The Future: Social Enterprise

Blink:

In my last post The Big Gap I addressed the global compensation culture and warned about the dangers of self-enriching executives. As the workplace continues to morph in the new Covid era, I believe occupants of corner offices should be more concerned about building social enterprises for long-term sustainable growth.

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As the number of people fully vaccinated increase (approximately 47.1% of the U.S. population (source: NPR Health News as of the July 4th weekend), more white-collar workers are gearing up to return to their offices. Thanks to the pandemic technology transformation of communication tools resulting from people working remotely, work place experts project businesses will create hybrid models in which workers will split their time between their office and home. A major leadership challenge for the C-suite – tech or leadership or both?

Technology is a given, especially with customers. One of my favorite resources for a better understanding the utilization of the digital world by corporations is the CMO Survey, a group created back in 2008 by Duke’s Fuqua school of business. In their latest survey released back in February, no surprise 73.8% of the respondents indicated they enhanced their digital marketing interfaces. Only 43.3% relied on data-based execution. Branding and companies taking a stand on social issues, especially COVID-19 and racial equality ranked high by a majority of the respondents, but varied by industry; B2C products being the highest at 85%. In regards to communications, 65.3% reported changes with approximately one half (48.7%) of the respondents indicating the changes were successful in contributing to their company’s overall performance. 53.4 % of the companies indicated there was a change in training, yet moving forward only 20.4% were going to spend money on training geared towards “Big Data”. I believe if companies are going to implement a hybrid workplace model, they are going to have to make the investment to train their people a priority on how best to navigate their digital toolbox to communicate internally and externally to build a social enterprise for long-term sustainable growth. The graphic below details the building blocks of a social enterprise – the future!

The Social Enterprise

Key words that appear in the first three building blocks in the above graphic: connect, engage and collaboration are derivatives of effective communications. The hybrid workplace will combine high tech remote working communications with low tech face to face coffee break room interactions. C-suite leaders should not expect communications will flow smoothly after the disruption created by the pandemic in their organizations. They will need to help establish the communication boundaries/guidelines needed to build a social enterprise, thus allocate money and resources to adapt to a hybrid work culture.

Occupants of the C-suite, are you prepared to make the changes needed to build long-term sustainable growth in the new COVID era?

The Big Gap

Blink:

CEO compensation once again made headlines. Equilar, a leading compensation consulting firm released their results of an executive renumeration survey. 2020 was a banner year and the gap during the pandemic widen between CEOs and everybody. Reminded me of management guru Peter Drucker’s warning decades ago of “The Greed Factor.”

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Drucker’s mantra was about the need for moderate uniformly corporate compensation. He believed in performance related pay (rewards) for exceptional/outstanding contributions (e.g., innovation) was acceptable, However, he believed a 25:1 after tax differential would be more equitable and lead to the better overall performance of a company, internally and externally. In 2020, the gap between the C-suite ballooned to 274 CEO vs. the median worker compared to 245 times the prior year. On Average CEOs pay increased 14.1 percent in 2020 compared to.9 percent for the median worker. Equitable?

One major pay for performance equity reward is what Drucker labeled “Golden “Handcuff” stock options. Corporate boards establish stock price hurdles predicated on future stock prices and valuation to pump up their CEO’s pay even if they are currently reporting net loses. A good example is a young company with vision of grandeur, Door Dash a food delivery company. Tony Xu its chief executive placed second in the survey at $414 Million. Thanks to the company’s IPO, Tony was rewarded restricted shares of stock despite the fact the company has yet turned a profit ($461 million net loss on reported revenue of $2.9 billion in 2020). What day to day contribution will Tony make to Door Dash’s future long-term success, a company relying on gig workers (“Dashers”) for delivery and the community they service merchants/consumers or are they riding the food-away-from home delivery wave resulting from the pandemic?        

Drucker believed that the “community” of a business enterprise is such a valuable thing itself that executive pay should not be allowed to endanger it, through pay structures that are generally considered to be unfair. Again, Drucker argued that executive pay should not exceed 20 to 25 times that of skilled workers. Decades ago, he was warning us about The Big Gap and dangers of self-enriching executives. Bottomline the global corporate compensation culture will continue. Overall, companies will continue to exhibit strong performance thanks to technological advances resulting from the pandemic. In the process, I advocate C-suites should begin to embrace social enterprises for long-term sustainable growth to benefit its employees, members of its supply chain and community.

In my next post I will review my thoughts regarding the future establishment of social enterprises.

Digital Mental Health

Blink:
I often think about society’s future mental health as a result of the pandemic. Ensuing from the trauma people experienced – death, illness, losing their jobs, lockdown isolation etc. The Kaiser Family Foundation reported four in ten adults in the U.S. revealed they had symptoms or anxiety or depression.

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In the future will there be enough affordable mental health professionals, therapists and psychiatrists to help us cope? The need for mental health services has open the window of opportunity for digital mental health. According to the American Psychiatric Association there are approximately 10,000 apps in what has evolved to a multibillion-dollar industry.

How do most automated therapy apps work? They utilized AI algorithms to guide people through the therapy process via a series of behavioral questions similar to in-person therapy. Is digital therapy an affordable solution for the future for filling the void of qualified, skilled mental health experts? Stay tuned. Automated therapy is a relatively new, uncharted, disruptive industry. Will the apps help people truly understand themselves better or help them change long-held behavioral patterns? To me it will depend on the situation at hand personalized for each individual. Consequentially, I do not foresee AI algorithms covering all bases of mental health issues comparable to a trained, experienced analyst. Consequently, my reservation is AI algorithms utilized for the behavioral process digitally for therapy will be too general. A hypothetical example I read researching this post is detailed below:

Digital patient: “I am experiencing a relationship problem right now.”

App: “Tell me more”

Digital patient: “Blah, blah, blah.”                                                         t

App: “To build a better relationship are you prepared to accept 100% of the responsibility for the changing the relationship.”

Digital Patient: “Please explain. I do not fully understand.”

App: “Well for starters blah, blah, blah………….”

Sounds very general to me? Makes me wonder how any of the available apps would handle a more complex personal well-being issues related to the pandemic or one recently bought to light by a tennis prodigy. Anxiety resulting from professional ambition not just for professional athletes, but individuals in demanding work environments. As I stated earlier, automated therapy is still evolving and will take time for the scheme of algorithms to be developed in the future COVID World where one size (e.g., angst) does not fit all.

How do you feel about digital therapy?

Food Inequality

Blink:
My google search this morning uncovered the average cost of food per month for the typical American household (2.5 people) is approximately $550.

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What is the relevancy of this trivial stat? A sign!

Back in May I posted Share of Collectibles which detailed some statistics about the wealthy further highlighting income inequality in the U.S. Earlier this week I read an article concerning another prime example of income inequality. A new food-away-from-home trend has surfaced in California. Prominent high-end chefs who lost substantial revenue due to the Covid pandemic shuttering their restaurants or the fire damage which damaged wine county have found a new venue for their operations. Resorts (north of Los Angeles or Mexico) thanks to their indoor and outdoor space normally utilized for banquets (e.g., weddings). One chef in Ojai Valley orchestrated for 44 guests a 13-course meal complete with wine pairings from the renowned Krug Champagne house and Harlan Estate. Gastronomes paid $999.00 per ticket for the dining experience.

$999.00 per ticket! A lot of groceries for the typical American household (2.5 people) as I stated in my Blink. Food inequality, a byproduct of income inequality

Technobabble (a.k.a. Privacy)

Blink:

I enjoy posting about consumer marketing, specifically consumer targeting. Have you been following the Apple and Facebook privacy feud? As one of my favorite columnists Paul Krugman suggests, when it comes to high tech, which is currently under global scrutiny, we need to cut through all their “technobabble.”

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Background in English – Privacy Is all about a tech company’s ability to track user’s behavior online (a.k.a. data) and sell it to advertisers targeting consumers. Facebook believes in the open internet with no limitation to tracking so it can fuel its ad business which generated approximately $25 billion in the first three months of 2021. They (Zuckerberg) got into a hissy fit late last year when Apple introduced a new iPhone operating system requiring each app to ask permission for tracking user data across the internet. Facebook claims permission tracking hurts small businesses to effectively grow since they cannot afford the data brokers, thus advertise competitively. Fact: Only 6 percent of U.S. daily users, closer to 15 percent globally (source: Flurry Analytics) opted to allow Apple to sell its data.

Thanks to a borderless digital space, the data is already out there! I am just highlighting the feud between Apple and Facebook. If you cut through all the technobabble, Facebook’s real concern is about transparency if consumers opted out thus it would threaten their advertising tracking business model – the ability for advertisers to trace purchase conversions for their ads. I am only addressing two of the tech behemoths. What about Google? They have minimal privacy features for its Android mobile software – advertising revenue is one of their driving engines.

I have been a long-time advocate it is time to reel in and regulate high tech. Big brother is watching! And listening. Another future area of concern is the utilization of voice profiling via voice technologies (e.g., Siri) by consumer marketers – analyzing the sound of our speech to provide behavioral clues.

Alexa, “what do you think about privacy?”

Shares of Collectibles

Blink:

Thanks to the COVID-19 pandemic, millionaires are the new billionaires. The United States gained 56 new billionaires bringing the total to 659 (source: Institute for Policy Studies). The wealth held by a small bloc of Americans (10% households; approximately 70% net worth) increased by more than $1 trillion.

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The coronavirus windfall extends beyond the world’s 10 10 richest billionaires — Elon Musk, Jeff Bezos, Bill Gates, LVMH luxury group’s CEO Bernard Arnault, etc. Collectively their wealth grew by an estimated $540 billion over this period.

Noticeably the stock market’s upswing thanks to government policy (e.g., Federal Reserve’s commitment to zero interest rates), benefited the wealthiest 10 percent of households. They own 88 percent of all stocks, thus capitalized on the 18 percent increase in the S&P 500’s total return during 2020.

Many on-paper gains during attributed to the COVID-19 pandemic may prove transitory. At last count, approximately 650 billionaires in America saw their net worth increase by more than $1 trillion (note: they’re now worth more than $4 trillion) Bottomline: we probably will not know the complete impact on wealth and income distribution for a few years as a result of a new breed of investors, yield-hungry wealthy people buying shares of collectibles in lieu of bonds or shares in private equity funds They are buying fractional shares in collective assets like designer fashions (e.g., signature Hermes tote bags), exotic cars, memorabilia, race horses, etc. These collectable shares are traded until the owner of the market place sells the asset.

What impact did the pandemic have on collectible assets? Potential investors took advantage of spending more time at home, thus more time online researching information available via apps (e.g., Rally Rd.) catering to shares of collectable assets: taking equity in an object that you might not own outright, but might still prove to give you good dividends. What confuses me is how investors can place value to their investment assets or is it all about the bragging rights? Example: What is the true share value of Air Jordan 1s from designer Melody Ehsani sitting in the closet of a member of the Rally Rd, community.

Forever Relevant – Frank Gehry

Blink:

I was sorting through some old newspapers, when I came across an article that piqued my interest. It was about Frank Gehry, one of my favorite architects, detailing all the current projects he is working on.

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At age 92 when most people retire or garden, the man continues to be prolific (building projects, Philadelphia museum renovation, an opera set, Los Angele’s Riverwalk, etc.). He is the truly “An energizer bunny.” Reading about Gehry Reminded me of my 2009 post: Lessons from Great Artists & Architects.

Thursday, April 9, 2009

Lessons from Great Artists & Architects

Blink:
In my last blog posting, America’s Coach, I indicated that I have been inspired by some great people I never met, artists and architects that have guided me on my business journey. The list is long: Leger, Matisse, Picasso, Chagall, Miro, Calder, Dali, Neel, I. M. Pei and Frank Gehry.

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Detailed below are the lessons I have learned from my favorite artists and architects:

– You must start with traditional training before you can breakout and create new ideas.
– Simplicity.
– Scale – sketches that lead to large masterpieces.
– There is no instant gratification when it comes to artistic creation.
– Artists serve people and live in a commercial world, but they need to discover how they can step outside the norm, take risks and slice their sliver/niche.
– When artists/creative people step outside the norm they must accept criticism, wear it like an article of clothing for a while, then toss it and move on.
– What makes it all worth it (the thrill) is the process of pulling together an achievement.
– Don’t compromise your values.
– Treat each client differently and special.
Harmony = Balance.

One final thought. Each one of the individuals on my list were larger than life, thus taught me the value of Joie de Vivre, the Joy of Living.

Actually, when I reviewed the list of great artists and architects above, beside their Joie de Vivre, I realized most continued to be very prolific and creative, thus experiment as they got older.

  • Picasso (90) experimented with betograves concrete engravings for his sculptures.
  • Chagall in his 90’s experimented with a new stencil technique called pochoir.
  • Matisse (74) created his famous Jazz series made from                     collages of colored cutouts.
  • Mior at 90 was quoted, “young people, future generations interest me not the old dodos. Miro began painting with his fingers.

Are you an “Energizer Bunny?”

A Cut Above – An Update

Blink:

Once again kudos to Chipotle Mexican Grill. Last year I wrote about their innovative supply chain initiatives, plus recognized them for winning Marketing Dive’s 2020 mobile marketer of the year award. Last week I learned they formed another strategic alliance with cosmetics brand e.l.f to further leverage their target audiences.

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Last year during the pandemic, Chipotle and e.l.f. Cosmetics created a special virtual prom after-party for teens. Both companies have a core value of using ingredients that personify purity/sustainability, thus appeal to Gen Z. Note: The prom makeup kit e.l.f. assembled last year sold out in four minutes. The CMO of e.l.f. also indicated data revealed their products were purchased by a group of new consumers to their product line.

Now they are in the midst of launching the sequel (round two): A limited-edition line of beauty products inspired by the fast-casual chain’s menu. Chipotle will add to its menu a vegan Eyes Chips Face bowl inspired by the beauty brand. e.l.f. created custom food inspired products like an avocado-shaped sponge for applying makeup, eyeshadow colors that run the gamut from avocado to hot salsa, a red Make It Hot Lip Gloss and an Eyes Chips Face makeup bag. These items will go on sale on their company’s websites, apps, as well as numerous social media platforms (e.g., livestream selling platform Ntwrk and TikTok). Both companies announced they will make more product available given the results of their first collaboration. Brand synergy! Their smart marketing goal is to engage and integrate their brands with Gen Z culture.

Chipotle: Always innovating; A Cut Above!

Astonishing COVID-19 Domino Collapse

Blink:

I have been binging on Netflix’s foreign language TV shows – streaming crime dramas and heists. In its quest to appeal to global audiences, Netflix is ushering in the new television era. Actually, binging is a byproduct of the pandemic lockdown. Overall, streaming services exhibited robust growth disrupting the entertainment business.

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Throughout the pandemic, I have published numerous posts about the COVID-19 domino collapse associated with different segments of business – travel, luxury watches, etc. For today’s post I would like to focus on theater chains.

Globally, analysts project 2020 box office revenue losses of $20-$31 billion. In the spotlight, market leader AMC threaten with bankruptcy, raised $1 billion to stop their hemorrhaging. Despite burning through some cash, Cinemark by contrast, thanks to innovation (e.g., private watch parties, where families or small groups rent full auditoriums for $99), believe they will come out of the pandemic relatively intact. Regardless, interesting week ahead for the entertainment business. New York Gov. Andrew Cuomo announced New York City theaters can begin opening at 25% capacity on March 5. Theaters will need to assign seating to maintain social distancing, and a maximum of 50 people will be allowed per screening. California is expected to follow suit within the month. Note: New York and Los Angeles combined, account for 15% of domestic box office revenue.

Good news movie theaters are reopening. However, the market for streaming services (new services and subscribers) has exhibited strong growth (37%) during the pandemic lockdown of 2020. Back in 2020 Variety magazine conducted research about consumers’ anxiety over health and safety in public venues, specifically movies, thanks to the pandemic. Key findings: 70% indicated if costs were roughly the same, they would more likely favor watching a first-run feature from their couch; 13% at a local cinema, with 17% not sure. 

Sounds like a COVID-19 domino collapse for movie chains:

  • Less box office revenue.
  • Less employees to run the theaters.
  • Less concession stands sales (e.g., soda, popcorn, candy, etc.).
  • Less concession stands packaging materials (e.g., cups, popcorn containers, napkins, etc.).
  • Less sanitation products (e.g., cleaners, bathroom materials, etc.).

Long-term, how do you think major movie chains will manage in the new COVID era?

Trivial Rebranding

Blink:

Last summer I posted Branding 2020 – Part I Responsible Messaging. In addition to the pandemic, racism in America was a noteworthy issue. Quaker Foods announced they were going to rebrand Aunt Jemima given the brand’s racial stereotypes. Last week PepsiCo. publicized the rebrand as the Pearl Milling Company. Trivial!

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I am an Aunt Jemima brand alumnus. I was the junior member of the AJ brand team back in 1986. We decided to rebrand Aunt Jemima by providing her with a graphic facelift – a fresh profile, plus removed her bandana. I remember the countless meetings, plus traveling around the country conducting focus groups listening to Afro-Americans voice their concern about racist branding. In retrospect, maybe a naïve advertising mishap only settling for a packaging redesign of her image versus a total rebrand including changing her name. Consequently, I wanted to get a better understanding of the origin of Pearl Milling Company. This is what I learned:

  • The current line of Aunt Jemima pancake mixes, syrups, cornmeal, flour and grits rebranded to Pearl Milling Company in the familiar red packaging, will arrive on supermarket shelves June 2021.
  • The Pearl Milling Company dates back to 1889, when a small mill in St. Joseph, Missouri developed a milling process producing flour, cornmeal and self-rising pancake mix that would go on to be known as Aunt Jemima.         
  • PepsiCo Inc.’s press release (a.k.a. corporate speak) indicted Quaker Foods worked with consumers, employees, external cultural subject-matter experts and diverse agency partners to gather broad perspectives to ensure the new brand was developed with inclusivity in mind. They also announced they will initiate a $1 million commitment to “empower and uplift Black girls and women” in addition to PepsiCo’s more than $400 million, five-year investment to uplift Black business and communities, plus increase Black representation at PepsiCo.

As I stated above, I remember the countless meetings we conducted back in 1986 to rebrand Aunt Jemima. I can only imagine the number of meetings already conducted and the future meetings needed to launch Pearl Milling Company by June of 2021. FYI: Other brands scheduled to rebrand thanks to the racial reckoning of 2020 include Uncle Ben’s, Cream of Wheat, Mrs. Butterworth’s and Eskimo Pie.

Back when I was a product manager in corporate America, rebranding was like a face lift. We wanted to refresh our brand messaging to sell more widgets. Rebranding in 2021 sounds woke: trivial rebranding!