Brand Autopsy

Pings, Trackbacks, and Comments from the WOMMA Summit

I took page after page of notes from the inaugural Word of Mouth Marketing Association Summit. After culling through them today, I compiled a list of posts which round-up my takeaways and thoughts from the conference.

Go ahead and click-thru the following jump-list of posts.

The Mainstreaming of WOM?

The Grandfather of WOM Speaks

WOM Units and C.P.I.

Developing Ethical Guidelines for WOM

Influentials vs. Individuals

Greater the Promoters, Greater the Growth

Opening Kawasaki’s Kimono

Guy’s Bad Apple

Marketing Metaphor Melee

Emanuel Rosen’s 10 Questions Marketers Should Ask

David Polinchock Made Me Think

Viralmentalist – the Coolest New Word in Marketing

Don’t just take my impressions from the conference. Be sure to check out other WOMMA round-up postings from these blogs:

Brand Experience Lab (David Polinchock)

Church of the Customer (McConnell | Huba)

Community Guy (Jake McKee)

A Penny For (Todd Sattersten)

Business Blog Consulting (Rick Bruner)

Conference Calls Unlimited blog (Zane Safrit)

Keith Bates blog

(Keith Bates)

The Mainstreaming of WOM?

In his State of the Industry address, Andy Sernovitz (WOMMA CEO) mentioned the long-term goal of having WOM become a mainstream marketing tool.

Guy Kawasaki commented during his post keynote Q&A that we may be overly optimistic believing WOM will become mainstream. He went on to say that it’ll take a whole generation of marketers to die before WOM goes mainstream.

Hmm … what if WOM becomes mainstream? Will it become like all the other once tired and true and now tired and trite marketing tactics that we all find to be ineffective?

My thinking is WOM’s goal should be to become the best and not the biggest. We shouldn’t work to have WOM become the biggest, most used marketing tactic but instead … continuing working to have WOM be the best, most effective marketing tactic.

The Grandfather of WOM Speaks

George Silverman, the Grandfather of WOM, has been tracking WOM since the early 70s and wrote the first book on it in 1991 (Secrets of Word-of-Mouth). Throughout the conference George delivered some memorable quotes and interesting observations. Such as …

WOM works especially well today because it reduces information. In essence, our social networks edit out all the unnecessary information about unremarkable products and only lets the hyper-relevant information spread.

“Sustainable WOM only works for good companies with good products.”

“If WOM is 5,000x more powerful than advertising then it will attract every sleaze ball out there.”

Later in the conference, George elaborated on how brands need to pay attention on how to get consumer’s to pay attention by saying …

”Brands better earn it [customer’s attention]. We have the same time currency. We all allocate it differently. Attention is not cheap. It is expensive. Brands attempt and strive to have us pay attention. Brands need to earn it."

WOM Units and C.P.I.

There was a lot of chatter about measuring and quantifying WOM during the conference.

One emerging idea was the concept of a WOM Unit. Jonathan Carson (BuzzMetrics) defines a WOM Unit as “a single unit of marketing-related information.” Another idea discussed was C.P.I. – Cost Per Influencer.

Anyone else having a hard time imagining presenting a media spend plan with 125 WOM Units at a certain CPI? How much longer until someone proposes an E.I.F (Effective Influencer Frequency) measurement for a WOM campaign?

Obviously we have work to do on quantifying WOM.

Developing Ethical Guidelines for WOM

Question … how can you establish guidelines for something that is still being created and still be understand by its practitioners? I dunno.

Yet, that’s exactly what we at WOMMA are trying to do with establishing ethical guidelines for WOM.

My take is to publish a set of general, but well-defined WOM core values and seed them with marketers. Once these core values begin to take root, we then start to built a WOM culture and through this culture-building, social norms for WOM will develop.

Ultimately shouldn’t it be up to us to self-police ourselves and not to any definitive list of guidelines?

Can’t we TRUST ourselves to behave properly?

After all … as advocates for WOM and customer evangelism, we are challenging businesses to TRUST their customers to take ownership of the brands they promote. As such, we oppose businesses dictating how customers should use their brands.

Why then are we proposing dictating WOM guidelines?

Where’s the TRUST?

We talk about how today’s society of attuned consumers and determined detractors will sniff out anything inauthentic and inappropriate. And once they do sniff out the crap, they will go to the mountaintops and tell the whole networked world about it.

Consumers will police us. And we will police ourselves.

Do we have enough TRUST in consumers to believe they will police us? Can we TRUST ourselves enough?

So … why the need to dictate guidelines for WOM when we supposedly have all this TRUST?

(Yep, you guessed it. I’m a Libertarian.)

Influentials vs. Individuals

[UPDATED to include a link to Dave Balter's presentation]

WOM practitioners are clearly divided on who drives WOM. Some say influentials are responsible while others say its individuals.

Ed Keller (CEO of Roper ASW and author of The Influentials) has oodles of research data identifying the integral role influentials play in determining how the rest of society acts. On the other hand, Dave Balter (CEO of BzzAgent) contends everyday people are the best drivers of WOM. (Click here to download a PDF of Dave's presentation.)

Could it be that Influentials help remarkable products and services reach the proverbial chasm and then hand off the WOM baton to Individuals who carry the product/service across the chasm and deep into the mainstream?

Greater the Promoters, Greater the Growth

If you need analytical ammunition to better champion the allocation of funds to implement evangelism marketing tactics, share Frederick Reichheld’s Harvard Business Review article titled The One Number You Need to Know with your company’s left-brain naysayers.

This article was mentioned throughout the conference and it’s a great read for any marketer interested in quantifying the sales impact of evangelical customers. Click here to read a vintage Brand Autopsy post on the article and for a link to purchase the article.

Opening Kawasaki’s Kimono

This was the first time I’d heard Guy Kawasaki speak and I was impressed. His lucidity, humor, and ability to connect with an audience went beyond being amazing to being inspiring.

In his keynote speech, he basically merged his thinking from Art of the Start and Selling the Dream into Guy’s Top 10 Rules for Evangelism.

#1: Make Meaning.
Create products and services that are designed for the higher purpose of making a difference in the world.

#2: Niche Thyself.
Bring truly unique and great products to market. Avoid crap.

#3: Don’t be Paranoid.
Welcome and actively engage the early adopter freaks and outer fringe folks who embrace your product from the get-go.

#4: Localize the Pain.
Personalize the meaning of your products and services by succinctly and compelling explaining how it will improve one’s life.

#5: Let 100 Flowers Blossom.
Don’t force customers to use your products in a certain way. Encourage and facilitate customers to create new uses for your product.

#6: Look for Agnostics, not Atheists.
Forsake atheists who will never believe. Instead, spend marketing dollars on agnostics who are neutral and can become believers.

#7: Enable Test Drives.
Be generous and find ways to share your product so potential customers can experience it.

#8: Provide a Slippery Slope.
Make your products and services easy-to-use. Never create barriers for adoption/acceptance by customers.

#9: Foster Team Spirit.
Make customers feel part of the team. Enduring companies have a moral obligation to make customers a part of the ‘family.’

#10: Don’t Ask Anyone to Do Something You Wouldn’t.
Do unto your customers as you would have your customers do unto you.

#11: Be a Mensch.
If you are a true evangelist … you have a moral obligation to share, to care, to service, and to give abundantly with the expectation your actions will make the world a better place.

Guy’s Bad Apple

While Guy Kawasaki is still Apple to the core, he is tired of defending Apple, hypothesizing about Apple, and answering for Apple. This after being asked about his thoughts on why Apple is suing their evangelists for leaking information and why there are no Apple bloggers of note compared with the many notable Microsoft bloggers.

Marketing Metaphor Melee

Just when you thought there wasn’t another metaphor left to describe the way marketing happens, someone offers up a new marketing metaphor.

The latest one comes from Greg Stielstra (Zondervan Publishing) and his concept of PyroMarketing. During a panel discussion, Greg walked us through how activating great marketing is like starting a great fire. First, one has to “gather the driest tinder.” Then one must “touch it with a match,” “fan the flames,” and “gather the coals.”

Ugh.

But wait, his metaphor works pretty darn well. It works well enough that the book -- PyroMarketing -- will be published this year. You can download a version of the presentation he shared at WOMMA by clicking here (.pps) and be sure to download the presentation script (.pdf).

Emanuel Rosen’s 10 Questions Marketers Should Ask

Emanuel Rosen, Anatomy of Buzz author, shared with us in his keynote address how to design marketing campaigns to engage customers, spread stories, and drive results.

He distilled his advice into Ten Questions to Ask Yourself BEFORE Activating Your Next Campaign.

1. Does the product lend itself to WOM?
Is the product remarkable?

2. Are we reinforcing the concept and the message behind the product?
Are we implementing stunts to grab fleeting attention? Or are we implementing meaningful and compelling activities that are captivating?

3. Can we release information gradually?
How often can we give customers new chapters to the story we are telling them?

4. Are we giving our customers something to talk about?
Are our tactics interesting to get customers interested?

5. Do we give customers an opportunity to get involved?
What can we do to allow customers the opportunity to co-create with us?

6. Are we making it easy for customers to spread the word?
What simple mechanisms are we giving customers to tell others about the product/service?

7. Can we stimulate interaction among customers?
Are we enabling customers to bond with each other? And are we fostering the spirit of community with our customers?

8. Can we identify network hubs by category? By their activism?
Have we properly identified our customers by their like-minded passions?

9. Are we seeding the network?
Have we located and appealed to the uber-mavens across multiple social network hubs?

10. How is this campaign going to affect our reputation?
Is this campaign a brand credit or a brand debit?

David Polinchock Made Me Think

In the 'Buzz: Earning It and Making It' breakout session, Dave Polinchock (Brand Experience Lab and Fast Company/Ad Age media darling) said a few comments that got me thinking.

“We [consumers] don’t like to be captive.” -- Dave Polinchock
Yeah … with splintered audiences as a result of media proliferation, no such thing as a captive audience exists anymore. But as marketers, we still seek to communicate messages to captive audiences. Instead of trying to hold audiences captive, we should strive to be captivating to audiences. Captivated – YES!!! Captive – NO! Dig?

"Tourists come home with souvenirs. Explorers come home with stories." -- Dave Polinchock
That’s something we would have said at Starbucks back in the day. In the late 90s we approached amplifying the Starbucks brand to appeal to consumers we termed as being Everyday Explorers. These are people who seek to be interesting and interested as well as crave experiences big or small. Commoditized goods/services fall into the tourist trap marketing mindset. Remarkable goods and services appeal the everyday explorer.

Viralmentalist – the Coolest New Word in Marketing

Viralmentalist. That’s the term South Carolina teens use to describe their anti-smoking activist community. It’s an offshoot from the Brains on Fire agency created Rage Against the Haze anti-smoking campaign. The term ‘viralmentalist’ didn’t come from an agency copywriter. It came from the kids. That’s even cooler.

Vacuous and Idiotic Annual Reports

It’s spring time and besides being the season for March Madness, it’s also the season for companies to issue Annual Reports. And the authors behind Why Business People Speak Like Idiots have turned their attention to showcasing the most vacuous and idiotic shareholder letters from 32 of the largest corporations in America.

They're calling it Manure Madness and are conducting a Tournament where the ultimate vacuous and idiotic shareholder letter will be rewarded with their 2005’s Shining Beacon of Business Idiocy.

Round 1 judged letters on Verbal Diarrhea (“… the inability to say something in less than a page when one sentence would suffice").

Round 2 judged letters on their percentage of Empty Calories (the % of total words that are all fluff and convey nothing measurably substantive).

Round 3 will judge letters on their level of Committophobia (how deftly the company shakes responsibility and dismisses accountability).

Round 4 will judge letters based upon their Cheese Factor (measuring “…who can offer up the cheesiest load of tired clichés (‘our people are our most important asset’), overused catchphrases (‘we are well positioned for growth’) and syrupy say-nothing slogans (‘building a better world for all")).

Round 5 is the Inspired Insipidness championship game and the winner of the 2005’s Shining Beacon of Business Idiocy crown will be the most dull, boring, and lifeless shareholder letter.

Creative stuff to say the least and all of their commentary is ruthless with some comments more ruthless and more brutal than others.

For example, here is their take on the annual report from AmerisourceBergen, a pharmaceutical services company.

[The authors write] The first problem with AmerisourceBergen’s annual report is the ginormous full page profile shot of CEO R. David Yost (don’t leave the R. off). OK, say you’re the CEO of some big humongous Fortune 50 company. It’s time for you to review the annual report, and your Reese Witherspoon Legally Blonde Communications Department Assistant Manager in Charge of Annual Reports comes in to show you the first draft. And you see, right there on page two, this picture of you that shows in full IMAX relief every single Botox neglected wrinkle on your face. So what do you do? Any executive with an ego within six sigma of the human mean would say, “Oh my, isn’t that just a little much? Why don’t we go with a slightly smaller version, say about 98% smaller”. But not R. As in R. David Yost. R. decides to go with the supersized version. We call this the Mt. Rushmore syndrome. Major league Cheese Factory infraction for this one.

After the full page tribute to R., we get a nice helping of Commitophobia. We do give them credit for admitting 2004 performance was below expectations. But then the dissembling starts. Here are the reasons for 2004’s performance:

“In fiscal 2004, a very competitive pricing environment in all our business units, a decrease in drug price appreciation in the September quarter, and a shift in manufacturer compensation contributed to a very challenging year. We lost our largest provider customer, the Department of Veterans’ Affairs, to a competitor’s lower priced bid and another large account due to its sale to a company we do not service”

Oh, those silly competitors. Always coming in and undercutting our prices. Will they never learn? And what has happened to our luck lately – it just never seems to go our way anymore. How about some cheese to go with all that whine?

*************************************************

More ruthless commentary is directed at the Altria annual report.

[The authors write] This is the kind of photo that really inspires confidence. Check out Shifty Eyes Szymanczyk on the lower right, and Mr. I-smoked-more-than-just-tobacco-today Greenberg on the top, second from left. Wanna’ take bets on how many Marlboro Reds each of them inhales a day?

Beyond the class photo, Altria gets props for introducing a new buzz term into the business person’s vernacular: “societal alignment initiatives.” We have no idea what these are, because Altria refuses to explain the term, which leads us to believe it’s their Super Secret plot to lace all Kraft Foods with tobacco, and eventually get the whole world addicted.

“We are witnessing more innovation and more activity on the business development front. And very importantly, societal alignment initiatives are placing our operating companies at the forefront of the tobacco and food industries.”

“Although PM USA has been increasingly successful in pursuing its societal alignment initiatives, regrettably, Congressional legislation providing for regulation of the tobacco industry by the U.S. Food and Drug Administration (FDA) was not passed in 2004.”

Scarrrrrry!

All you marketing gadflies out there … why are you still reading this? Go visit Manure Madness NOW!!! Your marketing gadlfy mind will be better for it. Dig?

[Thanks for the PR Machine for the link to the Fight The Bull Blog.]

Talkin' Shop at WOMMA

On Monday I'm heading to Chicago to attend the WOMMA Summit. I plan to spend the day visiting Dusty Groove (an ohh so funky record shop) and a few way tasty beer haunts (Map Room and Hopleaf) ... but my evening is free.

Email me [john(at)brandautopsy.com] or call me [Five-One-Two-Six-Three-Three-Four-Zero-Eight-Six] if you want to hook-up and talk shop Monday evening.

BOOK REVIEW: A Whole New Mind

Dan Pink's A Whole New Mind is an important book which deserves the immediate attention of every cubicle monkey and corner-office executive working in business today. It'll teach you how to thrive in the emerging Conceptual Age where "... the 'right brain' qualities of inventiveness, empathy, joyfullness, and meaning -- increasingly will determine who flourishes and who flounders." [READ MORE of my review on the 800-CEO-READ Blog.]

The Pontiac G6: All Buzz. No Bucks.

Remember all the hullabaloo from the Oprah Winfrey Pontiac G6 Giveaway? It was lauded by many as being a brilliant marketing move. At the time we questioned the tactic by blogging, ”… if the only thing remarkable about the Pontiac G6 is the Oprah Marketing/PR stunt, then is the car really remarkable?”

Now it seems the only thing remarkable about the Pontiac G6 is how UNREMARKABLE sales are.

According to the Detroit Free Press, sales of the G6 are at least 30% below expectations. And six months after its introduction, Pontiac’s marketers are getting desperate to move G6 inventory by offering $3,600 in incentives to goose sales. {Hmm ... not good.} As Seth Godin has taught us "… a low price strategy is the last refuge of a marketer who is out of ideas.”

The Oprah giveaway may have generated a lot of buzz for Pontiac, but it hasn’t generated a lot of bucks for Pontiac.

[Thanks to the Agenda Inc. blog for the heads up.]

Run, Gun, and Have Fun -- Whole Foods Market style

“Whole Foods is more like a fast-breaking basketball team. We’re driving down the court, but we don’t exactly know how the play is going to evolve.” -- John Mackey, Point Guard forWHOLE FOODS MARKET

Ya know … as a former bench player for Whole Foods Market, that’s probably the best way to describe the playing style of the company. Whole Foods fast break style is indeed frenetic, focused, and fabulous.

You can find more compelling candor from John Mackey, Whole Foods Market co-founder and CEO, in this liberated Texas Monthly interview (.doc). And when you read this interview, you’ll learn Mackey refuses to shop at Central Market, Whole Food’s biggest competitor in Texas.

Interesting. I wonder if he shops at Trader Joe’s ???

If not, he should. Trader Joe’s is positioning itself nicely to compete against the Whole Foods Market juggernaut.

Scion's Co-Created Brand Hijack Attempt

“Thank you Scion for bringing out 70 musicians from Los Angeles to Austin. Show me a record company that is going to do that!”
-- Double G daKONDUCTOR from daKAH, a hip-hop orchestra --

On Saturday afternoon at SXSW, Scion, the upstart youthful skewing car brand from Toyota, pulled off a co-created brand hijack by staging a semi-exclusive free music showcase for daKAH, a 70 member strong hip-hop orchestra.

Alex Wipperfurth, author of Brand Hijack, defines the co-created hijack as, “… the act of inviting subcultures to co-create a brand’s ideology, use, persona, and pave the road for adoption by the mainstream.” And yesterday, Scion seeded itself amongst an early adopter market of 750+ influential and leading edge musical provocateurs by providing them an experience they otherwise would not have experienced.

Double G daKONDUCTOR is right … no record company in its right mind would fly out 70 musicians for a 90-minute showcase. But daKAH is a band worthy of notice and it wouldn’t surprise me if daKAH becomes the next Polyphonic Spree. After all … it was SXSW 2002 where Polyphonic Spree was discovered by influential, leading edge musical provocateurs at a music showcase.

The question is … has Scion bet right and will daKAH blow-up like Polyphonic Spree did? And if daKAH does blow-up (as I think they will), how tightly associated will Scion be with music’s newest 'it' band?

Idea Sandbox: The First Sifting

Thank you for your comments regarding my new business, the Idea Sandbox... and my plan to open source the building and launch of this concept.

Here’s the reaction to the idea thus far...

RAVES
Initial reaction and feedback from the folks below was positive excitement. You can read all of the comments made on Brand Autopsy here... Below are links to posts on other folk's sites...

"Sounds pretty fun to me. I think an inspiring environment can really help folks do the thinking thing... I'm not sure about that word ideation, I think most folks would settle for having ideas. Setting that niggle to one side, I wish Paul lots of good fortune with this, it sounds like a bold effort to make a dream come true." - Johnnie Moore

"OK meeting planners, this is your chance to help see the space you've always wanted actually come to life. Go on over and tell him what you think." - Sue Pelletier

RUMINATIONS
These folks posed great questions, both challenging the concept AND stretching the concept. I'll be addressing these comments in future posts. Thank you for your comments...

"I'm not sure about that word ideation, I think most folks would settle for having ideas..." - Johnnie Moore

During the boom we had one of these facilities in my old neighborhood in Palo Alto, called KnowWhere ...As powerful as the idea was, this particular venture failed. Do you have any insight as to the causes of that or similar businesses failing? - Steve Portigal

How is your service going to attract businesses other than giving them space? Are you going to have experienced professionals come in to work with the groups that sign up or are you going to have a set staff of "ideators"? If you bring in gurus, do companies have to pre-plan so that you can bring in who they want, or do you pre-book the gurus and then sign up companies to pay for their stay with your company - Walker Hamilton

Congrats on striking it out on your own! Hairy, scary, but never boring. You should research Catalyst Ranch and the owner, Eva. She is very open and has learned a ton about how to manage and promote such a space. We at Alphachimp Studio Inc. have launched a sister-site to yours focused on the use of visual learning to solve real world problems: www.graphicfacilitation.com. I hope that this could become a way for creative practitioners as yourself to hook up with graphic facilitators and useful tools. - Peter Durand

Here are a couple ideas that "plus" the concept to something even bigger and better...

"Why don't you have a second offering where people can use your blog to ideate - without having to go in and do a session. All virtual, based off of your blog. - Tom of Tom's Blog

Andy Havens took some time to add these great thoughts and more...

"I will suggest both caution and mad amounts of creativity. Caution, because you will be competing in a category that is already hotly contested by traditional space-rental businesses like hotels, conference centers, restaurants and convention halls. Mad creativity, because if you don't exhibit insane levels of the juice you're hoping to imbue in your clientele, you'll be less likely to attract them..."

Additionally he adds...

"...get in touch with people and groups that do training events and see how you can combine what they do."

"...figure out a way to make your Idea Sandbox a welcome place for groups who are, as yet, un-tethered in the real world... where we can get back together and be... connected in person again."

"...I'm with Andy to see if there is a way for us that have the e-relationships and meet and discuss in person" - Adam

Finally a comment that wasn't posted on the Brand Autopsy site, but that caught my attention was posted by Kevin Briody on his seattleduck blog. He comments...

"Ideation, Ideators...is this 1996 again? Where's the talking sock puppet? - I hate to admit this, but I’m not sure if the guys at Brand Autopsy are using sarcasm and having a wry laugh...or are proposing a serious business...They toss around buzzwords like “ideators”, “ideation” and “BrainTrust” (note the creative use of caps), and brag about all the cool LCD’s and Play-Doh they’ll have to provide “visual, aural, tactile, and mental stimulation” for all your brainstorming and idea creation needs. Maybe I’m being too harsh, but I just got a serious flashback to the Valley circa 1996."

Do other folks think this idea is hokey? If so, let me know... and please let me know why you feel that way!

IDEA SANDBOX: STATUS
To keep you informed of the process, I’ll bullet out my key activities and updates.

Location

Fri. Mar. 11 - Toured Seattle with Rebecca of Flinn Ferguson Corporate Real Estate. This team contacted me proactively when they saw my name out there looking for space. They presented me with a catalog of twelve locations in Seattle, and we visited six of them on Mar. 11th. They all were great spots. It’s great to have an agent that’s on your side and understands your needs. I’ll keep you posted as the sites are narrowed down.

Business Plan

I’ve used Guy's "The Art of the Start" book as a guide to building my business plan. I’m in the middle of putting my binder of notes together... from target market... to price list... to marketing tactics... in a form to share with prospective landlords.

Finance

While I have a chunk of cash to cover build-out and start-up costs, a landlord wants the security of knowing that you can afford your lease payments. I’ll be securing a small business loan to serve as a cushion. (I’ll share that adventure as I progress)

Creative | Marketing Tools

Logo - I have a bunch of sketches, but need to refine it to a final version. (I’ll post my sketches when I have a few minutes)

Website - I’ve got a skeleton site built... But it isn’t ready for public viewing...

Blog Site - Blog it and they will come... The blogsite will be coming soon... it may replace these comments on Brand Autopsy if I take up too much examining table space.

Pre-Sales - Once I’ve secured a location, I plan to create an artist’s rendering of the space for use in pre-sale materials. While I’m planning to open in August ’05, I plan to start pre-selling the space beginning in April. Akin to a condo or hotel, (or other rental situation), I hope to have a number of reservations in the books prior to officially opening.

Misc.

Jackie Huba is in town to give a presentation at the local American Marketing Association annual conference. She hosted a marketing dinner tonight in Seattle attended by Pete Winemiller of the Seattle Super Sonics, Chris Pirillo and Robert Scoble. I don't mention this to name drop... I mention it because there was a lot of discussion about RSS feeds and ways to consolidate content. One of the missions of Idea Sandbox is to gather and deliver meaningful creative tools and resources. I can see a link to the 'virtual' meetings above as well as using RSS to share creative resources... we shall see.

Thank you for your time, energy, enthusiasm and comments... Keep 'em coming!

A Wise Crowd Selects the NCAA Winner

[UPDATED | National Bracket image | March 17 @ 7:45 AM (cst)]

Conventional wisdom tells us the NCAA Men’s Final Four will consist of all #1 seeds (Illinois, Washington, North Carolina, and Duke). It also tells us the winner will be Illinois, college basketball’s top-ranked team. However, since 1985, #1 seeds have reached the Final Four only 42.5% of the time and top-seeded times have won the tournament 55% of time. Hmm … conventional wisdom doesn’t seem to produce the best results when filling out your NCAA bracket.

What would happen if we applied James Surowiecki’s The Wisdom of Crowds theory to filling out our NCAA bracket?

Well, it would probably look like this:

[Images captured at 7:45 AM (cst) on Thursday, March 17.]

This National Bracket is from the collective wisdom of those playing ESPN.com’s online NCAA Tournament game. And as of Monday night, it mirrors conventional wisdom with Wake Forest being the only non-#1 seed to make it to the Final Four.

According to Surowiecki, four qualities must be present for a crowd to be wise:
(1) diversity
(2) independence
(3) decentralization,
(4) aggregation

This ESPN.com National Bracket seems to conform to Surowiecki’s outlined qualities needed for collective wisdom. With over 1.3M submissions last year, the ESPN National Bracket is inclusive of diverse opinions. Each submission is independently entered and the selections are not contingent upon other submissions. It is decentralized in that each person uses their own knowledge to select winning teams. And, ESPN.com aggregates all the submissions to arrive at a collective decision.

It’ll be interesting to see how the collective wisdom of ESPN.com’s National Bracket changes as thousands more diverse opinions are incorporated. You can track the changes to the National Bracket by clicking here.

The Domino’s Theory to Keeping Employees

Did you know the average employee turnover rate at fast food joints can be as high as 300%? That equates to a store fully turning over its staff three times within a year. (And we wonder why fast food chains struggle to give us attentive and efficient service.)

High employee turnover rates not only compromise service to customers, it can also hurt a business financially. It costs a business like Domino’s Pizza $2,500 to train every new entry-level worker and in upwards of $20,000 to train a new store manager. And when you hire 180,000 workers a year, like Domino's was doing in the late 90s, we're talking huge financial costs.

So when David Brandon was named Domino’s CEO in 1999, he went on a crusade to reduce Domino’s 158% employee turnover rate. Brandon’s crusade has been a success. These days, Domino’s employee turnover rate hovers around an impressive 107%.

In reducing its employee turnover rate, Domino’s choose not to go the conventional path of paying workers more money. As Brandon put it, “If we had increased everybody’s pay 20%, could have moved the needle a little bit to buy a little loyalty? Maybe, but that’s not a long-term solution.” He went on to say, “… you can’t overcome a bad culture by paying people a few bucks more.”

Instead, Domino's chose to focus on retaining store managers more than store employees to reduce staff turnover. It is Domino's experience when store managers churn at high rates, it has a tremendous negative effect with store-level employee turnover rates.

So the Domino’s Theory to Keeping Employees is about ensuring store managers are (a) of better quality, (b) have better tools, and (c) are better incentivized.

(a) Hire Better Quality Store Managers
According to research commissioned by Dominos, the critical success factor of a Domino’s store is not location, location, location ... but rather ... store manager selection, selection, selection. One way Domino's selects better store managers is to have each candidate undergo an online test to measure their financial acumen and people management style.

(b) Give Store Managers Better Tools
Each Domino’s store has an in-store computerized tracking program which details store sales figures down to the employee level with stats like average order size per employee and the time it takes to get a pizza order out the door. These tools help Domino’s managers to better track their star performers and challenged performers.

(c) More Meaningfully Incentify Store Managers
Besides giving profit-based bonuses, Domino’s also doles out stock options to top-performing managers based upon customer service measurements and store sales growth gains.

SOURCE: Wall Street Journal | To Keep Employees, Domino's Decides It's Not All About Pay (sub. req’d) | Feb. 17, 2005

Brand Autopsy now Scattergorizing

It’s time Brand Examiner Paul and I cleaned up our house of posts. So we’ve decided to start categorizing each post. By scattergorizing … err … categorizing our archives and all posts going-forward, it should be easier to locate Brand Autopsy takes on a swath of marketing topics.

You can find our categorized list of posts by scrolling and looking at the far right-hand column.

The Idea Sandbox: Introduction

I’m delighted to share with you that I, Brand Examiner Paul, am starting my own business in Seattle.

I’m opening an ideation destination... a conducive place for people to brainstorm. It’s called...

The Idea Sandbox

With the broad audience that this Brand Autopsy blog affords, I thought... instead of starting this business on my own – we could do it together. We could have a lot of fun.

For you... there is transparency in the project. Like starting a plant from a seed... you can witness the sprouting, growing and blooming of this project. You’ll have the chance to water, fertilize and pollinate.

As much as NOT a fan of reality television... there may be something to say about reality internet...

For me... opening this project to input from a broad audience allows access to ideas and thoughts I never would have come up with on my own... and THAT, my friends, is what the Idea Sandbox will be all about...

inspire businesses and entrepreneurs alike to dream the unthinkable and do the impossible.

From me... I promise to provide regular updates on the project. I’ll share where I am in the process. I’ll share the key decisions I’ve made. Some of this may be done here... or (respecting the core Brand Autopsy audience) I may bring you to an Idea Sandbox blog for the details. I promise to invite each and every one of you to the grand opening AND will offer each and every one of you something special if you bring your teams to the Idea Sandbox to find the solutions to your challenges.

From you... I want your honesty. Your thoughts. Your feedback. Your input. If you were to spec a dream space to bring your team – what would it be like? What have the barriers been at your organization to turning a flip-chart page of ideas into reality? How can you help make this the right place for the left brain?

Why this project?

As a little kid, I always wanted to ‘be an idea guy’ and help people find solutions to their problems. In each job I’ve had since graduation I found I had the knack to improve some part of the business by contributing solid, practical and actionable ideas. The Idea Sandbox allows me to formalize my passion and ability to help others generate wicked good ideas. I will share my expertise, as well as an extensive library of tools and resources to help others develop their own creative solutions.

About Idea Sandbox

Idea Sandbox will be THE space for creative thinking in the Pacific Northwest. One step inside this idea wonderland, you’ll understand how the Idea Sandbox will inspire businesses and entrepreneurs alike to dream the unthinkable and do the impossible.

Work groups and individuals ranging from business professionals, marketing teams, project managers, small group facilitators, and anyone aspiring to think more creatively will visit Idea Sandbox. They will be inspired by the space, mind meld with a BrainTrust of experts, and access the library of problem solving tools and resources. Idea Sandbox will not only appeal to Ideators from companies and non-profit organizations throughout the Puget Sound area, but also attract folks from across the Pacific Northwest - from Vancouver, BC to Portland, Oregon. Its reputation for productive thinking will make it a destination to Ideators across North America.

With three themed rooms, two with the capacity for 30 Ideators and one for groups up to 70, Idea Sandbox will be chock-full of visual, aural, tactile and mental stimulation. Rooms will be outfitted with practical high-touch tools such as white boards, flip charts, Play-Doh and toys... Required-tech tools will include... LCD projectors, DVD/VCR players, Wi-Fi Internet access, and satellite radio. Our kitchen will be stocked with food for thought and creative juices – tasty snacks and crisp drinks to keep the ideas flowing.

Ideators may book single or multiple rooms on a half-day basis (under 4 hours) or for the full day (4 to 8 hours).

The primary way solutions will be generated will be through facilitated brainstorming sessions... Where Ideators are guided through the various stages of ideation - from ‘blue sky’ to the ‘fewer, bigger, better’ list of actionable ideas. Alternately, Ideators may choose free-range sessions and use the inspiring Idea Sandbox space for brainstorming, planning sessions and team building activities.

Hopefully that’s enough to whet your appetite... Let’s see how this experiment goes! I look forward to your feedback!

What Ries Doesn’t Get About Execution

There’s been some blog chatter on Al Ries’ latest Ad Age article, “What CEOs Just Don’t Get About Marketing.”

I think Ries’ penchant for hyperbole is overshadowing the crux of his argument that good execution of a bad marketing strategy will not deliver exceptional results.

However, I can’t blame anyone for jumping all over him when he writes such blanketed statements like, “Marketing is 90% strategy and 10% execution. With the right name, the right target audience, the right position and the right timing, most marketing programs are bound to work. The difficult part is the 90%. The easy part is the 10%.”

Has Ries undervalued the importance of people (employees) executing a marketing program? Oh yes ... he has grossly undervalued the importance of people making marketing happen.

I just don’t buy his argument that most marketing programs are bound to work if the right name, right audience, right positioning, and right timing are in all place. I also disagree with his statement that the easiest part to a marketing program is the execution.

My experience at Starbucks Coffee and Whole Foods Market tells me marketing is more like 35% strategy and 65% execution. A so-so marketing strategy can deliver exceptional results if those responsible for executing it are informed and inspired to make retail magic happen. The real trick is how best to solve for informing and inspiring customer-facing employees to make retail magic happen.

Brand Examiner Paul and I wrote about one such way we solved for informing and inspiring Starbucks partners to make retail magic happen in a Fast Company blog posting from December of 2003. Click here to read about Blended Beverage Bingo.

So … from your experience, what % of marketing is strategy and what % is execution? Is it 90/10 or is it more 35/65?

Mike & Kevin’s Excellent Executional Adventure

Is it just me or has the Harvard Business Review become more action-minded and less academic-driven? I’ve been reading HBR for years now and typically found most articles to be too aloof and too obtuse to apply to my everyday business life. But the March issue is chock-full of great articles with learnings you can apply immediately to improve your business and how you manage your business.

I’ve already posted my takeaways from Marcus Buckingham’s article, “What Great Managers Do.” And now I’m posting takeaways from the highly informative interview with Michael Dell and Kevin Rollins. Michael is DELL’s Founder and Chairman and Kevin assumed CEO responsibilities at DELL in 2004. (Click here to purchase the entire article from HBR.)

I learned more about the culture of DELL in twenty minutes from reading the article than I have in twenty years of knowing the company. After reading the interview, I now understand how and why complacency has never and will never creep into the culture of DELL. This is a truly remarkable read. My takeaways are below …

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On why competitors haven’t been able to copy and beat DELL at its game …
ROLLINS: The same reason why Kmart can’t imitate Wal-Mart. What Wal-Mart does isn’t rocket science—it’s retailing. Why can’t everybody be Wal-Mart or JetBlue or Samsung or whatever the best company in their industry is? Because it takes more than strategy. It takes years of consistent execution for a company to achieve sustainable competitive advantage. So while Dell does have a superior business model, the key to our success is years and years of DNA development within our teams that is not replicable outside the company. Other companies just can’t execute as well as we do.

On the fallacy of high R&D spending …
ROLLINS: Asset reduction, inventory reduction, speed and time consolidation—these became more important than how much you spend on R&D. High R&D spending, when you do it to create proprietary products, leads you into a niche strategy, not a broad-based strategy. Yet many companies continue to argue that the winner will be the biggest R&D spender.

DELL: That paradigm belongs in the Smithsonian with the dinosaurs.

On the perception DELL is not an “invent” company …
DELL: We invent quite a bit but have a different approach. Our business model reflects what customers truly believe is important. We were the first in our industry to really embrace the Internet and to identify the role that standards would play in the server and storage markets.

For every dollar we put into R&D, we get about six dollars back in profit. When Samsung puts in a dollar, it gets three or four dollars back. Those are both pretty healthy ratios. Microsoft earns about $18 billion in operating income on about $7.7 billion in R&D spending. But Sony invests $1 billion and gets back only $200 million in profits. Sony is overinventing. They invest in things that might be exciting but that aren’t valued by customers. So they can’t generate good returns.

ROLLINS: Our competitors can’t beat Dell while also spending a ton of money on R&D and trying to be “invent” companies. Those two goals are mutually exclusive.

On implanting the DELL DNA throughout the company …
ROLLINS: We drummed into our people’s heads, through presentation after presentation, what’s good performance and what’s bad performance. They saw data on inventory every day. They got rewarded when inventory came down and punished when inventory went up.

DELL: By the way, the reward and punishment didn’t come from us, it came from our people seeing for themselves how much better their businesses worked when they didn’t have inventory.

On what happens when a DELL manager doesn’t deliver positive results …
ROLLINS: You become a pariah. We’ve had a no-excuses culture from the beginning. Whenever we hear that a business might have to lose money for a while, we challenge the GM to figure out how to run the business better than anyone ever has and not lose money.

DELL: If you start accepting the idea that a business doesn’t have to make money—for reasons that you might convince yourself are real—then that’s what happens. The opposite is also true. If you say, “No, we’re going to make this business profitable,” good things happen. Of course, the first kind of culture is easier to live in than the second.

On creating a high-performance and high-expectations corporate culture …
ROLLINS: It requires discipline and consistency. We know, down to our toenails, that our model works. When Dell fails to execute, it’s either because the GM is applying the model wrong or he’s not the right GM. In either case, Michael and I are to blame. When you fail to execute, our culture says, “Fix it. Find what’s wrong, and fix it. Or ask for help.”

On DELL managing by ‘fear’ or by ‘truth telling’…
ROLLINS: We’ve tried to create a culture where openness and honesty are encouraged.

DELL: The worst thing you can do as a leader at Dell is to be in denial—to try to convince people that a problem’s not there or play charades. A manager is far better off coming forward and saying, “Hey, things aren’t working, here’s what we think is wrong, here’s what we’re going to do about it.” Or, even, “Hey, I need some help. Will you help me?” That manager won’t have a problem. The manager who covers up and says it’s really not as bad as it looks—he’ll have a big problem.

ROLLINS: Our culture has evolved from a fear of the consequences of not telling, to where you just know you have to tell. It’s the way we all operate. Everybody sees everybody else’s numbers and gets to help with suggestions about their businesses. Here you can’t tell your boss or your peers, “Stay out of my business.” Openness and sharing are part of success at Dell.

On decision-making at DELL …
ROLLINS: The first rule is: Make your decision fast—even if you don’t have complete data. Get the best data you can, because making a decision with no data is a sin. But delaying a decision while you overanalyze the data is not good.

On the perception of DELL’s innate conservatism in decision-making …
ROLLINS: We are very risk averse.

DELL: In our industry, many promising new ideas become short, dead-end roads. We have a pretty good record of not going down them. That’s why our competitors accuse us of not being innovative—because we’re not investing in tablet computers or artificial intelligence.

But are we innovative? Show me another company that’s 21 years old, has $50 billion in revenue, and hasn’t done acquisitions. We’ve achieved massive organic growth, despite our caution about entering new businesses. We’ve led the market in the areas of innovation we believe will be important to customers—like the Internet, the commoditization of servers and storage, and converting from CRT monitors to LCDs. We’re not looking for the most challenging problems, we’re looking for the easiest problems that have the most opportunity.

On other companies poaching DELL’s high-performing employees…
ROLLINS: They [other companies] think hiring a Dell manager will allow them to replicate our operational and financial success. But it’s not that easy. If you hire a Dell-trained GM, you’ll get a smart, tough P&L manager. But a single manager cannot create Dell. That’s why Michael and I don’t take as much credit for the success as people might like to give us. It’s taken a team of a lot of people to create Dell.

A Dell GM couldn’t be as successful without the tools he gets at Dell. At another company he’d find himself asking, “Where’s my dashboard? Where’s all the talent?”

Things Great Managers Do

As mentioned earlier, Marcus Buckingham has written an outstanding Harvard Business Review article outlining the traits of great managers. The article is a synopsis of his recently released book titled, The One Thing You Need to Know … and below is a scalpel/suture of my takeaways from the article.

However, I HIGHLY ENCOURAGE you to go beyond reading this article outtake and purchase the entire article online or buy the March issue of the Harvard Business Review at any number of offline retailers.

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Great managers play chess, not checkers
Average managers play checkers, while great managers play chess. The difference? In checkers, all the pieces are uniform and move in the same way; they are interchangeable. You need to plan and coordinate their movements, certainly, but they all move at the same pace, on parallel paths. In chess, each type of piece moves in a different way, and you can’t play if you don’t know how each piece moves.

Great managers know and value the unique abilities and even the eccentricities of their employees, and they learn how best to integrate them into a coordinated plan of attack.

Being a Manager is different than being a Leader
Great leaders discover what is universal and capitalize on it. Their job is to rally people toward a better future. Leaders can succeed in this only when they can cut through differences of race, sex, age, nationality, and personality and, using stories and celebrating heroes, tap into those very few needs we all share.

The job of a manager, meanwhile, is to turn one person’s particular talent into performance. Managers will succeed only when they can identify and deploy the differences among people, challenging each employee to excel in his or her own way. This doesn’t mean a leader can’t be a manager or vice versa. But to excel at one or both, you must be aware of the very different skills each role requires.

This doesn’t mean a leader can’t be a manager or vice versa. But to excel at one or both, you must be aware of the very different skills each role requires.

Great Managers capitalize on people’s unique abilities
All that said, the reason great managers focus on uniqueness isn’t just because it makes good business sense. They do it because they can’t help it.

Like Shelley and Keats, the nineteenth-century Romantic poets, great managers are fascinated with individuality for its own sake. Fine shadings of personality, though they may be invisible to some and frustrating to others, are crystal clear to and highly valued by great managers. They could no more ignore these subtleties than ignore their own needs and desires. Figuring out what makes people tick is simply in their nature.

Identifying a person’s strengths …
To identify a person’s strengths, first ask, “What was the best day at work you’ve had in the past three months?” Find out what the person was doing and why he enjoyed it so much.

Remember: A strength is not merely something you are good at. In fact, it might be something you aren’t good at yet. It might be just a predilection, something you find so intrinsically satisfying that you look forward to doing it again and again and getting better at it over time. This question will prompt your employee to start thinking about his interests and abilities from this perspective.

Identifying a person’s weaknesses …
To identify a person’s weaknesses, just invert the question: “What was the worst day you’ve had at work in the past three months?” And then probe for details about what he was doing and why it grated on him so much.

As with a strength, a weakness is not merely something you are bad at (in fact, you might be quite competent at it). It is something that drains you of energy, an activity that you never look forward to doing and that when you are doing it, all you can think about is stopping.

Great Managers recognize great performance
The most powerful trigger by far is recognition, not money. If you’re not convinced of this, start ignoring one of your highly paid stars, and watch what happens.

Most managers are aware that employees respond well to recognition. Great managers refine and extend this insight. They realize that each employee plays to a slightly different audience.

To excel as a manager, you must be able to match the employee to the audience he values most. One employee’s audience might be his peers; the best way to praise him would be to stand him up in front of his coworkers and publicly celebrate his achievement. Another’s favorite audience might be you; the most powerful recognition would be a one-on-one conversation where you tell him quietly but vividly why he is such a valuable member of the team. Still another employee might define himself by his expertise; his most prized form of recognition would be some type of professional or technical award. Yet another might value feedback only from customers, in which case a picture of the employee with her best customer or a letter to her from the customer would be the best form of recognition.

Great Managers find ways to amplify a person’s style
Great managers don’t try to change a person’s style. They never try to push a knight to move in the same way as a bishop.

They know that their employees will differ in how they think, how they build relationships, how altruistic they are, how patient they can be, how much of an expert they need to be, how prepared they need to feel, what drives them, what challenges them, and what their goals are. These differences of trait and talent are like blood types: They cut across the superficial variations of race, sex, and age and capture the essential uniqueness of each individual.

Great Managing is about releasing not transforming
To excel at managing others, you must bring that insight to your actions and interactions. Always remember that great managing is about release, not transformation. It’s about constantly tweaking your environment so that the unique contribution, the unique needs, and the unique style of each employee can be given free rein. Your success as a manager will depend almost entirely on your ability to do this.

Wal*Mart’s Profit per Minute

Wal*Mart registers nearly $20,000 profit every minute of every day. Last fiscal year, Wal*Mart recorded profits of $10.3 billion.

$20,000 profit per minute!!!

Astonishing … ain’t it.

For comparison, Target’s profit per minute is $6,084 and Costco’s profit per minute is $1,711.

To say Wal*Mart is a money-making machine would be an understatement.

SOURCE: NY Times (reg. req’d) | The Count | Feb. 27, 2005

JC Penney’s 'Missing Middle' Strategy

If you watched the Academy Awards last Sunday (Feb. 27), then you were sure to have seen commercials from JC Penney. This is noteworthy because it marks the launch of JC Penney’s marketing strategy to appeal to the so-called Missing Middle.

With upscale retailers like Neiman Marcus & Nordstrom attracting the affluent shopper and with downscale retailers like Wal*Mart & Target appealing to the bargain shopper … it doesn’t leave much space in the middle for retailers selling moderately priced goods.

Yet, this is exactly where JC Penney is banking its retailing strategy on – the Missing Middle.

As Mike Ullman, Penney’s CEO & Chairman, puts it, “The core of America is up for grabs in terms of their heart and soul. This customer is underserved.”

The driving force behind Penney’s decision to focus on the Missing Middle comes from research the retailer did to define/understand its target customer better. According to JC Penney, the Missing Middle customer is:

Female

Age 35 – 54

$69K household income

married, with kids

seeks stylish, but not too trendy casual clothes

wants high-quality, form-fitting clothes that aren’t too tight

To serve the Missing Middle market, Penney’s is working with well-known designer Nicole Miller on an exclusive line of moderately priced and more than moderately stylish casual woman’s clothes. Penney’s has also added exclusive home furnishings from Chris Madden and Colin Cowie.

With private label goods comprising 4% of company sales, Penney’s is introducing a new private label band, “W – Work to Weekend” to better serve the Missing Middle audience.

These efforts to fine-tune its retailing strategy reflect the latest phase in a four year revitalization plan. Results so far have been positive for JC Penney as third-quarter earnings grew 86% and January year-over-year sales rose 3.3%.

SOURCE: Wall Street Journal | New Penney: Chain Goes for ‘Missing Middle’ (sub. req’d) | Feb. 14, 2005

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FLASH ANALYSIS:
If you followed our recent coverage on Robert Spector’s book, Category Killers, then you’ll know the dinosaur department store is facing extinction due to specialized retailing concepts like Best Buy, Home Depot, Staples, etc.

I applaud JC Penney’s attempt to remain relevant and stave off extinction. On paper, the Missing Middle strategy seems sound; however, I have my doubts.

To better understand the dire straits department stores are in, consider these figures from Category Killers:

Over the past twenty years, department stores’ share of the apparel business has fallen from 70% to 40% (Ouch.)

In 2001, 90% of American consumers visited either Wal*Mart, Target, or Kmart while only 28% of American consumers visited a department store. (Double Ouch.)

In 2003, consumers said they sent 16% of their money at department stores. That percentage represents a sharp decline from nine years ago (1994) when consumers said they spent 41.4% of their money at department stores. (Triple Ouch.)

Given those numbers, should JC Penney be on the endangered retailer list? Well, I expect by the end of this decade all department stores targeting the middle ground customer will be on the endangered retailer list.

As for JC Penney’s Missing Middle strategy … I’d rather see the retailer focus its marketing efforts on delivering a better shopping experience through improving customer service and making the store more exciting and more shopable. I’m not convinced focusing on apparel for the Missing Middle customer is a unique enough strategy to stave off retail extinction.

Tasty Links and Learnings

[UPDATED LINKS on 3/7/05]

I found the following links worthy of referring ... enjoy.

Webcast Interview with Dave Balter of BzzAgent
Don’t sleep on this CMO magazine webcast with Dave Balter, CEO of BzzAgent. No matter if you are a BzzAgent devotee or a BzzAgent determined detractor, spend 42 minutes to view/listen to this very informative interview. Dave discusses all aspects of the BzzAgent business and lets us know they recently ran a highy successful BzzCampaign for 20Q … something Brand Examiner evangelized.

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Swingline and the Purple Cow Stapler
From Public Radio’s Marketplace, we learn how Swingline is improving the staid staple. Not much has changed with the stapler in decades. Well, that’s about to change. Listen to learn more.

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Harvard Business Review (March Issue)
Marcus Buckingham’s article on “What Great Managers Do” is a must-read for any manager. The article is superbly well-written, highly informative, and very actionable. I cannot imagine how his forthcoming book could be better than this article. (For more, read this Brand Autopsy blog entry from Mar. 7.)

Expect a blog early next week on my key takeaways from this article.)

The interview with Michael Dell and Kevin Rollins from DELL is also fascinating. I learned more about the culture of DELL in twenty minutes than I have in twenty years. After reading it, I now understand how and why complacency has never and will never creep into the culture of DELL. A truly remarkable read. (For more, read this Brand Autopsy blog entry from Mar. 8.)

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Strategy + Business March Issue
The case study (PDF) on how Home Depot is making its people their competitive advantage is a very interesting read for those who believe every business is in the ‘people business.’

The article (PDF) on the state of the Consumer Packaged Goods business has some juicy nuggets on Wal-Mart’s impact, on the modus operandi of CPG brand managers, and on how CPG companies must relinquish ‘command and control’ management and adopt more of a ‘coordinate and communicate’ management style.

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Wild Ass Freak Show Link-of-the-Week
This inane video snippet reminded of an Improv exercise Andy Crouch, from the Heroes of Comedy, has his students do.