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Posted Jan. 22, 2008 2:00 a.m. by 800-ceo-read
We've all heard the success stories of the small, short-haul, Texas airline that grew out of a loophole in federal legislation to become one of the most profitable airlines in history. James Parker, the former CEO and chairman who led Southwest Airlines during the tumultuous times of 2001 through 2004, is the author of Do the Right Thing. He shares the lessons he learned from the people he worked with during his 25 years of service to Southwest.
Parker tells us that "[t]he overriding lesson I learned doesn't involve a lot of management guru buzzwords and acronyms. It is the simplest of principles, which we learned from childhood: When in doubt, just do the right thing." For Southwest, that means being dedicated to people. Both principles are embodied and reinforced in everything the company does; employees and customers respond, in kind, by showing their loyalty. For example, on 9/11, the pilots and crewmembers took it upon themselves to make sure each passenger was safe; customers responded by offering to send money or forego their refunds.
Parker tells the story of a speaking engagement in Boston. Hundreds of people packed a hotel ballroom eager to hear more about Southwest. At the end of Parker's speech, one person asked for a Southwest employee to explain why they loved Southwest. The employee "stood up and said without hesitation, 'I think I love working there because it's a company that loves you back.'"
Southwest's focus on people has made a world of difference; it shows in its income statement, in its customer service and in its employees' satisfaction. Do the Right Thing does not unveil revolutionary insights into the business world nor give you a detailed strategy to follow. What Parker does well is remind us of the important lessons that he learned along the way. It's easy to become so immersed in the present and forget the simple lessons of business: appreciate your employees, treat your customers well and have fun. Sometimes we all need a little encouragement and a reminder to do the right thing.
Posted Jan. 21, 2008 2:12 a.m. by 800-ceo-read
When Gary Hirshberg started in business, he looked at the standard definition of efficiency in our economy and saw it as ultimately unsustainable. In Stirring It Up, he gives us a new standard to gauge efficiency that is both profitable and sustainable, inspired by his 25 years worth of experience applying this standard at Stonyfield Farm.
Hirshberg concludes that we have the power to quicken this process as consumers--that if we show the demand for environmentally sound products, more industries will shift to making more products sustainable. He also discusses the best environmental practices companies are implementing--from newer companies like his own and Patagonia that built these principles into their original mission, to behemoths like GE that have had to change with the times.
To come up with sustainable solutions for his own company, Hirshberg has enacted some practices at Stonyfield that most business people would think are ridiculous and unsound--pay substantially more for materials than competitors, never advertise products, encourage more government oversight of his industry, and release reports on how much it pollutes--but he goes on to explain why each practice has reaped huge benefits and helped the company's growth. Paying twice as much as competitors for the milk they use to make yogurt, for instance, helps strengthen the small organic farmers who produce it, ensuring Stonyfield will continue to have access to the quality ingredients their customers expect. Instead of needing big budgets for advertising, the quality of the product and their loyal customers have become the best advertising one can imagine. Conversely, Stonyfield's main competitor, Yoplait, spends much less on producing its product, but spends large sums advertising it. These differences have created a situation where Stonyfield loses in the gross margin battle, but actually wins in net profits.
Stirring It Up is filled with examples of how thinking about your business's impact on the earth is not only responsible, but profitable. We're used to viewing big industries as being part the problem. Hirshberg suggests that business, even the smallest, has to be the solution, and his book can be used as a guide for the best ways to bring about that change in mission and behavior.
Posted Jan. 18, 2008 4:50 a.m. by 800-ceo-read
In Meatball Sundae, marketing guru Seth Godin explains that not all products are created equal in terms of marketing approach. In the old days of marketing, consumers really had no choice but to listen to whatever marketers, sales clerks, or the media ads wanted them to hear. And for companies trying to promote a product, there were only a handful of media tactics to control. But things have changed, and the old target audience can fast-forward through commercials and block ads with TiVo, DVRs, and SPAM blockers. So, companies must turn to other media channels like YouTube, MySpace, Google, blogs and blog trackers. Consumers have adapted to hearing those messages from this new media and, Godin assures, there are plenty of consumers to target. But, he cautions against doing a new media patch job on any old product. Certainly we've all done it, tried to pass off something as different from what it is. Maybe it's growing a beard to cover a blemish or wearing black because it's slimming. But in the marketing world, that's like making a meatball sundae.
Godin refers to any kind of base company, product and/or service as meatballs. The new marketing tools and tactics--YouTube, Google, blogs--are the whipped cream with cherries on top that these companies think they should be using in this time of new marketing. Godin offers the Proctor and Gamble line of cosmetics, Reflect, as an example of how a meatball can get drowned in whipped cream. Six years of being in the red, P&G stopped production because their demographic did not want cosmetics from a small appliance company. Godin urges companies to be smart, and either find the ice-cream for their toppings, or just stick to meatballs without the sweets. Marketers can use Godin's 14 Marketing Trends, which include outsourcing, authentic product stories, the long tail, and the triumph of the big idea, among others.
Meatball Sundae is a wake-up call for companies to get rid of old ideas. I was captivated by the examples Godin uses to explain how the trends work, why the new marketing tactics don't work for many companies and how they can use this knowledge to grow and change along with the trends. This is a must-read for anyone who thinks that, by default, they have to use new media to sell their products.
