Looks Like Gordon Gekko was Right

It’s not a principle until it costs you money.

― Bill Bernbach

Corporate Social Responsibility damps stock price, says a new study by two Florida Atlantic University business professors.

A company that champions the environment, human rights, diversity, product safety, or other causes shoulders costs which depress its Wall Street performance, according to the study, because a CSR initiative diverts resources from growing the core business.

Looks like Gordon Gekko was right.

While Fortune 500 companies spend over $15 billion a year on philanthropic and CSR activities, most of the money may be no more than a disguised PR spend.

A study published last year shows a CSR initiative will succeed or fail in direct proportion to the CEO's greed, as measured by his ownership of luxury assets like fancy cars, boats, and second homes.

The study found that companies led by greedy CEOs have low-scoring CSR initiatives, while those led by generous CEOs have high-scoring initiatives. It also found that greedy CEOs undertake CSR initiatives primarily to increase their own power and pay.

The findings reinforce those of psychology studies showing that people who worship possessions and pursue their acquisition are less sensitive to their effects on others; less willing to share their money and possessions with charities, friends, or family members; and less likely to engage in environmentally responsible behaviors.

Every Service Failure Levels the Playing Field

A mammoth corporation like this―it embodies too much experience. 

It possesses in fact a sort of group mind.

― Philip K. Dick

Organizational theorists believe every big business is a collective mind, and that performance "depends on coordinating the distributed knowledge and activities of the collective’s members."

When a big business screws up a simple transaction―more and more the norm―it obliterates the value of that vast, collective mind―opening the way for a small business to steal the disaffected customer.

Execs should think about that when tempted to cut more corners on talent, technology and time-frames.

All the money, bravado and best-practice babble in the world won't make you stronger than your weakest link.

Reading is Fungible

An investment in knowledge pays the best interest. 

— Benjamin Franklin

According to Pew Research Center, 47% of adult Americans read every day keep up with current events; 35%, for pleasure; 31%, for work or school; and 29%, to research topics.

The majority who don't read every day—for whatever reason—represent tomorrow's economic losers.

When their jobs are automated, they'll be tossed out on the street, unable to compete even for scut work against their robotic replacements.

It's a simple fact: most highly compensated people read—many for hours at a sitting (Warren Buffet reads five hours a day). They know knowledge—not effort—is the world's new currency.

Not many years from now, knowledge will be the human's value; effort, the robot's. 

People will be paid for their grasp of reality, their foresight, their vocabularies, and their empathy, while robots produce all the products, stock all the shelves, drive all the vehicles, and serve all the coffee. Their effort will be demonetized.

If you want to help someone this holiday season, give him a book. If you're at a loss for titles, check out these bookworms' picks:

• Maria Popova
• Oprah Winfrey
• Barack Obama
• Bill Gates
• Stephen King
• Phillip Roth
• Don Draper

Fat, Dumb and Happy Revisited

I guessed eleven months ago American Society of Association Executives wouldn't contact me after I'd enrolled—even once—until it wanted me to renew my membership. I guessed correctly.

Associations need to do better than that, to stay in business. 

Perhaps ASAE should consult the FBI. It would learn the Bureau frowns on advance fee schemes.

Price Wars

While shares of retailers like Macy's and J.C. Penney continue to plummet, shares of Apple climb. Apple is not only the world’s most valuable publicly traded company, it has generated better investor returns than any since 1926, including blue-chip stalwarts like Dupont, GM, and Procter & Gamble.

Why? The answer's simple.

Whereas mass retailers like Macy's layer flash sales on top of loyalty programs on top of coupon discounts on top of even more discounts for using their branded credit cards, Apple sticks with price integrity (and a premium price, at that).

While retailers engage in relentless price wars, Apple enjoys peaceful prosperity.

Retailers brought the wars on themselves.

"Retailers could have chosen to focus on deep customer insight to deliver more relevant personalization," says consultant Steven Dennis. "They could have invested in product innovation. They could have seen their physical stores as assets to leverage in creating a more harmonious and remarkable customer experience, rather than as liabilities to cost reduce and shutter."

Meantime Apple and its shareholders flourish.

There's a lesson in this―or 10 lessons.

HAT TIP: Many thanks to Ellie Summers for offering me her infographic.

Best Book Ever on Business Ethics

A book on business ethics must be a very short book.

— Arthur Dobrin

An old joke goes: A businessman is counting the daily receipts and observes that a customer has mistakenly paid $1,000 instead of $100. It sinks in with the businessman that he faces an agonizing ethical question: Should he tell his partner?

While most B-schools require students to take ethics courses, there's no evidence the training works, if you read the news of corporate fraud.

Students in those courses must read professors' papers with titles such as Managing for Stakeholders, A Note on Rights, and Ethics at the Frontier.

But the best book on business ethics for my money is, thankfully, a very short book (130 pages). 

It's titled Groundwork of the Metaphysics of Morals. 

Written by philosopher Immanuel Kant in 1785, Groundwork argues that making the right ethical choice is easy, if you know how to make a rational decision.

When you make any decision, you act on a "maxim," Kant says. 

If you trade stocks at high frequencies just to earn rebates, for example, it's because you value your own gain above that of your clients. "I love money" is your maxim. 

All decisions have a maxim behind them.

Morality is merely a set of maxims. But moral maxims differ from other maxims (like valuing money) because they apply equally to everyone.

According to Kant, your choice between two actions, one right and one wrong, is easy. You just have to ask: "Would I want everyone to make the same choice?" If you can answer "Yes," it's the right one.

Kant calls such a maxim a Categorical Imperative. You can’t take or leave a Categorical Imperative as you want in the moment. Making a choice you'd deny to everyone else isn't selfish; it's irrational.

Like reason itself, morality is universal ("categorical"). Neither depends on what might satisfy your selfish desires; and neither ever stops applying to you—even when you don’t care.

Here's a delightful podcast on Kant's Categorical Imperative, courtesy the BBC.

Capital Mistake

You can dress up greed, but you can’t stop the stench.

― Craig D. Lounsbrough

This weekend, I "worked the booth" at the Capital Home Show on behalf of a remodeler, greeting visitors and cultivating leads.

While discussing a deal with another exhibitor, an overly dressed exhibit salesperson (the show manager, nonetheless) appeared suddenly and broke into our conversation, demanding to know why the exhibitor hadn't re-signed for next year's show.

When he said he was undecided, she proceeded to twist his arm.

I quietly left the booth, after a few minutes of the spectacle.

When I next saw the salesperson, I mentioned that she'd interrupted a deal.

"I thought you were just one of their staff," she replied, without apology.

If you sell anything—whether booths, biotech, or blockchain—putting your aims ahead of customers' is a capital mistake.

It may, in fact, be the chief reason most customers detest salespeople.

DiscoverOrg recently asked 230 customers how they feel about B2B salespeople. The answers are chilling:

• Only 18% think B2B salespeople are trustworthy
• Only 35% think they are likable

Chew on that, salespeople. Eight in 10 customers think you're dishonest; two in three, you're despicable.

7 Signs You're Mediocre

The general tendency of things throughout the world is to render mediocrity the ascendant power among mankind.

— John Stuart Mill

Nobody dazzles safely.

Nobody dazzles accidentally.

Nobody dazzles lackadaisically.

Nobody dazzles cost-efficiently.

Nobody dazzles by copying.

Nobody dazzles by committee.

Nobody dazzles by appeasement.

So why keep claiming you do?

Maybe you weren't designed to dazzle.

Hustle

In a recent op-ed in The New York Times, Disrupted author Dan Lyons slammed Silicon Valley's work ethic.

Under the rubric "hustle," Lyons says, the Valley worships workaholism.

"You hear it everywhere," he writes. "You can buy hustle-themed T-shirts and coffee mugs, with slogans like 'Dream, hustle, profit, repeat' and 'Outgrind, outhustle, outwork everyone.' You can go to an eight-week 'start-up hustle' boot camp. You can also attend Hustle Con, a one-day conference where successful 'hustlers' share their secrets."

Angel and hero Gary Vee (Vaynerchuk) tells hustlers to work 18-hour days, seven days a week, according to Lyons. So do employers like Uber and Lyft. They've fetishized hustle, and made hardship a mandate.

While too busy to read books, Valley dwellers would do well, in my opinion, to read the last pages of Steve Jobs, the entrepreneur's authorized biography. They recount Jobs' deathbed interview.

Jobs tells his biographer he permitted the posthumous book not for the public's sake, but as a memento for his children. "I wanted my kids to know me," he said. "I wasn't always there for them, and I wanted them to know why, and to understand what I did."

Asked whether he cared much for children he never knew, the multi-billionaire said they were "10,000 times better than anything I've ever done."

The More You Lie, the Less We Buy

After 10 years as a user of Kaspersky anti-virus software, I'm switching brands, due to the treatment I received by an offshore sales rep.

My credit card was stolen a few months ago, so to allow my subscription to auto-renew, I contacted Kaspersky (which doesn't permit users to change the credit card numbers it keeps on file).

The rep who finally took my call refused to stop reading from a script of "security" questions that were blatantly meant to upsell me. 

Each time I asked her what her questions had to do with security, she insisted they were for my own good.

None of them were.

After 10 minutes of this, I told her I'd switch to the leading competitor, unless she helped me update my credit card info.

She wasted another 15 minutes of my time bumbling around with this process, to no avail.

I politely thanked her for the help and hung up. Now I'm moving on to the competitor.

Walk a mile in your customers' shoes, CEOs. Try a quarter-mile, if you have no time for customers.

The more you lie, the less we buy.

Contempt

The only cure for contempt is counter-contempt.

— H. L. Menken

I'm keen about Alan's Blog, not only because its creator Alan Weiss serves up highly original business tips, but because he routinely skewers the arrogant, the hypocritical, the timid, and the incompetent.

No one—from the lowly cashier to the mighty CEO—is spared his delicious scorn.

Indeed, the blog might be better named Alan's Barbs.

I just introduced my wife to Alan's Blog and she hates it.

That's because she's the kind of person the philosopher Aristotle calls "good-tempered."

Anger for Aristotle occupies a spectrum.

Angry people—occupying one side of the spectrum—Aristotle calls "irascible." Irascible people "get angry quickly and with the wrong persons and at the wrong things, and more than is right. They do not restrain their anger, but retaliate openly, owing to their quickness of temper."

Too-cool people—occupying the opposite side of the spectrum—he calls "fools." Fools never give way to anger, and are "thought not to feel things nor to be pained by them." Fools never defend themselves, and "endure being insulted and put up with insult."

Tolerant people—occupying the mid-point of the spectrum—Aristotle calls "good-tempered." "Good temper is a mean with respect to anger," he says. "The person who is angry at the right things and with the right people, and, further, as he ought, when he ought, and as long as he ought, is praised. This will be the good-tempered person."

Aristotle's analysis of anger leaves me worried that, like Alan, I'm on the "angry" side of the spectrum.

But, thankfully, the philosopher comes to my rescue.

I'm merely, like Alan, "hot-tempered."

"Hot-tempered people get angry quickly," Aristotle says. "But their anger ceases quickly—which is the best point about them. This happens to them because they do not restrain their anger, but retaliate openly owing to their quickness of temper, and then their anger ceases."

That sure beats being "irascible"—or, just as bad, being the kind of person Aristotle calls "sulky."

"Sulky people are hard to appease, and retain their anger long; for they repress their passion. But it ceases when they retaliate; for revenge relieves them of their anger, producing in them pleasure, instead of pain."

When sulky people can't avenge themselves, Aristotle says, watch out!

Unavenged, sulky people "retain their burden; for, owing to its not being obvious, no one reasons with them, and to digest one's anger in oneself takes time. Such people are most troublesome to themselves and their dearest friends."

Owning Up

To err is human; to admit it, divine.

— New Richard's Poor Almanac

Visit GiveWell's website and you'll find something remarkable: a label in the main navigation that reads "Our Mistakes."

Click and you'll jump to a page headed, "This page logs mistakes we've made, ways in which our organization has failed or currently fails to live up to our values, and lessons we've learned."

The page is long, long, long.

Alexander Pope once wrote, "No one should be ashamed to admit they are wrong, which is but saying, in other words, that they are wiser today than they were yesterday."

How many organizations are gutsy enough to own up?

Not enough.

Shoddy

Fortune reports Amazon is contacting and refunding shoppers who bought "shoddy counterfeit solar eclipse glasses on the company's website."

Shoddy has a scurrilous backstory.

In the mid 19th century, English shepherds would sell scraps of wool to textile manufacturers, who'd mix it with old rags to make a packing material known as shoddy.

Before long, the companies succumbed to the idea to market the stuff to makers of cheap clothing―and sold millions of pounds of shoddy to American war profiteers, soon to be known as "shoddy millionaires."

Shoddy quickly came into use as a term for swindling and humbug of every sort.One shoddy millionaire was Brooks Brothers.

When the Civil War broke out in 1861, federal contracts for military uniforms were awarded not to the lowest bidder, but the highest briber.

The bribes inflated their cost of goods, so clothing makers cut corners on product.

Brooks Brothers won orders for 36,000 uniforms that year, and turned out uniforms for the volunteers that fell apart in the first rainstorm.

When asked by legislators why his company used shoddy instead of broadcloth for the uniforms, one brother, Elisha Brooks, responded, “I think that I cannot ascertain the difference without spending more time than I can now devote to that purpose.”

Brooks Brothers was by no means the only "shoddy millionaire." Profiteers materialized throughout the North. Some sold the government shoddy uniforms that were non-regulation color, causing many soldiers' deaths from "friendly fire."

Harpers Weekly described shoddy in 1861 as “a villainous compound, the refuse stuff and sweepings of the shop, pounded, rolled, glued, and smoothed to the external form and gloss of cloth.”

In 1861, there were a couple dozen millionaires in New York City; by 1865, millionaires in the city numbered in the hundreds. One even included the mayor, who in his role as procurement officer awarded Brooks Brothers its contract for uniforms.

The New York Herald proclaimed, "This is the age of shoddy. The new brownstone palaces on Fifth Avenue, the new equipages at the Park, the new diamonds which dazzle unaccustomed eyes, the new people who live in the palaces, and ride in the carriages, and wear the diamonds and silks―all are shoddy."

Pleasing the Gods

Several years ago, I hired a cabinetmaker to construct half a dozen cherrywood built-ins with adjustable shelves. Handsome, beautifully-crafted things.

I noticed the man was finishing every edge of every shelf―all 60 of them―and asked, "Why bother to finish all four edges, when you can only see the one facing you?"

His reply was dour. "Because I see them."

It's delightful to encounter mortals who won't run in the race to the bottom.

The sculptor Phidias was commissioned in 440 BC to create statues for the roof of the Parthenon. 

After the installation, the city accountant refused to pay his bill.

"These statues are on the roof of a temple on the highest hill in Athens," the accountant complained. "Nobody can see anything but their fronts. Yet you have charged us for sculpting them in the round―for sculpting back sides nobody can see."

"You're wrong," Phidias replied. "The gods can see them."

There's danger in the race to the bottom, as Seth Godin says: you might win.

And whether you do or don't, the gods can see you.

Coach

Coaches who love coaching teach players to love learning.

— The Coach Diary

Can you run a successful business from the sidelines?

Absolutely.

That’s the message of Lessons of an Entrepreneur: How to Grow, Take Risks and Survive, the new book by The Expo Group’s chairman and CEO, Ray Pekowski.

Pekowski's 113-page book is full of personal stories and anecdotes, which makes it breezy and entertaining.

At its heart are teachings only a coach could concoct:

• Innovative customer service, not growth, should be your business's goal.
  



• A servant's mentality in a CEO goes hand in hand with steady growth.
  



• Humble leaders are strong leaders.
  


• No matter your specialty, you're really in the training business.
  



• Only leaders who are mentors can influence corporate culture.
  



• Teamwork comes from setting goals specific enough to influence performance.
  



• Plan for failures and mistakes—they're inevitable.

It's little wonder Pekowski has published this little book: teaching and coaching are in his blood (he did both before joining the event industry in the 1980s).

And teaching and coaching underpin nearly all his success formulas.

"If you can teach or coach the group or department that reports to you, then in turn, that group can go out and teach the next group and so on," Pekowski writes. "I called it 'Teach the Teacher.' If you have ever taught someone something, then you are both teaching and reinforcing what you have been taught. It is the transformation of both knowledge and culture."

In this era of narcissistic CEOs, it's refreshing to learn some business leaders still put employees and customers first.

In an interview, I asked Pekowski what he'd be doing, if he weren't running his company.

"I’d be coaching in the NFL," he said. "That’s what I really wanted to do. I just love coaching and football. After I graduated, I coached in three different schools. But it’s a tough industry—it certainly didn’t pay then what it pays today. I had an opportunity to work for the Chicago Fire—a one-season team in the World Football League—but the job paid less money than I was getting paid as a teacher, and I had two children at the time."

Lessons of an Entrepreneur: How to Grow, Take Risks and Survive is available from Amazon. Proceeds will be donated to charity.

Tackling the Stack

Events may at long last have the CMO's attention—deservedly so, since they consume up to 60% of the marketing budget at most B2B companies.

That's because event tech is transforming the analog meeting into a full-scale "digital production."

So much so, CMOs now face a formidable "event tech stack," a digital gauntlet comprising CRM systems; email delivery platforms; event websites; online communities; registration systems; event personalization platforms; onsite networks; session scanning and survey tools; audience engagement, second-screen, and polling systems; beacons and sensors; games; event apps; lead retrieval systems; learning management systems; social media suites; analytic suites; and vendor sourcing and travel management systems.

That's a ton of tech to choose from and "B2B marketers sometimes need 12 different tools to run an event," says Alon Alroy, CMO of Bizzabo.

A new conference launches this month to help marketers tackle the stack.

Transform USA promises to help attendees develop a "coherent data and digital strategy," according to its founder, Denzil Rankine.

Geared to event producers, Transform USA offers "practical takeaways for their strategies for their organizations, and for the partnerships that they should be operating," Rankine recently told Convene.

Transforming a meeting into a digital production sounds really sexy. And the big-data metrics, personalization and amplification event tech can provide are long overdue. 

But without a strong business-first philosophy—asking of every piece, "How does this serve our marketing goals?"—a CMO could easily find herself overpowered by the event tech stack.

HAT TIP: Gary Slack inspired this post.

Logistics

We are not in the coffee business serving people, but
in the people business serving coffee.

— Howard Schultz

For four crazy years I ran mid-market antiques shows.

It was often tempting to think the business was about logistics, because planning and executing a successful move-in and move-out consumed so much attention.

Collectors—the attendees—could have cared less; but dealers—the exhibitors—considered logistical snafus, even tiny ones, world-shattering.

Until the doors opened.

In that moment, the business's raison d'etre crystallized: the business supplied fixes to people addicted to fine gewgaws.

Don't be lured by language into believing you work the "wheelhouse" of some vast sorting machine.

Your raison d'etre is people—the ones you sell to, the ones you buy from, and the ones in between.

No one has relationships with brands.

Everyone has relationships with people.

The Slippery Slope

You prohibit tradeshow attendance.

You cancel the newspapers.

You fire the agency.

You outsource customer service.

You automate marketing.

You discount.

You rush it out.

You praise only the rock stars.

You let everyone over 50 go.

You delete the phone numbers on your website.

You cancel the Christmas party.

You sublet to a multi-marketing firm.

You close your office door.

You never ask why.

You initiate Chapter 7.

Ready to Work Two Jobs?

I often encounter folks who've opted, or been forced, to freelance.

A great many share something in common: they don't want to work two jobs.

Unfortunately, that's what you have to do to succeed.

Because it ain't easy to cultivate "1,000 true fans." Else, we'd all do it.

Editor Kevin Kelly first expressed the idea a decade ago:

You can define a "true fan" as anyone willing to send you $100 a year for your product. Provided your cost of goods is low, a freelancer can get by comfortably with only 1,000 true fans.

And the money need not arrive in lump sums; it can trickle in (fans can subscribe, say, at the price of $8.34 a month for 12 months).

However you're paid, the bar to success is low, Kelly says.

"To be a successful creator you don’t need millions. You don’t need millions of dollars or millions of customers, millions of clients or millions of fans. To make a living as a craftsperson, photographer, musician, designer, author, animator, app maker, entrepreneur, or inventor you need only thousands of true fans."

Besides keeping costs low, the challenge freelancers face is difficult enough to put most of them off.

To succeed, you have to cultivate 1,000 solid relationships―both financial ones (no one else can profit from your work) and professional ones (fans must like and trust you).

It's easy to attract 1,000 or more fair-weather fans (just ask Paul Reubens). But you need 1,000 diehards.

And, although digital platforms that enable relationships with diehards abound, nurturing those relationships could kill you.

"The truth is that cultivating a thousand true fans is time consuming, sometimes nerve racking, and not for everyone," Kelly says.

"Done well it can become another full-time job."

Heads Up

Repeat customers produce 41% of revenue, according to Forrester.

Yet B2B marketers spend nearly all their money on lead gen.

Jay Baer at Convince & Convert calls it a Ponzi Scheme.

The fault lies with senior management: it makes lead gen marketers' key performance indicator.

Baer hopes "all B2B marketers muster the courage to look beyond the monthly and quarterly sales-qualified leads numbers that dangle over their collective necks like a guillotine."

You should spend more marketing money on retention.

Just a heads up.