When an Apology isn’t Enough

By Mike Myatt, Chief Strategy Officer, N2growth

93 Year Old World War II Veteran Freezes to Death In Home

Not paying your utility bills should not result in death, but it did earlier this week in Michigan. Bay City Electric Light & Power moves to the top of my “Companies that Don’t Get It” list by turning off the heat of a 93 year old World War II causing him to freeze to death in his home. I can’t think of a single valid reason why this should have happened…this was clearly a case of administrative process taking precedence over common sense and compassion. An apology just doesn’t cut-it in this case. If the leadership team at Bay City Electric Light & Power has become so removed from its processes, and so disconnected from its customers that something like this can happen, they should resign immediately. I can think of any number of steps that could have been taken to prevent something like this. If the Bay City Electric Light & Power CEO wants to call me I’d reengineer their process at no charge…Furthermore, if you’re elderly and cannot pay your utility bills send me an email, or give me a call and I’ll make sure this won’t happen to you…Lastly, I hope the utility company that killed this man is paying for his funeral expenses. 

The Donald

By Mike Myatt, Chief Strategy Officer, N2growth

The DonaldThe Donald is up to his old tricks again…When everybody and their brother is looking for a bailout, the Donald simply engineers his own rescue by playing hardball with his creditors. Remember it was The Donald who said “If you owe the bank a million dollars the bank owns you, but if you owe the bank a billion dollars you own the bank.” This particular time around the magic number seems to be $1.25 billion dollars, which is the amount of the debt restructuring he’s trying to negotiate with bond holders. In today’s post we’ll take a look at “The Art of The Deal” Trump style…

Trump casinos received a two week extension today to reach an agreement with bond holders on restructuring $1.25 billion in debt. My question is this…Do you really think Trump cares whether or not the debt is restructured? He has previously sought Bankruptcy protection on two other occasions so why not a third time? What I’m trying to point out is that being cross purposes with creditors is not awkward for Trump, rather it is part of his strategic plan. What I don’t understand is why investors haven’t awakened to the game…Well actually I do; it’s called greed.

For some time now Trump’s business model has been to use his formidable personal brand and the cash flow from his casinos to leverage into real estate deals and business opportunities well beyond his repayment capabilities. He adroitly maneuvers investors and lenders into a position where if they don’t bend to his will by restructuring the terms and conditions of his financial obligations he’ll seek shelter in the safe haven of the Bankruptcy courts. Either way he wins…he reduces his debt service and buys the time to continue to grow his business at the expense of his investors and lenders.

While you have to love his chutzpah, I’m not sure you have to like his style, or his hair… 

More of The Same…

By Mike Myatt, Chief Strategy Officer, N2growth

Too much fun...Do today’s inaugural events resemble change or more of the same? Call me crazy, but while I wish President Obama all the best, I cannot for the life of me understand $175 million dollars being spent on his inauguration during this time of financial crisis. This is not change, but it is just more of the same on steroids…On election day I vowed to lend my support to the new administration for as long as it was earned. I stated that we all must now hope for great things from our new President, but we must also hold him accountable to uphold the standards of the office he holds and the country he represents. Not to be a party-pooper, but it’s time for my first accountability call…

My hope is that in the case of today’s celebration that one day does not make a trend. President Obama is clearly charismatic and affable. In fact, I even found myself starting to like him as I watched him interact with his family, the Bush family, the troops, volunteers and the like. I also understand that today’s historic event is deserving of celebration, and don’t begrudge him that. However, I believe the excesses of this inauguration are not in good form. At a time when our nation and its people are suffering from economic turmoil largely due to unprecedented financial excess, is this really the time to spend well more than 2 times what President’s Bush and Clinton combined spent on their inaugurations?

Wouldn’t it have been better form for President Obama to cut spending on his inauguration and lead by example? Wouldn’t it have been more inspiring if he had instructed the large list of corporate and financial donors to make contributions to charity and those in need in lieu of contributing to the inauguration gala?

I’m not going to belabor the point any further other than to say that I hope President Obama uses more wisdom and discretion in how he handles matters after the events of this inauguration day have passed…

It’s All About The Customer…

By Mike Myatt, Chief Strategy Officer, N2growth

It’s all about the customer…Sync the timing of the message with the needs of the market if you want to achieve advertising success. The above ad is simply brilliant…Hyundai gets an A+ for innovative marketing during tough times, and at the same time gains entry into my “Companies That Get It” category. While I enjoy creative advertising, what I truly love is a simple, relevant, authentic message that resonates with its intended market. When the going gets tough, smart companies listen to the needs of their customers. What Hyundai recognizes that other companies fail to grasp, is that putting the needs of their customers ahead of their own, is in fact in their best long-term interest. The sad news is that the big three US automakers have been caught asleep at the wheel again…

Blogging for M&A

By Mike Myatt, Chief Strategy Officer, N2growth

Blogging for M&AI think it’s fair to say that Blogging for M&A has arrived when two banks merging spawns a blog. I saw a tweet (code for twitter post) from Dan Schawbel about the new Wells Fargo – Wachovia Blog which is dedicated to topics directly related to the Wells Fargo / Wachovia merger, and I simply couldn’t resist the opportunity to applaud the efforts of Wells Fargo on this initiative. This is the first blog that I’ve seen focused on a merger, and I think it sets a brilliant example of a creative way to transactionally leverage the use of the blogosphere. In today’s post I’ll share my thoughts about blogging for M&A…

While many mergers and acquisitions don’t live up to the hype generated pre-closing, it is the post closing issues dealing with the integration of culture, business process, systems etc. that actually causes many M&A transactions to fail.  Put simply, unless you’re considering an acquisition based upon nothing more than intellectual property value or to exploit break-up value, strong consideration must be given to the recognition that there must be an excellent cultural and organizational “fit” in order for any acquisition to succeed. By “fit” I mean a similar set of values and practices regarding the actual running of an ongoing business: business ethics, work styles, work ethic, a vision for the future, perpetuation objectives, leadership styles, and so on.

I’ve often mused that any idiot can put together a deal, but it takes real leadership to keep the deal together over the long haul. The preceeding paragraph constitutes the soft-side of the M&A business that takes place once the investment bankers have left the table. When the transaction team passes the baton to the operating team is when the real work starts. So what does a blog have to do with this? Think about it…what I’m really talking about here is communication and expectation alignment. What better medium could there possibly be to facilitate this type of interaction than a well conceived blogging platform?

Bottom line…as a CEO Coach my hat’s off to Wells Fargo CEO John Stumpf for not only creating a tool to align expectations and disseminate important information to all stakeholders, but also for authoring the initial post on the blog. Job well done John…

A CEO Worthy of Following

By Mike Myatt, Chief Strategy Officer, N2growth

“A CEO Worthy of Following” is something that many workers long for. If you want to become a truly great CEO, then apply your focus on maximizing shareholder value over maximizing your personal W-2 and see what happens. Oddly enough, the more you focus on making those around you successful, the more successful you will become. As a CEO Coach one of the questions that I often pose to my clients is: Why should anyone be led by you? If as a CEO you don’t have a very good answer to this question (other than because I’m the boss), you might want to watch the above video profiling the CEO of Japan Airlines. All great leaders are willing to make short-term sacrifices for long-term gain.   

The Innovation Song

By Mike Myatt, Chief Strategy Officer, N2growth 

The Innovation Song you ask? That’s right…The above video contains a song performed by a Stanford student which was submitted for his final project for a class entitled: “Innovation and Implementation in Complex Organizations.” The song was intended as a tribute to Gordon MacKenzie’s “Orbiting the Giant Hairball,” a book which puts forth some thoughts on how organizations can better address the issue of innovation. The video is superb, and nails the issues surrounding a lack of innovation better than many more detailed case studies which I have read over the years.  Many a CEO could benefit from downloading this song on their iPod. If this project didn’t get an “A” it should have…

The Counter-Intuitive CEO

By Mike Myatt, Chief Strategy Officer, N2growth 

Great CEOs are counter-intuitive. They don’t subscribe to herd mentality, rather they use their contrarian instincts to exploit opportunities, to create advantage, to build strong leadership teams, to expand market share, and to increase brand equity. A global recession is nothing more than an excuse for poor leaders to assign blame for weak performance elsewhere. The counter-intuitive CEO (Great CEOs) sees an economic downturn as an opportunity to strengthen their organizations and to grow the enterprise. As 2009 draws to a close I want you to invest 10 minutes in watching the video above as it provides a strong validation for what I’ve been espousing to you for quite sometime in posts like: “Recession Proof Your Business” or “Beware the CFO” or “Young CEOs.” I wish you great success in 2009…   

Keeping Your Composure

By Mike Myatt, Chief Strategy Officer, N2growth 

Great leaders understand the value of keeping their composure. The video above, while certainly entertaining, is also a prime example of what can happen when you lose your composure. As a CEO few things are as important as displaying a command presence and demonstrating the ability to maintain control no matter how dire the circumstances. I would recommend going back and reading a prior post entitled “Never Let Them See You Sweat.”

McDonald’s Plays Brand Offense

By Mike Myatt, Chief Strategy Officer, N2growth

McDonald's Plays Brand OffenseIf you wonder what smart companies do to gain market share in down economies just look at McDonald’s…McDonald’s plays brand offense. McDonald’s understands that playing brand offense is exactly what it takes for businesses to thrive in a down economy. In fact, over the last year they have flawlessly executed an aggressive brand assault on Starbucks that has been nothing short of pure genius. In today’s post I’ll contrast the marketing brilliance of McDonald’s vs. the tentative approach of Starbucks…

Before we dive into today’s case study in brand management, I would recommend reading “Recession Proof Your Business” as a backdrop for today’s piece. This prior post provides further support to my position that smart companies play brand offense by increasing their marketing and advertising initiatives, while their more conservative competitors are busy managing risk. Let me be very clear that I am a strong believer in defending brand equity, it’s just that I believe the best way to protect brand equity is to increase it. From my perspective, if you’re not taking market share from your competition, then they are likely taking it from you…it’s just that simple.

If we were to roll back the clock a few years it would be difficult for most brand aficionados to see how the Golden Arches would pose any real threat to the king of retail coffee. After all, Starbucks is an upscale, premium priced, gourmet coffee outlet that caters to an affluent market based upon attitude and environment. Contrast this to McDonald’s who sells fast food at inexpensive price points. The only thing the two brands would have appeared to have in common was that they sold food through retail stores, and that would be about it. Well, somebody forgot to tell McDonald’s…

You see if you look past the Happy Meals and Dollar Menus you’ll find that the hallmarks the McDonald’s brand are built upon are value, speed, and efficiency. This is something Starbucks had obviously overlooked. While Starbucks was resting on their laurels, McDonald’s simply saw a the ability to create a line extension into the gourmet coffee business by bringing value, speed, and efficiency to Starbucks door-step. 

Where did Starbucks go wrong…The economy was slowing, consumers were growing weary of $4 dollar coffees that you have to wait in long lines for, Starbucks service wasn’t what it once was, and at the corporate level, Starbucks was tightening their belt, closing stores, and pulling back on the innovative marketing initiatives that created their category dominant position to begin with. Their business model had become static, and they were out of touch with the market. However Starbucks biggest mistake was not fighting back against the McDonald’s attack. As an old soldier I can assure you that you cannot win a battle you do not fight. While you might delude yourself into thinking you have won the fight by “picking your battles” and fighting on different fronts, full out assaults must be repelled or you’ll be overrun. This is exactly what happened to Starbucks.

Where did McDonald’s go right…they didn’t manage risk, they exploited an opportunity. They didn’t play defense, they played offense. They went on an all out full-frontal marketing and advertising blitz that included among other things placing billboards in close proximity to Starbucks clearly stating their value propositions. They told the consumer that they understood their needs better than Starbucks, and Starbucks didn’t fight back…McDonald’s applied their brand strengths to fill an unmet need in the market…gourmet coffee served faster, cheaper, and according to independent taste tests…better.

The lesson here are simple:

  1. As markets mature service providers must become efficient to prosper;
  2. Business models must remain fluid and adapt to the needs of the consumer.;
  3. Category dominant brands only remain so if they stay on offense;
  4. A true focus on customer centricity trumps trendy ambiance 11 times out of 10, and;
  5. In the food business, taste matters.

 McDonald’s…job well done.

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