David Dalka | Chief Business Futurist Blog

Posted on July 18, 2014April 8, 2021 by David Dalka — Leave a comment

My Thoughts on Susan L Wagner of BlackRock Joining Apple’s Board

Apple appointed Susan L Wagner to their board of directors yesterday and people have been contacting me to ask if that is the same BlackRock I once worked at in the 1990’s. The answer is yes! Here is the announcement:

CUPERTINO, California—July 17, 2014—Apple® today announced that Susan L. Wagner, founding partner and director of BlackRock, has been elected to Apple’s board of directors. Bill Campbell, the board’s longest-serving member, is retiring after 17 years of service.

Wagner co-founded BlackRock in 1988 and helped it become one of the world’s most successful asset-management companies, holding a range of leadership positions including vice chairman until mid-2012. She continues to serve on the boards of BlackRock and DSP BlackRock (India), as well as Swiss Re, Wellesley College and Hackley School.

“Sue is a pioneer in the financial industry and we are excited to welcome her to Apple’s board of directors,” said Tim Cook, Apple’s CEO. “We believe her strong experience, especially in M&A and building a global business across both developed and emerging markets, will be extremely valuable as Apple continues to grow around the world.”

“We conducted an exhaustive search for someone who would further strengthen our board’s breadth of talent and background, and we are delighted to have identified such an outstanding individual,” said Art Levinson, Apple’s chairman. “I’m confident that Sue is going to make an important and positive impact on our company.”

I’m thrilled about this because one of the biggest frustrations of my adult life has been that most people do not fully appreciate the unique transformational leadership abilities that myself and others possess due to our experiences at early BlackRock. I hope that her joining this board forces people to look at and understand the history of BlackRock and that it unleashes a torrent of demand for the early employees who know how to make this rare type of business operations, risk management and business model transformation a reality. The story of what made BlackRock BlackRock during those early days is not well understood. Worse, it is not being transferred to other industries places where it could do good in the world. This needs to change for the world of business to prosper and migrate in the 21st century.

This insane ignorance of our society about BlackRock was well demonstrated in this article comment about her appointment to the board:

SoAnyway

14 hours ago at 02:20 pm

She’s from an investment company but how well does she know tech?

Rating: 3 Votes

UGH!!!! That drives me insane as BlackRock redefined an industry business model leveraging technology 20 years ago in a way that some companies still can’t even dream of today – because they don’t have a culture that empowered people to do things focusing on operational outcomes first. While the technology played a large role, it was about vision, leadership and a culture of trust, fun and empowering people to do the right thing. BlackRock, like Bloomberg, until the past few years was primarily a B2B story – consumer companies with no business model and no revenue get hundreds of times more media coverage in this environment and that is a shame because society is frequently focused on the wrong role models for mentors in business.

Though I didn’t interact with Sue nearly as frequently as Rob Kapito and Larry Fink, I did enough to understand that Sue possesses highly unique abilities and attributes:
– Sue is a a deal maker and unlike the majority of the M&A community, her analysis was much more than purely financial. When BlackRock bought a company it was not kept a silo, it was assimilated into other BlackRock processes immediately. While most people that didn’t experience it will likely not appreciate the comment fully, this is what made BlackRock, BlackRock in its hypergrowth phase. Apple needs this ability as it acquires various assets.

– In a company where everyone used a Sun workstation at the time, I vividly recall her insistence on using a Mac..back in 1995. Rest assured Apple nation, you have acquired one of your greatest evangelists that you didn’t even know you had.

– If someone asked me what I admired most about her, it would be that she led through quiet, deliberate actions that led to big events occurring.

Other things Apple left off the list are Susan’s operational insights. Apple has had some software missteps in the recent past…I was recently talking to some of my engineering friends that are heavy Apple users and I was saying wouldn’t it be amazing if we could talk to CEO Tim Cook and advise him on how to alter certain processes to increase the integrity of software releases, risk processes and integration using the techniques I used at BlackRock. Maybe someday now due to this event that might become a reality. 🙂

One article also suggested that this might just be a female diversity appointment, I take offense to that as Sue is qualified for this role regardless of her gender based on my knowledge of her. Good luck Sue! Make all of us ex-BlackRocker’s proud with your service on Apple’s board.

P.S. To BlackRock – Why don’t we have a designated alumni community yet? There are so many amazing people that shared an amazing experience and we should all be collaborating to create future BlackRock’s.

photo credit: http://www.wellesley.edu/news/2014/4/node/43266

Posted on March 24, 2014March 24, 2014 by David Dalka — Leave a comment

Emanuel Rosen Interview About His New Book Absolute Value

Remember Emanuel Rosen? Author of Anatomy of Buzz and Anatomy of Buzz Revisited? He is out with a new book entitled Absolute Value: What Really Influences Customers in the Age of (Nearly) Perfect Information with co-author Itamar Simonson. To me, the book is a highly thoughtful trip down the changes of the Internet and the personal growth of the author along with it to reach towards different topics and conclusions. I respect this journey immensely as it is a journey all executives should be taking and it is one that I’m on myself.

The extensive research in the book also serves to validate much of my research and it is nice to find authors demonstrating thought outside the current group think. This book is about much, much more than marketing and should be read by those outside the discipline first and foremost. There is no higher compliment I can give to a book on marketing than that suggestion. We are living in a time when corporate organizational charts are starting to be redefined and so far as a society we are stuck at the starting gate of the race. Those who break free will pull away from their peers. Please share this interview and encourage others to read this great book! Enjoy the conversation.

Q: How was it different to write this book with a co-author?

A: When you write by yourself, you go through long periods where things are in your head. When you work with a co-author, you get immediate feedback on every thought. It’s a very different process and I was lucky to have Itamar Simonson as my co-author. Itamar is one of the world’s leading authorities on consumer decision making. Very knowledgeable and open minded. It’s been certainly a productive collaboration.

Q: This book appears to have taken a long time to write. As someone who has researched a proposal, I can appreciate and respect this. This book is quality, it was not slapped together quickly. Please discuss the reasons for this and the impacts it had on the final product?

A: Indeed, it took us a long time to write this book and we’re happy with the final product. We were exploring a lot of ideas, and we weren’t shy about changing our minds. This usually takes time. Some people work faster (and still write good books), but this is the way it worked in our case. We both felt that even though a lot has been written about the Internet’s impact on marketing, something bigger was happening, and we wanted to get to the bottom of it.

Q: Long before ASUS built laptops, they built motherboards. In custom build computers, people had the choice of choosing ASUS or not for a long, long time. Did you explore the impact of this previous awareness on ASUS laptop sales?

A: Yes, this was a factor that facilitated their market penetration. Because of their experience with motherboards, ASUS had good awareness among power users, so when ASUS started selling laptops under its own brand those in the know, who can easily assess the quality of ASUS, made their verdict and published it in reviews, blogs, discussion boards etc. This, of course doesn’t mean that they endorse every product from the company. Some products from ASUS get high ratings and some don’t.

Q: We see lots of business models changing. Do you think part of the reason they entered the market was to protect ASUS motherboard market share? (For more on this topic, please see my recent article on Steve Jobs.)

A: Yes, their shift to the consumer market was triggered by others’ move into their turf—motherboards. This made it clear to ASUS (and other manufacturers) how vulnerable they were.

Q: Conversations about information overload aren’t new. I liked your example from 1545 where Ann Blair talked about a “confusing and harmful abundance of books’. It is not new, but is it different now?

A: Of course, today we all face unprecedented amounts of information. But while this is true, consumers are actually very good at identifying that slice of information that is most relevant to them. Using new search tools, they can use information selectively and efficiently and benefit from it without being overwhelmed or overloaded. Information abundance as we know it today is a very new phenomenon in the history of the human race, and it will probably take a while before we fully comprehend its implications. The conclusion that it paralyzes decision making seems a bit hurried. While some consumers are indeed overwhelmed, most consumers can handle the information just fine.

Q: For mass markets with large volumes of information, lack of information is clearly not an issue as your research shows. When it is a new paradigm changing service people aren’t looking for yet or a thinly provided product or service, this information becomes imperfect due to the illiquidity. What would you advise providers of elite, low demand niche services to do in this environment to create trust and sales?

A: When a product category doesn’t have enough users, it’s obviously hard to expect many user reviews. For example, you won’t find too many organized review sites for private jets (although you ca still find much more information in this category than in the past). The role of experts and other influencers in such cases is then more significant. Customers in these areas also still rely on the marketer to provide the information which means that the marketer still can have significant influence.

Q: Why were Peter Rojas’ blogs successful for technology and yet some other new verticals in society don’t have sites of this nature? While we are at it, what do you see as the future of blogs?

A: Engadget and the other services that Rojas started were successful because a lot of people are interested in consumer electronics and share their experiences. When there is significant demand and where quality can be assessed, tools are likely to emerge (although this may take time). Marketers should be on the lookout for game-changing technologies that might lead to new types of information sources . The trends we discuss in the book may be vaguely relevant to a company today but increasingly important only a few years later

Q: Not exactly a surprise to people that know me well, my favorite chapter was “When Brands Mean Less”. In fact, one could argue this would have been a great title for the book. Without spoiling the amazing content in the chapter, could you please discuss how this chapter came together?

A: This chapter opens the second part of the book “How Marketing Changes Forever” and it’s been getting a lot of attention since the book came out. What we say in this chapter is that the power of brand as a main cue for quality is diminishing when customers can use reviews from other users and experts to assess the absolute value of products and services. Brands still have some important roles that are not likely to go away, but when it comes to assessing quality, things are changing pretty dramatically.

Q: The book has mostly consumer examples, what are B2B business people to consider here? What is different?

A: The same general principles apply: Whenever customers rely on reviews (from experts & other users) the rules of marketing are changing. The key question the marketer should ask is: To what extent do my customers rely on these new sources of information? In many areas in B2B, this is not yet happening, but this is starting to change in some categories. For example, suppose you’re a B2B software company. A site like http://www.trustradius.com/ which focuses on business software may signal a shift if your customers actually use it. If that’s the case, you need to promote an ongoing flow of authentic content from your users to make sure potential customers find reviews of your software that are relevant and current. In general, customers are likely to prefer objective reviews over things like case studies or white papers because they are perceived as more credible and give potential users a sense of what to expect. For some (especially large) customers things are not significantly different because they have always had the in-house expertise to assess absolute value, but today this type of knowledge is becoming accessible to more companies—even small companies. In addition, sites like LinkedIn or Glassdoor have also changed things for B2B marketers as they help potential customers know what is happening within companies: who work there, who used to work there, etc. Incidentally, the lines between B2B and B2C have been blurred. Routers are reviewed on Engadget and projectors used in business presentations are reviewed on Amazon or PC Magazine.

Posted on October 2, 2013November 28, 2013 by David Dalka — Leave a comment

Interview of Daniel Isenberg on the Potential To Launch Contrarian Business Ideas Successfully and His Top Entrepreneurship Book

Daniel Isenberg has likely written one of the most important books on entrepreneurship I’ve ever seen. It is not about pitch decks or pitching venture capitalists for funding. The book entitled, Worthless, Impossible and Stupid: How Contrarian Entrepreneurs Create and Capture Extraordinary Value, actually discusses something far more important, the stories of people who had contrarian ideas that most people thought would never work.

I really loved reading this book! Anyone would actually as it has rich, fresh, and obscure stories. The kind and wonderful folks at Harvard Business Review Press were kind enough to arrange an interview with Daniel Isenberg about the book. The capital letters are how he returned it and I present that as the interviewee answered exactly.

Do entrepreneurs have to be young or have an engineering degree?

Daniel Isenberg : OF COURSE NOT. NOT ONLY IS THIS EMPIRICALLY THE CASE, IT SHOWS THAT WE HAVE DEVELOPED VERY NARROW, AND I THINK UNHELPFUL STEREOTYPES OF ENTREPRENEURS. I HAVE ENGAGED WITH HUNDREDS OF ENTREPRENEURS IN MY 30 YEARS AS ENTREPRENEUR, VC, ANGEL, AND EDUCATOR AT HARVARD AND ELSEWHERE, AND IN DOZENS OF COUNTRIES. LET’S TAKE ISRAEL JUST AS ONE EXAMPLE: IT IS RIGHTLY FAMOUS FOR ITS HIGH TECH ENTREPRENEURSHIP. BUT SOME OF THE MOST SUCCESSFUL AND VALUABLE ENTREPRENEURIAL VENTURES THERE INCLUDE SODA STREAM (HOME CARBONATION SYSTEMS), TEVA (WORLD LEADER IN GENERIC DRUGS), AND ISCAR (WORL LEADING CUTTING TOOLS MAKER, ACQUIRED BY BUFFETT). THESE ARE FAR FROM OUR STEREOTYPICAL AMAZONS APPLES AND GOOGLES, EVEN THOUGH ISRAEL HAS THOSE AS WELL. SODA STREAM WAS SAVED FROM THE VERGE OF BANKRUPTCY AFTER THIRTY YEARS IN THE MARKET, AND WAS RAPIDLY EXPANDED INTO A $1 BILLION NASDAQ COMPANY. REPURPOSING OF EXISTING UNDERVALUED (“WORTHLESS”) ASSETS BY EXPERIENCED EXEUCTIVES IS AS LEGITMATE A PATH TO entrepreneurial EXTRAORDINARY VALUE CREATION AS STARTING A HIGH TECH COMPANY FROM SCRATCH.

Entrepreneurs don’t have to have an amazing new idea in an area of deep expertise?

Daniel Isenberg : THAT SURPRISED ME – WHEN I STEPPED BACK AND LOOKED AT THE DOZENS OF CASES I HAD WRITTEN, I SAW THAT NOT JUST ONE OR TWO STARTED WITHOUT EXPERTISE, BUT A LARGE NUMBER. WE SHOULD NOT MISINTERPRET THAT AS ADVOCATING IGNORANCE, BUT THAT EXPERTISE IS NOT A PREREQUISITE. OF COURSE, PRETTY SOON THE ENTREPRENEUR BETTER LEARN ALL THERE IS TO KNOW.

Almost all of the entrepreneurs in your book were not technical founders. I found that to be amazingly refreshing and more representative of reality. Why do you think our society choses to hyper-focus on a small subset of technology entrepreneurs and how can we change that dynamic?

Daniel Isenberg I WROTE WORTHLESS IMPOSSIBLE AND STUPID IN ORDER TO INFLUENCE THE ENTREPRENEURSHIP DIALOG, BROADEN IT, MAKE IT MORE REAL-LIFE. THE MEDIA ARE NATURALLY MORE ATTRACTED TO THE MORE SNAZZY AND VISIBLE EXAMPLES. (LET ME REMIND EVERYONE, THOUGH, THAT THE IPHONE IS NOT ENTREPRENEURSHIP BUT VERY SUCCESSFUL INCREMENTAL INNOVATION BY A LARGE ESTABLISHED CORPORATION.) I INVITE THE LEADING ENTREPRENEURIAL SUPPORT FOUNDATIONS TO HELP BROADEN THE DIALOG AS WELL BEYONE SOCIAL MEDIA, IT, YOUTH AND STARTUPS. IT WILL HELP US ALL TO DO SO.

So if everyone says an entrepreneurial idea is great, you state that you should likely run? Please explain.

Daniel Isenberg: IF YOU HEAR THAT A BUSINESS IDEA IS GREAT, YOU CAN ASSUME THAT (IN MOST CASES) DOZENS IF NOT HUNDREDS OF PEOPLE AROUND THE WORLD HAVE THE SAME OR A BETTER IDEA. EXTRAORDINARY VALUE IS CREATED BY IGNORNING MARKET DEMAND IN MANY CASES, ANTICIPATING IT, OR EVEN CREATING IT. THAT IS ONE OF THE FALLACIES OF EQUITY CROWDFUNDING: IF EVERYONE RUSHES TO INVEST IN SOMETHING, THEN IT IS LIKELY NOT A GOOD INVESTMENT. NOT DEFINITELY, BUT AS LIKELY AS NOT.

In one of the best sentences of the book you stated, “It is the job of the entrepreneur to sniff out and realize opportunity that is overlooked, undervalued, or even berated by others.” That is powerful stuff. How did you develop that definition over the years?

Daniel Isenberg : FROM DEEP IMMERSION IN THE FIELD. ANYONE WHO IS INVESTING IN OR EVEN STUDYING ENTREPRENEURS WITH HIS OR HER EYES WIDE OPEN, CANNOT HELP BUT LEARN OVER TIME THAT THE GREAT STUFF, THE GREAT ACHIEVEMENTS, ARE IN THE SURPRISES. ENTREPRENEURSHIP ALMOST ALWAYS SURPRISES THE MARKET. THAT MEANS THAT THE MARKET EXPECTS SOMETHING ELSE. I HAVE BEEN IN THE FIELD FOR OVER 30 YEARS NOW, AND I HAVE BEEN WRONG SO MANY TIMES IN BOTH DIRECTIONS. IT IS SOBERING. AS MARC ANDREESEN SAID A FEW MONTHS AGO,” It’s in the nature of venture capital and start-up investing that there are always stupid investments. The problem is that you never know which ones are which. I get these things as wrong as anybody else.”

IT HAS GIVEN ME A LOT OF FOOD FOR THOUGHT TO REALIZE THAT THE BEST OF THE BEST GET IT WRONG A LOT OF THE TIME. THAT SAYS SOMETHING ABOUT ENTREPRENEURSHIP ITSELF. AS SCHUMPETER WROTE, THERE IS SOMETHING INTRINSICALLY UNPREDICTABLE ABOUT ECONOMC GROWTH – HE WAS ALSO REFERRING TO ENTREPRENEURSHIP.

How should an entrepreneur that has an idea that they know to be valid and they are berated by society overcome that negativity? Who and in what order do they need to convince people beyond themselves?

Daniel Isenberg : THERE IS NO RECIPE FOR THIS. IF THERE WERE, IT WOULD BE PRICELESS. I THINK CONTINUALLY BLENDING FORWARD MOTION WITH BACKWARD REFLECTION. YOU HAVE TO MIX THE WATER OF INCREDIBLE OPTIMISM AND THE ABILITY TO ENVISION THE INVISIBLE, WITH THE OIL OF HARD HEADED, PASSIONLESS OBJECTIVITY. AND COMBINE THAT WITH AMAZING SELLING SKILLS – I HAVE SEEN EXCELLENT SALES PEOPLE IN ACTION, AND THEY CAN MAKE MARKETS HAPPEN THROUGH SKILL. IN MANY CASES, THERE IS A THIN LINE BETWEEN GREAT SUCCESS AT SELLING A PRODUCT, AND ABJECT FAILURE, AND IT OFTEN HAS LITTLE TO DO WITH THE PRODUCT OR SERVICE ITSELF.

In your view, what are the differences between an entrepreneurship launching a product versus a service?

Daniel Isenberg : I DON’T THINK THERE ARE GENERIC DIFFERENCES. THE DIFFERENCE BETWEEN PRODUCT AND SERVICE COMPANIES ARE BLURRED IN ANY EVENT: DOES LEXUS SELL AN AMAZING CAR, OR AMAZING SERVICE? I BOUGHT MY LEXUS BECAUSE OF THE AMAZING SERVICE.

How should David go up against Goliath with tens of thousands of employees in a service situation have a chance of succeeding?

Daniel Isenberg: IT IS NOT ALWAYS JUST GOING AGAINST GOLIATH, ALTHOUGH THAT IS CERTAINLY POSSILE AND HAPPENS A LOT. STUDIO MODERNA BUILT A SERVICE COMPANY IN EASTERN EUROPE IN THE FACE OF THE INABILITY HUGE COMPETITORS WITH EXPERIENCE AND MONEY TO DO THE SAME, AND THEY DERIDED HIM ALONG THE WAY. WHO’S SMILING NOW?

BUT THERE ARE ALSO SMART PARTNERING STRATEGIES. IT WOULD HAVE BEEN INTERESTING FOR DAVID TO HAVE CONSIDERED A STRATEGIC ALLIANCE.

One of my favorite stories in the book is Sea To Table. In the 1800’s, the refrigerated boxcar eventually changed the meat slaughter and delivery process. Why do you think it took almost 150 years for someone else to do something similar with fish?

Daniel Isenberg : I DON’T KNOW THE ANSWER TO THAT. IN RETROSPECT, MOST SUCCESSFUL THINGS APPEAR MUCH MORE DOABLE AND OBVIOUS THAN IN PROSPECT. BUT CERTAINLY MODERN INFRASTRUCTURE AND TECHNOLOGY AND LOGISTICS GREATLY FACILITATED SEA2TABLE INVENTING A COMPLETELY NEW MARKET.

I regularly attend the Joe Levy Group entrepreneurial meetings, I’m amazed by the patterns one sees in founders that are not successful and the ones that make it. What patterns have you seen and how can those patterns be reverse engineered into practical advice?

Daniel Isenberg : IF I KNEW THE ANSWER TO THAT, I WOULD INVEST IN ALL THE FUTURE SUCCESSES AND AVOID THE FUTURE FAILURES! WE HAVE TO BE A LITTLE CAREFUL OF HINDSIGHT BIAS AND RESPECT MARC ANDRESSESEN AND OTHERS’ WORDS THAT EVEN THE BEST DO ‘STUPID’ THINGS. OF COURSE, WITH EXPERIENCE, INVESTORS AND ENTREPRENEURS MAKE “BETTER AND BETTER” MISTAKES, SO THAT YOU MAKE MISTAKES WHILE YOU ARE SUCCEEDING, NOT WHILE YOU ARE FAILING.

Posted on June 13, 2013 by David Dalka — Leave a comment

Most Interesting Things I Saw at Internet Retailer Conference & Expo 2013 (IRCE2013)

IRCE 2013 again had a jammed packed expo hall full of the best vendors in ecommerce.

One of the first companies I encountered was Riskified. Riskified was one of the most unique new offerings that improves customer experience and business performance while reducing merchant risk that I saw at IRCE2013. Eido Gal is passionate about his organization – “Riskified reviews, approves & guarantees transactions you would otherwise decline”

Jai Rawat was one of the most visible people at #IRCE2013 this year – he reached out to me prior to the show, he was at every evening event I attended and I had the pleasure of watching him address several prospect question sessions. Jai has amazing energy and is an outstanding founder who puts the business issues up front. A rare breed. Look forward to learning more about their offerings – “ShopSocially embeds rich social experiences on websites to improve discovery, conversion, engagement and brand amplification.”

There were a few other early phase organizations that I liked that did not want to do an interview because their value propositions were still under development.

The Singapore Post is delivering significant ecommerce services of all types and is a profitable organization. The conversations I had with these folks were fascinating as they told me about innovations unimaginable in the USA. I hope to visit their facility someday in the future to fully document their unique story.

In terms of companies that are household names doing cool new stuff:
FedEx – Fed Ed has a new service called Fedex Delivery Manager that allows you to control your packages destiny and special delivery instructions. I really like this concept as I’ve always felt the consumer was the true customer of delivery services.

I also loved the the vibe I saw at Digital River and Netsuite booths, both companies have knowledgeable people seeking to do the right thing for their customers. Many other great conversations were had, but these stand out.

What did you see and like at IRCE2013?

Posted on May 15, 2013 by David Dalka — Leave a comment

Ted Matthews Interview : The Real Meaning of ‘Brand’ is Outstanding Culture

At the back of John Warrillow’s Built to Sell, I saw a book mentioned as a must read. That book is Brand : It ain’t the logo*. The asterisk stands for “It’s what people think of you.”

This perspective matches and aligns with my own views quite closely. After a short chat with Ted Matthews via email, a copy of the book arrived and I was reading away.

Why is branding not a creative logo? What is it really?

Branding is the managed care and nurturing of the culture of an organization- building a brand must start, take hold, connect first on the inside, with internal stakeholders- employees and partners and then through osmosis it connects to external stakeholders- customers and critically important future employees.

The logo leads in the visual identity of an organization- important because humans are very visual beings, as Malcolm Gladwell popularized, we recognize images in a ‘blink’ vs recognizing spoken or typeset names. And in this hyper-messaging world nanosecond recognition is the Brander’s key objective.

What are the three primary tools of branding? Why are these overlooked?

Everybody who comes out of business school, knows there are strictly followed tools and rules for the financial discipline- the value protector – managed by the ‘important’ financial department. While there have never been tools or rules, or never a department, for managing the culture/brand discipline- the greatest value creator! There are now…
Tool #1 Be remark-able; have a product or service so good, so unique that people talk about it, publicizing and recommending for you. Jeff Bezos has said “Advertising is the penalty you pay for having an unremarkable product.” Honda has a new feature in their van for the young families who still buy vans- a vacuum for all the crumbs and crushed Cheerios! There, I’ve ‘remarked’ for Honda, no advertising required.
Tool #2 Own a position; a Brand must have a unique and ownable point of difference. If you are not different then you are the same, and same dies away. Volvo owns ‘safety’. Staples owns ‘easy’.
Tool #3 Build you Brand with experiences; Surround your offering with positive experiences, people never forget how you make them feel! AltlasCare, a home heating and air conditioning provider, trains their service people on every detail of experience- like where to stand and how to address people at their front door.

So if it is true that culture is the brand, why do so many companies give this so little attention while giving so much attention to creative services?

Hey, the creative part is fun, involves new ideas, working with crazy fun people, maybe a bit of Hollywood- shooting commercials, seeing your ‘creativity’ on TV. But as for culture, it’s the behind-the-scenes stuff, relationship-stuff, stuff never taught in business schools.
Founding entrepreneurs create culture instinctively- usually around their own personalities, character and their vision for something better. But as organizations grow, they outgrow their founder’s skill set or interest. BlackBerry is an example, two guys change the way the whole world communicates and then loose interest, ‘cause it’s (vision) done- they had moved onto other things that now challenge them.
This is when firms get turned over to professional managers who know how to run businesses at scale BUT, this gets back to our systemic problem, these biz grads never learned about culture nurturing or anything about brand beyond- it’s marketing’s function. Full stop!

You state that if the culture is right, everything falls into place. How should corporations deal with the fact that most of them do not have the culture right and likely not even be able to know it?

Every organization needs a surrogate for the entrepreneur. First, in this broader definition of brand- what people think of you – the CEO needs to assume the role of CBO- chief brand officer. They need to capture their guiding principles in a brand foundation- the carved-in-stone, 7-commandments that guide the organization in everything they say and do. Their core purpose- why they exist, their vision- where they are going and how they will know when they arrive. The mission- what they have to do consistently EVERY day to get there. Their values- who they are as people, their principles. Their position- as I said, how they are different. And their character- their image, their voice. Then the CBO needs to relentlessly remind people of these guiding principles and that everyone has a role in building their brand- consistency is the #1 rule of branding.

You mention an interesting quote at the start of the chapter on “Evolution, not Revolution” by Charles Kettering: “We have a lot of people revolutionizing the world because they’ve never had to present a working model.” Please discuss what that quote means to you.

Kettering was an interesting guy- inventor, businessman, a serial entrepreneur with over 180 patents. In the mid 1800’s he invented the electric starter for gas engines- started Delco- part of GM today.
For me, his quote is about all the people who think innovation and change are easy. While discounting the contribution of our ‘wacky’ entrepreneurs, impatient investors push and merge organizations destroying what made them successful in the first place- my own 30-year, 80-person firm, was deconstructed in 28 months after a merger- another unmanaged clash of cultures. Change must happen, but it must evolve, retaining the brand equity- what an organization is known for. Look, in the news recently- J C Penny is now apologizing for the rush to change by their last board appointed CEO. GAP stirred up a hornet’s nest among their stakeholders with a wholesale identity change that was also reversed. A company does not ‘own’ its brand, it’s owned by the stakeholders who love it.

What events typically precede an organization being ready for change in their culture and why is this so hard to recognize?

It becomes increasingly difficult to retain the best people and impossible to attract new stars.
This flesh-eating disease is hard to recognize, because it sneaks up slowly and is only diagnosed and reported by an under-respected department in North American organizations – HR.
And this is the root of the most critical issue of our day.
Fouled by our leaders’ misunderstanding of brand, their default positioning is ‘cheap’. Then, to ‘sell-for-cheap’ we have given away our former well-paying production jobs to Asia and now, to employ our neighbors so they CAN buy from us, we need to invent all new jobs and do it with a dwindling workforce. 70 million boomers readying to retire, only 30 million young people (not all of them stars) available to replace them.
This startling truth has been disguised by the years of recession- firms watching costs so not hiring, boomers hanging on to jobs in fear their investments won’t support them, young folks (therefore), not seeing the openings and at the same time being a generation that wants a job with meaning, a job with a organization with a core purpose.

It is time for America (and the world) to understand brand, to understand it’s a compelling culture they need.

Again that book is Brand : It ain’t the logo*. The asterisk stands for “It’s what people think of you.”

Posted on February 27, 2013February 27, 2013 by David Dalka — Leave a comment

Brett King Discusses Bank 3.0 – Why Banking is No Longer Somewhere You Go, But Something You Do…

I was sent a copy of Brett King’s new book Bank 3.0 a few weeks back. Good reading on timely topics. Brett was nice enough to share some thoughts with me in an interview.

So what is new in Bank 3.0?

Brett King: Bank 2.0 was really about the challenges of shifting from branch-centric to multi-channel customer engagement. Bank 3.0 is all about the realization that digital is the future of the brand and that branch will become the alternative for most customers in just the next 3 years.

You do a lot of speaking to share your message, how did all of that get started?

Brett King: After I wrote Bank 2.0 I worked hard at getting invitations to conferences to get my message out. By the end of 2010 I was getting 2-3 requests a week, so I had to get some professional assistance from a speaker management firm to help me manage all the requests coming in. In fact, the reason I wrote Bank 2.0 and the subsequent books was really to get the dialogue going in the industry around the changes that were coming down the pipe, and to shake up the traditionalists who reacted with skepticism that things like mobile and social media were going to have a long-term effect on the business.

Now that we’re in launch mode at Moven, I can only do a couple of gigs each month, but I guess because of the message and my social media presence, etc that I still get quite a bit of visibility. So the original goal I had of driving the conversation across the industry is still something I hold near and dear.

What is the biggest obstacle to innovation in financial institutions today?

Brett King: Inertia. Essentially the fact that we’ve got so many hardwired processes and legacy systems that have been built into the bank ecosystem.

As an industry we’re suffering from the fact that there was always a paper application form, or someone in a branch to collect the paperwork and that revenue recognition is still biased towards these mechanisms. That ship is hard to turn though, so when new tech like tablets and mobile emerge, rather than open up these channels for revenue, we try and limit them to transactional capabilities.

As our customers’behavior is changing in respect to typical bank interactions, they’re not visiting branches as much, and therefore metrics around revenue, cross-sell, up-sell, etc are heading south, but we’re protecting the old processes on the assumption that they are less risky. However, in most cases the old processes are significantly riskier than the experiences we can build using new technologies today. Case in point is the simple bank statement. How much of the identity theft that occurs today is based on simply compromising a bank statement?

I showed a friend of mine the book, he asked, what about those who say payments have already always been everywhere without a bank with cash?

Brett King: That’s true, of course, but the difference is the fact that this is the first time in history that those payments have become purely digital and you don’t need a physical artifact (check, cash, card) to move money around the system (e.g. PayPal). The fact that millions of Americans and Chinese now use a pre-paid debit card as their primary day-to-day bank account, or that 50% of the Kenyan population save money on their mobile phone is a great illustration of the fact that payment modality is dramatically effecting the nature of banking.

Which is a bigger opportunity for traditional banks, transforming legacy branch structures and technology or lack of truly customer focused bank culture?

Brett King: The branch is not going to be the primary revenue channel in a few years, just a supporting service channel, so investing in branch is a huge mistake at this point.

I like that you defined social media as having started in 1978, I’ve talked previously about how the things we did at BlackRock during the 1990’s were a far more radical change in customer service than most financial institutions are doing today. Why do people have trouble understanding this is not new?

Brett King: I think if people aren’t putting themselves in the equation or dialog, then they see it as foreign. How many people said they’d never own a ‘cell’ phone, but do. How many people said they’d never use email or get an internet connection and do. How many are saying the same about Facebook today. We see the same trend over and over when new technologies like this first emerge. The problem is that these technologies like SoMe are impacting business far quicker than ever before.

In your opinion, why aren’t the boards of directors of financial institutions putting in place transformational leaders who understand how to build a winning culture in the CEO and CMO chairs?

Brett King: I think it is a generational shift that just may take time at many institutions. In fact, one of the most common reactions I get is the old guard expressing how glad they are that they are retiring soon and can leave these problems to someone else to solve.

What’s going on at your startup Movenbank?

Brett King: At Moven, formerly Movenbank, we’ve set out to transform banking and drag it into the mobile age. Our experience seamlessly brings life and money together for the mobile and social generation, helping them perform better at both.

We’re currently ramping up for the launch of our private beta release. Our launch will feature our Spending Assistant, a mobile feature that gives customers real-time feedback on their purchases directly to their smartphones. It gives them the context and control they need to make smarter spending decisions.

Moven is also proud to announce that we were recently awarded Best in Show at FinovateEurope.

Anything else you’d like to say right now?

Brett King: Banking might just end up being a really fun and dynamic industry to be in over the next few years! However, don’t imagine for one second that you can do things the way you have in the past. It’s all going to change.