Monthly Archives: April 2013

Free markets versus slightly controlled markets. Pt 1 of a 3 part Blog.

Free Market Capitalism

In the mid 1980s the Chicago school of economics prevailed, with the rise of Milton Friedman’s school of free market thinking we moved from an era of controlled markets of the type which enabled US Governments to break apart giant corporates like the Bell Telephone Company to become a less monopolistic group of companies: the “baby Bells.”

Somewhere in that decade, 30 years ago, there became an acceptance that we should stop having complex moral debates about money (Greed is Good! said the Gekko characterter, in a satire of this thinking) and simply let the market decide.

There’s a lot going for this idea. For one thing, it is a lot simpler. I remember years ago being an a political meeting – a meet the candidates evening – when somebody in the audience asked a candidate: “where do you stand regarding abortion?” The audience erupted into booing – not because we thought the issue didn’t matter, but because we knew that no meeting was going to resolve this issue. We’d break into two predictable camps, there’s be rancorous arguments and none of us would move a step forward. Who needs it?

So too, it would seem, when it comes to debates about greed, or about fairness. In the 1980s our societies bought into the idea that money is amoral, and the the free market is a fair, democratic arbiter in the marketplace of ideas.

So the political arena became less a debating chamber in which issues of conscience were discussed as a board of directors in which the costs and budgets were evaluated. Where once the death penalty was discussed in moral terms, soon it became debated in terms of the relative cost of lifetime incarceration.

At the same time, the intellectual landscape of ideas became increasingly monetised. It was only in the 1980s that the valuation of companies incorporated an estimate of a brand’s value. So today we get extreme valuations on companies that may perform quite dismally in terms of pure turnover or productivity. Remember how the merger of Warner and AOL resulted in a hyper-valuation – and the value of the company rose on the hot air of the marketing deciding…to beat the true gravity of the merged company’s actual performance.

Examples such as this, or need we remind ourselves, the balloon of the 2008 sharemarket, show that the marketplace is NOT actually a robust arbiter of what’s good or bad, even in business terms.  And, for that matter, I could go into the well tested new business models that suggest that much business success is due to luck rather than collective wisdom or inherent hard work or talent. (See the experimental work of Duncan Watts.)

The lack of perfection of the free market – due to hysterias, clumsy mechanisms, misinformation (even in an age of instant media) and poor management (all those banks that made risky, sub-prime lending so fashionable) – gives us plenty of reason to allow that sometimes, sometimes, the public needs to step in and – for the greater good – override the free market.

Free marketers, by and large, were welcoming of bail-out money from Washington, and were quick to call on regulatory authorities to do their work. (Bring in the Government!)

So if we need some intervention, and some slight control of the market, we are accepting that sometimes the public good still trumps the absolute free market.

By how much? Where does one draw the line?  That’s going to be a theme of my next few blogs.

First we take the Poppy – then we take Berlin

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A few hours ago I wrote a blog criticising Nivea for appropriating the ANZAC Poppy symbol for their own marketing message on the FB page.  Their (Singapore?) office withdrew the posting following some well deserved public protest but I notice in the Poppy’s place is the image above: Their message – “Happy Earth Day!”

Well I guess it is 67 years or so since Coca-Cola appropriated Christmas (and rebranded Santa in the now familiar red suit – it used to be brown) and I guess it is 40 years or more since Coke hijacked world peace by Teaching The Whole World to Sing – so perhaps I shouldn’t be shocked any more when a hand creme company concertedly rebrands two things I value (in my own way as a citizen) dearly. First they took the Poppy, now they take…the entire planet!

To explain that this might be wrong would be to engage, what I suspect are young market-economy indoctrinated marketers who have never attended any ethics courses along their academic pathway. Neither did I for that matter but in my lifetime I’ve sensed a deep erosion – a melting of once-permanent ethical polar ice – around what is, and what is not commercial property.

A good starting point for marketers is the book by Harvard ethics lecturer Michael Sandel. In it he cites often outrageous transgressions of public and personal freedoms and beliefs by the free market – then he discusses not only why there is some moral repugnance around these facets of commercial life, but why this marketing-society-led creep is occurring.

His message – and Nivea’s team could do well by reading it – is that brands are not people, and that when brands appropriate or subvert human values, then they cheapen those values and erode the things we hold dear.

In a few days I’ll post a review of the book so that other marketers can avoid the pathway that Nivea seem so keen to take.  I hear the signage rights to the Universe are up for grabs.  

 

 

When corporates try to own a nation’s values.

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Yesterday the manufacturer of the skincare brand Nivea, managed to show their facebook fans just how venal a corporate can get. What they did was publish a photo of an ANZAC Day poppy, in the foreground of a New Zealand flag, and insert their Nivea Creme logo into the middle of the poppy.

What the hell were they thinking? For a start, let’s overlook the complete lack of connection between skin creme and the disastrous Allied WW1 campaign that saw nearly 70,000 allies and 60,000 Turks lose their lives. It was a military fiasco of dreadful proportions: a combination of appalling strategic thinking from the British High Command, enmeshed with sheer guts and courage at the troop level.  The courage and heroism of those poor soldiers, damned to die by poor planning is rightly remembered on ANZAC day in my country and in Australia.  But what has this got to do with skin care? Nothing whatsoever – so what was Nivea trying to say?

We’ll ignore the fact that they commandeered a trademarked logo of the RSA (the Poppy) or that they they used a national flag to herald their brand.

What really stinks is that here is a corporate who think that nationalism, remembrance and other important values that have helped define our national culture are somehow up for grabs by the corporate sector.  Their Facebook stunt showed utterly no respect for the individual feelings of families who lost grandfathers at Gallipoli. Nivea showed a shameless, venal motivation simply to appropriate our community of feelings, and hijack these for the purposes of branding. They found a parade and stuck their big banner in front of it.  I can almost hear the PR and marketing team right now. “JB, sir…we can own this event.”

Well they can’t. Brands are mighty powerful things, but the moment they start trying to own deeper and sacred national values – and by sacred I do not mean sporting – then they cross the line which all brands must respect. Authenticity.

Nivea skin care and ANZAC Day. An inauthentic relationship. The only connection I can see between the Gallipoli campaign and Nivea’s Facebook stunt is that both were epic fails.

What a good, memorable story requires.

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This last two weeks I’ve been reading a textbook called Storycraft, written by journalist Jack Hart and designed to help writers of non-fiction hone and enrich their skills: to turn true events into compelling stories. I was pleasantly surprised actually, because the book is damned good, but it reminded me how much I had learned in a previous life as a script writer and as a freelance journalist. For sure, there were new insights and tips that I will dial-up in future, but the most useful function of the book for me was to set out a formal checklist of things we ought to incorporate in a compelling story – especially one based on data. Here are a few must haves.

1) A clear tone of voice and standpoint. As teller of the story are you the problem solver who was given a challenge, or are you the skeptic who is trying to disprove something? Are you an insider or an independent outsider?  Be clear on this.

2) A clear story structure. Stories usually start calmly but quickly a crisis or decision-point occurs that threatens to change everything. The problem gets worse, and then gradually the heroes (in analytics perhaps, or those amazing customers and what they told us) wrest the flight controls off the dead pilot and set about bringing this aircraft down safely.  Most story structures rack up the tension and then engage in the process of solving the problems. Always, there are decision-moments along the pathway.

3) You need characters – especially good guys. Now in crunching Big Data, you’re reporting on numbers, right? Well, not quite. Those numbers represent people – so it can be useful to pull out one line of data, give the customer a nickname  – Honest Harry – and use him as a cipher to tell the big story. Here’s where Harry faces a choice – what will he do?  Personify the data. Don’t forget there are other characters in the story as well – including the analytics team.  

4) Setting.  A good story is underscored by the setting. High Noon took place in a lonesome, Godforsaken town miles from any help.  This framed Gary Cooper’s dilemma and added to the tension. CSI uses Las Vegas or NYC to good effect to create for each series a memorable backdrop against which their problem solving skills stand out in stark relief. When you’ve got 30 minutes to stand up and report on what your analytics have found – don’t forget to devote 3 or four minutes setting the scene.

5) Satisfactory denouement. The wrap up of the story had darn well better sing – not fizzle out. So in putting together your presentation or report think hard about this.  The plane is coming in to land, there’s ice on the runway and a small child (and a few nuns, there are always a few nuns) in the passenger cabin.  Structure the story so that when the ending occurs – the 747 ploughs through the snow on its only wheel before coming to rest right outside departure gate 9 – everything wraps up tidily. The hero gets home for thanksgiving. The little girl is saved. The nuns collective faith is restored. 

Now in writing these things I come over as pretty glib. Yet I’ve seldom done a presentation without thinking of these elements. At first I thought it was just a duty, if you have a story, tell it well.

But these days there’s a much bigger reason for storytelling skills to be employed in the boardroom. Big Data deals with 8 zillion narratives. You want this to be the one that the decision-makers remember.