Mapping Strategy

Threats in the Age of Obama

I'm excited to report that our new book, 'Threats in the Age of Obama' is now available for purchase -- from Amazon, as well as directly from our publisher, Nimble Books (same price; take your pick). Here's the cover:

I contributed a chapter entitled "Preparing One's Mind to See" expanding on this post last fall by about an order of magnitude (writing for publication is far more exacting than blogging!) Here's the brief blurb on Amazon:

If you are on a mission to change the way government works, particularly in the national security arena, this is one place where some independent and intellectually diverse thinking is to be found. In these essays, we offer our view of some of the more pressing threats the Obama administration will have to deal with in these early days of the 21st century.

The title should not be taken as implying that this is a political book or that its insights are for the short term. Just the opposite. My esteemed co-authors make up a fascinating and insightful bunch of long-term thinkers who come at this from a wide array of perspectives.

Whatever you may have thought the next decade may bring before reading this, I guarantee you will be challenged to think about it differently, more holistically and in more depth afterward.

My co-authors are: Dan tdaxp, Christopher Albon, Matt Armstrong, Matthew Burton, Molly Cernicek, Christopher Corpora, Shane Deichman, Adam Elkus, Matt Devost, Bob Gourley, Tom Karako, Carolyn Leddy, Samuel Liles, Adrian Martin, Gunnar Peterson, Cheryl Rofer, Mark Safranski, Steve Schippert, Tim Stevens, and Shlok Vaidya. And last, but really first, editor, contributor and chief cat-herder, Michael Tanji.

But before you get distracted reading everyone's bio or blog... BUY THE BOOK!    :)

Side note: It's been quite a thrill just to get this far. The team is spread across eight different time zones. Most of us know one another's writings but only some of us have ever spoken live,  much less met face-to-face. Welcome to the future of publishing.

How Much is a Brand Worth?

About ten years ago, I ran across a piece of analysis I haven't seen since and can't seem to lay hands (or search-engine bots) on at the moment. It ran in CFO Magazine and -- according to a set of accounting calculations I don't claim to fully understand -- listed hundreds of major brands whose brand value had ascended or descended the most in the preceding years. I recall such brand icons from the '70s as Peugeot and Nikon as being near the top of the latter category (i.e., the bottom of the list one would want to be on).

What was striking -- at least to this non-accountant -- was how rapidly brand values can change and by how much (many billions of dollars, in some cases).

From the standpoint of the kind of work I do helping clients to think about future strategic imperatives under a wide range of possible scenarios, the implication was clear: even if it hurt in the short term, the value of preserving (or failing to preserve) the brand could be enormous. Take that into a financing event and the advantages (and disadvantages) multiply even more, creating (or precluding) a whole range of strategic options, and so on, and so on. Brands are some of the slipperiest and yet most important assets any firm has. (The same could be said for individuals, but that's a different post.)

All of it can seem tremendously academic to companies that don't deal with consumers directly -- and tremendously obvious to companies that do... which doesn't mean that all of the latter do it well.

Thus it was that this piece in today's WSJ caught my eye:

It all started about two years ago, when a ship carrying 4,703 shiny new Mazdas nearly sank in the Pacific. The freighter, the Cougar Ace, spent weeks bobbing on the high seas, listing at a severe 60-degree angle, before finally being righted.

The mishap created a dilemma: What to do with the cars? They had remained safely strapped down throughout the ordeal -- but no one knew for sure what damage, if any, might be caused by dangling cars at such a steep angle for so long. Might corrosive fluids seep into chambers where they don't belong? Was the Cougar Ace now full of lemons?

The Japanese car maker, controlled by Ford Motor Corp., easily could have found takers for the vehicles. Hundreds of people called about buying cheap Mazdas. Schools wanted them for auto-shop courses. Hollywood asked about using them for stunts.

Mazda turned everyone away. It worried about getting sued someday if, say, an air-bag failed to fire properly due to overexposure to salty sea air.

It also worried that scammers might find a way to spirit the cars abroad to sell as new. That happened to thousands of so-called "Katrina cars" salvaged from New Orleans' flooding three years ago. Those cars -- their electronics gone haywire and sand in the engines -- were given a paint job and unloaded in Latin America on unsuspecting buyers, damaging auto makers' reputations.

Mazda saw no easy way to guard against these outcomes. So it decided to destroy approximately $100 million worth of factory-new automobiles. "We couldn't run the risk of damaging the brand name that Mazda worked so hard over the years to develop," says Jeremy Barnes, the company's corporate-affairs director for North America.

It could be argued that a) $100M is fairly cheap to preserve (and, arguably enhance) a major brand name like Mazda (paltry in comparison with some product recalls, or lack-of-recalls that should have happened but didn't), b) it isn't even that much because both the cars and the demolition operations that Mazda had to invent and undertake were largely overed by insurance and c) it's a tremendous waste, even if it does make sense from a business perspective.

American Idol - Lessons for Business

For those living in a cave (or without access to FOX), the reality contest show American Idol has been a runaway success. Last week it took the top slot in the Nielsen ratings (again) with a 19.2 rating and a 28.0 share, reaching just over 21 million households. That's big by any measure. While merely the most recent and visible in a long string of viewer-participation shows dating back decades, I sense that it's brought us to a new 'place' as a nation of consumers.

I cannot tolerate its interminable ad-maximizing tease without a DVR, but plenty are willing to endure that irritation. That says a lot. By raising expectations of participation, Idol has brought us one step closer to accepting if not demanding a 'vote' in how new products, services and artists are brought to market. It has also proved that involving potential customers in the vetting process can be hugely entertaining - a big business in its own right. Where once one had to pay customers to attend focus groups, it's now at least plausible to consider how their input can be garnered virtually without cost if not as its own profit center.

Idol has also shown how the traditional marketing process can be turned on its head: cement brand loyalties first, before risking far more money and time on a broad promotional campaign. Rather than financing the launch of manufactured talent (think Back Street Boys, Spice Girls, etc.), why not let loyalties emerge before the deal is ever signed and the CD master cut?

What's remarkable to a follower of crowd-wisdom methodologies is how close the format is to something truly sophisticated and widely applicable. It should not come as news to anyone reading this blog that Tradesports has for some time made a robust business out of contracts on how Idol will turn out. (As of this writing, Bucky is the runaway favorite to take the fall this week - so far ahead at 45 on a 1-100 scale that it causes me to wonder if insider information has leaked.)

It is this second derivative crowd that's fascinating: "which singers are most likely to fail to garner votes?" rather than "which singer(s) do I like?" Traditional market research and polling methodologies have typically asked: "How would you react?" ...to this product, this service, this price point, this set of features. The results can often fail to reflect reality.  People  don't always put their money where their mouth is. They don't vote. They express enthusiasm for a product that's subtly surpassed by a competitor once it reaches the market six months later. They (or the researchers) fail to take into account how the respondents may be unrepresentative of the market at large.

"How will all customers react?" is a very different question. On the one hand it is more complex in that it demands a gestalt sense of what many people will do, taking into account a vast array of possible extraneous factors that ordinary market research techniques assume away. Assuming ordinary weather. Assuming no war with Iran. Assuming no immediate competition. Assuming a sterile laboratory in which the choice is simple and binary. Those tricky questions have traditionally been internalized in the sense that it was up to the management team to figure them out (or more often, gloss them over.) And yet, on the right questions and with sufficient participation the more complex question of what other people will actually do (and what are the chances that they will do it) elicits information that can be incredibly rich and prescient.

What will everyone do taking into account everything that you know, sense, feel, intuit, hear on the grapevine and imagine could happen in any scenario? Moreover, what's your confidence in each the bottom line given all of those possibilities?

Those are the types of questions good executives ask and probe and probe again. It should be no surprise that we're finally starting to ask them of much wider audiences. Bottom line: what do you think will happen? Is it Bucky or Ace? The human desire to express an opinion  about what other people will do is a powerful force that marketers are only beginning to tap.