Tuesday, June 25, 2013

Heresy Brings Peace to the Middle East

If you've ever read any of my stuff, you've become familiar with my own definition of branding, which is "being perceived as the only solution to your prospects' problems."  Normally, I like to focus on the part about being the only, because differentiation is a key component of success in the market.  

But while being the only has its advantages, that's not to say it's, well, the only benefit of brand strategy.  Too often, business and experts alike forget the part about brands providing solutions, which is just as critical.  Brands that simply differentiate often fail precisely because they don't provide adequate solutions to their prospects' problems. 

That's just as true in international politics as it is at your local shoe store.  And one of the best examples I can think of is the Middle East.

Those who know me also know that to me, life is a branding problem.  If you build the brand from the outside in, you construct a solution that's more effective for two reasons:

1.  The brand is for people who don't know you, which means it has to resonate with their interests, not yours.
2.  By building it from the outside, the brand strategy avoids the contamination of internal politics and hubris.

Of course, there are no brand strategists in Washington D.C., so there's very little likelihood that any solutions could ever be achieved.  Let's face it:  All the suggestions emanating from there are constructed purely from self-interest to the exclusion of everyone else's, while being wholly engulfed by politics and hubris.  So there's just no way solving the Middle East crisis is ever going to spring from the halls of our Great American Democracy.

So here's another take to get you thinking on how peace really could be achieved in and around Israel and its neighboring states.  I warn you, this is strategic in nature, and hardly politically correct.  But where I come from, we value what works over who likes us:

The first piece of heresy I'd introduce is the internationalization of Jerusalem.  That's right, I'd draw a perimeter around the city that's home to three of the world's great religions (Asian orders have no skin in this game) and offer Muslims, Jews and Christians complete, equal, undivided interest and total access to every neighborhood.  Of course, as we learned from The Lion King, "with great power comes great responsibility," so each religious affiliation would also be responsible for jointly securing the city. 

See, what politicians have forgotten is that consensus is built from common interests, not conflicting viewpoints.  The big problem with Jerusalem is that everyone is so busy wanting to own it that nobody's realized it's in everyone's interest to preserve and use it.  Jews, Christians and Muslims all claim to have roots there.  They all claim to value it.  So why not all chip in to protect it?   

International cities do just fine as soon as people get used to the idea.  The Vatican thrives in peaceful existence with the world, protected -- and I used that term very loosely -- by Swiss guards in questionable-looking uniforms.  Nobody attacks the Vatican.  Everyone respects its status. No guns.  No bombs.  No threats of driving the Pope into the sea.

I can already hear people freaking out about this, but stick with me for a minute.  Think about it:  Who's going to blow up an asset that everyone values, and more importantly, in which they have an ownership stake?  Especially if the unit charged with protecting the place is a joint force composed equally of Christians, Muslims and Jews?  If it's in everyone's common interest to secure his share of ownership, it's in nobody's interest to destroy his share.  And because it would be an undivided share of ownership, like the common areas of your condo complex, attacking any part would be attacking yourself.

"Ah," I can hear you reply, "but those who would destroy valued religious icons are not rational! They are terrorists! Religious fundamentalists!"  And you're right.  They are.  But once all three religions were to ratify the existence of an internationalized, co-owned Jerusalem, each religion would remove its radical elements' raison d'etre:  There'd be little incentive for anyone to attack Jerusalem because they'd be attacking what they already own.  When your own people don't support your revolution, recruiting soldiers gets harder by an order of magnitude. 

Then there's the issue of Jerusalem being the capital city of Israel.  I'm not naive enough to suggest Israel leave it's capital city unsecured.  But I'm certain that Israel can exist just fine moving its capital out of Jerusalem, just as it functioned for decades previously.  After all, Boeing moved its corporate headquarters from Washington to Illinois and last I checked, they're doing just fine.  Besides, Israel has already done a "land for peace" deal.  If Israel can avoid the human and financial costs of war, why not just pack up and move down the road?  They still have their share of the city.  When you calculate how the costs of a perpetual state of alert drains the Israeli economy, the increase in productivity likely creates a peace dividend not seen since the Reagan years in the USA.  The fact is that far more Israelis, Palestinians and Arabs already spend more time engaging each other in business deals than on battlefields.  This just steps up the game.

Okay, so there's zero chance of anything like this ever happening.  I'm used to that. You have no idea how many effective solutions are never implemented due to politics, hubris and simple inertia.  So maybe I can't sell this one to tamp down the violence in the Middle East.  But, hey, there's always downtown Oakland.

Sunday, June 09, 2013

J.C. Penney Circles the Drain

Every once in a while, a reporter calls me up and -- more often than not -- succeeds in at baiting me into a rant about a popular brand in play.  God only knows how many Great American Brands have suffered on Death Row at the hands of incompetent management -- Kodak, Maytag, Woolworth, Sears are just a few of the more notable casualities. 

And then there's J.C. Penney.

Years from now, JCP will likely be the textbook case illustrating how clueless corporate boards can be about the businesses they've acquired.  In the case of JCP, the naiveté and outright ignorance is nothing short of astounding.  If you don't know the story, the abridged version goes something like this:

J.C. Penney's board was essentially taken over by outside financial investors, who weren't at all pleased with its financial performance.  In their eyes, despite J.C. Penney being a long-standing staple of generations of Americans, the entity as a whole was an under-performing asset.  Ostensibly, this was the main reason for the financiers to wrest control of the board:  After seizing control, they'd install new management and show everyone exactly how it's done.

So the old managements got the boot.  The board hand-picked its new CEO, Ron Johnson, for one reason alone:  he was the guy responsible for designing Apple's retail stores.  Keep in mind that at the time of his appointment, Apple stock was soaring on a weekly basis, the digital darling that weaker minds perceived as proof that "you can succeed in a recession if you know what you're doing."

Clearly, that wasn't the case with this decision.

While Johnson certainly has talent and success with Apple (and retail clients prior to that stint), the board became so blinded by Apple pixie dust that it neglected to notice Johnson had absolutely no experience or talent in branding or operations.  They simply expected him to wave his Jobs-like wand over their operations and wake the next morning to find Americans embracing J.C. Penney as the "Apple of household retail."

Johnson was given a carte blanche to do whatever he wished, beginning with his forté -- redesigning floor space.  In an unbelievable escapade of sheer hubris, Johnson went to the full court press and re-designed every store in the chain without ever testing the concept on a limited basis.  That was Mistake #1, because in short order, consumers proved worse than indifferent -- they hated the new environment because it wasn't the J.C. Penney they knew and loved.  They could sense this was Mr. Hollywood consdescending to Middle America -- and they didn't like it one bit.  A failure that could have been less public and less traumatic actually failed large scale -- and very publicly.

Mistake #2 was Johnson underestimating the slow, grinding pace of brick-and-mortar retail.  JCP wasn't iTunes and it wasn't Apple.  J.C. Penney is as old as retail gets in America.  Things happen over time, often at a glacial pace.  Once again, the Apple pixie dust proved illusory.

Mistake #3 -- the most important one -- is the Johnson never understood brand strategy.  He never took the time to understand JCP's brand, nor did he have the skills to create and implement any changes to it.  Let's face it: if you don't understand how a car works, you're really in no position to dictate how to repair it.  Johnson rode his successes based on his design skills.  Getting its staff and its public to understand why J.C. Penney should be perceived as the only solution was far afield of his abilities.

Ron Johnson lasted a total of 17 months at J.C. Penney.  The board replaced him with the very same managers they'd booted to bring in Johnson.  But the story doesn't end there, either.

Recently, JCP launched a mea culpa ad campaign, essentially apologizing to the American public for being as stupid as they'd been.   Proving they're still as stupid as they'd been, they published a report in the Wall Street Journal of "research" claiming that JCP's efforts to improve its brand was working .

Surveys?  Really?  I don't think so.  The only surveys that count are those that ring the cash register, and that won't be happening at JCP any time soon.  Surveys are what inept corporate spin doctors wheel out to cover their own inability to get things done.

In the corporate world especially, this is what happens when decisions are overly reliant on data rather than smart, strategic judgment.  Generate enough statistical garbage and the decision-makers can avoid accountability because they can always blame the data.

J.C.Penney is hosed until they articulate a clear brand strategy and execute it smartly.  That doesn't happen with thirty second band aids proclaiming how stupid you've been.  It does, however, do a good job of proving just the opposite.