Elements of Trust

Murray at davosFortune magazine editor Alan Murray hosted a couple of dozen CEOs at dinner last Friday. They were all at the World Economic Forum in Davos, Switzerland, and apparently in a philosophical mood because the topic for discussion was "what big business can do to rebuild its trust with a global public that has clearly grown skeptical."

The topic is not too surprising: it's one of Murray's favorite questions. But the first suggestion to come from the discussion is promising.

As Murray reported it, his dinner companions quickly agreed on the importance of "putting purpose as well as profit at the center of a company's strategy."

That's promising on two scores. First, purpose is by definition long-term, and if this means CEOs want to take a longer view than next quarter's financial results, we'll all be better off. 

But even more importantly, it signals CEOs understand that "purpose," defined as what companies and brands actually mean to their stakeholders, is an essential element of trust.

But purpose or meaning is only one leg of the stool. The other two are competence and affinity.  And all three are defined, not by companies, but by their publics.


Trust starts as a judgment of someone’s competence to accomplish a specific task. Trust is context specific. I would trust my cardiologist to administer my electrocardiogram and to recommend changes to my lifestyle as a result.  But I’m not sure I’d trust him to fix my car.

Competence is largely a rational judgment, but it has an emotional undertone. It not only refers to people’s judgment of someone's capacity to accomplish a task, but also of the sincerity of their willingness to do so.  I know my doctor is competent – it says so right on his Board Certification. But my trust in him is also based on the judgment that he sincerely wants to keep me healthy. 

And that’s where trust leaves the realm of the purely rational. 


Affinity is more than familiarity, it’s likability. It is sharing something with a brand at a deep psychological level. In some cases, it’s a feeling of security; in others, the bond of common values; in still others, a strong sense of identification.

Some brands have been around so long they have a strong emotional connection with consumers right out of the chute. How people feel about Coca-Cola, for example, can actually be seen in a functional magnetic resonance machine. Newer brands have to work hard to make those emotional connections. For example, everything from Red Bull's labeling and packaging to its advertising and sponsorships associate it with young people's unconscious appetite for rebellious fun.  

Affinity, like competence, is context-specific. And the context of both depends on a brand's meaning.


Meaning is purpose, but purpose as others see it, not as a brand defines it. What role do people think a brand plays in their lives? This may be the most consequential question a brand can address. Harvard Business School professor Ted Levitt famously said, “People don’t want to buy a quarter-inch drill. They want to buy a quarter-inch hole.”  

A former student and disciple, Clayton Christensen expanded this insight into a jobs-to-be-done framework. He suggested the traditional ways of segmenting markets by demographics, geography, psycho-analytics, etc. misses the point. People don’t base their purchase decisions on factors like those. On the contrary, they hire products to do a job they want to accomplish.

That job can be functional, like a quarter-inch hole. Or it might be emotional, social, or even aspirational such as appearing to others as a professional wood worker. That's the brand's real purpose, its meaning.

Public relations and marketing are all about creating meaning. Finding a product’s most meaningful purpose is an essential step. Procter & Gamble, for example, found a way to give everything from Pampers diapers to Pringle’s potato chips salient meaning. Pampers are not just a container for solid and fluid waste. They’re an article of clothing that plays an important role in baby’s development, from her first days in the hospital nursery to her last day of toilet training. And Pringle’s might be of dubious potato lineage, but customers have no question it’s slice after slice of unexpected joy.

Trust elements

Meaning, competency, and affinity are the elements of trust. But they only work when they are in alignment. And that alignment begins with definition of higher purpose, as portrayed in the drawing above.

For a fuller description of the Elements of Trust, see a paper I wrote for the Journal of Business StrategyTowards A Model Of Trust.  




Where's the pain?

Trusted-brand-370x229A friend commented on my VW post (not here, but over at LinkedIn):

"While VW certainly has a big internal issue and culture to fix," he wrote, "I am predicting that the consumer sentiment will not be harsh or long lasting. After all, GM's culture of secrecy and stupidity (re key systems) resulted in many deaths -- and no PR backlash that appears to have hurt revenue. Same with the airbag fiasco and Honda and Toyota."

Sales figures seem to confirm his perspective: in October, Chevrolet had its best sales in 11 years and GM overall posted its seventh consecutive increase in retail market share. Toyota's October sales also increased 13% over 2014. For its part, Honda broke all October sales records with a 9% increase. Even Volkswagen, which couldn't sell diesel models, eked out a 0.2% sales gain, thanks to hefty discounts.

Where, you might ask, is the pain?

Could be it's masked by the combination of lower fuel costs driving truck and SUV sales, heavy promotions and cheap financing getting people into showrooms, and an improving economy making customers feel better about trading up from the clunker in their driveway.

As Automotive News put it: "The final months of 2015 are expected to see widespread incentives and promotions, especially among luxury brands, and on cars, where consumer demand has been weakest. Buick, for example, is offering $6,000 off select 2015 Regal models that have been on dealer lots the longest."

By one calculation, incentives increased 14% to $3104 per vehicle compared to 2014.  In other words, the industry is riding on pricing.

I worked in an industry that let pricing dominate people's purchase decisions. It was not pretty. The alternative, of course, is to sell on brand values. Another word for "brand" is "trust."

VW, GM, Toyota, and Honda are on the equivalent of opiates to mask the pain of of losing customer trust. They all need to work hard to regain it.







Trader Joe's Fearless Flyer

Fear;ess FlyerA great example of branded content landed in my dead tree mailbox the other day. Trader Joe's Fearless Flyer is published every now and then by the grocery chain of the same name. 

The Fearless Flyer (get it?) looks like it was put together by stock boys with access to Victorian era clip art and a word processor. 

My copy ("Always free and worth every penny") ran to 24 magazine-sized pages of very cheap-looking paper. ("Printed on 100% recycled paper with soy-based inks. For mental consumption only," it says in tiny type along the spine.) 

The soy ink apparently comes in three biodegradable colors because the flyer is chock-a-block with stories printed in red, blue, or black. Some stories are circled with a think line of the same color. "Gluten Free Mac & Cheese" warranted highlighting; "Gluten Free Greeting Cards" didn't.

The chain itself describes the Flyer as a cross between Mad magazine and Consumer Reports. But it's really much more.

Flyer issueIt's a semi-private communication with the chain's cult-like followers. And it's just what they would expect. 

Not only does it announce that it's selling Organic Tomato Basil Sauce for "Just $2.29!" as any grocery flier would, it describes just how it's made -- "simmered in small batches to bring out the bright flavors of the fresh ingredients" exclusively for Trader Joe's.

There are also short articles on subjects like Poutine, "a mess of good things" from rural Quebec, 4 Kouigns Amann, "a classic French pastry" that is "the darling of the food scene right now," Pa Jeon, scallion pancakes made especially for the chain in South Korea, Quince Paste, made for the chain in New Zealand, and Barramundi Fillets, a mild white fish native to Australia, but grown just for Trader Joe's "in low- density farms, on sustainable feed, with the utmost consideration given to cleanliness and sustainability."

The flyer also advises on the history and correct pronunciation of its "carefully cut camembert (that's cam-em-BEAR)" and the difference between a serum and a lotion or a cream ("Boy, are we glad you asked that question.).

Add National Geographic to that mix of analog publications. 

Plus, on page 13, there's a pre-printed shopping list of all 87 items mentioned in the flyer, organized by department and cued to the page on which they're described. Ever helpful, if quirky, the editors also provide space on the list for "Things You Don't Need."

It all works for some reason. (There's also an electronic edition, with the same steampunk graphics, but it doesn't have the same tactile, low-rent quality as the print version.)

The Joe in Trader Joe's hasn't been around since he sold the business to a German retailer back in 1979. But all the store's "crew members" still wears Hawaiian shirts just like he did, and the in-store signage still has the vibe of a South Seas trading post.

It's a company that knows what it is and what it stands for. And it communicates that character by exercising it, not by advertising. It hires extroverted people to staff the stores (want to wear a Hawaiian shirt year-round?), stocks a fraction of the groceries the big chains do, but compensates by offering products unavailable anywhere else. About 80% of its goods are private labled.

In fact, a lot of it sounds like it came straight out of the cargo hold of some world weary vessel that just washed up on the beach.

All of which gets to the essence of effective branded content -- it reflects a brand's character and higher purpose, the fundamental reason it's in business and the unique approach it takes to fulfilling that purpose. It's a customer service, not an ad.

Higher purpose doesn't have to be high-falutin', but it does have to be deeply rooted in customers' needs, aspirations, and values.

Trader Joe's customers care about low prices, organic and sustainable products that are sometimes unusual and almost always unique (e.g., miso ginger broth from Japan, botantical foaming hand soap, and organic coconut sugar). 

That's what Trader Joe's is all about, from its inventories to its pricing. And even its occasional Fearless Flyer.


Content creation at its best

Trust-Around-the-World-300x140For an excellent example of brand journalism, look no further than the annual "Edelman Trust Barometer," released just in time for the World Economic Forum meeting in Davos. 

The 2014 report shows the largest ever gap between trust in business and government since the study began in 2001.

It will undoubtedly garner more media coverage than most PR initiatives. And despite all the other studies and surveys in the field, it will once again emerge as the go-to source of macro data for journalists and academics writing about reputational issues.

It's the perfect example of intelligent content creation:

  • It's proprietary. Edelman has owned these industry and sector specific measures of trust since 2001. The earliest surveys interviewed a few hundred "informed publics" in a handful of big countries and were of dubious import. Later surveys have had 33,000 participants in 27 countries.
  • It's newsworthy. The results always come out just before the Davos shindig so journalists have a natural news hook. A Fox News story, for example, led with this: "Ahead of the gathering of political and business leaders in the Swiss resort of Davos, the public relations firm Edelman found that only 44 percent of university-educated people participating in the survey trusted government, down 4 percentage points from the previous year." 2014-Edelman-Trust-Barometer-Infographic
  • It's well produced. Far from the dry statistical reports lying around your officein unopened binders , the Edelman report is well-written and designed to be easily accessible through white papers, slide shows, and snappy infographics. 
  • It's at the intersection of the agency's competencies and its clients' needs. Trust is the holy grail of any PR effort. The Trust Barometer is the manifestation of Edelman's capabilities. Plus, all those media mentions tend to serve as a de facto endorsement of its unique know-how. It makes the head of every Edelman office an "expert" on the nature of trust in his or her country.
  • It's relevant. Each year's survey explores issues of interest to senior clients in the public and private sector. The 2014 survey, for example, probed public attitudes toward regulation of business. "By a 3 to 1 margin, informed publics called for increased regulation of financial services, energy, and food and beverage industries," the report notes.
  • It has legs. Edelman executives will give speeches based on the survey  for the whole year. It harvested 16 "attributes" of trust from the survey results and has developed a system for applying them to individual clients in report cards and prescriptions for improvement.  


Three-dimensional thinking

EscherWe live in a three-dimensional world (four if you count time), yet much of our thinking is two-dimensional. That's partly because so many consultants use two-by-two matrices to show relationships between different factors.

I've gotten into the act myself over the years. Recently, I suggested that trust is a function of rational and emotional factors, most specifically people's feelings of affinity and judgments of competence.

Drivers of Trust.011

I stand by that theory but it occurs to me that the context within which this happens matters enough to warrant the addition of a third dimension.

Trust remains theoretical until it meets the job that people want done. That job can be functional, emotional, or social. Every job has meaning, but some have higher significance to people than others. For example, for some people, a drink that contributes to their sense of identity has higher meaning than one that simply quenches their thirst. 

Meaning and trustA brand's higher purpose occupies the quadrant of a three-dimensional model where its recognized competencies are applied to a meaningful job people really care about. 

Market leaders have figured out how they can make a difference in people's lives. It is their higher purpose -- the reason they're in business, beyond making money. 

Higher purpose doesn't have to be high-minded, but it does have to be deeply rooted in an understanding of people's needs, values, and aspirations within a company's areas of competency.

Determining a brand's higher purpose is not a job for the company wordsmiths. A brand's higher purpose defines its very business strategy. It needs to permeate every function, system, and operation.

But the organization most associated with managing stakeholder relationships and articulating the company's values is often best positioned to help lead such a definitional effort, integrating different perspectives across the C-Suite. And helping to ensure that the brand's higher purpose reflects that fourth dimension -- time -- as people's needs, values, and aspirations change. 




TrustEveryone knows that relationships are built on trust. And trust has never been lower for businesses, government, and most institutions.

But there are a lot of different theories about the nature of trust -- what it is exactly, what it's based on, how it's lost, and how to win it back.

Based on the reading and research I've been doing over the last few years, I've begun sketching out a model of the drivers of trust. It's in the typical 2 by 2 matrix that consultants seem to love, but I think it captures some important concepts.

Basically, I start from the not terribly original idea that trust has both rational and emotional components.

Let's call the emotional component "affinity" for now. What I mean by affinity is someone's feeling that they like a brand, have something in common with it, feel warmly towards it.

I call the rational component "competency" and it is someone's assessment of a brand's capabilities along dimensions that are important to them.

Since it's a 2 by 2 matrix, we can speculate about the typical response to different combinations of affinity and competence, as illustrated in this chart.

Drivers of Trust.011

If a brand is thought to be highly competent but to have low affinity, the typical response is likely to be "wary respect." That's probably how a lot of people feel about many investment banks these days.

If a brand is low on both affinity and competency, the likely response is "distrust." That's probably how most conservative Republicans feel about President Obama.

If a brand is high on affinity but low on competency, the probable response is "disappointment." That's probably how most liberal Democrats feel about Obamacare right now.

And if a brand is high on both affinity and competency, the likely response is "trust." I hesitate to nominate any brand for that hallowed position, but that's probably the way most Catholics feel about Pope Francis at the moment, despite what they may think about the church he heads.

Looking at trust through this model suggests what steps a brand should take when it moves from one quadrant to another among a significant segment of publics. But I'd welcome reactions to this still-evolving model.

Better smart than right

Tesla-model-s-front-three-quarter-11Elon Musk is a smart guy.

He can do math. And by his count, despite the current brouhaha, his electric car is safer than the typical gasoline-engine car.

His math: a gasoline car goes up in flames for every 20 million miles driven.  But so far his Tesla Model S cars have had only one fire per 100 million miles. And one of those fires happened after a drunk driver jumped the curb, took out several feet of concrete wall, and then hit a tree. Any car would have burst into flame after that. (No one has been hurt in any of the fires.)

Nevertheless, after initially trying to defend his electric cars with data, Musk is taking a smarter approach:

  • He expanded the car's warranty to cover all fires (even those caused by drivers).
  • He rolled out an over-the-air update to the air suspension to give the car greater ground clearance at highway speeds, reducing the chances of underbody impact damage. A January update will give drivers even greater control over ground clearance.
  • And he's invited the National Highway Traffic Safety Administration to conduct a full investigation into the fires, pledging to make any changes they recommend to improve fire safety both in new cars and as a free retrofit to all existing cars.

As I said, he's a smart guy. He understands that his customers' trust is a product of both logic and emotion. He can address people's logical cognitive processes with data, but as Daniel Kahneman and others have noted, that part of our brain is slow, costly, and lazy. 

The faster, cheaper, and far more compelling part of our brain doesn't respond to facts and figures. It runs on memories, associations, and feelings. It's subject to all kinds of illusions and faulty rules of thumb. But it usually gets the job done while the more logical part of our brain is still trying to get in gear, espcially if there's any risk involved.

So Musk is almost certainly right -- based solely on their power source, electric cars are inherently safer than gasoline cars. But he'd be wrong to depend only on that fact to win his case.

It's always better to be smart than right.

Branded content invades the news

BestofBrandedContentMarketing.225x225-75My latest column in the Conference Board Review is on brand journalism, which is the new-fangled term for "sponsored content."

The idea is that advertisers can break through the clutter of print and electronic media by offering content that is useful and somehow connected to their core competency. It's the latest shiny new thing in marketing.

Of course, it's hard to believe branded content could ever invade the "real" media like the network evening news programs. Except it's happening. And the perpetrators are the news divisions themselves.

Last Thursday on the CBS evening news, for example, Scott Pelley devoted three minutes to excerpts from an upcoming "60 Minutes" story he did on Lanborgheni's 50th anniversary. It included just enough of his whitknuckled time on the company's test track to pique viewers' interest. 

This morning, NBC's "Meet the Press" ran part of a Matt Lauer interview with Bernard Kerick, New York City's disgraced Police Commissioner. Kerick actually had some interesting things to say about the way minimum sentencing guidelines are crowding prisons with people convicted of nonviolent drug crimes. But the issue was given so little time on the program that the excerpt's real purpose was evident -- to promote the "Today" show on which it would run the next morning.

The network news divisions are entitled to run as many cross-program promotions as they like. But when this kind of "sponsored content" gets in the way of real news, it's no better than "human interest" stories featuring puppies and babies. 

Ironically, the news divisions are violating the cardinal rule of brand journalism -- be useful and, if you can't be useful, be interesting. Otherwise, don't.

While I was out

While I was out.002I've been away visiting friends and enjoying warm Southern hospitality all the way from Little Rock to Toad Suck, Arkansas, with a terrific stop at the Crystal Bridges Museum in Bentonville.

While I was away, my latest column for The Conference Board Review came out.

It surveys the shiny new thing in marketing variously called "native advertising," "brand journalism," or "sponsored content."

You can read my column here.

Ironically, the advertising column in today's New York Times notes that the development has begun to attract the interest of folks over at the Federal Trade Commission.

All in all, I think that's a good thing. Whether "native" or "sponsored," content created by "brand journalists" won't work unless (1) it's genuinely useful and (2) its source is clear. 

But it can be a powerful way to deepen customer relationships, which is what marketing should be all about.  


Carnival Clowns

Cruise-1-4_3_rx513_c680x510The Carnival Corporation has become Exhibit A in how not to handle the fallout from an operational crisis.

The passenger ship company's eponymous cruise line -- Carnival -- has had three cruise-ending mishaps at sea so far in 2013. In at least one case, the ship had to be towed back to port by the Coast Guard. Passengers were refunded at least part of their fares and offered a discount on later cruises. 

But Carnival -- which pays little if any federal income taxes because it's incorporated overseas -- balked at reimbursing the Coast Guard for its help.

Rendering assistance at sea is a long-standing maritime tradition, it said. So there.

Of course, that generated more negative media at a time when the beleagured cruise line already had a surplus of it. 

Eventually, it offered to make a voluntary payment to cover some of the costs.

But today's Wall Street Journal suggests that the bottom line cost of all the negative attention is still playing out. 

"Since the end of March, fleet-wide booking volumes for the next three quarters are running higher than the prior year at higher prices," the Journal explained, quickly adding that those figures exclude Carnival Cruise Lines. "Booking volumes for Carnival Cruise Lines during the same period are running behind the prior year at lower prices."

That's the cost of not knowing how to handle public relations. In reaction -- at least in part to these results, I expect -- the company has split the job of CEO and Chairman in two. And it's hired a new head of PR.

Both are smart moves.


P&G Part Two

P&g productsI haven't blogged for a while because I've been working on a project that has totally occupied my time. (More on that in due time.)

But a piece in today's Wall Street Journal about P&G prompted some rethinking of my second-to-last book, Secrets of the Marketing Masters.

I spent some time discussing P&G's marketing strategies in that book. Generally, I thought they were masterful. But since the book came out, the company installed a new CEO and the chief marketing officer left. It was hard to tell whether the steep decline in market share and stock price that followed was the product of those changes or of the Great Recession.

Well, now we may find out. The old CEO is back and one of his first big moves will apparently be reorganizing the company into four groups. The Journal thinks that will help identify and test his possible successor. That may be.

But it will also give us some insight into his business strategy. Here's what I mean. 

P&G markets a very broad product line, from diapers to laundry and personal grooming. The Journal suggests the company will group those products by common ingredients. "Paper-based products like Bounty paper towels, Charmin toilet paper, Pampers diapers and Always feminine care products are likely to end up in one sector," it writes.

If the company thinks its major problem is on the manufacturing end, that might make sense.  After all, Pampers and Tampax both start as trees.

But if the company realizes that the root of its problem is in understanding and serving consumers, it will take a very different approach.

Pampers and Luv diapers ($11 billion businesses) will stand on their own with the goal of figuring out how to better serve babies and their parents.  Feminine beauty products like Clairol, Puffs, and Cover Girl will be in a separate group with similar goals. Same thing for masculine grooming. Etc.

That may end up creating more than four groups, but it will focus the company on what really matters -- staying in touch with customers and their changing needs.

That's the biggest secret of the marketing masters. And the company that taught it to us is P&G itself.


Time to go

Time Now What.005The older I get, the more I relearn the same lessons.

Luckily, these days, it's usually at someone else's expense.

Case in point: Time Warner's decision to spin off its publishing unit, the venerable Time, Inc.

It's not hard to understand why the TV and movie company would want to rid itself of a declining business like print magazines. It doesn't need the drag on earnings growth. Plus, spin-offs are a golden opportunity to beef up the balance sheet by extracting a special dividend and casting off debt.

The more interesting question is how Time, Inc. got itself into this position.

Some say it was inevitable -- much of the advertising that sustained magazines like Time, People, Fortune, and Sports Illustrated were siphoned away by the likes of Google.

But I think Time, Inc.'s problem was more fundamental: the company never really understood what business it is in. It bought AOL because it saw a natural fit between its business (content) and AOL's (electronic delivery).

But in fact, AOL was in three businesses -- dial-up Internet access, communications services such as email and instant messaging, and a portal or home page from which unsophisticated users could begin their exploration of the Internet.  At the time of their merger, the first of those businesses was about to go the way of buggy whips, the second had no relevance to Time, Inc., and the third hid behind a "walled garden" that was easily -- and quickly -- displaced.

Time, Inc. didn't even understand its own business, which was more than raw "content" as defined by copyrights and trademarks. The company was actually in at least three businesses -- branded journalism, advertising sales, and magazine distribution.

When the Internet came along, the company shoveled all its branded journalism onto a single platform called "Pathfinder," as if it was the electronic equivalent of its print distribution network. Its storied titles wern't allowed to build their own presence on the 'net. And the audiences that trusted them went elsewhere. So did advertisers.

The spin-off of Time, Inc. represents an opportunity to correct those mistakes. But the company's success depends on two things. First, that the new management really understands what businesses it's in. And two, that it has the financial capability to invest in them.

I hope the company learned those expensive lessons from the likes of AOL and AT&T. 

The perils of exaggeration

ExaggerationI've posted before on the difficulty of correcting false information.

People's attitudes always outlive the "facts" they're supposedly based on.

Now there's new research that shows the danger of false positive information.

It seems that positive information generates a “punishment effect” when it's discredited. People overestimate how much correction is needed.

As a result people end up with a more negative opinion than they otherwise would have.

(By contrast, people underestimate how much correction is needed to adjust for false negative information, leading to belief perseverance.)

The research suggests that bogus credit-claiming or other positive misinformation can have severe repercussions when it's discredited (as it almost always is).

So watch those claims, all you anglers. Not to mention corporate advertising and PR people.


Poll diving

Paperstack4There's lots to learn from the recent election, both in the way the campaigns were run as well as from all the polling data.

In this post, I do a little poll diving.

The best presentation of the presidential exit polls I've seen is over at Fox News

I'll be digging through the results for the next few days, looking for insights that might have application in public relations and marketing. Here's one consideration that companies should ponder: 

The pollsters asked people who had just voted, "Which one of these four candidate qualities mattered most in deciding how you voted for president?"

                                                   Total      Obama        Romney

    Shares my values                       27%          42%            55%

    Is a strong leader                       18%          38%            61%

    Has a vision for the future          29%          45%            54%

    Cares about people like me         21%          81%            18%

Governor Romney did better than President Obama on the first three, but Obama blew him away (81 percent to 18 percent) on the fourth, which was regarded as most important by 21 percent of the respondents. In fact, Obama's margin on that single characteristic trumped Romney’s combined margins on the other three qualities.

Similarly, on the question of "who is more in touch with people like you?" Obama has a ten point lead over Romney (53% to 43%).

On the critical issue of who would best handle the economy, Obama and Romney were essentially tied (48% and 49% respectively). 

The touch-feely question of who cared more appeared to be the tie-breaker.

Big Business, which may have been one of the big losers in this election for reasons I'll get into in future postings, should pay heed.


Global business leadership

ConnectedWhat does it take to be a global business leader, to jump out of one pond into another? 

The Harvard Business School's "Working Knowledge" blog has a good posting on the essential qualities required.

They count five:

  1. Good understanding of the global business context,
  2. A perspective that is simultaneously global and local, 
  3. A bias for "non-dominant" thinking (i.e. outside HQ),
  4. A knack for cross-border partnering and,
  5. The ability to develop strong internal and external networks.

It's a good list.

It comes courtesy of Bill George, currently a professor of management and ethics at Harvard and formerly CEO of Medtronic.

But with apologies to Prof. George, who has probably forgotten more about globalization than I will ever know, I think it misses the single quality that underlies all the ones he lists.


The ability to see the world as others do, to feel what they feel, is the key to successful leadership. It's what enables business leaders to see beyond what customers say to what they really mean. It's what enables them to see beyond differences to what we have in common.  

Empathy is hard-wired into all of us. Scientists have even found its biological seat in the neurons of our brain. But its natural range is relatively short. We have little trouble empathizing with members of our immediate family or close friends. But empathizing with people outside that tight circle is more problematic.

Learning to draw that circle larger is possible, however. Empathy can be developed and refined. That's the real secret to business success. And it's even more important when the ratio of difference to familiarity is high, as in global markets.


Ale to the chief

Beer and hot dogsPeople supposedly vote for the candidate they'd most like to have a beer with.

So tavern photo ops have become a campaign staple, as President Obama demonstrates in the photo above.

Governor Romney, a Mormon, says he hasn't had a beer since he was a teenager. But he demonstrates his "regular guy" creds by scarfing hot dogs every chance he gets. Bending elbows with pint in hand has been delegated to vice presidential nominee Paul Ryan, who hails from a brewery-rich state.

Vice president Biden drinks only non-alcoholic beer. So President Obama has compensated by releasing the formula for a brew he and a White House chef concocted.

Things have reached the point where the National Journal has analyzed consumer data to determine the politics of beer drinkers.  See below.

Beer chart

Coming next: boxers or briefs, and what they say about how you'll vote.

Brand Power

Kids are more likely to drink milk if it comes in a cup with Ronald McDonald's photo emblazoned on the side.

It seems something similar happens in politics.

Bill Bishop reports on a new poll of rural voters in several swing states.  The poll gave voters two different positions on immigration and asked them which they preferred. In some cases, the positions were attributed to the Democratic and Republican parties; in others, there were no party labels.  The result:

Rural voters supported the Republican position when the statements were labeled “Republican” or "Democratic." 

 When the same positions didn't have party labels, rural voters supported for the Democratic position.

See the chart below, from The Monkey Cage. (Red and Blue bars refer to each party's position, not to the political affiliation of the voters.)


Great to see you out

Gay adWe'd all like to think the actions corporations take are guided by doing what's right.

Those of us who worked on executive row know the real world is a lot more complicated.

But one question seems to consistently resolve the thorniest moral dilemma: which action has the better payoff?

So a recent story in the Wall Street Journal may explain why more companies are paying attention to their gay customers.

It quotes Bob Witeck, a consultant who has studied the gay community for 20 years. He estimates there are roughly 16 million gay adults in the U.S. with projected spending power of $790 billion this year, or roughly $49,000 each.

That compares to annual per capita spending of about $26,000 for the overall market.

Add the millions of people who support greater inclusiveness based on sexual orientation, and it helps explain why companies like J.C. Penney, Target, and Miller/Coors are suddenly becoming OtherWise. 



OtherWise Home Page

Everybody and everything has a home page these days.

Otherwise Home Page.001

My new book, due out in June but available now for preorder on Amazon and Barnes & Noble is no exception.

Thanks to my friend Michael Kwan, OtherWise has a home page. You can reach it at

Once there, you'll find an overview of the book, some excerpts, a discussion guide, and a couple of surprises.

Many thanks to Michael and to another friend, Jonathan Struthers, who introduced me to him. Comments and suggestions, as always, are welcome.Signature

The right to bear facts

Obama_muslim_garb  Every American is entitled to his own facts, not just his own opinions. 

It's in the Bill of Rights. Look it up.  

That may help explain the results of some new polling by the highly respected Pew Research Center. Pew reported last week that the proportion of people who think Obama is a Christian has declined sharply over the past year, from 51% to 34%. 

What makes this perplexing is that it concerns a matter of fact, not opinion. 

It's one thing for increasing numbers of people to think he's a socialist, but doubting his professed religion (not to mention the 34% of conservative Republicans who think he's Muslim) seems to be in a different category altogether.  

The issue of Obama's religion came up early in his campaign, triggered in part by his father's Muslim faith, the years he spent as a kid in Indonesia, his "funny" last name, and some confusion with the first Muslim congressman who took the oath of office with his hand on the Koran.  

Obama's political opponents used all this -- along with the widely emailed photo above, taken when Senator Obama was on an official visit to Kenya -- in an effort to make his religion an issue when he ran for president. It didn't work then, and one would expect fewer people -- not more -- to fall for it now.  

Except that the comparison to opinions about his socialist creds is not really that different.  

People's opinion that Obama is a socialist is based, at least in part, on three factors: their interpretation of his actions, media reports of the accusation, and an overall decline in his popularity. 

Ironically, some of the actions taken by the Bush administration (TARP), along with Obama's own efforts to deal with the Great Recession (the American Recovery Act and the auto bailouts), as well as to keep campaign promises (Healthcare Reform), can be interpreted as government interference with free enterprise.  

That's exactly the spin Republicans are giving them, and their shorthand for it is that Obama is a Socialist. Polls and media reports simply give the idea more currency.

Similarly, Obama's outreach to the Muslim world, his apparent support for a mosque near Ground Zero, and his family's decision not to join a Washington-area church have created the impression that he is, at best, an agnostic and, at worse, secretly a Muslim.  

When Pew asks a question about Obama's faith, it gives people an opportunity to voice their disapproval of the man, whether or not his religion plays a role in their attitudes. (In fact, they may not even be expressing an opinion about Obama, but about their own economic situation. But that's a different topic.)  

Then of course when the media reports on the Pew Research, it puts the issue back in play. People who weren't following the controversy all that closely begin to think there's something to it. 

That's how opinions become facts. 

Palin_bikiniAnd just so you don't think I believe the political right has a corner on this, consider this widely emailed photo of a bikini-clad, gun-toting Sarah Palin.

What "fact" is being promoted here?

It's the culture, stupid!

It's the culture.001When Bill Clinton was running for president in 1992, one of his advisers famously put a sign in the Little Rock campaign headquarters to keep the candidate on message.  

"It's the economy, stupid" became something of a slogan for the campaign.

Smart marketers would be wise to do business under a similar banner:  It's the culture, stupid. 

And one of the defining characteristics of American culture in the 21st century is that it is becoming increasingly diverse. 

In 2010, for the first time, more than half of all births in the U.S. will be to Hispanic, Black, and Asian moms. The Census Bureau estimates that minorities will constitute a majority of Americans under age 18 in only one decade. By 2050, non-Hispanic whites will be in the minority across all age groups within the U.S.  

Multicultural markets are the new mainstream. But effective multi-cultural marketing requires more than a good bi-lingual dictionary.  

Multicultural audiences consume media differently. African Americans are heavier radio listeners than average, and Hispanic consumers spend more time online. At the same time, ethnic media is exploding across the country. In some major markets, including Los Angeles, Miami, and New York – Spanish-language TV stations have higher ratings among the young adults advertisers covet than the mainstream networks. 

Multi-cultural audiences have different cultural values and consumption patterns.  For example, P&G research shows that African-American women spend at least three times as much on beauty products as the general female population. P&G also found that 71 percent of black women feel they are portrayed worse in the media than any other racial group. 

The result was a nationwide “My Black Is Beautiful” campaign, underwritten by Pantene, Cover Girl, Crest and Always, to share beauty and lifestyle tips within the context of a discussion about issues of concern to African-American women.  

Finally, the “multi” in multi-cultural applies within groups that speak the same language as well as between them and others.  There are social and cultural differences between Hispanics of Puerto Rican, Mexican, and Cuban descent, not to mention between people in the nearly two-dozen other Spanish-speaking countries. 

Similarly, besides speaking different languages, the U.S. Asian population includes people who trace their ancestry to countries as diverse as India and Vietnam or Nepal and Japan. 

Multi-cultural marketing is not only about language, it’s about identifying with people’s values and traditions. 

Like all good marketing, it’s about culture.  

What did we learn this week?

Slater The gentleman to the left -- ex-Jet Blue flight attendant Steven Slater -- taught us once again that how people interpret events depends on their pre-existing feelings. 

Almost always, even more than on a rational analysis of the events themselves.  

Social scientists call this "framing."  Simply put, it means that we see the world through a series of emotional filters we have built over their lifetime. It's a mental short-cut that helps us make sense of the world. 

Consider the following set of facts: a flight attendant gets bumped in the head, drawing blood, when a passenger tries to retrieve her out-sized luggage from an overhead compartment; angry words are exchanged; the attendant gets on the intercom, announces he is quitting his job in an obscenity-laced rant, grabs two cans of beer, releases the emergency escape chute and slides to the tarmac where he is promptly arrested.  

Now, this set of facts could be interpreted in at least two ways -- (1) the flight attendant is a jerk, emblematic of the shoddy service too typical of travel by air these days, or (2) the flight attendant is a working class hero for telling off a rude passenger and quitting in flamboyant style. 

By now, you know which interpretation ruled the tabloids last week -- and even the New York Times, which ran three separate stories on the incident two days after it happened. 

The interesting question is why did this become the dominant interpretation?  

Were all these reporters mindlessly reflecting the instant Internet reaction?  (A Facebook page supporting the flight attendant went up within minutes of the first news report and had 18,000 followers within hours. By the end of the week, nearly 200,000 people said they "liked" his Facebook page. One image tracking firm even reported that Mr. Slater had higher positive ratings than Sully Sullenberger, the pilot who safely landed his disabled jet, full of passengers, in the Hudson River following a mid-air collision with birds.) 

More likely, the reporters and their editors were seeing the incident through the same emotional lens as the denizens of Facebook. 

They saw Slater's actions through a lens shaped by feelings of helplessness in the face of economic uncertainty. Many of them hate their jobs, feel squeezed because they're doing the work of laid off colleagues, but don't think they have any alternatives, and identify with Slater's "I'm mad as hell and not going to take it anymore" attitude. They admire him because they'd like to hit the chutes themselves.

Framing isn't just "spin," as in the particular twist someone gives a story. It's the way people see the events themselves, through a frame that is twisted by their previous experiences and deepest concerns.  

Next week: watch for a spate of contrarian stories as the framing effects begin to fade and more details emerge. 

Dating Tip

Dating I'm the wrong guy to offer dating tips. 

I've been with the same woman for nearly 40 years and I've never really understood exactly how I managed it. 

(I suspect our friends are just as mystified by my good luck.) 

But dating is not that far removed from marketing, and some recent research may help both undertakings. 

Some French researchers (who else?) recently demonstrated the aphrodisiacal properties of music.  They recruited a bunch of 18 to 20 year-old single females to participate in some research.  While waiting for the experiment to start, they pumped recorded music into the room where they were waiting. 

Five minutes later, a young male confederate came into the room, clipboard in hand and gave them a marketing survey. Later, during a break, he asked each woman for her phone number. 

The women who had been listening to "romantic" music were almost twice as likely to give him their phone number as those who heard some "neutral" music.  The full study is here

The marketing implications are obvious. And those of you who are still dating should reexamine their iTunes playlist.


051  Facebook, Twitter and YouTube didn't even exist when I retired from public relations in 2003, so I hesitate to offer advice on how institutions should use social media.  But I know a good idea when I hear one, and I heard one last night.  

It happened during a panel discussion of a new book by two friends of mine, Michael Goodman and Peter Hirsch.  The book is Corporate Communication: Strategic Adaptation for Global Practice.  

The idea is Peter's, and he admits that he lifted it from the medical profession, specifically pediatrics, though it's also used in music and meterology.  

Peter's insight is that companies should treat social media as an opportunity for "entrainment," i.e., the natural process by which new parents bond with their infant. Companies shouldn't try to use social media to push a product or an idea, he says, but rather to get in synch with their customers. 

I later learned that Peter blogged more extensively on the idea back in October 2009. Here's the link.

Makes sense to me.  Plus, it gives me an opportunity to post a photo of my new grandson, Beck Martin Coakley, born on April 19.  See above.

Guns and venti shots

Starbucks-and-guns Starbucks is being prodded to take a stand on state laws allowing people to carry unconcealed guns.  

Opponents say the company's coffee houses should ban gun-toting customers, just as they ban those who aren't wearing shirts or shoes.

Proponents of the law say the company should keep its caffein-stained fingers off the second amendment. 

Both sides love the debate because it keeps the issue in the news. 

My own opinion was forged when AT&T got caught in the crossfire between the Religious Right and Planned Parenthood over abortion. I think Starbucks should avoid this issue like watery Nescafe. The company should say nothing beyond "our stores follow local laws." Otherwise, it risks being sucked into a debate it doesn't want to have. 

For example, the statement posted on its web site suggests that it hesitates to put its baristas in the position of asking gun-toting customers to take their sidearms elsewhere.  That suggests that there's some danger involved, which is exactly the position opponents of the laws have taken. Without meaning to, Starbucks appears to be taking sides.

When I was studying philosophy, I asked the metaphysics professor a question.  He stopped wandering around in front of the blackboard, looked me in the eye and said something like, "In 30 years of teaching, I've never heard such a provocative question."  So naturally, I elaborated.  "Oh, that's what you mean," he said.  "No that's stupid."

Sometimes less is more.