Zoomerang will be publishing a study next week which reveals that even though Web 2.0 has hogged the business headlines (for what, a couple of years now?) 8 out of 10 marketing professionals still are not even familiar with the term. At the other extreme, one third of those who have latched onto what is going on are using web 2.0 approaches in their marketing, and most of those (70%) are having success.
Assuming the study is correct, what does this say about how in touch with their markets most marketers are? Marketing is all about understanding consumers and reacting to (if not anticipating) shifts in interests, attitudes, values, and behaviours. It is hard to imagine that web 2.0 (which, despite what its detractors may say, heralds a megashift in consumer culture) has gone unnoticed by the hordes of marketing wonks, their agencies, researchers, and advisors. I could accept that they don't really understand it or that they dismiss it as a temporary anomaly -- but that they have never even heard the term web 2.0 is just scary.
Corporations (particularly of the kind reviled by The Cluetrain Manifesto) are notoriously slow to catch on to or care about what their customers or potential customers are doing. You sort of expect that level of indifference in the folks in Finance or Production or even in the boardroom. But if anyone should be intimately in touch with the chaotic changes in the consumer world, it's the Marketing people. Maybe there's a new digital divide to think about: those who care about what is going on in their professional area have tuned into digital media; those who do not are still waiting for the memo from corporate.
Showing posts with label strategy. Show all posts
Showing posts with label strategy. Show all posts
Friday, November 17, 2006
Saturday, August 5, 2006
Corporate spin and the mythology of management
What on earth are we teaching people in “management training” courses? The more senior managers I encounter, the less impressed I am with either our training practices or our promotion processes, or both. In organizational management, there seems to be a growing sense of self-righteous despotism, cosmetically made over as leadership, in an ecology characterized by denial.
There has always been a lot of lip-service paid to “employee nurturing” in organizations. Our Vision, Mission, and (especially) Values statements bask in a PR-conscious preciousness that rarely reflects the reality on the ground. Upholding human dignity, respect for the individual, fairness, equal opportunity, striving for excellence, all drip from the earnest clichéd prose used by corporations to describe their management regimes. But, in most companies, at the one-on-one, manager-to-employee level, it’s a sham.
There’s a disconnect between the myth and the reality of corporate life. Proving the effectiveness of marketing, many employees actually believe their employers’ propaganda, even though the contradictions whack them upside the head every day. Managers spout the company line back at the rare employee who plucks up the nerve to question whether in fact the emperor is naked, and with luck the confused employee starts to believe again, if only for a while. If your lifestyle (and your mortgage) has you strapped to your company, and you spend 8 to 16 hours a day immersed in the business, you have to believe simply to suppress your inner despair. The alternative is existentialism, the “it’s only a job” mentality that those too jaded to care often opt for. Beyond that, go postal, or get out. There is material here for a PhD dissertation on corporate spin and employee perceptions of reality. But you’d never find a sponsor.
Over the decades I have worked with corporations large and small around the world, and my universal impression has been that most people manage by fear and manipulation, and they get ahead by polished bureaucracy, skilful (or instinctive) use of politics, networking above themselves, avoiding risk, and exploiting their peers. The warm, fuzzy, touchy-feely stuff so beloved of HR policy wonks and management training gurus is a whitewash that obscures the reality: at the individual level, people-management in corporations is all about taking credit and passing blame.
If this is a result of incompetence or indifference, then perhaps training is at fault. But often it is a result of calculated competitiveness in those with ambition for “bigger things,” or desperate attempts at maintaining control in those already out of their depth. As consultants, we prefer to ignore these realities, because formally acknowledging them is career suicide in companies that are in denial.
In upper-middle management you have a cadre of political officers who discourage any challenge from below to the illusion of impeccable decency and high standards in management practices. If an employee speaks out, they have an “attitude problem” and if they can’t be rehabilitated, they are often disciplined, exiled, or terminated.
Far too often, dominance rules over competence. That appears to be the natural order of things anyway, so maybe it is the best way to run a business. It’s how the military has been run for centuries, and 20th Century business organization was derived from military organization, with command-and-control hierarchies the central pillar of most corporate designs. Sadly, the military has always done a much better job of managing talent.
The dog-eat-dog environments in which most employees operate tend to allow those with bigger teeth and less restraint to advance ahead of those who may be better qualified but less ferocious, or less sly. Nothing is more guaranteed to have you occupying the same desk for decades than doing a good job and passively waiting to be recognized. The result is a top-tier of management whose unifying characteristics are ambition, ruthlessness, and a sense of infallibility, and whose integrity, decency, and fitness for task may be questionable.
It is that mix of characteristics which gets companies into trouble. It is how mega-corporations lose billions in only a few months. It’s what leads to the commonplace firings of thousands of workers, a gesture that says “I have absolutely no constructive ideas how to manage my business out of the hole that I put it in, so I’ll just dump overhead.” Bizarrely, such acts of desperation are routinely applauded by analysts as indicators of strong management.
That self-serving indifference to employees also leads to another commonplace management practice – instead of simply re-organizing a department, everyone in it is instructed to re-apply for their own job. “You have been working for me for years, but I don’t really know who you are or what you do, so sell yourself to me.” In the contorted world of management-speak, this grotesque process is seen to be clever, yet it is really another admission of management failure.
Individual employees are routinely ignored, stifled, oppressed, mentally abused, and in other ways subjected to enormous stress that has nothing to do with their roles or tasks. Good people are played off against each other. Managers nurture those least likely to threaten their jobs or their egos, and sideline those whose competence makes them uncomfortable. Getting ahead these days typically requires a good performer to change companies. None of this is good for the health of an organization.
There’s something wrong with this picture, but what, if anything, is to be done?
Should we heroically be trying to train managers to act in the best interests of the company, even when it is not in the best interest of their own careers? Should we be training managers to recognize and respond appropriately to self-serving practices in those reporting to them? Should we be training employees how to get ahead, giving those who are by nature less assertive the skills and insights to compete? Or is this all futile – should we simply stick to regurgitating Argyris, Ansoff and Maslow, and hope that nobody ever notices that we are not in touch with day-to-day realities?
There has always been a lot of lip-service paid to “employee nurturing” in organizations. Our Vision, Mission, and (especially) Values statements bask in a PR-conscious preciousness that rarely reflects the reality on the ground. Upholding human dignity, respect for the individual, fairness, equal opportunity, striving for excellence, all drip from the earnest clichéd prose used by corporations to describe their management regimes. But, in most companies, at the one-on-one, manager-to-employee level, it’s a sham.
There’s a disconnect between the myth and the reality of corporate life. Proving the effectiveness of marketing, many employees actually believe their employers’ propaganda, even though the contradictions whack them upside the head every day. Managers spout the company line back at the rare employee who plucks up the nerve to question whether in fact the emperor is naked, and with luck the confused employee starts to believe again, if only for a while. If your lifestyle (and your mortgage) has you strapped to your company, and you spend 8 to 16 hours a day immersed in the business, you have to believe simply to suppress your inner despair. The alternative is existentialism, the “it’s only a job” mentality that those too jaded to care often opt for. Beyond that, go postal, or get out. There is material here for a PhD dissertation on corporate spin and employee perceptions of reality. But you’d never find a sponsor.
Over the decades I have worked with corporations large and small around the world, and my universal impression has been that most people manage by fear and manipulation, and they get ahead by polished bureaucracy, skilful (or instinctive) use of politics, networking above themselves, avoiding risk, and exploiting their peers. The warm, fuzzy, touchy-feely stuff so beloved of HR policy wonks and management training gurus is a whitewash that obscures the reality: at the individual level, people-management in corporations is all about taking credit and passing blame.
If this is a result of incompetence or indifference, then perhaps training is at fault. But often it is a result of calculated competitiveness in those with ambition for “bigger things,” or desperate attempts at maintaining control in those already out of their depth. As consultants, we prefer to ignore these realities, because formally acknowledging them is career suicide in companies that are in denial.
In upper-middle management you have a cadre of political officers who discourage any challenge from below to the illusion of impeccable decency and high standards in management practices. If an employee speaks out, they have an “attitude problem” and if they can’t be rehabilitated, they are often disciplined, exiled, or terminated.
Far too often, dominance rules over competence. That appears to be the natural order of things anyway, so maybe it is the best way to run a business. It’s how the military has been run for centuries, and 20th Century business organization was derived from military organization, with command-and-control hierarchies the central pillar of most corporate designs. Sadly, the military has always done a much better job of managing talent.
The dog-eat-dog environments in which most employees operate tend to allow those with bigger teeth and less restraint to advance ahead of those who may be better qualified but less ferocious, or less sly. Nothing is more guaranteed to have you occupying the same desk for decades than doing a good job and passively waiting to be recognized. The result is a top-tier of management whose unifying characteristics are ambition, ruthlessness, and a sense of infallibility, and whose integrity, decency, and fitness for task may be questionable.
It is that mix of characteristics which gets companies into trouble. It is how mega-corporations lose billions in only a few months. It’s what leads to the commonplace firings of thousands of workers, a gesture that says “I have absolutely no constructive ideas how to manage my business out of the hole that I put it in, so I’ll just dump overhead.” Bizarrely, such acts of desperation are routinely applauded by analysts as indicators of strong management.
That self-serving indifference to employees also leads to another commonplace management practice – instead of simply re-organizing a department, everyone in it is instructed to re-apply for their own job. “You have been working for me for years, but I don’t really know who you are or what you do, so sell yourself to me.” In the contorted world of management-speak, this grotesque process is seen to be clever, yet it is really another admission of management failure.
Individual employees are routinely ignored, stifled, oppressed, mentally abused, and in other ways subjected to enormous stress that has nothing to do with their roles or tasks. Good people are played off against each other. Managers nurture those least likely to threaten their jobs or their egos, and sideline those whose competence makes them uncomfortable. Getting ahead these days typically requires a good performer to change companies. None of this is good for the health of an organization.
There’s something wrong with this picture, but what, if anything, is to be done?
Should we heroically be trying to train managers to act in the best interests of the company, even when it is not in the best interest of their own careers? Should we be training managers to recognize and respond appropriately to self-serving practices in those reporting to them? Should we be training employees how to get ahead, giving those who are by nature less assertive the skills and insights to compete? Or is this all futile – should we simply stick to regurgitating Argyris, Ansoff and Maslow, and hope that nobody ever notices that we are not in touch with day-to-day realities?
Monday, January 9, 2006
Corporate pandemics of 2006
Inspired by a batch of recent frustrating consulting gigs, a battery of medical check-ups and the current buzz about pandemic preparedness, here are my predictions for six emerging corporate pandemics that trainers will have to deal with in 2006:
1) Ulteriorsclerosis – the clogging of an important initiative by personnel or policies, for spurious reasons that mask more pernicious ulterior motives. Widespread ulteriorsclerosis will lead to the demise of several organizations in 2006. The disease, once it takes hold and starts to spread, can only be cured by surgical OD interventions. It manifests itself in the right projects not being approved, or not moving forward, for apparently good reasons which, with persistent investigation, turn out to be fatuous. Ulteriorsclerosis is typically artificially induced by the idle, the desperate, or the power hungry, and can be career threatening to diagnose.
2) Nearly Ubiquitous Wireless Mobile Informal Learning Syndrome (NUWMILS) – the propensity to instantly learn only what one needs to learn in order to perform, when and where the performance is required. Also referred to as Schizogooglia, it will evolve in cultures where networked knowledge links of known quality and reliability become so intuitively accessible that it will be like having multiple brains in your head. Sporadic outbreaks have been occurring with increasing frequency, and now seem set to attain pandemic status in 2006. Once it loses its stigma and is accepted as a blessing rather than a curse, NUWMILS will be renamed “ambient learning” and at least three gurus will claim to have invented the term.
3) Mailanoma – the unrestrained metastasizing of productivity-sapping email, texting, and instant messaging, leading to complete breakdown of one’s ability to communicate. While much of this has been from externally inflicted spam, as 2006 progresses there will be increasing volumes of malignant messaging that are internally generated through quite unnecessary cc-ing, bcc-ing, and e-messaging of people sitting whispering distance apart. As communication is the life blood of organizations, malfunctioning of the system can cause a serious breakdown in performance – and in the ability of training to have an impact.
4) Infobesity – the deleterious effect of excessive data consumption on the fitness and agility of individual and corporate minds. With the volume of new data being produced doubling every three days (vs. every three decades a few generations ago), Infobesity will become dramatically debilitating, though it will stimulate the growth of technology filtering tools. Those who master infofiltering will jog confidently through the fog, while those who don’t will keep staggering into lampposts. Employees and teams with calcified knowledge filtering modes will become alienated and resentful, unable to compete, and decreasingly productive. Fortunately for them, they make up most of upper and middle management, and still dominate the shareholders of most large companies. So they will hold onto legacy processes and implement new glass ceilings to keep info-savvy juniors from gaining power (often by inducing ulteriorsclerosis in the relevant area). Unfortunately for their companies, the info-savvy are subversive, mutate rapidly, are well networked, and will job hop into smaller, more fluid entities that will collaboratively run competitive rings around the big corporations.
5) Organizational Incontinence – the involuntary leaking of things you’d rather not have others see. As the networked world brings on premature aging in organizations, they will start to leak at increasingly alarming rates. They will leak knowledge (IP Incontinence) as their walls become porous and their employees network outside of the company to gain the insights they need to get things done. They will leak processes, as much that used to be done in-house becomes outsourced. They will leak secrets, as staff start to blog and podcast without the censoring filter of Corporate Communications. And they will suffer from increasing motivational incontinence as employees finally lose all sense of belonging to a cohesive caring organizational family. This in turn will lead to the leaking of valuable employees. Organizational Incontinence, in all its forms, may require a significant rethink of the role of learning services, and its repositioning as an aid to the enhancement of an individual’s market value.
6) Learning Impact Myopia – the failure to expect or demand that learning initiatives have lasting effects. Like most other things in corporate life, training activities will be evaluated more and more on what effect they have on each quarter’s financial results, rendering longer term impacts irrelevant, and in turn making the development of long-term programs pointless. When trainers struggle to develop interventions that have lasting impact, they will be told that such esoteric stuff simply does not matter, and will be pressured into providing instant gratification to the bean counters. Learning Impact Myopia and Schizogooglia both seek faster short-term solutions to the expertise problems, but for different reasons. Trainers may have to selectively succumb, while still fighting for some strategic surgical impact. [Paradoxically, Surgical Learning Impact Myopia (SLIM) -- the deliberate implanting or nurturing of e-learning 2.0 where appropriate -- may give SLIM organizations added vigor and longevity].
Be prepared! The future will be a dangerous place if you relinquish control of your integrity to the organizational pandemics.
Compliments of the season to all, and may your 2006 be filled with health, wealth, and happiness!
1) Ulteriorsclerosis – the clogging of an important initiative by personnel or policies, for spurious reasons that mask more pernicious ulterior motives. Widespread ulteriorsclerosis will lead to the demise of several organizations in 2006. The disease, once it takes hold and starts to spread, can only be cured by surgical OD interventions. It manifests itself in the right projects not being approved, or not moving forward, for apparently good reasons which, with persistent investigation, turn out to be fatuous. Ulteriorsclerosis is typically artificially induced by the idle, the desperate, or the power hungry, and can be career threatening to diagnose.
2) Nearly Ubiquitous Wireless Mobile Informal Learning Syndrome (NUWMILS) – the propensity to instantly learn only what one needs to learn in order to perform, when and where the performance is required. Also referred to as Schizogooglia, it will evolve in cultures where networked knowledge links of known quality and reliability become so intuitively accessible that it will be like having multiple brains in your head. Sporadic outbreaks have been occurring with increasing frequency, and now seem set to attain pandemic status in 2006. Once it loses its stigma and is accepted as a blessing rather than a curse, NUWMILS will be renamed “ambient learning” and at least three gurus will claim to have invented the term.
3) Mailanoma – the unrestrained metastasizing of productivity-sapping email, texting, and instant messaging, leading to complete breakdown of one’s ability to communicate. While much of this has been from externally inflicted spam, as 2006 progresses there will be increasing volumes of malignant messaging that are internally generated through quite unnecessary cc-ing, bcc-ing, and e-messaging of people sitting whispering distance apart. As communication is the life blood of organizations, malfunctioning of the system can cause a serious breakdown in performance – and in the ability of training to have an impact.
4) Infobesity – the deleterious effect of excessive data consumption on the fitness and agility of individual and corporate minds. With the volume of new data being produced doubling every three days (vs. every three decades a few generations ago), Infobesity will become dramatically debilitating, though it will stimulate the growth of technology filtering tools. Those who master infofiltering will jog confidently through the fog, while those who don’t will keep staggering into lampposts. Employees and teams with calcified knowledge filtering modes will become alienated and resentful, unable to compete, and decreasingly productive. Fortunately for them, they make up most of upper and middle management, and still dominate the shareholders of most large companies. So they will hold onto legacy processes and implement new glass ceilings to keep info-savvy juniors from gaining power (often by inducing ulteriorsclerosis in the relevant area). Unfortunately for their companies, the info-savvy are subversive, mutate rapidly, are well networked, and will job hop into smaller, more fluid entities that will collaboratively run competitive rings around the big corporations.
5) Organizational Incontinence – the involuntary leaking of things you’d rather not have others see. As the networked world brings on premature aging in organizations, they will start to leak at increasingly alarming rates. They will leak knowledge (IP Incontinence) as their walls become porous and their employees network outside of the company to gain the insights they need to get things done. They will leak processes, as much that used to be done in-house becomes outsourced. They will leak secrets, as staff start to blog and podcast without the censoring filter of Corporate Communications. And they will suffer from increasing motivational incontinence as employees finally lose all sense of belonging to a cohesive caring organizational family. This in turn will lead to the leaking of valuable employees. Organizational Incontinence, in all its forms, may require a significant rethink of the role of learning services, and its repositioning as an aid to the enhancement of an individual’s market value.
6) Learning Impact Myopia – the failure to expect or demand that learning initiatives have lasting effects. Like most other things in corporate life, training activities will be evaluated more and more on what effect they have on each quarter’s financial results, rendering longer term impacts irrelevant, and in turn making the development of long-term programs pointless. When trainers struggle to develop interventions that have lasting impact, they will be told that such esoteric stuff simply does not matter, and will be pressured into providing instant gratification to the bean counters. Learning Impact Myopia and Schizogooglia both seek faster short-term solutions to the expertise problems, but for different reasons. Trainers may have to selectively succumb, while still fighting for some strategic surgical impact. [Paradoxically, Surgical Learning Impact Myopia (SLIM) -- the deliberate implanting or nurturing of e-learning 2.0 where appropriate -- may give SLIM organizations added vigor and longevity].
Be prepared! The future will be a dangerous place if you relinquish control of your integrity to the organizational pandemics.
Compliments of the season to all, and may your 2006 be filled with health, wealth, and happiness!
Friday, September 30, 2005
Thinking outside the idiot box
The current buzz about IPTV (Internet Protocol Television) makes me realize how rapidly some industries are evolving, and how relatively slowly the marketing profession is responding.
In 1998 I engineered an invitation to the Royal Television Society conference, the biennial Cambridge gathering of 200 of UK television’s elite. Much of the conference was spent in presentations, planning, and self-congratulation on the recent coverage of Princess Diana’s funeral. The only two presentations that still stick with me were a history professor’s singularly unpopular assertion that TV was creating news rather than simply reporting it (much hissing from the audience), and a demonstration of WebTV by the now CEO of Microsoft, Steve Ballmer.
At the time a mere VP, Steve Ballmer was actually heckled. From the audience I heard all the superior snickers of disbelief and the whispered dismissals of the very notion that television might become interactive. The leading decision-makers in the industry were so conditioned by their past experiences of television that they could not conceive that any significant change might be possible, let alone desirable.
I had seen WebTV unveiled a couple of years earlier in New York, before Microsoft acquired it, and had been captivated by the notion that you no longer needed a computer to surf the web. In those days I was all about convergence, and would assail anyone who would listen with my predictions that TV, the web, and mobile telephony would collide and facilitate revolutions in entertainment, communication, and education. Of course this was not original thinking – lots of people were working toward achieving that convergence, and it was an uphill battle.
One of the people at the conference who I tried in vain to convert was a producer of Channel 4’s The Big Breakfast, whose resolute position was something like: “The internet is rubbish. I’d rather have my children watching TV than wasting their time online. You can’t get more educational than a television documentary.” The Big Breakfast was at least innocent, entertaining, predictable, and vaguely informative. But, to my mind, it seemed more worthy of the “rubbish” label than much of what was available online.
The singular lack of vision, with an edge of defensiveness, demonstrated among the television cognoscenti at the time was frustrating, but not unexpected. Even highly intelligent and wonderfully creative people have their limiting horizons and their comfort zones.
What is remarkable to me is not so much that attitudes and behaviors have changed, but how rapidly they changed. The technologies have advanced significantly in the past decade, but so too has our willingness to use them. Our notion of what a computer is has dissolved – it is no longer a grey box under a desk connected to the world with cables, but a palm-sized clam-shell on our hip. It has become almost second nature to take and send images and video using a mobile phone. E-commerce is rapidly going mobile – in Japan you can rent a car, or even get a Coke from a vending machine, by pushing a few buttons on your phone. Bloggers proliferate, entertainment and commerce exploit new media, and news coverage and commentary have decentralized and gone real-time. Now, with the imminent arrival of the millions of channels made available by IPTV, convergence is almost total.
But what of marketing? Where are the revolutions in thinking, the exploitation of new possibilities, the creativity and experimentation? I still work with companies, some with seemingly limitless resources, who are slowly “putting their ads online” and trying to catch up with a paradigm that now belongs in the last century. It baffles me why we in marketing are so slow to evolve. Our role in training is to prepare brands for the future, yet we cling tenaciously to the past.
Is it because marketers define themselves too narrowly, and think of themselves in “activity” terms instead of in “outcome” terms? Or is it because companies don’t consider the value that marketing can bring to the organization is sufficient to justify the potential cost of innovation? Or is it, perhaps, that the current generation of management is still conditioned by its own past experiences, and is not capable of seeing that marketing does not have to be that way? I know that we have only recently accepted the benefits of online engagement, but perhaps we should continue to peer over the horizon instead of settling into a new zone of comfort?
If you did not have a website or the capacity to run TV or print ads, but you and all your target customers had web-enabled mobile camera-phones, how would you exploit the technology more efficiently and effectively help build your brands and grow revenues?
In 1998 I engineered an invitation to the Royal Television Society conference, the biennial Cambridge gathering of 200 of UK television’s elite. Much of the conference was spent in presentations, planning, and self-congratulation on the recent coverage of Princess Diana’s funeral. The only two presentations that still stick with me were a history professor’s singularly unpopular assertion that TV was creating news rather than simply reporting it (much hissing from the audience), and a demonstration of WebTV by the now CEO of Microsoft, Steve Ballmer.
At the time a mere VP, Steve Ballmer was actually heckled. From the audience I heard all the superior snickers of disbelief and the whispered dismissals of the very notion that television might become interactive. The leading decision-makers in the industry were so conditioned by their past experiences of television that they could not conceive that any significant change might be possible, let alone desirable.
I had seen WebTV unveiled a couple of years earlier in New York, before Microsoft acquired it, and had been captivated by the notion that you no longer needed a computer to surf the web. In those days I was all about convergence, and would assail anyone who would listen with my predictions that TV, the web, and mobile telephony would collide and facilitate revolutions in entertainment, communication, and education. Of course this was not original thinking – lots of people were working toward achieving that convergence, and it was an uphill battle.
One of the people at the conference who I tried in vain to convert was a producer of Channel 4’s The Big Breakfast, whose resolute position was something like: “The internet is rubbish. I’d rather have my children watching TV than wasting their time online. You can’t get more educational than a television documentary.” The Big Breakfast was at least innocent, entertaining, predictable, and vaguely informative. But, to my mind, it seemed more worthy of the “rubbish” label than much of what was available online.
The singular lack of vision, with an edge of defensiveness, demonstrated among the television cognoscenti at the time was frustrating, but not unexpected. Even highly intelligent and wonderfully creative people have their limiting horizons and their comfort zones.
What is remarkable to me is not so much that attitudes and behaviors have changed, but how rapidly they changed. The technologies have advanced significantly in the past decade, but so too has our willingness to use them. Our notion of what a computer is has dissolved – it is no longer a grey box under a desk connected to the world with cables, but a palm-sized clam-shell on our hip. It has become almost second nature to take and send images and video using a mobile phone. E-commerce is rapidly going mobile – in Japan you can rent a car, or even get a Coke from a vending machine, by pushing a few buttons on your phone. Bloggers proliferate, entertainment and commerce exploit new media, and news coverage and commentary have decentralized and gone real-time. Now, with the imminent arrival of the millions of channels made available by IPTV, convergence is almost total.
But what of marketing? Where are the revolutions in thinking, the exploitation of new possibilities, the creativity and experimentation? I still work with companies, some with seemingly limitless resources, who are slowly “putting their ads online” and trying to catch up with a paradigm that now belongs in the last century. It baffles me why we in marketing are so slow to evolve. Our role in training is to prepare brands for the future, yet we cling tenaciously to the past.
Is it because marketers define themselves too narrowly, and think of themselves in “activity” terms instead of in “outcome” terms? Or is it because companies don’t consider the value that marketing can bring to the organization is sufficient to justify the potential cost of innovation? Or is it, perhaps, that the current generation of management is still conditioned by its own past experiences, and is not capable of seeing that marketing does not have to be that way? I know that we have only recently accepted the benefits of online engagement, but perhaps we should continue to peer over the horizon instead of settling into a new zone of comfort?
If you did not have a website or the capacity to run TV or print ads, but you and all your target customers had web-enabled mobile camera-phones, how would you exploit the technology more efficiently and effectively help build your brands and grow revenues?
Wednesday, December 1, 2004
Chinese take-away: Asia eats America’s lunch
To some, this was going to be The American Century with the US as the hub of a booming knowledge economy. Lower-paid menial jobs would go, and Americans would upgrade to higher-paid knowledge jobs. George Bush, when asked what he would say to someone who had just lost his job to someone in India, said he’d give that poor worker some money to get a better education in a community college. But many of those losing jobs to offshore companies don’t need community college educations, because they are already graduate engineers or PhDs in computer science. The White House has become an Ivory Tower.
Business Week has a fascinating breakdown of the impact of Chinese competition on the manufacturing sector in the US. But, alarming as it is, the problem is a lot larger and a lot more immediate than this article suggests. The focus of the article is mainly on what damage Chinese productivity and/or economics are doing to the manufacturing sector in the US, and the associated balance of trade issues.
Manufacturers are hurting, at least the smaller ones are. Retailers, however, currently benefit from sourcing cheap goods in China. But they also become dependent on their suppliers. WalMart is doing $18 billion with China this year, getting 70 percent of its stock there. WalMart is China's eighth largest trading partner, beating entire countries like Russia and Canada. It has taken only three years to get to this, and the process is accelerating. You’d think cheap suppliers make for good profits and sweet dreams. But if the CEOs of retailing companies are sleeping well at night they do not know what is going on.
A very high percentage of everything that US consumers buy comes from a factory in China. What happens when Chinese entrepreneurs wake up to e-commerce and disintermediate the entire US retail sector? Why would you pay $500 for a designer suit at Macy's when you can get the same suit from the same factory online for $50? $35 for a blender at Target, or $5 for the same thing online? A couple of Chinese Amazon.coms and a Chinese FedEx could cripple one of the few sectors in the US where employment is currently growing. And it could happen overnight.
One telling quote from the Business Week article: "Can China dominate everything? Of course not. America remains the world's biggest manufacturer, producing 75% of what it consumes, though that's down from 90% in the mid-'90s." Of course not?? If we have lost that much that fast, we can lose a lot more even faster. Disbelief in its own vulnerability is one of Americas biggest obstacles.
That's why I get annoyed when politicians in both camps talk about the slump in the US economy as if it is something cyclical that we will pull out of. It is a one way street. In the interests of achieving quarterly profit targets and pumping up the immediate value of our investments, we are offshoring everything to an Indian-Chinese hemisphere that will be eating our lunch by the time the next Olympics take place, appropriately in Beijing. The US has bigger problems to deal with than terrorism, but the next round of White House cabinet appointments will probably not reflect any of these concerns.
The US is negligently imperiling the future of its economy with a callous disregard that makes Enron seem benign. That may seem like the jingoistic ranting of an extremist, or worse, a Sinophobe. But the facts are these:
The American scientific/engineering base is weakening – enrollments in graduate and post-graduate courses are down by huge percentages
Numbers of foreign students coming to America to study and stay are way down
We are not producing or importing the critical mass of brilliant minds that we used to
China and India produce many more scientists and engineers every year than the US
China and India are capable of innovative thinking and good design, not just sweatshop work
Combine the massive growth in China’s economy with its urgent need for oil, and we could see the US being outflanked in the Middle East, further compounding America’s economic problems.
American retailers are endangered, but do large American manufacturers care? They are investing heavily in having a manufacturing base right there in China to supply not American demand but the enormous demand that is coming from increasingly affluent (relatively) Chinese consumers. They know how the boom years in the 50s and 60s made them giants, as newly-middle-class Americans put refrigerators and washing machines and TV sets in their new homes. They did well out of a couple hundred million Americans -- there are a couple of billion potential consumers in India and China. But the profits will probably not make it back to the US, because financial headquarters are being offshored too, to tax havens.
Corporate America apparently no longer values having brain-power or talent on the domestic payroll – the notion of human capital as an investment is being replaced with the notion of human ingenuity as an expense. If our money, our designers, our R&D, our manufacturing, our management, our business partners, our suppliers, and our major markets are all in Asia, where does that leave the USA?
Figuring out creative ways to survive what will surely become known as the Chinese decade should be a national priority.
Business Week has a fascinating breakdown of the impact of Chinese competition on the manufacturing sector in the US. But, alarming as it is, the problem is a lot larger and a lot more immediate than this article suggests. The focus of the article is mainly on what damage Chinese productivity and/or economics are doing to the manufacturing sector in the US, and the associated balance of trade issues.
Manufacturers are hurting, at least the smaller ones are. Retailers, however, currently benefit from sourcing cheap goods in China. But they also become dependent on their suppliers. WalMart is doing $18 billion with China this year, getting 70 percent of its stock there. WalMart is China's eighth largest trading partner, beating entire countries like Russia and Canada. It has taken only three years to get to this, and the process is accelerating. You’d think cheap suppliers make for good profits and sweet dreams. But if the CEOs of retailing companies are sleeping well at night they do not know what is going on.
A very high percentage of everything that US consumers buy comes from a factory in China. What happens when Chinese entrepreneurs wake up to e-commerce and disintermediate the entire US retail sector? Why would you pay $500 for a designer suit at Macy's when you can get the same suit from the same factory online for $50? $35 for a blender at Target, or $5 for the same thing online? A couple of Chinese Amazon.coms and a Chinese FedEx could cripple one of the few sectors in the US where employment is currently growing. And it could happen overnight.
One telling quote from the Business Week article: "Can China dominate everything? Of course not. America remains the world's biggest manufacturer, producing 75% of what it consumes, though that's down from 90% in the mid-'90s." Of course not?? If we have lost that much that fast, we can lose a lot more even faster. Disbelief in its own vulnerability is one of Americas biggest obstacles.
That's why I get annoyed when politicians in both camps talk about the slump in the US economy as if it is something cyclical that we will pull out of. It is a one way street. In the interests of achieving quarterly profit targets and pumping up the immediate value of our investments, we are offshoring everything to an Indian-Chinese hemisphere that will be eating our lunch by the time the next Olympics take place, appropriately in Beijing. The US has bigger problems to deal with than terrorism, but the next round of White House cabinet appointments will probably not reflect any of these concerns.
The US is negligently imperiling the future of its economy with a callous disregard that makes Enron seem benign. That may seem like the jingoistic ranting of an extremist, or worse, a Sinophobe. But the facts are these:
The American scientific/engineering base is weakening – enrollments in graduate and post-graduate courses are down by huge percentages
Numbers of foreign students coming to America to study and stay are way down
We are not producing or importing the critical mass of brilliant minds that we used to
China and India produce many more scientists and engineers every year than the US
China and India are capable of innovative thinking and good design, not just sweatshop work
Combine the massive growth in China’s economy with its urgent need for oil, and we could see the US being outflanked in the Middle East, further compounding America’s economic problems.
American retailers are endangered, but do large American manufacturers care? They are investing heavily in having a manufacturing base right there in China to supply not American demand but the enormous demand that is coming from increasingly affluent (relatively) Chinese consumers. They know how the boom years in the 50s and 60s made them giants, as newly-middle-class Americans put refrigerators and washing machines and TV sets in their new homes. They did well out of a couple hundred million Americans -- there are a couple of billion potential consumers in India and China. But the profits will probably not make it back to the US, because financial headquarters are being offshored too, to tax havens.
Corporate America apparently no longer values having brain-power or talent on the domestic payroll – the notion of human capital as an investment is being replaced with the notion of human ingenuity as an expense. If our money, our designers, our R&D, our manufacturing, our management, our business partners, our suppliers, and our major markets are all in Asia, where does that leave the USA?
Figuring out creative ways to survive what will surely become known as the Chinese decade should be a national priority.
Subscribe to:
Posts (Atom)