Second Glance

Trust Continued

2009-09-25T18:27:00.000-07:00

To give you an update, my youngest is adjusting to Kindergarten. She's learning that there are those you can trust on the playground, and those you can't. She's also learned there are those with whom trust is best bestowed (mostly teachers, but not all).

Which brings me to last week's edition of BusinessWeek (Sept. 28 issue date -- 100 Best Global Brands).

ADDED SEPT. 26. You're wondering, what does Kindergarten, playground and teacher trust have to do with Brands -- more on that in a moment.

First, kudos to Avanade parents -- Microsoft ranked #3 and Accenture #45.

You may have also seen the article titled The Great Trust Offensive. It's been a long week, and I'm sitting at Seattle Tacoma Airport waiting to board Southwest to Oakland, but let me share a few thoughts on the piece.

The first thing that caught my attention was this statement: "Trust is what drives profit margin and share price." So says Larry Light, CEO of brand consultancy Arcature, who comes from McDonald's and BBDO advertising. I couldn't agree more. But then this from the writer: Not long ago, trust and reputation were the domain of the PR department. Marketing executives, by contrast, pushed products and brands using the classic Procter & Gamble two-step: spending huge sums to maintain "share of voice" ... and it went on.

The rest of the article basically says that trust is now in the hands of marketers. Yet, when you look at many of the examples in the article, it is all classic PR: do good, get recognized for the good you do and EARN trust.

ADDED SEPT. 26. Like my Kindergartner learning to whom to bestow trust, with all due respect to my marketing colleagues, trust is still the domain of PR. But what the article does show, and I support, is that brand is a promise, and trust is built when companies deliver on that promise. Marketers aboslutely play a central role in partnership with PR in that capacity.

Take note. McDonald's collaborating with PETA to force egg suppliers to raise the living standards of hens. Highlighting the quality of ingredients to focus on food, nutrition and fitness. Ford is focusing on the quality of the cars, their independence from government handouts (stability), fuel efficiency, and then aggressively communicating those facts.

In essence, "branding" is moving from an emotional appeal (at least in some categories) to a rationale appeal. And for brands that relied heavily on "experience" -- like a Starbucks (after all, it's not rationale to pay that kind of money for a cup of coffee, though I'm guilty of doing so) -- it is harder for brands that rely heavily on "experience" or emotion to recover in this sort of economy. Why? When money is tight, people buy with their head. When money is abundant, people buy with their emotion.

What's really fascinating is the bottom line impact of this "trust" offensive approach for Ford. "Ford is now spending $1,800 less on incentives per car than it did a year ago, and consumers are forking over on average $1,300 more for Ford models ... a combination that drives a leading booster of customer trust: resale value." That's a powerful stat.

But the final quote of the article is an absolute fallacy.

"Trust-related marketing only works if there is a message that people want to believe in. You cannot spin an audience that doesn't want to be spun."
- Eric Dezenhall, crisis management consultant.

You're wrong, Mr. Dezenhall. First, you're assuming people want to be spun. They don't. Second, you can't spin trust. You earn trust. Third, it's not about messaging. It's about delivering on a promise, pure and simple.

The Cost of Trust

2009-08-29T18:51:00.000-07:00

September starts next Tuesday. The summer holiday has come and gone. Though I think I missed the holiday part. And at 106 degrees today in the East Bay, it seems as if summer is trying to leave August with quite a statement.

So much has changed in the past three months, too. My youngest turned three. Celebrated 20th wedding anniversary in Mendocino, Calif. Went to Sea World, Coronado Island and Lego Land with the Family. And school started this week, with one child starting Kindergarten and the other starting 7th grade.

My wife and I took them to school. By way of contrast, my youngest had us walk her to class, hold her hand while we walked, helped her unpack her things into her desk, took a picture with her teacher and we stayed as long as we could before we were forcibly removed from the class.

My oldest told us to drop her off at the curb.

So starts the fall semester.

My youngest was walking into whole new territory. She didn't know how things worked, how the school does things (or its culture), the rules, the school's lingo (jargon), where things are located -- like the bathrooms or the lunch room and so on. Fortunately for her, most of the other kids were new as well. But some had attended the preschool that's located on the campus, so they are one step ahead of her.

She was nervous, but she was brave. She didn't cry. She smiled as we left. But she said several times that evening that she missed mommy.

My oldest, on the other hand, had no interest in having us walk her to class and all that sort of stuff. She'd been at the school since 4th grade. Many of her same friends were there. She knew the school, the system, the people, the cultural norms and so on. "Drop me off here." And off she went.

For my youngest, there was a level of trust with the situation because mommy and daddy said it's ok. Trust in us, not necessarily her new environment.

Dov Seidman, CEO of LRN, is a former client of mine in 2003 (I think) when I was at Fleishman-Hillard. It was a short-lived relationship, as we were not successful getting him in places like BusinessWeek fast enough. But, in this week's BusinessWeek, Mr. Seidman has an opinion piece (congratulations) titled Building Trust by Trusting (subscription might be required).

In the piece, he says that to build trust, you need to extend trust. I think there's some merit to his point. I just think his illustrations don't do an effective job at making the business case with hard data.

For example, he uses a doughnut shop to point out that the owner put change out on the counter so people could make their own change. He says the owner could serve customers faster and won loyalty and left customers behind. He doesn't back the story with any specific data, so it's hard to draw any conclusions from the illustration. However, he also uses Radiohead's release of their album online and letting fans decide what to pay and generating more revenue than all its previous releases. Could that be simply the band making more money because they don't have a record label to share revenue with? Not sure. He then uses a good part of the rest of the piece to talk about LRN.

There is a cost that comes in building trust. Trust is not free, it's hard work, doesn't come fast and is easily lost. Trust is the foundation of relationships, and relationships are built over an extended period of time. Successful relationships require many things, but two very important ingredients come to mind: mutual benefit and effective communication. This is true in marriage, friendships, business/customer, doctor/patient and so on.

My oldest will continue to learn the importance of building trust, extending trust and doing so by establishing foundational relationships that are mutually beneficial where effective communications abounds.

My Kindergartner will learn that too. But for now, she's just trying to get over new school jitters. I think she'll do fine.

Forbes-IT after the Recession: Gartner Q&A

2009-06-15T21:03:00.001-07:00

I just came across this, so assuming others haven't seen it either, I thought it worth passing along from Forbes interview with Mark McDonald of Gartner.

According to McDonald, the IT model will change significantly as we exit the recession. What does that look like?

Some excerpts, but read the full Q&A.

The response we're getting back from our survey and interviews with CIOs is they've cut back on consultants, software and hardware purchases and they're renegotiating vendor contracts. They're changing the amount of money they spend outside of IT as a way of coping with this budget change.

IT demand is very strong. Companies have had to work harder than ever to make money in this environment and also to be able to drive the types of innovation that will keep customers interested in new things they're offering. But CIOs are meeting that demand with existing IT assets rather than buying new assets.
Of the CIOs we surveyed, 38% expect to see a recovery by September 2010, and another 32% expect a recovery by March of 2010. Only 24% said it would be beyond September 2010.
If the economic recovery begins at the end of this year, IT budgets will lag by one or two quarters.

What's also interesting, though, is we're starting to see IT look at cloud computing as a sourcing option. They can source with a provider or source with a cloud. Oracle, Dell, Amazon and Google now start showing up in RFPs (requests for proposals) where you would traditionally see an IBM, Tata, AMS or Accenture. They're starting to consider the cloud not as a technology but as a sourcing option. It's taking a fixed expenditure and turning it into a variable expenditure.

A love story of a father and his kids

2009-06-07T15:34:00.000-07:00

I don't normally get too personal in this blog. I've tended to keep my personal life separate from my professional life, but in this post I digress from my usual format.

Friday was Henry's birthday. He turned three. So the week before Father's Day, I thought I'd share the story of Henry. To me, it is a remarkable account of surprises on the grandest of scales.

I don't believe chance, and have no tolerance for the concept of coincidence. This is a tale that is pure and simple an act of God -- the uninsurable kind found in homeowner policies and the like.

Silicon Valley, CA -- June 12, 2006. I'm sitting in my cube at Solectron, where I was director of public relations prior to getting acquired by Flextronics. My wife calls me on my cell phone. A mild panic in her voice suggested to me I should take the call outside.

But before I go on, you need to meet Clara. And before you meet Clara you need to meet Isabella ... as all three children are inseparably linked. Not by blood. But something much deeper.

Los Angeles -- Fall 1996. I went for a routine physical exam. I was told to come back to retake a blood test. Turns out I had a blood disorder. Origins unknown. Even to this day. One possible link could be leukemia. A bone marrow tap dismissed that as the cause. My doctor chose not to put me on medication. In December 2006 we learned that Antonia was pregnant with Isabella. After Isabella was born, a new hematologist put me on a medication immediately for fear of possible consequences. This medication, had I taken it a year earlier, would have meant we would not have been able to have biological children. No Isabella.

In 2003 we decided to consider adoption to add to our family. We prayerfully determined foreign adoption was the best choice for us. After considering many countries and many different children with varying degrees of ages and needs we determined South Korea was our country of choice. In March 2004 we learned that a little girl was ours. Clara arrived home Oct. 6 of that year.

August 2005, I started a job with Solectron and moved with my family to Silicon Valley.

Ten months later, in her mildly panicked voice, Antonia informs me she received a call from the social worker, Ann, who we worked with on Clara's adoption. We learned that Clara's birth mom had given birth to a boy, and wanted to know if the family who adopted Clara would be open to adopting her son.

In more than two decades as a social worker, this has never happened to Ann. She's was stunned as we were.

You have to know that in the adoption process with our adoption agency (Holt) in South Korea, we never met the birth mom. As soon as the baby is born it goes into foster care. So the birth mom has no idea who we were, who had her daughter or where we lived. All she knew is that someone adopted her daughter, and she hoped the two siblings could be put in the same family.

Throughout the entire phone call with Antonia, I uttered one word repeatedly. "Wow!" Nothing else would come out of my mouth, until the next bit of information that she shared carefully -- we had about five days to tell Holt our decision. I uttered two words: "Wow. Wow."

Imagine. A major life-changing decision in five days. It's not that we were opposed to the idea of adopting again, but we weren't pursuing it.

Needless to say it was a quick, and relatively easy, decision. Yes!

Six months later we were in Seoul holding our son. He was six months old. Today he is three. Now Clara and Henry -- blood brother and sister -- share a bedroom and a bunk bed. While two and a half years apart, they enjoy playing together and fighting together -- though fighting is incredibly rare (I can dream, can't I?).

I realize that most people hear this story and smile and dismiss this as a case of good karma or something. I've heard people say how good we are to adopt these children. Nice sentiments, but both notions are completely false and incompatible with reality. We are not good, and hence by definition it could not be good karma, at least as good karma has been defined. The truth is the adoption of Clara and Henry were acts of God, and the entire orchestration of events is a tribute to His love and grace. Neither of which were earned or deserved. Only received thankfully.

I've done the math. I'll be close to retirement when Henry graduates from college. As I see friends my age on the cusp of being empty nesters, I salivate.

But that is not what God had planned for me.

As Antonia tended to her visiting friend today, I cleaned up the Play-doh Henry got for his birthday. I played chase with all three kids in the front yard. I gave Clara and Henry baths. I tucked them into bed.

It's a great story.

It's a story that continues to be written today.

It's a love story between a father and his kids.

VIDEO: The Day the Media Died

2009-06-05T19:38:00.000-07:00

Set to the tune of Bye Bye Miss American Pie. Entertaining and depressing at the same time.

Newsweek's Relaunch: A new media model for old media?

2009-04-17T20:36:00.000-07:00

No newsflash here ... the news industry continues its miserable decline. One traditional media title that has actually grown in circulation and navigated a tough economic climate fairly well -- The Economist.

Newsweek has taken notice. In a Financial Times article today, Newsweek, part of The Washington Post Co., reported that Newsweek's revenue declined 13% -- faster than even the Post.

Newsweek will rollout a new print and online edition in May.

So what's the plan to get revenue up? More white space, bolder photos, popular writers and columnists. Oh, also reduce circulation, increase subscription rates, attract upscale readers ($100,000 annual income and higher) and, in turn, luxury advertisers.

If The Economist is a model for other traditional media, I'm not sure that more white space, bolder photos, popular writers, reducing circulation, increasing subscription rates is the winnable formula. Insightful, compelling, probing writing and analysis is. And that, apparently, is what people are willing to pay for.

But who am I to critique Newsweek's strategy? I'm a traditional media junkie. I still read the local newspaper, a national business newspaper and an international business newspaper. Plus five magazines -- Fortune, Forbes, BusinessWeek, Fast Company and TIME.

I thoroughly dread the day when those traditional print titles are relics, like the LP. I might need to consider saving one copy of each title I currently subscribe to, frame the cover of each to show my kids in the future and hang them in my office.

Now, it's time to publish this post on traditional media in a new medium. Call me conflicted.

Corporate Reputation in an AIG Era

2009-03-20T20:31:00.000-07:00

I always enjoy reading the annual rankings from FORTUNE and FORBES.

But only one ranking evaluates corporate reputation -- FORTUNE's Most Admired Companies.

A successful reputation is predicated on good corporate policies and values that lead to good business practices and results. Reputations are built over an extended period of time by delivering on the brand promise.

But that's not enough to have a positive reputation. A reputation is not what a company thinks of itself. It's what others think of the company. Hence, it's equally important how the public (including employees, customers, shareholders, communities, government bodies, etc.) perceives the company.

The Most Admired Ranking -- found in the March 16 issue of FORTUNE -- comes at an interesting time in the corporate world. We've just experienced one of the biggest breaches of trust by business leaders in recent memory. You only need to look at the headlines in the past week regarding AIG to see just far public trust in business has eroded.

Edelman, Avanade's Americas PR firm, has conducted a survey for the past 10 years. Called the Trust Barometer, it tracks the trust levels of the public in a variety of institutions, including business.

Not surprising, trust in business is at an all-time low globally, but especially in the U.S. Interestingly, when segmented by industry, technology is the most trusted sector. That's good news for Avanade. The Most Admired list bears that out. 12 of the 50 companies on the list (nearly 25%) are technology companies.

It's great to see our parents in the top 50 -- Microsoft at #10 and Accenture at #49.

Like pornography, reputation isn't always easy to define -- you know it when you see it. But FORTUNE does a good job in providing some parameters for defining reputation (note all companies are publicly traded firms). And Edelman's research confirms that a strong reputation is an indispensable element to business success.

What research has indicated is that companies with strong reputations typically have stronger customer loyalty. They are typically more resilient to economic fluctuations (though not immuned) and typically come out stronger in good economic conditions. These companies also typically have lower staff turnover and perform well among other rankings, such as FORTUNE's Best Places to Work rankings (though Most Admired and Best Places have different criterion and as a result not necessarily the same companies on both lists).

From a communications standpoint, PR can't create reputations, and no amount of PR can recast the egregious acts of greed we have seen on Wall Street. But strategic PR that is rooted in companies with good policies and values that lead to good business practices and results will help shape positive perception and understanding of those companies, and in the process help foster trust in and respect (admiration) for those companies.

Business mags still credible, Edelman

2009-02-27T19:56:00.000-08:00

Informative piece from Richard Edelman on business magazines, and his conversation with Steven Adler, editor of BusinessWeek.

I pulled summaries of each point, but read the full blog yourself. It's important.

1) BusinessWeek aims to be a business information brand, not just a magazine.
2) Readership has increased substantially because of the web. The print circulation is 933,000 paid and a total of 4.7 million with the five times pass along. The digital product gets 9.5 million unique visitors a month and 50 million page views.
3) The focus is business to business topics. There are no more lifestyle stories on wine or travel.
4) Breaking news is covered, but in a different way than a wire service. “Our take is more analytical..."
5) “We aggregate any content that is free, from blogs to mainstream media. We provide users the ability to track developments and give them ownership,” Adler said. Users can read, save or add content on the topic network.

Nice conclusion, too:

BusinessWeek has taken the most radical step of recognizing that the audience now seeks to be on the field and to control its own destiny. Given the very high credibility rankings of business magazines, we need to make them first port of call for important stories.

Clarity in the Cloud: A PR story

2009-02-24T20:31:00.000-08:00

Yesterday Avanade announced the results of a global study of more than 500 senior business and IT executives regarding their understanding, views and intentions for cloud computing.

The term cloud computing is confusing, and the noise level is deafening. But cloud is also a disruptive force and it isn't going away. Avanade believes there is a strong business opportunity as companies look to cloud computing to improve their business performance.

Unlike Dell, we have no plans to try and copyright cloud computing. However, this level of industry silliness made the task of trying to carve out a unique position on cloud computing all the harder.

Back in October 2008, I discussed with our PR team and agency partners this very challenge. As we evaluated the types of discussions taking place in the media and among vendors (Larry Ellison's rant in Sept. 2008 is classic), we realized there was an inordinate amount of debate about what cloud is and what cloud isn't. We knew we couldn't win this debate, nor would we want to. It provides little value to companies grappling with serious questions about how to leverage cloud computing to affect a business outcome.

So we applied PR 101 -- change the debate.

What we didn't see in fall and we still don't see much of today is any substantive discussion about what cloud enables -- what's the business value of cloud computing.

Bingo. We felt we landed on something no one else was discussing. And in the process, we believe we have been able to carve out some competitive differentiation on a fast-moving, fast changing technology trend.

Time, of course, will tell if we were successful, but the research results certainly has garnered some positive responses from analysts and press and served as a great launchpad to continue the discussion.

One benefit to recession: better business manners

2009-02-15T14:41:00.000-08:00

Perhaps one positive to an otherwise gloomy business environment is that we all might be acting a bit nicer to each other.

It makes sense. Turns out that in a down economy, no one can afford to make enemies. When you don't know where business will come from next, let alone a possible future job in a insecure job market, being polite makes good business sense.

So says a piece in The Economist's Feb. 12, Businesses Become More Polite.

'Rudeness is out, and civility is the new rule in an uncertain world. The former kings of abrasive behaviour—Masters of the Universe bankers, hedge-fund traders, private-equity chiefs—have been humbled. On Wall Street, says a banker, “it’s now all about charm and openness and taking time with people.” Cocky young things straight out of the best business schools have stopped skipping interview appointments, recruiters say, and there is much less looking over people’s shoulders at drinks parties, reports one veteran. Many people, fearful for their jobs, are trying to burnish their contacts at other firms.'

Not unlike our most recent economic boom, all good things must come to an end. So is the expectations of the current trend toward politeness business.

'And as soon as things turn up again, all agree, the extra niceness will vanish.'

Enjoy it while it lasts.

The Hot Air of CSR?

2009-02-07T13:56:00.000-08:00

The air in the Swiss community of Davos might be crisp and clean, but the Financial Times' Stefan Stern argues the deadliest greenhouse gas is the hot air of CSR.

He says that the global annual gathering of business, government, celebrities and do-good NGOs -- otherwise known as the World Economic Forum in Davos, Switzerland -- there was renewed discussion about corporate responsibility.

My argument has been that when times are good, companies push 'green' agendas because it's the popular thing to do -- it's 'in' to be green. In tough times, there is a much different green agenda -- making money, survival, avoiding bankruptcy. Stern says "serious CSR types understand this."

But there is a difference in my mind between doing the right thing in the course of doing business and having altruistic objectives such as a green agenda. Clearly "earth-first" types will argue it's the same thing -- to do the right thing as a company is to be green.

Managers are pressed to make money while consumers are pressed to save money. But consider Stern's example of making a T-shirt. Consumers are aware of child labor issues, environmentally unsound manufacturing processes, and so on. But notice the recent news on retailing sector -- the only company showing some stability is Wal-Mart. Why? Cheap T-shirts, among other things. There is an element of consumers turning a blind eye to how products are made (no, I'm not suggesting Wal-Mart's supply chain practices are unethical).

In my mind this isn't an either/or debate. As I mentioned in my last post, many companies that have endured difficult times are companies that have demonstrated a moral compass that drives positive behavior that leads to long term viability and success.

In other words, tough times does not give license for unethical business practices. It is not a free pass to willfully pollute, to violate child labor laws and treat employees unfairly.

Richard Edelman, CEO of Edelman, a public relations firm (disclosure: Edelman is Avanade's PR firm in the Americas) wrote in the FT on Jan. 27, How to Restore Trust in Business (subscription required). In it, he says companies can no longer have as their sole objective to maximize profits.

The Edelman Trust Barometer (there is a report and several videos presenting 2009 findings) shows that business credibility is at an all time low.

I believe Edelman's point supports mine, but with a twist. First, business must focus on maximizing profit. In today's world, that means simply survival. But as Edelman says, they must do more than just focus on maximizing profit. To me, maximizing profit does not contradict doing what is right in the course of making a healthy profit, or perhaps just ensuring an existence post our global recession.

Making money ethically, with a moral compass based on enduring values (see my previous post) isn't a new obligation by organizations. But in this era of heightened scrutiny and oversight by government officials, NGOs and advocacy groups, maximizing profits while doing business the right way are now non negotiable for any firm hoping for longevity.

Jim Collins: "Those who panic die on the mountain"

2009-01-31T09:24:00.000-08:00

Finally getting to my Feb. 2 issue of FORTUNE. There is a terrific interview with Jim Collins, author of Good to Great and other books.

This is a must read piece. Collins addresses questions from FORTUNE's Jennifer Reingold regarding our current global economic crunch and how companies can and should navigate this extremely difficult time.

The thrust of his argument is about values, character.

The interesting point he makes is that the economic prosperity we've experienced since the 1950s is what was unprecedented, pointing a few periods in history with similar golden eras, such as the Egyptian empire or Rome in 200 A.D.

So the anomaly isn't the turbulent times we face, but rather the prosperity we've enjoyed over the past five decades.

As he puts it, "what we're experiencing now, get used to it. It's life, and it's the normal life."

His point is that companies that survived extremely difficult periods of economic uncertainty had certain characteristics. From my vantage point, these qualities are the essence of public relations -- articulating a set of values and then models those values with employees, customers, shareholders and other constituents.

One, a deep fabric of values. He mentions P&G. When faced with difficulty, the company insisted it would not skimp on quality. It cost more, but in the long term it built a stronger relationship with customers and forged its reputation as a quality brand people could trust.

Two, invest in talent. During difficult times, companies like HP post WWII chose to hire engineers laid off from other companies or the government. It proved to be the foundation for the HP Way of the future.

Three, have a quarter-century view, not a quarter-by-quarter view. During tough times, it's easy to go micro, Collins says. We zoom in to tightly manage the current situation yet fail to assess the landscape and make long-term choices. His point is that most executives zoom in, and it's the rare (and successful) execs and companies that have the ability to zoom out. He points to Boeing after WWII. Boeing's revenue was based on the military. Post WWII Boeing had lost 90% of its revenue (staggering). But CEO Bill Allen decided to invest 20 years out in the jet age. What vision.

Four, the results of the company is the responsibility of the employees Sounds obvious, but the point is people have to look at their work not as a job but as a responsibility. At all times, but especially during challenging economic periods, people must deliver on their commitments and actions that support the longevity of the company. It's a personal commitment.

Five, focus on prevailing, not just surviving. His final point is that companies need to make decisions and investments that will enable it to prevail, or gain market-share or come out stronger during the up cycle, not merely survive the down cycle.

And all of this, he sums up, is about our core values that transcend good or bad times, and not deviating from those values in good or bad times.

His final point, and a great one: "Our characters are being forged in a burning, searing crucible."

It is in difficult times that true character reveals who we really are, and what we truly value. And nothing matters more than character. It separates those focused on short term gains (whether personal or political or business) from those focused on enduring, long term values.

A Glimmer of Hope for the NYT (all Newspapers)

2009-01-21T20:01:00.001-08:00

Good post from Dr. Leslie Gaines-Ross at Weber-Shandwick in Reputation XChange blog.

"The incongruous juxtaposition of reading about the potential death of newspapers and this morning’s long line at my local newsstand with people beaming with pride, speaking languages I could not place and knowing that seeing President Obama on the front page of the most reputable paper legitimized everything will not be forgotten."

My Morning

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Gartner: Top CIO Priorities in 2009

2009-01-14T20:05:00.000-08:00

Gartner announced findings of their annual CIO survey. It shows top priorities for CIOs in 2009.

Top 10 Business Priorities
1. Business process improvement
2. Reducing enterprise costs
3. Improving enterprise workforce effectiveness
4. Attracting and retaining new customers
5. Increasing the use of information/analytics
6. Creating new products or services (innovation)
7. Targeting customers and markets more effectively
8. Managing change initiatives
9. Expanding current customer relationships
10. Expanding into new markets and geographies

Top 10 Technology Priorities
1. Business intelligence
2. Enterprise applications (ERP, CRM and others)
3. Servers and storage technologies (virtualization)
4. Legacy application modernization
5. Collaboration technologies
6. Networking, voice and data communications
7. Technical infrastructure
8. Security technologies
9. Service-oriented applications and architecture
10. Document management

From the press release ...

"In 2009, executives face challenging global economic conditions that have not existed for more than 50 years," said Mark McDonald, group vice president and head of research for Gartner EXP. "This environment is reflected in IT budgets, priorities and strategies as one third of CIOs reported no change in their budget from 2008, while 46 percent reported a slight increase, and 21 percent reported a cut in IT budgets."

"All CIOs will face the need to restructure their budgets, cutting in some areas and investing in others, including those reporting no change in their overall spending level," Mr. McDonald said. "Enterprises expect IT to contribute results in an uncertain economy. CIOs need to be decisive and resourceful in building an effective enterprise that can meet current and future challenges. Leading enterprises recognize the seriousness of economic conditions, but they are not paralyzed by them. Their leaders have confidence in their ability to use IT to achieve results."

Do more with less -- a significant Microsoft message -- has never had more meaning for IT professionals.

Defining "A-list" authorities

2009-01-11T20:02:00.000-08:00

Good post by Mack Collier at the end of December.

Basically, it's the age old question of defining who is influential (whether traditional media or "new media") -- the A-list of media (bloggers, journalists, etc.).

But as Ted Weismann from Beyond the Hype mentions Jan. 9 (What is Authority), the wrong question isn't who is the A-list, but who is your A-list. In other words, don't try to influence those who others define as top tier, but invest your time influencing those speak "passionately about your specific market segments' problems and concerns."

For a business-to-business IT services firm like Avanade, our A-list is going to be a lot different than an enterprise software vendor, even if that A-list is extremely well known and "influential."

By way of comparison, when I worked at Fleishman-Hillard, I would have clients who would tell me they wanted to be in The New York Times or The Wall Street Journal -- not because the outlets were strategic to reaching a target audience, but because they were perceived to be influential. Yes, absolutely, they are highly influential, but they are only influential to those they influence. And if the people they influence are not the ones your company is seeking to influence, then it was a wasted effort. Sounds like a duh statement, but it's true.

The same principles apply to social media as they do to "traditional media" (side note, let's drop "social media" or "new media" from our lexicon -- it's all just "media").

Google's Schmidt Wishes He Could Save Newspapers

2009-01-08T19:19:00.000-08:00

In a FORTUNE interview with Eric Schmidt of Google (Google News), he confirms what I've been saying lately. Watching mainstream news disappear would be a real "tragedy in the sense that journalism is central part of democracy."

When asked what if the newspaper industry does go down? I love Schmidt's comment:

"And if [newspapers] can't be funded because of these business problems, then that's a real loss in terms of voices and diversity. And I don't think bloggers make up the difference. The historic model of investigative journalists in any industry is something that is very fundamental."

Amen, Eric.

When asked about ideas he'd have to save newspapers: "I wish I had a brilliant idea, but I don't." As I said last month, lots of questions and few if any answers about what to do for the news industry in general, and newspapers specifically.

But even almighty Google admits their powers are limited. It raises one question: if the news industry crumbles, there will be fewer opportunities for Google to sell advertising. I believe a viable, vibrant news industry is vital to Google's future, and democracy's future.

BusinessWeek Contradicts CES' Shapiro

2009-01-03T19:37:00.000-08:00

Earlier I wrote about Gary Shapiro of CES saying that consumer electronics will be instrumental in getting the economy back on its feet. The reason he said?

Innovation creates investments. Innovation creates new jobs and new ways of doing things. There is a lot of innovation still yet to come. It (the downturn) is disruptive in the short term, because it causes some business to win and some to fail.

The cover story from the current issue of BusinessWeek regarding Silicon Valley (Is Silicon Valley Losing its Magic -- subscription might be required). The premise of the piece is that Silicon Valley isn't producing the next Cisco or Microsoft or Intel, and that the big established companies are wresting away innovation from start-ups.

As Steve Hamm concludes the article he says this: "The Valley's and the tech industry's contribution to the national economy is likely to wane."

So who is right -- CES' Shapiro or Steve Hamm's assessment of Silicon Valley's innovative malaise? We have 12 months to find out.

TechCrunch: No more embargoes

2009-01-03T14:33:00.001-08:00

As you can tell, I'm catching up on news of the past couple of weeks. Many of you probably saw this, but if not, TechCrunch's Michael Arrington declared Death to the Embargo.

But don't miss his bigger point: PR agencies are not serving their clients well. He makes an argument that's hard to combat.

PR firms are out of control. Today we are taking a radical step towards fighting the chaos. From this point on we will break every embargo we agree to.
Background:
Tech companies are desperate for press and hammering their PR firms for coverage on blogs and major media sites. That in turn means that PR firms hammer us to get us to write about their clients. Gone are the days of polite pitches and actual relationship building. Today, PR firms email a story to us as many as 20 times, and call every TechCrunch writer on their cell phones repeatedly.

This is so important a post for PR professionals, that I'm including more of his direct comments:

A lot of this news is good stuff that our readers want to know about. And we have the benefit of taking some time during the pre-briefing to think about the story, do research, and write it properly. When embargoes go right, we get to write a thoughtful story which benefits the company and our readers.

But there’s a problem. All this stress on the PR firms put on them by desperate clients means they send out the embargoed news to literally everyone who writes tech news stories. Any blog or major media site, no matter how small or new, gets the email. It didn’t used to be this way, but it’s becoming more and more of a problem. As the economy turns south, PR firms are under increasing pressure to perform and justify their monthly retainers which range from $10,000 to $30,000 or more. In short, they have to spam the tech world to get coverage, or lose their jobs.

This is really serious, and I believe Arrington's comments are spot on.

In defense of the embargo, it is not something exclusive. There is nothing inherently wrong with seeking to pre-brief under embargo to any number of reporters. Personally, I think a proper strategy is to limit the number of pre-briefs to a few (three, four or so).

In my view, what contributes to this "spam" that Arrington speaks of is the demand for coverage volume. When the expectation by the client is on clip count or coverage in a certain book ("get me into the Journal"), you end up with a smile-and-dial media strategy. If you're approached by a PR agency that promise some form of coverage volume or coverage in a certain media outlet, run.

Instead, hire a firm that will focus on developing an effective competitive positioning strategy, and execute media relations program that supports that strategy ... the right media coverage in the right outlets reaching the right audience at the right time.

Finally, his comment about the broken embargo -- whether intentional by PR agencies or not -- is really unfortunate.

One annoying thing for us is when an embargo is broken. That means that a news site goes early with the news despite the fact that they’ve promised not to. The benefits are clear - sites like Google News and TechMeme prioritize them first as having broken the story. Traffic and links flow in to whoever breaks an embargo first.

There has always been a love-hate relationship between journalists and PR "flacks." To be balanced here, there are good PR firms and bad PR firms (I am on record of valuing good PR firms as strategic business partners), just as there are good doctors and bad doctors, good lawyers and bad lawyers, and so on. But when I read accounts like Arrington's I'm struck with the realization that PR agencies (I'm speaking in general) need to work on their own reputations.

CES Pres: "2009 will be 3rd Largest Ever"

2009-01-03T13:29:00.000-08:00

"Our industry is the one that this going to get the economy through this recession." Such is the optimism of Gary Shapiro, CES CEO. While most economists say we haven't seen an economic climate this bad since the 1930's, Shapiro is brazen about his prediction.

In an interview on Dec. 31 with The Wall Street Journal Digits blog (formerly Business Technology blog), Shapiro explains why he's so optimistic.

Innovation creates investments. Innovation creates new jobs and new ways of doing things. There is a lot of innovation still yet to come. It (the downturn) is disruptive in the short term, because it causes some business to win and some to fail.
When I first started out, a travel agent booked my travel. Now I don’t think too many people use travel agents any more, and there were a lot fewer of them. A lot of things we just use the Internet for.

When I started out, the issue was whether the VCR was going to destroy Hollywood, and obviously it didn’t.

The real cool thing about this CES is it is in a time when Americans have voted for change. They voted for a digital president.

Our industry’s message has always been about change, and openness to new ideas. The incoming Obama administration’s vision is very consistent with our theme.

It's a good argument except for the fact that if people don't buy the innovation you're selling -- because they don't have jobs or being extremely cost conscious -- it makes it hard for an industry to extricate the rest of the economy out of a recession. But, I'm all for hoping for the best.

He says this year square footage sold is down by 6 or 7%, but with over 130,000 people expected to attend, it will still be the third largest in history.

That's certainly a nice indicator.

2008-Merry Christmas & Happy New Year

2008-12-31T19:37:00.000-08:00

I hope you all had a nice holiday season. I'm always amazed how fast it speeds by. In the States, with a week less between Thanksgiving and Christmas, the holiday seemed to go by even faster.

The Olferts have many Christmas traditions. For one, on Thanksgiving, we allow ourselves the pleasure of listening to one Christmas CD -- Vince Guaraldi's Charlie Brown Christmas CD (what a missed talent Guaraldi was). That's it. The day after Thanksgiving, the flood gate of Christmas jazz, gospel and classical flow freely.

We like to kick off December with the local Christmas parade (click here). Pleasanton, Calif. might be part of the greater Bay Area with millions of people, but for one night you feel like you stepped back into time -- some small, Mayberry-like experience. It's everything local: the two high school bands, every Boy Scout and Girl Scout troop in Pleasanton, countless other groups, city council members, fire trucks, the Mayor of Pleasanton and, of course, Santa. This is followed by the Christmas tree lighting ceremony in front of the local museum, and then the town crowd the street to sing Christmas songs. It's corny but fun.

An Olfert Christmas day is pretty well organized, too -- open stockings first, kids play/watch a video while we make French toast for breakfast, then presents. The kids had a great time this year.

2008 started with a new job for me, and I spent the rest of the year just doing a lot of learning. Avanade had its best fiscal year (ended August 30). The global economy is causing us to be prudent and even more focused and strategic -- which is a good thing. The Comms and PR function are working well, but still much more to do in 2009 to become even more effective and relevant to the business. One area to explore and experiment with will be various forms of social media. Frankly, we're still making significant strides to our traditional media and analyst relations program (two strong people leading those efforts). 2009 will require more emphasis on new forms of media (see today's Financial Times article "Companies Use Twitter to Pack PR Punch" ... subscription might be required).

But for my 401k, 2008 can't exit fast enough. What an amazing implosion of our financial system.

As a new administration takes office in the U.S., and countless global challenges await President-elect Obama, I have no idea what to expect. From a business standpoint, here's hoping for a better year in 2009.

Even more important, here's to a happy and healthy new year. I look forward to continuing our conversation in 2009.

VIDEO: News in 2015

2008-12-12T11:12:00.000-08:00

Some of you may have seen this, but a colleague sent it to me today. A frightening, hypothetical look at the news industry in 2015. This is particularly relevant (and incredibly well done) based on the events of this week with Tribune and The New York Times.

This was developed in 2007 by the Poynter Institute. I had trouble sizing it, so you can find the video here.

FT: Who will mourn local newspapers

2008-12-11T16:24:00.001-08:00

Good post from John Gapper today (subscription requirement likely) in The Financial Times. He notes that the recession has "turned the long slow decline of newspapers int oa brisk fall." He raises the concern I mentioned a few posts ago on Tribune's Chapter 11 filing -- that newspaper journalists fear that "television, radio and blogs can never replace what newspapers provided for readers."

Bill Keller, executive editor of the New York Times on NPR recently said this: "Good journalism does not come cheap." His point -- not too many websites will open up bureaus around the world and cover news effectively.

Gapper concludes with this:

"The question for national and international reporting is not whether city papers survive but whether news organizations such as The New York Times do. Clearly, if they did not, and blogs were left alone to provide coverage of Washington and Iraq, there would be a problem.

"My working assumption, in more ways than one, is that consolidation -- or, more accurately, eradication -- of local newspapers will strengthen the editorial position of the remaining elite: The New York Times, The Wall Street Journal, Bloomberg, The Financial Times, etc. I also assume the elite will find some way to cover its costs. Here's hoping, anyway."

A few thoughts. The Internet has shown that there are too many news organizations. Breaking news is mostly consumed on the Web, or perhaps TV or radio. Feature stories are often found in blogs, magazines, other media forms. But we do know this: A robust and diverse media is absolutely essential.

What model will be profitable? Will I continue to get my copy of the FT or local newspaper in the mornings? Will we have trusted news sources covering important global and local events? How will news organization turn a profit -- news organizations are, after all, for-profit organizations. Should they be? I'm not an advocate of government funded media. We've seen the disaster that is in China, Russia (where killing journalists has become sport), and so on.

Well, lots of questions, no answers, and a lot of hoping.

NYT Next?

2008-12-09T14:24:00.001-08:00

And it looks ugly for the New York Times. Here's what I propose. Instead of a separate blog post for every bankrupt newspaper, let's just assume major print media will be hit really, really, really hard in 2009 and will struggle to ever regain their former prominence.

MarketWatch.com reporting that the New York Times Warns of a Challenging 2009.

The company in November cut its quarterly dividend by 74% in an attempt to decrease its debt.
Over the last few months, it has cut jobs and reduced other costs. Last month, New York Times said October ad revenue at its newspapers fell 17.2% on continued weakness in print advertising. Classified sales dropped nearly 35%.
In the third quarter, New York Times Co.'s total advertising revenue dropped 14%. Classified-ad sales plunged 29%.

Merry Christmas.

Tribune Chapter 11

2008-12-08T12:29:00.001-08:00

In case you haven't seen the news, Sam Zell couldn't rescue Tribune, a premiere media brand, from the prospects of bankruptcy.

From MarketWatch.com

Tribune Co. said Monday that it filed for Chapter 11 bankruptcy protection to restructure its nearly $13 billion debt load, a move that dramatically underscores the dire circumstances clouding the near-term future of the newspaper industry.

The future is grim for media companies. Some might argue traditional media are not unlike other old business models like automotive industry (at least Detroit) -- unable to be nimble and able to change business models fast enough to compete in rapidly changing global marketplace. It's painful to watch. Yes, call it short-sightedness on the part of media executives. Even "forward looking" media companies like Time Warner wasn't able to make headway with AOL, which has resurrected itself a bit and is now making a somewhat implausible attempt at Yahoo!

You don't see government running out to rescue traditional media. But, the day's not over ...

In the most recent issue of BusinessWeek (subscription might be required to view) Jon Fine made his 2009 media predictions. He didn't have to wait for today's news to already see his first prediction come true.

"It gets much worse before it gets better. Marketers use the downturn to revamp (and reduce) ad spending. At least one recent, heavily leveraged media deal—Tribune, Univision, Clear Channel, the Minneapolis Star Tribune, I could go on—goes bankrupt."

And then this from Lee Gomes in Forbes, Dec. 4 issue. His point is that even Web properties are not guaranteed endless riches.

"A cautionary tale involves MySpace, which, according to Hitwise, gets 4% of all Web traffic. MySpace owner News Corp. doesn't break out the numbers, but the unit that includes MySpace and other online divisions lost $101 million in the quarter that just ended, on revenue of $719 million. Even Gannett does better than that."

So where does all this leave us if old media fails? I would argue we'll become less informed, or perhaps worse, informed by even more narrowly minded views. Example, Arianna Huffington is fond of advocating that journalists are not obligated to tell both sides of the story, that one-side issues reporting is valid and needed. Sorry, I don't agree. I don't need someone to tell me who to vote for, how to think or what side of an issue I should be on. I need fair and balanced reporting that informs, not dictates.

Anyway, a different topic but not completely disconnected from Tribune's travails. Let's hope old media can figure out how to remain a valued source of information gathering and sharing in a new media era.

Burson's CEO Survey-Changes in Information Influence

2008-11-10T17:43:00.000-08:00

I find these studies interesting, and always look forward to them (ok, I need a life). At any rate, Burson-Marsteller released its annual CEO survey (press release here). If you have a subscription to PR Week, you can find the cover story and report here. Many interesting findings, but what I look for is influence -- how is the changing information landscape (financial/industry analyst reports, research data, news sources, corp. content, etc.) impacting what influences senior management decision makers.

Burson's research shows the following:
Information influence -- Which of the following information sources has become more influential
over the past three years?

Word of mouth 60.0%
Trade media covering my industry 54.0%
Blogs covering my industry 50.0%
The Wall Street Journal/Dow Jones 43.5%
CNN 38.0%
National evening news programs 28.5%
The New York Times 26.0%
Forbes 25.5%
BusinessWeek 24.0%
National morning news programs 23.5%
Fortune 22.5%
Time 16.0%
Newsweek 14.5%

Base: 200

Some of the data are not surprising -- one would expect word-of-mouth to rank high. However, I have serious doubts that trade media rank second. Am I clueless or is it surprising to anyone else that blogs would rank that high for CEOs? The way I look at it, CEOs of large companies spend a good portion of their time traveling -- not online. Their online connection typically means a Blackberry or similar device. Finally, that Forbes would rank above BusinessWeek and that national morning news would rank ahead of FORTUNE seems also odd. I subscribe to Forbes, BusinessWeek and FORTUNE, and I'll take FORTUNE over the other two any day. Granted, percentage wise, it's virtually a dead heat.

Again, maybe I'm clueless on this one.

The other part of the study I find interesting is "information importance" as it relates to an executive's business. The "influence" shows progression over the past three years. The "importance" shows media with the highest impact right now.

Information Importance -- Which of the following information sources has the most impact on business these days?

The Wall Street Journal/Dow Jones 51.0%
Word of mouth 42.0%
Trade media covering my industry 37.5%
Blogs covering my industry 34.0%
CNN 31.5%
National evening news programs 22.5%
The New York Times 18.5%
National morning news programs 14.5%
Forbes 13.0%
BusinessWeek 10.5%
Fortune 6.5%
Time 2.0%
Newsweek 1.0%

Base: 200

The Journal is no big surprise. But CNN above New York Times? National evening news? National morning news? I struggle to see the CEO of GM or Dow Chemical or Alcoa or IBM watching Matt Lauer or Diane Sawyer. You've got to be kidding me. And no mention of CNBC or Bloomberg TV. And that there is a 6% delta between Forbes (13%) and FORTUNE (6.5%) just baffles me.