Banter Without Borders

Driving Success in 2010: 3 Simple Rules of the Road

As those of us involved in coaching and consulting global executives well know, cultures are messy. Globalization, then, is anything but a tidy affair. A look at Google, Yahoo, Kraft, and now Toyota serve as suitable, if emotionally charged examples, of what can happen when cultures, national or organizational, encounter turbulence.   

It has always been true that simply taking a business, or portion thereof, and putting a global stamp on it through “opening a subsidiary in a far-flung place and hoping brand recognition and experience…will be enough,” is not advisable, as John Gapper points out in one of his recent articles in the FT*. The many missteps and dramas which seem to occur almost nonstop these days, often of soap-opera proportion, lead us to believe that companies need to do far more to ensure their overseas success.

Following are three things to keep in mind when taking a business to the global table, which in today’s market means, according to Mr. Gapper, entering the BRICs (or, if you subscribe to the view that Russia should be out and South Africa in, the ‘BASICs’!):

1. Cheaper is better: China has Haier, India has its Nano, and even non-BRIC Japan has jeans for under $10. Western companies need to let go of their focus on high end products and start looking at the other end of the price spectrum if they hope to remain  competitive for the long term. While quality still has its place, and while certain luxury brands continue to flourish, they are facing a questionable future, as emerging markets enter the picture and aim ever higher on the (24k) value chain. Ironically, though, Toyota may now be facing the dreaded consequences brought on when quality takes a back seat to the goal of reaching a larger market segment.

2. Know that in entering any emerging market, not understanding and appreciating the local conditions intimately puts you at a great disadvantage. This includes not only perceiving the nuances of local tastes -- and how many companies have suffered by missing even the smallest beat here, as Marks and Spencer learned in India the hard way ** -- but knowing how the local distribution systems and networks operate as well. Having an excellent product at the ideal price point is all for naught if it can’t make its way past the roadblocks into the marketplace.

3. Most of all, don’t underestimate the power of your competition. The BRICs are all working at a feverish pace, and now have so many companies coming forth as serious global contenders to be reckoned with. This trend shows every indication of continuing well into the future.

Western companies certainly need to wake up and smell the (Brazilian?) coffee, before all this new competition and lack of sufficient cultural business savvy à la 2010 leaves them in the dust.                                         

* http://www.ft.com/cms/s/0/b4bdfc22-062d-11df-8c97-00144feabdc0.html

**http://www.ft.com/cms/s/0/9d2bd1fe-05e9-11df-8c97-00144feabdc0.html

 

Technology, Globalization and China: Too Much, Too Soon?

There is no denying it: technology has made globalization possible. It has, in large measure, flattened the world and leveled the playing field, bringing cultures and countries together in ways we wouldn’t have thought possible, even twenty years ago. For tech geeks new and seasoned, this has been a blessing and a joy, with each new development bringing welcome challenges and opportunities. But, alas, new technological advances have always had their downsides as well, affecting not only basic skills and strengths but cultural constructs such as family structure and the social fabric as well. Way back in the 20th century, the invention of the TV caused worries about the loss of imagination and creativity, as people would, going forward, be fed visual images. The advent of the electronic calculator similarly caused concern that mathematical prowess would suffer, as simple operations would no longer need to be done in one’s head. More recently, as computers burst on the scene, and the rate of technological progress suddenly seemed to take off at unprecedented speed, the price has been paid, many would argue, in the communication sphere, as huge swaths of etiquette and social decency seem to have fallen by the wayside with each new upgrade, particularly where social media is concerned (And talk about infectious – even the players at Copenhagen have been dubbed “Facebook Bureaucrats”*).

What happens, though, when after years of government imposed deprivation, a country, never mind one of the world’s fastest growing superpowers, suddenly leapfrogs over the computer age’s early by-products  -- “instant messaging, video streaming, online gaming and interactive media,” to name a few -- and drops full throttle into the present, missing the decade where such developments transitioned naturally? According to a recent article in the Financial Times**, the consequences for China’s youth are dire for many, as internet addiction has recently surfaced as a serious social problem there (and in China, eroding values are already posing a cultural challenge to the centuries' old nation steeped in tradition). The notion of Chinese teenagers addicted to their computers isn’t exactly shocking, especially given the aura of forbidden territory resulting from so much policing of internet activity. Besides, as it’s the rare individual anywhere these days who is not helplessly hooked on one tech device or another, it’s a refrain we’re certainly used to hearing. In China’s case, though, it’s the degree and seriousness of this addiction which is troubling. The FT article cites a recent film which chronicles dozens of sobering cases of China’s wayward youth involving even murder, and “pinpoints the internet as the scourge leading kids astray and tearing families apart.”

In response, many of these teenagers are now being sent by their parents to bootcamps throughout China, of which there are currently over 300***; and with the country’s dubious track record where human rights are concerned, it is all the more worrisome to hear of the questionable conditions and “inhumane methods” under which these youth are weaned of their internet addictions. Since we’re dealing here with the future workforce of a country which perhaps holds more promise and potential than any other nation at the moment, this is not something to be taken lightly.  With China facing so many unique challenges as it moves up the global success ladder, and with technology sure to keep racing ahead, let’s hope that its youth’s internet addiction crisis recedes before too long. 

                                            
      

   *http://www.ft.com/cms/s/0/a9772ae6-e8d7-11de-a756-00144feab49a.html           

 **http://www.ft.com/cms/s/0/b0948580-e463-11de-a0ea-00144feab49a.html

***http://www.latimes.com/news/nationworld/nation/la-fg-china-beatings22-2009aug22,0,231246.story 

 

Sometimes Leadership is imposed

Sports figures are often forced into a leadership role they do not want, nor can fulfill.  I have heard some basketball players even make the statement, "I am not a role model.  People shouldn't follow me."  I can't remember who exactly made that statement, but I often think of business leaders, managers and current golfers who neither fit the role nor know how to maintain their leadership. 

Recently, Bob Moffat, a former executive in IBM was arrested for insider trading and, having personally met him, I found him to be approachable, to have seemingly high values and to be driven.  I guess the real question is, what does someone with high values look like?  Is it a visual?  Not hardly.  Maybe that's it, he was so driven there was a fear of falling short of expectations.  Maybe with the pressures of success, or the pressures of not failing were too much.  Maybe it was simply greed and ego.  Ego, its a funny dynamic which enters into everyone's life from time to time. 

Once you start comparing yourself to others, you are either behind or ahead.  I'm not sure at what time or age you reach a point where you are happy with you.  I am sure Maslow identified it as self-actualization.  However, it seems that today's mediocre leaders find excuses to blame everyone but themselves.  Its always been somebody in their lives who caused them to do whatever it was.  I remember a series on TV where "the devil made me do it."  Guess what, its no excuse. 

There is no excuse for harming others.  There is no excuse for poor leadership.  There is no excuse for not taking responsibility and not motivating others to excel.  There is no excuse for letting people go because you could not identify the unique skills they had and capitalizing on that strength. 

Leaders need to be able to synthesize the differences, turn it into an innovative driving force and then getting out of the way enabling those who are empowered to excel. 

True global leadership is unique because it recognizes even some of the deep seated cultural differences which have existed and then turns it into a knowledge base driving excellence.  Leadership is not easy.  Nobody said it would be. 

Are marketers giving up their leadership role?

 

In the November 30, 2009 edition of Advertising Age, two articles appeared: "From CVS to Costco, retailers put the screws to brands," and "Walmart ups the ante with brand co-op ads in more ways than one." The first article posits that well advertised brands are not indispensible to retailers, while the second discusses how Walmart is taking over the role of communicating the brand's equity message in 30 second television spots, paid for by the marketer of the brand.  The common thread to these articles is how retailers are dominating the marketing to consumer process, which was once the purview of marketers. How has this role reversal evolved, and how is the term marketer becoming a misnomer? Let me explain.

Traditionally the marketer and retailer roles had been clearly defined in terms of interaction with the consumer. The marketer understood the consumer in terms of their wants and needs and created products to meet those criteria. In order to build a market for those products, the marketer, through its appointed advertising agencies, created compelling messages to create awareness and purchase intent among consumers, and then executed these messages through traditional media, including broadcast and print.  Concurrently, retailers played their role as the distributer of these brands to the consumer, and used the tactics of price and promotion to draw these consumers to their store locations. Although this may be simplistic, there was a clear distinction between the keeper of the brand equity... the marketer, and the promoter of the brand... the retailer. What evolved over time, however, was the balance between what the marketer spent on their equity building efforts versus what was spent on retailer driven activity... and this balance shifted significantly in favor of the retailer. So what happens over time when marketers spend a fraction of their marketing budget on convincing your consumers of the value of their brand at a regular price, while the bulk of the marketing budget is spent with the retailer who is convincing the consumer that the brand has value only when it's discounted?  Brands become commodities.

During the 80's and 90's, my agency had the opportunity to help Procter & Gamble develop a unique approach to overcome this dilemma by developing shared equity advertising programs. The concept was to combine the equity of the brand with the equity of the retailer in a seamless fashion so as to communicate the value of the brand, and the positioning of the retailer as a preferred place to shop. No mention was made in these executions of pricing or promotion. P&G clearly received value in converting marketing funds that would normally have been spent on price promotions into equity reinforcement, while the retailer received bonus advertising support. This concept worked because P&G had the courage to implement an approach which was difficult for retailers to accept initially, but proved successful for them over time. It was then, with interest that, I read the second article in which Wal-Mart has introduced co-op ads that seamlessly integrate the brand into a 30 second television commercial, without mentioning price or promotion. And by the way, funding for these commercials come from what remains of marketers' advertising budgets.

In the article: "From CVS to Costco", the question is asked: are brands truly indispensible? Mentioned in the article is the fact that Costco has recently stripped Coca-Cola products from its shelves in a pricing dispute. The answer to the question of whether well advertised brands are indispensible to retailers may be no, unless real value can be added. I urge marketers to take the initiative of developing shared equity programs, before remaining retailers duplicate the Wal-Mart strategy.

Tips for the overextended international and domestic traveler

Globetrotters, World Travelers, Road Warriors, Jet Setters, International Business agents, we've all heard the terms and have worn the banners in today's business environment.  I am sure many of you have the additional battle scars of long nights, delayed flights, long international flights and jet lag and wall as important time away from your homes and family.  Long gone is the 8 hour business day and today's technology makes us work 24 x 7 x 365 and sometimes x 366 days a year.  Your body takes a tremendous toll and the wear and tear, often, goes unnoticed until it's too late.

So how do you stave off the accelerated aging process, the added weight gain, the shear exhaustion that wreaks havoc with your biological clock?  There are steps you can take to ensure you maintain your health and maybe, even more importantly, improve your health.  Yes, it's true; you can actually improve your health and well being with a few precautionary steps and most importantly, remain consistent once you develop this routine.

First things first, create a budget.  Create a budget?  You will need to sit down, push all your work aside and admit there is a problem.  We've been there, in the hotel room or airport lounge with a few minutes to spare and more often than not, you get that glazed look and fall into a trance listening to...nothing.  TV background noise or music fills the room which just numbs the senses.  Or, sometimes you just sit there blankly thinking, "What am I doing here?"  It's ok to feel that way.  What you discover is that this a great time to think about your health budget.  It's really fairly easy and may add years to your life, bounce to your step, and sometimes increase you overall well being.  But, the key is, you need to admit there is a problem and you want to do something about it.

            On your budget, how much time will you allocate for exercise and more importantly, what type of exercises will you do.  Here is a hint, keep it simple, but start.  Starting is always the hardest part. 

Your Routine

1. Once you roll out of bed and get a bit warmed up, do a set of sit-ups. Initially, only do one set of 10, if you can. Don't be embarrassed, no one is watching, but more importantly, you're trying. You can increase the repetitions later as you gain strength. http://www.wikihow.com/Do-Sit-Ups
2. Leg Raises: Complete one set of 10 leg raises. While you are lying on the floor from doing sit-ups, you can transition into leg raises. Remember, do them slowly, deliberately and maintain proper position. http://www.wikihow.com/Do-Leg-Lifts
3. Crunches: While still lying on the floor, complete one set of 10 torso crunches. You do this by putting your hands, laced, behind your head and then do a sit up and bring your knees up at the same time to meet your elbows. Do not pull your head up with your hands. This is a bit more difficult and will fell awkward at first, but it's a great exercise for the abs. http://exercise.about.com/cs/abs/ht/Crunch.htm
4. Let's get up off the floor and do some torso twists. Compete one set of 20 torso twists. With your arms extended slowly twist in one direction, and then twist as far as you can in the other. Do these SLOWLY and deliberately at first. You can increase speed and intensity at a later date once you gain more strength and elasticity. http://www.ehow.com/how_2283064_do-torso-twist-core-exercise.html
5. Moving to the legs, do some squats. About 10 will do for a start. If you haven't done these in a while, you may want to position yourself next to a chair to help you with your balance. Do about 10 squats. http://exercise.about.com/od/exerciseworkouts/ss/howtosquat.htm
6. Find a large book, usually a thick phone book will do and place your front part of your feet on this book and do some calf raises. What you want to do is stand straight and lower your heels to the floor. Then, slowly rise up on your toes. This extends and flexes your calves. Do about 10 reps of those. http://www.wikihow.com/Do-Calf-Raises
7. Let's move to the upper body and arms. Let's work your biceps. Do you have a briefcase or large purse? If so, use that for weight resistance and complete a set of 10 bicep curls, again maintaining the proper position and movement. http://exercise.about.com/cs/weightlifting/l/blsamplebicep.htm
8. Reverse bicep curl. Instead of your palms being in an upward facing position, do bicep curls with your palms facing down. It's feels weird at the beginning, but it works the muscle group differently and you now have pretty much hit that bicep from all directions. There are other variations, but let's keep it simple.
9. Triceps extensions. This nicely tightens up that flabby floppy muscle under your upper arm opposite the bicep. Do this one very carefully. With your weight resistance, raise the briefcase, or other item, over your head and then lower it behind your head to about neck level. Then, slowly raise it about your head and repeat for 10 times. Ouch...feel the burn. You will if you haven't done this one before. http://www.abcbodybuilding.com/standing_triceps_extensions.htm
10. Ok, return to the lying position. This is a nice one to finish with. These are simple bench presses. They are good for your chest and a bit of your shoulders as well. Grasp your briefcase/bag firmly with both hands. Hold it about your chest, lower it to your chest and press it up again. Do this in slow deliberate motions. Take your time and remember form is important.

 

This should get you started in a good routine and budgeting your time for you.  Slowly but surely you will start to see improvements.  Your stamina and energy level will increase.  Remember this is a start and you will need to increase reps, weights and duration over a period of time.  And, as always, check with your personal Physician before starting any exercise program.  

The other important thing to do is alter your diet.  Eat healthier, smaller portions.  And, you will find out that you can actually eat more often, if the foods are those which are higher fiber.  Increase fruits and vegetables.  Decrease your intake of...snacks.  What you will learn is to budget your intake of foods and you know which ones are the right ones.  We all do.  In short, follow your exercise plan, change your diet and do it logically and moderately.  If you take the time, you will find yourself rejuvenated and your family might discover a new you as well.  Remember, draw up your budget, make your plan, implement the plan and do it comfortably.  The bottom line is that you will see physical as well as mental benefits from your plan.  This doesn't make the trips any shorter, but you will find, once you return home you'll recover a bit quicker and find time and energy to do the more important personal things in your life.   

Last, but not least, check out some of the other travel sites for additional tips on security, relaxation, stress, jet lag, expenses, hotels, offers, and all the hotel and travel freebies and benefits.  http://www.roadwarriortips.com/

Marketing Me Brands versus Performance Brands

 

In the current CNBC documentary on the Coca Cola Company entitled: "Coca-Cola: The Real Story Behind the Real Thing," the focus is Coke's urgent campaign to reinvent itself after years of losing ground to arch-rival Pepsi in the race to develop new blockbuster beverages. What makes the documentary particularly compelling is Coke managements' candid admission that they had taken their eye off the ball by becoming complacent and by living on the brand's past glory. With this mea-culpa came admissions of marketing blunders, the most famous of which was the "New Coke" debacle.

The year was 1985. Coke faced an onslaught by its archrival Pepsi, which was threatening to dethrone Coke as the leading cola brand with an effective marketing campaign called "The Pepsi Challenge." The campaign, which was featured on television, showed consumers preferring Pepsi's sweeter taste in blind taste tests to Coke, even among Coke drinkers. As an aside, these blind taste tests had consumers taking only a small mouthful of both Coke and Pepsi, rather than consuming a normal 8 or 12oz serving of each. Subsequent arguments have been made that with small servings, the sweetness level is more pronounced and responded to positively, whereas in larger servings, the aftertaste becomes more important. On this basis, many researchers believe larger serving tests would have resulted in an equal preference.

Facing this onslaught, Coke, under the leadership of its then CEO Roberto Guoizueta, began testing alternate formulas that were higher in sweetness level than the original Coke formula. This produced a formula which, when tested among both Coke and Pepsi drinkers, was preferred in blind taste tests to the existing formulas of either Coke or Pepsi. In a move criticized by many as one done in a state of panic, Mr. Guoizueta announced before a New York media audience that Coke's 99-year-old formula was being replaced by a new, sweeter formula, and it would be named "New Coke." The results were immediate and devastating. Consumers were outraged, and what followed was essentially a consumer rebellion. Three months later, Roberto Guoizueta formally announced the return of the original formula, renamed "Coke Classic."

As a marketer, what are the lessons to be learned from Coke's experience? Is it to never change the "original formula" of an iconic brand? Would Tide detergent, certainly an iconic brand, still be the market leader if Procter & Gamble had not continually updated and improved upon its original formula... and aggressively marketed these improvements? Wouldn't most leading brands have languished if they had not kept constantly improving their consumer experience, and marketing these improvements? Certainly the answers in most cases would be no. One could argue that developing a formula that beats both your current formula and that of your competitor, as Coke did, is a win. Traditional marketing would encourage you to generate trial of this new formula, and watch your brand share grow. So, what makes Coke different?

Coke is a "Me" brand. So is Budweiser. So is Marlboro. These brands, and brands like them, are "Me" brands because they are part of "My" self-image and reinforce who I am, much as a designer label does. If you change these brands, then you're trying to change me ... and I may not want to change. Subsequent research by Coke revealed that they had totally underestimated the emotional bond that consumers had with their brand. They realized you needed consumer permission to make changes to their "Me" brand. 

In contrast, Tide and most other packaged goods brands are "Performance" brands. These brands don't require permission to make changes. In fact, consumer demands dictate that changes be made continually to improve performance, or they will seek out other brands that they perceive to perform better. You can establish trust and loyalty with these brands, but very seldom are there the emotional ties associated with "Me" brands. However, whether you are marketing a "Me" brand, or a "Performance" brand, you must view these brands through the eyes of the consumer. You may own the brand, but your consumers are stakeholders, and as stakeholders they have definite expectations. and as we've seen with Coke, they may even have an emotional bond with the brand. Understanding these expectations and the extent to which there is an emotional bond can give you permission to make changes, but in their absence, you run the risk of creating the next Coke debacle.

Globalization's Tribulations: Old (Cultural) Habits Die Hard

One of the consequences of the recent economic downturn is that more and more companies realize they can no longer continue to grow their businesses successfully on domestic turf alone. In writing of the Japanese pharmaceutical industry, a recent Financial Times* article states: “With diminishing prospects at home…companies have little option but to scour the globe for richer pickings.”  While I do find the notion of Japan manufacturing ‘fat-busting’ products for its rotund Western customers a bit tongue-in-(plump) cheek, it is nevertheless a compelling sign of this trend in action. Whether through shrinking populations, as in Japan’s case, or shrinking earnings figures and GDPs, companies from Bentonville to Bangalore are, more than ever, “[taking] the fight abroad.” For those of us in the global coaching and consulting industry, it signals cultural challenges and tough times ahead.

As businesses expand their operations through various means (M & A activity, joint ventures and the like), they must resist the temptation to fixate solely on the financial picture.  Although this seems obvious, the spate of recent articles on the lack of global mindset and proper attention to cultural context and human capital factors would have us believe otherwise.  In the Harvard Business Review*, Rosabeth Moss Kanter discusses successful mergers, and outlines the importance of attending to the cultural and emotional facets of a transaction in order to “create real value.” In her eyes, “a deal is never a bargain” when these all-important factors are shortchanged.

Similarly, the title of an editorial in last week’s Nikkei Weekly*, “What Good is Globalization without Global Perspectives?”, effectively describes the many frustrations of UK companies who have been operating in Japan, stymied in their attempts to reach across the cultural divide. It is a striking example of how, even when the aforementioned factors are taken into account, and even with thorough due diligence  – and who better for assiduous information gathering than the Japanese – putting globalization into practice is far easier said than done. Old cultural habits die hard.

From the unfolding Kraft and Cadbury drama, where the merging of two major US and UK business cultures is at stake, to the countless discussions as to whether the cultural differences of East and West Germany have been reconciled successfully since the fall of the Berlin Wall, signs of the difficulty in managing cultural interactions are nearly impossible to ignore. With the world’s economic future still uncertain, and companies ramping up their overseas efforts, we can at least be sure of plenty of intercultural activity on the horizon.

* http://www.ft.com/cms/s/0/72688fb8-c9ab-11de-a071-00144feabdc0.html  

* http://hbr.harvardbusiness.org/2009/10/mergers-that-stick/ar/1

* http://www.nni.nikkei.co.jp/e/cf/fr/tnw/weekly_index.cfm?Keisai_dt=20091026

Global Relocation: Executive Challenges

Contrary to Thomas Friedman's mantra of yore, the world is not flat. In fact, as the Financial Times commented in an August 28th editorial entitled “Rough and Smooth,”* “reality is more messy. Recent history is littered with tales of CEOs from one culture who, for whatever reason, have not stayed the course when put in charge of a company with deep roots in another.” Stuart Chambers aptly phrased it when he resigned as head of Nippon Glass: “I have learned I am not Japanese.”  

What executives must grasp is that the behaviors and attitudes that got them to the top in one culture would not necessarily translate when they assumed control of a company in another country. Culture does matter, and on several levels. For executives to succeed in crossing cultures, they must realize that the greatest attribute they bring to the table is not their previous successes or reputation; in fact, these can hinder their effectiveness in a new market. Their greatest strength in moving to a company in a different country is their ability to be nimble and adaptible, open to events as they unfold. As the Financial Times article concludes, “…there is no template for how to run an Asian business – or, for that matter, a British, French, or Russian one. Running any business requires political savvy and managerial flexibility, going outside one’s comfort zone simply requires a double dose. Different business cultures are there to be navigated, not flattened into mush.”

Every culture has its own set of values that govern not only management styles, but all aspects of business, from advertising & marketing to sales to R&D. And, the range of stakeholders, their attitudes and their issues may be quite different from anything the executive had previously encountered. Laws and regulations, investor relations, unions, employee behaviors, and corporate structures are seldom identical from one culture to another, and they seldom exhibit any degree of flexibility in the short term. So, it falls to the executive to be able to adapt to a very different environment if he or she hopes to achieve any degree of success in a foreign company.

Often, however, it is not the above-mentioned workplace related challenges, but the family issues that force an executive either to refuse a lucrative overseas position or to abort it. Family relocation issues can, for example, undermine the effectiveness of an executive when his loyalties and time are split between his family in one country and the company in another. The Japanese media often attacks Sir Howard Stringer for not spending enough time in Sony’s head office. Indeed, the importance of the family's success in managing the overseas move was given top billing in a recent Harvard Business Review* article on the subject. Simply put, "You can't be successful in your new role if your home life is in chaos." So obvious, yet so often overlooked.

Corporate boards of directors are surprised again and again by the failure of CEOs who have not succeeded in running a foreign corporation. The onus is on them, the board members, to be diligent in their search for the right executive, one who has not only the name recognition (the “his PR precedes him” syndrome) or the technical skills, but also an attitude of openness and flexibility, a satisfactory family situation, and a willingness to learn about new cultures. While that may seem an overwhelming task for a board, the consequences of not doing the requisite due diligence in their search can be even more daunting. However, finding the right executive for the right job with the right skills for a particular company and culture can send the company to new levels of success.

*http://www.ft.com/cms/s/0/673ce6aa-9406-11de-9c57-00144feabdc0.html

*http://hbr.harvardbusiness.org/2009/10/three-keys-to-getting-an-overseas-assignment-right/ar/1

Non-Verbal Communications Are Not Universal

Dollar Is Down, Exports Are Up: Cultural Considerations of Exporting