Rupert Murdoch on Politics and the Presidential Election

Is Murdoch manipulating the media via his ownership of The Post which recently endorsed Obama?  Is this what's next for the Wall Street Journal? As print media and traditional print media's web sites get aggregated, the independent voice of the Internet will be more important.  

Significance to our viewers: 1) This year's election will have the most globalized coverage U.S. election in history, with unprecedented print and video coverage online.  How will this impact our election process  going forward?  2) Electronic fund raising meets electronic media.  News, editorial opinion, pay per click information, and fundraising will converge in carefully segmented but unarguably integrated ways.  3) Start your own tally of WSJ Opinion posts and articles that endorse Obama vs. McCain.   See if the scale is balanced.

Tata Buys Auto Makers Jaguar & Range Rover: What Does it Mean?

Detroit - After years of struggling to make money with these two companies, Ford has sold them to Tata for $2.3 Billion. The sale to Tata changes the company's visibility on a global scale. The key strategy for them has been to grow as a global manufacturer via acquisition. The transaction helps them compete globally and increases their ability to sell into the U.S. market, and it increases their ability to learn and capitalize on lean manufacturing which is already strong in Jaguar plants. Chinese manufacturers have been unable to make such a large purchase, so this also increases India's market share vs. other major emerging economies.

Just over sixty years have passed since India became an independent nation (see related BBC news post), leaving behind its status as a British Colony. Ironically, today one of India's leading companies is purchasing two of the best-known British brand names. The sale of Jaguar this week to Indian car maker Tata has prompted some to question what this means for the motoring brand's rich associations with all things British. The concern, however, ignores the fact that for almost 20 years the pouncing big cat motif has been under the stewardship of American owners, Ford. The new parent is a huge Indian conglomerate aptly named Tata, the word for daddy or father in a string of languages including Latin, Serbo-Croat, Polish and Zulu. The Nano, acknowledged as the cheapest car in the world at about $2,500, is very different from the high-end brands they purchased. The acquisition of luxury brands helps growth because these brands tend to be more insulated from market fluctuations.

A very British Brand

BBC news noted that some in the UK are concerned over the potential loss of British identity with the acquisitions, but Tata stated that they are committed to retain and enhance their British identity. "Think of James Bond and you think of Jaguar. Think of 60s London gangsters and you think of Jaguar. Recollect Inspector Morse - Jaguar..." - branding expert Jonathan Gabay sums up why one of Britain's best known brands is so inseparable from the country of its origin.

Ford

What about the impact on Ford and it's strategy? First, Tata is not expected to become a full-line manufacturer, but this helps Ford strategically. Partnerships may come more from OEMs than private equity firms in the future.

Second, is Tata getting value or cast offs from Ford? Ford has already done much of the heavy lifting for Tata and has broken down some of the organizational barriers in these companies to optimize them. Cultural differences between Tata, Jaguar, and Range Rover may be an issue, however Tata's global roots may make it easier for them to own and maximize these companies than for Ford. For Ford, the luxury brands have been a bit of a distraction. Now Ford can focus, but this also means, "no excuses." Ford is not abandoning the luxury market as they still own Volvo and Lincoln. There has also been some talk of taking the Lincoln brand global.

Future Success, Innovation

The $20 Billion plus company is truly an industrial company with momentum and capital. It has a good record in terms of acquisitions - Tetley Tea was a successful acquisition, and Tata has helped the company achieve profitable growth. Under the company's leadership, Ratan Tata successfully managed through some difficult times. “But it hasn't been a smooth ride for Ratan Tata. When he became the chairman in 1991, he was seen as a pushover by the group companies' CEOs, who lorded over their entities.

He had to battle it out with these men, who treated their companies as their fiefdoms. So, the new chairman eased out CEOs like Rusi Mody (of Tata Steel) and Ajit Kerkar (Indian Hotels). Ratan revamped the operations of Tata Steel and made it one of the lowest-cost producers in the world. He made the critics eat their own words, when he launched India's first indigenous car, Indica, which turned around Tata Motors' fortunes.

Transformation, Business Strategies

As the group entered the 21st Century, Ratan Tata was obsessed with four critical issues. The first was to globalize his group's operations, where he has succeeded to a certain extent.

The second was to safeguard his companies against possible hostile takeovers after the London-based Indian, Lakshmi Mittal, purchased the Luxembourg-based Arcelor early in 2006 to become the world's largest steelmaker, and announced his ambitious plans in India.

So, to thwart any threats, Tata decided to up his stakes in most of the group companies. Ratan Tata's most important concern, however, was to protect his top lines and bottom lines in the face of ever-increasing competition from domestic and global players.

To achieve this objective, he had no option but to become aggressive, a quality that helped him in other areas. Today, the group, which was seen as risk-averse and cautious, has no qualms about taking on competitors publicly - be it in areas of policy-making, products launched or marketing tactics.” – BBC News

Significance to our readers:

1. First, increasing globalization requires increased efficiency in coordinating global teams. See our related post here.
2. No World Borders automotive consulting team is experienced in maximizing the performance in both automotive and other organizations. Our team's experience in firms such as Toyota, Honda, Kawasaki and others enables us to provide immediate value. Our certified Lean Manufacturing management consulting professionals and IT practice leadership has helped many firms achieve their IT, solution, and business goals. Best practices experience in ITIL, CMMI, ISO, and Lean have helped our team provide value to firms in over 200 engagements in this market.

The Role of the CIO in Transforming Business & Enabling Growth

The ability to redefine business can come in large part today from understanding technology and how it can be an enabler of transformation. The smartest companies realize that a strong CIO can take customer and transaction data and help turn it into knowledge that enables businesses to better understand their markets. When needed, information assets can also help transform business and underlying processes. How viable is it to hire an IT head who really understands the business? Today many companies hire an IT Director as their CIO - someone who may be more experienced at managing and leading only technical employees. However, understanding the business and having an intelligent conversation about it in the board room is important. C-level IT executives are embodied in CIOs like Charlie Feld formerly with Frito Lay and later successful at Burlington Northern and Delta Airlines. CIOs of this caliber have moved into the CEO position.

Fedex transformed itself from a shipper to a major player in logistics. It is now seen as a technology company in the logistics and transportation business. The momentum coming from the top, enabling the CIO.

One important philosophy to embed in transformation projects is growth. Is the transformation enabling business goals and business growth? Here are some thoughts to consider from one high-performance CIO:

The implementation of change initiatives hasn’t always been smooth: business leaders (and IT managers) who had grown used to an IT department that merely took and fulfilled orders had to get comfortable with IT leaders who challenged them and kept an eye on the IT strategy of the broader enterprise. But the changes were necessary—and, despite the bumps, ultimately successful.

• As the CIO for a rapidly growing technology vendor, one client had to scale the IT organization quickly so that it could handle not only its current tasks but also whatever might be on the horizon.

• Keeping systems up and running is just the beginning; the way the IT function uses resources to satisfy the demands of the business determines the real value of information technology. Our client explained how they organized the team to work closely with the business in order to ensure that IT’s investments match the organization’s strategic priorities.

• Even in the tech-friendly realm of Silicon Valley, IT leaders struggle to inspire their own people—and the business colleagues who depend on them—to move beyond an order-taking mentality by striving to understand the needs of the business and proposing innovative solutions to its problems.

Figuring Out What to Fix

Best practice: Conduct high-level interviews with executives and a series of work sessions to identify the biggest problems faced, as well as the top five or six things to focus on in the next 18 months to be successful.

For companies that are strong in product innovation this can not only help to acquire new customers but retain them with excellent service. For example when you sell to CIOs and other senior IT execs who understand IT operations, the expectations around IT customer support and professional services are high. Service capabilities that can remotely diagnose trouble in products and signal it, sometimes even before the customer becomes aware is a way of using technology to be proactive in providing excellent service, which in turn usually leads to growth due to high current customer satisfaction.

Setting transformational priorities – A business & IT partnership

Often when in rapid growth, companies do not focus on improving business processes. As part of a long-term growth strategy, improving business processes can be key. In a normal business process transformation, you would focus primarily on making improvements on the process side. Often, a high percentage of critical processes have IT implications, so you must deal with business processes together with the IT that supports them. Systems and processes are often tightly linked.

Assessment & Methodology to Develop a Roadmap

An assessment can reveal capability gaps between where you are and where you needed to be. Using something like Six Sigma alone may be too rigorous and might not enable you to move quickly enough to get from here to there. Instead, using a Lean or Lean / Six Sigma approach enable you to identify the five top critical process capability gaps that can prevent you from scaling up the business. Attack those gaps with gusto. This enables you to continue to build quickly while also looking at least two or three years ahead to make sure that we had a road map of where we wanted our business and our technology to go. We revisit the road map every year because our business is pretty dynamic. Our problem areas will change, and we need to be nimble enough to address changes in the strategy.

Improve Processes to Improve Scalability

For example, an order-to-cash process might be something needed to improve in order to be able to scale up our business. You might note that a large percentage of sales orders in your company have to be manually touched by someone on the order-management team. Since so much of your business comes at the end of a quarter, that really threatens your ability to scale. So start by attacking that from the business process and systems perspectives. Some companies reduced orders requiring a manual touch by 75 percent.

Strive to deliver tangible business value in 90-day increments

When the company doesn’t see the results fast enough, questions start to pop up. So communication and change management are paramount because you want to show clearly not only the road map but also the results that you are generating by working through the road map.

Significance to our readers: 1) read the Wall Street Journal / MIT Sloane Management Review's analysis of CIOs in the work place 2) No World Borders has helped CIOs in several industries to transform business process and improve organizational effectiveness through organizational development work.

McCain Links Up to Potential Voters on LinkedIn

Senator John McCain debuted with a question on LinkedIn this morning, with over 500 connections in his profile – something that takes less well-known people months or even years to accomplish unless they make LinkedIn a hobby.   The question, "What is the Biggest Challenge America Faces? received 70 answers in 9 hours. Althought less anwers than Bill Gates receieved, Senator McCain is the first national political figure to leverage a truly business-oriented social network to ask questions about what is important in American politics to a hyper-connected technology and business savvy network.  At last count, over 1,680 people have now responded to Senator McCain's question.  We would not rule out increased momentum online for the McCain campaign as they show their savvy for using mediums not yet tested by Senators Obama or Clinton.  View McCain's linkedin group here.

Obama - $1 Million Minute on the Web

"AnObamaMinute.com calls for pledgers to register a donation within 60 seconds, at 1pm on Apr. 21. Could the site be interpreted as just another stunt in an environment where $1 million isn't what it used to be? "There is certainly an element of theater," admits one member of Obama's national finance committee who's familiar with the project (the campaign is participating to make sure all contributions meet federal giving requirements). But, it is also another ambitious fund-raising effort in a political season marked by campaigns that have aggressively pushed the boundaries of raising money, both off and online." – Business Week

"This is another wrinkle, another innovation that confirms the Internet's potential." 

says Larry Sabato, director of the Center for Politics at the University of Virginia

"In some ways, the Internet connects Obama supporters better," adds Sabato. "Clinton and McCain supporters are generally older, and this kind of high-speed fund-raising may not exactly be the way they think." The irony, of course, is that Pennsylvania primary voters tend to be older, comprising exactly the demographic that might not be attuned to such online events. His war chest well-funded, Obama's biggest hurdle is to convince more white, working, and lower- and middle-class voters to back him.

 

 

 

Be an Arsonist and a Fire Fighter – by Paul Sloane

Innovative leaders are comfortable with ambiguity. They know that there are many ways forward. They are evangelical about the vision but agnostic about how to achieve it. They have a clear strategy but are quite prepared to change tactics. They recognise the need for different leadership styles at different times. When it comes to innovative ideas they are alternately arsonists and fire fighters. They go around starting fires under people – challenging them. They ask questions that confront their teams - the kinds of questions that demand answers and actions:

• Can you find a new route to market?
  
• Can you halve our service response time?
  
• How can we break into the Chinese market?
  
• Can we find a better way to provide this service?
  
• Can you design a lighter, cheaper, faster version?

The leader starts many initiatives and then follows up to ask how things are going. The projects that are not succeeding are cut back. If the new product prototype does not please customers, or is not technically feasible or is very costly then the fire is extinguished. Lessons are learnt and the team moves on. The leader has a restless curiosity to try new things. Some people may find this frustrating and ask, 'Why does she keep asking us to try new things and then stop them just when they are getting interesting?' The answer is that only by trying lots of different things are we likely to find the radical new initiatives that we need. Not every interesting project can be pursued to completion. Life is too short and resources are limited. It is essential to eliminate the less promising projects so that we can devote resources to those that show the most potential.

Innovative leaders are a little schizophrenic. They strive for success but fear it. They love to win yet they applaud failure. They are coldly analytical some times and hotly passionate at others. They use left brain and right brain techniques. Their management styles are sometimes tight and sometimes loose. They are proud of what their team achieves yet they are humble enough to listen to feedback. They start fires and they put them out.  

Paul Sloane is an advisor to No World Borders and the author of The Innovative Leader, published by Kogan Page. His website is www.destination-innovation.com

Overcoming Customer Resistance to Innovation, by Paul Sloane

Sometimes the biggest resistance to innovation comes from the person who should benefit most from it – the customer. Customers can be very conservative. When you come along with an unorthodox new product or service they are often initially unimpressed. Why should the buyer take a risk with your unproven new gismo? He knows that new products often have bugs and he does not want to be the guinea pig on which you experiment. He is familiar with the current method – why should he change?

Who would want to be the first customer for a fax machine or indeed for a telephone? It seems ridiculous now but selling the first few telephones must have been really difficult. And how about laser eye treatment? How would you find the first person to try it when there was a safe alternative in a pair of spectacles?

This is understandable and needs careful handling. Your sales people will doubtless be adept at explaining the benefits of your new products but the customer is right to be sceptical. You need to find ways to reassure him and to mitigate his risk.

At the same time you need early adopters so that you can get some traction in the market, customer feedback and positive references for your innovation. So acknowledge the client's concerns and put offers in place to allay them. You cannot just use your standard terms and conditions for a radical new product. You have to be innovative in your sales approach too. For example you could:

• Allow them a free trial of the new product
  
• Continue to provide the old service so that they can go back to it at any time.
  
• Offer a money back guarantee.
  
• Provide a special service level that gives them immediate access to your top support experts.
  
• Agree joint service level agreements.
  
• Stress the payback and benefits they will receive and even make payment dependent on their being achieved.
  
• Promise to arrange a positive PR result for them in the trade press if the trial succeeds.
  

Above all you must choose the right early customers. Some people love new technology and others hate it. Select the best early adopters from among your top clients. Appeal to their sense of pioneering adventure. Stress the prestige that goes with early success – for both of you. Make sure that they share in the recognition of a successful launch. If all goes well then ask them for a testimonial. You can help them be seen as an industry leader in trade journal stories and at conferences. You are in it together and it must be a win/win for both parties.

Significance to our readers: No World Borders specializes in unlocking the value in your organization by facilitating change and maximizing innovation that develops value.  We have helped early stage ventures launch new products, and enterprise companies transform process.  Paul Sloan, our advisor is available for speaking engagements.  Contact us for more details.

Paul Sloane is the founder of Destination Innovation. He writes and speaks on lateral thinking and innovation. His book, The Innovative Leader, is published by Kogan-Page.

Ten Digital Media Issues to Watch in 2008

Distributing Experiences

The digital media business is no longer simply about buying ad space. It's a discipline focused on distributing experiences—through social networks, videos, widgets and applications, branded content, and, yes, ad placements. Make no mistake; the traditional practice of media buying is still a critical component of online marketing. However, to view ads as the only way to promote a brand or product is to ensure that the brand is seen as stiff, commercial, and inward-looking.

1. Accountable Marketing Channels are Best Insulated from Recession

In difficult economic conditions, the most accountable marketing channels will be best insulated from cuts in spending. This clearly bodes well for online advertising relative to other channels. However, there will be an impact, even in the most efficient digital channel—search marketing. Search has become a powerful tool for shoppers, and in a recessionary environment, consumers will search, shop, and buy less frequently. Revenue derived from the cost-per-click ad model is driven by the volume of clicks and the cost a marketer is willing to pay for each of those clicks. While a marketer may keep the same cost-per-click during a recession, it's quite likely that a difficult economic environment will lead to fewer commerce-driven searches, which leads to fewer clicks. The end result is less money being spent in search.

2. Apple opens the iPhone to third party developers – a big year for mobile innovation

The mobile industry is poised for tremendous growth. Mobile search and location-based services are growing in importance. Apple is opening the iPhone to third-party developers. Carriers are becoming more flexible—maybe. With all of these developments, mobile advertising is sure to gain momentum in 2008, but we are still a year away from seeing it break out and become a staple for marketers.

3. Rise of the Semantic Web

Semantic web tools have long been predicted to shape the next wave of online innovation but many are predicting that 2008 will be the year that they finally take off. While such tools have traditionally been confined to research purposes, mainstream applications such as StumbleUpon and del.icio.us are allowing marketers to leverage a wealth of user data.

In addition, companies such as TrueKnowledge, Twine, and Spock will allow semantic web to continue to make progress in 2008.

4. Beyond clicks - improvements in effectiveness measurement

With the proliferation of publisher sites and advertising models has come the challenge of measuring and tracking user activity. As more advertisers launch online branding campaigns, the metrics need to extend beyond clicks. Advertisers increasingly want more detailed feedback on the effectiveness of their online marketing efforts, both to justify spending on the web and to help guide their future media allocations.

5. A limited increase in advertising rates

With an ever-increasing number of advertising choices, it will be difficult for publishers to raise advertising rates substantially. In a January survey of media planners, 37% forecasted a pricing increase of 1% to 5% in 2008, while 38% expected a rise of 5% to 10%. Nearly 20% of the media staff felt prices would fall year over year.

6. The Internet's impact on the 2008 presidential election and U.S. Olympics

The Web will be the most impactful and influential medium in the 2008 presidential race, not only for presidential hopefuls but for voter self-education and self-expression. Much like radio for Roosevelt and TV for JFK, the 2008 race for the White House will be determined by candidates' abilities to connect with and galvanize supporters online. The Internet has changed the political environment. Despite the importance of digital channels in the elections, online ad spending by campaigns will continue to lag well behind television spending. The importance of digital in the 2008 elections is rooted in connecting with and motivating communities, but online advertising is likely to play a secondary role in doing so. Similarly, more people will watch events on the Internet for the Olympics this year than ever before.

7. Behavioral targeting expands, and brings new focus on privacy

Behavioral targeting is expected to increase ten-fold over the next five years, according to eMarketer. Behavioural targeting allows marketers to offer more personalised customer experiences, whilst consumers gain from more relevant advertising and content as they have been targeted based on their online footprint (e.g. what sites they have visited).

Last year saw the formation of an alliance enabling large publishers to share behavioral information on their users, facilitated by Revenue Science. There was also the launch of Wunderloop Connect, a self-service ad exchange for behavioural-based online advertising. This should be the year that it becomes something that advertisers and publishers want to embrace automatically, or expect as part of their ad serving technology, rather than still needing to be convinced that this is a no-brainer.

We will be looking out for more case studies and research to show how effectively behavioral targeting works.

8. Emergence of vertical ad networks

With spending on ad networks increasingly concentrated with the largest players, it will become increasingly difficult for small ad networks to break through. Ad network efficiency is largely a matter of matching the right advertiser to the right placement, and the likelihood of being able to do so increases as a network increases its ad inventory and number of advertisers. This means the largest players should be able to best monetize ad space for publishers (and provide the most relevant inventory for advertisers). T he bigger and more efficient the large networks get, the more ad dollars will be directed to them. It will become more difficult for second-tier players to earn ad budgets, and therefore less necessary for the larger players to acquire them. One related area to watch closely is the growth of vertical ad networks. Martha Stewart Living's lifestyle network and Forbes' Audience Network are two recent examples of strong brands extending their reach by building out ad networks. It's a reasonable extension for brands and helps the smaller sites and blogs within a vertical network gain needed exposure with large advertisers. Look for more vertical ad networks in the year ahead.

9. Nokia's emergence as a player in the digital marketing industry as it expands to software & services

Nokia made two important moves in 2007 that will impact digital marketing in the coming year. It acquired both Enpocket, a leading mobile advertising and marketing services firm, and Navteq, a leader in navigation data and systems software. While there have been no formal announcements from Nokia about how its assets will fit together, it is clearly going to be a company to watch in the coming year. Nokia appears to be vying to expand its own business outside of consumer mobile devices and into the software and services that consumers are able to use on those devices. Nokia now has assets that may accelerate the use of smart devices that use location-based services that know where we are. The potential benefit for marketers is the ability to deliver relevant, geographically contextual advertising opportunities to customers. Accomplishing this feat in the U.S. today, while not impossible, often involve orchestrating a small army of carriers, devices, marketing services providers, and agencies whose interests are not always aligned.

10. Local search marketing & social media and advertising platforms can expect growth

Local search platforms will cross over to the mainstream, with US companies such as Yelp, Yoono, and Outside.in becoming more popular.

Local search platforms will become more niche with vertical search playing an important role. Additionally, companies who focus on enhancing user experience and gaining repeat users will succeed in this space.

Watch new UK players such as Welovelocal and Tipped, and the recently revamped Yell.com. And let's not forget Google, which has the power to crush search startups that are reliant on Google referrals for the majority of their traffic.

This is a competitive market and we should also expect continued consolidation in 2008.

From Today’s WSJ: Timing is Everything for Private Equity Firms

Having bought up $1.9 trillion of companies from 2005 to 2007, private owners will inevitably confront how to monetize their investments, what is so cynically called "the exit."

The doors look barred. The mergers-and-acquisition markets have shut, as potential buyers wait for asset prices to decline. One can only hope that a mass of over leveraged and overpriced assets will stay out of public-investor portfolios. But don't bet on it. There is too much inventory to move. If the IPO markets re-vitalize, will values be bloated for these assets?

Below is a video from the Wall Street Journal's Dennis K. Berman explaining the challenge for these firms. No World Borders is still finding value in innovative companies as a sell-side representative for an Enterprise-class IT outsourcing firm targeted at SMB, and a leading Internet search marketing firm ranked in the top 15 among agencies and consulting firms in the U.S.