Baskin Dim Bulb branding advertising social media business strategy

Starbucks & Saks

As the economic meltdown continues to challenge our very premises about brands and selling, I'm intrigued to watch two well-known names respond to our dire circumstances in somewhat similar ways.

Starbucks is launching instant coffee: called "Via," it promises to recreate the company's  drinking experience at home or on the go, and for just a bit less than a hot small ("Tall") cup of its joe would cost in one of its outlets.  Company execs say that the market is gigantic -- 81% of coffee sales are instant -- and company founder/chief reviver Howard Schultz says "this is a transformational event in the history of the company."

I just wonder if anybody wants to drink it.

Starbucks has always been more about the in-store experience than the actual coffee it served.  Of course, the stuff had to be really good, but the brilliance of the concept was that the stores were a stop-over for drivers at which they got to encounter the smells, sights, and context of a coffee shop.  The "third place" concept, while as old as the coffee houses of the Enlightenment, was new for harried commuters and unemployed consultants alike. 

While confronted with serious price pressure for its high-margin kooky concoctions, Starbucks' real problem has been that its store experiences have become crowded and stinky.  Too many people ordering too many customized drinks meant long waits, and it's just so plain irritating to listen to them order and kvetch.  Adding cooked sandwiches to the menu meant odors of tuna and burnt bread wafted across you as you waited in line. 

Does an instant coffee packet get consumers to engage with the Starbucks brand in some meaningful way?  It sure saves them a visit to the stores, especially if the drinks are as tasty as promised.  Transformational?  Perhaps.  But I would have expected lots of innovative, meaningful changes to the store experiences; other than a quickie 3-hour shut-down a while back to make sure employees had read their job description manuals, there's been not a word from Starbucks on changing the real drivers of its brand differentiation.

Saks Fifth Avenue seems to have a similar approach to avoiding those drivers of brand preference, in that its latest plans center on 1) reducing prices by selling cheaper stuff, and b) selling its real estate, if necessary.

It slashed prices as much as 75% during the holidays, so it has already revealed to its customers that what it used to charge was probably not warranted.  Those price margins are never coming back.  And once it rolls cheaper merchandise in its stores, it can try to differentiate itself from Target, Kohl's, and any of the other merchants who're chasing those newly-minted bargain consumers. Different displays?  Better employees?  New programs?  Again, not a word.

I just wonders if cheap stuff will make anybody want to shop there.

I just can't see how Saks can avoid focusing on its store experiences -- and all of the benefits, services, add-ons, etc. that working with that context allows -- and still hope to possess the stores a year or two from now.  Maybe it wants its customers to shop online, which makes it an even tougher business to differentiate from every other online retailer? 

But that sounds like instant department store packets to me. 

Copping a Better Slogan

The Minneapolis Police Department has painted its squad cars new colors, hatched new slogans and tag lines, and otherwise embraced the full monty of branding.

A firm called Kazoo Branding stepped up to the challenge of helping the force burnish its reputation within minority communities.  It seems the cops have a history of brutality complaints, and suffered a racial-discrimination complaint by five high-ranking officers in 2007.  The big idea was to recruit more minority officers.

So they went to a branding firm?

I mean no slight to the project, which selected absolutely beautiful colors for the squad cars.  The new tag line -- "Be looked up to" -- is a fine statement, even if its English is a little strained.  Kinda like "think different," right?  There's a slogan, too, which reads "To protect with courage, to serve with compassion."  Posters for the campaign have a retro-happy-thing going, which I actually like.

But back to my question: why a branding firm?

The Chief Of Police reports that the project has been a stunning success. "This year's recruiting class is 50% minority, the highest percentage in department history."  Buried in all the blather about how the police rank-and-file thought the approach was utter hooey, there's the revelation that "a greater emphasis" put on placing ads and materials at schools, churches, job fairs, community centers, and other places where the force might connect with minority applicants.

Duh.  They recruited more minority candidates by recruiting more candidates. 

Nothing else changed, really.  Whatever polices and procedures were however responsible for the alleged insensitivity to racial minority communities weren't part of the branding analysis.  The character and conduct of the rank-and-file officers who'd earned the negative reputation by their actions (and/or by their omissions) didn't likely appear on the brand architecture, DNA, or whatever nonsense metaphor Kazoo uses for expressing its findings.  None of the high-falutin words of the new slogan had actions and metrics attached to them. 

I'’s a miracle of branding.  Until reality catches up to it.

Let's give the Minneapolis Police the glossy new paint jobs and pretty posters.  Fine.  But wouldn't it have been far more meaningful if the force had instituted a study of the behaviors that had earned it the bad brand reputation, and then launched substantive changes in addition to the nice new visual branding? 

Granted, the strategy could be to simply inject a motherload of minority officers into the force, and hope that they'll effect de facto change.  But that wouldn't be a miracle of branding either, would it? 

You can't cop a better slogan.  You've got to live it.  

The New Seasonality

If you ever needed proof that the context of would-be purchasers' lives is a far more important quality than any attribute of brand that you might promote, just look at the emerging utility "paycheck cycle" for packaged goods marketers.

It's a reference to the periodicity of purchasing behavior inherent in the lives of salaried employees.  With less money in the bank, people are tending to buy things -- especially necessities of food and other household products -- when they get paid.

While such observations are nothing new, the lengths to which marketers are incorporating the behavior into what would have once been sacrosanct branding and marketing plans is truly amazing:

• Content: All the talk about promoting "value" is just marketingspeak codeword for relenting on the absolutes of brand, and finding messages that are relevant to consumer needs.  At paycheck time, the fundamental need is to buy something, so messaging is far less about emotion, and far more about utility
• Channels: Is a conversation via some social media tool the best way to get the message out to payday shoppers?  Probably not.  Key an eye out for a resurgence in drive-time media, like radio, and POP (like coupons). And lots more direct marketing.  One of the primary benefits of being "a loyal member" of something should be getting access to payday purchase discounts
• Distribution: Different packaging configurations depending on time of the month (larger at payday, vs. smaller units for when money is running out), and making sure the right products are available during the right periods are probably far more important than marketing an intangible emotional quality
• Price: This is the simplest and perhaps most compelling tool for dealing with the new seasonality, only it might be counter-intuitive to standard practices: shouldn’t prices be lower when consumers are flush with paychecks, to encourage them to spend a lot and do so habitually?  Prices can be higher later in the month, while package configurations can be smaller (so thereby bringing prices down)?

Big-name brands are aggressively exploring such approaches, like Frito-Lay, ConAgra and Heinz.  I think it's a grand idea, not only because it challenges marketers to get even more connected to the sales reality of the businesses, but it allows them to refocus their attention on prompting behavors, not just intentions, conversation, or the happy thoughts of most branding.

And maybe it means that all marketers can start getting out of the habit of waiting for the holidays, or the other long-term seasonal certitudes of planning that aren't so certain anymore...and embrace new definitions of periodicity in their marketplaces.

A Shareholder Revolution? Pt. 2

I wrote yesterday that the way holders of stock in companies are treated amounts to benign disregard, at best, and fascist manipulation, at worst.  So we can complain that execs are either 1) getting to rich, and/or b) dumber than dumb, but we'll grow old and bitter (and poorer) if we wait for corporate boards and government regulators to step up and change things. 

The TARP and auto bailout news suggest that the corporate structure-thing isn't going to get resolved anytime soon -- the immediate opportunity to do just that with companies receiving TARP or other bailout monies notwithstanding, and having been ignored entirely -- but we could make a few changes right away that would help owning stock more resemble electoral democracy. 

But first we need a shareholder revolution.

What could we owners demand as we stormed the exchanges?  Whether we chose to challenge companies directly, or the mutual, college, pension funds (et al) that hold more than half of all the shares in known existence, here are a few starter ideas:

• Demand better communications.  The Federal government requires extensive reporting from companies, as do most stock exchanges.  Unfortunately, most of these documents are written in Egyptian hieroglypics.  Imagine if every publicly-traded company had to send a quarterly communication to all shareholders (or tweet every second, the mechanism doesn't really matter), written in plain English, and covering the issues...perhaps some formalized SWOT analysis for normal people, that was consistent across industries?  How about designating an independent, third-party that would be responsible for research and writing?  Expecting financial firms to write the definitive work on corporate health is like expecting your drug dealer to rate 10-step recovery programs
• Allocate funds to support the discussion of issues.  Ever notice that box you can check on your IRS return and send a buck to fund the Presidential campaign?  Why not allow shareholders and/or companies to designate funds for use in annual meeting issue communication?  If you think about it, we have a far greater need to force better communication with corporate leaders on an ongoing basis than we need to help Presidential candidates blather on every 4 years (and it's an optional fund, so President Obama opted out of using it anyway!).  Let's pay for real campaign communications from the companies we own.  Perhaps the funds could be accessed by any proponent of any topic, assuming some basic (and fair) conditions were met?  I say take the money blown on flying just one board member to the meeting, throw in the cash that would have been wasted on that fancy-shmancy dinner the night prior, and use it to allow novel, unexpected issues to get onto the agenda
• Provide better valuation/use of shareholder opinions. The Animal Farm-inspired voting arrangement within most company stock plans is an insult to your intelligence, if you think about it too hard.  Stocks are glorified CDs, only with a gambling variable attached; if stockholders are supposed to feel and act like actual owners, their ownership stakes have to matter.  The nickel slot players are still risking real money that is real to them, right?  So how about coming up with a mechanism for capturing those votes and putting them/keeping them on the corporate agenda?  Build real obligations for subsequent analysis and action, so if some percentage of the unwashed-class owners think so-and-so issue matters, it has to be explored and reported back, etc. 

Issuing stock is truly one of those brilliant breakthroughs in thinking that changed the world.  Giving companies a liquid marketplace in which they can raise money, and allowing the risk and reward of investing to be open to everybody and anybody to share is cool insight, brilliant economics, and quite democratic. 

But we now know that once those shares have been purchased, the mechanism for exerting that ownership is woefully flawed.  The exciting dynamism of the free market disappears once the stock trades hands, only to be replaced by a statist, command-and-control relationship.  Just think of the marketing potential of opening up this arrangement to the tools and techniques of communications. 

Talk about a loyalty marketing opportunity! 

Imagine if companies truly competed for investor dollars, and used transparency as a real measure of corporate responsibility and business sustainability.  It might not help every company avoid every misstep, but at least we owners would know about it somewhat more in advance?

Let's go beyond limiting exec pay, or trying to change corporate behavior from the top-down.  Shareholders need to demand more of their 401(k) administrators and mutual fund managers, as well as of the boards that purport to help guide corporations.

I say let's effect change from the bottom-up. 

Where are the financial world's James Carvilles?  The meetup.com get-togethers to connect shareholders of particular companies (or within industries)? 

Let the campaigning begin!

A Shareholder Revolution? Pt. 1

If many corporate leaders have run their companies as drunken sailors at the till (or, more aptly, like wolves with the key to the hen house), maybe it's time for true stockholder revolutions, and the initiation of real, voter-driven democracies?

Nell Minow, one of the nation's leading thinkers on corporate governance, suggests that calls for corporate reform so far have focused on supply side changes: boards of directors, chief executives, and the various other leaders and lackeys who support one another’s self-enrichment.  "We have completely failed to address the demand side of corporate governance, which is what shareholders must do," she said recently in Business Week.

I think she's absolutely right, and as a marketer, I immediately start thinking about how to effect that change.

Gulp.  Telling a shareholder to get more involved (they're otherwise busy person with a zillion other things going on) is like telling somebody that where they choose to stand affects the balance of the earth in space. 

We can talk about involvement until the execs have socked more zillions into their personal bank accounts...somebody has to explain it, connect it to the real lives of real people, work through the options, and provide the procedures and mechanisms to enable the required behaviors.  Ultimately, votes have to matter, not just to the voters, but to the votees.

Definitely an opportunity for marketers to make a difference.

Just for chuckles, let's compare the way a company annual meeting is run to, say, the recently completed Presidential election in the U.S.

• The voters.  Individual stockholders aren't really like citizens, in that there are institutional investors who own large blocks of stock (they're corporate America’s superdelegates, and they own over half of all stock) and various classes of stock that make some votes more equal than others (oink).  So every individual vote really doesn't really count
• The agendas. It takes wherewithall mixed with know-how to get a topic discussed at an annual meeting; individual shareholders need to work through proxies or special interest groups, and which may or may not be interested in getting involved.  Imagine if the outgoing President and his cabinet got to decide what the issues for the next election might be (consciously, that is)
• The candidates. Forget hearing from a Ron Paul or Ross Perot, or even a gaggle of reasonably sane wanna-be leaders.  The stars on the stage of any annual meeting are decided by the people running the meeting; those in the audience, however brilliant and telegenic, are extras, rarely anything more
• The campaigns. If you own stock in a company, you know that the first (and usually only) time you even hear of the agenda issue is in your invite mailer, in which a brief description is followed by the company's "suggested" voting action.  Maybe there's some mouseprint backup printed on toilet paper...but there have been no town hall meetings, Reverend Jeremiah videos, or stump speech gaffes to get you involved
• The choices. See above.  The message is vote, even though it really doesn't matter
• The follow-up.  There isn't any.  Companies are covered by the media and financial analysts as things or entities that exhibit emotions and behaviors, but the mechanics of governance -- who decided to do what, and why -- are relegated to the proverbial smoke-filled backrooms

In other words, we've heard of countries that were run like major corporations.  Fascist Italy.  Nazi Germany.  The Soviet Union.  Give us your allegiance and conformity, and we promise not to kill you, unless we change our minds.  We'll let you know via proxy mailer or midnight visit. 

I think annual stockholder meetings should run more like general elections or referenda.  That would mean giving them better tools, cash, and enabling their very own James Carvilles.

And first, I think we need to be thinkin' a lil' revolution.

Part 2 of this essay will riff on the possibilities.

All Hope Is Lost

From everything I can tell, the supposed details of the recovery plans delivered by GM and Chrysler to Washington this week make one thing perfectly clear: all hope is lost.

Did anybody hear any reason to think that the Detroit automakers have figured out how to get people to buy their vehicles?  We've heard lots about how they're going to wring more concessions from the UAW, and that pensions, healthcare, and other long-term commitments shouldn't be long-term commitments anymore.  Businesses will be sold, factories shut down.  Then, when the economy turns around, consumers will show up with cash and credit in hand, ready to buy cars.

Yeah, right.  And then you can watch monkeys fly...

In fact, marketing is the 800 lb. gorilla left out of the recovery plans, which tells me that the companies don't have a clue about what to do about it. 

Remember, these are the same businesses that successfully spent over $6 billion in 2008 to convince people not to buy their products.  Vehicle branding and marketing is about as broken, disconnected from reality, and uselessly expensive as you can get.  The idea that a "recovering" GM could choose to produce more of the same old branding dreck is not just stupid, but frightening. 

But no worries.  The recovery strategy depends on whacking the unions.

I know that griping about the automakers has gotten really old.  And I promise I'm not attacking them for making bad cars (they're pretty good, and have improved vastly over the past decade).  It's just that now I'm convinced that there's no hope; here's why:

• Government cannot oversee business. I know that now.  This entire firedrill of hearings, proposals, verdicts...it's nonsense.  Legislators wouldn't know a good business plan from a box of takeout noodles.  And the likelihood that a business as complex and moribund as an automaker (or any heavy machinery/manufacturer) could get an "A" on what amounts to a term paper to outline a bold, new strategy is almost as low as the likelihood such a strategy would ever work.  What were we thinking?  If experienced executives, learned boards of directors, activist shareholders, and the screamingly loud verdict of disinterested consumers couldn't revive these companies, why did we think a glorified PowerPoint presentation do it?
• The credit crunch is the immediate problem, but not the bigger, hairy one.  Cash to pay suppliers and fund loans for buyers is a nasty problem, and one that's both not of Detroit's making, and has to be overcome for the companies to address any other issues, good or bad.  There's no tomorrow without credit help today.  But why save companies if they have no idea how to respond to the deeper, more intractable issue of ever-shifting car-buyer needs?  The silence of the government, financial industry, and media on this issue is scary: where's the Manhattan Project of gurus coming up with the inventive, radical, risky, high-potential plan to utterly reinvent automotive marketing?  Oh, I forgot...they're busy ignoring the similar challenges facing every other brand these days.  The bailout doesn't even touch the problems confronting all businesses, as the practice of marketing is exploding around us.
• Never, ever underestimate the power of inertia.  Some of the most recent mainstream media coverage has revealed that the folks in Detroit saw the writing on the walls over a decade ago.  Not just abstract sketches of it, but like explicitly: smaller cars will be popular, and that'll mean thinner margins.  Humm...almost sounds like something an Internet person would say -- "the future is selling more things for less money" -- yet what did the Detroit leadership do with this insight?  Build gianormus SUVs.  Inflict Hummers on a generation of idiotic poseurs.  And we're supposed to believe that now they really want to change?  Again, I don't only not believe the sentiment, but I don't think it's possible.

Sorry to end the week on such a downer.  This kabuki drama could have played out so differently.

But it hasn't.  All hope is lost.

I'll Toast Anheuser-Busch

So Anheuser-Busch has come up with a new approach to compensating its marketing agencies, and the trade headlines say it "...whacks retainers..." as a casualty of the InBev-directed strategy to put the screws to said partners (oh, and trim $1.5 billion in costs that need to get trimmed).

I say let's toast Anheuser-Busch.

The old set-up let projects slide and change, perhaps even due to legitimate issues sometimes, which then let agencies add hours to their monthly retainers.  It seems that A-B also regularly reimbursed certain costs that may have included agency charges or mark-ups.

Now, agency compensation will be tied to specific projects, with specific deliverables and due dates, and explicit front-end declaration of costs.  Agencies, and their client, will have to live and die based on how strategic and smart they can be about the branding and marketing tasks before them.

Those bastards at A-B.

The easy interpretation is to see this as an efficiency move, having nothing to do with the efficacy of branding and marketing (or, worse, damaging it, whatever it is).  But I'd like to suggest that it's all about doing better marketing, and that's good news for advertising agencies, and any other vendors who chase that sort of work.  Here's why:

• The project approach better pairs costs with expected returns.  The digital revolution has transformed what was once the ongoing, analog wash of communications into the quanta of Internet search and online campaigns, so much of the marketing work was getting "product-ized" anyway.  Looking at an expenditure, and matching it with an expected outcome (whether sales, or some enabling other behaviors), benefits both parties in the deal: agencies can't bill wantonly, and the client can't blindly add revisions.  Limiting scope-creep helps everyone, not to mention enabling better work output.
• It orients everyone on same outcome, not competing purposes.  A big, still-unresolved bugaboo for the ad business in general is that many agencies think their job is to create great advertising.  That's wrong: they're supposed to help their clients sell stuff, and advertising is one of many tools to help accomplish that goal.  Imagine if the stated objective of a project were "to win an award at Cannes?"  It sure would make everyone deal with it, up front.  I suspect that the outcomes that'll drive most projects for A-B will have little to do with qualitative praise from the industry (or media), and lots to do with generating consumer behaviors.   Again, welcome to the late 20th Century already.
• The focus stays on deliverables.  Retainers are based on a process approach to financing, while project budgets are focused on deliverables.  The criteria for any budget decision (or change) in the physical world's supply chain are based on the impact on outcome, quality, speed, etc.  Most marketing agencies are rewarded for qualitative values -- i.e. likability, retention, and lots of the nonsense metrics that get applied to the stuff they produce. (Hummm...) -- versus the objective reality of their output.  Projects mean a focus on making things happen in the real world.  It could be carte blanche for hating your agency (or your client), and yet still loving your collaborative results.  Once more time, welcome to how the rest of the business is run.

Perhaps last, though not least, cooperative updates to client-vendor relationships, as a general rule, are better than the surprise changes, which usually amount to the former firing the latter.  No client is going to cut budgets they feel are beneficial to the company's bottom-line, so a whack at A-B's agencies means that A-B thinks there was some fat to be cut.  Bone?  Naw, probably nowhere near, and the brand isn't anything physical anyway. 

If it's a problem, where's the learned epistle from an agency exec defending the retainer, cost-overrun, Mad Men-era model? 

Tell us how the former arrangement helped A-B sell any beer.  In contrast, that's exactly what the new deal might just do.

I say let's toast Anheuser-Busch.

Trust in the Digital Age

With Facebook's latest change to its service terms creating a bit of a row, I thought it would be a good excuse to think about the role of trust in this digital age of ours.

The Facebook policy revision is at once simple and stunningly gigantic: it now claims "perpetual worldwide license" to anything posted on the site.  The rationale is that it cannot control what happens to the stuff people post -- pictures, for instance, can get forwarded to other web sites, perhaps even sold -- so it doesn't want to get involved in possibly messy legal wrangling. 

"We wouldn't share your information in a way you wouldn't want," founder Jeff Zuckerberg wrote in a post which, I assume, would only be shared in the way he would want.

In other words, trust him.

Similarly, we're supposed to trust:

• Google (and Yahoo, and any other search company) that has access to intimate details of your online behavior: what search terms you enter, the links you click, while its email service trolls the content of what you send and receive
• Most web sites you visit, which work hard to recognize you, and then track how long you stay, and what you look at most
• Your ISP, as it monitors your actions from site to site, and applies measurements commensurate with its perspective.

Never before has some much intelligence, creativity, and technology been applied for the sole purpose of watching you...

...and remembering you...

...and reconfiguring all of that information about you for a variety of purposes, many of which will make it easier to manipulate you, some of which you've never even imagined, and a few that you'll never be asked to approve or refuse.  All in the spirit of technology making your experience better.

In other words, trust it.

I'm convinced that if we swapped the words "secret police" for "technology services," lots of people would grab the nearest baseball bats or hockey sticks, and smash their computers to bits.  Yank the broadband cable out of the wall.  Throw the wireless modems out of windows. 

Most of our ancestors lived in abject fear of such oversight.  A seeming endless series of religious persecutions, totalitarian regimes, economic manipulations and forced emigrations taught them that trusting those in power is never, ever enough. 

It's actually pretty damn foolish.

So isn't it kind of weird that for all of the learned debate over ownership of digital assets (copyright for artists' work, for instance), there's been little disclosure or conversation about how much of everything else -- i.e. everyday online behavior -- is actually owned by the technology and service providers?

The big money-making of the digital age isn't distributing songs or photos for chump change, but manipulating and controlling this purchasing behavior, not to mention the overall access to knowledge and understanding, of zillions of consumers.  Only nobody really talks about it in these terms.  There's no public outcry for oversight, other than the Digerati blather following Zuckerberg's recent announcement.

We marketers depend on consumers having no issue with our intentions.  Just click on the "approve" box, skipping all the mouseprint, and let's get back to surfing, chatting, or whatever.

With that said, I know that Facebook doesn't have evil intentions.  Nor does Google, or any other company in the online services business.  The only conspiracy here is that they want to make money, and that doing so will probably make our online lives somewhat easier and more rewarding.  And, as of now, there's little consumer awareness of what (or how much) independence, anonymity, and ultimate control they'll give up in the process.

In other words, trust that it'll all work out.

And if that Facebook picture of me crushing a beer can against my forehead ends up getting bought by some company to feature on its web site, my only recourse will be to kick myself.

Which is perhaps as things should be?

My Recovery Plan For Twitter

I wrote yesterday at Information Week about how odd it is that we think we're smarter, more capable, and certainly more honest than the leaders of real-world businesses, like carmakers and financial institutions, yet we blithely defer to the machinations of technology leaders...even when we don't know what their plans might be.

Such was the situation Friday when Twitter received $35 million in additional funding from International Venture Partners and Benchmark.  The company said that it hadn't been looking for the money, but the offer was just too good to pass up. 

FYI, Twitter has never made a dime.  It has attracted legions of consumers for its free service, but then again, so has the atmosphere; like breathing, there's no reasonable expectation that doing so is monetizable.

There's just hope, and trust, in the myth of the boy-genius technology entrepreneur: the founders promise to emerge in short-order, and reveal to the Universe their brilliant plans, which will defy history, economics, and sundry laws of causality. 

It's funny.  We demand that GM's leadership spell out its plans to sell cars in excruciatingly painful and humiliating detail, and only then grudgingly give it a dime.  But the technology wiz-kid fantasy du jour?  There's somebody willing to hand them $35 million, which should have been even harder to get than public largesse.  GM is going to embarrass everyone, but Twitter will make its investors proud.  They just know it.

Whether admitted or not, lots of private capital investing is based on Black Swan theory, which is just shy of outright gambling.  Money isn't spent because of the certitude of a company striking gold; it's invested on the bet that a business idea will defy the very conventions that make it such a risk, and on how surprising, and surprisingly huge, such breakthroughs usually are. 

Twitter isn't getting money because it's a sure bet, but rather because it's such a long-shot. 

So I want to invest my two cents to help it succeed: here is my Three Point Plan to help it defy those odds, confound the critics, and become a recurring game-changer:

1. Step out of the conference room.  Let's face it, the smarty-pants technoentrepeneur myth is just a myth: just because one college-aged guy chanced on something that caught on doesn't make him smarter than the thousands of similarly-talented innovators whose ideas were either too early, too late, or just didn’t quite fit like his did.  So when you or any other wiz-kids retreat into your echo chamber bubbles, it satisfies and reinforces your sense of self-aggrandized worth, but it doesn't bode well for future breakthroughs.  It's just the wrong set-up (see Bill Gates).  The first step in finding that next breakthrough is to step out of the conference room (or private jet) and try to replicate the circumstances from which breakthroughs emerge.  I have no idea what those criteria were when you dreamt up Twitter, but I bet they included being in touch with lots of other, real people, and understanding (perhaps intuitively) what they like and want to do.  Not via focus groups, or from those other brilliant investor-types who populate your board.  For real.
2. Give up the next innovation to your users.  So forget plotting the money-making ideas that you'll dump on them, and let them co-invent the next steps.  Treat the community like a real community, and build the development conversation into the fabric of tweets, putting a simple question to users: We need to monetize this service, so what would that mean to you?  By definition, all of the ideas from digital agencies intended to exploit said users would be rejected, as would probably most other actions that would overly-crapify the interface (see MySpace for details).  It might also create a sense of ownership and involvement heretofore unimagined by the experts at Twitter World HQ.  Think less corporate genius, and more public radio.
3. You need to create a platform for constant change, not ideas to make money.  Whatever gets invented over the next 12 months at Twitter, there'll be all those other brilliant wiz-kids busy working to invent better stuff.  Competition is constant, and the siren call of other fads -- especially free ones -- will constantly lure folks away from your platform.  So once you get users co-inventing and managing their Twitter experience, you have to create ways to institutionalize that innovation.  Less consumers, and more citizens.  Could Twitter users vote on new ideas?  Are there milestones for introducing radical new services and tools, so everyone knows that everything will change so-and-so often?  If Twitter isn't fundamentally different a year from now, it'll be distant history.  And adding ads and other garbage doesn't count.
   

I doubt we'll see any of this from Twitter, of course, and we’ll get far too detailed -- and unreliable -- plans from GM and Chrysler later today.  All of these companies are beholden to outdated processes and expectations, even if some of them are in businesses that look and feel really futuristic. 

Even Twitter needs a recovery plan to get past the Conventional Wisdom.

A Mercenary By Any Other Name

Blackwater Worldwide, the company of mercenaries responsible for shootouts in Iraqi traffic jams and general mayhem-for-hire around the world, has announced it is changing its brand name to "Xe." 

Rarely is branding used to make a business effectively disappear, but that's what's happening here.

Blackwater is a manifestation of two current trends: outsourcing, and the privatization of government.  It is to killing people what IBM is to running IT departments; its policing and training capabilities much like an Indian call-center, or far-flung corporate supply chain.  Our government annually paid it almost $500 million over the past few years, so that it could do a lot of the fighting and logistics work that used to get done by the U.S. Army and Air Force.

The problem is that both trends are falling out of favor these days.

Outsourcing is one of those concepts that looks absolutely brilliant and obvious on paper (or in a glossy slide presentation), but often wrecks utter havoc when put into practice.  Steps in a supply chain, not just the items or ingredients themselves, should get done wherever in the world the work can be best accomplished.  The technology exists to virtually manage a distributed manufacturing process, whether assembling airplane parts, or artists creating a movie.  A lot of marketing money (and the work-hours of thrilled journalists) has promoted the idea to execs looking for ways of looking smarter, while paying for the privilege.

• So when an outsourced fastener maker misses a deadline for its step in assembling Boeing's new 787 airplane, it doesn’t just grind a factory floor to a halt, but rather throws businesses around the world into disarray.  Lots of production schedules get whacked instead of one
• A six degrees of separation approach to manufacturing lets distant factories skimp or skip entirely on safety compliance, and deliver lead-painted toys to Mattel and other toy brands

Anybody old or wise enough to remember the bad old days of making things would have known that the risk exposure inherent in outsourced manufacturing was possibly greater, or more dangerous, than even the best insurance policy might hope to mitigate.

In the instance of Blackwater, outsourcing gave the American people -- its ultimately employers -- contractor behavior in Iraq that wasn't always accountable to the rules our military are supposed to follow.  Perhaps they were hired for that very quality, which is a frightening proposition in and of itself.

Privitization of government services is another bugaboo for the Blackwater brand.

The premise that for-profit endeavors can do a better job of handling public responsibilities begs the question of to whom, or what, are they accountable?  We all know that government is inefficient, bloated, and wasteful...but at least we know where their offices are located, and have some leverage to unelect the leadership should we get too fed up.  Government processes are somewhat transparent, which is one of the reasons we know how screwed up they are.  Giving up that involvement in the name of better efficiencies means giving up some modicum of authority, not to mention our very citizenship.

That's not to say that outsourcing can't work, or that there's something wrong with every privatization scheme, but the combination of the two trends -- outsourcing government responsibilities -- puts Blackwater in a very difficult position, however high the profit potential might be in it.  It's in risky businesses that we really don't want to hear about, or we're probably going to insist that our government not abrogate its responsibilities.

Hence the branding change...from a well-know, and mostly disliked name, to something that is short, has no associations, and is impossible to pronounce.  Xe was picked because it had "the best potential for brand identity," according to a company spokeswoman quoted in the Wall Street Journal.

Yup.  Just watch these modern-day Hessians go invisible.  Once out of sight, the potential is endless.