Spin Country
Why has the rise of the Web coincided so precisely with a
decline in organizational candor? Obviously I don't blame the web, but I
wonder at
the coincidence. By organizational candor, I'm thinking of the alignment of
what
is said by corporations and religions and companies, compared to their actions.
Whether it's a company, a government or a religion, it seems that a marketing
mentality has co-opted the organizational agenda.
This disconnect
is what the Cluetrain guys were describing:
"Corporations do not speak in the same voice as
these new networked conversations. To their intended online audiences,
companies sound hollow,
flat, literally inhuman."
Have you heard the old saw that a man's blood supply
is insufficient to
support his brain and penis simultaneously? Likewise, perhaps, there's just
not enough energy in an organization to talk the talk and walk the walk.
Our
Future Economy
Not the economy of the future, but an economy obsessed with
future outcomes. That is to say, outcomes which have not yet occurred. That
is to
say, outcomes
which are not in place, as in nonexistent. We think it's great to be forward-looking,
working on emerging technologies and inventing the future. But organizations
seem to spend so much effort describing their impending triumphs that they
just can't match their projected image or meet the inflated expectations that
they
so casually broadcast.
Perhaps it is the Internet's fault. Perhaps it's always been
like this and the Internet has exposed a traditional disconnect which was
not obvious
before.
However,
there's another suspect. Some time in the 1990's, the quintessential corporate
obsession became stock price rather than intrinsic company value. And stock
price is all about unexpected good news which the SEC calls "Forward-looking
statements". These statements have even perverted formerly reliable statements
like "the company will":
"The Company and its representatives may from time
to time make written or oral forward-looking statements, including statements
contained in the Company's filings with the SEC and in its reports to
shareholders. One can identify these forward-looking statements by use
of words such as "strategy," "expects," "plans," "anticipates," "believes," "will," "continues," "estimates," "intends," "projects," "goals," "targets" and
other words of similar meaning."*
Aha!
Now we're on to something. Corporations must maximize their stock market valuation
so employees who do the things that raise the stock price are valued
above all others. Now let's consider what really drives stock prices. Do we
think it's by doing the right things that build a solid company and better social
values?
No, that's just the spin. The market discounts all the information it already
has, whether it's product news or war news, as Mitch Ratcliffe observed on
April 9th in Wreakonomic
Reality:
Saddam's statue topples and the Dow closes down
100.98 points, off 1.72 percent for the year. The predicted rally on the
heels of a rapid "victory" in
Iraq hasn't materialized (now we're in for months of internecine conflict
and a slow dissolution of the "new Iraq" as the U.S. moves on to
the next crisis -- see Afghanistan for details). The long run-up to war kept
growth
subdued and now we're seeing the impact in lowered guidance from companies
and rising national debt and trade deficit s. In other words, war isn't a
magic elixir
for the economy and we still have to face reality, that a lot of basic block-and-tackling
of fundamentals needs doing. This from the New York Times :
"
The market has been absolutely thrilled about an imminent end for arguably
(these) first three weeks of the war. We started the stock rally before
the war started,''
said Arthur Hogan, chief market analyst at Jefferies & Co. "Unfortunately,
when investors stop celebrating they will have to focus on corporate profits,
which may not be so jubilant,'' he said.
Profits. Those often ugly realities which, we know, companies
will attempt to counter with marketing to the stock market, spinning the
analysts, pre-announcing products not ready for
prime
time and all the other insubstantial maneuvers meant to divert the world
from that pesky challenge called profits.
The Hard Work of Holding a Job
The obsession with brightly painted futures is
not confined to the executive suite, it permeates organizations. The brightest,
most ambitious employees
can't afford to work for a living. They need to hold jobs for a living. Sure,
they'd
like to work for a living, but they need to do what best secures their families'
futures: their careers. And what builds careers? Expectations build careers.
Track records don't build careers, mentoring doesn't build careers, innovation
doesn't build careers.
What builds careers is the constant expectation that
you will make things dramatically better, with the emphasis on the dramatic
part. And that's the
problem. Practical,
workmanlike solutions are not dramatic enough for a spin-based economy. No,
if you want a meteoric career, you'd better come up with whopper ideas, transformative
re-structurings, mega deals and impossibly complex global initiatives that
are
never proposed by the conventional, unimaginative people whose horizons are
limited by the realities of operations and the fact that there's no such
thing as
a resourceless task.
What if things don't work as planned? It really won't
matter to your career, because you'll have moved on to your next grand
vision. The disconnect
between the grand plan and the sad reality won't be apparent until you've
applied your magic to an even bigger opportunity in some other division
or subsidiary
or, more likely, moved up to corporate where your positive attitude and
strong convictions give hope to an even higher level of credulous cheerleaders.
Nope,
none of has met a bubble we didn't love, in a company or in the market. For
those with the best backgrounds, prospects and handshakes, bold initiatives
are the path to corporate stardom, with a remarkable strain of company amnesia
about what happens to the grand plans 3 years later, when the shooting star
of your career is riddling another operational illusion.
What Doesn't Work
There's a lot of ritual in business. We do things because
it's unthinkable to not do them, even if there's no evidence that they make
much difference.
Consider
Marketing and sales. When we consider the billions of dollars spent on advertising,
we glimpse a naked emperor. Maybe there's some huge cohort of the population
that we've never met that is highly impacted by ads, but I haven't met anyone
whose buying decisions are actually impacted by most advertising. If my premise
is correct, it's because there are three kinds of purchases, habitual, important
and trivial.
- Habitual buys, like detergent, cereal and corporate OS
decisions.
(A kind of dogma that Mitch described in his important article, The
Invisible Dogma.)
- Important buys, so crucial we blow right past the ads and do our own research.
(which,
thanks to the web, is easier than ever)
- Trivial buys, based more on shelf position and coincidence
than ad awareness.
I know, there are far smarter people than I who have proved
time again that advertising is effective and crucial. I'm just reflecting
my experience and
that of people I know. Do you suppose those studies were done by people with
a vested interest? Maybe they're just more spin, since a lot of careers are
counting on advertising. Don't pay attention to the detail that the only
ads with measurable
effectiveness, Web and email ads, are so ineffective as to be laughable.
The other thing that doesn't work as advertised is selling.
Don't take my word for it, ask Jerry Vass, author of Soft
Selling in a Hard World. Jerry is paid a lot of
money to teach highly paid account execs to string together the right words
to close
sales. He will tell you that only 52% of sales are the result of selling.
The remaining 48% involve salespeople, but may be subject to the same three
limiting factors as advertising. Here's Jerry's assessment of most experienced
salespeople:
Company Secrets
Experienced salespeople lack the skills
to present at the boardroom level because they are unable to explain:
• your firm's sustainable competitive advantage
• your unique selling proposition
• what business you are really in from your Client's point of view
• how your service fits the Client's business
• how your service is different from the competition
• the results your service delivers in the Client's terms
• why your service is worth your asking price
• why you are defenseless in a price negotiation
• why you are surprisingly difficult to buy from
And here is the kicker:
Your salespeople don't know that they don't know and leave half their business
undiscovered and unsold.
So if marketing doesn't work and selling doesn't work, how
do we explain all the business that gets done? We are, after all, running
a robust economy here, even when times are slow. Maybe it's because
we're all in the habit of buying stuff from each other, and we make our peace
with whatever level of quality our research leaves us with. Maybe competitors
spend about the same amount on marketing and sales and so it looks like it's
as necessary as sponsoring a tennis star or golf tournament. But I think
it's because top executives like to hobnob with celebrities.
What we do know is that if a company quotes a study, we assume
it's been rigged in ways we can't analyze. If the government says a new law
is good for us, we assume it's beneficiaries have prepaid its sponsors. If
the Catholic Church or the Air Force Academy says that sexual abuse is rare,
you know that a lot of innocents are being taken advantage of.
Spin gives you motion sickness and our society is looking
a little green around the gills.
12:16:39 AM 
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