Penchuk.com

The other day I wrote about Dell receiving an incentive package from NC and Winston-Salem.  It’s still being discussed in the local press as evidenced in this article from Local Tech Wire (emphasis mine).

“They could have succeeded. It’s a gamble,” said Sen. David Hoyle, D-Gaston, the primary sponsor of the state incentives package targeting Dell that was approved hastily in a one-day legislative session in November 2004. “You take a chance, and you roll the dice.”

There are two issues I have with Sen. Hoyle’s approach here.  First, the money used to “roll the dice” isn’t his money.  Frankly, I’m not real happy with an elected state senator that deems it his place to “gamble” with hundreds of millions of dollars that aren’t his.  The people of NC could have used that money more wisely on their own than by giving it to a corporate welfare recipient.  If he wants to gamble, do it on his own dime.  Second, the government, in this case, endorsed a single company.  They essentially played favoritism by deeming Dell to be worthy of incentives aimed directly and specifically at Dell.  Why are they worthy but other companies are not? All companies, big or small, should have the same incentives to put up shop in NC.  That point is made lower down in the article.

I also love this statement (emphasis mine):

House Speaker Joe Hackney said he doesn’t regret the Dell deal, because it probably generated additional tax revenues from the jobs it created.

Isn’t that great?  It “probably” did what it was intended to do.  I “probably” won’t vote for Mr. Hackney at the next election.

The one good thing, which I haven’t been able to fully grasp yet, is how it appears Dell only used some $8.6 million of the almost $280 million in incentives available to it.  Perhaps in the long run, the finances of this deal will work out OK.  But, the principles remain the same.  The government shouldn’t “gamble” taxpayer money on corporate welfare.

Just got my annual subscription notice for the Wall St. Journal’s online edition. I’ve been a loyal subscriber for 12 years now and every October my credit card gets charged. Years ago I realized that if I got the paper edition, they would stack up and I’d probably never read them. For me, the online only option is the way to go.  I read it every day and love the email I get with all of the stories from that day’s paper.

This year’s subscription was $197, which is quite a hike from last year’s $119 (it’s a 65% increase). Rather surprised, I went to the “My Account” section of WSJ.com and looked at the billing options. There are two.

• Annual subscription: $197
• Monthly payments of $12.95 (annual cost of $155.40)

Fine. It’s a big hike in price and frankly, one that made me question whether or not to continue paying for it.  I like the WSJ and its coverage so I’ve decided to keep it but, of course, I’ve changed to the monthly option.

But what I don’t get at all is why in the world would they charge MORE for a one-time annual subscription than the monthly option?  Typically, a discount is provided when someone pays upfront for a whole year.  After all, the seller gets extra money upfront and reduced risk. With the monthly option, there’s more work involved (doing something 12 times versus once) and an overall higher risk level.  If that’s the case, why have the pricing disparity the way it is?  Shouldn’t the WSJ, the paper of record for business, understand this simple concept?

Even with the lower priced option, I’m still looking at an over 30% increase in price.  Frankly, I’m still questioning whether to continue subscribing, but now I’ll have a monthly reminder to consider pulling the plug.

A few years back North Carolina and Winston-Salem gave Dell some $280 million in incentives to build a plant in the Piedmont Triad.  Now, less than 5 years later, Dell’s closing that plant.  They’re probably going to have to give some of that money back to NC and W-S, but it won’t be all of it, it won’t be with interest and it won’t be profitable for NC and W-S, that’s for sure.

What it all boils down to is that I am not a fan of government incentive packages.  They don’t work.  Companies can be wooed with huge tax breaks and frankly, that’s nothing more than commercial welfare.  One of the biggest reason these incentives are given out is because neighboring states are doing it, too.  I have a much better idea:  create an overall tax structure that will encourage ALL types of businesses to the state.  Reduce corporate tax rates so that the total business climate in the state is friendly and inviting.  Companies will come on their own, no need for massive incentive packages.  All companies will benefit and the state won’t look foolish for making a major investment in a company that can just turn around later and leave.

This will be the fourth time that I’ve written about this (12/3/08, 12/11/08 and 3/17/09) and I’m thrilled to see it on the pages of the Wall St. Journal.  Senator John Thune of SD, wrote (emphasis mine):

Our financial markets are no longer in free fall and the crisis has receded. Yet we now find ourselves in a troubling situation where the federal government is a major owner of more than 600 U.S. financial institutions and banks, as well as two auto makers, an international insurance conglomerate, and numerous other businesses…It is time to bring an end to the TARP emergency measures and come up with an exit strategy to get government out of the business of running businesses.”

Hear, hear.  The US Government has no authority to own parts of private businesses.  It did what it had to do (even if I was uncomfortable with it at the time) to keep the economic system afloat, but now that time has passed.  It’s time to divest.

Watching the boob tube last night and saw an ad for Ford that had the tagline “Why Ford.  Why Now.”  Mike Rowe (who I’m a big fan of) stars in this commercial and follows up the tagline with “Why Not?”  Seriously?  Is this the best that Ford could do?  “Why not?”  The message I got was, “Hey, why not buy a Ford?  Why?  Why not?”  Oooh, now I’m convinced.  What does this say about their brand?  It’s not good.

My suggestion would have been to drop the “why’s” and just go with “Ford Now”.  Make the tagline a call to action, get people thinking about buying a Ford today.  They could have followed up “Ford Now” with benefit statements that bolster the brand.  Best fuel efficiency.  Low price.  0% APR.  Not enough?  How about the $4,500 tax break?  Buy American.  Ford Now.

I typically don’t criticize Detroit because I think they’ve got a bad reputation that precedes any actions they take, but this is a bad marketing idea.

Recently, I heard about a company that ran a 360 degree review.  If you don’t know what that is, here’s what the omniscient Wikipedia has to say:

In human resources or industrial/organizational psychology, 360-degree feedback, also known as “multi-rater feedback,” “multisource feedback,” or “multisource assessment,” is feedback that comes from all around an employee. “360″ refers to the 360 degrees in a circle, with an individual figuratively in the center of the circle. Feedback is provided by subordinates, peers, and supervisors.

I’m all for feedback.  The only way to improve is to understand what you’re doing right and what you’re doing wrong.  In my past leadership positions, I’ve continuously asked for feedback.  I conducted named and anonymous surveys.  I held meetings where I encouraged my employees to speak their minds (those that wouldn’t could use the anonymous surveys).  I implemented regular client surveys to assess my and others’ performances.  So, I like the idea of 360 degree feedback.

Back to that company I mentioned.  The person at the head of the company didn’t participate in the exercise.  She ran it, had others provide all types of feedback, but didn’t solicit any of her own.  She didn’t have subordinates review her.  I guess that’s her prerogative, especially if it’s her company, but if you’re the one calling it “360 degrees” and you are encouraging all of this feedback, you need to be wary of omitting yourself.  You look silly and your exclusion negatively impacts the “rank and file”.

First of all, it segregates you in a negative way.  It doesn’t make you look like a leader but instead sends the message that you don’t want or care about feedback from the “little people”.  Secondly, it robs you of a fantastic opportunity to hear what your employees think about you, your style, your decision making process, etc.  You can’t succeed without them, so it would behoove you to listen to them.  If you can improve based on their comments, why wouldn’t you?  Finally, I believe it creates resentment.  Your actions have said there are two sets of rules here, mine and yours.  Put yourself in your employees’ shoes.  Would you like it if everyone around you (e.g. your peers) critiqued your performance but your boss was untouchable.  That’s the kind of thing that will get discussed at the water cooler, at lunch, when you’re out of the office, etc. and it will cause dissension in the ranks.

In the end, if it’s your company, you get to do what you want.  But remember, your success depends on the loyalty and performance of your employees.  Do you want them resenting you at crunch time?

Thanks to the wonderful invention known as a DVR, I have a new favorite show:  Pitchmen.  For those of you who don’t know it, it’s about Billy Mays and Anthony Sullivan, two guys that are in the direct response business.  Billy is the bearded loud guy that hawks everything from Oxiclean to insurance.  Anthony is a lesser known talent but also has a business creating ads for products.

The premise of the show is these two guys are looking for new products that they can pitch via direct response.  The products themselves are hit or miss, the banter between the two celebrities is sometimes annoying and the show is a little predictable.  So why is it my favorite?  Frankly, because these guys do marketing right.

They have a formula for what makes a good selling product.  It’s simple, easy to understand, has a low price point, offers good value, demonstrates well and has a “wow” factor.  Once they find a product that has these qualities, they pitch it via 2-minute or 30-minute infomercials.  All of the buzzwords and catch phrases get used:  “Now”, “But wait, there’s more…”, “Order now and…”  And before they dump a bunch of money into something, they test it.  They buy limited media runs in different markets using different approaches.  In the end, they end up with the right products getting proper investments.

Marketing is a trial and error game with science mixed in for good measure.  When I was responsible for product marketing back at NetIQ, I used a similar test, test, test approach to email marketing.  For example, for one email campaign I created three different messages and value propositions.  Buzzwords and calls to action were must copy.  Then I tested each message with a segment of my target market.  The best performing message was then rolled out to the rest of the list.  The end result was an improved response rate and higher sales.  Testing takes a little more work, but is compensated for with improved performance.

I’d be thrilled to spend some time with those guys just to watch them in action.

Back on Dec. 3, 2008, I wrote about the importance of an exit strategy. Then again on Dec. 11th, I highlighted Christopher Cox’s comments. Now today, I see this news in the Washington Post (emphasis mine):

House Minority Leader John A. Boehner (R-Ohio) said the [AIG] bonus issue added to his belief that there will be almost no Republican support for any expansion of a bank-bailout program that passed Congress last fall with broad bipartisan support.

“What is the government’s exit strategy from this sweeping involvement in private business?” he asked in a statement, adding that “taxpayers are not receiving an adequate accounting from either the Treasury or the management of the companies that received taxpayer funds. Unfortunately, we have not yet seen such a plan.”

The sooner the US government pulls out its investments in private companies, the better.

It was very interesting to read about Skittles.com and their interesting experiments with various social media.  They should be applauded for taking a bold step and trying something different.  They certainly got themselves TONS of free press, people talking about them and quite likely, a boost in sales.  So, the experiment was probably a success, right?

I’m not entirely convinced.  Let me give you two reasons. Below is what I saw when I visited the site sometime on Tuesday.  Notice the big pile of crap?  It’s an interesting moniker that the tweeter uses, as well.  Nothing quite says yummy Skittles like a steaming pile of dog poop.

Here’s another screenshot.

Kazybrown writes about the saddest thing he ever saw.  SKITTLES!  Perhaps the whole thing is a joke and he just wanted to be included but this isn’t a great association to make with the brand image of Skittles.

So, we’ve got horrible death from an accident and dog shit.  Let’s go get some Skittles.  When a company gives control of its brand and image to others, especially in this day and age, they’re walking a fine line.  That said, the overwhelming majority of what I saw was positive and most likely, people will ignore the excrement and traffic accident type posts.  There will be positive associations made and that’s an important part of branding.  If more people buy Skittles and continue to do so, this will have made a lot of sense.

This is a continuation of the previous post.

That night at the hotel I was lying in bed thinking about the day. Not only did I love Splash Mountain (we did it 3 times), I was thinking about the show.  The script kept coming back to me and I thought, we really need something similar for our purposes.  I got up and jotted down a few ideas:  First meeting script, email announcement template, catalog naming conventions, basic permission sets, etc.  What I did was think about what were the repeatable tasks faced by team.

When I returned from Disney, I began working on a Word document called the Account Manager Manual.  I started adding anything that my team did to it whether or not I knew all of the info.  There were placeholders galore, but that was OK.  It was just a list of things that needed to be added.  My vision was each team member would have a copy that they could refer to at any time.   I searched the office and my email archives for content.  There were tons of emails that people had sent at one time or another that was trapped there in someone’s email.  Anything that fit the “repeatable” criteria was added.

Quickly the document grew to 20 pages.  Then 30.  It started to approach 50 pages and then I began to have problems with formatting.  If you’ve ever worked with Microsoft’s Styles features, you know what I’m talking about.  I quickly realized that I needed a better solution.  My first thought was Sharepoint, Microsoft’s intranet in a box solution.  I was never a big fan primarily because our search capabilities didn’t work.  So, finding anything was next to impossible.

After consulting with a few other people, the idea of a wiki was proposed.  After some research (thank you Wikipedia) I settled on MediaWiki, the same software that runs the aforementioned Wikipedia.  Our infrastructure guy installed it, gave me the admin login and said, go to town.  And I did.  I spent a few weeks converting everything I had accumulated.  I searched more email.  I played with ways to organize the site.  In due time, I had over 100 pages.  Then I started talking it up to people.

When people asked me a question, I jotted it down and made sure it was on the wiki.  If someone asked a question that I knew the answer was posted, I didn’t answer but referred them to the wiki.  I started sending emails saying, “so and so asked me about XYZ.  Did you know that the answer is on the wiki.  And, by the way, you can also learn ABC while there”.  A few people got tired of me constantly saying, “Did you check the wiki?” but my goal was to embed it into the culture of the company. It took time, but eventually everyone knew about it and I knew I won when I heard someone else say, “Did you check the wiki?”

When I left, there were close to 1,000 pages of information.  Uses of it spread from reference material to schedule planning, project management, FAQs, capturing ideas, using it for newsletters, and more.  Our sales staff was using it as a repository for RFP responses.  The content development team used it to schedule their upcoming workload.  Product management used it to create release plans.  Client services used it as a checklist for emergency response to application downtime.  The uses continued to grow.

I learned that you could collaborate with others very easily.  Everyone could have the same document with all updates at the same time.  Information was publicly available.  I learned that you could communicate very effectively through the tool.  Posting information was easy and literally anyone could do it.

A simple script for a Disney show inspired me to implement an infrastructure where colleagues could share information, document processes, write newsletters, capture business critical procedures and catalog knowledge that had previously been in someone’s head.  Personally, I’m proud to have added something significant that helped not just me, but just about every user within the company.