Corporate naming gaffes--BP

On Wednesday, I interviewed Christine Bader. She's written a personal and wonderfully nuanced book that explores the challenges that people who have strong social missions face as they pursue corporate careers. It's titled The Evolution of a Corporate Idealist: When Girl Meets Oil and it will be published by Bibliomotion in late March. Eventually, the Q&A will appear in strategy+business and I'll post it here.

Until then, I'd like to share a passage from the galley of the book that's off topic, but which caught my eye because I've written about the pleasures and perils of corporate naming in the past:

"When I first arrived in China, I was surprised to find that four years after the company officially changed its name from British Petroleum to BP, Chinese staff were still using the old name in conversation and written correspondence, and having their old business cards reprinted at local copy shops rather than ordering new ones from the company. I asked a few people why but got nothing more than giggles and shrugs in response, so I wrote it off to inertia.

"Finally, a friend outside of the company revealed that BP had fallen into an even worse trap than the apocryphal story about Chevrolet's Latin American launch of the Nova, which approximates Spanish for no-go, not a great name for a car. With the wrong combination of context and tone, B in Mandarin can sound like slang for 'vagina,' and P like 'fart.' In the dialect of Guangdong Province, it can also mean 'big pig.' No wonder the new corporate identity hadn't caught on."

Is investigative journalism dying out?

My weekly book post on s+b's blog covers two books--one that bemoans the dearth of muckrakers and one by a muckraker


Muckraking Is Alive and Well

Investigative reporting is the pinnacle of journalism, and has been ever since the early 20th century when writers like Ida Tarbell, Lincoln Steffens, and Ray Stannard Baker exposed systemic corruption in the United States and changed the nation. They helped bring down business trusts, provided the impetus for much-needed regulation and oversight (in Steffen’s case, the establishment of the Federal Reserve System), and created political platforms for reformers, such as Teddy Roosevelt, who named them muckrakers. Is there a business reporter who doesn’t aspire to follow in their footsteps?
 
And yet, less and less investigative—or accountability—reporting is being published, according to Columbia Journalism Review (CJR) editor and fellow Dean Starkman. In his fascinating, if somewhat flawed book, The Watchdog That Didn’t Bark: The Financial Crisis and the Disappearance of Investigative Journalism (Columbia University Press, 2014), Starkman points to the subprime lending meltdown of 2007 as a primary example of his contention.

Although there has been no lack of high-profile investigative reporting since subprime lending imploded and caused a global recession, an examination of reporting on the subject in the years before the crisis tells another, rather curious, story. According to research that Starkman conducted at CSJ between 2004 and 2006—the period in which the worst lending excesses occurred—“mainstream accountability reporting [was] virtually dormant. The watchdog, powerful as it was, didn’t bark when it was most needed.”

But there’s more to the story... read it here

Zachary Shore on getting a sense of the enemy

My Q&A with professor Zach Shore for strategy+business was published today:

Zachary Shore on How to Predict the Future
A historian’s approach to strategic empathy can help you anticipate your rivals’ next moves.

If Komatsu decides to cut prices in a bid to grow its market share, will Caterpillar match the cuts? If Amazon makes a full-out run at the grocery business, will Kroger compete online? If Google refuses to censor Internet searches, will China’s government deny its citizens access to the search engine? Predicting the actions and reactions of competitors—and other stakeholders—is often an essential element in executive decision making, and getting those predictions wrong can have costly consequences.

Historian Zachary Shore believes leaders in all spheres can reduce decision risks and improve the accuracy of their predictions by developing a skill that he calls strategic empathy. In his fourth and latest book, A Sense of the Enemy: The High Stakes History of Reading Your Rival’s Mind (Oxford University Press, 2014), the professor at the Naval Postgraduate School, a research university operated by the U.S. Navy in Monterey, Calif., offers a new perspective on predicting the behavior of others. Shore discussed his findings and their applications with strategy+business.

S+B: What is strategic empathy, and why does it matter?
SHORE: Strategic empathy is the ability to step out of our own heads and into the minds of others. It’s the ability to discern someone else’s underlying drivers and constraints—to understand what makes someone tick.

The idea behind strategic empathy has been around for a long time in the military and politics. Two thousand years ago, Sun Tzu wrote about the importance of thinking like the enemy. What we don’t have is a reliable way of doing it... read the rest here

The ROI on mega sporting events isn't Olympian

My weekly book post on the s+b blogs wonders how Russia will benefit from hosting the Winter Olympics.

A Sucker’s Bet in Sochi

Truth be told, Olympic medal counts aren’t all that interesting anymore. Before the Cold War ended, medals were a leading indicator of global might: If one country’s hockey team beat another one’s hockey team, that meant the winner’s political and economic ideologies were righteous. But these days, it’s less about how many gold medals a nation wins and more about how many gold bars it spends. And hey, by that measure, Russia is back on top! The Winter Olympics in Sochi are the most expensive in history, reportedly costing US$51 billion—more than every other Winter Olympics Games combined.

That’s impressive, and so are some of the stories that have dug into the breathtaking scale of “waste and corruption” at Sochi, like Joshua Yaffa’s cover story in Businessweek. But countries and cities have been going on Olympic-sized spending sprees to land mega sporting events for a long time. The perennial question remains: Is it worth it? For the answer, I turned to the International Handbook on the Economics of Mega Sporting Events (Edward Elgar Publishing, 2012), edited by professors Wolfgang Maennig (an Olympic rowing champion himself) and Andrew Zimbalist, and reissued in paperback in December 2013.

I can’t follow all the economic analysis in this book, mainly because the use of letters and other non-numeric symbols in the equations marks the border of my mathematical nether regions. But the conclusions of the impressively credentialed group of academicians and researchers who contributed to the thick—and rather daunting—collection are clear: “Most studies have found no statistically significant economic effect from hosting [the Olympics and other mega sporting events] and a few have found a negative effect”...read the rest here

Strategy when competitive advantage is unsustainable

My Q&A with Rita Gunther McGrath has been published in strategy+business:


The Thought Leader Interview: Rita Gunther McGrath
The Columbia Business School professor says the era of sustainable competitive advantage is being replaced an age of flexibility. Are you ready?

Rita Gunther McGrath thinks it’s time for most companies to give up their quest to attain strategy’s holy grail: sustainable competitive advantage. Neither theory nor practice of strategy has kept pace with the realities of today’s relatively boundaryless and barrier-free markets, says the associate professor at the Columbia University Graduate School of Business. As a result, the traditional approach of building a business around a competitive advantage and then hunkering down to defend it and milk it for profits no longer makes sense.

This is the core argument in McGrath’s most recent book, The End of Competitive Advantage: How to Keep Your Strategy Moving as Fast as Your Business (Harvard Business Review Press, 2013), in which she steps squarely into the ring of corporate strategy for the first time. McGrath started out in government 30 years ago, after earning a B.A. in political science from Barnard College and an M.A. in public administration from Columbia’s School of International and Public Affairs. “I took a job with the City of New York that eventually involved automating the City’s purchasing system, which had been manual up to that point,” says McGrath. “That got me interested in large-scale organizational change.”

In 1989, McGrath returned to school, first pursuing her Ph.D. in the Wharton School’s innovative social systems sciences department, which was founded by management iconoclast Russell Ackoff, and then joining Ian C. MacMillan at Wharton’s Sol C. Snider Entrepreneurial Research Center. It was the beginning of an extended collaboration between the two that continued long after McGrath joined the faculty at Columbia’s Graduate School of Business in 1993. McGrath and MacMillan wrote three books together: The Entrepreneurial Mindset: Strategies for Continuously Creating Opportunity in an Age of Uncertainty (Harvard Business School Press, 2000), MarketBusters: 40 Strategic Moves That Drive Exceptional Business Growth (Harvard Business School Press, 2005), and Discovery-Driven Growth: A Breakthrough Process to Reduce Risk and Seize Opportunity (Harvard Business Press, 2009).

Those books’ themes—entrepreneurship, innovation, and growth in fast-moving, uncertain markets—are also woven into The End of Competitive Advantage. “All these pieces of research that I’ve done over the years came together,” says McGrath. “Innovation used to be over there, and strategy was over here, but now they are inseparable. The idea of learning from failure, the notion of studying business portfolios, and the concept of building new capabilities are all linked when you consider the new competitive environment and how companies need to change in order to succeed within it.”

To buttress the core argument in The End of Competitive Advantage, McGrath identified every publicly traded company with a market capitalization of US$1 billion or more—there were 4,793—and eliminated any company that had been unable to grow its net income by at least 5 percent annually from 2000 to 2009 (about 1 percent more than the growth of global GDP during that time). That left just 10 companies, some well known, others less familiar: Atmos Energy, Cog-nizant Technology Solutions, and FactSet in the U.S.; HDFC Bank and Infosys in India; ACS and Indra Sistemas in Spain; Krka in Slovenia; Tsingtao Brewery in China; and Yahoo Japan.

McGrath then compared each company to its top three competitors. The major conclusion: The growth outliers were “pursuing strategies with a long-term perspective on where they wanted to go, but also with the recognition that whatever they were doing today wasn’t going to drive their future growth.” They are successful, McGrath wrote, because they are “exploiting temporary competitive advantages, not sustainable ones.”

McGrath spoke recently with strategy+business and described the ramifications of transient competitive advantage on corporate strategy and organizational structure...read the rest here

A love affair with stuff

My weekly book post on s+b's blogs explains why consultant and author Tim Halloran thinks it’s time to inject some romance into brand marketing.


How’s Your Brand’s Love Life?

Cupid is coming this week. Stores have heart-shaped boxes of chocolates stacked to the ceilings and the price of roses has trebled. But here’s what I’m wondering: Will your brands be getting any love on Valentine’s Day?

This question came to mind after I read the new book by Brand Illumination president Tim Halloran, Romancing the Brand: How Brands Create Strong, Intimate Relationships with Consumers (Jossey-Bass, 2014). Halloran begins the book with a story from his time as a brand manager at Coca-Cola. He was watching a focus group through a two-way mirror when a member of the group, a woman in her late 20s, held up a can of soda.

“I drink eight of these a day,” she said. “It is always with me, no matter what happens. It was there when my boss gave me my promotion last week. It was at my side two months ago when my cat died. It got me through it. I start and end my day with it. It’s never let me down. I can always count on it. To sum it up, it’s my boyfriend…Diet Coke.”

Leaving the health considerations aside (my doctor’s head would explode if I told her I drank that much of any kind of soda), this consumer’s relationship with a brand is clearly based on more than a cost-benefit analysis. “This was preposterous, wasn’t it?” writes Halloran. “We can’t connect with products the same way we connect with people!”

But of course we can. Research by academics like Jennifer Aaker and Susan Fournier suggests that brands can have personalities, and consumers can have highly emotional relationships with them just like they might with a significant other. In Romancing the Brand, Halloran explains how marketers can create such a relationship using an eight-stage approach that starts with “know yourself” and ends with “breaking up and moving on.”

This sounds like it has some Svengali-esque potential to me. So, I asked the author whether his book could be used as a pickup manual by manipulative marketers... read his answer here.

Decoding employee performance

My weekly book post on s+b's blogs covers The Decoded Company, which argues that it’s time to know your employees better than your customers.

Employee Management in the “Big Data” Era
In December, I wrote about Dave Eggers’ novel, The Circle, and its creepily claustrophobic depiction of a Big Brother–like corporation that monitors, evaluates, and addresses its employees’ every action to supposedly drive productivity. This week, I’m writing about The Circle’s non-fiction doppelganger: a new business book titled The Decoded Company: Know Your Talent Better Than You Know Your Company (Portfolio, 2014), by Leerom Segal, Aaron Goldstein, Jay Goldman, and Rahaf Harfoush.

The main message of The Decoded Company is that companies are missing a major opportunity for growth and profit—by not applying the same technologies used to identify, track, and sell customers to improve employee performance. To remedy that, the authors say companies need to do three things: use technology as an employee trainer and coach, inform employees’ decision making with data, and create a culture that maximizes the ensuing benefits.

This all sounds very promising. If Joe Employee is struggling with some aspect of the task at hand, assistance can be delivered in real time. He doesn’t need to fail before he gets help, so his employer doesn’t need to bear the cost of that failure. Or before Jane Executive fires the manager of a project that has gone seriously over budget, she can consider a wealth of information regarding the manager’s performance and results over his entire tenure with the company.

Three of the book’s authors—Segal, Goldstein, and Goldman—are executives at Klick, a digital marketing agency serving global health clients. They say that they’ve integrated many of the tools needed to do these things into a system called Genome. Genome has helped Klick grow into a US$100 million company. It also helped them determine how many cups of coffee the company’s 400 employees drank in 2013. (The number was 61,392, in case you’re interested.)

But the underlying codicil is something of an iceberg...read the rest here