Starbucks Race Together and the Starting Line

I was lucky enough to see Howard Schultz talk about Starbucks’ Race Together initiative at a small gathering not too long ago. While I was already a supporter of the company’s brave foray into the issue of race, I became an even bigger fan after witnessing Mr. Schultz’s passion and personal commitment to a cause he clearly views as important, and genuinely holds close to his heart.

While I laud the effort, I also think it is important to point out that there has been a problem with the execution and the manner it was launched into the mainstream. Execution always matters, but in an effort of this magnitude, sensitivity and complexity, it will be the difference between success and failure. For one thing, it is absolutely imperative that this effort not come across as a glib and disingenuous marketing campaign. Nor can it afford to be ‘perceived’ as an altruistic effort designed to generate sales and foot traffic for Starbucks. I know it is not, but I may be the in the minority.

For starters, there are very few companies and brands in the world that could even attempt to raise an issue so loaded and so sensitive, leave alone try to convince the world that it is coming from a selfless place. The Starbucks brand has built a strong reputation for authenticity both with the respect with which they treat their partners (employees) and the amazing benefits they offer. They also have a history of actively supporting the communities they do businesses in. They were one of the early companies to join RED to help fight AIDS. During the recent recession they partnered with Opportunity Finance Network to help put people back to work. Diversity and inclusion have always been more than a motto and mere words on a vision statement to this company. Recently, they launched a major initiative to help US veterans. They sponsored a star-studded concert this past Veterans Day, and Howard Schultz has even co-authored a book “For Love of Country” that shines a light on these brave men and women by sharing their personal stories. Starbucks has also pledged to hire at least 10,000 veterans and military spouses by 2018. This is a company whose social outreach has always gone above and beyond writing cheques. They have never been afraid of rolling up their sleeves and getting their hands dirty on issues they believe are important to society.

However, unlike all their past efforts, there is one stark and crucial difference that they need to recognise with Race Together before they can create a blueprint for how to execute it. Free undergraduate college degrees (recently announced for all employees), helping fight AIDS, supporting Veterans and every other social initiative Starbucks has undertaken are very easy for people to get behind in ways that instantly make them feel warm and fuzzy, be it through personally getting involved or by simply buying a cup of coffee. Race Together is different.

The topic of race pushes people well outside their comfort zone. There is no warm and fuzzy here – only guilt, grimace, shame, embarrassment and gross discomfort. Whether you have witnessed a racist act and did nothing to stop it, or have been humiliated because of the colour of your skin and felt like you did something wrong – most everyone has had a personal experience with race. Yet, this is not a subject that families discuss at the dinner table or even with close friends. It is something we bear witness to and experience, most often in silence.

For this reason, I am confident that none of the traditional tactics will work here. In fact, the message will fail to resonate as long as it is delivered in a top-down manner. What I mean is that USA Today inserts make this feel like a marketing campaign. Writing it on cups (while well intentioned) made it feel forced and gimmicky. You cannot force people to talk about sexual abuse publicly; and most people feel the same way about racism. One final point on this; I believe that as long as Mr. Schultz and/or his board and senior executives are seen to be the public “voices” and faces of this campaign, they will struggle to lend it the authenticity it requires. I have no doubt that Mr. Schultz is genuine about his desire to start this conversation and for all the right reasons, but he is still a wealthy and successful white man and this fact matters in this conversation (even though it should not).

My suggestion to Mr. Schultz is to turn his current executional strategy on its head – stop trying to deliver it top-down. By this I mean think about Race Together less like every other traditional corporate PR and communications effort, and imagine it like needing to build a grassroots movement – one that can only be built bottom-up.

For me the video Mr. Schultz showed us of an impromptu town hall meeting (he held at Starbucks headquarters last December) did more to provoke thought and evoke a sentiment about this topic than anything else Starbucks has done thus far. And it was not Starbucks’ voice that caused this emotional stirring, but the voices of the everyday people sharing their very personal stories.

By sharing starkly different experiences about simple, mundane, everyday acts that most of us go through without batting an eyelid – it brought to life very vividly the different Americas we still live in today and experience differently based purely on our skin colour.

Hearing a black mother say that one of her greatest daily fears is making sure her child does not wear brightly coloured clothes to school has a power that no advertising or PR agency can ever deliver in a campaign. It is raw. It is authentic. It is where Mr. Schultz should begin building his brave and much needed conversation about race in America, all while ensuring that Starbucks Corporation and his voice are always in the background, creating the safe zones, providing the platforms and championing everyday voices until one-day they light the spark that will get everyone speaking out, across America.

Stop Using ‘Category Experience’ as a Criteria to Hire an Agency

If I had a penny for every time a client Request for Proposal (RFP) document asked if the agency has relevant category experience, I would be rich and retired today…

Not sure if this is something clients are taught in some secret “client” school but it has become a global epidemic and I for one am completely unable to understand why. For those not from the wicked world of advertising and marketing – when a prospective client is looking to hire a new ad agency they send out an RFP and it always asks if the agency has relevant category experience (they are most often eliminated if they do not). For example, Mercedes-Benz would look for an agency with automotive experience and Benadryl for one with pharmaceutical/healthcare category experience.

I have never understood why it is so important for an automaker to only find someone who has sold a car before. Or why they believe that an agency that has sold cars is the only one capable of selling another car. One would think that clients would seek out agencies that have the greatest salespeople. People who have done great work across many different categories; rather than limiting themselves to car salesman. If I were a client I would never limit myself when selecting a new agency partner. There is good reason why it is so hard for consumers to tell automotive, financial services and pharmaceutical advertisements apart. The best way to illustrate my point is by using a golfing analogy.

All professional golfers play on many different courses around the world. With every new course they need to navigate a totally different layout, wind conditions, sand quality and even climate and vegetation make a dramatic difference in everything from distance control to putting green speeds. Most good golfers are able to negotiate these aspects and sufficiently play a competitive round but great golfers have the ability to raise their game. They can take their past experiences and combine it with innate skills and talent, adapt their game, and excel in new and varying conditions. As a result, after spending a very short time learning the intricacies of the new course, they are able to master it and win.

Great agency practitioners are the same way. They have the necessary skills to adapt to the needs of any category and client because the fundamentals of great advertising never change – a great strategy, a powerful customer insight and creative work built on an idea. This is what differentiates iconic brands from regular brands and courageous clients from clients.

I have also found that agencies and agency folk with strong cross-category experiences bring not only a fresh set of eyes to a challenge but also richer perspectives that ultimately lead to better solutions for their clients. Over my career I have sold ice-cream, complex CRM solutions, baby products and even launched a television channel. It is our wealth of cross-category experiences that ensures we are well-versed enough to develop a corporate M&A strategy one day and help market a dandruff shampoo the next.
So the next time you are selecting a new agency, look for diversity of experience versus specific category experience – you might just end up being delighted by the ground breaking and category re-defining work your agency delivers.

Has LinkedIn Lost Its Relevance?

For now there is no question that LinkedIn remains the go to platform for business and working professionals. It is often said that you will no longer be able to find employment without a LinkedIn profile; a whole industry of so called LinkedIn profile builders has also mushroomed around it. People who charge serious money to help navigate the platform’s features; everything from creating a profile to claiming to help you get higher search rankings and better visibility with prospective employers.

In the early days, I found LinkedIn an extremely valuable tool for professional networking. It was the best way to connect with friends from school and college, on a professional level, and with people connected to your industry. It was a tool for networking and making valuable and relevant new connections through the small degrees of professional separation we all had but never knew how to tap into. And it was the greatest way to showcase your background and professional experience, without geographic limitations, or the far more cumbersome and time-consuming alternative of physically mailing or dropping off a CV to each and every prospective employer.

Today, it is a vastly different network. For one, everybody and their uncle has a profile. Tons of random people are now able to click a button and ask to connect with you for no rhyme of professional reason; from banana farmers in Bolivia to bakers in India. I cannot count the number of times, when I ask someone why they want to connect, they tell me they accidentally hit the button or had no real reason other than finding my profile interesting. A large number of people seem to feel that by just connecting with as many people as possible, it will help them boost their career prospects and/or search rankings. I for one cannot fathom this logic because it does more damage to their prospects, if they serially invite friends of friends and random strangers to connect for no legitimate business reason.

When LinkedIn first introduced the InMail as part of their premium offering I was excited and willing to pay monthly fee to be able to reach out to people I wanted to do business with and vice-versa. It offered a professional method that did not entail having to go find common connection to get a soft introduction, or simply email someone cold. However, this feature has also turned into spam marketing of sorts. While I do still get a number of legitimate emails, I get many more from telemarketing and lead generation companies looking to sell me databases; they now just as unsolicited as those pesky tele-marketing calls we get at home.

LinkedIn is now trying to become a publishing platform; taking a page out of Amex OPEN’s book. Unlike OPEN theirs was originally a closed platform. In order to publish content you had to be classified an ‘Influencer’; and unless you were the likes of Richard Branson you were not be granted this rarefied title. I guess they realised pretty quickly that being successful did not mean that people were good writers, or able to offer meaningful content on a routine basis; at least not enough to keep it fresh and interesting for the rest of us non-influencer minions. LinkedIn has since learned this lesson and opened content posting to everyone with a profile and an internet connection. Sadly, this step in the right direction has also been rather catastrophic.

While I laud the decision to be democratic, the problem is that not everyone who has something to say has something of value to say. So while I am not suggesting that they close the doors and once again allow only super successful people or great writers to post; I do believe they urgently need to find some method to curate the vast volume of mediocre and useless content that now invades our streams every hour. The point of this curation is not to play judge and jury but to find some smart crowd sourced way to weed out the utterly useless content that only bubbles up and gets eyeballs because of sensational and provocative headlines with the content rarely ever delivering on the argument suggested.

I have found the vast majority of ‘popular’ and ‘recommended’ posts lack substance. They simply offer a provocative headline, based on recent high-profile events in the news, to bait the reader and then at best offer an extremely tenuous (and most often nonsensical) connection to the subject matter they are sensationalizing in their headline.

Recent examples of such posts are one that used the iCloud celebrity photo leak to try and link Jennifer Lawrence’s decision to bare her breasts in Vanity Fair to faulty PR and marketing decisions. Another was about sexual harassment in a CVS store that tried to make a link to sexual harassment at the workplace (which is a serious issue that this article made feel less serious). The same author just recently posted an article about the Uber PR fiasco and then halfway through started talking about the issue of rape with no relevance to her argument.

I have nothing against provocative or controversial points-of-view but the problem is that none of these articles come close to delivering on their headline’s premise; they are merely sensational for the sake of sensation. Sadly, these have overwhelmingly become the posts that seem to garner the most attention and get recommended in the Pulse stream.

If LinkedIn wants to be regarded as a destination for business-related, thought-provoking content, then this is doing nothing to further their cause and in fact damaging their credibility. It has seriously reduced my opinion of both the articles and the quality of the posters. It seems that publishing on LinkedIn is designed purely to drive eyeballs and offer no other real business insight or value; a BuzzFeed for business.

I am not suggesting that this is the end of LinkedIn by any means but that its value proposition for people like myself will erode over time if this level of ‘clutter’ and ‘noise continues to grow without substance. Even forum posts and discussions have started to suffer the same malady with people consistently asking deep and penetrating questions like “Would you rather be a good person or a good CEO” and “How do you define power in one or Two words?” As a result, I have started to drop my membership to many of these professional forums and groups on the site.

It is also not just me they should fear losing but the fact that they are about to face some serious competition for the first time; with Facebook announcing the launch of a “at work” professional network and WeWork (shared workspace for startups and freelancers) also planning to launch a networking site that would allow their physical entrepreneurial tenants, all over the world, to connect online. I suspect LinkedIn is about to get a run for my eyeballs!

Everybody’s Doing The Social Commotion…

The hype with social has become so big that a whole new industry of “social-experts” has appeared out of thin air. Just a few years ago these people did not exist or perhaps wore some other moniker when peddling their wares.

I am not saying there is no need to have a social strategy but merely that it is also important for to think about the relevance of these platforms for your product and business; think about the best way to engage your customers, based on who they are. This means that every company DOES NOT needs to have a social presence with a Facebook page, a Twitter account, a Pinterest board, or a blog. Maintaining a presence in social media is a full time job and doing it in a way that is meaningful to customers and valuable for your business – is a full team job. Few people realize that just setting them up and then posting or tweeting a few times is probably more damaging than not having it an account all. I routinely ask companies why they feel they need a Facebook page or Twitter account, and most say because everyone else has one. For me, a single person startup or small business should have many other priorities they need to be focused on before starting to worry about tweeting every few hours. And then there are also products and categories that really should not have a Facebook page – toilet papers and clogged drain cleaning brands come to mind as high on that list. Ultimately, it boils down to a little old fashioned common sense being utilized before rushing to sign up to the social bandwagon.

It takes time and work to build a solid social presence. Each new platform that you add means more work because it’s not as simple as sharing the same information across all your social pages. If you really want to build value for your business then you need to create value for your customers. This means first understanding the role of Twitter versus Facebook versus a blog and seeing how your customers are using and interacting with these platforms. Only then can you start to formulate a strategy to effectively make use of them for your needs. For example, Facebook can be an effective platform for building a community around your brand; by sharing information, starting discussions, soliciting ideas and requesting feedback on your products and/or services. It can be a great way to build loyalty through engagement and dialogue. Help to create long-term relationships with your customers and maybe turn them into evangelists; if done well. Twitter on the other hand is a great tool for more instant sharing. You can use it to announce new product launches, special flash sales and even to resolve customer complaints in real-time; as Dell and Southwest have done so effectively.

No matter which social platform(s) you decide to use there are a few things you have to be prepared to do; if you want to succeed. First and most importantly, get over yourself, your products and your services. I don’t care how great you think they are – it does not matter if you think so – it only matters if your customers do. Never use social media to blow your own horn; nothing is more off putting to an existing or prospective customer than a company telling them how brilliant they are. Second, never try to sell, sell, sell – you have sales people and channels for that. Social media is not a hit them on the head type selling tool. You can place ads for that. Find smarter and more subtle ways to offer value to your customers that will in turn lead to sales or generate word-of-mouth for your brand. Third, make sure that what you share will be of interest to your customers, beyond just your company stuff. This means not restricting yourself to tweets or posts that are always about your products and/or company. Take some leaps and broaden your horizons. Don’t be scared to follow interesting people, to be creative, human and inspirational. Share things that make you laugh and things that make people laugh about you. Share stories about your customers and even your competitors. All this helps make your brand and company come across as more secure and confident; and those are typically the kinds of brand that customers are attracted to and like to be associated with.

Finally, remember that you will need to grow a very thick skin. By putting yourself out there, and you will be if you do this well, be prepared for harsh criticism from customers and screw ups by employees (have an action plan to deal with them when they happen but don’t retreat). This is the price you have to pay to truly come across as real, in a world where very little can be controlled and preplanned. This will ultimately determine the difference between your social success and failure – how “real” or contrived your company comes across.

Big Numbers. Small Research.

Many companies fall for the big numbers being touted about the size of the Indian middle class, the fact that it is the second most populous nation on earth and has had the second largest economic growth rate for most of the last decade. These figures can and have dazzled even the most seasoned marketers, and here begins the fallacy of easy growth and big revenues. For years the middle class number being thrown around was 300 million, by both the UN and the US President. In 2001 it was finally accepted as being total tosh after a comprehensive McKinsey Global Institute Study. But it did not matter because the allure was enough for many brands to pour money into India without ever questioning the numbers, and far more importantly without trying to understand the local market dynamics and unique consumer behaviour.

Today, it is accepted that India’s middle class will grow to be an astounding 583 million people by 2025 (source: McKinsey Global Institute). To give you an idea, five percent share for a company like Kellogg’s would equal 29.5 million customers. In the UK, Kellogg’s is the market leader with a commanding forty-two percent share of the cereal market, which amounts to a mere 27 million customers in comparison. So, essentially even a relatively small share number, that in any other market would be scoffed upon, in India can amount to a larger customer base than leadership share in most developed markets. Many a seasoned marketer has looked at these numbers and dangerously never bothered to scratch beneath the surface before diving headfirst into India.

In the 1990’s Kellogg’s was one of the many companies that fell victim to this and had to learn their lesson the hard way. They invested some $65 million into launching their No. 1 breakfast cereal brand, Corn Flakes, in India; relying entirely on the population numbers and dreams of converting a meager one or two percent of consumers, without bothering to study and understand the existing breakfast habits that have been around for thousands of years.

If anyone at Kellogg’s had simply bothered to ask any Indian they would have known that Indian’s like to eat hot and savory foods for breakfast; like idli & sambar, aloo paratha with pickle, or spicy mixes like bhujjia. Furthermore, Kellogg’s never bothered to change any aspect of its marketing strategy or packaging for this vastly different customer. Instead, they relied on their Western strategy to win the day. Employing their world famous marketing strategy of “crispy flakes and premium quality” – unfortunately for them it turned soggy the moment it landed in hot Indian milk on every breakfast table. Their price premium also made them an unaffordable luxury for the vast majority. Kellogg’s was so confident of replicating their global successes that they proceeded to immediately launch a whole series of brands, one after the other; in the end only compounding woes.

In 2001, Kellogg’s finally realised their combination of ignorance and arrogance had led to dismal failure in India. They realised that they were not going to change the Indian consumers’ age old eating habits, in one short decade, and that they needed to change their strategy to succeed in India.

Kellogg’s is by no means alone; Mercedes Benz, Coca-Cola, MTV, Domino’s Pizza and a host of other well-established global brands and savvy marketing companies all learned their India lessons the hard way – by basing their entry on flawed assumptions, doing scant local research or arrogantly expecting to replicate Western strategies, they too failed to set themselves up for success as early entrants. Yet there is an equally long list of hugely successful companies that took the time to understand the market, adapt and cater their product offerings to suit the Indian palate and local tastes; they are now laughing all the way to their Indian bank accounts!

(Sources: Brand Failures – and lessons learned! and Brandalyzer)

It Will Last Forever…

Sadly, nothing lasts forever. However, this does not seem to stop so many successful companies from believing that their brands have become so powerful, so unique and so entrenched in the consumer psyche that their companies will never fade or die.

The “it will last forever” syndrome is mostly an affliction suffered by senior management that comes in the latter years of a company’s success. At a time when the company is often functioning as a near monopoly, or commanding a market beating price premium and enviable customer loyalty. From the outside it would look like this company is at the top of the world, and seemingly at the top of its game too. When long entrenched rivals seem unable to touch it and young, agile new competitors talk big but wither away quickly. This is usually when the management myopia sets in. When they bury their heads in the sand and repeatedly ignore the small but unmistakable warning signs of future decline.

Ignorance is bliss because what these managers never experienced was the many years their company’s spent putting the building blocks for success in place. Blocks built by taking big risks that helped them grow, get ahead and stay miles ahead of all their rivals. It was this hunger in the belly and the lessons learned from those many failures that helped develop its never say die attitude and unassailable competitive edge. The company mantra used to be all about innovation, R&D, thinking laterally, entering new markets. Often launching new products on nothing but a calculated hunch and a prayer; not about protecting their bottom-line to please Wall Street, every quarter.

These new managers end up doing nothing but looking inwards in the hopes of protecting their current market share, which in the end has exactly the opposite effect. They create shareholder value through cost-cutting and portfolio reduction; not by innovating or growing their product portfolios. If there is expansion then it is usually driven by buying up competitors and smaller companies, but all too often without any long-term strategic focus or goals. In the end, they simply end up depleting their companies’ once deep cash reserves. Sadly, fear of failure has driven the majority of their decisions, not hunger for success.

This is the reason so many great iconic brands (and hundred year old companies) are dying slow, painful and inevitable deaths today.

Pepsi: In Need of a Refresh?

“When industry market share numbers came out in March, showing Pepsi-Cola slipped to No. 3, analysts quickly accused PepsiCo—and Chairman and Chief Executive Indra Nooyi—of taking their eyes off the company’s biggest brand.” (WSJ article: http://on.wsj.com/iF1Jel)

Just a couple of years ago Ms. Nooyi was considered a visionary and the messiah who had come to transform Pepsi. Today, the same people are raking her over the coals for not delivering in “the numbers” in the short-term.

Granted that Ms. Nooyi has had some major missteps along the way with the disastrous re-branding of Tropicana and the Sun Chips LOUD bag fiasco but I think that is to be expected when one is trying to fundamentally change the DNA of a company and brand.

From the beginning, Indra Nooyi, made clear that she was embarking in an ambitious and risky plan to change the complexion of Pepsi Co. by making it a more responsible and health conscious global company. She never hid the fact that she was going to do this by re-orienting Pepsi’s product portfolio to be healthier and less “junk-filled.” This is the equivalent of a corn flakes brand entering a country like India where people ate hot and spicy meals for breakfast. This brand laid out a strategy that said they would not expect to break even for at least 10+ years because their first objective was to change generationally entrenched consumer habits.

The same applies for Ms. Nooyi’s strategy. It is based on a long-term vision and relies on changing consumer habits over the period of a generation, not over a quarter. By taking advantage of a global health trend that is only going to grow in the future she is among that rare breed of CEO’s actually doing their job by thinking about the company ten to twenty years down the road.

I truly believe that one of the major reasons US companies today fail to dominate like they once did in the global marketplace is because so many have become slaves to this quarterly earnings and profit mentality driven by Wall Street.

The reason companies like Kellogg’s and IBM have succeeded and stayed dominant for more than 100 years. It is because they still take the long view; which often means investing and/or taking losses in the short-term to enter a market or implement a new strategy, which pays huge dividends and sets the company up to dominate in the future.

There is no substitute for a CEO’s long-term vision and strategy for a company.