Monthly Archives: January 2009

2009 focus on your existing customers

Josh Cochran

Artist: Josh Cochran

The economic crisis was felt initially in the U.S. last year. But economists and financial analysts say that the situation won’t get any better yet. Not in five years or so. In fact, here in the country, they say that the impact of the crisis will be felt this year yet. I’m hoping that our economic policies can soften the impact.

So, as the world will try to weather global economic crisis, businesses will have to take care of their existing customer. For isn’t it that it is more costly to lure in new customers than to retain old ones?

Thus, 2009 is dubbed by Retail Systems Research as The Year of the Existing Customer. This year is the time to take care of your exisiting clientele by giving them quality products and excellent service at any time.

How does a focus on existing customers change retailers’ priorities?

Nikki Baird, Managing Partner, Retail Systems Research shares her thoughts:

1. Know your (existing) customers well.
2. Online is no longer a salve for sales.
3. Pay attention to customers wherever they are.

Source: http://custserv.gbwatch.com/ Posted by Meikah

Josh Cochran

Artist: Josh Cochran

The shadows of consumption

Looking for the magic

Looking for the magic

I found this post on by Vince Carducciwww.popmatters.com very interesting.

He reviewed The Shadows of Consumption: Consequences for the Global Environment

by Peter Dauvergne, MIT Press,October 2008, 328 pages, $24.95

Consumption is by many accounts the key to economic prosperity and general well-being. In the wake of the World Trade Center attacks, for Americans it became our patriotic duty as well, as ‘W’ exhorted us to carry on with shopping as usual even as smoke was still rising from the ruins of the twin towers. But according to political scientist Peter Dauvergne, it’s the biggest threat to our and the planet’s long-term survival. More troubling in the short term, Dauvergne asserts, is that the worst effects of consumption as currently practiced are visited upon those people and those areas of the world that can least afford to bear the costs. Improved regulation, market incentives and innovation can help make the situation better, but vested interests too often stand in the way. Even with the many gains that are being made in terms of sustainability, the overall upward trend of global consumption is such that the negative consequences far outweigh the positive.

Dauvergne tells his story using five key examples that illustrate the threats of runaway consumption and the opportunities for and impediments to reining it in. The first example is the private automobile, which Dauvergne calls ‘arguably, the most harmful consumer product ever for people’s health and the stability of the earth’s environment.’ The next is the gasoline that propels those infernal machines, and in particular the political struggle in the second half of the 20th Century to replace noxious leaded fuel with the supposedly less-noxious unleaded version. The third example looks at the refrigerants we use to keep our food and ourselves cooled between weekly trips to the grocery store even as they contribute to global warming. The fourth is the example of beef, which has been treated elsewhere in books such as Eric Schlosser’s Fast Food Nation and Michael Pollen’s Omnivore’s Dilemma, though Dauvergne brings a global perspective to bear on the subject. Finally, there’s the cautionary tale of the Canadian harp seal that illustrates the need for an ongoing, comprehensive approach to dealing with the ills of global consumption.

The book is titled The Shadows of Consumption, but it might be better to think in terms of the shadows of capitalism. Contemporary consumption properly understood stands in the shadows of capitalist production. Modern industry’s ability to spew out mountains of stuff spawns the need for ways to move the merchandise, hence advertising, promotional tie-ins, packaging, branding, credit and other nefarious practices of the dark art called marketing. It’s the way of the supersized American, from the leased gas-guzzling SUV sitting in the driveway of the suburban tract house with the upside down mortgage to the plethora of items inside, along with the various networks—roads, television, junk mail, strip malls, drive-through windows, the Internet, etc., etc.,—for moving it all from point of production to point of sale to various points of personal storage and disposal. This process is spreading worldwide under the guise of modernization, the idea of enabling more and more people to enjoy the benefits of the Western lifestyle through the wonders of globalization.

But Dauvergne acknowledges that globalization isn’t just about making life better; it’s about making boatloads of money. And in order to fully analyze the shadows of consumption, one must look directly into the source of light. This entails a more open discussion of capitalism than Dauvergne provides. (There are only two entries in the book’s index for that all-important term.) Classical economics holds that money functions to efficiently settle the hypothetically natural urge to ‘truck, barter, and exchange’. (It’s easier to break a $20-dollar bill than make change for the pig you brought to market if all you want is a quart of strawberries.) But other analyses of capital in its modern form note that money basically exists to beget more money and that exchange is simply the mechanism by which to rake in the profit. There’s no better example than the subprime mortgage precursor to our current economic meltdown—the need to find an ever-increasing supply of loans for bundling into securitized financial paper led to a no-holds-barred effort to flush out borrowers from every nook and cranny and get them to the closing table by any means necessary, creating the opportunity for various parties—bankers, real estate agents, mortgage brokers, insurance agents, etc.—to walk off with wads of cash while leaving some dupe to hold the bag.

Among the dupes are all of us who will likely now absorb the costs of the credit bubble’s ‘externalities’ (the theoretically unaccounted-for consequences, such as the social costs of home foreclosures, of ‘rational’ economic activity). Other externalities of global capital are the toxic waste, airborne particulates, species extinction, debt servitude, and diminished well-being that Dauvergne investigates in his book. More and more, these externalities are being outsourced to the developing world and onto populations who have less power to resist. There are still places that use leaded gasoline. Tobacco companies ship their products overseas as markets in the developed world become more restrictive. Production economies are realized by manufacturing in regions with lax environmental controls. Recording the details of these externalities, analyzing their origins and speculating on challenges and remedies is where Dauvergne really shines.

One of the major obstacles to reducing consumption is that we have long defined the good life by material abundance. From the beginning, modern capitalism promised to spread that abundance far and wide. And it has largely delivered. According to several studies, we are past the threshold of need—the planet produces enough total food calories to easily feed everyone alive. It’s the distribution system that’s become the problem. In the developing world we’re well on the way to the hovering lounge chair existence of the fatsos in WALL-E while others in less-fortunate regions are still starving.

Responding to these inequities are so-called ethical consumers, people mostly in the developed world who factor moral and political considerations into purchasing decisions. While better than nothing, this activity is swamped by the overall increases in global consumption. According to Anti-Slavery International, for example, fair trade cocoa accounts for less than 2 percent of total worldwide sales. The statistics for other categories of ethical consumption aren’t much better. And it’s to Dauvergne’s credit that he comes right out and says that without more international regulation and cooperation, the cause is probably lost. Even more to his credit are the case studies he provides, such as the recent African phasedown of leaded gasoline, that show how concerted effort by nation-states, nongovernmental organizations and even corporations can dramatically improve environmental conditions in relatively short order.

There are still massive barriers to change. The case of leaded gasoline demonstrates the ability of money power to actively oppose change and silence critics even though many in the industry knew pretty much from the start that their product was dangerous. The man who discovered the lead additive, Thomas Midgley, had to take a one-month Florida rest cure in 1923 to recover from lead poisoning shortly after the product was introduced to the market. Five workers died in a New Jersey lab just a year later. For years, scientific reports on lead-based air pollution were routinely suppressed and the responsible researchers ostracized. There are many examples of corporations influencing scientific research and using intellectual property law to hide the negative effects of their products under the veil of trade secrets. The global system as it currently evolving is being rigged in favor of corporate (read: capitalist) interests, though there are pockets of resistance, from the grassroots global justice movement to regional alliances such as Mercosur (the Southern Common Market), which place environmental concerns high on their agendas.

The Shadows of Consumption is chock full of statistics, names, dates, and examples, making it a highly useful reference tool if a sometimes less-than gripping read for the average person. There is one grimly amusing anecdote. Besides discovering leaded gasoline, Thomas Midgley in 1928 brought us chlorofluorocarbon (CFC), marketed under the trade name Freon. It seemed like a good idea at the time and when Midgley died in 1944 at age 55 he was hailed as a genius for having developed it. It would be decades before it was recognized that this newer invention helped put a hole in the Earth’s ozone layer the size of North America. The cause of Midgely’s death: he was strangled by a contraption he’d devised to lift himself out of bed after being partially paralyzed by polio. Let’s hope we can figure out this environmental-crisis thing before we find ourselves in a similar situation.

The shadowside of consumption

The shadowside of consumption

Why we hate HR

When it comes to a critique of human resources departments, the best article one may  read on the matter remains Fast Company’s 2005 piece “Why We Hate HR.”

Josh Cochran

Artist: Josh Cochran

Keith H. Hammonds outlines in telling and hilarious fashion why HR folk are often ineffective, prevent talented employees from progressing and become slaves to form and legal box-checking.

HR people see themselves as protectors of management from lawsuits and embarrassment rather than nurturers of up-and-coming employees and champions of their companies.

Here’s one example. HR relies on the special and often insidious processes to prevent lawsuits and gather dirt on workers. Every one recognizes  that youwas a manager at a company where if a problem employee came up, the “PIP” (performance improvement program) or something like that is kicked in. But PIP is truly Orwellian since it means anything but improving the employee. Once in PIP, the worker is as good as fired. PIP is designed to gather incriminating information about the employee to be used to intimidate that person when they were dismissed so they wouldn’t file a lawsuit.

Keith comes up with a number of perceptive reasons why HR departments end up doing these things. Here’s a brief list:

  • HR people are often the dregs of the corporate world. Not the “sharpest tacks in the box,” HR bureaucrats get to those positions because they often can’t handle jobs requiring more talent or imagination.
  • HR pursues efficiency in lieu of value. Efficiency is a lot easier to justify numerically and doesn’t require a true understanding of what a corporation does.
  • HR tries to get executives sucked into their system. These include pro forma, annual personnel appraisals. Raises and advancement depend upon them, but who’s to say that annual is the right time frame or you even need them?
  • The corner office doesn’t get HR. There’s often little communication between the C-Suite and HR, but given the state of many HR departments, maybe that’s just as well.
Josh Cochran

Artist: Josh Cochran

To be sure, there are some firms that do HR well, such as Cardinal Health, Yahoo, Procter & Gamble and

General Electric. But Keith’s scathing magazine piece still rings true three years later.

Source: http://blogs.bnet.com/ceo/?p=1457 Author Peter Galuska

One might say it in a different way.

My way is: HR connect with your changing context and act.
For the academics and a good understanding:

Beyond HR

Book: Beyond HR

Blown to Bits: newspapers

Blown to bits

Blown to bits

Adam Ostrow Jan 20, 2009 9:52

If newspapers were hoping that Google would be their savior, it looks like they will need to find another white knight. The company has announced that they are discontinuing their print ads product – which allowed advertisers to place ads in newspapers via AdWords – at the end of next month.

The problem does not appear to be a lack of interest from the newspapers; in a blog post, Google notes that more than 800 newspapers in the US signed up for the program. Instead, it’s a lack of demand from advertisers. Google writes: “While we hoped that Print Ads would create a new revenue stream for newspapers and produce more relevant advertising for consumers, the product has not created the impact that we — or our partners — wanted.”

Print ads debuted in late 2006, and have essentially faced a perfect storm of bad news. Between declining readership of printed newspapers, an economic slowdown that has hampered advertising spending, and the fact that Google was trying to sell ads side-by-side with more measurable Internet ads, the product never really had a chance.

For its part, Google still wants to be involved in the newspaper business, writing “We will continue to devote a team of people to look at how we can help newspaper companies.” But for now, it looks like AdWords isn’t the be-all and end-all in advertising that Google hoped it would be. It makes us wonder of what the future of Google’s other offline ad efforts – like radio and TV – might be.

via iGoogle.

Blown to bits

Blown to bits

Competent leaders, charlatans and Sean Connery

artist-unknown

Leibovits & Sean Connery

Artist: Leibovitz & Sean Connery

I found this post http://management-issues.com/2009/1/20/opinion/seeking-competent-leaders.asp interesting

In 2008 we discovered that many of the business leaders in whom we had placed our faith, our trust and even our money, were incompetent or (in some cases) out-and-out charlatans.

In reflecting on this turn of events, it is impossible not to ask how this happened.

How could we have picked leaders who made such bad decisions or even engaged in blatant fraud?

The answer lies, in part, with the fact that we often are more concerned with social skills, likeability and charisma in choosing our leaders than we are with their ability to be effective leaders.

Traditionally our ideas about what makes a great leader were based on a military model. A great leader was a man who took command, acted with courage, and did what was necessary for the success of his organization or country. Often he led using fear rather than persuasion.

In recent years this model has been replaced with softer ideas of what a leader should be like.

We have the servant leader who, as the name suggests, serves the people whom he or she leads rather than controlling them. We have the emotionally intelligent leader who has social charm, empathy, self-awareness and self-control. We have the transformational leader who provides people with a vision of a better world and motivates them to transcend their self-interest. We have the charismatic leader who emotionally energizes followers with an inspiring vision of the future and convinces them that he or she is the heroic figure who can make this vision real.

None of these newer softer ideas of what a leader should be stress whether a leader is competent.

Instead they focus on leaders being socially adept, charismatic and likeable.

George Bush is an example of someone who has always used likeability to establish his leadership credentials with the general public. On a talk radio show following his reelection in 2004, people called in to say why they voted for him. Comments centered on the fact that he was a good guy with whom you could share a beer. One caller even went so far as to state, “I voted for George Bush because I liked his father.”

The problem with this emphasis on likability and strong social skills in picking our leaders is that these qualities don’t ensure that we are choosing a leader who will be able to deliver results. Research has not found that leaders who are socially adept or liked and admired are more effective.

Bernard Madoff is a perfect example of how likeability and social skills have little to do with competence. He built his giant financial house of cards by using his charm and affability to create a powerful social network. The New York Times has reported that his social and professional lives were “practically inseparable.” He cut deals at country clubs, golf courses, locker rooms, charity events and restaurants.

Eventually Madoff even built up a loyal cadre of friends who approached their friends and encouraged them to invest with him. While some more astute investment professionals pointed out that Madoff’s numbers didn’t add up, his social circle never thought to question his competence. They continued to believe in him and provide him with clients.

In the corporate, political and professional worlds social skills, likeability and charisma all influence who is chosen to lead.
CEO’s who embody these qualities find it easy to rotate between companies regardless whether they have the skills and past experience needed to be effective in a particular company. The fact that board members socially know and like them gives them an edge which can result in questions about their ability to deliver being suspended.

As a result, candidates for top positions are often subjected to less scrutiny than people being considered for lower level positions in organizations. Ken Lay, who led Enron during its death spiral, was recruited to head AT&T several years before Enron imploded. Luckily for AT&T, Lay declined the offer.

This is not to say that likeability and charisma are bad qualities. They have value in energizing and motivating followers to achieve a leader’s goals. The point is that they should not be the major yardstick that we use in selecting a person for positions of responsibility that can impact the lives of many people and even the economic well-being and stability of countries.

Artist Leibovitz & Coppola

Artist Leibovitz & Coppola

In the future it is imperative that we carefully evaluate potential leaders to make sure that they can perform at the levels needed to be successful in a particular position. This includes having the cognitive capacity to process, understand, and use complex information from around the world in making important decisions.

As the recent financial crisis has illustrated, countries and businesses are globally intertwined. We can no longer afford leaders who lack the competence to be effective in this dynamic environment. Sports teams pick people based on their competence and ability, not their social skills and charisma. Why shouldn’t businesses and organizations follow suit?

About the author
Myra White teaches managing workplace performance and organizational behavior at Harvard University and is a clinical instructor at Harvard Medical School. She is the author of “Follow the Yellow Brick Road: A Harvard Psychologist’s Guide to Becoming a Superstar”, a book based on her research into how over 60 well-known people became superstars. [more]

Blown to bits: high level consultancy

Common sense

Common sense

One might expect that  high level consultancy has value added in these difficult times!

But look at Gartner

Common sense is not common at all!!

Common sense

Common sense

Blown to bits: service

Great post found on http://blogs.bnet.com from Jeffrey Pfeffer

January 20th, 2009 @ 12:02 pm

Retailers are going bankrupt by the carload and retail sales are in the toilet. I needed to buy some things, so I thought I would do a field trip to see what’s up at the local mall. Here’s what I learned.

Retailers are using that manpower scheduling software with a vengeance — you know, the software that makes sure there aren’t extra people on the sales floor during times when there are fewer customers? I arrived mid-afternoon to find most stores quite bereft of sales people. On the other hand, the other customers were often quite helpful and I made some new friends.

Tip: Don’t go shopping during off hours. You won’t find anyone to wait on you.

First stop: Macy’s
December Same Store Sales: –4%
Macy’s has perfected the neutron-bomb theory of retailing. You remember the neutron bomb — it was designed to kill the people but leave the buildings. Macy’s has lots of merchandise but no sales help that can be located. All right, there may be a few folks staffing some of the cash registers, but there’s no one on the sales floor to answer questions about the merchandise, even in the men’s tailored clothing department. I guess it’s akin to the price-checking machines they have scattered throughout the store — sort of a “do it yourself” operation, which is fine except I don’t really know how I could fit my own clothes.

But I was determined to find the sales help, and with some diligent searching I made a discovery. There are several “hiding places” in the store I visited — spots ostensibly on the sales floor but out of sight of the customers — where the sales people hang out. One was giving another a back rub. In another department, a small group was happily chatting away. But they were not to be interrupted by me, so I went on my way. They also didn’t seem very happy to see me. Even in these stringent financial times, it doesn’t cost much to smile.

I wonder how much merchandise is walking out Macy’s front door without being paid for. No one shoplifts while they’re being waited on, so maybe Macy’s could cut its shrink by attending to customers.

Second stop: Nordstrom
December same store sales: -10%
I stopped by the men’s department to look at a sport coat. I did find a sales person who began to help me when the phone rang. He answered it. Must have been a great call. After about five minutes listening to him talk on the phone with his back to me, I left. The message implicitly sent: Whoever was on the phone was way more important than the potential customer standing there waiting to be helped. No wonder Nordies’ sales are down 10 percent. High prices and no customer attention is a bad combination.

Third stop: Sears
December Same Store Sales: -7.3%
Sears has a pretty large store in my local mall, so to find what I was seeking, I needed to ask people. Big mistake. No one seemed to know where anything was. Well, that’s not entirely true; some of the other customers were actually quite helpful. Couldn’t blame the sales staff — many were new to the store, and I doubt they had received much, or any, training.

By then I’d had all the fun I could stand, so I went home. So what did I learn in my brief shopping excursion? First, no wonder I hate to go shopping. It has become a thoroughly unpleasant experience. Second, the mall is sort of like an Outward Bound experience: Lots of friendly customers helping each other out, since the sales staff is either nonexistent or would rather not be bothered. Third, without for a moment denying that the principal factors causing the retail downturn are the lousy economy and the credit crunch, it is also the case that the in-store experience adds almost nothing to shopping success. Who would want to go to a store when you can compare prices online? At least online, people don’t ignore you to take a call or chat with their friends. Insults are way worse in person.

By the way, all the studies show that service does matter. Take a look at the customer satisfaction ratings produced at the University of Michigan. They correlate closely with market share and financial performance.

We supposedly live in a service economy, now that manufacturing has mostly

Old fashioned anyway

Old fashioned anyway


pfeffer_small_2.JPGJeffrey Pfeffer is a professor of organizational behavior at Stanford’s Graduate School of Business and is the author or co-author of 12 books including “What Were They Thinking?: Unconventional Wisdom About Management.”


Identical experience here with some of the major Dutch companies. In fact, even if there are many customers, a good number of salespeople are not there, too. It’s a sad reality, actually.

I believe that to be in service, whether in sales or in the army, those who are called to serve should be available all the time, ready to be called to serve, and ready to serve. Or does their business model has another business logic?

Old fashioned anyway

Old fashioned anyway

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