The Real Risk in Risk Management

Posted November 25, 2009 by David Blumenthal
Categories: Crisis Management, Leadership, Sales, Strategy, Visioning
Tags: , , , , , , , , , , , , , , ,

It’s not uncommon to find businesses all over this country talking about the impact the current economic environment is having on their operations.

Just yesterday, I was speaking with my good friend, John Fodera. John is a partner in Eisner, LLP’s audit and risk management services group. He spends his days discovering how to reduce risk and streamline operations, while making sure that his clients remain compliant with regulations a diverse as labor law to SEC requirements. Not surprisingly, he hears about the impact of the recession all of the time.

As our discussion progressed, it became apparent that John brings some fresh thinking to these conversations. One of the thoughts that we shared is that cutting staff is not always the best way to deal with a slowdown in business.

John explained that the “knee-jerk” reaction is always to reduce costs and sometimes this is truly appropriate. But, like any other challenge, there are always opportunities.

When companies are concerned about business, they are more apt to rethink the way that they approach the marketplace. Leadership will also find that staff will be more open to trying new approaches. This is typical when the risk of remaining with the status quo exceeds the risk of trying new things.

Reaching out to existing customers and discovering and sometimes re-discovering what is valued in one’s offerings – and what isn’t – can change what is being sold and how it is being presented to other potential clients.

When something is not valued, often, the cost associated with adding and delivering that capability can be stripped out. Suddenly, the product may actually be more valuable because a level of complexity is removed and the cost associated with developing, selling, delivering it and training others has been reduced. Out of such discussions, many competitive advantages and opportunities are born.

And in an age where technology is changing as rapidly as it is, an economic downturn can provide the impetus to create new ways to produce meaningful value.

As John would probably tell you, the real risk is when you are not rethinking your business.  But don’t take his word for it.

Just ask the people running the newspaper industry and the postal service.

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In us we trust?

Posted October 14, 2009 by David Blumenthal
Categories: Leadership, Strategy
Tags: , , , , , , , , , ,

From time to time, the world sends us reminders about a value or function that we need to master or at least address better. Lately, I’ve noticed a single word keeps surfacing – trust.

Patrick Lencioni, author of The Five Dysfunctions of a Team, says that trust is the foundation of teamwork. Without trust and vulnerability, one cannot have a candid conversation. And without a candid conversation there can be no conflict, which would lead to understanding each other’s perspectives and ultimately creating commitment, accountability and results.

Healthy organizations have a culture of trust. There, trust means the ability to also believe that one can count on one another and that we each share a common purpose.

Isn’t the whole healthcare debate in Washington really about a lack of trust in the numbers, positions and beliefs of our leaders?

And a fundamental reason regional peace talks fail between countries is often because neither party trusts the other.

If we wish to rebuild our country, industries, school systems, and families, perhaps it is time to revisit this fundamental underpinning.

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Contextualizing Who We Are…

Posted October 9, 2009 by David Blumenthal
Categories: Leadership, Sales
Tags: , , , , ,

Recently, I returned from a trade show. While on the floor of the exhibit hall, I listened intently as people walked up to those staffing the booths and asked about their products. Many of those people did not bother to introduce themselves – rather they asked general questions with the intention to learn about the product being promoted.

Almost to a person, these people did not volunteer any information about themselves. On one level, I can get it. After all, who wants a salesperson calling you and disturbing your day?

Here’s the argument though for rethinking that position…

If you’re stopping by a booth, chances are there is a reason. You want to compare a product to something that you are using. You have a unique need or challenge or opportunity and you wish to see if the product can address it. Or you simply wish to discover if something is possible.

If you contextualize who you are, and by that I mean you paint the details of what your company does, who you are and the role that you play, why you are at the booth and what you hope to address or learn, you allow the salesperson to leverage their expertise and help you determine very quickly if your unique need can be met.

And you can still always decline to move forward with the conversation after you have learned more.

What this all comes down to is trust – and part of this is about trusting yourself to have a real meaningful conversation. If you are willing to share and discuss and engage, you open yourself to the possibility that the other person can help you. And you learn whether the solution fits or what is even possible.

We already know all that we know. It’s usually the other person’s knowledge that is the most useful.

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Dealing with Unexpected Consequences and Seth Godin

Posted October 2, 2009 by David Blumenthal
Categories: Crisis Management, Leadership, Sales, Strategy
Tags: , , , , , , , , , ,

So how does, one deal with unintended consequences?

Honestly and quickly.

As part of my explanation, I will begin by telling you that I am a fan of Seth Godin. He considers himself a marketer and entrepreneur and agent of change. What I love most about him is that he makes me think.

Godin recently launched Brands in Public. His company, Squidoo, was going to set up a place that would aggregate content from around the Web, highlighting the good and informing of the bad, while letting the companies respond to the feedback. Not a bad idea – and his business model for doing this would result in annual payments from each of these companies totaling about $5,000.

The criticism came due to Godin’s decision to actively set up 200 of these ‘Brands In Public’ lenses (consider a “lense” like a location or site) before launch without the consent of the companies involved. The companies would be locked out of the lenses until they decided to sign up and pay up for the almost $5,000 a year service. At which time the lens would be unlocked. Some called it brandjacking, with online branding effectively taken hostage with a price on its head for release.

Needless to say the reaction to the model and its implementation was harsh.

However, Godin’s response was swift.

In his daily blog post, two days after launch, he wrote:

The response from the brands we’ve shared it with has been terrific, but other people didn’t like elements of it. And they were direct in letting me know.

The goal of the program is to invite brands into the conversation that’s already going on around the web, to make it easy for them to do it on their terms. I talked with a brand manager yesterday who explained that this is exactly what he’s been trying to do for his company, but the corporate website systems make that difficult for him. We want to open the door and to permit large brands a way to get started without having to roll their own solution.

One way we tried to encourage that was to build 200 sample pages, pages brands could adopt. Alas, some people felt that this was inappropriate, so we’ve recalibrated and we’ll take those pages down before the end of the day.

When a brand wants a page, we’ll build it, they’ll run it and we’ll both have achieved our goals.

Part of the magic of the web is that you can adjust as you go, particularly if you’re willing to listen.

I apologize if anyone was confused by my original post, and we’re looking forward to having major brands and non-profits using this tool the way we intended–to join in to the conversation that’s already happening all around us. Thanks as always for reading.

Putting aside the questions of whether Godin’s idea and implementation were appropriate, he does get points for addressing the problem honestly and in a hurry and that, I think, earns him the right to try again.

* * * * *

As to my post the other day about my recent experience with Continental Airlines, I received this response from Continental’s Customer Service Manager, Denise Epstein.

Your letter has brought up several very valid points. These are consequences that I have pondered, however, you have put them in words in a thoughtful and straightforward manner.

I will include your letter with the original complaint that was filed on your behalf. This includes your contact information if our management team needs to contact you.

I’ll let you know if it goes any further…

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Unintended Consequences, Decisions and Continental Airlines

Posted September 27, 2009 by David Blumenthal
Categories: Leadership, Sales, Strategy, Uncategorized
Tags: , , , , , , , , , ,

Decisions only scare me when I don’t understand their consequences. If I do, and as long as those consequences are acceptable, I’m fine. That’s why when confronted with a challenging decision, I always try to investigate what could result from it. It’s important to me that I weigh the potential positive and negative consequences.

My recent trip from San Francisco dramatized the importance of doing so.

Continental Airlines prides itself on “flying right.” Their brand is built on attentive service and well-planned departures and arrivals. In fact, in a press release earlier this month, I found this quote — “Continental’s corporate culture is based on treating customers and co-workers with dignity and respect,” said Diedra Fontaine, Continental’s director of diversity and sales development. “Dignity and respect are key principles of our Working Together cornerstone.”

Continental’s recent decision to charge for bags is a terrific example of unintended consequences and illustrates how a set of negative consequences can jeopardize a brand.

Continental, like many airlines, saw this additional baggage charge as a way to increase revenue. Their customers, however, responded by deciding to take more and more of their luggage on the flights so they could avoid the additional fees.

The unintended consequence: With more than 25 people waiting to get on board this plane from San Francisco, the overhead bins were completely filled. The flight attendants at the gate then proceeded to offer free baggage check-in to all those that had yet to board.

Some passengers took the attendants up on their offer and the gate and boarding ramps were transformed into luggage check–in areas. The attendants scrambled to check the luggage at the entry of the plane. This was difficult for them because the physical location made this problematic and most assuredly, assuming they were trained to do so, it was certainly not what these attendants intended to be doing at this time.

Many passengers chose not to check their luggage. They had to stow their bags underneath their seats, resulting in uncomfortable rides for many, many passengers and difficult entries and exits from where they were seated. More passengers also stood in the aisles for portions of the flight simply to stretch their legs.

As to those poor flight attendants…

They were trying to get the flights to take off on-time because that is one of the areas that Continental evidently measures.

Once the plane took off, the flight attendants rudely rushed to pass out the meals. The were frustrated and like most people put in similar situations, they never had the chance to regain their “balance” and they performed their work the way someone would do it if they were upset.

These were the short-term unintended consequences.

The long-term ones, of course, concern the brand and image of Continental.

And if these become tarnished enough, Continental may discover that the revenue that they gained in no way compensated for the customers that they lost.

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The Changing Face of Marketing and What It Means to Your Company

Posted September 6, 2009 by David Blumenthal
Categories: Leadership, Strategic Plans, Strategy, Visioning
Tags: , , , , , , , , , , , , , , , , ,

The message has always been the brand and the brand has always been the message.

Marketing and marketing communications have traditionally been about what is conveyed to the public and to a company’s employees but the changing face of customer service may be altering the way we think of this important role.

As more and more small and mid-size companies shift into creating ways for customers to help themselves – see this article on Southwest Airlines, a not so small company – perhaps it is time to reconsider the role of marketing in the development of new programs and IT solutions.

The thinking here is that the customer experience is the brand, as much and if not more than the message. Large companies have known this for a long time. Small and mid-size companies need to recognize this.

Does their web portal reflect the important messages of the brand? Is the IT system that is being deployed throughout the company an extension of how the company wishes its employees to think of it?

One of my clients asked the other day if it’s time for a ne role, one that he called a “Customer Experience Officer.” In these tough economic times, I’m not so sure I would approach this opportunity by adding a new role.

Here’s what I would do…

(1) Insist that Marketing outline the key principles that all new programs and internal and external software solutions must incorporate. If these solutions did not reflect these tenets, they are not rolled out.

(2) Until these principles are second nature, marketing should be a member of all new programs (and I do mean all – not just software programs) and design teams.

(3) All graphical user interface developers on the IT side should have to learn and discuss how they are incorporating these principles into their solutions.

If you share this belief that people are attracted to your brand and what it represents, is there really any other choice?

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On the passing of Senator Edward Kennedy

Posted August 27, 2009 by David Blumenthal
Categories: Leadership, Visioning
Tags: , , , , , , , ,

I grew up as a huge Robert Kennedy fan. As a young boy, I devoured books about his life and mission. Most intriguing for me was his metamorphosis into a man who grew to recognized his responsibility to help others.

With his passing in 1968, I was introduced to Senator Edward Kennedy.

Although I was only ten years old at the time, I vividly remember Robert Kennedy’s funeral. It was there that his remaining brother, Ted, quoted his fallen sibling in the eulogy that he offered. Ted reminded us of a principal that RFK cherished and lived.

“Each time a man stands up for an ideal, or acts to improve the lot of others, or strikes out against injustice, he sends forth a tiny ripple of hope, and crossing each other from a million different centers of energy and daring, those ripples build a current that can sweep down the mightiest walls of oppression and resistance…” (These words were spoken by Robert Kennedy at the Day of Affirmation at Capetown University — a remarkable speech worthy of your time.)

In the course of the remembrances today, I was struck by how strongly the Senator from Massachusetts took these words to heart. He believed in compromise and he understood that progress is made one step at a time, particularly when the road to be travelled is very long.

To build bridges, one broadcaster noted that Senator Kennedy would often woo and cultivate the relationships with his colleagues by visiting them in their offices armed with a plate of cookies.

What a simple and remarkable gesture!

What a beautiful way to remind others that we are all human and that the greatest way to accomplish something is to start with a generous but simple act of kindness.

There are many lessons I will draw from his remarkable legacy of service but as I sit and write these words, the two that I will likely try to further integrate in my life is to remain steadfast in the service of others and that acts of compromise and generosity led to progress.

As for the late Senator, it is my hope that he be remembered as he hoped RFK would be remembered, “simply as a good and decent man, who saw wrong and tried to right it, saw suffering and tried to heal it, saw war and tried to stop it.”

Rest in peace, Senator. You will be missed.

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