PEN PALS AND FACEBOOK
I still remember the day my fourth-grade teacher, Miss Okamoto, said that we could all have friends of our age in far-off places in the world by becoming a “pen-pal.” (Growing up in Hawaii, that meant pretty much any kid outside of the Islands!) I don’t remember however, which country my pen-pal was from, I think it might have been Norway.
Anyway, with the impending IPO of Facebook, I started to reminisce about this entertaining and educational extra-curricular activity. I also wondered if elementary schools around the world still encourage their pupils to communicate in the old fashioned way: pen and paper, cursive writing, stamps and snail mail. I imagine that email, Twitter, Facebook, and Facetime have made pen-pals obsolete. In fact, just yesterday, I read about how Microsoft, in teaming up with Facebook, is about to launch its latest version of Bing which combines search and social media in a pretty cool way. According to an article in the New York Times, “if you are logged onto Facebook through Bing, and you want to search for hotels on Maui, then you will get pictures of friends who have shared some affinity for Maui before on Facebook.”
NOT MADE IN CHINA
As the incomes of a large number of Chinese are rising, their thirst for luxury handbags and designer apparel and accessories made in France, Italy and Japan (particularly designer eyewear) are also going up. A mark of status of a women with an expensive looking handbag is to be sure that everyone knows that she bought the product abroad, preferable in France or Italy. But short of that, at least the product should be bought in a official company store. While in Shanghai a few weeks ago, I took this photo of an almost completed high rise just next door to the office building of a company in which I was conducting a seminar. I am told that the base of this building (about four stories high) will house the offices and showroom of Louis Vuitton.
I recall during my first trip to China back in 2001, I was browsing in a fairly attractive looking store selling handbags that everyone knew were copies of the real thing. When I asked the price of one of the items, the saleswomen quoted me a price that I though was quite for a “fake.” When I told her that the price was way too high for a fake, she countered, “yes but this is a high quality fake!”
Well a decade later, Chinese shoppers don’t have to worry about bargaining with shopkeepers over the price of a knockoff. They now have plenty of money… and opportunity… to buy the real thing.
EARLY MBA: THE CHINESE WAY
The visible progress in China continues to amaze me, especially in Shanghai. On my recent trip to Shanghai, I once again was in awe of its skyscrapers (and the cranes signalling even more skyscrapers), the traffic (and the number of luxury cars stuck in traffic), and the malls full of high-end shops. But on this trip, I discovered something new in one of the malls near my hotel. On the seventh floor of an eight-story luxury mall, I came across an English-language school for children with an interesting marketing twist. The school’s name is “FastTrackKids,” which sounds catchy enough. But it was its flagship program, “EarlyMBA,” that really intrigued me. In its brochure, the school says that those children enrolled in this program will learn “Teamwork, Leadership, Creativity, Communication, Knowledge Integration, and Global Vision.” I leave you to think about the implications of this aspect progress in China!
NEW YORK CITY STOREFRONTS TELL INTERESTING STORIES
New York City storefronts can sometimes provide interesting socioeconomic insights. In this and the next few blogs, I’ll share a few photos that I’ve taken around New York City in the past few weeks. Here’s a photo that I recently took of a restaurant on the upper east side of Manhattan. It is getting harder and harder to find Kosher restaurants in Manhattan, let alone on the upper east side. I hope this restaurant’s owner gets a quick response to the “help wanted” sign on its window.
TOUCH VS. PRESS
I finally bought an iPhone recently and for the first several weeks I struggled to use it properly. I finally realized why when I observed my 20-month-old granddaughter flawlessly operate her parents’ iPad and iPhone. As she interacted with these devices, I noticed her tiny finger barely touched the screen (just like the little girl in the stock photo above). Yet, everything was moving and changing according to her wishes. It was then that I realized that I am part of the “press” generation, while she is part of the “touch” generation.
I learned to type on a clunky manual Underwood typewriter. I had to press real hard to make the letters come out clearly. This heavy-handed way of typing carried over to my interaction with my PC’s keyboard, whether desktop or laptop. It may be a cliche but it is truly amazing how fast technology changes and how this creates problems for those who are used to doing things in a certain way. Oh well, at the rate that voice recognition technology is finally progressing, perhaps we’ll rarely need to touch or press to get our devices to act on our command.
HAVING YOUR CAKE AND EATING IT
I try to eat healthier as much as the next person in my demographic category. But one thing that I have not been able to get used to is the taste of whole wheat pasta. In preparing to teach in a leadership development program for Conagra Foods, I discovered that the company developed an all-purpose flour product called Ultragrain. As the described on its web site, Ultragrain All-Purpose Flour is a “…revolutionary, all-natural 100% whole wheat flour that combines the nutritional benefits of whole grains with the taste, texture and appearance of white flour….” Conagra Food has been using Ultragrain in the making of many of its own branded products such as Healthy Choice frozen entrees and meals, Marie Callender entrees and meals, Kid’s Cuisine entrees, and Chef Boyardee whole wheat pasta. Several weeks ago, it announced that it is now selling this product retail.
To be honest, I don’t normally buy the brands listed above. (However, I do buy on a regular basis a few of Conagra Foods’ other brands such as Wesson Oil , Hebrew National Franks, and Gulden’s Mustard.) So I was not aware of Ultragrain flour. But I wouldn’t be surprised if not all the regular consumers of the brands mentioned above are aware of the use of this type of flour. During the leadership program, I brought up the idea that maybe Conagra Foods should emulate the PC companies and their “Intel Inside” co-branding and advertising campaign of some years back. I found out that this indeed is already being done. Another one of the company’s brands, Aztec Tortillas is now labeled Aztec Ultragrain Tortillas. The company is thinking about extending this approach to their other products using this type of flour.
As part of its current marketing strategy, Conagra is planning to spend more on advertising to build up its major brands. It is fun to think about what the tag line would be in advertisements of Ultragrain All-Purpose Flour to retail shoppers. I’m not a “Mad Man,” but I offer as a suggestion the title of this blog, or some variation of it. (By the way, the popular TV show “Mad Men,” about Life in a Madison Avenue Advertising Agency in the 1960s, is starting its 5th season tonight.”)
THE CEO’S CHALLENGE
It is said that a CEO of a publicly traded company has two customers: those who buy its product and those who buy its stock. The challenges faced by PepsiCo CEO Indra K. Nooyi clearly exemplify this notion. Since becoming CEO in 2006, she has been working to tilt the company towards healthier, more nutritious product offerings. Unfortunately, the stock market is not buying this. PepsiCo stock has remained relatively flat throughout her years at the helm.
An article in yesterday’s New York Times reports that in response to pressures from key shareholders, she is making certain management changes by elevating people to senior positions whose background is more with the selling of PepsiCo’s core products of salty snacks and carbonated soft drinks, i.e. Frito-Lay and Pepsi.
At the end of the month, Pepsi will launch its biggest new carbonated soft drink product in years: “Pepsi Next.” This product is described as a “mid-caloric drink made with a combination of artificial sweeteners and high fructose corn syrup.” CEO Nooyi also announced that the company will be spending about $500 - $600 million in additional marketing, most of which will be for its core brands.
It is sometimes said that strategy is “where you put your money.” Based on this news, it appears that there is a shift in PepsiCo’s strategy back towards its core business. “Healthy and nutritious” may be better for you as a consumer, but not for you as a shareholder.
Photo: Courtesy of IBM
This reblogged article on the IBM’s Watson being a bank teller takes me back to a project that I had in the early days of bank automation. In the early eighties, I was asked by New York-based Citibank, the first bank to introduce automated teller machines, to help them increase the usage of these machines, particularly among customers in the outer boroughs of Queens, Brooklyn, the Bronx, and Staten Island. Believe it or not, when these machines were first introduced, a lot of people were hesitant to use them because they didn’t trust them. I hired students in my undergraduate classes at Pace University to serve as “guides” in the various Citibank branches. They would try to pull people off the long teller lines, teach them how to use the machines, and also try to allay their fears of their money not being properly deposited. (As an experiment, we even put cardboard boxes labeled “For Deposit Only,” and found that there were customers who were more willing to put their money into these boxes than insert them into the automated teller machines! Retail bank automation has certainly come a long way since those days.
Reblog:
Citibgroup’s next teller: IBM’s Watson
IBM’s Jeopardy! playing computer Watson is getting plenty of job offers following its smack-down of two grand champions on national TV a year ago.
Citigroup threw its support behind the question-answering software on Monday, when the bank announced that it was exploring possible uses for Watson. It didn’t go into specifics, but Citi said Watson could “help advance customer interactions, and improve and simplify the banking experience” for a “first-of-a-kind customer interaction solution.”
“We are working to rethink and redesign the various ways in which our customers and clients interact with money,” said Don Callahan, Citi’s chief technology officer, in a statement. “We will collaborate with IBM to explore how we can use the Watson technology to provide our customers with new, secure services designed around their increasingly digital and mobile lives.”
The news follows health insurer Wellpoint’s September 2011 announcement that it would incorporate Watson to help medical professionals diagnose and sort out treatment options for complicated health issues.
IBM had said early on in the Watson project that the research wouldn’t just be used for playing games. The tech giant said it would focus on partnering with companies in the health and finance industries, which IBM believes are best-suited to integrate a natural human language analytic technology.
“IBM continues to advance Watson in information intensive industries, enabling organizations to quickly gain valuable insights from vast amounts of data that can speed decision making and improve how companies serve their customers,” said Mike Rhodin, head of IBM’s software solutions division. -David
LOOK MA, NO IPHONE!
How did we find a good restaurant in an unfamiliar place in the days before the Internet, Google, iPhone maps, crowd sourcing, Zagat, food blogs, Trip Advisor et. al.? In the old days, whenever I had a free evening on a business trip, I would just ask the locals for a recommendation. Last week, while attending a workshop on Business Analytics in San Francisco, I did just that. (More on the workshop in my next blog.)
While walking around Chinatown looking for a place to eat, I started glancing into restaurant windows to see how many Asians were at their tables (one of the old fashion ways of trying to find a good Chinese restaurant). But then I stopped a man and women (probably Chinese-Americans) who were coming out of a store and asked them to recommend me a good seafood restaurant, particularly one that served the reknown San Francisco dungeness crab. They said they rarely ate in Chinatown and were there for other reasons. However, they did recall a few years ago eating in a very good seafood restaurant called “R and G.” They gave me general directions to get there but I knew I had to ask one more person just to be sure. On the way, I stopped a young women who looked like a grad student or young professional if she knew the exact location of ”R and G” restaurant and also if thought it was a good place to eat.. She said it was definitely a good restaurant and added, “they treat their workers really well.!”
“R&G Lounge” turned out be an excellent restaurant. I had their signature dish “Salt and Pepper Crab,” The service was very prompt (as all Chinese restaurants usually are) and friendly. Seating one person in a busy restaurant can be challenging and the hostess asked me to sit at the bar. I knew I would be ordering the crab and wanted some elbow room and so asked for a table, She found one way in the corner but I didn’t mind. It was a bit before 6 p.m. when I was seated. During my meal, streams of people poured in. By the time I left, dozens of people were milling around waiting to be seated.
Later on I decided to do some Internet checking just to see what the foodies thought of this restaurant. Sure enough, I found that R&G Lounge is highly rated by food bloggers and Trip Avisor contributors alike. The photo of the restaurant’s signature dish shown above is taken from a food blog that I highly recommend. Also, if you’re curious about how I use prompt service in a Chinese restaurant to help explain business models, go to the site of my Learning Burst Academy.
WHERE IN THE WORLD IS MADAGASCAR?
When you think of Madagascar, the chances are that you recall the name from the movie about “Alex,” the lovable, computer-generated lion from New York’s Central Park Zoo, who longed to return to his native jungle habitat. But how about Madagascar as a place where French-designed clothing for children is made?
I recently paid an involuntary visit to Jacadi, the trendy, French boutique specializing in clothes for children. When I think of clothes with American brands, whether they be designer brands like Ralph Lauren, or store brands such as the Gap, I immediately assume most of their apparel were made in China. So as my wife was brousing for possible outfits for my granddaughter, I amused myself by looking at the labels of the clothing to see where they were made. If American branded clothes are made in China,” I thought to myself, “I wonder where the French make their clothes?” I assumed the answer was China, as well.
To my surprise, the first piece of apparel that I looked at said “Made in Bulgaria.” The second said, “Made in Vietnam.” The third said “Made in Madagascar.” Perhaps the French are more diversified in their approach to global manufacturing. Perhaps geographic proximity, history or cultural affinity play a role in their sourcing decisions. (Up until 1960, Madacascar was a French colony.) But I am guessing the main reason is economic: It it is starting to become more expensive to make clothes in China. Just recently, I was told by someone in the industry that Walmart is starting to produce more of its clothing outside of China. Just yesterday, I bought a pullover from the Gap that was made in Vietnam. I imagine “Made in Ghana or Ethiopia” will soon be on our garment labels.
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GREAT CRAB AND A SIDE ORDER OF CRABBY SERVICE
A new restaurant in town gets rave reviews and suddenly becomes “the” place to go, but also the toughest to get a reservation. I see it all the time in New York City, and I guess this is a universal phenomenon. In my previous blog, I talked about the great meal some business associates and I had at the Ministry of Crab, a new restaurant in the recently restored Dutch Hospital in Colombo, Sri Lanka. What I didn’t mention was that we were almost unable to get a table, because of a mix-up that our hotel had in our reservation for the only free evening of our trip there. It would have been a shame if we had missed the opportunity to sample the famous Sri Lankan crab.
When we arrived at the restaurant, thinking we had confirmed reservations, we were told by the manager that our names were not on the list and that the restaurant was not accepting any walk-ins. A big A-frame board at the entrance also reinforced what he told us: “No further seating without a reservation.” We noticed that the restaurant (which appeared to seat at least 50 or more people) was only about one-fourth filled. Could there be so many reservations? It was about 7:30 p.m. on a Tuesday night. ”Perhaps a bit early for most locals to dine?” I thought. As we pleaded with him to let us in because this was our only free night in Colombo, we noticed him turning away at least 5 or 6 other people. Not only did he continue to refuse our patronage, he was quite…well… “crabby” about it. Then one of his waiters came up to him and whispered something to him. After a brief discussion between the manager and the waiter, the manager gave in and said that he could seat us at a table.
We had a great meal and the same waiter who had convinced the manager that there was indeed room for us provided us with very prompt and friendly service. We finished our meal in less than an hour. As we were leaving, the restaurant was only about 1/3 filled. I think there are a few “management lessons” in this travel story. First, perhaps it was inexperience (it was a new restaurant), but the manager should at least have had a feel for how many people actually honor their reservations. He could then have considered “overbooking” (as the airlines do) by letting us in, knowing that not all the reservations would be actual customers. Second, and maybe this is asking too much, he could have “profiled” us and our eating customs. As Americans, we tend to eat early and fast. If he had told us, we’ll seat you but could you please finish your dinner by around 8:30 (or whenever the big reservation crowd was coming in), we would have had no problem with that. But there is one redeeming feature. At least this manager knew well enough to listen to a “front-line” worker (i.e. the waiter), who apparently had a better sense of the ebb and flow of patrons with and without reservations than he did.
‘AT LAST WE CAN BUY WHAT WE SELL!”
For years, I have been wanting to try the famous Singaporean culinary specialty, “chili crab,” in the country that originated this dish. I have yet to visit Singapore, but last week I was pretty close to it, in Colombo, Sri Lanka. While there I learned that the crab fishery of this island nation is one of the best in the world. I also found out that pretty much all of Sri Lanka’s best catch is exported to Singapore: there to become the raw material of their reknown “chili crab.”
It has been about three years now since Sri Lanka’s tragic 30-year civil war ended. The country has since been experiencing strong economic growth on the basis of this new platform of peace. Infrastucture projects all over the island are in progress and plans for new hotels and the build-up of the tourist industry are many. A sign of this economic rejuvination is the conversion/restoration of an old Dutch hospital into an upscale shopping center, complete with fine-dining restaurants, a spa, and stores offering the usual high-margin souvenir items (if not, how can they afford the rent?).
An anchor restaurant in the “Dutch Hospital” is called the “Ministry of Crab.” Its name tells us what is the specialty of the house, with one additional feature. This restaurant, started by two of the country’s leading cricket stars (in countries such as Sri Lanka and India, the game of cricket is akin to a religion), purports to be the only place in the country where one can dine on “export quality” crab. This story very much reminds me of the time when I was conducting some seminars in Poland in the mid-nineties. The big deal then was the opening of McDonald’s in Warsaw and also the opening of an Ikea store nearby. One of the seminar participants said with tongue in cheek,”at last we have the opportunity to buy the very furniture that we have been making all these years for Ikea!” I guess that’s one sign of progress: that a country develops to the point where it can afford to buy the very products that it sells.
By the way, I always follow the “when in Rome….” policy. I ordered the Island specialty, black pepper crab (shown above). It was delicious. I’ll wait till I get to Singapore for the red chili version. But at least I had crab that was even fresher than what is served in the restaurants and hawker food stands of Singapore!
Back in 2001, Jim O’Neill of Goldman Sachs identified Brazil, Russia, India, and China (or as he put it, the “BRIC” countries) as the emerging market countries with the greatest potential for growth and development. The last decade has proven him largely correct with arguably certain qualifications. O’Neill has just come out with a new book to follow up on his original thoughts on these countries. The Growth Map: Economic Opportunities in the BRIC’s and Beyond.
I just happened to learn about O’Neill’s new book this evening when I saw him interviewed on TV by Charlie Rose. I’m now here in Colombo about to start a corporate training program for the NDB Bank. Last week I was doing an open enrollment corporate education program in Mumbai, India. The participants in the class came from a wide variety of over 40 different companies in India. The interesting discussions that I had with the participants during the class and in between sessions and just being in India for a week inspired me to come up with a macroeconomic indicator that I have dubbed the “Opportunity Index.” (Then, tonight, while watching the Charlie Rose Show, I find out that by sheer coincidence, O’Neill uses a similar turn of phrase in the title of his new book.)
I’m going to read the book as soon as I can. But meanwhile, I just want to share with you my new macroeconomic measure. Amongst all the macroeconomic and socieconomic data available on all countries of the world today, I took two statistics: last year’s rate of growth of real GDP and the percentage of the population under the age of 15. I then multiplied the first by the second (taking both percentages as absolute numbers) and came up with my “Opportunity Index.” For example, China led all BRICs and G-7 countries last year with a 9 percent growth rate of real GDP. India was roughly tied for second place with Brazil with about a 7 percent increase. However, about 30 percent of India’s population is under 15, while this figure is only about 18 percent for China. China’s one-child policy is the main explanation for this significant difference. So using my index of opportunity, India tops China with a score of 210 to 162. Brazil’s score is 182 based on its 7 percent growth rate in real GDP combined with 26 percent of its population under 15.
This index really becomes discriminatory when applied to the G-7 countries. The U.S. index is about 30 (1.5 percent growth rate and about 20 percent under 15). Germany’s and the UK’s indexes are 39 and 8, respectively. In upcoming blogs, I’ll elaborate on this further and discuss some of this index’s socio-economic and political implications. In the meantime, using my index, Russia, one of O’Neill’s original BRIC countries, does not appear to have much of an opportunity compared to India and Brazil. Its 4 percent rate of growth in real GDP and 15 percent of the population under 15 give it an Opportunity Index of only about 60.
We’ve All Been There
You’ve just arrived at your hotel after a long day of traveling. You’ve got tons of emails that you have to get back to and you don’t want to type it all out on your mobile device, plus you’ve got to make last-minute tweaks to your PowerPoint deck that you’re using in tomorrow’s presentation. The hotel’s business center is closed for the night. You open your laptop, do what you need to connect to the wireless network in the place, and oops, nothing happens! You call the hotel operator and he directs you to the toll-free number of the Internet provider to the hotel. When you call, you get caught in the menu loop and.. anyway, you get the picture.
A few days ago, I found myself in this situation in a hotel in Mumbai, India at about 10 o’clock at night The situation I described above had happened to me several times in hotels in the U.S. and Europe. But this time, when I called the hotel operator, he gave me an extension to call within the hotel. Within two rings, a person answered “IT assistance, may I help you?” I explained this situation and he said that someone would be up to my room shortly to help me. Within five minutes, the doorbell rang and who was it but a young man in a white shirt, tie and blazer from the IT help center. He fixed the problem in about 10 minutes. He told me the hotel’s IT help center has a staff available 24X7. When I asked, he also told me that he had a college degree in telecom engineering.
The company he works for is DoCoMo, who was contracted by the hotel to set up and maintain its wireless network. I was impressed. He also said he enjoyed his work, felt that he has been learning a lot and that helping hotel guests with their computer problems was an entry level assignment that gave him lots of opportunities to learn practical things not taught in his college. Also, he does trouble shooting for the hotel’s wireless network as well as help individual guests. Eventually,he said he’d get opportunities to design and implement wireless networks in other hotels and commercial properties. Enough said, I leave you to figure out the point of my story. It should be pretty obvious.
SOLD AND BOUGHT
My absolute favorite blog is written by Seth Godin. His blog is the only one I choose to receive by email. Every morning I look forward to one of his gems. This morning’s blog has inspired me to write an addendum to his thoughts. This is what Seth said today:
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Sold or bought?
Some things are bought—like bottled water, airplane tickets and chewing gum. The vendor sets up shop and then waits, patiently, for someone to come along and decide to buy.
Other things are sold—like cars, placement of advertising in magazines and life insurance. If no salesperson is present, if no pitch is made, nothing happens.
Both are important. Both require a budget and a schedule and a commitment.
Confusion sets in when you’re not sure if your product or service is bought or sold, or worse, if you are a salesperson just waiting for people to buy.
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I always think about the difference, too, particularly as a consumer. And I think that sometimes, things that are bought also have to be sold. Take Seth’s example of an airline ticket. There are so many ways to buy it (from the airline, a travel agency, online, discount online etc.). I still buy some of my tickets from American Express Travel because of their superior service. Whatever is happening to American Airlines, I continue to use their telephone travel service because their Platinum service is excellent. There are four dry cleaners near where I live. I chose mine because of their friendliness. There are many places to buy bottled water and chewing gum. When I lived in New York City, I would walk two blocks to buy my newspaper (in the pre-digital days) rather than buy it from the newsstand in front of my apartment because the people further away greeting me by name.
To get to my point: I think a lot of things have to be sold as well as bought. I think the danger for a business is to assume that the things it offers are just bought and do not have to be sold. They then become complacent…customer service gets sloppy, sales people forget to smile etc. etc.
I have heard that Seth’s blog is the most popular blog on the planet. I wouldn’t doubt this. I just started up my blog several weeks ago and believe me I’m trying to do a lot of selling to get people to read it. Given Seth’s blog’s immense popularity, you would think that it is bought whereas mine has to be sold. I had the pleasure of hearing him talk and also met him briefly. He’s quite a guy and a very entertaining and engaging speaker. Don’t think for a minute that Seth stops selling his blog, even if it is #1.
