Monday, August 31, 2009

Where MLMs Went Right

My first experience with a multi-level marketing (MLM) operation was an invitation to an "interview" for a marketing job when I was 20. On arrival, I was promptly carted into a room with 50 other people, spoken to by a guy with brilliant white teeth whose hair probably wouldn't have moved under any circumstances. He could have written the book on presenting, making eye contact, using names, asking the appropriate number of questions. The whole thing seemed about as sincere as a game show host's desire to see an overweight housewife win a new car. I didn't want to be rude and walk out in the middle of it, but there was no way I was going to sign up to be in somebody else's down line. The gentleman who invited me to the religious cult gathering, er, intro session sat me down in an overstuffed leather chair and shoved a clipboard at me. "I've already filled in part of it for you." I stood up, thanked him for his time, and let him know I wasn't interested. He put his hand on my shoulder, pushed me back into the chair, and said "That's great. We'll go ahead and get you signed up. What I need from you today is $200."

I was mad. He wasn't listening. It felt manipulative. And there was one thing about it I've never been able to shake for all these years. I've never seen any organization with members who bought in as completely as the stakeholders of an MLM. They were mobilized, committed. They had their pitches down. They had their materials. They learned how to market. They were fearless!

I've been part of some really great churches, political groups and social clubs. The membership is often largely attracted by a handful of members, or in some cases a single person. I've learned how to be the connector. I recruit for my company, not in any official capacity, but because it's a great place to be and I want other people to have the opportunity.

There's an unmatchable excitement around recruiting. I love talking about intangibles with people. I want them to buy into the idea of what I'm doing. I want to learn what they're excited about. I love sharing ideas, vetting my own, seeing how we can all get better. I think every employee should get in the habit of recruiting, every club member, every congregant. If you don't love what you're part of enough to tell other people, why are you doing it?

I scan my company's website for open positions on a regular basis. I can rattle off a dozen reasons why people should want to work for us. I love my church, and one of the highlights of last week was having my best friend with me. I'm part of a political women's group that I started inviting friends to after the first meeting.

If you're not part of an incredible church, a vibrant company or a dynamic club, join one. There's no day like today!

Friday, July 10, 2009

The Foot

A rose is a rose is a rose. A foot in Portland, OR is a foot in Portland, ME. This common set of measurement standards is useful in everything from recipes to building construction. So, when and why is uniform standardization a good idea?

When start up companies start, the president may also be in charge of everything from building the website to mailing packages to collecting accounts receivable. Companies rely on their institutional memory - we do things the way we've always done them, and if you have a question about that process, feel free to ask your neighbor. As companies evolve, employees need to standardize and document exactly as much information as will be used again, no more, no less.

Documentation can run out of control. If a process is likely to only be repeated once by the same user, or not at all, documentation is unnecessary. A speech written by its deliverer doesn't need stage notes. Companies trying to track down every process and generate report after report after report can find their production grinding to a halt.

How is your end user going to interact with your information? Do you have a strong sense of who your end user actually is? If not, or if you want to check, ask another department in the company who you interact with how they need the information presented. I like standardized abbreviations in marketing material I'm trying to find. When the word international is sometimes written out in full, sometimes written int, sometimes written intl and sometimes written int'l, it can be easy to think a piece is missing or was never created. When your company is 25 people with low turnover, it's easier to learn any system and stick to it. When your company is 25,000 people with high turnover, a non-intuitive system can create a significant source of mistakes and frustration.

How far does this go? Teachers rebelling against the No Child Left Behind Act claimed it neutered their ability to teach the material and forced them to "teach to the test." Children's education has huge variability depending on the wealth of the district, the involvement of the parents, the quality of the teachers the district is able to attract. Standards are good, so how do you account for variability when you can't control the input? Companies can hire the people they want and fire the ones they don't. To a large degree, schools don't have that option.

A solution: require all Master's of Education candidates to meet KIPP standards for teaching, and integrate the program into America's schools over a 5 year period. KIPP (Knowledge is Power Program) is a national network of free, open-enrollment, college-preparatory public schools with a track record of preparing students in under served communities for success in college and in life. There are currently 82 KIPP schools in 19 states and the District of Columbia serving around 20,000 students (from their website, July 2009). Their program is rigorous, requiring attendance from 7:30 am to 5:30 pm, with hours of homework afterward and significantly shorter breaks and days off. Their mandatory curriculum includes music and foreign languages. And their results are impressive: teachers and administrators are lined up to teach and start new schools, and although they serve primarily at risk communities, they proudly boast 25 to 100% better results in math and reading. In many cases, their graduates are the first member of their family to go to college.

Back to standardization. Where does the funding come from? KIPP, while an important movement and one I fully expect to continue to grow in the following years, serves only 20,000 students. If that number grew to 2,000,000 students, funding options for the independent schools would be vastly lacking and space for students would be even more of a premium.

The only solution is to make KIPP, which already seems to have figured out the answer, the new standard and for government to get out of the way. If we removed teacher tenure and the vacation schedule and raised the pay to the demands of the job we now require them to do, every school could be a KIPP school and America could take her place as the world's foremost intellectual leader.

Standardization is good, but only by standardizing at the highest level and not the lowest.

Monday, May 11, 2009

The Will

Sitting in my apartment in sunny Denver, CO, I'm thinking of Bangladesh, a country with the population density equivalent to half the US population in an area the size of Wisconsin without clean water or clean toilets. Disease, infant mortality and despair run rampant across the countryside.

My question to America is "Do you care?" or, more importantly, "Would you be more likely to care if you knew you would be able to make a difference that you could see and measure?"

Dr. Muhammad Yunus, the father of micro-lending, may have already given us the answer to the latter. In his two NY Times bestselling books Banker to the Poor and Creating a World Without Poverty, he outlines what it looks like to have a system where capital is A) recycled, and B) put directly in the hands of the people who can use it to generate business. His argument (with 30 years of success to back it up) is that the poorest of the poor have some skill that they've used to survive, and their need isn't for training, it's for capital and a market.

People have with in them the will to survive. But more than that, they have the will to dream big, to the will to change their circumstances and the will to change their family trees, one branch at a time.

So how does this work?

A micro-loan, at least in this context, is a loan of as little as $25 that is given to a person who belongs to a community of borrowers, without collateral, that they agree to repay on a fixed schedule with interest. It's different from charity in several significant ways.

1) These are loans, not gifts. They're on a fixed schedule, including interest. Once the borrower has repaid, both borrower and lender may enter other deals with each other or other borrowers/lenders.

2) These are loans to generate income producing businesses. Whatever the borrower's skill, whether making baskets to sell or anything else, must produce income. The goal is for every borrower to become financially self-sustaining, and possibly even a lender some day. There are no loans for simple consumption.

3) The target borrower for these loans are women, to empower them and eventually their children/families.

For thirty years, he's taken the concept of micro-lending across the countryside of his native land. He's helped his fellow countrymen help themselves, and lowered the poverty rate from a mind-numbing 62% to under 25%. While their current state is still roughly the same as the Great Depression, the progress is phenomenal.

His argument seems to eliminate the obstacle all charitable organizations face - how do you finish the mission before you run out of money? By making the structure a loan that gets repaid, people can willingly invest significantly larger sums and, with the promise of their money back (Yunus boasts a 98% repayment rate among the poor), the capital can be redeployed again and again. Further, it instills in the organization the need to function with business efficiency to become self-sustaining and to eliminate the need for continuous fundraising.

By reaching out through a person-to-person network, establishing local accountability and a systematic way to empower people, we have the ability to end poverty in this lifetime.

Are you in, America?

Sunday, March 1, 2009

Everywhere in the world and right next to you.

UBS, the world's most successful investment bank, claims to only have two locations - everywhere in the world, and right next to you. Their tag line "You & Us - UBS" is supposed to convey thoughts of global size, strength, resources, trust and ability. I like their marketing schtick, but it made me ask myself another question:

When is universality a good thing?

Does a client in Manhattan need the same thing as one in Arthur, NE? What about a client in Athens, OH vs. one in Athens, Greece? How important is specialization? When thinking about a global enterprise, how do you achieve economies of scale and compatibilities of message while being responsive to the needs of the local business?

Can any business exist by being truly universal?

The world's most transcendent business is probably McDonald's. Many economists point to the Big Mac Index, a weekly published list of the price of the world's most popular sandwich here and in countries around the world as a quick take on the relative value of the dollar against 33 foreign currencies. There are few icons in the world that are as broadly recognized as the Golden Arches. But, even within this country, there are variations in local offerings. In heavily Catholic areas, the Fridays during Lent offer a great opportunity to push fish sandwiches. In the deep South, you're more likely to see barbecued options. In certain parts of the burbs, McDonald's are more likely to have playgrounds.

Do these regional differences hurt the brand?

I argue no. While standards can be highly beneficial, they must be viewed in context of what the business needs are. Rigid conformity to absolute standards minimizes the ability of your front line to respond. So, how does a business find a balance?

An interesting survey would be to ask your customers, vendors, employees and senior management to answer these questions:

What do you love about our company?

What do you hate about our company?

What do we do better than our competition?

What does our competition do better than us?

How similar do you think the answers would be? What information could you get by taking that regionally as well as by respondent segment? Would you get the same answers from IT and Marketing? What about Legal and Sales? While no business can (or probably should) allocate its resources identically across all categories, it's interesting to think about the penetration of the message. Does your senior management think you have a stellar website that your customers think is a joke? Are middle managers empowered to make unusual concessions if it benefits the overall bottom line?

One of my favorite examples is an engineering firm who needed a special project done and was considering American labor, foreign labor, or importing foreign labor. They settled on the latter, and brought five gentlemen in from India. Culturally, they preferred to work without shoes and for their wives to be able to cook them their favorite dishes. The manager's solution? Rip up the carpet and reinstall it with extra thick padding, and add a special oven to the kitchen. The price? 30% less than it would have cost to outsource to a local firm.

So, when are floating standards a bad thing? When should standards be set?

First, legally. Rules on document retention, etc. must be followed even when annoying. However, giving employees some discretion on how to improve compliance may be a good thing. Changing from a paper to electronic filing system (assuming that satisfies regulations), color coding files, sending out reminders may all be good ways to make it easier for employees to integrate standards into their process.

Second, brand wise. While a franchise owner may think Big Macs taste better with spicy mustard than special sauce, the brand's overall value is likely to be harmed if Corporate is broadly promoting a traditional product. A better solution may be to insist on certain standards, but give franchise owners a small amount of discretion to try new products. It might even be a great test market with rewards for success.

Third, ethically. Chick-Fil-A, a self-proclaimed Christian company, insists on all sites being closed on Sundays so their employees can attend church and be with their families. Locations that want to be open on Sundays must not be allowed to violate the company's overall ethical standard or the overall credibility will be damaged.

Finally, universality must be evaluated in multiples. Best Buy is a great example of having strings of different types of stores - some known for great service/personal shopping, others for low prices, others for technical expertise. While the general brand is the same, there's a great opportunity for mini-brands based on local markets.

The best opportunity for a company to establish a universal brand is to decide on which elements truly need to be universal, and leave everything else to local taste.

Saturday, February 21, 2009

"...and when you get done with all of the forevers, then AMEN!"

The subject, for those of you who might not recognize it, is the last line of Rev. S.M. Lockridge's famous six minute description of Jesus, commonly known as "That's My King!" for Lockridge's use of the phrase throughout.

It's available on YouTube. It's available in its original entirety, spliced together with other songs and beats, preceded and/or followed by other messages. It's been heard by thousands, if not millions, of people.

Lockridge inspires me. But far more, Jesus inspires me. I can't think of anything better than a message I truly believe in wrapped up in a flawless delivery.

Who inspires you?

More specifically, once you have the answer to that question, do you make a point to listen to them as regularly as you need to live in a state of inspiration?

Printed speeches are good also, but don't have the same emotion and power as the spoken word. Some of the most moving words of our time put a face on civil rights, a man on the moon and tore down the Berlin Wall. Our leaders have boldly declared us victorious in the war on terrorism, then kept us safe for 8 years after the first attack on our soil since Pearl Harbor. They've rallied us to raise money for charitable causes and inspired us to new heights of success inside corporations.

So... who then is the face behind the face?

Even the most famous speechwriters are largely unknown to the general public. (Although if you take Jay Leno's JayWalk as a sample of the common man, our highest leaders are also largely unknown.)

The essential part of a good speech is 2-fold, first a concisely constructed idea and second a delivery with strength, conviction and power. Lockridge, although a seasoned minister and public speaker, delivered his most famous address off the cuff. Some say he was simply seized by the Holy Spirit, others say he was infused with a lifetime of preparation beforehand.

Candy Lightner, the founder of Mothers Against Drunk Driving (MADD), was so angry at the lax treatment of the driver who killed her 13 year old Cari that she started a grassroots campaign that eventually became a national movement. She passed out leaflets. She held meetings. And eventually, she testified before Congress.

What are you convicted about? And, given the opportunity, could you deliver it with strength and power?

If the answer is no, join a Toastmasters Club and start practicing! Buy a camcorder and start critiquing yourself on film. Learn to convince people both in writing and in person. Follow strong leaders with strong values. Make inspiration as necessary a part of your life as food and water.

Conviction + Action = Purpose

Who and what are you living for?

Wednesday, February 18, 2009

When Not to "Ace the Interview"

I just finished a great book, Acing the Interview by 30+ year career coach and recruiting veteran Tony Beshara, that will teach you exactly everything you need to know to get a job you hate.

He's been recruiting since before I was born. However, I edited over 1,000 resumes and interviewed over 400 candidates last year so I feel like I can speak to this topic with some authority.

His advice:

1) Write cover letters.
2) Learn the "right" answers to interviewers' questions.
3) Spin yourself into their ideal candidate.

My advice:

1) Find a person to be your cover letter.
2) Find a job that both uses many of your skills and few of your weaknesses.
3) Never take a job for someone that you wouldn't want to see promoted.

Debunking Myth #1 - The Cover Letter

A cover letter says two things about you. You don't know anybody in the company who can get you in, and you're "one of them" vs. "one of us." The push back people usually give me in this area is that they don't know anyone at a company they're trying to get into. Malcolm Gladwell's compelling argument in The Outliers was that weak connections are more likely to be helpful than best friends or family, since there's a good chance that you already know the same people they do. Your casual acquaintances and friends of friends are the most likely to have a connection that you don't and can help you get to the opportunity of your choice.

Rather than sending an anonymous letter, go through your Rolodex and start building it out. LinkedIn and Facebook are great resources for this. Once you find a person who might be open to helping you, a cover letter is unnecessary.

Debunking Myth #2 - The "Right" Answers

I've had exactly two jobs in my life that I hated, and I got fired from both of them within the first month. I've had another four jobs that I've loved, including my current job, and when I look back at what the difference was, I realized I should have seen it coming in the interview.

I'm very good at interviewing. I know the right answers. I've gotten every offer I've interviewed for since I graduated from college, and I can tell you definitively that there is never, ever a beneficial reason to sell a skill set that you don't have.

The classic example "My biggest weakness is perfectionism" is a really dumb answer for two reasons. Number one, it doesn't answer the question and number two, it sounds canned because it is canned. I once spent 23 hours over four days doing bullet (15 minute) back to back interviews with college students and I heard that answer over 70 times. Given the fact that so many of their resumes had extra returns, spaces instead of tab stops, and in one particularly egregious example, grammar spelled an E, I found that answer to be at best unoriginal and at worst an outright lie.

If you have a habit you can't or don't plan on breaking that might cause friction, you might want to consider making that the answer. I've admitted I'm not the best public speaker (which I'm working on) and that my desk is almost always a mess (which I'm not working on). But I'd rather not get an offer than to be harangued over something like office cleanliness.

Several years ago, one of my teammates and I were both promoted to the same position in marketing generating detailed reports and original sales ideas/campaigns. She used to proof my detail work and correct the many errors. I had so many original ideas, I turned in half of them with her name on them. The obvious solution we came up with over burritos at lunch one day? She'd take my detail work, I'd take her creative. Our boss' solution? NOT A CHANCE. She had a specific vision of what she wanted in that role.

I'm not good at detail. Saying I am is something I shouldn't have said in that interview. Complete full disclosure isn't always a great thing to lead with, but it's better to be up front then get into something you hate.

Debunking Myth #3 - Your personal brand

Interviewers, particularly early in your career, have been doing this a lot longer than you have and almost always do it more often.

The easiest way to impress an interviewer is to be impressive, interesting and mildly entertaining. If there's something about your current job that you don't like or think is a waste of money, start brainstorming around some ideas. Take a teammate to lunch and brainstorm together. Be interesting. Read books, have hobbies, have something to talk about.

Beshara and I disagree on the last point also - he says stay away from politics, religion, anything controversial. Where we disagree is on the delivery. On your resume, saying "Member of X Church (or political party)" isn't a bad idea because it might stigmatize you, it's a bad idea because it's not relevant. But, if your involvement shows clearly related job skills, I actually think it's a good idea if it comes up. Serving as an Elder on the board of your church and having fiduciary responsibility for the church's budget and pension is a non-controversial way to show your commitment to the community.

I'm a committed, lifelong Republican who once made a strong recommendation for an equally committed, lifelong Democrat who told me about her success stories winning over Democrats in a very red part of rural Georgia - which showed me more about her sales skills and passion than any of her prior job experience. She went on to have a successful stint as a sales rep (later promoted to sales manager) and we mutually agreed to never discuss politics. :)

As soon as you get a job, find the bathroom, and figure out what you actually got hired to do (HR job descriptions aren't always the most conducive), then the next thing you should do is figure out how to get your boss promoted.

If at all possible, only work for people you truly like and respect. The #1 reason people leave jobs is because of their immediate supervisor. I must either be the luckiest person in the world or just a decent judge of character because I've had a string of incredible bosses, each of whom I've seen get promoted while they were leading the team I was on. I used to joke around that I was causing it, but I think the real reason is that winners attract winners. If you're a winner, never work for a loser. If you work for a winner, push him or her up as high as you can.

The reason I start with character is because people push back on me here also with comments like "my boss would steal credit for all my ideas" or "there's no reason to push my teammates up - they wouldn't do the same for me." That's a loser's attitude. You're a winner. You work for winners. Your company is lead by winners. If that statement isn't true, you should start looking for a new job where it is true.

To wrap up, the best way to "ace an interview" is to be a star where you are, continue to push yourself and let success find you.

Monday, February 16, 2009

We spent *how much* on olives???

I just got back from long weekend trip in Cincinnati to celebrate my parents' 40th anniversary and to be astounded at the sheer tonnage of food my five year old nephew can consume and still be hungry. (On an unrelated note, one of the highlights of that trip was him asking me if he could look at my Wii controller, where he promptly dropped me out of the Batman game we were playing and replaced me with a computer player, then handed it back to me and told me he was done looking at it.)

On the way back to Denver, I got to the airport two hours early but there were only three people ahead of me in line at security. I brought a book, but figured I'd save it for the plane and spent some time thinking about the airport and the future of the airline industry.

Twenty years ago, according to a 2005 article in the International Herald Tribune, American Airlines made the industry's first attempt at cost cutting by taking one olive out of every salad. Since then, the increasingly competitive nature of the airline industry has divided into a barbell - hoping to snag the bargain shoppers with the cheapest seats on consolidation sites likes Cheap Tickets or Travelocity, and wooing the business/first class passengers with expanded offerings.

Airlines, like the rest of the transportation industry, hit their price ceiling in how much they could raise prices and still retain demand for their product. So when an industry has a highly variable cost structure, what's the best way to stay profitable both at the moment when the prices are the highest and a year later when prices may be significantly lower as they were between December, 2007 and December, 2008?

Before you can put together any strategy, I recommend considering three points 1) are your best customers those who will be the most profitable this month or for the next year in aggregate? 2) How are your competitors likely to capitalize on any decisions you make? 3) How can you drop your least profitable customers at the same time you attract new ones?

First, defining your customer base. The ideal plane would be full of last minute booked, refundable (maximum fare) business travelers with light luggage (minimum extra fuel usage), taking a flight that costs the least amount in fuel, crew capacity and doesn't require an overnight stay. What opportunities are available to pre-sell large mileage punch cards to be the exclusive carrier to companies whose employees travel en masse? If the dollar is weak, should you increase your marketing overseas to encourage travelers to come here? What about locking up future revenue by offering sweeteners?

Second, do you want to be the absolute lowest price in the game? Would you rather have one $400 passenger and one empty seat or 2 $200 seats filled? From a straight fuel charge, that answer seems obvious. What about 2 $225 seats? Where is the break even point? If corporate associates know the answer, do gate agents? If there are opportunities to fill seats last minute, would a bid model be appropriate? How empowered are your front line employees to either make or save the company money? Where do they see opportunities and waste?

Third, is it ever appropriate to move away from unprofitable customers? While certain federal guidelines (as well as general good PR) require universal availability, is there data broadly available about the true cost of service? Does a small child plus a stroller weigh less than a larger child, both paying the same fare? Is there an opportunity to market a grandparents' package for mothers with infants in arms who make multiple round trips to the same location in a year?

Lastly, what other factors go into airlines' process management? Is it time for a complete overhaul of the air traffic control system to see if we can save fuel by redirecting plane routes? What about additional services inside airports such as individual TVs (as they have on some airplanes) for a separate charge? Or the ability to log on to Internet only in-flight? (For the sanity of all passengers, I hope that the ability to make phone calls never becomes a reality!)

There is a tremendous opportunity for the airlines committed to streamlining to emerge from this financial crisis stronger and leaner with bigger market shares than ever before.