Posted by Michael McKinney of LeadershipNow 6.22.2010
In January 2009, founder and chairman of India’s Satyam Computer Services—the “largest publically traded company you’ve never heard of”—Ramalinga Raju confesses to massive accounting fraud and resigns. In a five-page letter to the board, he described the problem saying, “It was like riding a tiger, not knowing how to get off without being eaten.” In an instant, he left behind him, chaos, distrust, and plummeting moral among his more than 53,000 employees. But Riding the Tiger is not about how the Enron-like tragedy occurred, but how a leading through learning strategy calmed the chaos and helped the company recover and rebuild.
Authors and former Satyam employees Pricilla Nelson (Global Director of People Leadership) and Ed Cohen (Chief Learning Officer) share the take-away lessons learned on the road to recovery and renewal. Step one was what they eventually called the “Lights On” strategy. That is “deciding exactly what must be done to keep the business moving and doing only that which is critical to help the organization stabilize.” They describe 6-steps—beginning with hold everything and build an adaptable stop-stop-continue plan—based on the two pillars of learning and communication.
Nelson and Cohen write, “Learning is critical for stabilizing the organization, providing guidance to leaders, communicating with employees, and keeping the business open.” Communication is critical. “The leaders who lead out loud—those who maintain transparency, approachability, and integrity—are the ones with whom people want to work, in good times and bad.”
Venkatesh Roddam, Director of VenSat Tech India was the CEO at Satyam BPO (a Satyam subsidiary), reflects on the resilience at Satyam, “To be faced with a crisis the magnitude of what Satyam dealt with and then one year later to be reborn and vibrant in a new avatar speak volumes about the value of a strong leadership culture. This resilience is the result of years of painstakingly implemented leadership strategies.” The authors stress the need for developing leadership guidelines in order to leverage learning and to assist leaders with the complicated people and relationship dimensions of the business. You can use these 12 guidelines as a basic for coaching conversations:
1.Understand that we will never get back to normal: While it is comfortable to want to seek the status quo, “normal” in times of a crisis is constantly changing. Leaders need to move on to seek better ways of doing things, letting these new ways become the new normal.
2.Take care of one another: Listening reduces anxiety. Provide regular updates on what is happening across the organization and expand inclusivity.
3.React…pause…respond: The right response will be made once information gathering, integrity, an open heart, and seeking to understand have been considered.
4.Talk—even when you don’t believe there is much to say: Overcommunication is essential during turbulent times. Consistent and continuous messaging prevents rumors from spreading and demonstrates the leaders’ approachability and transparency.
5.Be visible—now is not the time to play hide-and-seek: People become fearful when the leader goes into hiding. As a leader, be present, inform comfort, and provide strength for others.
6.Maintain integrity and high value morals: Current circumstances should not influence or distort your definition of integrity and other core values.
7.Optimize costs, with retention in mind: Make cost optimization decisions keeping employee retention in mind. This allows leaders to assess risk and make more informed decisions.
8.Be a brand ambassador: The organization needs people who are brand ambassadors. As brand ambassadors, you are responsible for representing the organization both internally and externally in a positive manner. This means you must refrain from making statements that might cause further turbulence.
9.Assess and rebuild trust: Rebuilding an injured organization requires making difficult decisions that not everyone will understand. For this reason, you and other leaders must continuously asses and rebuild trust.
10.Remember, leaders are human, too: Though there will be difficult times during a crisis, as leader, it is important to remain composed.
11.Think like a child: Try to live “in the moment,” not allowing business to consume every moment. Work/life balance can exist, even in a crisis.
12.Take care of your emotional, physical, and spiritual well-being: Don’t put any aspect of your well-being on hold. While change and uncertainty at work are draining, you cannot allow them to take over your life.
The authors say that 87% of businesses fail to recover from devastation such as this because they have “not correctly aligned their priorities for recovery, and more importantly re-growth. Too often the immediate focus is put on salvaging customer relationships and brand identity. The relationship with employees does not receive the same priority. Leaders do not communicate as much as needed leaving them wondering what the future holds for them and their colleagues. This dichotomy results in major turnover, far more than companies in crisis can withstand, and ultimately contribute to their failure.”
Thursday, June 24, 2010
Wednesday, June 16, 2010
6 Ways to Keep Your Rising Stars on Track
American Express' OPEN/Small Business Forum
by Lynn Truong Co-Founder, Sales Director (Wise Bread)
June 14, 2010 -
You may think it's safe to assume your rising stars are also highly excited and committed to your company, but Jason Martin and Conrad Schmidt's research suggests otherwise. Over the past six years, they studied over 20,000 "emerging stars" at more than 100 organizations worldwide. Considering the statistics that came out of the study, you may want to rethink any assumptions you have regarding your high potentials:
One in four intends to leave her current employer within the next year. 12 percent of all the high potentials in the study said they were actively searching for a new job.
One in three admits he is not putting all his effort into his job.
One in five believes her personal aspirations are very different from what the company has planned for her.
Four in 10 have little confidence in their co-workers and even less confidence in the senior team.
So, what can you do to combat negativity in your rising stars? Here are six ways to keep your company's best assets—its future leaders—on track.
1. Keep them engaged.
Your rising stars want stimulating work, recognition for their accomplishments, and the chance to push their career forward and prosper with the company. If the company is struggling, however, they are the first to consider leaving. Confident in their skills, they are the ones most likely to actively research other opportunities.
Even if your company is experiencing rough times (as many companies are these days), you need to make sure that high potentials are engaged in the company. Give them the recognition they're due by celebrating their successes and reward them with flexible work options, such as once-a-week telecommuting. Make it clear that their individual goals align with company goals and let them help solve major problems. The more involved they are with building the company's future, the less likely they will jump ship when the going gets tough.
2. Assess them for future potential.
The three attributes that really matter in the success of rising stars are ability, engagement and aspiration. Your rising stars need to have the intellectual, technical, and emotional skills necessary to handle future challenges, especially as their roles in the company become more and more important. They also need to feel personally connected and committed to your company and its mission. And they certainly need to want to advance in the company.
According to Martin and Schmidt's research, 70 percent of high performers don't have the levels of ability, engagement, and aspiration necessary to succeed in future roles. Although it certainly isn't impossible to do well without them, the chances for success are greatly reduced if even one attribute is found lacking. Design annual tests and interviews to assess these dimensions. You want to make sure that your rising stars will continue to rise.
3. Manage them at the corporate level.
Don't delegate the management of your top talent to line managers. Sure, line managers may know employees' individual strengths and weaknesses. It may also seem to make sense from an economic standpoint because the costs of talent development programs are shifted from corporate headquarters into the budgets of the department or business unit.
However, leaving the cultivation of your future leaders exclusively to business units tends to narrow the development opportunities of top talent, focusing on the skills required now rather than those needed tomorrow. Instead, senior leaders and general managers must share the development of high potentials. Your star players will be much more willing to contribute to the company if they're treated like the critical organizational assets that they are.
4. Place them in "live fire" roles.
Emerging stars need to be placed in demanding roles where they have to acquire new capabilities in order to succeed. Don't shield them by leaving them where you know they'll succeed. Your company's future leaders need to be developed and tested in "live fire" roles where they must perform under real stress and where there the chance of failure is very real.
Start by identifying the high-impact positions in your company that can offer quick development and learning opportunities (i.e., "brand manager for a leading product" or "marketing director for a new segment"). Then, make an effort to assign most of these positions to your high potentials. Yes, failure can disrupt the business, but if you shield your emerging talent from derailment in the training stage, they may not be able to handle greater challenges later on.
5. Make them feel special.
Martin and Schmidt's research found that under normal circumstances, high potentials put in 20 percent more effort than other employees in the same roles; their contributions may be even greater if the company has recently downsized or restructured. However, don't take their extra efforts for granted just because they're willing to do the work.
Give your support to your company's best employees. One company in the study dedicates a portion of the dollars saved through layoffs towards the emerging leaders' bonus pool, while another company buys lunch for its high potentials every day. Such gestures of appreciation, whether generous or modest, show your employees that hard work will be rewarded accordingly.
6. Share future strategies with them.
One of the strongest factors in high top employees' engagement is their confidence in their managers and in the company's strategic capabilities. If you don't disclose corporate strategies at times of economic uncertainty, you risk disengaging the very people that can help your company pull through.
Share strategies with your high potentials by sending them e-mail updates, inviting them to meetings with high-level executives, or providing other opportunities for them to weigh in on corporate direction. Let them know they're part of the team that is building the company's future. That's exactly what you want your rising stars to do, after all.
by Lynn Truong Co-Founder, Sales Director (Wise Bread)
June 14, 2010 -
You may think it's safe to assume your rising stars are also highly excited and committed to your company, but Jason Martin and Conrad Schmidt's research suggests otherwise. Over the past six years, they studied over 20,000 "emerging stars" at more than 100 organizations worldwide. Considering the statistics that came out of the study, you may want to rethink any assumptions you have regarding your high potentials:
One in four intends to leave her current employer within the next year. 12 percent of all the high potentials in the study said they were actively searching for a new job.
One in three admits he is not putting all his effort into his job.
One in five believes her personal aspirations are very different from what the company has planned for her.
Four in 10 have little confidence in their co-workers and even less confidence in the senior team.
So, what can you do to combat negativity in your rising stars? Here are six ways to keep your company's best assets—its future leaders—on track.
1. Keep them engaged.
Your rising stars want stimulating work, recognition for their accomplishments, and the chance to push their career forward and prosper with the company. If the company is struggling, however, they are the first to consider leaving. Confident in their skills, they are the ones most likely to actively research other opportunities.
Even if your company is experiencing rough times (as many companies are these days), you need to make sure that high potentials are engaged in the company. Give them the recognition they're due by celebrating their successes and reward them with flexible work options, such as once-a-week telecommuting. Make it clear that their individual goals align with company goals and let them help solve major problems. The more involved they are with building the company's future, the less likely they will jump ship when the going gets tough.
2. Assess them for future potential.
The three attributes that really matter in the success of rising stars are ability, engagement and aspiration. Your rising stars need to have the intellectual, technical, and emotional skills necessary to handle future challenges, especially as their roles in the company become more and more important. They also need to feel personally connected and committed to your company and its mission. And they certainly need to want to advance in the company.
According to Martin and Schmidt's research, 70 percent of high performers don't have the levels of ability, engagement, and aspiration necessary to succeed in future roles. Although it certainly isn't impossible to do well without them, the chances for success are greatly reduced if even one attribute is found lacking. Design annual tests and interviews to assess these dimensions. You want to make sure that your rising stars will continue to rise.
3. Manage them at the corporate level.
Don't delegate the management of your top talent to line managers. Sure, line managers may know employees' individual strengths and weaknesses. It may also seem to make sense from an economic standpoint because the costs of talent development programs are shifted from corporate headquarters into the budgets of the department or business unit.
However, leaving the cultivation of your future leaders exclusively to business units tends to narrow the development opportunities of top talent, focusing on the skills required now rather than those needed tomorrow. Instead, senior leaders and general managers must share the development of high potentials. Your star players will be much more willing to contribute to the company if they're treated like the critical organizational assets that they are.
4. Place them in "live fire" roles.
Emerging stars need to be placed in demanding roles where they have to acquire new capabilities in order to succeed. Don't shield them by leaving them where you know they'll succeed. Your company's future leaders need to be developed and tested in "live fire" roles where they must perform under real stress and where there the chance of failure is very real.
Start by identifying the high-impact positions in your company that can offer quick development and learning opportunities (i.e., "brand manager for a leading product" or "marketing director for a new segment"). Then, make an effort to assign most of these positions to your high potentials. Yes, failure can disrupt the business, but if you shield your emerging talent from derailment in the training stage, they may not be able to handle greater challenges later on.
5. Make them feel special.
Martin and Schmidt's research found that under normal circumstances, high potentials put in 20 percent more effort than other employees in the same roles; their contributions may be even greater if the company has recently downsized or restructured. However, don't take their extra efforts for granted just because they're willing to do the work.
Give your support to your company's best employees. One company in the study dedicates a portion of the dollars saved through layoffs towards the emerging leaders' bonus pool, while another company buys lunch for its high potentials every day. Such gestures of appreciation, whether generous or modest, show your employees that hard work will be rewarded accordingly.
6. Share future strategies with them.
One of the strongest factors in high top employees' engagement is their confidence in their managers and in the company's strategic capabilities. If you don't disclose corporate strategies at times of economic uncertainty, you risk disengaging the very people that can help your company pull through.
Share strategies with your high potentials by sending them e-mail updates, inviting them to meetings with high-level executives, or providing other opportunities for them to weigh in on corporate direction. Let them know they're part of the team that is building the company's future. That's exactly what you want your rising stars to do, after all.
Cable's Ratings Are Down, Which Is Why Its Upfront Is Up
By Catharine P. Taylor | Jun 15, 2010
BNET by CBS
I really should have seen this coming, but the cable TV upfront ad sales market is resembling the just-concluded network upfront in one way I hadn’t anticipated. Some nets, per Mediapost, are playing the ad inventory scarcity card to get more ad dollars in the door.
In brief, the scarcity card is what you play when your ratings start to go down. It’s s a game the broadcast networks have been playing for years, largely by convincing advertisers they need to buy more TV inventory to reach the same number of people they did back when ratings were higher. (God forbid the advertisers should go find those missing viewers where they are, like on YouTube or Facebook.) The reason some high profile cable networks are playing the card now is that, just like their network counterparts, they’re beginning to see erosion — of as much as 11 percent — in the key 18-49 demo.
The scarcity card seems to be working its magic in cable, just as it has in broadcast. Cable is experiencing CPM increases of as much as ten percent, and may wrap up business taking in upwards of $7.5 billion, a very healthy double-digit increase over last year’s recession-battered performance. By that logic, you’d almost think that when TV executives get together in private, they really all pray for no one to watch their shows.
BNET by CBS
I really should have seen this coming, but the cable TV upfront ad sales market is resembling the just-concluded network upfront in one way I hadn’t anticipated. Some nets, per Mediapost, are playing the ad inventory scarcity card to get more ad dollars in the door.
In brief, the scarcity card is what you play when your ratings start to go down. It’s s a game the broadcast networks have been playing for years, largely by convincing advertisers they need to buy more TV inventory to reach the same number of people they did back when ratings were higher. (God forbid the advertisers should go find those missing viewers where they are, like on YouTube or Facebook.) The reason some high profile cable networks are playing the card now is that, just like their network counterparts, they’re beginning to see erosion — of as much as 11 percent — in the key 18-49 demo.
The scarcity card seems to be working its magic in cable, just as it has in broadcast. Cable is experiencing CPM increases of as much as ten percent, and may wrap up business taking in upwards of $7.5 billion, a very healthy double-digit increase over last year’s recession-battered performance. By that logic, you’d almost think that when TV executives get together in private, they really all pray for no one to watch their shows.
SNL Kagan Forecasts Ad Recovery
by Wayne Friedman June 16, 2010
After crushing double-digit percentage declines in advertising a year ago, TV stations' ad growth will rocket up double-digit increases this year. Radio stations will also point upwards, but less than half the rate of TV.
SNL Kagan, the Charlottesville, VA-based media researcher, says TV stations will climb 14.3% in 2010 to $19.8 billion -- rising from $17.3 billion in 2009, the lowest TV ad revenue total in 15 years.
Adding in new retransmission fees, total TV station revenue is expected to grow to $20.9 billion in 2010 and $25.4 billion by 2016.
Radio will also make gains -- some 6.4% to $17.1 billion. This boost follows a drop of 17.7% to $16.0 billion in 2009. Advertising revenue from online businesses will push up total revenue for radio. SNL Kagan says radio stations will climb 15% to $552million. In six years, radio will grow to $19.8 billion.
The media company says investors have noticed the major progress in ad growth. This year, radio station stocks are up 36%, and TV stocks are 26% higher, year-to-date.
"The bounce-back in ad revenues, combined with other positive trends, such as growing digital dollars, have reassured investors," stated Robin Flynn, senior analyst with SNL Kagan
After crushing double-digit percentage declines in advertising a year ago, TV stations' ad growth will rocket up double-digit increases this year. Radio stations will also point upwards, but less than half the rate of TV.
SNL Kagan, the Charlottesville, VA-based media researcher, says TV stations will climb 14.3% in 2010 to $19.8 billion -- rising from $17.3 billion in 2009, the lowest TV ad revenue total in 15 years.
Adding in new retransmission fees, total TV station revenue is expected to grow to $20.9 billion in 2010 and $25.4 billion by 2016.
Radio will also make gains -- some 6.4% to $17.1 billion. This boost follows a drop of 17.7% to $16.0 billion in 2009. Advertising revenue from online businesses will push up total revenue for radio. SNL Kagan says radio stations will climb 15% to $552million. In six years, radio will grow to $19.8 billion.
The media company says investors have noticed the major progress in ad growth. This year, radio station stocks are up 36%, and TV stocks are 26% higher, year-to-date.
"The bounce-back in ad revenues, combined with other positive trends, such as growing digital dollars, have reassured investors," stated Robin Flynn, senior analyst with SNL Kagan
Monday, June 14, 2010
Seven Secrets Of Driving Customer Loyalty And Profits
Information Week
SMB
June 8, 2010
By Micah Solomon
Loyal customers are valuable to any businesses and by building a strong personal bond with your customers, you can empower them to help market your business.
In these rough and recessionary times, it's important to escape the commodity pricing wars and to find ways to strengthen the marketing backbone of your company. The most reliable and affordable way to achieve both these goals is by building a strong personal bond with your customers. Loyal customers see you as more valuable than a mere commodity purveyor, and can serve you as a powerful marketing arm, going out of their way promote and defend your company online and off -- for free. Here are seven ways to get process started of building customer loyalty.
Research shows that customers remember the first and last minutes of a service encounter much more vividly -- and for much longer -- than all the rest of it. Make sure that the first and final elements of your customer interactions are particularly well engineered, because they are going to stick in the customer's memory.
1. Did you shine that doorknob?
Research shows that customers remember the first and last minutes of a service encounter much more vividly -- and for much longer -- than all the rest of it. Make sure that the first and final elements of your customer interactions are particularly well engineered, because they are going to stick in the customer's memory
2. Set your clocks forward.
Modern customers expect speedier service than did any generation before them. (Not only speedier than their parents expected, but even than their older sisters and brothers expected.) In this age of BlackBerrys and iPhones, of Amazon.com and Zappos, you may as well not deliver your product or service if you're going to deliver it late.
3. Customers want to connect with a real person-online or off.
For example, instead of a web-based chat window that blandly announces "you are now chatting with Jane," try "you are now chatting with Jane Yang-Katzenberg." The customers will treat your "Jane" better, they'll take her advice more seriously -- and they'll be more likely to want a committed customer relationship with her company.
4. Remember each returning customer.
Whatever your business-and no matter how large, work to achieve the computer-assisted effectiveness of a beloved bartender, doorman, or hairstylist -- the kind who would know Bob's preferences, the name of Bob's pet, when Bob was there last ... Superb client tracking systems can create that same "at home" feeling in your customers -- regardless of the size and price point of your business, and whether it exists online or off.
5. Anticipate a customer's wishes.
When a customer's wish is met before the wish has been expressed, it sends the message that you care about the customer as an individual. That cared-for feeling is where you generate the fiercest loyalty.
6. Don't leave the language your team uses up to chance.
Develop and rehearse a list of vocabulary words and expressions that fit your business brand perfectly. For example, the expression "no worries" sounds fine if a clerk at a Portland Bose' Audio Store says it, but would be exceedingly off-brand for the concierge at The Four Seasons in Milan. Equally important, search and destroy any vocabulary words that could hurt customer feelings. For example, your service team should never tell a customer "you owe us." (Try instead: "our records seem to show a balance…")
7. Be patient when filling positions.
In a superb service organization, a single disagreeable or unresponsive team member can erode customer loyalty and team morale. That is why it can be better to leave a position unfilled rather than rushing to hire someone unsuitable. More generally speaking, customer excellence is most fully achieved once you become expert at recruiting, selecting, training, evaluating and reinforcing the efforts of service personnel.
SMB
June 8, 2010
By Micah Solomon
Loyal customers are valuable to any businesses and by building a strong personal bond with your customers, you can empower them to help market your business.
In these rough and recessionary times, it's important to escape the commodity pricing wars and to find ways to strengthen the marketing backbone of your company. The most reliable and affordable way to achieve both these goals is by building a strong personal bond with your customers. Loyal customers see you as more valuable than a mere commodity purveyor, and can serve you as a powerful marketing arm, going out of their way promote and defend your company online and off -- for free. Here are seven ways to get process started of building customer loyalty.
Research shows that customers remember the first and last minutes of a service encounter much more vividly -- and for much longer -- than all the rest of it. Make sure that the first and final elements of your customer interactions are particularly well engineered, because they are going to stick in the customer's memory.
1. Did you shine that doorknob?
Research shows that customers remember the first and last minutes of a service encounter much more vividly -- and for much longer -- than all the rest of it. Make sure that the first and final elements of your customer interactions are particularly well engineered, because they are going to stick in the customer's memory
2. Set your clocks forward.
Modern customers expect speedier service than did any generation before them. (Not only speedier than their parents expected, but even than their older sisters and brothers expected.) In this age of BlackBerrys and iPhones, of Amazon.com and Zappos, you may as well not deliver your product or service if you're going to deliver it late.
3. Customers want to connect with a real person-online or off.
For example, instead of a web-based chat window that blandly announces "you are now chatting with Jane," try "you are now chatting with Jane Yang-Katzenberg." The customers will treat your "Jane" better, they'll take her advice more seriously -- and they'll be more likely to want a committed customer relationship with her company.
4. Remember each returning customer.
Whatever your business-and no matter how large, work to achieve the computer-assisted effectiveness of a beloved bartender, doorman, or hairstylist -- the kind who would know Bob's preferences, the name of Bob's pet, when Bob was there last ... Superb client tracking systems can create that same "at home" feeling in your customers -- regardless of the size and price point of your business, and whether it exists online or off.
5. Anticipate a customer's wishes.
When a customer's wish is met before the wish has been expressed, it sends the message that you care about the customer as an individual. That cared-for feeling is where you generate the fiercest loyalty.
6. Don't leave the language your team uses up to chance.
Develop and rehearse a list of vocabulary words and expressions that fit your business brand perfectly. For example, the expression "no worries" sounds fine if a clerk at a Portland Bose' Audio Store says it, but would be exceedingly off-brand for the concierge at The Four Seasons in Milan. Equally important, search and destroy any vocabulary words that could hurt customer feelings. For example, your service team should never tell a customer "you owe us." (Try instead: "our records seem to show a balance…")
7. Be patient when filling positions.
In a superb service organization, a single disagreeable or unresponsive team member can erode customer loyalty and team morale. That is why it can be better to leave a position unfilled rather than rushing to hire someone unsuitable. More generally speaking, customer excellence is most fully achieved once you become expert at recruiting, selecting, training, evaluating and reinforcing the efforts of service personnel.
Nielsen: Americans Watch More TV, Smartphones on Rise
MediaPost News' MediaDaily News
by David Goetzl, Friday, June 11, 2010, 11:16 AM
A new periodic Nielsen three-screen report shows the penetration of devices equipped for video viewing has risen notably over the past year, giving programmers more real estate to generate consumer hunger. Plus, with the traditional "big screen" at home, people continue to spend more time watching.
Using figures from the January-March period, Americans on average spent two more hours a month watching TV versus the same period a year ago. The figure came in at an average of 158 hours and 25 minutes this year -- up from 156 hours and 24 minutes in 2009.
Broadband penetration stood at 63.5% among Americans ages 2 and up in the first quarter, up from 60.7% in 2009. Even more significant could be a rapid rise in smartphones: among people 13-plus, the figure went from 16% a year ago to 22% -- passing 20% for the first time.
Still, as programmers have more nontraditional distribution options, there appears to be a struggle to find breakout content for the emerging platforms. On average in the January-March period, Americans watched 3 hours and 10 minutes of video on the Internet each month, barely up from 3 minutes a year ago. The first-quarter figure was also down from the last three months of 2009.
In the mobile arena, video viewing was flat year-over-year, at a monthly average of 3 hours and 37 minutes.
One potential upside: as networks like NBC target multitaskers with their Olympic programming, Nielsen found that people using the TV and the Web at the same time grew about 10% year-over-year. The average of 3 hours and 21 minutes last year increased to 3 hours and 41 minutes in the first quarter of 2010.
DVRs proved a mixed bag for programmers because of ad-skipping risks, yet provided an opportunity to build viewership. DVR penetration is closing in on 40% (at 36.2%) -- up from 30.9% in the first quarter of 2009. The report shows average monthly time watching TV in time-shifted mode up from 8 hours and 22 minutes in 2009's first quarter, to 9 hours and 36 minutes in 2010.
Programmers counting on HD programming to boost viewing may take heart: The number of homes able to view -- although not necessarily receiving -- HD content soared from 32% in 2009 to 47.9% this year.
by David Goetzl, Friday, June 11, 2010, 11:16 AM
A new periodic Nielsen three-screen report shows the penetration of devices equipped for video viewing has risen notably over the past year, giving programmers more real estate to generate consumer hunger. Plus, with the traditional "big screen" at home, people continue to spend more time watching.
Using figures from the January-March period, Americans on average spent two more hours a month watching TV versus the same period a year ago. The figure came in at an average of 158 hours and 25 minutes this year -- up from 156 hours and 24 minutes in 2009.
Broadband penetration stood at 63.5% among Americans ages 2 and up in the first quarter, up from 60.7% in 2009. Even more significant could be a rapid rise in smartphones: among people 13-plus, the figure went from 16% a year ago to 22% -- passing 20% for the first time.
Still, as programmers have more nontraditional distribution options, there appears to be a struggle to find breakout content for the emerging platforms. On average in the January-March period, Americans watched 3 hours and 10 minutes of video on the Internet each month, barely up from 3 minutes a year ago. The first-quarter figure was also down from the last three months of 2009.
In the mobile arena, video viewing was flat year-over-year, at a monthly average of 3 hours and 37 minutes.
One potential upside: as networks like NBC target multitaskers with their Olympic programming, Nielsen found that people using the TV and the Web at the same time grew about 10% year-over-year. The average of 3 hours and 21 minutes last year increased to 3 hours and 41 minutes in the first quarter of 2010.
DVRs proved a mixed bag for programmers because of ad-skipping risks, yet provided an opportunity to build viewership. DVR penetration is closing in on 40% (at 36.2%) -- up from 30.9% in the first quarter of 2009. The report shows average monthly time watching TV in time-shifted mode up from 8 hours and 22 minutes in 2009's first quarter, to 9 hours and 36 minutes in 2010.
Programmers counting on HD programming to boost viewing may take heart: The number of homes able to view -- although not necessarily receiving -- HD content soared from 32% in 2009 to 47.9% this year.
Sunday, June 13, 2010
Retailers Answer Call of Smartphones
By DANA MATTIOLI
THE WALL STREET JOURNAL June 11, 2010
As More Consumers Shop via Mobile Devices, Stores Tailor Sites to Make Viewing, Ordering Easier
As Apple Inc. Unveils its new iPhone, more retailers—from Home Depot Inc. To Lilly Pulitzer—are looking to generate sales from smartphones' surging popularity by making it easier for people to shop via cellphones.
Mobile e-commerce is a small but high-growth area in retail. Shoppers will order $2.2 billion of physical goods from websites via cellphones this year, $1 billion more than last year and five times more than 2008, projects ABI Research Inc., a New York technology research firm.
Regular e-commerce sales, excluding mobile orders, are expected to grow more slowly— around 11% to $144.8 billion this year, says ABI, while retail sales overall are expected to creep up 2.5%, according to the National Retail Federation.
Currently, about 30% of retailers have mobile-commerce websites, simpler versions of their sites that make it easier for shoppers to place orders with cellphones, says Dave Sikora, chief executive of Digby, a software company that helps retailers create mobile sites. It costs retailers roughly $50,000 to $100,000 to create and launch a mobile site, he estimates.
Women's clothing retailer Lilly Pulitzer is launching a mobile-commerce site June 15 and is rushing to debut an iPhone application, which will let users browse its catalogs and place orders. "We're full steam ahead and trying to get it out as fast as we can, since we know the new iPhone will help adoption rates for smartphones," says Michelle Kelly, vice president of e-commerce, online marketing and stores for the brand.
Ms. Kelly says she pushed to create the mobile site after noticing an increase in mobile visits to Lilly's website. In May, mobile visits totaled 4% of Web traffic, up from half a percent in July. Customer-service representatives also noticed that more than half the emails they fielded came from iPhones.
Sales remained slim, however, because ordering via cellphone on Lilly's regular website is clunky. Ms. Kelly says she hopes the new mobile site will make that easier and perhaps drive impulse shopping. "I have a vision of a target consumer being at a party and thinking a friend's dress is gorgeous, looking it up on her phone and buying it," she says.
In August, Home Depot will launch a mobile-commerce site geared toward smartphone users and will introduce an iPhone app at around the same time.
"I think within two or three years a material percentage of our site visits and online revenues will come through mobile phones," says Hal Lawton, president of Homedepot.com. By 2014, he expects perhaps 30% to 40% of Homedepot.com traffic to come from mobile phones.
In January, Home Depot launched a basic mobile site for consumers who don't have smartphones. Mainly, consumers look up store locations, products and call stores. Its current iPhone app, which launched in January, lets visitors browse products, access how-to guides and watch videos, but not make purchases without being redirected to its website; it has about 250,000 downloads so far.
Retailers that have launched mobile-commerce sites say sales are growing. Armani Exchange, owned by Giorgio Armani SpA, launched its mobile-commerce site in November after seeing strong traffic at an earlier mobile site that let visitors view collections and videos but not place orders. The new version lets users make purchases.
By May, 5% of Armani Exchange's e-commerce sales came from mobile phones, and June is trending near 6%, the company says. "We've had some pretty fantastic growth with it," says Harlan Bratcher, chief executive of Armani Exchange, which is the youngest and most casual of the Giorgio Armani brands. Mr. Bratcher says mobile appealed to him because it is the way his customers—who typically are 18 to 25 years old in urban areas—prefer to communicate
1-800-Flowers.com Inc. Created its mobile site in 2006 and has seen mobile orders increase from a few thousand dollars a month to tens of thousands of dollars a month, says spokesman Joe Pititto. The mobile site's homepage features popular items, such as a dozen red roses, and minimizes the number of clicks required for a purchase.
"It's probably our fastest growth channel right now," says Vib Prasad, vice president of Web marketing and merchandising for the flower-and-gift retailer, where overall revenue fell 7% to $502.3 million for the nine months ended March 28.
James O'Brien, a 34-year-old senior Web developer from Levittown, Pa., in the last few weeks has used his iPhone to buy clothes, a bike rack and workout weights. On a recent trip to American Eagle Outfitters at the mall, he discovered the store was out of a style of jeans he likes. He ordered them on his phone instead.
He says he likes the immediacy of mobile shopping. "By the time I get home there's a good chance I'll forget about it," he says.
THE WALL STREET JOURNAL June 11, 2010
As More Consumers Shop via Mobile Devices, Stores Tailor Sites to Make Viewing, Ordering Easier
As Apple Inc. Unveils its new iPhone, more retailers—from Home Depot Inc. To Lilly Pulitzer—are looking to generate sales from smartphones' surging popularity by making it easier for people to shop via cellphones.
Mobile e-commerce is a small but high-growth area in retail. Shoppers will order $2.2 billion of physical goods from websites via cellphones this year, $1 billion more than last year and five times more than 2008, projects ABI Research Inc., a New York technology research firm.
Regular e-commerce sales, excluding mobile orders, are expected to grow more slowly— around 11% to $144.8 billion this year, says ABI, while retail sales overall are expected to creep up 2.5%, according to the National Retail Federation.
Currently, about 30% of retailers have mobile-commerce websites, simpler versions of their sites that make it easier for shoppers to place orders with cellphones, says Dave Sikora, chief executive of Digby, a software company that helps retailers create mobile sites. It costs retailers roughly $50,000 to $100,000 to create and launch a mobile site, he estimates.
Women's clothing retailer Lilly Pulitzer is launching a mobile-commerce site June 15 and is rushing to debut an iPhone application, which will let users browse its catalogs and place orders. "We're full steam ahead and trying to get it out as fast as we can, since we know the new iPhone will help adoption rates for smartphones," says Michelle Kelly, vice president of e-commerce, online marketing and stores for the brand.
Ms. Kelly says she pushed to create the mobile site after noticing an increase in mobile visits to Lilly's website. In May, mobile visits totaled 4% of Web traffic, up from half a percent in July. Customer-service representatives also noticed that more than half the emails they fielded came from iPhones.
Sales remained slim, however, because ordering via cellphone on Lilly's regular website is clunky. Ms. Kelly says she hopes the new mobile site will make that easier and perhaps drive impulse shopping. "I have a vision of a target consumer being at a party and thinking a friend's dress is gorgeous, looking it up on her phone and buying it," she says.
In August, Home Depot will launch a mobile-commerce site geared toward smartphone users and will introduce an iPhone app at around the same time.
"I think within two or three years a material percentage of our site visits and online revenues will come through mobile phones," says Hal Lawton, president of Homedepot.com. By 2014, he expects perhaps 30% to 40% of Homedepot.com traffic to come from mobile phones.
In January, Home Depot launched a basic mobile site for consumers who don't have smartphones. Mainly, consumers look up store locations, products and call stores. Its current iPhone app, which launched in January, lets visitors browse products, access how-to guides and watch videos, but not make purchases without being redirected to its website; it has about 250,000 downloads so far.
Retailers that have launched mobile-commerce sites say sales are growing. Armani Exchange, owned by Giorgio Armani SpA, launched its mobile-commerce site in November after seeing strong traffic at an earlier mobile site that let visitors view collections and videos but not place orders. The new version lets users make purchases.
By May, 5% of Armani Exchange's e-commerce sales came from mobile phones, and June is trending near 6%, the company says. "We've had some pretty fantastic growth with it," says Harlan Bratcher, chief executive of Armani Exchange, which is the youngest and most casual of the Giorgio Armani brands. Mr. Bratcher says mobile appealed to him because it is the way his customers—who typically are 18 to 25 years old in urban areas—prefer to communicate
1-800-Flowers.com Inc. Created its mobile site in 2006 and has seen mobile orders increase from a few thousand dollars a month to tens of thousands of dollars a month, says spokesman Joe Pititto. The mobile site's homepage features popular items, such as a dozen red roses, and minimizes the number of clicks required for a purchase.
"It's probably our fastest growth channel right now," says Vib Prasad, vice president of Web marketing and merchandising for the flower-and-gift retailer, where overall revenue fell 7% to $502.3 million for the nine months ended March 28.
James O'Brien, a 34-year-old senior Web developer from Levittown, Pa., in the last few weeks has used his iPhone to buy clothes, a bike rack and workout weights. On a recent trip to American Eagle Outfitters at the mall, he discovered the store was out of a style of jeans he likes. He ordered them on his phone instead.
He says he likes the immediacy of mobile shopping. "By the time I get home there's a good chance I'll forget about it," he says.
Tuesday, June 8, 2010
Five Surefire Ways to Reach the Youth Market
By Donna Fenn
June 7th, 2010
From BNET,
Leading insights from business owners and entrepreneurs
Companies are falling all over themselves trying to reach the youth market these days.market these days. Small wonder. Nearly one in five Americans are in the Millennial Generation and they spend upwards of $300 billion annually. Who wouldn’t want even just a little piece of that? But reaching the youth market is tough: they’re marketing savvy and not easily influenced; they’re not big consumers of traditional media; and they will ignore your carefully crafted brand message in favor of what their friends are saying about your product and/or service. So what resonates with these finicky consumers?
At the Ypulse Youth Marketing Mashup in San Francisco a couple of weeks ago, I learned about some very successful youth-centric marketing campaigns. And while most of them were executed by large companies, there are relevant lessons here for entrepreneurial firms as well. Here are few tips from the Mashup:
Be edgy. What other word could possibly describe Kotex’s new product launch geared toward young women? The U by Kotex campaign actually employs a good deal of self-mockery, including television commercials that poke fun at older Kotex ads. The packaging, black boxes with bright pink, yellow and green accents, also flaunts convention. The video, launched in March, has racked up almost a million views and the product has already captured 8.3% market share.
Provide valuable content and information. On the U by Kotex website, you’ll find a page called The Straight Scoop where young consumers can ask questions about their periods to a panel of advisors; every question gets an answer from a health professional, a mom, and a peer. There’s no selling here, but the feature establishes Kotex as a company that cares enough to provide an information forum for its customers and that, of course, helps sell the brand.
Have a social mission. GenY, or Millennials, care deeply about social causes. A study by Cone revealed that nine out of ten consumers in this generation would switch to a brand associated with a good cause if quality and price were comparable. So when Avon launched Mark, a new brand of cosmetics for young women, they signed on MTV celebrity Lauren Conrad to help create a cause-related product. Sales from Conrad’s “Have a Heart” necklace go to Avon’s m.powerment campaign, which makes donations to organizations that help end dating and partner abuse. So far, the campaign has raised over $400,000 and Avon’s campus rep sales have increased by 174%.
Connect with their parents. This is not a “don’t trust anyone over 30″ generation. GenY’ers tend to be very close to their parents and often consult them on life decisions, large and small. The folks at Avon knew this, so when they were ramping up the campaign for their youth brand, Mark (see above), they blasted emails to both college students and their parents. The goal: to spread the word that Mark was looking for campus sales reps. Remarkably, the parent-targeted email got an open rate of 43%, which is well above average. The campaign, combined with other efforts by Avon, resulted in a 60% increase in campus reps.
Co-create with your customers. Last January, VitaminWater created a new flavor called Connect. Or rather, its customers did. Connect, which is black cherry-lime flavored and contains caffeine, was the result of a Facebook Fan Page contest that encouraged fans to design their own VitaminWater flavor. Connect was launched in March and its creator, Sarah from Illinois, won $5,000. Young consumers love this kind of co-creating using crowdsourcing because it creates a two-way conversation with a brand. Companies love it because it’s a pretty cheap way to validate new ideas and to get buy-in from consumers before new products hit the shelves.
June 7th, 2010
From BNET,
Leading insights from business owners and entrepreneurs
Companies are falling all over themselves trying to reach the youth market these days.market these days. Small wonder. Nearly one in five Americans are in the Millennial Generation and they spend upwards of $300 billion annually. Who wouldn’t want even just a little piece of that? But reaching the youth market is tough: they’re marketing savvy and not easily influenced; they’re not big consumers of traditional media; and they will ignore your carefully crafted brand message in favor of what their friends are saying about your product and/or service. So what resonates with these finicky consumers?
At the Ypulse Youth Marketing Mashup in San Francisco a couple of weeks ago, I learned about some very successful youth-centric marketing campaigns. And while most of them were executed by large companies, there are relevant lessons here for entrepreneurial firms as well. Here are few tips from the Mashup:
Be edgy. What other word could possibly describe Kotex’s new product launch geared toward young women? The U by Kotex campaign actually employs a good deal of self-mockery, including television commercials that poke fun at older Kotex ads. The packaging, black boxes with bright pink, yellow and green accents, also flaunts convention. The video, launched in March, has racked up almost a million views and the product has already captured 8.3% market share.
Provide valuable content and information. On the U by Kotex website, you’ll find a page called The Straight Scoop where young consumers can ask questions about their periods to a panel of advisors; every question gets an answer from a health professional, a mom, and a peer. There’s no selling here, but the feature establishes Kotex as a company that cares enough to provide an information forum for its customers and that, of course, helps sell the brand.
Have a social mission. GenY, or Millennials, care deeply about social causes. A study by Cone revealed that nine out of ten consumers in this generation would switch to a brand associated with a good cause if quality and price were comparable. So when Avon launched Mark, a new brand of cosmetics for young women, they signed on MTV celebrity Lauren Conrad to help create a cause-related product. Sales from Conrad’s “Have a Heart” necklace go to Avon’s m.powerment campaign, which makes donations to organizations that help end dating and partner abuse. So far, the campaign has raised over $400,000 and Avon’s campus rep sales have increased by 174%.
Connect with their parents. This is not a “don’t trust anyone over 30″ generation. GenY’ers tend to be very close to their parents and often consult them on life decisions, large and small. The folks at Avon knew this, so when they were ramping up the campaign for their youth brand, Mark (see above), they blasted emails to both college students and their parents. The goal: to spread the word that Mark was looking for campus sales reps. Remarkably, the parent-targeted email got an open rate of 43%, which is well above average. The campaign, combined with other efforts by Avon, resulted in a 60% increase in campus reps.
Co-create with your customers. Last January, VitaminWater created a new flavor called Connect. Or rather, its customers did. Connect, which is black cherry-lime flavored and contains caffeine, was the result of a Facebook Fan Page contest that encouraged fans to design their own VitaminWater flavor. Connect was launched in March and its creator, Sarah from Illinois, won $5,000. Young consumers love this kind of co-creating using crowdsourcing because it creates a two-way conversation with a brand. Companies love it because it’s a pretty cheap way to validate new ideas and to get buy-in from consumers before new products hit the shelves.
Sunday, June 6, 2010
Parents: It's a Whole New Playground
MediaPosts' Engage: Gen-Y
Kristine Shine Friday, May 28, 2010
Recent statistics show that Gen Y has already given birth to more than 13 million babies. With the generation being nearly 80 million strong, they will produce more children than baby boomers. What does this mean for marketers? Strap yourself in for a few decades of a wild ride! This generation is big and spans many years. It is also unruly, fickle, elusive and smart.
Gen Y women are re-casting the mold for what "mom" looks like. They don't sit in one place for long and don't define themselves by their "mommyhood." They are confident, know nothing but multi-tasking and believe their balance is found within their personal interests and global responsibility -- more than just work and family, as previous generations may have.
So, who are these millennial moms and how do marketers reach them?
It's important to understand that just because they have had children doesn't mean they have changed their outlook, activities, or personal beliefs -- they have just added "baby" to the mix. Being a parent is only one part of who they are and it co-exists with everything else they embody. There is less separation between "mommy time," "work time" and "me time," but rather a more infused state where all of their passions and interests come together.
Because multi-tasking is fully ingrained in this generation, moms' online time toggles between updating their Facebook pages, building their personal blogs and following, jumping in and out of multiple conversations within various communities, all while celebrity-watching and seeking out the latest fashion and beauty trends.
Consequently, don't limit your advertising to traditional parenting magazines and mommy sites. Yes, moms will pop into parenting sites to chat with friends about specific child-related topics but this is not where they are spending the bulk of their time nor is parenting their primary interest online. Research shows that moms' fourth task online behind email, banking and search is shopping.
This is a group that cares about how they look, the fashions they are wearing and the image they project. Some brands understand this and have already evolved their product and messaging appropriately. The Detroit automotive industry, for instance, has come out of the economic downturn, replacing the caravan with the crossover. Sleek designs coupled with safety, is what makes vehicles such as the Ford Edge or the GMC Acadia attractive to this new generation of parents.
Lastly, let's not forget -- daddies matter, too. With nearly 20% of fathers serving as the primary caregiver, it's not just about moms. This generation has a deep respect for each other and parenting carries equal responsibility. Moms are still the influencers but they are not the sole decision makers.
Brands need to think about a family approach to their messaging, not just mom-targeted communications. This doesn't mean stroller ads should appear on ESPN, but thoughtful family- oriented creative on your female-targeted sites will resonate much better than addressing moms only.
Gen Y moms are well-rounded women. Think about their various passion points and bring that into the discussions. We all know this generation likes to be communicated with, not to, so make sure the dialogue you are creating involves more than just "kiddie talk." They will have more interest in your brand and be more apt to stick around for conversations if you can connect with them personally and understand the many dynamics that make up their lives.
Kristine Shine Friday, May 28, 2010
Recent statistics show that Gen Y has already given birth to more than 13 million babies. With the generation being nearly 80 million strong, they will produce more children than baby boomers. What does this mean for marketers? Strap yourself in for a few decades of a wild ride! This generation is big and spans many years. It is also unruly, fickle, elusive and smart.
Gen Y women are re-casting the mold for what "mom" looks like. They don't sit in one place for long and don't define themselves by their "mommyhood." They are confident, know nothing but multi-tasking and believe their balance is found within their personal interests and global responsibility -- more than just work and family, as previous generations may have.
So, who are these millennial moms and how do marketers reach them?
It's important to understand that just because they have had children doesn't mean they have changed their outlook, activities, or personal beliefs -- they have just added "baby" to the mix. Being a parent is only one part of who they are and it co-exists with everything else they embody. There is less separation between "mommy time," "work time" and "me time," but rather a more infused state where all of their passions and interests come together.
Because multi-tasking is fully ingrained in this generation, moms' online time toggles between updating their Facebook pages, building their personal blogs and following, jumping in and out of multiple conversations within various communities, all while celebrity-watching and seeking out the latest fashion and beauty trends.
Consequently, don't limit your advertising to traditional parenting magazines and mommy sites. Yes, moms will pop into parenting sites to chat with friends about specific child-related topics but this is not where they are spending the bulk of their time nor is parenting their primary interest online. Research shows that moms' fourth task online behind email, banking and search is shopping.
This is a group that cares about how they look, the fashions they are wearing and the image they project. Some brands understand this and have already evolved their product and messaging appropriately. The Detroit automotive industry, for instance, has come out of the economic downturn, replacing the caravan with the crossover. Sleek designs coupled with safety, is what makes vehicles such as the Ford Edge or the GMC Acadia attractive to this new generation of parents.
Lastly, let's not forget -- daddies matter, too. With nearly 20% of fathers serving as the primary caregiver, it's not just about moms. This generation has a deep respect for each other and parenting carries equal responsibility. Moms are still the influencers but they are not the sole decision makers.
Brands need to think about a family approach to their messaging, not just mom-targeted communications. This doesn't mean stroller ads should appear on ESPN, but thoughtful family- oriented creative on your female-targeted sites will resonate much better than addressing moms only.
Gen Y moms are well-rounded women. Think about their various passion points and bring that into the discussions. We all know this generation likes to be communicated with, not to, so make sure the dialogue you are creating involves more than just "kiddie talk." They will have more interest in your brand and be more apt to stick around for conversations if you can connect with them personally and understand the many dynamics that make up their lives.
Friday, June 4, 2010
5 Business Fundamentals I Learned the Hard Way
by Tim Berry on June 3, 2010
in Business Management, Business Mistakes, Reflections
Two days ago I had the pleasure of being interviewed by John Caddell, founder of the Mistake Bank, for a podcast focusing on mistakes. That made me think about some of the things I learned that came from the business mistakes I’ve made. This is over the more than 27 years since I was last an employee, and 22 years of running my (well, our) own business. And despite a fancy business degree.
1. Your employees can’t also be your friends.
Most business owners want to treat employees like friends. We hire people we think we like, we work with them, we share values, so it’s only natural. But I’ve found, I’m afraid, that it doesn’t work.
Sometimes friends become employees, and sometimes former employees become friends, but don’t kid yourself. People you pay aren’t really friends. And business requires management, which means goals and tracking and accountability and feedback, which, ultimately, means you aren’t equal. You can’t be both equal and effective.
As a test, ask yourself: when those people you thought were friends leave the company, are they still friends?
This was really hard on me because I brought my anti-establishment quasi-hippie former ’60s persona with me into my business. I’m not naturally comfortable with hierarchy. But in a real business, it has to be there. I learned this the hard way.
2. Profits aren’t cash.
Profits are just an accounting concept. You get them by adding up the sales you make over a specified time and subtracting the costs and expenses. But having the sale doesn’t mean you have the money; and the cost associated with that sale might be something you paid months earlier. And furthermore, the money you spend to repay debt or buy assets is completely ignored by profits.
So it’s not hard to go broke while still being profitable. I learned that in business school first but then had to relearn it 15 years later when my company suddenly doubled sales and profits, but it nearly killed us. We were selling through channels, so money from sales came five months later, but we were building inventory and spending on marketing months in advance. So we were spending in October for sales made the following March that generated deposits into the bank in the next July. We nearly went under during our first big growth spurt. So I learned about cash flow the hard way.
3. Good liars are rare but dangerous.
Most liars are obvious and easy to spot, but last week I was chatting with an investor whose firm got into trouble for not catching a problem before they invested. He felt bad. It looked like their “due diligence” process failed. But he said:
“If you think about it, we rarely run across a person who can look you straight in the eye and lie through their teeth without showing it. We’re not equipped for that. When people answer straight direct questions with straight direct lies, they can get away with it.”
That made me think. Lots of people tell lies at odd moments, make excuses, try to squeeze out of things; but with normal people, that kind of behavior trips them up on a regular basis. But the power of the person who lies very well is something else altogether. That’s another one I learned the hard way.
4. You have to live with mistakes.
If you can’t stand mistakes, don’t make them, and don’t tolerate them, then you’re not cut out to have your own business. You are going to make mistakes, you can count on it. You have to be quick and flexible about recognizing mistakes, acknowledging them, and taking whatever steps need to follow them.
In Robert Sutton’s 12 Things Good Bosses Believe, posted last Friday at the Harvard Business Review, he says:
One of the best tests of my leadership — and my organization — is “what happens after people make a mistake?”
I agree. I had to learn that the hard way.
5. You can’t do everything, so at least try do the right things.
I call it displacement: everything you do rules out something else that you can’t do. Every entrepreneur wants to build every possible product to please every possible customer. I do an you do too. But we don’t realize, or at least I certainly didn’t for a long time, that trying to do everything doesn’t work. You end up not doing the really important things as well as you should, getting things only half done.
You try to focus. Take a step back out of the chaos, clear your head, and revisit priorities. What really matters? No matter what brilliant ideas you may or may not call your strategy, your real strategy is how you spend your time and your money. I learned that the hard way.
in Business Management, Business Mistakes, Reflections
Two days ago I had the pleasure of being interviewed by John Caddell, founder of the Mistake Bank, for a podcast focusing on mistakes. That made me think about some of the things I learned that came from the business mistakes I’ve made. This is over the more than 27 years since I was last an employee, and 22 years of running my (well, our) own business. And despite a fancy business degree.
1. Your employees can’t also be your friends.
Most business owners want to treat employees like friends. We hire people we think we like, we work with them, we share values, so it’s only natural. But I’ve found, I’m afraid, that it doesn’t work.
Sometimes friends become employees, and sometimes former employees become friends, but don’t kid yourself. People you pay aren’t really friends. And business requires management, which means goals and tracking and accountability and feedback, which, ultimately, means you aren’t equal. You can’t be both equal and effective.
As a test, ask yourself: when those people you thought were friends leave the company, are they still friends?
This was really hard on me because I brought my anti-establishment quasi-hippie former ’60s persona with me into my business. I’m not naturally comfortable with hierarchy. But in a real business, it has to be there. I learned this the hard way.
2. Profits aren’t cash.
Profits are just an accounting concept. You get them by adding up the sales you make over a specified time and subtracting the costs and expenses. But having the sale doesn’t mean you have the money; and the cost associated with that sale might be something you paid months earlier. And furthermore, the money you spend to repay debt or buy assets is completely ignored by profits.
So it’s not hard to go broke while still being profitable. I learned that in business school first but then had to relearn it 15 years later when my company suddenly doubled sales and profits, but it nearly killed us. We were selling through channels, so money from sales came five months later, but we were building inventory and spending on marketing months in advance. So we were spending in October for sales made the following March that generated deposits into the bank in the next July. We nearly went under during our first big growth spurt. So I learned about cash flow the hard way.
3. Good liars are rare but dangerous.
Most liars are obvious and easy to spot, but last week I was chatting with an investor whose firm got into trouble for not catching a problem before they invested. He felt bad. It looked like their “due diligence” process failed. But he said:
“If you think about it, we rarely run across a person who can look you straight in the eye and lie through their teeth without showing it. We’re not equipped for that. When people answer straight direct questions with straight direct lies, they can get away with it.”
That made me think. Lots of people tell lies at odd moments, make excuses, try to squeeze out of things; but with normal people, that kind of behavior trips them up on a regular basis. But the power of the person who lies very well is something else altogether. That’s another one I learned the hard way.
4. You have to live with mistakes.
If you can’t stand mistakes, don’t make them, and don’t tolerate them, then you’re not cut out to have your own business. You are going to make mistakes, you can count on it. You have to be quick and flexible about recognizing mistakes, acknowledging them, and taking whatever steps need to follow them.
In Robert Sutton’s 12 Things Good Bosses Believe, posted last Friday at the Harvard Business Review, he says:
One of the best tests of my leadership — and my organization — is “what happens after people make a mistake?”
I agree. I had to learn that the hard way.
5. You can’t do everything, so at least try do the right things.
I call it displacement: everything you do rules out something else that you can’t do. Every entrepreneur wants to build every possible product to please every possible customer. I do an you do too. But we don’t realize, or at least I certainly didn’t for a long time, that trying to do everything doesn’t work. You end up not doing the really important things as well as you should, getting things only half done.
You try to focus. Take a step back out of the chaos, clear your head, and revisit priorities. What really matters? No matter what brilliant ideas you may or may not call your strategy, your real strategy is how you spend your time and your money. I learned that the hard way.
Wednesday, June 2, 2010
Entrepreneurs: The Elevator Pitch Is Dead
While there has been much said about shortening the "pitch" to a new business client as they are beseiged with a deluge of media reptiles on a daily basis, I have found a contrast to that idea from a essay regarding hooking a venture capitalist to lend seed money for a new enterprise which negates the so-called "elevator pitch." Dr. Philip Jay
Jun. 1, 2010, 9:28 AM
Business Insider War Room
by Mark Peter Davis, who is a New York City VC and member of the DFJ Gotham Ventures team
When I first started attending panels and VC events, there was a lot of hype around the concept of an ”elevator pitch”. An elevator pitch is an overview of a new business idea that an entrepreneur can explain to an investor in the length of a chance elevator ride shared by the two parties. In approximately one minute, the entrepreneur needs to bait and hook a VC so that he can reel the investor in later.
At business plan competitions and pitch events, “pitch coaches” spent hours with entrepreneurs sharing with them the secrets of the arcane art of the elevator pitch. And once their disciples were fully indoctrinated, the newbies would get to show off their elevator pitching skills. Most entrepreneurs are trained to pack as much information as possible into that minute, driving most pitches to sound like they were being delivered by the spokesman for MicroMachines.
While there are always cases where stories hyped by the media and entrepreneur folklore do come to life (I suppose entrepreneurs do occasionally share elevators with VCs), this generally isn’t how business gets done. While entrepreneurs can meet investors at networking events, at pitch events and, yes, in elevators, they don’t need to feel that they have to corner the investor and deliver a canned 1-minute light-speed monologue about their business before the investor can get away.
More commonly, when an investor meets and entrepreneur, the former wants to know what the latter is working on and will typically ask. Investors by nature are seeking great entrepreneurs and are therefore likely to be interested in hearing the pitch if they think they are speaking to a credible person. Because the investor is interested in hearing a little bit about the business if it matches their interests (sector and otherwise), entrepreneurs will typically get to describe their business through the course of a regular conversation, not a monologue. You don’t have to trap them and you don’t have to rush.
When asked what they’re working on, good entrepreneurs provide a plain English overview of the company (and sometimes describe the pain point when it’s not obvious). That explanation can come in as little as one sentence. "We’re helping people do X by offering a service that does Y". Typically, if an investor doesn’t get it from your description, they’ll ask some clarifying questions. And, if they’re interested in learning more about key elements of the opportunity (market, competition, etc.) an investor will ask.
In some cases, investors will ask the entrepreneur to send along an executive summary after just hearing the overview of the service or after a few questions. The executive summary is the document that should fill in the rest of the blanks about the business – this document should cover all of the other elements that are often packed into an elevator pitch.
In other situations, the investor will determine that the opportunity isn’t a fit for them and not ask for any more information. That’s an okay outcome for entrepreneurs to – they don’t have to waste time with an investor that isn’t going to get interested.
While I do think you should be able to speak succinctly and intelligently about your business, I don’t think you need to have a canned elevator pitch on hand. Ultimately, I contend that elevator pitches are relevant for pitch events and not much else.
Jun. 1, 2010, 9:28 AM
Business Insider War Room
by Mark Peter Davis, who is a New York City VC and member of the DFJ Gotham Ventures team
When I first started attending panels and VC events, there was a lot of hype around the concept of an ”elevator pitch”. An elevator pitch is an overview of a new business idea that an entrepreneur can explain to an investor in the length of a chance elevator ride shared by the two parties. In approximately one minute, the entrepreneur needs to bait and hook a VC so that he can reel the investor in later.
At business plan competitions and pitch events, “pitch coaches” spent hours with entrepreneurs sharing with them the secrets of the arcane art of the elevator pitch. And once their disciples were fully indoctrinated, the newbies would get to show off their elevator pitching skills. Most entrepreneurs are trained to pack as much information as possible into that minute, driving most pitches to sound like they were being delivered by the spokesman for MicroMachines.
While there are always cases where stories hyped by the media and entrepreneur folklore do come to life (I suppose entrepreneurs do occasionally share elevators with VCs), this generally isn’t how business gets done. While entrepreneurs can meet investors at networking events, at pitch events and, yes, in elevators, they don’t need to feel that they have to corner the investor and deliver a canned 1-minute light-speed monologue about their business before the investor can get away.
More commonly, when an investor meets and entrepreneur, the former wants to know what the latter is working on and will typically ask. Investors by nature are seeking great entrepreneurs and are therefore likely to be interested in hearing the pitch if they think they are speaking to a credible person. Because the investor is interested in hearing a little bit about the business if it matches their interests (sector and otherwise), entrepreneurs will typically get to describe their business through the course of a regular conversation, not a monologue. You don’t have to trap them and you don’t have to rush.
When asked what they’re working on, good entrepreneurs provide a plain English overview of the company (and sometimes describe the pain point when it’s not obvious). That explanation can come in as little as one sentence. "We’re helping people do X by offering a service that does Y". Typically, if an investor doesn’t get it from your description, they’ll ask some clarifying questions. And, if they’re interested in learning more about key elements of the opportunity (market, competition, etc.) an investor will ask.
In some cases, investors will ask the entrepreneur to send along an executive summary after just hearing the overview of the service or after a few questions. The executive summary is the document that should fill in the rest of the blanks about the business – this document should cover all of the other elements that are often packed into an elevator pitch.
In other situations, the investor will determine that the opportunity isn’t a fit for them and not ask for any more information. That’s an okay outcome for entrepreneurs to – they don’t have to waste time with an investor that isn’t going to get interested.
While I do think you should be able to speak succinctly and intelligently about your business, I don’t think you need to have a canned elevator pitch on hand. Ultimately, I contend that elevator pitches are relevant for pitch events and not much else.
Upfront TV Ad Market Moving Fast, Fox Sells Out A Big Chunk
OK....it seems there is a good indication that ad $$ are moving up and media sales teams should no longer be too prone to client cutbacks. It's time to push ahead as the future of 2010 looks brighter. Dr. Philip Jay
by Wayne Friedman MediaDailyNews Wednesday, June 2, 2010
The TV upfront advertising market is moving fast and furious, with Fox -- the leading broadcast network -- nearly completing a big chunk of its upfront negotiations, according to a number of executives, well ahead of other networks.
One media agency executive believes Fox grabbed 8% to 9% cost per thousand (CPM) price increases, which would put Fox well over a $30 average CPM for the price for advertisers to buy key 18-49 viewers on the network. Fox executives didn't comment.
Last week, big media agency Zenith Media was rumored to have registered upfront budgets with most of the networks, much to the chagrin of competing media agency executives, who claimed the move might force the market to move too quickly. Zenith executives would not comment about any upfront activity.
As in years past, movies and automotive media budgets were the first to move the market. Movie studios can stir the market in grabbing high premiums for key must-have inventory, especially on Fox, which has many young-skewing shows that studios seek.
ABC, CBS and NBC are well behind Fox in doing upfront deals, according to media buyers.
"Fox is the industry leader; they wanted to go out first," says one veteran media agency executive. In regard to the other networks, "I'm sure they'll want even bigger increases -- around 12%."
CBS executives have publicly said they expect to ink upfront deals at double-digit percentage price increases. Media executives expect networks to aim for that range to make up for other lost ground -- including audience erosion at around 5%, as well as price declines of a year ago at around 2% to 7%.
This is setting out to be one of the quickest upfronts in recent memory. Last year, most of the market moved in late July. Executives expect much of their upfront business to be completed by the end of the week.
Estimates are that this year's upfront market is expected to rise 20% in revenues over year-ago levels to around $8 billion for prime-time broadcast network programming; as well as a 15% hike for all cable networks' programming, getting to around $7.5 billion.
by Wayne Friedman MediaDailyNews Wednesday, June 2, 2010
The TV upfront advertising market is moving fast and furious, with Fox -- the leading broadcast network -- nearly completing a big chunk of its upfront negotiations, according to a number of executives, well ahead of other networks.
One media agency executive believes Fox grabbed 8% to 9% cost per thousand (CPM) price increases, which would put Fox well over a $30 average CPM for the price for advertisers to buy key 18-49 viewers on the network. Fox executives didn't comment.
Last week, big media agency Zenith Media was rumored to have registered upfront budgets with most of the networks, much to the chagrin of competing media agency executives, who claimed the move might force the market to move too quickly. Zenith executives would not comment about any upfront activity.
As in years past, movies and automotive media budgets were the first to move the market. Movie studios can stir the market in grabbing high premiums for key must-have inventory, especially on Fox, which has many young-skewing shows that studios seek.
ABC, CBS and NBC are well behind Fox in doing upfront deals, according to media buyers.
"Fox is the industry leader; they wanted to go out first," says one veteran media agency executive. In regard to the other networks, "I'm sure they'll want even bigger increases -- around 12%."
CBS executives have publicly said they expect to ink upfront deals at double-digit percentage price increases. Media executives expect networks to aim for that range to make up for other lost ground -- including audience erosion at around 5%, as well as price declines of a year ago at around 2% to 7%.
This is setting out to be one of the quickest upfronts in recent memory. Last year, most of the market moved in late July. Executives expect much of their upfront business to be completed by the end of the week.
Estimates are that this year's upfront market is expected to rise 20% in revenues over year-ago levels to around $8 billion for prime-time broadcast network programming; as well as a 15% hike for all cable networks' programming, getting to around $7.5 billion.
What's in Store for Retailers in the Second Half of 2010
Paul Leinwand, a consultant at Booz & Co. The Economist June 2010
As they decide how to stock their shelves later this year, America’s shopkeepers are debating whether the recent rise in consumer spending will last.
THE mood of executives at retail firms normally moves in lockstep with that of their customers. But in America the news on May 25th that consumer confidence had reached its highest level in two years left them oddly subdued. Consumer spending per person, which fell for two years in a row for the first time since the Depression last year and the year before, has been rising again in recent months. But as retail executives place orders for the crucial end-of-year rush, they are anxiously debating how strong and lasting the consumer’s revival will be.
In the first quarter both fancier retailers such as Gap, Macy’s and Saks and workaday ones like Target, Wal-Mart and Home Depot all announced improved results. The rebound has been strongest in luxury stores: same-store sales at Neiman Marcus, for example, were 11% higher this April than last. But there was also reason for cheer at Home Depot, which relies on humbler consumers and the still-low housing market: revenues were up by 4.3% on the first quarter of 2009. Sales of home-improvement gear such as paint and gardening tools were especially strong.
Although profits were up at Wal-Mart, sales at its American stores fell by 1.4% compared with a year earlier. “More than ever, our customers are living pay cheque to pay cheque,” says Tom Schoewe, its chief financial officer. “I’m worried,” admits the boss of another large retail chain, privately. “Things seem a little rougher now than in the first quarter.” The effect of the government stimulus is running out and consumers’ finances remain stretched, he confides. The International Council of Shopping Centres, a trade group, recently trimmed its sales projections for May.
Everyone agrees that American consumers are more cheerful than they were last year. A new survey by Deloitte, a consultancy, found that nearly two-thirds of them say their financial situation is as good as or better than it was a year ago, and that accordingly they plan to spend the same as last year or more. “Retailers should be encouraged by consumers’ tone as they plan for the critical fall and winter selling seasons,” says Stacy Janiak, who heads Deloitte’s retail practice in America.
Yet the recent improvement is from a very low base, especially at the grandest stores. Neiman Marcus’s strong April marked a rebound from a 22.5% decline in the year to April 2009; the 3.2% increase in revenues reported by Saks in the first quarter followed a 32% decline in the same period a year earlier, points out Steven Dennis, an analyst at Gerson Lehrman, a research firm.
The typical customer “still has a lot of fear in her heart, and she is still being very cautious,” says Michael Silverstein, a consultant and co-author of “Women Want More”, which argues that women control the lion’s share of household spending. “She had over-consumed before the recession. At the bottom of the recession, she had nothing unworn, nothing new. This spring, she looked at her closet, her kitchen, said, ‘Goddamit, I still have a job’, and decided to loosen the purse strings.”
This might explain the recent sharp increase in spending on lingerie, dresses, coats and even the higher sales at Home Depot, given that women, Mr Silverstein argues with dogged consistency, tend to initiate redecorating sprees. Loosening the purse strings did not mean abandoning the frugality that was the clearest consumer trend during the recession. “She still bought everything on sale,” says Mr Silverstein. Moreover, the volatile economy is clearly taking its toll; falls in the stockmarket are quickly showing up in lower sales. In short, says Mr Silverstein, “It is going to be a stressful summer for the consumer. She will be moody.”
“The assumption that when the recession was over consumers would return to where they were has already been disproved,” says Paul Leinwand, a consultant at Booz & Company. Retailers are investing heavily to track consumers’ behaviour in an attempt to work out what they might want to buy and how much they are willing to pay.
In general, retailers have learned to focus far more on lowering prices, and in particular to stock a larger proportion of products at the low end of the price range. Saks has been especially astute at this, not least by increasing significantly the share of goods on its shelves that carry its own label. This has been a trend across the retail industry in the past two years, and no one expects it to be reversed now that consumer sentiment is starting to improve. On the contrary, the proportion of private-label sales may well continue to rise to levels long seen in Europe.
Nor does anyone expect any reversal of another trend: consumers have been buying through a growing number of channels, from department stores to discount warehouses to the internet, often going online first to hunt for the best prices. All of the leading retailers have tried to spruce up their online act during the downturn, but few have done as well as start-ups such as Gilt Groupe, which uses social networking to carry out discounted sales of designer-label clothes and homeware, and luxury holidays.
Retailers have also tried to shorten the ordering cycle, so that manufacturers end up carrying more of the risk of managing stock. Many are trying to replace the standard four annual “seasonal” orders with as many as 16 orders a year, says Mr Leinwand. Five years ago only Zara, a Spanish clothes retailer, followed such a strategy, but firms such as J.C. Penney, Saks and Macy’s have since adopted it too.
In some respects, it was easier for retailers to plan during the recession, provided they had accepted the gruesome reality, since plunging sales were all but assured. Now, there is great uncertainty about what consumers will do. If the recent uptick in sales proves short-lived, retailers who extrapolate from the latest numbers will spend a miserable holiday season trying to offload unwanted stock at crippling discounts. Conversely, excessive pessimism could lead to empty shelves, disappointed customers and red faces in the executive suite. “I am trying to create the flexibility in our supply chain to deal with both these scenarios,” says the worried boss of the large retail chain. He, unlike the typical consumer, is finding little comfort in retail therapy.
As they decide how to stock their shelves later this year, America’s shopkeepers are debating whether the recent rise in consumer spending will last.
THE mood of executives at retail firms normally moves in lockstep with that of their customers. But in America the news on May 25th that consumer confidence had reached its highest level in two years left them oddly subdued. Consumer spending per person, which fell for two years in a row for the first time since the Depression last year and the year before, has been rising again in recent months. But as retail executives place orders for the crucial end-of-year rush, they are anxiously debating how strong and lasting the consumer’s revival will be.
In the first quarter both fancier retailers such as Gap, Macy’s and Saks and workaday ones like Target, Wal-Mart and Home Depot all announced improved results. The rebound has been strongest in luxury stores: same-store sales at Neiman Marcus, for example, were 11% higher this April than last. But there was also reason for cheer at Home Depot, which relies on humbler consumers and the still-low housing market: revenues were up by 4.3% on the first quarter of 2009. Sales of home-improvement gear such as paint and gardening tools were especially strong.
Although profits were up at Wal-Mart, sales at its American stores fell by 1.4% compared with a year earlier. “More than ever, our customers are living pay cheque to pay cheque,” says Tom Schoewe, its chief financial officer. “I’m worried,” admits the boss of another large retail chain, privately. “Things seem a little rougher now than in the first quarter.” The effect of the government stimulus is running out and consumers’ finances remain stretched, he confides. The International Council of Shopping Centres, a trade group, recently trimmed its sales projections for May.
Everyone agrees that American consumers are more cheerful than they were last year. A new survey by Deloitte, a consultancy, found that nearly two-thirds of them say their financial situation is as good as or better than it was a year ago, and that accordingly they plan to spend the same as last year or more. “Retailers should be encouraged by consumers’ tone as they plan for the critical fall and winter selling seasons,” says Stacy Janiak, who heads Deloitte’s retail practice in America.
Yet the recent improvement is from a very low base, especially at the grandest stores. Neiman Marcus’s strong April marked a rebound from a 22.5% decline in the year to April 2009; the 3.2% increase in revenues reported by Saks in the first quarter followed a 32% decline in the same period a year earlier, points out Steven Dennis, an analyst at Gerson Lehrman, a research firm.
The typical customer “still has a lot of fear in her heart, and she is still being very cautious,” says Michael Silverstein, a consultant and co-author of “Women Want More”, which argues that women control the lion’s share of household spending. “She had over-consumed before the recession. At the bottom of the recession, she had nothing unworn, nothing new. This spring, she looked at her closet, her kitchen, said, ‘Goddamit, I still have a job’, and decided to loosen the purse strings.”
This might explain the recent sharp increase in spending on lingerie, dresses, coats and even the higher sales at Home Depot, given that women, Mr Silverstein argues with dogged consistency, tend to initiate redecorating sprees. Loosening the purse strings did not mean abandoning the frugality that was the clearest consumer trend during the recession. “She still bought everything on sale,” says Mr Silverstein. Moreover, the volatile economy is clearly taking its toll; falls in the stockmarket are quickly showing up in lower sales. In short, says Mr Silverstein, “It is going to be a stressful summer for the consumer. She will be moody.”
“The assumption that when the recession was over consumers would return to where they were has already been disproved,” says Paul Leinwand, a consultant at Booz & Company. Retailers are investing heavily to track consumers’ behaviour in an attempt to work out what they might want to buy and how much they are willing to pay.
In general, retailers have learned to focus far more on lowering prices, and in particular to stock a larger proportion of products at the low end of the price range. Saks has been especially astute at this, not least by increasing significantly the share of goods on its shelves that carry its own label. This has been a trend across the retail industry in the past two years, and no one expects it to be reversed now that consumer sentiment is starting to improve. On the contrary, the proportion of private-label sales may well continue to rise to levels long seen in Europe.
Nor does anyone expect any reversal of another trend: consumers have been buying through a growing number of channels, from department stores to discount warehouses to the internet, often going online first to hunt for the best prices. All of the leading retailers have tried to spruce up their online act during the downturn, but few have done as well as start-ups such as Gilt Groupe, which uses social networking to carry out discounted sales of designer-label clothes and homeware, and luxury holidays.
Retailers have also tried to shorten the ordering cycle, so that manufacturers end up carrying more of the risk of managing stock. Many are trying to replace the standard four annual “seasonal” orders with as many as 16 orders a year, says Mr Leinwand. Five years ago only Zara, a Spanish clothes retailer, followed such a strategy, but firms such as J.C. Penney, Saks and Macy’s have since adopted it too.
In some respects, it was easier for retailers to plan during the recession, provided they had accepted the gruesome reality, since plunging sales were all but assured. Now, there is great uncertainty about what consumers will do. If the recent uptick in sales proves short-lived, retailers who extrapolate from the latest numbers will spend a miserable holiday season trying to offload unwanted stock at crippling discounts. Conversely, excessive pessimism could lead to empty shelves, disappointed customers and red faces in the executive suite. “I am trying to create the flexibility in our supply chain to deal with both these scenarios,” says the worried boss of the large retail chain. He, unlike the typical consumer, is finding little comfort in retail therapy.
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