Two things have crossed my radar in the past 24 hours that have raised the question about statistical error and, more particularly, when one should act on research findings.
The first was on the ABC's excellent Q&A program where, as usual when politicians are exposed to public questioning, the conversation turned to climate change. Federal Environment Minister, Penny Wong, said that the research indicated that there was a 90% chance that human activity was contributing to climate change (note: global warming has disappeared from the vernacular!).
Segue to a newsletter I received this morning from respected Melbourne research company, Forethought Research, which discussed statistical error in research and what it means in terms of management decision making. There was stuff about p-value etc, which essentially measures the likely accuracy of statistical information.
The point in the newsletter was that companies are generally accepting of 90% accuracy, rather than the 95% that the statisticians would like us all to shoot for. Why is this?
I suspect it is because research is often used to test out management's instinctive or anecdotal suspicions that average performance according to a set of criteria has varied. In my view, a company with its finger on the pulse of what customers are thinking should not be totally surprised by research findings.
Which brings me back to Penny Wong and climate change. This is an area where the variables are so broad, and inputs so vague that anything close to 90% accuracy is miraculous. She put the argument that it would be irresponsible not to take action given the level of certainty around the research.
Penny pointed out that the last decade was the warmest since weather records began. I wonder if this is the 'managerial' anecdotal evidence that enables action on the 90% certainty? There have been warm periods previously. Antarctica used to be covered in forest - but perhaps that was when the Earth was still busy cooling the primordial swamps. The only climate records from then are layers of rock and fossils.
The only certainties I can see in all this is that global resources, though vast, are finite and economists, bless their hearts, still consider that the only valid success measure is growth in GDP. We talk about sustainability and still breed like rabbits.
More significantly, western democracies seem to have rendered themselves virtually impotent to do anything about it. Opposition politicians drool at the chance to harpoon governments if GDP declines, interest rates increase, new home starts fall and so on. Sometimes these are necessary evils. It's why the Chinese may be the best-positioned to act on climate change and make a difference. The are big emitters and special interest lobbies and the loonie fringe find it harder to get a foothold there.
In the end, climate change cycles outlast political cycles and will ultimately prevail. And you can bet on that with a high degree of accuracy.
Tuesday, May 4, 2010
Monday, May 3, 2010
Football clubs - Great insight into the brand balance sheet
I watched my team, Liverpool FC, play Chelsea in the English Premier League in the wee hours of this morning. It was a sad end to the season for one of the proudest clubs, may I suggest 'brands', in world football.
Football clubs provide great insight into the brand balance sheet. On the one hand, they have everything that brand managers want - fiercely loyal tribes of advocates, an NPS in treble digits. On the other, they are brands open to the most rigorous scrutiny and comment. The players are ambassadors for brand value and, in elite sport, the pressure is on them to perform 24/7 both on and off the pitch. The tribe can turn ugly very quickly if their 'brand' doesn't perform or its values are trashed.
I turned 'ugly' this morning, although some would suggest this was a byproduct of my birth rather than football and happened decades ago. But I digress. The Liverpool brand has been slaughtered this season by indifferent owners looking to make a quick buck on the franchise, a manager out of ideas and a number of overpaid players who could not have shone the boots for more stellar players in bygone eras.
Read the internet banter among supporters and hecklers though and you can see why football clubs are great brands. Despite their disappointment, football tribes still vehemently defend their brand, even while hurling criticism at club owners, managers and players. The emotional attachment to football brands trumps all logical arguments that flow from disappointment.
The hard core of a club's supporters never think of going to support someone else. They merely heckle until the sheer force of public approbrium brings about change. How many corporate brands could withstand the barrage of criticism hurled at personnel and products as well as football brands seem to do it? How many would be game to freely host hostile commentary on their own websites?
Football is a winner-take-all business. There are no shades of gray. At the elite level, it's not how you play the game, it's whether you win or lose. If you're concerned about the political correctness of that, visit the message boards of under-achieving clubs and see how 'correct' they are.
Liverpool is an outstanding case. The club is a victim of its rich, winning heritage, of trophies won at the top level through intimidating speed and style. The tribe will accept nothing less and nor should it. Being true to brand is all they care about.
YNWA. If you don't know what it means, you're not one of us...! Bring on 2011!
Football clubs provide great insight into the brand balance sheet. On the one hand, they have everything that brand managers want - fiercely loyal tribes of advocates, an NPS in treble digits. On the other, they are brands open to the most rigorous scrutiny and comment. The players are ambassadors for brand value and, in elite sport, the pressure is on them to perform 24/7 both on and off the pitch. The tribe can turn ugly very quickly if their 'brand' doesn't perform or its values are trashed.
I turned 'ugly' this morning, although some would suggest this was a byproduct of my birth rather than football and happened decades ago. But I digress. The Liverpool brand has been slaughtered this season by indifferent owners looking to make a quick buck on the franchise, a manager out of ideas and a number of overpaid players who could not have shone the boots for more stellar players in bygone eras.
Read the internet banter among supporters and hecklers though and you can see why football clubs are great brands. Despite their disappointment, football tribes still vehemently defend their brand, even while hurling criticism at club owners, managers and players. The emotional attachment to football brands trumps all logical arguments that flow from disappointment.
The hard core of a club's supporters never think of going to support someone else. They merely heckle until the sheer force of public approbrium brings about change. How many corporate brands could withstand the barrage of criticism hurled at personnel and products as well as football brands seem to do it? How many would be game to freely host hostile commentary on their own websites?
Football is a winner-take-all business. There are no shades of gray. At the elite level, it's not how you play the game, it's whether you win or lose. If you're concerned about the political correctness of that, visit the message boards of under-achieving clubs and see how 'correct' they are.
Liverpool is an outstanding case. The club is a victim of its rich, winning heritage, of trophies won at the top level through intimidating speed and style. The tribe will accept nothing less and nor should it. Being true to brand is all they care about.
YNWA. If you don't know what it means, you're not one of us...! Bring on 2011!
Wednesday, April 21, 2010
Brand voted biggest impediment to merger
I attended a luncheon hosted by the Fund Executives Association Ltd (FEAL) in Melbourne yesterday. The topic was merger and collaboration in the superannuation industry. It was prefaced with a report on the findings from an email survey sent nationally to FEAL members to test the prevailing appetite for fund mergers. But enough of the backgrounder...
Among the questions was one about impediments to merger and the one than stood head and shoulders above the rest was brand or, in simple terms, loss of identity.
I don't agree with this. For one thing - if two brands get together, why talk about not continuing them, assuming they do enjoy the loyalty and respect that directors and executives think they have? Why should a merger necessarily bury good brands. Why can't we do a 'Proctor and Gamble' and market multiple brands? Why can't superannuation funds run off a common back-end and develop sophisticated data capabilities and organisational structures to achieve differentiation at the customer interface.
It's because there are two underlying drivers when the top bods talk about merger. The first is that brand is an intangible for most directors. That's because in many cases (and I'm not talking about my employer here) there is no substantive research on which to argue a case that the brand is crap anyway and we might all be better off with a new one.
In the absence of hard evidence, it's too easy for reluctant directors worrying about their next board position to use brand loyalty and the implied exodus of customers post-merger to build a substantial barrier to merger - pseudo-intellectual as their argument is.
The second is unique to the superannuation industry in Australia. It is the bizarre belief that we are unique, unable to leverage off the experience of mergers and back-end homogenisation in other industy sectors. Roll out standard excuses A to Z, with 'heavily regulated industry', 'equal member and employer board representation' etc etc leading the charge to thwart any attempts to make it all happen.
Yes. It's alright to collaborate using common platforms, but a merger changes everything ... doesn't it? Of course it doesn't. Why should it? Any decent application of intellect will find a way of doing what is necessary, especially in an environment where government wants industry consolidation. If these 'unique' superannuation issues were to get in the way of mergers, there's even a good chance the government would adjust legislation to remove the hurdles!
And where does loss of brand identity fit into all this? Frankly, it doesn't, at least not as an obstacle to merger. It's because, at the end of the day, there are two clear courses open to the merging entities - retain and market their brands under the umbrella of a parent company, or launch a new brand.
The decision about which option to pursue has nothing to do with merger, but everything to do with thorough research and an objective assessment of whether the existing brand equity is too valuable to lose.
Among the questions was one about impediments to merger and the one than stood head and shoulders above the rest was brand or, in simple terms, loss of identity.
I don't agree with this. For one thing - if two brands get together, why talk about not continuing them, assuming they do enjoy the loyalty and respect that directors and executives think they have? Why should a merger necessarily bury good brands. Why can't we do a 'Proctor and Gamble' and market multiple brands? Why can't superannuation funds run off a common back-end and develop sophisticated data capabilities and organisational structures to achieve differentiation at the customer interface.
It's because there are two underlying drivers when the top bods talk about merger. The first is that brand is an intangible for most directors. That's because in many cases (and I'm not talking about my employer here) there is no substantive research on which to argue a case that the brand is crap anyway and we might all be better off with a new one.
In the absence of hard evidence, it's too easy for reluctant directors worrying about their next board position to use brand loyalty and the implied exodus of customers post-merger to build a substantial barrier to merger - pseudo-intellectual as their argument is.
The second is unique to the superannuation industry in Australia. It is the bizarre belief that we are unique, unable to leverage off the experience of mergers and back-end homogenisation in other industy sectors. Roll out standard excuses A to Z, with 'heavily regulated industry', 'equal member and employer board representation' etc etc leading the charge to thwart any attempts to make it all happen.
Yes. It's alright to collaborate using common platforms, but a merger changes everything ... doesn't it? Of course it doesn't. Why should it? Any decent application of intellect will find a way of doing what is necessary, especially in an environment where government wants industry consolidation. If these 'unique' superannuation issues were to get in the way of mergers, there's even a good chance the government would adjust legislation to remove the hurdles!
And where does loss of brand identity fit into all this? Frankly, it doesn't, at least not as an obstacle to merger. It's because, at the end of the day, there are two clear courses open to the merging entities - retain and market their brands under the umbrella of a parent company, or launch a new brand.
The decision about which option to pursue has nothing to do with merger, but everything to do with thorough research and an objective assessment of whether the existing brand equity is too valuable to lose.
Friday, April 16, 2010
Merger. Do you ever start with a clean sheet in brand creation?
My company announced a merger with another of similar size yesterday, so one of the tasks I'll be involved in over the next couple of years will be re-branding. As you'd understand, in a merger re-brand means more than tweaking the logo and dreaming up a new catchline. It's a baby and bath water job - clean sheet of paper. Or is it?
The concept of starting from scratch is a brand dude's dream. But when you have two companies coming together - one with over 60 years of history and the other close to 80 - you're never going to be starting from scratch.
If you believe brand starts from within the company, then your framework is clearly defined by culture. The first task is to research where the two organisational cultures share common values and where they differ. Hopefully, there's some crossover where you can lay the foundations for your new brand. If there is no commonality, the risk of failure in the merger will be much higher and brand will likely be the least of you problems.
Then there's the external perceptions of your two organisations. How do customers perceive them? Suppliers? Industry partners? Media? How do you project your brand into the marketplace in a way that will not cause dissonance within one or both of the customer bases?
I know of companies that have dreamed up new brand names and positioning over a few good reds at lunch time. Some are lucky and hit the spot. But I hope as I progress this process, those that approve budgets set plenty aside for preliminary internal and external research and market testing among our customers.
The concept of starting from scratch is a brand dude's dream. But when you have two companies coming together - one with over 60 years of history and the other close to 80 - you're never going to be starting from scratch.
If you believe brand starts from within the company, then your framework is clearly defined by culture. The first task is to research where the two organisational cultures share common values and where they differ. Hopefully, there's some crossover where you can lay the foundations for your new brand. If there is no commonality, the risk of failure in the merger will be much higher and brand will likely be the least of you problems.
Then there's the external perceptions of your two organisations. How do customers perceive them? Suppliers? Industry partners? Media? How do you project your brand into the marketplace in a way that will not cause dissonance within one or both of the customer bases?
I know of companies that have dreamed up new brand names and positioning over a few good reds at lunch time. Some are lucky and hit the spot. But I hope as I progress this process, those that approve budgets set plenty aside for preliminary internal and external research and market testing among our customers.
Tuesday, April 13, 2010
Converting ethanol into testosterone
Avid readers will know that I drive a VW Passat. The identity crisis associated with this is proportional to the difference in price between my erstwhile chariot and other cars to which I aspire.
Nevertheless, its maker insists that I will only get optimal performance from it by filling it with 98 RON unleaded fuel. If I want to suffer poorer performance (responsiveness and fuel economy), I am permitted to use 95 RON. Below that and... well suffer the consequences. Engine seizure, heart seizure at the repair bill and so on.
And as for ethanol, even mixed in over-the-counter medication proportions, forget it. The VeeDub would most likely just lie dormant and wheezing in the drive way, as it slid through the gears into malnutrition.
The killer for ethanol is the suspicion that performance suffers. In the dark recesses of the male mind, this has sexual overtones. Like substituting your Viagra with pink icing sugar. In Australia, the V8 Supercars even use ethanol but, to my mind, it hasn't registered with the hoards on the hill at the Bathurst circuit.
No. To testosterone charged males, taking the lead out of petrol in the 1980s was the thin end of the wedge. I worked for Ford at the time and we dropped the V8! with calamitous consequences for top-end Falcon sales (now there's a contradiction in terms). Now, we're just diluting our potency further by adding plant extracts. My God, the cars will be vegetarian next and we know how thin and pasty looking vegetarians are!
Clearly ethanol is too much like estrogen. It even begins with 'e'. Nothing like the 'T' for testosterone or Tyrannosaurus Rex, or T-bar shift. Ethanol has as big an image problem as a Formula 1 or NASCAR driver called Ethyl. How's 'ethyl-benzene' sound? Just doesn't work like methyl-benzene.
Let's rename it Tethanol for a start. This close cousin of testosterone would have us queuing at the pumps for our weekly top-up of automotive viagra. And we'd be all the better for it - environment included. Who wants to do the global repositioning job for ethanol?
Nevertheless, its maker insists that I will only get optimal performance from it by filling it with 98 RON unleaded fuel. If I want to suffer poorer performance (responsiveness and fuel economy), I am permitted to use 95 RON. Below that and... well suffer the consequences. Engine seizure, heart seizure at the repair bill and so on.
And as for ethanol, even mixed in over-the-counter medication proportions, forget it. The VeeDub would most likely just lie dormant and wheezing in the drive way, as it slid through the gears into malnutrition.
The killer for ethanol is the suspicion that performance suffers. In the dark recesses of the male mind, this has sexual overtones. Like substituting your Viagra with pink icing sugar. In Australia, the V8 Supercars even use ethanol but, to my mind, it hasn't registered with the hoards on the hill at the Bathurst circuit.
No. To testosterone charged males, taking the lead out of petrol in the 1980s was the thin end of the wedge. I worked for Ford at the time and we dropped the V8! with calamitous consequences for top-end Falcon sales (now there's a contradiction in terms). Now, we're just diluting our potency further by adding plant extracts. My God, the cars will be vegetarian next and we know how thin and pasty looking vegetarians are!
Clearly ethanol is too much like estrogen. It even begins with 'e'. Nothing like the 'T' for testosterone or Tyrannosaurus Rex, or T-bar shift. Ethanol has as big an image problem as a Formula 1 or NASCAR driver called Ethyl. How's 'ethyl-benzene' sound? Just doesn't work like methyl-benzene.
Let's rename it Tethanol for a start. This close cousin of testosterone would have us queuing at the pumps for our weekly top-up of automotive viagra. And we'd be all the better for it - environment included. Who wants to do the global repositioning job for ethanol?
Wednesday, April 7, 2010
Do we go to conferences for comfort or to learn?
Tossing up going to an annual conference for financial services marketers, particularly those involved in superannuation. This deliberation is taking place after spending some of yesterday afternoon with a PR consultant.
I always come away from these meetings with a warm fuzzy feeling. In the case of the conferences, it could be a mild temperature accompanied by giddiness and loss of orientation which seems to follow the regular awards night. But nonetheless, buried under the after-effects of the leisure hours, I think there's more to it.
I never learn a lot at these things, so it's not that. Most of the time, I just sit in the audience spying on what others have achieved or are thinking of achieving - undeterred by the fact that this professional voyeurism could morph into some type of intellectual and/or creative plagiarism.
No. I think the warm fuzziness comes from being surrounded by others who think like me or, in that unlikely event, at least pretend to comprehend what I'm on about - brand at the apex of strategic planning, communicating in plain language, the list goes on.
These events are an escape from the blank stares of lawyers, technocrats, auditors, actuaries and others who just don't get this idea about brands defining businesses. This gaggle of overseers who dissect then reassemble communications so the arse is often where the head should be.
Yes, I think putting this in writing has confirmed for me that these talkfests are not about learning, but about comfort. They're about reaffirmation that the loonies really are in charge of the nuthouse everywhere except in the marketing and communications space.
Where's that registration form? I'm on my way to therapy...
I always come away from these meetings with a warm fuzzy feeling. In the case of the conferences, it could be a mild temperature accompanied by giddiness and loss of orientation which seems to follow the regular awards night. But nonetheless, buried under the after-effects of the leisure hours, I think there's more to it.
I never learn a lot at these things, so it's not that. Most of the time, I just sit in the audience spying on what others have achieved or are thinking of achieving - undeterred by the fact that this professional voyeurism could morph into some type of intellectual and/or creative plagiarism.
No. I think the warm fuzziness comes from being surrounded by others who think like me or, in that unlikely event, at least pretend to comprehend what I'm on about - brand at the apex of strategic planning, communicating in plain language, the list goes on.
These events are an escape from the blank stares of lawyers, technocrats, auditors, actuaries and others who just don't get this idea about brands defining businesses. This gaggle of overseers who dissect then reassemble communications so the arse is often where the head should be.
Yes, I think putting this in writing has confirmed for me that these talkfests are not about learning, but about comfort. They're about reaffirmation that the loonies really are in charge of the nuthouse everywhere except in the marketing and communications space.
Where's that registration form? I'm on my way to therapy...
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