The world is changing. We are witnessing the de-industrialization of America. As a consequence, home and work life are blending together again and the means of production are moving back to the home. Sound like the medieval era? You bet.

The Industrial Revolution

The printing press, invented by Gutenberg circa 1440, helped to introduce the Renaissance and end the Medieval era. The printing press sped the transmission of knowledge, planting the seeds for the Industrial Revolution about three hundred years later.

But even though the printing press created a flood of knowledge, it did not affect the daily nature of work. Family life and work life occurred in the same place—the home. The loom occupied a central place in the home. For carpenters, potters, and other craftsmen, the home was also the workshop. Workers (back then they were peasants) lived with their personal means of production—knowledge, skill, and their own personal production tools.

Since the beginning of recorded history work and family were largely inseparable within the house—then came the Industrial Revolution.

With the advent of mechanical production equipment (ironically, some of the earliest were mechanical weaving looms) the Industrial Revolution (circa. 1750-1850) centralized the means of production around the production equipment, and later around the power source which drove the production equipment. Within a few years craftsmen and laborers began to commute to the local factory.

The factory lowered production costs and eventually improved living standards for everyone. But its immediate impact was putting some workers out of work and inflicting further indignities on others.

Centralized production dictated fragmentation of work. Just like the mechanical devices, laborers became cogs in the factory wheel, doing small, repetitive, de-humanizing tasks.

Mechanization intensified throughout the 1900’s, leading to the famous “lights out” factories in Japan, which could operate in the dark without any human intervention. Workers migrated away from factories and into offices.

The Information Revolution—De-Industrialization

Initially, the information revolution (circa. 1950) appeared to be an extension of the Industrial Revolution. Manufacturing jobs peaked (as a percent of all jobs) at 30% in the 1950’s. Then workers began to shift from factories to offices.

At first the new information work itself remained fragmented and repetitive, just like the old factory jobs. Computers and communications, the means of production for information work, were large, centralized, and expensive, just like the old factory equipment.

In the 1980’s the PC and the internet started to weaken the chains of office workers. The de-industrialization of America picked up steam.

Back to the Future – Working from Home

The peasants of the new century are knowledge workers. With an internet connection and a laptop computer they typically work from home. Some remain as employees, but an increasing percentage work as independent contractors paid by the job, just as medieval craftspeople did. Job satisfaction may be better, but job security has plummeted.

This information revolution is only now working through the economy.

The industrial revolution changed the face of America and the nature of work. The information revolution is changing us.

The Biggest Unknown—The Power of Human Creativity

As Mark Twain said, “history does not repeat itself, but it does rhyme.” The Renaissance unleashed a tremendous wave of knowledge and human creativity that reshaped the world. However the Renaissance was only a small foretaste of the coming explosion of creativity and knowledge from the Information Revolution.

It will reshape everything, even our bodies and our minds. A little frightening perhaps, but what an exciting time to be alive.

The world it is a’changin’. When Richard Barrett joined MAPping Company Success last fall his first post was Tsunami of Changes for 2009.

Richard reads widely and when we were talking today he commented that he thinks the situation is even more complicated.

I asked what he meant and as I listened to him I realized that this was information that you could use when creating strategy.

Part of what Richard was saying was that “this time it’s different.” Part of this downturn is cyclical, with its scope extended to a global impact because the world has shrunk, but the balance is far more fundamental—more similar to the industrial revolution.

And it is that part of the current downturn that he’ll be exploring.

Richard is the first to say that he doesn’t have the answers; in fact, it’s difficult to formulate the correct questions (without which there can be no answers) without a radical shift in thinking.

He will be offering his evaluation of fundamental changes to how business is done, employees are managed, customers and markets are addressed, and even how investments are handled.

Join Richard as he explores the basic shifts he sees happening, shares his own struggle to reformulate some of his lifelong attitudes to fit the business world after this global tsunami withdraws.

Whether you agree with him or not, you don’t want to miss his Briefings and the opportunity to weigh in with your own thoughts.

Image credit: sxc.hu

You’re swamped with advice from a wide variety of experts, gurus and pundits on how to survive the downturn in 2009,

• Increase spending on R & D. Now is the time to build your product portfolio for the upturn in 2010.
• Increase your spending on marketing. Now is the time to build your brand.
• Increase your investment in sales. Now you can steal market share from competitors.
• Employees are your greatest asset. Nurture them.

Given that wonderful advice, don’t you feel foolish looking at a 25% revenue decline and corresponding expense reductions. Somehow the economic and business pundits still know best how to spend your money, in spite of their forecasts that just continue to get it wrong.

As the person in charge, you know that you have to reduce spending somewhere, somehow. So the question is not how to spend more money, but how to make spending cuts. One possibility:

Cut spending strategically.

Use Hard Choices to Sharpen Your Focus

In difficult times, where you cut spending may be the most important decision you make. The cuts demonstrate dramatically what you consider to be the most important priorities in your company. So, let’s back up one level. What are your company’s most important assets? If you had to preserve only one, single facet of your organization to restart your business in 2010, what would it be?

What is your company’s single most important asset?

Ultimately your revenues will tell you where you are today. What is the largest source of your current revenue? Is it a single product, a single sales person, a single customer, or even a single technology asset? What can you do to focus your company on that revenue source?

What is the single largest source of your revenues? AKA, what pays the bills?

Politely we can ask, what is the single largest source of your revenues? But in a small organization, you know the real question: What pays the bills? You have to look much deeper than the accounts receivable report. Consider:

Single Customer—If that revenue source is a single customer, then how can you protect and grow that relationship? Does it make sense to relocate your entire company next door to that customer?

Single Product—How can you extend that single product? This is the perfect moment to jettison the R&D project to explore another market. For you, now is the time to steal market share from other competitors. While they may lose focus, you can capture a few key customers.

Single Supplier—Maybe your single largest revenue source is anything from China. Your team speaks Chinese, both Mandarin and Cantonese dialects. When Wal-mart calls, you can find a Chinese manufacturer for anything Wal-mart wants to sell. Then shut down your initiative to build suppliers from other countries. Hire another Chinese speaker. Build on your successes with China.

Single Expertise—For instance, if you can trace your product dominance to a single technology, then your R & D team may truly be the best in that specific technology. In this market you can probably hire a few well-known experts to enhance your team. Cut your expenses elsewhere, say marketing. Build your technology team and send them out with your sales team to win a few key customers.

Single Person—Is your company really a corporate vehicle for a superstar? If so, why not focus on that person? How can you enhance that person’s reputation and value? A superstar often creates some jealousy, but this year just suck it up and build on the strength of the super star. Anyone who cannot support the star needs to find a new opportunity.

In summary, don’t cut vertically. Don’t cut horizontally; Cut whatever does not support your single greatest asset.

Get Off Your Butt

One last suggestion—just in case you haven’t done this already, get out of your office!

You need to be out in front of the parade, not kibitzing in the stands. What is your personal strength?  Get out of your comfortable desk chair. Go create some value—in the lab, in a customer’s office, or even in India.

Do what you do best and skip the rest.

You don’t have the luxury to be comfortable as Chief Executive. Get in the game. Rediscover yourself as Chief Inventor, Chief Salesman, Chief Mandarin Speaker, or even Chief Superstar.

And if you’re none of those things then do the one thing you’re sure of doing well.

Get out there and support your people, managers and employees, and move the company in ways that take the best advantage of their strengths.

To your success!
Richard Barrett

Richard’s recent posts (here and here) questioned what happens to culture and people as assets during a tanking economy.

Is culture anything more than lip service? Glib words to throw around during an expansion, but hollow and valueless otherwise?

Yes—and no

Unfortunately, too many executives still see people as an expendable resource—interchangeable and replaceable.

But not all.

The companies with strong, innovative cultures where executive action supports an environment that challenges and encourages growth will come out of this stronger and miles ahead of their lip-synching competitors.

They also know that keeping their people motivated and as happy as possible is the only option if they want to keep their customers happy.

Think Apple, Nucor, IBM and dozens of others, large, medium and small, where the execs practice what they preach.

But no matter how authentic the culture, the economy happens and companies have to deal with it—and even the best may face layoffs.

“Employees Are Our Most Important Asset” It’s almost ubiquitous in corporate culture statements, but what does it really mean?

Financially, employees simply don’t show up on the balance sheet. On the income statement, employees are definitely an expense, often well over 50% for most service-oriented companies. So, in any accounting or financial sense, employees are simply not treated as assets.

Next, asset ownership. Companies own assets .They can buy assets, sell assets, and borrow against assets. Pretty difficult to do that with employees.

Finally, assets tend to have long lives. Real estate has a long life, patents last 17 years (or more); even inventory has a shelf life up to a year.

But companies treat employees just the opposite. Companies resist unionization, which creates long-term relationships with employees. Companies prefer “at will” agreements, which allow the company to terminate employee relationships with only two weeks notice. Is that long-term thinking?

Bluntly, most American companies simply do not treat employees as long-term assets. European companies are even worse. Due to government regulations limiting a company’s ability to terminate employees; most European companies go to extreme lengths to avoid hiring full-time employees.

Rather than working to acquire these human “assets,” they actively avoid them. Sounds like employees are treated more like liabilities than assets.

And in the US the concept of “employee as a liability” has certainly gained currency in the past ten years. Temporary employment, both full-time and part-time, has exploded. Outsourcing, both foreign and domestic, is simply one more way for companies to avoid acquiring employee liabilities.

While employees may be our “most important asset,” companies act as if employees are their greatest liability.

Does your organization claim that employees are its most important asset? How does it demonstrate that? Do your employees believe it? Let us know.

The global environmental climate may be warming, but the global business climate is frigid, with even colder weather ahead for business in the next few years.

Without a doubt, most companies will face declines in sales, escalating bad debts, elimination or reduction of credit lines, forced reductions in labor, and significant internal adjustments in work assignments. How will your corporate culture withstand the upcoming business ice age?

Corporate Culture Snapshot

Corporate culture statements focus on “people values,” in contrast to corporate mission/vision/business statements, which focus on business objectives. A quick survey of corporate culture statements shows that many companies identify their employees as their most important asset. They also list their most important values as virtues as integrity, teamwork, accountability, and innovation.

For the sake of this post, let’s accept that the company actually means these good words.

How do you, as a business leader, honor these values in the current frigid business climate? More importantly, can your corporate culture actually help your organization to weather this storm?

The Situation

You are the leader/manager of a team of 25-50 people—a department or even an entire company. At the emergency leadership planning session last weekend, your sales team presented a revenue forecast 20-35% below last year. Your finance team predicted that bad debts will triple this year and credit will be unavailable, which means you need to find an additional 10% cash in your operations.

Worse yet, your employee payroll costs will grow by 3%, driven by increases in unemployment insurance and other state/federal payroll costs. Employee costs are 65% of your total expenses, so no matter how creative you are you know that the solution must eventually include reductions in employee expenses.

The Challenge

In stressful situations most people and organizations tend to circle the wagons, collapsing inside a small group of senior execs who run the business. Cultural values such as integrity, teamwork, and innovation are great for the boom times, but in difficult times our instinct is just the opposite. Our cultural statement that “people are our most important asset” rings hollow when we know that we must reduce employee costs by one third. How can we expect teamwork when reductions will inevitably pit team leaders against each other for inadequate resources? Who will volunteer to leave the team? Fear can constrict communications and limit feedback.

The Process

Ironically, your corporate culture statement may point the way to an effective process. If people are, in fact, your most important asset, communicate with them right now.

They are already talking with each other, already guessing about the challenges facing the organization and guessing at the possible solutions, which can start rumors that are usually far worse than the reality.

Bring them into the process at every level by opening the communication channels. Describe the challenge in as much detail as possible and in as many different forums as possible—send group emails, set up group meetings, and meet personally with the key people on your team.

Share the uncertainties also. Of the three common corporate virtues—integrity, teamwork, and innovation—the responsibility for integrity falls most heavily right now on you. Tell the truth to your team. Don’t wait and don’t hide in the uncertainties.

Structure the challenge then ask your team for recommendations. Your corporate culture emphasizes teamwork and innovation. Now is the time to count on those virtues as your team develops solutions.

The Solution

The solutions will be unique for each team and for each situation.

While each solution contains a set of action steps, the larger and most valuable elements of the solution are team ownership and acceptance. Grass-roots solutions developed by the teams almost always gain greater ownership and acceptance than top-down solutions imposed from above. However, grass-roots solutions are almost always messier.

How will your organization tolerate and accept a number of grass-roots solutions, each unique and each with distinct peculiarities? That is one of your challenges as a leader.

Sounds just a little crass, doesn’t it? Corporate culture is a set of shared values that affect the behavior of the company. What’s that got to do with email marketing campaigns? But if your corporate culture drives the behavior of your employees, then marketing communications will be a reflection of your company culture.

Email Marketing Virtues

As an example, consider a set of “email marketing virtues.” These virtues dramatically improve the effectiveness of email marketing campaigns. I’m not promoting these virtues as good behavior, merely effective behavior for email campaigns.

• Direct and Personal – Emails that come from a real person, as opposed to the “marketing department” or “customer service,” are much more effective in generating responses. On the recipient’s side the same is true. Email sent to an individual by name, “Dear David Persig,” will generate a better response than that same email sent to “Dear Director.”

• Honest – How often have you received an email promoting an e-book or a webinar claiming that “supplies are limited,” when, in fact, they are not. Once the email sender loses your trust, their company ends up in your mental spam bucket. Good email campaigns are honest not because it’s an honorable virtue, but because deception just doesn’t work as well.

• Patient and Persistent – Your customer does not think about your company every day. In fact, it may be a sign of trouble if your customer is thinking about you too much. You want to be a reliable, dependable supplier, always there when your customer does need you. In the same way, an email marketing campaign should be present in the in-box at the moment the prospect needs help. Patience and persistence in email marketing produce consistently higher results than erratic campaigns.

• Polite and Respectful – Do the email communications respect the prospect’s time? Are they short, direct, and clear? Timeworn marketing phrases such as “free,” “limited time,” “act now” and “while supplies last” demonstrate a lack of respect

Corporate Culture Drives Employee Actions

If the company culture demonstrates respect for individuals, then the marketing manager will reflect respect of customers and prospects in the email communications.

If the corporate culture truly values honesty and integrity, the marketing manager demonstrates that integrity in email communications to prospects.

If the corporate culture values long-term results over “quick hits,” then the marketing manager can take the time to build long-term relationships with prospects, patiently and persistently.

To discover your corporate culture just read your marketing communications.

If they sound like a late-night TV infomercial, don’t change the people, change the culture.

In the previous post our friend Jim Easterbrook, Director of Internet Security at Midwest Regional Bank, had just received his first marketing email from your company – Super Security, Inc.

Your first email passed Jim’s six intuitive spam tests, so he did not delete it immediately. Instead, he put it into his “To Read Later” folder. Congratulations to you and your marketing team.

Of course, Jim did not find time to read that email, so it got deleted a few weeks later when he cleaned out the folder. But it did its job. It created a little name recognition for Super Security, and made the initial introduction for a longer term relationship.

As VP of Marketing for Super Security, you continue your email marketing campaign, approximately one per month, for the next year.

Jim continues to file the next few emails in his “To Read Later” folder.  He likes the titles, he’s beginning to trust you and Super Security, and he has even opened one or two of them, but he has many urgent tasks and the services of Super Security are not critical at this point.

Then something happens to Jim and Midwest Regional. It could be a merger, a promotion for Jim, an internet attack on the company, or one of his vendors let him down. You may never know the trigger event, but suddenly Jim has a business need for internet security services.

Now he is alert and tuned to any information about internet security. When he gets your next email, he opens it and reads it thoroughly. The case study you reference in the email sounds interesting, so Jim clicks the link to read that study on your website.

Now Jim is ready for your team to engage with him, based on the relationship you have built through your email communications.

The chart below summarizes the email relationship building process.

As the chart shows, your sales team calls Jim only when he expresses interest by opening the email or clicking a link in the email. Jim’s interest level drives the intensity of the interchange. When an external event creates a business need, you will know by Jim’s actions.

These simple guidelines will lead you to effective email communications and easy sales when the time is right.

Always

• Be open and direct.
• Be patient and persistent.
• Respond to your prospect’s actions.

and opportunity will come to you.

If you are doing email marketing campaigns, you need to understand the inbox of your email recipients. If you can think like your recipient, and sit in his chair as he works his way through a huge stack of email, then you will succeed. In this post we will follow Jim Easterbrook, the Director of Internet Security at Midwest Regional Bank.

Some background: Midwest Regional Bank avoided the debt meltdown, did not take any loans from the Federal government, and had minimal exposure to consumer real estate loans. So now Midwest Regional Bank is growing rapidly, gaining new depositors who like its independence from Congress and gaining new business clients, too. Because businesses are fleeing banks that took Federal loans, Midwest Regional can choose the most creditworthy businesses as its new customers.

Jim has a big problem. He’s swamped with work and his inbox is swamped with emails. He cleaned it out Friday afternoon, only to see another 500 emails waiting for him on Monday morning.

Here’s what happens to them

• Jim’s spam filter automatically sorts about 350 emails into his spam folder. He plans to sort through the spam for any interesting emails, but somehow never has the time. Therefore, if the filter calls it spam, then Jim will never see it. (You can keep your email out of his spam folder, and we will talk more about this in a future post.)

• There are about 50 emails from coworkers, suppliers, or customers. Jim responds to these high-priority emails immediately, and then starts dealing with the remaining 100 emails, all lower priority from external sources. Your email probably falls into this bucket.

• Jim set up several rules in his Outlook (the company-selected email application) to help him manage the email. These automatic rules sort about 60 into various folders, such as community, professional and industry. These emails are typically newsletters, meeting notices, and professional correspondence that Jim handles in the evenings when he has time.

• Your email is one of the one of the remaining forty sitting unsorted and mostly unwanted in his inbox. Jim’s goal is to clean out these forty emails in five minutes, so your first email to him will get only about 5-10 seconds of his time.

First Email – Six Spam Tests

Jim uses a simple set of six external cues to evaluate an email before opening it.

Email title – Make it direct, specific, relevant, and plain. Jim intuitively recognizes certain words and phrases as spam. If he sees “free,” “limited time, “dear friend,” or other key phrases, he hits the spam button immediately. Your email should contain some information of value to Jim, and the title should reflect that content.

Recipient Email Address – Send business information to Jim’s business email. Jim has both personal and business email addresses. If your email went to jimeasterbrook0057@aol.com or any other ISP provider (comcast.net, msn.com, yahoo.com, etc.) he will delete it immediately. Take the time to find his business email address and send business emails there.

Sender Name – Make it personal. Your email should not come from the marketing department or the service team. Your email should come from a real, live person, preferably the CEO or an appropriate vice president in your organization.

Sender Email Address – Be transparent. The email address should always match the sender name; Jim unconsciously checks for this. If the sender is Fred Broomfield, then Jim expects to see  fbroomfield@ or fredb@ in the email prefix. Jim is looking for any reason to hit the delete button, so the email address must be obvious and transparent.

Email size and attachments – Small is beautiful, but attachments are ugly. As a sender, you are requesting time from the recipient. Jim always checks the email size, so keep it short, polite and respectful. He does not have time to read long emails and any attachment gets it deleted immediately.

Congratulations, your email passed all of Jim’s mental spam filter tests, so he did not delete it immediately. In fact, Jim moved the email into his “To Read Later” folder.  But don’t get too excited. That folder gets pretty full and Jim seldom has time to read the emails in it. Typically, he just empties the folder every week or so, without reading many of them.

Build a Relationship

The important thing is that with this first email you have started building a long-term relationship with Jim. Keep it up. Next week we will see how Jim handles the next few emails he receives from you.

Did you resolve to take the plunge into email marketing in 2009? If so, you need a good email list. Finding an email list is easy, but finding clean, qualified, effective email list is much more difficult. To ease the challenge, here are five questions that will help you build a more effective email list.

1. Is the list targeted to your prospects?

One of the first steps in a marketing campaign is to identify your prospects. Does this list specifically target your prospects? How do you know? For business-to-business (B2B) sales we identify target prospects at two levels – target accounts, or companies, and target contacts, people within each target account.

First identify the target accounts. For example, if you are selling transportation services then you want to target companies that handle physical goods. Use

• industry codes such as SIC or NAICS to identify target companies; and
• company sales to identify companies with the size that fits your services.

If you cannot get exact sales numbers for the company, you can usually find a sales estimate or a sales range. Even an employee count can help you estimate if the company is suitable for your services.

When your service is limited to a territory, use geography to narrow your target list. If you sell transportation services on the west coast of the US, then identify companies that ship in that transit lane.

Second, identify the target contacts within each account. Which people at an account use your services; approve purchases of your services? Use function and level to identify these contacts.

For your west coast transportation business, maybe the Manager or Director of West Coast Logistics uses your services and the General Manager or VP of Operations approves the initial contract. Depending on the size of your target, C-level executives (CEO, CFO, and COO) may not be involved with your contract unless it is especially large or mission critical. That means that the levels you want to target are Manager, Director, and VP. The functions you want to target are operations, logistics, shipping, transportation, and deployment. These people want to learn about your services.

Does the list contain your targets? Now that you can describe your targets specifically, you can tell your list provider exactly what you want – company sales, company industry, company location, employee level and employee function. Don’t assume or accept assurances, instead get a sample of the list. Do the companies and titles match your specifications? Do they match your targets?

2. Is the list current?

Job changes are accelerating. Senior level executives stay at a job less than three years, on average. With the recession driving significant layoffs and downsizing, many more emails will be obsolete in 2009.

• How does your list provider update its email lists?
• When was each email used last? Did it bounce?

The provider should have this information for you.

Use your list sample to test the emails. Send individual emails to a large test group, and track the responses yourself. Does your bounce rate correspond to the rate promised by the list provider?

3. Is the list complete?

For B2B sales, every email data record should contain this information.

If the sample from your list provider is missing any of these data elements ask why, but don’t hesitate to find a different list provider if the provider can’t supply the missing data.

Email Quality Counts. All email addresses are not the same. For business emails, you should demand a personal prefix and business domain. For instance, john.severinsen@ibmus.com is far better than severinsenfamily@yahoo.com for business communications.

Examine each email in detail. Is the email prefix personal, and does it match the person’s name? For our friend John Severinsen, the email prefix should be some variation of his name—j.severinsen, jseverinsen, severinj, etc. Look out for prefixes like sales@, info@, and nospam@. Not only will you get no response from these emails, but they may land you on a spam filter list.

Examine the email domain. Is it a business domain or an email provider? Do not send any business emails to email provider domains such as aol.com, yahoo.com, msn.com, gmail.com, pacbell.net, Comcast.net, or other email service providers. That is the fastest route to getting on an email black list.4.

Does “Opt-in” matter?

Yes, opt-in counts, but only in one situation—when the person opts-in to your email list. This “direct” opt-in is extremely valuable to you, and only to you.

Indirect opt-in, where the person opted-in to another list, say for the Modern Logistics magazine, that does not mean the person opted-in to receive email from you. Your list provider will show you the text in their email service agreement where their subscribers agreed to “accept occasional email communications from affiliates…” By buying that list you become a licensed affiliate, but the recipient just does not care. You have probably clicked your agreement to a few of these opt-in lists yourself. If the email is unwanted or not appropriate, it gets deleted at best or even reported as spam. Third party opt-in simply does not provide any value for you as a list purchaser.

5. Does size matter?

Does each recipient of your emails care how many other people received that email? Would your sales increase if you could email to one billion people in China? Good targeting and quality content are much more important than list size. Ideally you want to contact everyone within your target market and not a single person outside your target market. That’s the right size. When you focus your efforts on targeting and content quality, your market and your email list will grow naturally.

6. Test, Test, and Test Some More!

You are the only one who can determine the quality and effectiveness of the email lists you purchase. So test each list first, before you buy it. Ask for a sample of 50-100 records. If you already know key contacts at a few current accounts or target companies, ask your provider for samples from those companies.

Look closely at each email record. See if your contacts appear in the samples from companies you know.  Are any data fields blank? Any obvious errors in data format, such as 4-digit zip codes, misspelled cities or states? Any suspicious patterns in the data?

Examine the emails. Any bad email prefixes or email domains? Any illegal characters? Any bad email formats? Any email provider domains? Does the email prefix correspond to the person’s name?

Send some individual emails. Send personal, individual emails to the people. Track the results. Call them after sending the email. Does the telephone number ring? Is it the right person? Did they receive your email? After you test out 100 email data records this way, you will know the quality of the list. And you may even make a sale!

Contrary to promotional hype, successful email campaigns require significant effort to make them pay off. The key point to remember is that quality gives you more bang for your buck than quantity.

Best wishes for your email success in 2009,
Richard Barrett