December 9, 2013 by Ken Goldstein - 2 Comments

Brands in Memoriam 2013

Amazon CEO Jeff Bezos made a spectacular impact recently when he went on 60 Minutes the day before Cyber Monday and gave us a glimpse at the future—a fleet of small delivery drones he branded Prime Air. It was a bold statement, and whether intended or not an incomparable public relations move that got much of the nation talking about his online retail company at precisely the most important time of year for consumer purchasing.

Yet I might be in the minority thinking that was not the most interesting thing Bezos talked about on television and in the zillions of video clips that got sent around the digital world in the days that followed. What I latched onto in the Bezos appearance was this little exchange with Charlie Rose:

Jeff Bezos: Companies have short life spans, Charlie. And Amazon will be disrupted one day.

Charlie Rose: And you worry about that?

Jeff Bezos: I don’t worry about it ’cause I know it’s inevitable. Companies come and go. And the companies that are, you know, the shiniest and most important of any era, you wait a few decades and they’re gone.

Charlie Rose: And your job is to make sure that you delay that date?

Jeff Bezos: I would love for it to be after I’m dead.

Well, if Jeff Bezos who is currently sitting on top of the business world knows that sooner or later his company is toast, I think that is about as telling a tale of creative destruction as I can imagine! With that, here is this year’s short list of additions to the Dead Brand Graveyard:

Blockbuster: Aptly named for its status as the big bust of this year, Blockbuster is a sad loss for me. Harken back to the early days of video home rental and there were thousands of mom and pop stores in neighborhood strip malls. It seemed inevitable that these shops would fall victim to industry consolidation to achieve buying power and scale where margins were thin, and Blockbuster came to rule the day. My experience of Blockbuster was that it somehow held onto that mom and pop feel of a local video store, and at least where we rented they always were friendly, helpful, movie nuts, and the checkout line moved pretty quickly. Then as VHS gave way to DVD, along came the startup Netflix to reinvent the space, and Blockbuster went to sleep. By the time they woke up and decided that Netflix was onto sometime with their mail order subscription programs, Netflix was already reinventing itself as a digital distributor, and Redbox had figured out how to pick up the kiosk business with zero personnel vending machines. Blockbuster was two generations behind the innovation curve, and when Dish Network bought Blockbuster ostensibly as a storefront competitive tool in its battle with DirecTV, it was too little cavalry too late to justify the ongoing operating costs.

Current TV: It is hard to argue that Current TV ever acquired much momentum as a brand unto itself, although it’s hard not to draw a certain amount of attention when one of your masthead investors is former Vice President of the United States Al Gore, coming off a nail biter contested single state vote count that almost made him President of the United States. If you poke around the web for remnants of Current TV’s brand strategy, it was to be something like a news network for ages 18 – 34, where much of the content would be user-created, uploaded to a destination online site, and then curated for television cable audiences. I think the notion that I have to say something like denotes that the ill-formed brand strategy never got much resonance, which might have been reinforced when the strategy suddenly shifted to hiring high-profile former ESPN star turned MSNBC darling Keith Olbermann—at a big salary, with even bigger expectations. The concept of building a line-up around a tent pole Olbermann anchor also never resonated, so when Al Jazeera America came knocking with a monster payday for the founders of the 60 million subscriber reach network, it was an easy call for our former VP to call it a win and walk off the field. Not surprisingly, Olbermann went back to sports.

MetroPCS: Remember when we could look forward to airwaves of virtually unlimited choice and price competition due to the wonders of telecom deregulation? No, you forgot, too? MetroPCS is another brand that probably didn’t leave behind a lot of emotional longing with customers, but it is interesting to note that its founding dates back to 1996 and it came to position itself as a carrier with unlimited wireless communications for a flat fee and without an annual contract. The company was a pioneer in 4G LTE rich communication services, and with more than 9 million subscribers grew to become the fifth largest carrier in the United States—both good reasons for it to be acquired by T-Mobile which cemented its position as the fourth largest carrier in the nation. Still feeling good about all the many companies out there fighting hard for your smart phone bill?

What are the key takeaways from this year’s exit crop that might inform a Bezos-like objective of bolstering your brand to outlive your own era? First, speed is everything in the digital age, rest even a millisecond too long on your laurels and it will probably be too late to catch up with that company that leapfrogged you (Blockbuster). Second, a confused brand strategy results in a confused product strategy (and vice-versa) and swinging at that with pricey tactics doesn’t clear the confusion (Current TV). Third, an undifferentiated commodity without sufficient scale will not stand solo long in a consolidating market (MetroPCS).

Last year in my Brands in Memoriam post I went out on a limb and called Blackberry dead. I took a little heat for that, what I probably should have said was RIM (Research in Motion), the holding company for Blackberry was dead, and Blackberry was on deathwatch. Honestly, I feel okay about calling Blackberry dead, to me it’s spiritually dead, and while some loyals are still pounding thumbs on their mini-keyboards, it’s hard not to believe the clock is tick-tick-ticking to Final Jeopardy on this one. Slammed by creative destruction and inexcusably poor management—a very tough critique because it was a visionary company much beloved that lost vision—it is today a zombie brand at best.

Going out on less a limb this year, I don’t think I would be alone in calling for grave concern around the survival of Sears, J.C, Penney, and Radio Shack. I will climb out a little further and hope that Dell finds a fruitful path soon, as it is hard to believe the PC or laptop business is on the mend, or there is much room on the shelves for another flavor of tablets or tablet/keyboard combos. U S Airways is also likely to evaporate when its merger with American Airlines is completed. I hope I am wrong about all of these because we are talking an awful lot of jobs at risk in our too fragile economic recovery if we lose any let alone all of these. Let’s hope management is inspired with some leapfrog ideas for reinvention and revitalization.

Did I miss any for this year or in the near term gun sights of creative destruction? Feel free to chime in below and add your assessments, predictions, and prognostications. Just remember, if you tiptoe out on the limb, forward judgments of demise have an excellent history of being proven wrong!

October 28, 2013 by Ken Goldstein - 6 Comments

How Fragile Is a Brand?

Apple unveiled a bunch of new products last week, including numerous options in shape, size, and price point for a fuller line of iPads. Many of these products are desirable and will make great holiday gifts, but none comes close to pioneering a new category of experience. These are known as brand extensions, variations on a theme for already desirable existing successes. It’s good stuff, and good business, but not much to get excited about — nothing like the first Mac, the first iPod, the first iPhone, and the first iPad, all of which constituted innovations that created category-defining icons.

Steve Jobs used to talk a lot about brand deposits and brand withdrawals. A brand deposit takes place when a company invests heavily in making an indelible mark with customers, akin to their very first experience with a point-and-click computer, or a sleek digital music player, or an easy-to-use smart phone, or an intuitive tablet. Brand withdrawals are usually harvesting activities, like brand extensions, where a company takes some money off the table without over-investing to get it. Extremely short upgrade cycles for modest improvements in a device or high margin accessories like a carrying case are notable examples of brand withdrawals. Steve would say you have to maintain a balancing act to infuse a brand with life and a company with cash. I don’t think I ever met anyone better at this balancing act than he was.

That’s why I am starting to feel some heartache for Apple. I am seeing a lot of withdrawals and not a lot of deposits. I am also starting to see sloppiness as an acceptable norm, rocky roads that get paved over later without heavily pushing the envelope to warrant the annoyance.

Recently I posed the following question on my Facebook page regarding Apple’s release of the highly touted iOS7:

Is it just me or is iOS7 woefully slow, bloated, and unstable on older devices, particularly on the iPad2? My hour-to-hour experience on my beloved tablet has gone from impossibly perfect to mediocre. Is this the same Apple?

The response was mind-blowing. Here’s an extract from the thread, names removed to protect the honest:

I’m not having any problem with it except for user error with new features. I do see some slowness trying to connect to the internet but I assumed it was my wi-fi.
ME: I don’t think so because I am having the problem with wi-fi wherever I log in, it’s just sluggish, and apps that worked fine before crash at least once a day, and gasp, I have to reboot!
That’s not good. Wifi is definitely a problem. Apps don’t usually crash unless I stress them by doing things too fast. You have to reboot the device as opposed to relaunching the app?
ME: After a few apps crash it freezes, just like MSFT.
Ken, I am having the same problem on my iPhone 4S and MacBook. I regularly close apps on my phone, but that just saves battery life. It doesn’t help with speed.
Yep apple has confirmed with me that new software doesn’t perform well on old devices. Happen to me when I owned the iPhone 4.
It’s also bloated and annoying on newer devices as well.
4S is now super unstable.
ME: Yep, no question that the loss of Steve Jobs is hardly being felt in Cupertino. Brand is in hunky-dory hands.
My wife hates it… I won’t upgrade….
try running it on an iPhone 4. I hate it.
Slow and crashes. I’m running it on an iPhone 4S and an IPad 2. Shame. Shame.
ME: Wow, I don’t think I’ve seen this much negative love toward Apple other than at a MSFT conference. I wonder if they know. Maybe I should extract these comments into a blog post to help them understand. But would they care? That’s the real question. If they did, they probably already would have done something about it.

Brands are not invincible. They don’t fly with a safety net. Customer loyalty has to be won anew at every touchpoint. No company is safe from creative destruction, not even Apple. That is why the average life of an enterprise company today is about half as long as a human life, around 40 years.

And you thought your own 40th birthday guiding you into middle age was scary, huh?

In my view, Apple remains a legendary company with three key competitive advantages at the moment:

Brand: One of the most magnificent consumer brands of our time, expertly polished and full of lustre.
People: An almost incomparable assembly of talent in its employment to create, innovate, Think Different, and change the world
Cash: An unfathomable amount of reserves to invest as it deems wise and appropriate.

If they don’t protect the brand, the other two won’t matter in the long run. While historic odds of longevity are no more on Apple’s side than any other modern corporation, the good news is that Apple has built up tremendous goodwill with customers and shareholders to ignite the future, and I would venture to guess they will protect their brand, but not without a lot of pain in the reinvention. That’s perhaps the biggest problem of being at the top of the top, and why it is so easy to fall. When customer expectations are at the level where Apple sets the bar, you have no choice but to outperform yourself time and again. That’s an outrageous challenge.

Brands seldom shatter all at once. It’s the little hairline fractures that get you. Those are waved off as no big deal, normal ebb and flow in business. Then a hairline fracture becomes a crack, and the crack ripples outward like a spider web, and then the ceramic whole flies apart. Andy Grove calls it the Strategic Inflection Point, the change in market forces that happens and you miss it, and then it’s too late to course correct. You can remainder, but you seldom get back to the top of the heap.

That’s because a brand is not a logo, it’s a promise. And just like when a friend breaks a promise to you, you seldom fully forgive that person or fully trust them again. Apple has always promised us humanity above technology, so when they even mildly violate that promise we feel it, because we have come to trust them so much. When a promise goes undelivered or long delayed, like a next-generation product leaked to the public zeitgeist, word of mouth can be savage. Will we give them another chance on a bad release of iTunes or a map app? On a rough system upgrade? Of course we will. Until the promise is broken one time too many, and then we won’t.

Business leadership is managing part for today, part for tomorrow. It’s a plate spinning combination of the big picture and the small details. Mostly it’s about listening to customers and loving your brand more than they do, protecting that promise with every resource at your command. It’s very, very hard to do consistently, which is why the financial rewards are so immense when you get it right.

Curiously, the Facebook thread I extracted above went on a bit longer, and eventually someone pointed me to an online forum where I was directed to adjust a network setting and reboot. From there things got a little better, but not entirely. It was then suggested that I do a clean firmware install, which was way beyond my alloted time block for bettering the tool I needed to do my work — remember, these devices aren’t your work, they are the means to do your work. We migrated to Apple devices precisely because competitors put us through the ropes with reinstalls, adjustments, and tip on settings that experts could swap. Apple won the last few rounds because you didn’t have to be an expert at anything, you just opened the box and it worked. That was a wow, and it was always worth the premium price to those who wished to pay it. There were a lot of us!

Don’t break your promise. Sweat the small stuff. Love your brand. Love your customers.

September 29, 2013 by Ken Goldstein - 1 Comment

Toons, Love, and Letting Go

Earlier this month the curtain finally fell on Toontown Online. I am guessing that 90% of the people who read this post will have no idea what that is, was, or means. I won’t spend a lot of time telling you what it is or was, but I do want to share a few words about what it means.

Toontown was a massively multiplayer online role-playing game, an MMORPG, if you can believe such an acronym exists. It is more commonly referred to as an online world, or a virtual playground, where participants create a character, or avatar, that represents them among tens of thousands of others at any given time, in what is affectionately known as cyberspace, the intersection of computer networks, or the Cloud. The most famous and successful MMORPG of all time is undoubtedly World of Warcraft, which was created ages ago by Blizzard Entertainment and has produced immense wealth for those behind it. Toontown is kind of like the quirky second cousin of World of Warcraft, created by huge fans of WOW initially at Disney Imagineering R&D, seeking a key point of differentiation — Toontown was the first MMORPG for kids and families. Yes, that’s right, kids and families. It came from Disney, after all, where family entertainment is the brand promise.

Aside from appealing to a different demographic audience, Toontown accomplished a few other significant milestones. For one, it lasted commercially over a decade, if not putting it in the wealth stamping mode of World of Warcraft, certainly getting it into the rare window of time warp triumph that few digital games enjoy. It was certainly the longest living bit of software that I ever helped see the light of day, by an order of magnitude. We started working on it in 1999, launched the free public beta at Disney Online in the Fall of 2002, and went live in full subscription model in mid-2003. Earlier this year, Toontown Online celebrated a milestone of ten years active that very few libraries of compiled code ever have the occasion to note.

If you have never played an MMORPG or have no idea what the gameplay in Toontown Online encompassed, you can easily learn that by doing a few web searches or scanning the Toontown entry in Wikipedia. Now that Toontown Online is over, I want to talk less about its being, and more about its resonance. It was a turning point for those who worked on it in several capacities — proof that the Disney brand and Walt’s vision could be migrated to a new platform of which Walt never dreamed. It galvanized a team to emerge from the DotBomb bubble years through a process of creative destruction and reinvention. It bonded its developers to its customers in a true paradigm shift that redefined for all involved the notion of “community.” I remember approving a job requisition for a position called “Community Manager,” and I swear I stared at the page for an hour wondering what that meant, whether we really needed one, and whether any person was superhuman enough to tackle such a role. The truth was, we were all Community Managers, and residents, and participants, and young at heart immersives who knew something had changed. We bonded with our customers, and we bonded with each other, and that bond proved to be something that will last in perpetuity.

World class work is contagious. High performance teams willingly tackle shared dreams. Achieving the improbable is a permanent bonding agent. Copy and paste that in your signature file.

The bond of being part of doing something that hasn’t been done before with a team of impossibly talented individuals with whom you are unlikely to ever work again is both powerful and intangible. The odds against Toontown lasting a year let alone a decade were incalculable. It was so hard to describe the concept to people both inside and outside the company that building a consensus and maintaining funding was entirely improbable. Yet because history told us Walt had faced the same struggle and challenge opening a branded family theme park — Walt’s Folly, as it was known — we just stuck to it and got it done. We knew if we could get people to sample it — try it, touch it, be in it, share it — it would slowly catch on. It did, like the Little Engine that Could, and those silly little Toon characters got stuck in our minds and our hearts. We played in that world with each other, kids and adults, employees and customers, everyone an equal, everyone just looking for gags and Cogs to take down.

Years into it, Thomas Friedman wrote a critically important book called The World is Flat, but those of us making and playing Toontown already knew that. The hierarchy had inverted, unrestricted except by carefully constructed parental controls, global in reach and appeal. The Toons were in charge of this world, not us. Our job was to be good stewards of the world, not run it, only to tend the expansive lands. Yep, it was an online theme park that belonged to everyone there. It was a community, a true virtual community, almost perfectly safe because the community kept it that way, alive and vital 24x7x365. We discovered it then, and we feel it now. The game might be gone, but our sense of belonging, no chance that can be dipped in solvents. Belonging is eternal.

Therein lies the truest lesson of Toontown for me, a lesson I learned my very first years in the software business, years in which I rode the unruly swings of success and failure all at once. Astonishingly few projects in media succeed commercially or critically, and even fewer achieve both, but the ones that do make up for all the ones that don’t, both financially and in life satisfaction. An extraordinarily wise mentor taught me at the outset of my journey this simple but enduring lesson, that if I stayed in this racket and wanted a career instead of a job, I needed to learn and embrace the mantra that projects come and go, but it is the people with whom you work you will remember way more than the projects. He explained that anyone looking back on a creative career when it comes to an end — and they all do at some point because we are humans, not T0ons — is that a truly successful career will be built on the back of about a half-dozen successes you could never predict, mixed in with a landfill of failures.

The takeaway was that it would always be easy to forget projects magnificent and awful, but the people with whom you shared those projects could rise to the level of unforgettable if you made that a focus. If process was as important as outcome — more important than outcome because it is the only path to sustainable outcome — then you might forget the rotten days, the missed milestones, the modules that wouldn’t compile, the costly customer service calls, all that junk — but the joyous memories of the people would stay with you. The people were the gift then, and they would remain so forever.

The incomparably talented people who built and nurtured Toontown were many of the same people with whom I shared any number of initiatives that didn’t go right. It would be impossible to acknowledge and commend all of them here, and to pick just a few would inevitably be read wrong by the many. The ten-year run of Toontown didn’t make them good, they were good already and they are good still. All of us shared this tiny bit of magic, and now like most forms of media it joins the destiny of the ephemeral. Our bond with each other is unbreakable , and our bond with that community is impenetrable. The memories of the cast endure, the value of the bond beyond price, the stories of each other ours forever. We are a little geeky, a little playful, a little different, and a little older. We are forever Toons.

Toons of the World Unite.

July 8, 2013 by Ken Goldstein - 4 Comments

The 70% – Part 2

In the Executive Coaching Workshop I co-lead with John Vercelli for Coaches Training Institute, we discuss early in the curriculum the pervasive epidemic of Bad Boss Syndrome. It is jaw-dropping how many employees reflect on the lack of leadership and vision they receive from those who manage them, how starved they are for inspiration, and how little it takes to turn a bad day into a good day. When you think about the study published recently by Gallup noting that 70% of employees are disengaged — and that too many of them hate their jobs — boss improvement is a good place to start.

Another good place to start is the Dead Brand Graveyard, where we also focus in the workshop. Surely some brands die purposefully in mergers and consolidations, but my observation is that many more die because they break their promise to their customers, who simply move on. In a world of virtually unlimited customer choice, when a company fails to innovate or repeatedly breaks a brand promise, the Dead Brand Graveyard is soon to cement a new tombstone. For the employees who are part of the letdown, the lost promise, and ultimately the job loss that follows, demoralization is readily understood. Remember, a lot of these employees came to their companies with hope and passion and energy and ideas. They may have had the solutions to their company’s death sentence on their desktops. Perhaps no one was listening. That takes us right back to Bad Boss Land. It’s an infinite loop.

Let’s pull these two concepts together — bad bosses and dying brands — and then think about the twelve Gallup questions which you can find in last week’s post, Part 1 of this inquiry. None of the questions involve compensation. They ask things like whether individuals have the opportunity to do what they do best, whether their supervisor cares about them or their advancement, whether the mission or purpose of their company is understood and they are part of something that matters, whether there is a commitment to quality in the workplace, and whether there are peers or leaders in the environment who are supportive.

Human stuff, huh? HR mush? Not the stuff of hard-won profit and loss? Garbage! If companies have it so right, why are brands evaporating from the landscape in record time? Why are fully capitalized companies lasting half as long as the average human lifespan? Creative destruction, you say, the natural course of things business? Well, sure, I’ll give you that. So is top management willing to say the whole Circle of Life is out of their hands and the survival of the enterprise is entirely up to market forces, to fate rather than strategy, to a competitor’s campaign rather than a driven response to galvanizing the single most important asset in the company’s inventory, the intellectual capital that is allowed to rest idle and fester?

That’s not very optimistic. And yet, optimism is the spirit that drives opportunity, and opportunity is the backbone of capitalist enterprise.

Why do we so often get this so completely wrong? Why would we let 70% of employees churn in the ranks, angry and sad and defeated? Why would anyone allow a brand to go stale, to break a promise to a customer, to fail to reinvent itself when invention is the lifeblood of all revenue and profit growth? Borders, Circuit City, Kodak, Polaroid, Palm — all once admired companies, all with revered brands — what do you suspect the internal opinions were of management as repositioning opportunities were missed and tired product performance spiraled downward?

Much has been written about short-term versus long-term financial incentives as value destroying tactics, particularly among senior management at the top of the compensation bell curve. That is only part of the problem. Certainly if you set a sales target for a commission based or stocky savvy executive, she or he will chase that goal aggressively, often with widespread collateral damage. Yet is it the incentive that is the time bomb, or the misperception on the individual’s part of the fundamental rewards that may or may not be at hand? To that end, I mentioned that the Gallup poll does not reference compensation. I would be willing to bet Big Money that the disengagement factor cuts across every salary band in the spectrum. It is my own observation that once you get past basic human needs being met — housing, food, safety, decent educational opportunities for the kids and maybe a family vacation now and again — there is no guarantee whatsoever that financial reward brings vast job satisfaction. I have met as many or more unhappy wealthy people as I have in the middle class. The tendency to focus on the wrong motivation is not exclusive to the underpaid or overpaid, and the failure to align truly rewarding incentives with human performance is almost always the difference between long brand life and flash in pan cash register rings.

When I hear that 70% of employees are disengaged, and when I see brands and companies dying in record time, I experience one story. We try hard to focus the executive coaching mission on revitalizing the human potential in an organization, to bring the executive’s focus back to the brand promise, and to evangelize that set of values broadly among the members of a team as a rallying cry.

I see three major factors that matter in a job — what you do, who you do it for and with, and the compensation you receive for what you give. If the first two mandates of that string aren’t met, it seems ludicrous to believe that compensation is going to make up for the loss. And if the only thing that people are focusing on is compensation, what real chance does that company have at longevity? A brand will not be reinvented because it needs to be more profitable; it will be the magnet of innovation because people care about it and bond together to transform it into something it currently is not because it matters. From that investment of idealism will flow vast improvements in continuing profitability.

Short-term harvesting of any cash cow is possible — if you want to squeeze profits, go ahead and squeeze the people who are producing them. At the moment 70% of those people are telling you they don’t like what they are doing or who they are doing it for. Want to make the Big Money that lasts the long run? The Gallup survey tells you in the questions alone where we’re leaving the Big Money on the table. Start Thinking Different!

Bosses must learn to listen. Employees need to teach their bosses to listen so they can be heard and emerge. Coaching can be implicit or explicit, but it has to be obvious that letting ideas flow not only improves morale, it is vital to sustaining the enterprise. Companies that last do so because they apply long-term strategies, both in terms of bolstering their brands and employee engagement. Everyone can win — especially customers — if that’s the walk that leadership walks, leadership by example. It does not happen accidentally, but by commitment, and constant reminder of core values that can be shared.

For me, it will always be People, Products, Profits — In That Order.