural gas, and lots of it. It was a fairly clean technology, and plants could be built rapidly, and due to the fact that they are relatively small compared to traditional large scale coal plants, they were easy to permit and cheap to build.

Then Enron happened. oops. Now natural gas has tripled in price and the vast majority of combustion turbines are sitting idle waiting for dramatically higher power costs or dramatically lower natural gas prices.

So we are back to coal.

If we were to wave our magic Harry Potter wands and chant "ignitus carborundum" or something like that and be able to replace all coal fired power plants with some new yet to be developed technology, we would still need coal mining to support the steel industry. With diminished demand for coal, prices would drop as mines would close, putting thousands in the industry out of work. When enough mines closed for pricing to recover, the remaining mines would have the steel industry at its knees. If you push on the balloon in one place, it goes out somewhere else.

If you divert fields to corn for ethanol production, and corn prices soar because of a spark in interest in ethanol, then corn feed for cows gets expensive, beef prices go up and cheese prices double. Push on the balloon in one place and it goes out somewhere else.

Closing down nuclear power plant construction 30 years ago pushed on the balloon in a big way and we are still watching it go out.

Don't worry too much about reducing your personal carbon footprint, that will just cause something else to happen unless we develop a holistic approach to energy policy in the US and globally.

I meander around don't I?

New Head of Life Sciences Initiative Not from the Life Sciences Discipline. Does It Matter?

In a post on Taking Down Words, they ask the question: "Does anyone else think it's weird that the guy who's going to be leading Indiana's life sciences outreach on behalf of the State has absolutely no life sciences experience?"

"David A. Boncosky, a Central Indiana real estate development manger and marketing executive, has been named director of Indiana Economic Development Corporation's life sciences initiative.

"The IEDC said his position takes effect Aug. 6 and that as director, the Indianapolis native will lead the IEDC's efforts to attract and retain high-tech, high-paying jobs in the state.

"'David is an experienced sales and marketing professional that has demonstrated a passion and ability for successfully negotiating deals,' said Nathan Feltman, Secretary of Commerce and chief executive officer of the IEDC. 'He will play a vital role in further developing our life sciences economy.'"

Business acumen is great; however, subject matter expertise (or at least solid working knowledge) can't be underrated. Still, we're in the midst of a trend in putting CFO's in the top spot when playing executive "musical chairs." Take Thomson for example, a technology company that is run by their former CFO (note: not a techie).

Does this matter? I think so. Universities have, essentially two execute track: the university president and the provost, who is essentially the president of academics (the university's core business). Hospitals, too, have a medical director, responsible for medicine and treatment (again, their core business) and an president.

Antioch College Goes Down for the Count

I've been to Antioch (teaching a personal development workshop there that the students took to an alarmingly unworkable extreme--mostly because they didn't have any personal issues...it was everybody else that needed "fixing"). Well-meaning people one and all, their personal ideologies tended to reduce social and criminal misbehavior to external forces (the racist, sexist system), blame others for the failures of minority men and women and white women, and villainize white men (note: white women got a pass), corporations and the government. Listening to them talk about the "plight of the American Black," I couldn't help but feel that we were so doomed that without "special consideration" (and a heaping dose of pity), we didn't stand a chance. We, they explained, were to be excused for everything.

Before my time at Yellow Springs, I thought I was liberal. On the drive back home, I realized that I sho nuff wasn't.

No matter what our personal or political ideology, we need to be certain that the real world models of our ideologies will work. Having long been called the purveyors of spendthrift social experimentation, we would be well-served to carefully examine what went right and wrong at Antioch and not make those mistakes again.

A piece of George Will's Antioch Obit

Farewell, Antioch
By George Will
Sunday, July 15, 2007

WASHINGTON -- During the campus convulsions of the late 1960s, when rebellion against any authority was considered obedience to every virtue, the film "To Die in Madrid," a documentary about the Spanish Civil War, was shown at a small liberal arts college famous for, and vain about, its dedication to all things progressive. When the film's narrator intoned, "The rebels advanced on Madrid," the students, who adored rebels and were innocent of information, cheered. Antioch College in Yellow Springs, Ohio, had been so busy turning undergraduates into vessels of liberalism and apostles of social improvement that it had not found time for the tiresome task of teaching them tedious facts, such as that the rebels in Spain were Franco's fascists.

That illustrates why it is heartening that Antioch will close after the 2007-08 academic year. Its board of trustees says the decision is to "suspend operations" and it talks dottily about reviving the institution in 2012. There is, however, a minuscule market for what Antioch sells for a tuition, room and board of $35,221 -- repressive liberalism unleavened by learning.

Read the rest of the article...

Now, so you don't think I'm just talking about a liberal arts college that went terribly wrong, think a moment about your own business model. Does it address the needs of your customers in a workable way? Can you sustain your business this way? Wrongheaded is wrongheaded. And just like Antioch, I've seen numerous businesses with either no fleshed out business model or one that's unsustainable.