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GM, Subaru and Absolut: Same Planet. Different Worlds.

May 19th, 2010 · Brands, Marketing, Products

It’s not much of a picnic in the auto industry these days, yet despite all the doom and gloom, there are companies that have managed to not only survive, but thrive right here in the American “small cars are for sissies” market. Indeed, here’s a brief CNN Money piece about Subaru’s Turbocharged Sales Secret.

Two things in that article struck me that most consumers may not know about Subaru:

1) Toyota Motor Co. owns 16.5% of Subaru ($203 million investment) and the two automakers have a collaborative agreement between Subaru Indiana Automotive parent Fuji Heavy Industries Ltd. and Toyota Motor Corporation to build the Toyota Camry in Lafayette, Indiana as of April 2007.

*Toyota vehicles and components are built using U.S. and globally sourced parts

2) Besides winning its second Motor Trend SUV of the Year award in a row and five Insurance Institute Top Safety Picks — Subaru won a corporate responsibility award from GLAAD, the Gay and Lesbian Alliance Against Defamation, an award that recognized Subaru’s role as the first automaker in America to run ad campaigns specifically targeting gays. Their tagline? “It’s not a choice, it’s the way we’re built.”

Whether you agree or disagree with the subtext, you have to admit…it’s clever!

The GLAAD angle got me thinking about target markets. So I went to [Read more →]

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Back Office: Should We Stay Or Should We Go?

May 18th, 2010 · Economic Development, Human Resources

According to the Economic Policy Institute, “April brought the best jobs growth the U.S. has had in four years … and an increase in the unemployment rate to 9.9%. These seemingly conflicting patterns are actually consistent with EPI’s warning that unemployment would remain high even after the economy starts to recover.”

“In February, in testimony to Congress about the urgent need for more jobs,  EPI President Lawrence Mishel explained that even once the economy started to create jobs again, unemployment rates would continue to rise as large numbers of “missing workers” returned to the workforce.”

So, after two or so brutal years, the so-called Great Recession appears to be over. Yet it’s not. At least not for everyone.

Whether jobs disappeared because of a long-overdue, labor restructuring due to advances in technology, permanent lack of demand, or because of outsourcing — are there any jobs coming back? For companies, is “labor arbitrage” a viable strategy? Is outsourcing, employment evil or salvation? What should communities do in response to the “new normal”?Here are some things I discovered for a Global Corporate Xpansion magazine article I wrote on current trends in outsourcing.

Back Office: Should We Stay or Should We Go?

Rapid declines in top-line growth coupled with constraints in capital markets have placed intense pressure on businesses to reduce costs and increase productivity by re-engineering, realigning and repositioning their internal operations.

With potential cost savings of 15 percent to 20 percent or more to be gained, the economic case for consolidating, relocating, or outright outsourcing of “back office” functions is more compelling than ever. However, there is [Read more →]

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My Customer Service Event Horizon with Verizon

May 16th, 2010 · Customer Service, Staffing

Earlier this week, I received excellent service from my cellular phone provider.

No, that’s not a typo!

Cellphone technology and providers are so pervasive in our lives today and when you think of it, provide an unbelievable service. From getting a near-instant connection to 911 at an accident scene, to doing business or entertaining yourself…and if you are a teen — being able to send 21,836 text messages per month to tell your friends how bored you are — what was your life like before you got a cellphone?

Yet when was the last time you heard someone say, “My cellphone company? Oh, they’re awesome. Their calling and data plans are a great value, and their people are so knowledgeable and helpful. I own stock in them. Switch over to them as soon as you can.”

As a category, there are few businesses (at least in the USA) which are disliked so much that the opening line of news stories about them (like this one in Wired magazine) start with sentences like, “A turd by any other name is still a turd, but there’s no harm in counting the ways”.

Poor cellphone providers, so noble, yet recipients of so much scorn. Unfortunately, much of it well-deserved.

And I’m no exception. My current phone is a somewhat outdated but still useful Verizon Blackberry 8830 World Edition. A recent hand-me-up from my generous and technologically superior younger brother, I had no problem initially activating the device. Then things went downhill fast. Problems transferring the contacts from my previous phone. Then the email service wouldn’t work right. I could receive text messages but not send them. Phone calls, when finished, would not disconnect right away. Then the phone would hang and crash at random, the spinning hourglass triggering the rage I used to have upon seeing Microsoft Windows’ infamous Blue Screen of Death.

I was beginning to think my brother wasn’t so generous.

Just to get the thing to simply work took me through blackberry forums, Verizon’s website, their customer service line, tech support line, and eventually a personal visit to one of their stores.  And at least one interaction that caused me to cut off the “have you tried turning the phone off and on” rep in mid-sentence and slam down the phone in frustration. But eventually, I got the phone to function properly.

But I’m a believer in giving credit where it’s due. So I’m pleased to say that Verizon Wireless – with whom I’ve been a steady, though often reluctant, customer since 2002 – gets a gold star this week  for great behavior.

How so? Well, I wanted to unlock the phone so it would accept local SIM cards when used outside the U.S. That way I could use a local phone number (and pay local rates) when overseas.

I called their global support number, with patience in one hand and my phone’s IMEI number in the other. I got through immediately! The rep – let’s call him Bob – spoke English I could understand. Once I explained what I wanted, Bob explained how to get it — and he didn’t use a script! I didn’t have to ask for a supervisor. Furthermore, because our voice connection was bad, he asked if he could call me back – and did so within seconds, as promised. While we waited for the phone to reboot, Bob asked for my e-mail address so he could send me the Terms & Conditions for using an unlocked phone outside the network. I received it within seconds. He then explained why upgrading the phone to a newer model might be a good idea, since multi-band GSM technology has advanced since my phone was first released, and it would make it easier for me to make calls to and from different countries. I though it over, but said no thanks for now, and that was that. No hard sell. After a final systems check, Bob wrapped up and wished me luck on my upcoming trip.

Was I was on some strange Class M planet where something in the water makes call center staff competent and sincere? Did I stumble into a customer service black hole and emerge into some customer satisfaction champagne room? What did I do to deserve this?

Who knows and who cares – I should be thrilled right? Actually, I’m not.

That’s because my concierge level experience at Verizon Wireless has now made it a little harder for me to hate them. They have confused me. They were consistently terrible at worst, mediocre at best. Now I’m hoping for friendly, effective service every time. But something tells me this recent call was not typical. Why, Verizon, have you tormented me so?

I hope I’m proven wrong. I hope they hit a bull’s eye every time.

In the meantime, whether you own a company or work for one, is outstanding service baked into your organization as Standard Operating Procedure? If it isn’t, why not? Where are the weak links in your systems and culture?

If you are on the front line:

1) Listen
2) Pay attention
3) Speak your customer’s language (literally and figuratively)
4) Know your products.
5) Don’t be afraid to offer something of relevance or value.
6) Smile like you mean it.
7) If you don’t know the answer, just admit it. Then find it.
8) Say thank you.

If you are a manager or owner:

1) Hire the right people (You get what you pay for).
2) Train them
3) Trust them
4) Let them go off script
5) Reward them for great service

Why does it matter? It’s simple, decent service is not good enough. It doesn’t matter how big you are, or how long you’ve been in business. Today’s oligopoly can be tomorrow’s “dead brand walking”.

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Toyota’s Cruise Control Crisis

May 11th, 2010 · Brands, Customer Service, Strategic Planning

This may hurt a little

Just when they thought the storm was over, Toyota faces yet another government probe. (Could there be any worse kind?) One that may reportedly result in a $16 million (USD) fine.

In a statement Monday, the NHTSA said it’s opened an investigation into whether Toyota “notified the agency of a steering relay rod safety defect within five business days of learning of the defect’s existence, as is required by law.” About 1 million trucks and sport utility vehicles, may be affected.

Toyota Motor Corp. said Tuesday that January-March 2010 profit totaled 112 billion yen ($1.2 billion) compared with a 766 billion yen loss the year before. Quarterly revenue jumped to 5.28 trillion yen ($57 billion) from 3.54 trillion yen a year earlier, when purchases of cars and other vehicles were slumping amid the global financial crisis.

Yet despite its troubles, Toyota is forecasting even better results for the fiscal year through March 2011, projecting annual profit to rise 48 percent to 310 billion yen ($3.3 billion).

Whether the world’s biggest automaker can continue its recovery rests in part on [Read more →]

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Quality of Place is a State of Mind

May 10th, 2010 · Economic Development, Human Resources

As we all know, the U.S. economy is undergoing a huge state of flux right now. One of the biggest long-term effects will be where workers– especially those in computer-based “creative” sector job — decide to live, work, and play.

Below are some thought on the subject I recently wrote for a cover story article in Global Corporate Xpansion magazine. Let me know what you think. Which is getting stronger — people relocating to jobs or jobs locating to where a (certain demographic of) people are?

Quality of Place is a State of Mind

For years, site selection professionals evaluated cities and regions on the basis of infrastructure and cost of doing business. They considered inputs such as access to raw materials, energy, land, and water, the quality of communications and transportation, and the availability of physical labor. Infrastructure and other factors like tax climate and regulatory burden remain important; yet the long-term macroeconomic shift from manufacturing to services, in tandem with the economic upheaval of the last two years, has affected the way businesses and workers perceive what is critical to their success.

Just as an educated and talented workforce can make or break a company, quality of place has emerged an important ingredient in developing a successful, sustainable locale. Jobs alone are no longer enough to attract talent. Companies and communities have to adapt to where people are going. [Read more →]

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The Creative Destruction of Layoffs

March 1st, 2010 · Economic Development, Human Resources, Staffing

As the economy continues to twist and turn, seeking some kind of equilibrium-or at least reasonable stability- again, people, as always, are getting caught up in the storm. Some were prepared, many were not.

The goods news is that while many workers are unfortunately being cut back, others are seeking and taking advantage of opportunities which are opening up. It’s all part of what I call the Creative Destruction of Layoffs, which I wrote about in an article for Global Corporate Xpansion magazine.

The economic concept of creative destruction, first introduced by the Austrian economist Joseph Schumpeter, describes the cyclical transformation that accompanies industrial change, technological innovation, and the creation of new forms of wealth. However, the process is not without its painful side effects, especially during the worst economic contraction in decades. Laid off workers — particularly those with obsolete skills — are the human casualties of the recession and constant reinvention of a competitive and globalizing economy.

Since the start of the recession, 15.4 million Americans are unemployed and seeking work, another 6 million have stopped looking and 9.2 million are working only part-time. The hardest-hit sectors: automakers and their suppliers; publishing; pharmaceuticals; construction and manufacturing; natural resources and mining; IT, and professional services.

When joblessness rises during a cyclical downturn, self-employment tends to rise as many displaced workers become small-business owners in response to the pressing need to replace [Read more →]

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Business Feats of Strength: Serious Lessons from a Funny Milwaukee Manufacturer

December 23rd, 2009 · Cool Stuff, Marketing, Products

As a big fan of Seinfeld, this brief CNN story on Festivus caught my eye today. If you’re not hip to the genius of co-creator Larry David and show writer Dan O’Keefe, here’s a clip featuring Frank Costanza and the Seinfeld gang that explains it all:

And if you’re really into the holiday, here’s a full description.

Besides being a very funny response to the rampant commercialization of Christmas (how can you not love a holiday that features Feats of Strength and the Airing of Grievances?), the spirit of Festivus – in a life-imitates-art moment – has spawned an actual business.

Kind of neat in and of itself, but what’s even more interesting is the story behind The Wagner Companies, the Milwaukee-based parent company of www.festivuspoles.com, and a manufacturer of products for metal fabricators and a producer of custom products — primarily for handrails. Wanting to know more, I contacted Tony Leto, their Executive Vice President of Sales and Marketing. Not only was Tony gracious enough to send me a video clip about the product, he agreed to be interviewed by yours truly right before their Christmas party. Turns out that behind what sounds like a rather ho-hum manufacturing business whose jobs would have ended up outside Shanghai a long time ago, lies a pretty cool business philosophy and sophisticated marketing machine not typically found in the B2B world.

Tony’s responses about their Festivus Poles reveal some simple, yet powerful lessons (emphasized in bold) about how to succeed as a 21st-century business, even – or perhaps especially – if you are are manfucturer in the heart of the Rust Belt. The biggest takeaways ? See below…

How many Festivus Poles does your company sell?
First year (2005) we sold about [Read more →]

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Behind Brown: How UPS Delivers

December 22nd, 2009 · Brands, Customer Service

With the frenzy of the holidays upon us, it’s easy to forget how the gears of modern commerce work. Here’s a brief behind-the-scenes look  (courtesy of CNN Money) at the box pickers, truck loaders, and truck drivers of UPS who get our toys, books, scarves, lab samples, training binders, and literally millions of other items per year from point A to point B.

Although this is clearly a company-sanctioned video made by a mainstream media outlet, two things jump out at me from a business point of view:

1) the distribution center folks naturally talk about how they do what they do. However, the driver — a charming New Yawkuh by the name of Tony Roshdy — whom the camera follows on a delivery route, talks about trust and the personal relationship he has built up with UPS customers, and having the right attitude for the job.

2) when asked for the number of packages he’s delivered in his 25-year career, Tony take a WAG and estimates “about a million” deliveries. Let’s help him out with some quick, cocktail napkin math. According to Business Week’s recruiting profile of UPS, number of paid vacation days new hires receive:

In their first year on the job: 10
After 3 years: 10
After 5 years: 15
After 10 years: 20

That’s 50 days in years 1 through 5; 75 days in years 6 through 10; 300 days in years 11 though 25, which comes to 425 vacation days. Let’s say he’s a real trooper and calls in sick only 2 days/year, which comes to 50 sick days. The site says they get 8 paid holidays/yr (hmm, thought it would be more generous considering they are unionized); which comes to 200 total paid holidays. Assuming Tony normally works a 5-day week: 260 days/yr x 25 years comes to 6,500 delivery days. Subtract 675 days off (425 + 50+200) to get 5,825 total days. At 5,825 delivery days x the 250 packages/day Tony mentions, that comes to 1,456,250 packages delivered over his 25-year career Tony, take a bow! And that’s not counting any overtime. Just for fun, let’s guess that the average value of each package is $25. That comes to a total of $36,406,250 in delivered value. And that’s just one driver.

For those of you who are logistics junkies, here’s a UPS Fact Sheet, with all sorts of info about the company. And if you’re a FedEx fan, here’s an interesting compare and contrast write-up of FedEx vs UPS (courtesy of the Braun Consulting Group).

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Better Start Learning Mandarin Chinese Now.

December 21st, 2009 · Human Resources

The following has absolutely nothing to do with business. Or does it?

The local middle school, which my older son started this September, recently mailed every parent a multi-page newsletter (anyone there heard of pdfs?) containing this little gem of a reminder.

I’m sure for today’s Gen Z youth, going from 6th to 7th grade has its challenges. Especially for those who are timid or shy and need time to adjust to their new surroundings and systems. But seriously – they are not giving students grades below 65% – because it will “destroy their chances for a successful year”. It will be 2 quarters before students will receive the grades they actually earn.

Wow.

In the real world, at least the last time I checked, successful companies begin evaluating the performance of their employees, contractors, and suppliers starting on Day 1. Yes, of course it’s not a perfect analogy since 13-year-olds and adults are not the same (usually) and learning about the Constitution is not the same as trying to master the evil that is Microsoft Office 2007. But assuming that schools across the country are doing this, what kind of message does this kind of policy send? And if this is a trend here to stay, what long-term effect will it have?

Whether we like it or not, today’s world is global, interconnected, and extremely competitive. We can only imagine what the world, the economy, and the workplace will be like 10, 15, 20 years from now. I’m no fan of the 19th-century industrial worker drone approach that schools and employers still practice today, but since when did grades become “success destroyers”?. Don’t get me wrong – young students who need help – especially those with serious problems or disabilities, should get it. However, though it’s tough getting a 25 on a math test (I still remember the day I did in 4th grade) you know exactly where you stand. Are you entitled to pass go, just because you showed up? Isn’t there a lesson in every failure? Is there no value in striving for excellence, especially when you face adversity?

Or maybe, I’m just getting old and cranky and blowing this out of proportion.

What’s it like in your business or organization? Do you build up your team’s confidence and self-esteem by successfully overcoming obstacles…or by lowering the bar?

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Carbonated Confusion

December 20th, 2009 · Brands, Marketing

In an “only in America” moment, it’s a newsworthy event when a company decides not to advertise on TV. In this case, for the first time in 23 years, Pepsi takes a pass on Super Bowl ads, leaving the beverage giant’s rival Coca-Cola free to pitch it’s own version of tooth-rotting sugar water in peace.

The company will instead launch a cause-oriented marketing campaign called Pepsi Refresh Project early next year, which will grant about $20 million to charitable causes proposed and selected by consumers.

On the face of it, it seems like a nice idea – that instead of shelling out a few million on a 30-second Super Bowl ad, they’re going to channel the money to orphans or whatever, but geez, why can’t I have a simple can of soda without it being an act of “planetary responsibility” ? Is this some new politically-correct attempt at assuaging the guilt of “The Pepsi Generation” – aka Baby Boomers? Is it a new-found commitment to social responsibility because it’s the right thing to do? Is it a countermove to a Coca-Cola campaign? Or maybe they are simply out of fresh ideas?

Try to find out by visiting the Pepsi web site. After waiting forever for it to load, aack! It features 23 more websites you have to choose from!

Pepsi NFL Rookie of the Year
Twitter
Pepsi Shop
MTV Music Video Award ’09
Pepsi DJ Collective
Pepsi YouTube Channel
Refresh Everything
Refresh Goodworks
Refresh Music
Refresh Sports
Pepsi Gallery
Pepsi Racing
Pepsi Music
Become a Fan on Facebook
Poptub’s YouTub Channel (huh?)
Downloads
Pepsi Legacy
Pepsi Eco Challenge
City Year (double huh?)
Do Something
Bob’s House (triple huh?)
Contact Us
Ultimate Refresh

But wait, there’s more…

There are horizontal navbar links: Entertainment, Promotions, Ads & More, Cause, Products, Company, Join, and Shop Pepsi. Each with their own sub-pages. And finally, there is something called “False Rumor Alert”.

All that – and you haven’t even gotten past the home page.

Well, maybe I’m getting old and I don’t have Generation Y’s attention span of a flea, but this is too much work. I guess I’ll never really know their marketing campaign’s true intent. Or for that matter, what the Pepsi brand promise is in general…other than, we’re not Coca-Cola.

What’s the alternative? I’m sticking with my favorite soda – Orangina.

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