Quote of the day

Since we're entering a time when decision makers are less exuberant we can also expect some of the excessive rhetoric of the past couple of years to recede. Hence the quote of this day (source worth reading) about viral marketing, one of the hottest marketing fads of the recent past:

"Being viral isn't the hard part. The hard part is making that viral element actually produce something of value, not just entertainment for the client or your boss." - Seth Godin

Season's greetings

Just blame it on the crisis Joe!

As the news remain pretty negative, business and consumer confidence stays in the basement and incompetent senior managers get away with the consequences of past poor decisions by blaming it all on the crisis.

The string of recent bad news from several sectors of the world economy is fast becoming the latest great excuse in companies that are in dire straits for reasons wholly unrelated to the macroeconomic context. Sectors that are still considered to be at least unaffected if not outright favored by the recession, e.g. online and interactive marketing, have their casualties too and it does seem odd that the credit crisis should be invoked to explain lay-offs. In many cases the current difficulties can be better explained by yesterday's lack of foresight, excessive increase of fixed costs, careless allocation of financial and human resources and most likely by insufficient profit margins in the core of the business. So in many cases even though managers blame it on the crisis they'd better take a long hard look at the objective reality 'cause you may blame it on the crisis but in ain't so Joe!

Managing in the downturn

Obviously the current financial crisis is capturing a lot of attention and causing serious trouble even for the best managed of companies. In my practice I see a number of entrepreneurs and managers having very hard time coping with the fact that liquidity is not even an appropriate term to describe the lack of cash in te economy, while the level of trust is at its lowest and not only between banks. So, what's the smart way of managing in the downturn? Here are a couple of points that came up in an interesting email I got from McKinsey:

1. Freeing up cash from operations


2. Maintaining the customer experience


3. Upgrading talent


4. Managing IT spending

Of course these recommendation may seem to be very high-level, but I think they're interesting because the last thing you want to do in a downturn, unless you absolutely have to, is to part company from the people who run your business and in many cases ARE your business. In fact, not only should you do your best to retain talent, but it does seem like a good time to upgrade it. The trouble of course is that in many cases personnel is precisely the first area to be seen as a way to adjust, right after R&D and marketing. There's another reason why McKinsey's recommendations are an interesting inspiration for any manager worth their pinch of salt: the value of maintaining the customer experience, something that usually goes down the drain as soon as a business losses key customer facing personnel and / or core expertise.
Then there's another point here which I believe is important: cash should be managed carefully regardless the situation of the economy and what you don't want to do is spend it unwisely in perfectly useless assets. Some companies tend to do that, painting their walls, buying expensive furniture (nope I didn't say anything about the famous Aeron chair...), painting walls, travelling around the globe well beyond the needs of their business or acquiring tools and means that are not high priority... Usually, with unwise use of cash comes an increase in the fixed costs of a business, which makes break-even more challenging to reach. Another phenomenon that comes with lack of thinking through the allocation of cash resources is an increase of the cash tied into assets that are not directly productive... and you don't want that under any circumstances, let alone those in which we are today.
So be careful in dealing with the crisis so as to avoid throwing the baby with the bath water...

The making of a credit crisis

Here's an interesting set of slides to provide an overview of how the credit crisis was caused, even though there is a little something that is missing: the role of rating agencies that failed their mission more than ever before...

Creditcrisis 30slides Final

View SlideShare presentation or Upload your own. (tags: capitalism mortgage)

Internet advertising revenues to keep growing?

The latest figures of the IAB show that Q3/2008 Internet advertising revenue for Internet advertising rose by over 11% compared to the same period of 2007. While some people feel that this is a "proof" showing earlier assertions that interactive and online marketing would not suffer and possibly benefit from the ongoing economic crisis, the question is open as to the sustainability of what appears to be a healthy situation. My take is that:

1. advertisers are going to seriously reduce their spending at least for some time if not for reasons of substance at least to achieve cosmetic impacts on their quarterly figures and send a message to their employees;


2. the commercial efforts required for agencies to sell their services will increase very substantially making life very difficult for ad agencies that do not have ciritcal mass whether in terms of finances or in terms of personnel;


3. advertisers are poised to become much more demanding when it comes to getting verifiable and measurable impacts resulting from any interactive initiative, something that basically makes it even more relevant today to have adequate infrastructure and personnel for reliable and consistent web analytics

Let's see what happens.

Lousy ads

That's the tag line for Windows. Does Microsoft really think that it's smart to be speaking of a life without walls at a time when many Americans are not sure to be able to keep a roof over their heads? This is almost as bad as the campaign Fortis had launched in the midst of its recent woes with the red sinus curve and a message saying something like "in life there are ups and downs and Fortis supports you in both"... well these days Fortis and many other financial institutions are indeed experts in the lows...

Anyway...