“Bathing My Cat” and other useful social media insights…

As our mothers used to say to us as kids, “If you don’t have anything nice to say, don’t say it at all!” Man o’ man, ain’t that the truth.

Recently I went on a bit of a Twitter hiatus or, shall I say, #twitterhiatus? It was a self-inflicted purgatory to see what it’d be like to block out the stream of noise that Twitter can be. Now, recognize that if Twitter (or Facebook or LinkedIn) has simply become a worthless noise machine, it’s really your own fault, not the tool’s. Why? Because YOU choose who you want to follow, not Twitter. Maybe if all this social media stuff isn’t doing it for you, perhaps you don’t have interesting friends. Strike that. You don’t have friends who share interesting Tweets or Facebook updates. You know that guy or gal who’s always got the best jokes or the most keen insights or fascinating factoid? Yeah, well why the hell am I getting updates like “Bathing my cat” from them?

Working with companies on their social media strategies can be equally challenging. As you can imagine, nearly every firm out there is feeling behind the curve when it comes to using social media. The problem with social media — as opposed to web design or other marketing campaigns — is that there’s no barrier to entry from a financial standpoint. Yup, that’s right. I’m saying that its “free-ness” is a problem. When stuff costs money to execute, companies spend time thinking about how the want to invest that money. They rightfully question what they want to achieve. They request and require ROI.

But social media execution is practically free so companies have little reason not to simply execute. As a result, all of sudden you’ve got organizations publicly sharing information, tidbits, and snarky commentary without any strategic idea of what they’re trying to accomplish. I bet if it cost $20,000 to get up and running, you wouldn’t see these types of behaviors.

Social media’s magic isn’t in its execution of tools and outposts and pages. Social media, despite its “free” price-tag, is serious stuff with serious and potentially wonderful returns. Every company considering jumping into the realm of distributed content, market conversation, and real-time vetting — all fancy descriptors of social media — need to channel the voices of their mothers: “If you don’t have anything nice to say, don’t say it at all.” Organizations need to take considerable time to ask those basic and fundamental questions: What do we have to say? What do we want — and are prepared — to hear? What is our voice and perspective? How will we handle controversy and criticism? What are our returns? Why are we doing this?

I guarantee there are fruitful answers to all of these questions, but without asking them, you’re more likely to add to the noise rather than become a signal that people gravitate towards.

Woodstock for Capitalists | Andrew’s MinnesotaBusiness blog

Rich people have been getting creamed. From Wall Street bankers sipping their martinis in paper cups to Bernie Madoff in orange prison knickers, the past year and half has been a real bitch to be rich.

On the other hand, there’s one rich guy who’s my favorite — Warren Buffett. The Oracle of Omaha. Andy Rooney’s younger brother. (Alright, that was a stretch.) Last count, Mr. Buffett was the second richest guy in the world, right behind those guys who invented Twitter.

Warren Buffett might be the most boring investor in the world too. He buys insurance companies. He buys Dairy Queens. Get this — he buys railroads. Hey, Warren, would you like a side order of sock garters with that?

But through all of the “celebrity” bank collapses, Federal government bailouts, and perp walks, Warren Buffett has stuck to his conservative, boring investing ways, and we have so much to learn from the old man. Here are some snippets from his annual letter to his Berkshire shareholders. (He calls his annual meeting a “Woodstock for Capitalists”) The entire letter is a fascinating peek into his brain, with folksy prose (“Sing a country song in reverse, and you will quickly recover your car, house and wife”), and scathing critiques. It should be required reading for all MBA students. Hell, all sixth graders should read it.

On “chasing shiny objects” (my words):

Charlie and I avoid businesses whose futures we can’t evaluate, no matter how exciting their products may be. In the past, it required no brilliance for people to foresee the fabulous growth that awaited such industries as autos (in 1910), aircraft (in 1930) and television sets (in 1950). But the future then also included competitive dynamics that would decimate almost all of the companies entering those industries. Even the survivors tended to come away bleeding.

Just because Charlie and I can clearly see dramatic growth ahead for an industry does not mean we can judge what its profit margins and returns on capital will be as a host of competitors battle for supremacy. At Berkshire we will stick with businesses whose profit picture for decades to come seems reasonably predictable.”

On Wall Street:

“We make no attempt to woo Wall Street. Investors who buy and sell based upon media or analyst commentary are not for us. Instead we want partners who join us at Berkshire because they wish to make a long-term investment in a business they themselves understand and because it’s one that follows policies with which they concur.

On CEOs:

“In my view a board of directors of a huge financial institution is derelict if it does not insist that its CEO bear full responsibility for risk control. If he’s incapable of handling that job, he should look for other employment. And if he fails at it – with the government thereupon required to step in with funds or guarantees – the financial consequences for him and his board should be severe.

It has not been shareholders who have botched the operations of some of our country’s largest financial institutions. Yet they have borne the burden, with 90% or more of the value of their holdings wiped out in most cases of failure. Collectively, they have lost more than $500 billion in just the four largest financial fiascos of the last two years. To say these owners have been “bailed-out” is to make a mockery of the term.


The CEOs and directors of the failed companies, however, have largely gone unscathed. Their fortunes may have been diminished by the disasters they oversaw, but they still live in grand style. It is the behavior of these CEOs and directors that needs to be changed: If their institutions and the country are harmed by their recklessness, they should pay a heavy price – one not reimbursable by the companies they’ve damaged nor by insurance. CEOs and, in many cases, directors have long benefitted from oversized financial carrots; some meaningful sticks now need to be part of their employment picture as well.

On valuating a potential acquisition:

“When stock is the currency being contemplated in an acquisition and when directors are hearing from an advisor, it appears to me that there is only one way to get a rational and balanced discussion. Directors should hire a second advisor to make the case against the proposed acquisition, with its fee contingent on the deal not going through. Absent this drastic remedy, our recommendation in respect to the use of advisors remains: “Don’t ask the barber whether you need a haircut.”

His closing statement:

At 86 and 79, Charlie and I remain lucky beyond our dreams. We were born in America; had terrific parents who saw that we got good educations; have enjoyed wonderful families and great health; and came equipped with a “business” gene that allows us to prosper in a manner hugely disproportionate to that experienced by many people who contribute as much or more to our society’s well-being. Moreover, we have long had jobs that we love, in which we are helped in countless ways by talented and cheerful associates. Indeed, over the years, our work has become ever more fascinating; no wonder we tap-dance to work. If pushed, we would gladly pay substantial sums to have our jobs (but don’t tell the Comp Committee).

Nothing, however, is more fun for us than getting together with our shareholder-partners at Berkshire’s annual meeting. So join us on May 1st at the Qwest for our annual Woodstock for Capitalists. We’ll see you there.

February 26, 2010

Warren E. Buffett
Chairman of the Board

P.S. Come by rail.

Is Your Company An Advancer Or A Struggler?

From MinnesotaBusiness.com…

2010 is already turning out to be a banner year in terms of organizations putting digital first in their marketing priorities. For those of us who service the industry, it’s a blessing. The digital marketplace has been woefully underfunded, and everyone knows it. I mean, everyone. The problem wasn’t about tools or technology, it was about knowledge and understanding. That gap is closing.

There are key differences between the companies that are on the right track and those who continue to struggle. They’re concerned about fundamentally different challenges. Let’s pursue those from the positions of The Strugglers and The Advancers.

Challenge: Websites vs. Content

Ah, websites. We love ‘em. But what are they? The Strugglers are concerned about having to do a “site redesign.” They are concerned mainly with how to drive web traffic, freshen up their content, and increase page views. They’d love transactions! (I mean, who doesn’t?) The Strugglers spend a lot of time on a few key areas that are concerning. First, their point of view is more towards themselves and what they’d like to communicate, rather than the needs of their visitors. A website should not be a reflection of an organizational chart, rather a lens into the needs of consumers. This viewpoint creates conflict as competing internal wants and desires replace a keen understanding of their intended audiences. Second, The Strugglers often begin with and gravitate towards their site’s new aesthetic. As such, they are often times enamored with design concepts either produced internally or by their agencies. The teams here tend to galvanize around how a new site may “look.”

The Advancers are less concerned about websites these days and more concerned about how their content and relationships live outside of their sites in the world of distributed content and industry conversation. A “website” to The Advancers consists of several dynamics: incredibly efficient transactional processes (shopping carts, lead forms, sign-ups, etc.), content management that allows for all-content to be sharable and syndicated, and easy-to-follow instructions for conducting business.

Challenge: Brands Are Human

This morning, I had the pleasure of reaquainting myself with an old friend Dan Wallace of IdeaFood. He made an interesting comment in our discussion. “Brands were invented to replace personal relationships between customers and tradespeople.” Prior to the industrial revolution, “brands” consisted of  tradespeople who assigned their names to their companies. The shoemaker, the barrelmaker, the tailor all were known to their markets as individuals. As mass production replaced local manufacturing, consumers lost touch with the human element of their transactions. As a result, the Brand was invented to fill the gap.

The Advancers are recognizing that the digital markets offer an opportunity to rehumanize their brands. It’s possible now to offer consumers access to the real humans behind their products and services they buy. Brands like Best Buy are launching programs such as Twelpforce that make the relationship between customers and customer service more individualized and transparent. Another Advancer is Coldwell Banker Residential Brokerage (disclaimer: a client of mine) who recognizes that home buyers buy homes from agents not brands so they’re training their agents to be sophisticated and helpful users of social networks.

The Strugglers, on the other hand, continue to try and centralize their social efforts within marketing, rather than organizationally develop strategies that take into account how consumers actually interact with them across various disciplines.

Challenge #3: Earn vs. Buy

Here’s where current challenges hit your pocketbooks. Increasingly, The Advancers have hit their stride in their abilities to earn new customers and make existing customers more loyal by being more open with their content and relationships. The Strugglers continue to need to pay for their relationships. To put this in a very simple example, take the difference between search marketing and search optimization. Search marketing relies upon The Strugglers bidding against each other for placement within the paid listings on Google and the other major search engines. And there are a lot of people bidding on these finite terms, thereby driving up prices, often times outside the realm of positive ROI. Don’t get my wrong: there are plenty of circumstances in which paying for traffic makes sense — time constricted campaigns, message testing, etc. — but to be completely reliant upon paid media certainly does not take into consideration the many opportunities to earn relationships.

Search optimization, on the other hand, is the result of creating great content that, increasingly, has social connections to it. The Advancers are building strategies that take into account that Google, in particular, is indexing social content (Tweets, reviews, blog commentary, and other co-created content) at such a rapid pace that “branded” content is getting pushed off page one. Google hasn’t made this change because it’s trying to be some sort of social Overlord, rather because myriad data indicate that’s the type of content you and I trust. The Advancers are encouraging customers to review their products and services. They’re participating in online discussions about their industries. They’re creating sharable content left and right, not just because they’re good people, mind you. They’re doing this because that’s where the action is. The Advancers recognize that earning people’s admiration through being more open is a hell of a lot less expensive than having to pay for it.

So, where are you on the spectrum? Are you asking the right questions? What’s getting in the way? At the center of all of these challenges is the transition from the Industrial Age to the Information Age. That’s all.

Easy, huh?

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