Keep jobs in the US or not?

This is a touchy subject right now. Recently I was in communication with a CEO from another part of the world about partnerships with the US. Conducting some initial research with companies here in the US, I was struck with a dilemma. Even if I thought it was a good partnership with the foreign company, would there be fallout in the loss of local jobs. If this happened would it hurt the economy and would it worsen the potential prospects of the US workforce?

Many complain about the drain of US jobs to other parts of the world. However the truth is that high quality work is being carried out there more cheaply than in the US. As economics drive companies, they follow the line of most profit. In my view a reactionary isolationism is not going to help anyone. Instead a short-term economic and/or political gain will give way to massive loss in the world marketplace.

Rather, I suggest the US consider models based on those of the Japanese after the 2nd World War. Faced with a country with very little in the way of raw materials, Japan assessed its potential strengths - concentrating on developing industries demanding great skill and brainpower and few raw materials. The US is losing place and influence in the world economy, and while it is still the world’s richest and most influential nation, it must recognize times are changing.

The answer is not going to come in putting up a trade wall, but in identifying and seizing new market opportunities in an increasingly unified world market.

What was the biggest mistake of the "Big 3 in Detroit?"

There has been a lot of talk about the various bailouts. Particular negative attention was given to the recent request by GM, Ford and Chrysler for a bailout as the CEOs arrived in three private planes. Obviously the costs of these flights - approx $20,000 per flight - was not much in light of the multi-million bailout deals they were pleading for. However, this one action has not only jeopardized their requests, but garnered an awful lot of ill will towards their companies as the time they can least afford it.

I wonder how much these CEOs brought in their marketing/public relations experts to help them with their overall strategy. It’s hard to imagine that any of these CEOs was really thinking when they made their decisions to fly separately in private planes. Why didn’t they think? Was it tradition, arrogance, short-sightedness? These discussions with Congress could have turned into a wonderful opportunity to gain funding, increased the number of Americans determined to “buy American” and positioned them at the head of the growing drive to be green.

We don’t know what the result of this big marketing/public relations faux pas is going to be, but we should all beware we lead from the front in the public messages we send out about our companies, if we want to come of this meltdown healthy and growing.

Can branding hurt you?

This week McDonalds hit the headlines again! McDonalds has an unmistakable brand image. That could be said to be a massive advantage. McDonalds has certainly been able to expand internationally but how is it perceived in other countries? I was intrigued by the experiment they’re making in Japan by NOT using their brand. Their publicity machine says it’s so that customers can taste the taste without the image of McDonalds in their minds. The question is, “What makes McDonalds concerned that their image would have a negative impact on the taste buds of the Japanese?”

I remember the first McDonalds in the UK (bad quality), Geneva (better), Moscow (very ironic it was considered a luxury restaurant when Russian restaurants were so much better), outskirts of Jerusalem (really hate seeing those arches before the rest of the city). What image does McDonalds bring to your mind?

Comparing McDonalds to Coke, I realize that Coke has a very neutral to positive image in my mind, no matter what language or culture. When I think of McDonalds I remember how hard it was for me to initially even associate the word “Restaurant” with the type of food on offer. I also remember the negative publicity in the UK (the longest court case on record) for the debatable ethics of their targeted ads to kids. The movie “Supersize Me” hasn’t much helped either. Perhaps this image has prompted McDonalds to try their Japanese experiment. Will it be the precursor to a brand change? Is this McDonald’s first attempt to associate their brand with quality?

Whatever the upshot of this experiment, it certainly reinforces the need to be aware of the development of the brand image. Too little attention can have an impact decades in the future.

Trends through the recession

Ad Age recently published an interesting interview with Samsung CMO Steven Cook. He related some of his observations, which I believe can help many, as we seek ways through the tough times ahead.

Firstly, he mentioned the long-term success of companies that do not restrict marketing in tough times. Of course, inept marketing is not worth the money it takes, but effective marketing in tough times will actually help your company come out ahead of the competion - and faster! Procter & Gamble’s commitment to marketing helps explain its longevity. I recently went to a presentation paralleling the situation in 1929 and today. Companies such as P&G and General Motors actually did very well employing the strategy of consistent and innovative marketing.

Secondly, Mr. Cook shows the “upside” of the tough times for marketing. E.g. if people can afford less to go out to movies, they are more likely to invest in home movie options - including flat screen TVs, the new film downloading technologies and servers etc. This should emphasize the need for all of us to see the markets that will in fact be created by the recession.

Thirdly, Mr. Cook mentions the growing influence of “Green concerns”. He mentions how important it is to remain humble, not promise what you can’t deliver, and then deliver or over-deliver. I also liked his creative thinking when he gave out cellphone recycle envelopes at a recent conference when he was keynote speaker.

All of these examples should encourage us as we look at the ways strong companies are finding to negotiate a challenging time and come out ahead.

Countries to watch?

Jennifer Alsever wrote a thought provoking article on BNET.com suggesting the best countries for small, medium and large companies to look at when it comes to expansion. She agrees that it makes a lot of sense for US companies to look at international expansion, given the state of the US economy right now. I believe it will not only help companies survive the current crisis, but will position them well ahead of the competition when things pick up.

Here is her list of countries:

For large companies she suggests the more obvious choices - India, China and Russia (For me Russia poses some weightier and less obvious challenges than the others but there are obvious benefits to all three).

For medium-size companies she suggests Chile, Singapore and UAE. (I find this an ecclectic and interesting set of choices).

For small companies she suggests Vietnam, Rwanda, Peru and Kazakhstan. (I find this the most interesting set of choices).

I found this article well-written and researched, with a helpful risk index. The entire article is available at http://www.bnet.com/2436-13239_23-198453.html. What do you think?

Public Relations - how not to do it!

I was watching the US Presidential elections, switching between channels to see different perspectives and I came across BBC America (which I watch quite frequently, as it’s the only news station in the US that tells you anything about the rest of the world). BBC America had an MC and four panellists, who switched at various intervals. I happened to tune in at the end of an interview as discussion switched back to the studio. There were two Americans and two Brits on the panel.

The first American to speak gave a classic example of everything not to do while trying to communicate effectively (much I think to the embarassment of the other American present). He started off by telling the MC the reporter should be sacked, and then launched into an unbelievably arrogant dressing down of the BBC and the rest of the world, as if he was the parent and the rest were disobedient children without his insight and knowledge. If ever someone wanted a negative example of a stereotypical American, this was it. Key phrases that really jarred were such as, “You (BBC) are a guest in this country”. He was seemingly oblivious of the fact he was a guest on the BBC!! It is even more ironic that this person was previously an Ambassador! (One does not have to wonder too much to see why there are international public relations issues!)

Am I saying it’s impossible to have very different positions in effective international public relations? Of course not. In fact, I very strongly disagree with some of the BBC’s political reporting. The problem is not having different values, perspectives and positions - the problem occurs when we communicate those in a fashion which bring our character to the fore and not the problem. Some tips to consider when trying to communicate a vastly different position are these:

How does the receiving audience receive such information in their own country and culture in a way that they interact with it?
Have I focused down to my main point? It’s very hard to deal with differences all at once.
How can I communicate in such a way that I appear approachable, teachable and humble.
Will it help to use “third party questions”? (E.g. “How do most people in___ see this issue?”)
These are just a few suggestions. Obviously coming to constructive resolution or a way forward requires some more experience and skill.

Can startups think internationally?

Is it sensible for a startup to think of international markets? The answer of course depends on the startup. However, it certainly should not be ruled out. Increasingly workforces are becoming international and these international employees bring with them a wealth of experience and contacts. While overexpansion will lead to collapse, finding the right market and the right niche can put a company ahead of the curve.

What kind of questions should startups ask themselves?

Have we properly identified which of our employees' experiences and contacts may lead to a worthwhile business decision?
Having recognized these contacts, have we got an approach strategy?
Have we a strategy to prioritize results?
Along with these questions, startups need to examine their resource constraints more closely than established companies. This is where recruiting of the right (usually multiskilled) entrepreneurial and visionary personnel is important. I believe that if a startup is aware of key international developments in their general sphere, the right international link could help them be vastly ahead of the curve in the next decade. If we want to see current examples of such forethought, look at those companies which first foresaw a massive growth in India's IT capabilities.

Customer service gives your new market entry the edge

Seems like I’ve been going on a bit about customer service recently. The other day I called back to a State phoneline to ask why after I had sent a ton of information a month ago, I had just received a letter asking for the same information and this letter had erroneous information about me! When I called, I spoke to an unfriendly and unhelpful representative who told me, “How do we know you are who you say you are?”. At the end of the call I asked if I could highlight my problem and suggestion for improvement with a supervisor. She told me to call my State Representative if I had something to say, she was not interested!

If we go back a few years to the airline crunch, I remember being very loyal to a particular airline and its alliance. Frequent flier miles had netted me a lot of perks more easily than with other airlines. This airline filed for Chapter 11, as did many others, and for the first year plus, I actually bought tickets - eschewing the use of miles - in my personal attempt to help the airline and its employees. After about a year the customer service dived to worse than rock bottom - I would actually say unethical in some of the sudden changes in charges they made after ticket purchase, and regardless of frequent flier status. As a result I quickly used up my 200,000 miles of free tickets and have only used this airline sporadically since.

The trend in the US away from customer service has been exacerbated by concerns over the unstable market. So imagine how great poor customers will feel if you provide an easy to use product or service with excellent follow-up. Customers who are treated like royalty, rewarded for loyalty and helped quickly and effectively with any problems, will notice a very stark difference to the norm. I would suggest your business will very quickly be their partner of choice. The same will be true for any US business seeking to make entrées abroad. Many countries have no customer service tradition, and those previously famous for great customer service are slipping. This crisis is actually a leveler giving you a real chance at large market share.

Be careful though before imagining you customers want what you want them to want! To give great service in a foreign culture, you need to understand what great service is in that culture first.