Wisdom from my Internship

During my internship this summer, I had the opportunity to meet with many company leaders. Most of them shared sage career advice. Here are bits of wisdom from a few of the fascinating people I met:

VP of Marketing

• Find the nuggets you can learn from your superiors. Even managers who you do not wish to emulate in some ways can teach you something important. Learn what you can from them.
  
• Gain advocates who will give you honest feedback.
• Prepare for meetings with superiors. Anticipate their questions and needs.

VP of Marketing:

To succeed as a marketer as new marketing channels emerge and existing channels evolve:

• Empathize with your customer.
• Learn the language of the CFO so that you can communicate to executives.
  
• Gain experience with 3-D Marketing. (This is marketing where your consumers connect with consumers, your consumers can give you feedback, and you can communicate with your consumer- Think social media.)
  
• Seek experience and skills rather than titles.

Company President:

• Set goals and communicate to others how they will be measured against them.

Executives in Technology and Operations Roles:

• Maintain integrity
• Always question
• Be open to change. The only thing constant is change.
• Stay objective. Make fact based decisions.
• Work hard.

Executive in Risk & Compliance:

• Learn about systems to drive transparency and accountability in organizations.
• Learn how to create a system of governance.
• Learn to sort through noise.
• Remember the black swan. Many things seem obvious to everyone in hindsight.
• Communicate up and down.
• Say what you will do, and then do it.
• Learn to make complicated issues simple. Tell stories and analogies to bring your communications to life. Use data to support your arguments.

Big Companies Can Make a Difference Too

It’s difficult for me to tolerate “Better than thou” environmentalists. You probably know one. Those are the people who are such a friend to the environment in their own lives, they make you feel bad for taking smaller but impactful steps to help the environment in your own.

So I was surprised this week when business professionals echoed some of the sentiments of such hard-core environmentalists. I recently attended a webinar about developing a green strategy geared to small or medium sized businesses. Representatives of a sustainable consulting firm, Via Nova Group, made great points and gave some valid information for their listeners. For example, they told the audience that a green strategy isn’t a good strategy unless it saves you money. Great advice. Then, they mentioned how consumers consider other factors in a purchase decision before they think of the environment. Factors like price or convenience often drive purchase decisions before environmental concerns would for many consumers. Very true, and a fact many businesses overlook.

However, just minutes later these same people complained about “a large maker of cleaning products who recently launched a green line but that makes up only 2% of its business.” The company that came to my mind was Clorox with their recent launch of Green Works, a line of natural cleaning products. I get where the speakers from Via Nova Group were going with this. The webinar was directed toward small or medium size businesses, showing them how they can be green even though they aren’t “one of the big guys.” However, to me it seems counter-productive for those in the environmental movement to discourage any company from trying to be more environmentally friendly.

True, Clorox’s Green Works may only be a small part of its product mix, but at least it is part of the mix. A company like Clorox has responsibility to its shareholders. Just like the speakers advised the small companies not to pursue green strategies that don’t make financial sense, Clorox can’t today stop selling traditional chemical cleaning products. If they did so they would not be meeting their responsibilities to their many stakeholders, including shareholders, employees, and consumers who use their products. What they can do and are doing is creating viable alternatives.

I would argue that Clorox is probably doing a lot of good by using their scale and existing relationships with consumers to grow a market for natural cleaning supplies that is today very small.

• Clorox can use their scale to distribute their natural line in quantities smaller companies may not be achieve, allowing them to supply large retailers. I've seen Green Works sold in retailers like Wal-mart and Target, who require large volumes and guarantees against stock-outs. As a company accustomed to meeting such demands, Clorox is positioned to reach more households.

• In this economy many families are struggling to make ends meet. Clorox can leverage economies of scale to sell Green Works at competitive prices. As a result, families who can’t afford more expensive natural cleaning lines might find Green Works to be in their price range.

• Consumers across the country know and trust the Clorox brand. Clorox's creation of natural products might encourage people to try them who might not experiment with such products from companies they are not familiar with.
  

Clorox is probably growing the entire market for natural products, and isn’t that what we want? It’s OK for businesses big and small to not turn green overnight. It’s better to start small, than to not start at all. After all, Rome wasn’t built in a day. Let’s not discourage any organization from pursuing strategies that are more environmentally friendly.

The Brilliance of Haagen-Dazs: Made (and Communicated) Like No Other

Recently I have wondered how companies with an environmental focus can effectively differentiate themselves given the increasing numbers of products marketed as “green” and “eco-friendly.” For some products, it seems like an effective marketing strategy could be to choose a value proposition that is closely aligned with customers’ desire for a greener world, yet distinct from it. So many companies for very good reasons choose one of a few terms to describe their environmentally friendly products. Words like “green,” “sustainable,” and “natural,” are loaded with meaning and permeate the market. Because consumers hear these terms applied to so many different products, they have become confused and skeptical. In addition, though many consumers claim a desire for earth-friendly products, other product attributes, including price, quality, and product experience, also drive purchase decisions.

Recently, J. Tyler Johnson, former Chief Marketing Officer of Dryer’s Ice Cream, spoke to my consumer behavior class. After apologizing for coming to campus without samples, he largely discussed the re-launch of the Haagen-Dazs brand. One thing that struck me was how well-aligned H-D’s new brand positioning is with green values, though the brand never uses the words I mentioned above. And, indeed, the intent of management was never to position the brand as eco-friendly. Mr. Johnson briefly mentioned the fact that though H-D ice cream is all natural, its competitor, Ben & Jerry’s had already positioned itself as the socially and environmentally ice cream alternative. Thus, touting the “all-natural” component would not differentiate H-D in the eyes of consumers, and H-D executives searched for a value proposition that would.

How did Haagen-Dazs choose their branding? Market research showed that the H-D brand was viewed as slightly snobby and inaccessible by many consumers. H-D wanted a message that would allow the brand to escape from such negative perceptions. What else did research reveal? Consumers of the premium ice cream segment, those small pints you find in the store, were looking for an ice cream to provide them their moment of indulgence and escape. Based on such insights, H-D and its vendors formulated an incredible advertising campaign. H-D chose to reposition their brand as the simple, pure ice cream alternative. They focused on the quality of ingredients with the tag line, “Made Like No Other.” Later commercials emphasized the indulgent nature of their pure ingredients. How did the Made Like No Other campaign work out for Haagen-Dazs? Mr. Johnson and his team grew a brand previously targeted to just 1.5% of American households into the market leader in its category.

One of the reasons I am so intrigued by this marketing success story is that I can envision the same customer who drives a Prius, shops for organic produce, and uses bio-degradable cleaners, buying H-D ice cream and savoring it at night. The words “simple” and “pure” convey so many positive images, and they have many environmental undertones. I believe an intentional use of terms like these which are aligned with green values could be very effective for some brands.

Check out the H-D re-launch campaign commercial on YouTube:
http://www.youtube.com/watch?v=GEpenoD9-Ts

Later advertisements added indulgence to the value proposition:
http://www.youtube.com/watch?v=VQP0GGjhoOM&NR=1

Wisdom from an Advertising Executive

David Ogilvy, founder of the advertising agency Ogilvy & Mather, had these words of wisdom for us. "Develop your eccentricities early, and no one will think you're going senile later in life." I love it! Words to live by. I believe my late grandfather would have liked it as well. I have fond memories of him eating his cereal out of an enormous 4-cup Pyrex measuring cup, which most people use to measure liquids for cooking. He insisted it was the best way to eat cereal. Of course, that did occur later in his life. Perhaps I should start now?

Confronted by Too Many Eco-Dilemmas? Me Too!

A year or so ago I was at my local supermarket when the bright green cover of a magazine caught my eye. It was San Francisco magazine asking me if I was suffering from anxiety from too many options to live green, shop green, and be green. “Eco-anxiety” I think they called it. I thought to myself, YES this is ME! How did they know?

At the time, among other green initiatives in my life, I had become devoted to finding sustainable meat. I consulted websites, researched brands I found at Whole Foods and a local organic food market near my house, and tried to learn more about “sustainable” farming. After several months of this effort, I read the book Omnivore’s Dilemma, which only strengthened my resolve. But yet, I was overwhelmed with options. Despite all my research I had trouble determining which sources of foods were truly “sustainable.” One favorite brand of eggs proudly claimed “free range” on its packaging, but the myth of its chickens roaming free in a field was later debunked by another source. Neiman Ranch was rumored to treat its animals well, but I later learned its founder split with the organization believing that its organizational policies did not match the marketing hype.

Apparently, I am not alone. American consumers are awash with green marketing messages. When I met Damien Huang, VP of Design at Patagonia, he mentioned that his company assumes its customers are not willing to pay a large premium for sustainable products, and consequently Patagonia aims to price competitively. Other students were amazed by this, but honestly it is no wonder to me that many consumers will not pay a premium for all things “green” and “sustainable.” As more and more companies hop on the eco-friendly bandwagon, it is increasingly difficult to distinguish real claims from fake ones. In addition, assessing whether one product is more sustainable than another is incredibly complex, requires a vast amount of insight into the product’s value chain, and could be a full-time job. Busy Americans do not have time for such research, so it does not surprise me that many consumers are skeptical of the “green” products they encounter.

What happened to my sustainable food initiative, you might wonder? Tiring of my effort to identify the most sustainable meats, I gave up on eating meat all together. I buy beans at the grocery store now for my protein. With beans I no longer have to worry about whether my food was allowed to roam free and was treated humanely. Plus, I save money.

To me, this experience highlights the challenge for companies that want to market their sustainable products. It can safely be assumed that companies don’t intend to scare customers like me away from their product categories entirely. Brands that can make true claims that their products are environmentally friendly must cut through the so-called greenwash clutter to be effective. At last year’s Net Impact conference, I attended a panel on just this topic. Panelists there noted that company advertising, not surprisingly, is the least trusted source of environmental information about the environmental sustainability of products and companies. In addition, in a recent article called “The Green Trust Gap,” I read that only 11% of consumers will rely on product packaging and only 5% on company advertising when determining the eco-friendliness of a product. To successfully convey their green message to consumers, the Net Impact panelists suggested that companies should:

• Advocate for independent environmental certification in their industries.
• Partner with trusted environmental organizations that can lend credibility.
• Create transparency by providing consumers insight in to their supply chains and operational practices, including good with the bad. Supplying such information on the website is beneficial.
• Develop reports on social and environmental responsibility, including targets for improvement and progress against those targets.
• Provide forums for constructive feedback and engagement with consumers.

With that being said, I know that companies will not stop advertising. I wonder how organizations can make their conventional advertising more effective at conveying a message of environmental responsibility. I hope to explore this topic further while at school and with people in my network.

- Lauren

Want to learn more? Click here for: LOHAS "Green Trust Gap"

Entrepreneurship at Home & Abroad

“In reaffirming the greatness of our nation, we understand that greatness is never a given. It must be earned. Our journey has never been one of short-cuts or settling for less. It has not been the path for the faint-hearted - for those who prefer leisure over work, or seek only the pleasures of riches and fame. Rather, it has been the risk-takers, the doers, the makers of things - some celebrated but more often men and women obscure in their labor, who have carried us up the long, rugged path towards prosperity and freedom.”

--President Barack Obama, Inauguration Speech (January 20, 2009)

Judy Estrin, CEO of Jlabs and self-professed serial entrepreneur, used this quote from President Obama’s inaugural speech to start a discussion on common qualities of entrepreneurs, emphasized the words “risk-takers” and “doers.” At two recent conferences, the Women in Leadership Conference and the Asia Business Conference, I heard entrepreneurs discuss the traits that they believe contributed to their success. I heard many common qualities, including:



Looking at this list, I wonder about the implications of our challenged U.S. educational system on entrepreneurship in this country. If the above are the qualities that contribute to entrepreneurial success, are we building the foundation for future generations of entrepreneurs and innovators in our country? I’ve read how certain school districts are modifying curriculums to better prepare students for standardized achievement tests, by so called “teaching for the test.” Won’t this type of education suppress creativity? I have also read that grade inflation has become rampant in some school districts, which certainly doesn’t build tenacity or commitment in students. Structured curriculums emphasizing math and science at the expense of art, music, history, or literature stifle innovation and creativity as well. Will future generations of Americans exhibit these qualities that today’s entrepreneurs have found key to their success?

I also wonder about the implications for entrepreneurship in other countries. At the Asia Business Conference, speaker Jimmy Hexter touted the importance of China to the international business community, citing Chinese startups that now compete with multi-national companies. However, I would be curious to know what implications the Chinese political system and culture have on entrepreneurship there. For example, I recently read a New York Times article about Chinese citizens subverting the Chinese Government’s rampant censorship by using double-entendres to convey political messages that escape censorship algorithms. How well can entrepreneurs truly thrive in an environment that lacks transparency and true knowledge sharing? In addition, during the entrepreneurship panel in the Asia Business Conference, panelists noted that failure is not acceptable in many Asian cultures. If qualities that American entrepreneurs site as contributing to their success are difficult to find in China, how will Chinese entrepreneurs innovate the way Mr. Hexter proposes?

I feel fortunate to have had the opportunity to hear the thoughts of so many seasoned entrepreneurs at these two events! I don’t have much stake in China, but I do hope that the U.S. continues to provide children with educational experiences that will inspire and grow future generations of entrepreneurs. I believe that the quality of the entrepreneurial environment will be critical to our future success as a nation.

-- Lauren


Here are some links to interesting articles I read recently in the New York Times:

Chinese subversive responses to censorship
President Obama’s Educational Policy
David Brooks Op-Ed Educational Policy

Here are the entrepreneurs I heard speak at these two events:
Women in Leadership Conference: Judy Estrin- CEO Jlabs; Wendye Robbins- President & CEO Limerick BioPharma; Danae Ringelmann- Chief of Finance & Customer Development, IndiGoGo; Ann McCormick- CEO, Learning Friends
Asia Business Conference: Liam Casey, CEO PCH International; Saeed Amidi- CEO Plug and Play Tech Center; Umair Khan- CEO Secret Builders; Yangbin Wang- CEO Vobile; Yumiko Yamaguchi0- US Office Manager, Medical Create

International Business Strategy: Why China?

I had the privilege of hearing Jimmy Hexter, Director of McKinsey & Company, Beijing Office, speak at UC Berkeley’s recent Asia Business Conference. From his extensive experience doing business in Asia, he addressed the audience with a talk on why companies that want to stay competitive in a global marketplace need a strategy for business in China. I found his description of the importance of China to be fascinating. I will definitely keep this information in mind as I enter future business roles.

Why is China so important for global business strategy?

1- Size of the market
650 Million Chinese now live in urban areas. By 2025, China is projected to have 1 Billion urban residents. Each year 20 Million Chinese people either move to cities or are swallowed by them. After a house and a car, the first purchase of a typical Chinese family is a 50” big-screen TV. China is a hotbed of demand, and offers huge opportunities to leverage economies of scale.

2- Local competition
Multi-national companies that sell their products in China now find that local businesses are their biggest competition for market share. When multi-nationals first outsourced manufacturing to China, they relied on inexpensive labor and neglected best practices. Local competitors now understand design and manufacturing best practices so relying on inexpensive labor alone is no longer an option. Companies that fail to leverage industry best practices often face competing Chinese products that offer better value.

3- Emerging Talent
China has 1.3 Million college graduates each year. Multi-national companies are now empowering local R&D to design products in China for its own market, other emerging markets, and for global markets.

Mr. Hexter told the story of a U.S. semi-conductor company who attempted to design and manufacture a chip for the Chinese market. Once their product was launched, they found that a Chinese company was producing better chips at lower cost. In response, the U.S. company improved the design of their chip and lowered their costs and prices. After these changes, the chip was such a resounding success that it was exported to other markets. Today, only 20% of these semi-conductors initially intended for the Chinese market are actually sold in China.

How can companies incorporate China into their strategic plan?
According to Mr. Hexter companies should treat China like a second home market. Few multi-nationals understand Chinese perceptions of their products and tailor their value proposition to Chinese consumers. Companies should appoint board members from China and develop personal relationships with their largest Chinese customers.

To illustrate his point, Mr. Hexter told the audience a statistic about pianos. There are 60 Million piano students in China, he said. Chinese need pianos for small spaces, and they prioritize getting a good value for their money. Who will design and manufacture a piano to satisfy this demand, he asked us? Then, why wouldn’t that piano be well-suited for export to other markets around the globe? How will piano manufacturers in these markets recognize and respond to this competitive threat?