The View from Harvard Business

Are we in the US ready to talk about  “post American” markets? Are we ready to concede that although we have been the world’s leading, almost unilateral, economic power for much of the 20th century, today we stand on the brink of a new world order which the US shares rather than dominates?

Those questions came to mind as I read Now is the Time to Focus on Post-American Markets by Forrester Research VP Navi Radjou on Harvard Business Publishing. He points out that in the 1950s, US markets accounted for half of the world’s economy.  “But by 2050,” he writes, “post-American markets like BRIC (Brazil, Russia, India, China) will account for nearly 50% of the global economy.”

In other words, America, move over.

However you look at it, I think we can agree the US companies need to see these economic developments not just as competition, but as potential resources and markets to take advantage of. Radjou suggests we start with India.

“India is a great place for US firms to start transforming their organizational design — and their execs’ mental models — to act as globally adaptive organizations that can thrive in the post-American world.”

Look to India for three advantages, he says:

1. India can serve as a well located and resourced hub for global innovation networks increasingly deployed by American firms to tap into talent pools around the globe.
2. India offers market opportunities not just as the top but also at the bottom of the economic pyramid. India has 300 million middle class consumers, but also 300 million consumers who make less than $1 a day.
3. India can serve as a learning lab to refine and test new business models.

If you were a CEO or chief strategist for an American multinational today, how would you be thinking about the new global landscape. Competition or opportunity? Would India become your base for global operations?

My recent post  Is a Marketing Background Useless on the Web? received articulate and heated discussion from people obviously in the business. Many of the responders agreed that a marketing background provides basic fundamental skills that apply across a range of media, including the Web, and that cross-discipline teams can be effective in yoking the hard science of technology with the soft art of marketing.

I’m still left with one question, though, and I hope you marketing practitioners in the audience will  offer an opinion. To operate on the Web, how much technical know-how does the modern day marketer need?

Early in my career I was a newspaper reporter. I didn’t have to understand how a printing press worked to be effective. The only technology I needed to master was a Royal typewriter and Wite-Out. I suspect that marketers in the early days of radio and TV didn’t need to grok the technical intricacies of vacuum tubes or NTSC as much as they needed to understand artistic differences between the two media.

But I was struck by one of the commentators to my original post, who quoted Marshall McLuhan’s observation that the medium is the message. I never took this to mean that content was less important than the means of delivering it, but rather that the vehicle of delivery influences the message itself.

How Much Is Enough?

So I ask myself (and you): Do the unique capabilities of the Web — for example, the ability to conduct numerous marketing experiments simultaneously and get instant user feedback –  provide an advantage to marketers who have some depth of understanding of the technology? How deep does that technical expertise have to be?

You are hiring a young gun to lead an online marketing campaign. What skills are you looking for? Online experience, certainly. But what about some familiarity with HTML or cascading style sheets? Is it important for the person to to understand the capabilities of JavaScript, Ajax, and the various browser platforms?

In five years, do you think marketers will have to become even more technically savvy?

I’d love to hear what you think.

(Radio parts image by ccgd, CC 2.0)

Lacking immediate steps by regulators and policy makers, the American economy won’t recover even in the medium term, says Harvard University professor Lawrence Summers, a former Secretary of the Treasury.

According to Summers, writing in The Financial Times, current economic analysis is coalescing around the opinion that “the west is facing the most serious financial crisis since the second world war.” Unfortunately, he adds, the people at the policy controls are fighting rather than fixing.

Among his gloomy forecasts:

• The likelihood that the US banking system will require substantial capital infusions over the next year or two.
• A 90 percent chance that at least one major automaker will go into default in the next five years.
• Continuing decline in housing process.
• Potential increase in foreclosure and default proceedings.

Summers calls for a comprehensive effort involving fiscal stimulus and capital infusion to shore up the banking system. But even then, “these steps offer no assurance of success but reactive drift raises the risks of costly failure.”

Happy Monday!

Security experts say Georgia has been unprepared for denial-of-service and other cyber attacks that have crashed servers and Web sites, hampering Georgia’s abilities to communicate with its troops and with citizens.

Georgia has blamed Russia for the attacks; Russian authorities deny responsibility and say they, too, have suffered from information warfare.  But whomever is to blame, they seem to have been effective.

“In terms of the scope and international dimension of this attack, it’s a landmark,” Ronald J. Deibert, director of the University of Toronto’s Citizen Lab, is quoted in a Thursday Washington Post article, Longtime Battle Lines Are Recast In Russia and Georgia’s Cyberwar.

This is yet another warning, as if Web-reliant businesses needed one, that the ever improving capabilities of  cyber attackers can quickly bring a company down to its knees.

Harvard Business School professor Ben Edelman is quoted in the piece as saying, “Imagine how devastating it would be to a military commander to lose access to a server that tells him where his troops are stationed and where he has resources.”

So imagine how devastating it would be for your company to lose, even temporarily, e-mail, customer and personnel data, or financial transaction and recording capabilities.

Don’t Delegate

All this to say, executives need to be active partners with IT when it comes to corporate computer security. It’s not a matter just to be delegated to the tech experts.

Here are fivequestions for which you need to know the answers:

1. How, when, and where is your crucial data backed up?
2. If you had to restore from a backup, how long would it take you to be at full capacity? Is there a scenario where it would take days rather than hours to be back online?
3. What is your communications plan should you suddenly lose email or other key technologies?
4. How often are your security measures reviewed against the current capabilities of cyberthieves?
5. Is your security capability aligned with the level of risk you are willing to accept? In other words, do you need to expand your security resources to diminish risk?

Related reading:

Georgia Cyber Attacks From Russian Government? Not So Fast (CSOonline.com)

In the world of online “fast media”, having a marketing background only gets in the way of effective advertising.

So writes Jeff Stibel, entrepreneur and brain scientist, on Harvard Business Publishing.

“With the ability to track changes in real-time, you no longer need to think through the best way to advertise; instead, you throw everything you’ve got into the universe and see what works.”

Today’s typical online marketing campaign includes programs for testing the effectiveness of thousands of images, key words, copy, and Web site designs. Sure, traditional (i.e. print, TV, radio) advertising managers also tested their messages before unleashing campaigns, but the difference today, says Stibel, is velocity and volume. Fine-tuning a campaign that includes thousands of possible combinations happens on the fly.

“How do we know what campaign is best? The same way that the fruit fly evolves: we don’t know and we don’t care (well, we find out using the wisdom of hindsight). Instead, we let the creative destruction algorithms create a model of survival of the fittest, where the best campaigns live to fight another day and the worst are killed.”

What do you online marketers in the audience think of Stibel’s obituary for your career? Is successful advertising becoming more a product of writing great software than writing great ad copy?

The originators of the Balanced Scorecard approach to management are at it again with a new book that urges executives to make strategy a continuing process that is embedded deeply throughout the organization.

The Execution Premium: Linking Strategy to Operations for Competitive Advantage by Harvard Business School professor Robert S. Kaplan and consultant David P. Norton shows managers “how to weave organizational principles into a more effective management system that respects the differences between strategy and operations yet integrates them in a powerful way,” according to an interview with Kaplan in HBS Working Knowledge.

Several takeaways:

• Strategy execution often fades in the face of day-to-day operations issues — fighting fires.  The senior management team should meet monthly on strategy-only topics.
• The operational plan and budget should be driven from the revenue targets in the strategic plan.
• Large organizations should consider creating the Office of Strategy Management, which is a team of professionals that coordinate strategy management details orchestrate strategy for the executive team.

“We don’t advocate abandoning an intense focus on operations and their improvement,” Kaplan says. “But we do advocate planning strategy, not just describing it as important.”

The book lays out a six-stage process:

1. Develop the strategy.
2. Plan the strategy.
3. Align the organization.
4. Plan operations.
5.  Monitor and learn.
6.  Test and adapt.

How does your organization craft and execute strategy? Is it effective?

If you are inside China these days, you are seeing advertising by major brands such as McDonald’s and Coke that the rest of the world doesn’t see.

It makes sense, of course, that Volkswagen offers the local market its “honk for China” campaign. And Chinese can buy Pepsi, usually outfitted in blue, in a red can.

The world’s top brandmeisters are turning all of their creative powers to woo China’s emerging consumertariat, the second largest ad market in the world (the US is first).

So you have to wonder. Will the summer games over the next few weeks be seen by future historians as a turning point in Chinese history, tipping the country away from its still communist government rule?

Changing China

One thing is for sure, says Harvard Business School marketing professor John Quelch: China will be transformed forever by this experience. Read his Harvard Business Publishing blog post How Olympics Branding is Shaping China. His view:

“When the athletes have gone home, and the polluting power plants come back on line, what will remain beyond the memories and good impressions? The answer is brands. 2008 will not merely be the year of the Olympics. It will be the year of brands. Not only brand China being promoted on the world stage, but also the commercial brands of Olympic sponsors driving home their brand advantage in the domestic Chinese market.”

One interesting takeaway: While many observers believe that China’s increasing economic freedoms might create pressure on the government to offer more social freedoms, Quelch wonders if  government leaders will only be strengthened in the short run.

“Will the fruits of a growing economy and the passion for consumption be the distraction, the narcotic that postpones the day of political reckoning for the still dominant Communist party?”

With Steve Jobs‘ health in the news recently, investors, customers and Apple employees have all started to ask themselves a single question:

What happens when Steve leaves?

Many tech companies have made successful transitions to next-gen leadership; think Intel, IBM  and Microsoft. Others have not; think Hewlett Packard under Carly Fiorina. Where does Apple stand?

Apple will of course need a technologist with passion, argue Norm Smallwood, Kate Sweetman, and Dave Ulrich in After Steve Jobs, What Kind of Leader Will Apple Need? But perhaps even more important is a leader with business and management savvy, they opine on Harvard Business Publishing:

He or she will also have to get the organization to button up on execution, create talent to meet new business opportunities, and peer into the future to ensure that the workforce and workplace of tomorrow meets the business needs of tomorrow.

I couldn’t agree less.

That’s way too big a job description for one person to fill, at least at Apple.

Apple tried the “visionary technologist with business savvy” route three times after Jobs departed Apple in 1985. And all that successive CEOs  John Sculley, Michael Spindler and Gil Amelio managed to do was drive Apple to the brink of bankruptcy.

The power of the company, and its weakness, too,  is that on the product side one person runs the show. Jobs is the Product Picker, the Standard Setter,  the Talent Magnet who brings out the best from his extraordinary team. That’s a full-time job.  Leave the organizational side to an organizational visionary.

Every company eventually transitions from one leader to the next, and that will happen at Apple some day. How do you think Apple will survive in a post-Jobs era? What kind of transition planning should the company be doing now?

“Managing Through Recession 101″ teaches that you use the downturn to stock up on great talent being offed by your competitors. That’s superb advice — if your company has the financial flexibility to capitalize.

But let’s face it, many managers don’t have this option. Instead, we will be given a gloomy forecast and a downsized headcount or salary target to meet, and some star performers will be shown the door as a result.

Telling a great employee they have to be let go brings its own unique sadness, says management consultant Marshall Goldsmith in a Harvard Business Publishing post, How to Terminate a Great Performer. “It’s one of the toughest challenges that any leader will face,” he says.

His advice includes be truthful (sometimes life isn’t fair), don’t sell out co-workers or management, and be prepared for anger. But I think his best tip is this: Help them as much as you can. Says Goldsmith:

You never know, that person you are terminating today may end up becoming your customer, partner or even boss.  Times change.  People remember the way they were treated when they were hurt.  Aside from the good business logic, this just shows that you have class as a human being.

Have you had to let go a star employee? How did you handle the situation?

Just as the Olympic athletes prepare for their performances at the Beijing Olympics, advertisers and sponsors are also nervously anticipating how they will perform with billions of media viewers tuning in.

In a Harvard Business Publishing blog, HBS professor emeritus Stephen Greyser outlines what he calls “the branded Olympics” and what is at stake for companies that pay handsomely to hitch their marketing wagon to the sporting event.

At the highest rung are a dozen corporate members of the Olympic Partner Program including Coca-Cola that “each pay an estimated $70+ million for the four-year exclusive rights in their category to be a global sponsor and use the rings,” writes Greyser. “They spend many millions more to implement (”activate”) their sponsorship via merchandising and other promotional means.”

Will sponsors and other advertisers get their money’s worth? Let the Games begin!

Related reading:

Will the Olympic Rings Strangle Sponsors? (BNET)