The value of doing one thing at a time

Lately, I’ve been at a loss in this respect, but I found this HBR article to be very helpful:

The Magic of Doing One Thing At a Time

The author’s point:

when you switch away from a primary task to do something else, you’re increasing the time it takes to finish that task by an average of 25 per cent.

But most insidiously, it’s because if you’re always doing something, you’re relentlessly burning down your available reservoir of energy over the course of every day, so you have less available with every passing hour….

When you’re engaged at work, fully engage, for defined periods of time. When you’re renewing, truly renew.

I’m hoping to be able to get back into this type of mode.

 

Signs of hope in the economy

I’m still encouraged by signs of hope in the economy, and I’ve pulled a couple of articles.

First, Target Stores fared a wee bit better than Wal-Mart in the 2nd quarter. If you recall, Wal-Mart was one of two organizations (the other being McDonald’s) that showed a sales increase over the last recession.

Target Corp., which reported softer-than-expected sales Wednesday, said company initiatives like more grocery options and credit-card discounts should help offset tepid consumer spending.

The retailer’s two key steps—adding more fresh produce to stores and giving customers 5% off for using their Target credit and debit cards—should bring in more customers and spur buying that otherwise wouldn’t have occurred, executives said during a conference call.

“It’s clear that the second quarter marked a change in recent trend,” Chief Executive Gregg Steinhafel said. “Following stronger results in the last two quarters, gross domestic product growth softened considerably and our sales trends leveled off as well.”

The shift has Target positioning for a “slow and inconsistent” recovery in which comparable-store sales could grow as little as 1% in the third quarter but likely fare better in the holiday season’s fourth quarter, Mr. Steinhafel said.

Given that some 70% of our economy is driven by consumer spending, retail is now the new heavy industry, and hopeful signs here are appreciated.

As well, we’ve seen the emergence of new private, profit-based organizations that are actually making money by helping homeowners to avoid foreclosures:

As the nation struggles with the worst foreclosure crisis since the 1930s, Mr. Ranieri’s investment fund and others like it are emerging as the best hope for the roughly seven million U.S. households behind on their mortgage payments. Nimble, flush and willing to strike deals with borrowers, these funds have an edge over banks and other lenders that can be mired in bureaucracy and hampered by government rules about which loans can be renegotiated and how.

Borrowers less lucky than the Reynolds family must work with middlemen—loan-servicing firms that don’t actually own loans, but represent banks and investors, and collect mortgage payments on their behalf. These firms follow often-ambiguous rules set by the owners of the loans. In cases where a loan has been bundled into a security, it might have thousands of owners scattered around the world, making it impossible to know all their preferences.

By contrast, Mr. Ranieri’s Selene is the sole owner of its loans and has a servicing affiliate that can negotiate directly with borrowers. “Every case is individual,” Mr. Ranieri says. “There’s no template.”

But the main reason Mr. Ranieri can strike deals with borrowers is that his firm buys loans, mostly from banks, at steep discounts to the balance due. If his fund pays $50,000 for a loan with a $100,000 balance due, for example, it can make a profit even if the borrower ends up paying back only $70,000.

Since mid-2007, nearly 3.4 million households have received loan modifications, according to industry data from the Hope Now alliance of loan servicers.

Creative entrepreneurs will always find a way around government regulations and through the tough economic times.

“We’re already doing that”

As part of my routine calling of past contacts, I called a bank that I had worked for in the past, and I told them about a predictive modeling software solution that gives community banks a structured way to create and enforce a sales culture within branches

They said, “we’re already doing that.”

But I think maybe not.

Just below, I alluded to “the old days” still being with us. Does anyone remember driving past a bank branch (or even seeing an ad from a bank) and seeing the words “Loan Sale” on a banner? I am embarassed for the folks who’d put those banners out. That’s one step above simply begging a customer for business.

There are various degrees of business intelligence involved with marketing. I’m going to relate several different marketing angles that I receive from three different book stores. See if you can tell the difference:

1. As someone who has purchased or rated [BOOK] by [AUTHOR], you might like to know that [THIS NEW BOOK] will be released on August 15, 2009.  You can pre-order yours at a savings of $8.48 by following the link below.

2. YIPPEE! Bargain books abound at [Bookstore], or

3. John, loyalty has its perks–here’s a $10 coupon just for you!

Another leading “Rewards” program sends me “40% off an item of your choice” coupon. It’s embedded with a “30% off all Dummies(r) Guides” (which I’m NOT currently shopping for), and “Hit DVDs Sale — $4.99 Selected Titles” (which I’m also NOT currently shopping for.)

All three of those aproaches are the type you’ll see in a variety of different marketplaces. But who is the one that’s really going to appeal directly to me as the customer? Clearly, the Amazon.com appeal (#1 above) is the most sophisticated, because it’s actually a part of an individual relationship that they know they have with me, and it’s one that they nurture.

Which do you think is most effective?

Are we in for a robust economy?

Poised for a rapid job rebound?
Poised for a rapid job rebound?

Robust not only in the sense of a growing GDP, but in the sense of rapid job creation? The WSJ’s Outlook column today seems to be projecting that very thing.

“Firms were unusually aggressive in cutting costs and cutting employment,” said James O’Sullivan, an economist with UBS. “The flip side of that remains to be seen, but it could mean that companies will be quicker to bring back people because they were more aggressive about getting rid of them.”

… To be sure, even as more companies begin to hire as the economy recovers, it could take years before payrolls reach their prerecession level. With Americans spending more cautiously in response to the massive losses in wealth associated with this recession, some jobs may simply never come back.

That said, one thing different about this recession — and one more reason the job market may come back more quickly than in the downturns of 2001 and 1990-91 — is that so many of the job losses have been at the service-related companies that have come to dominate U.S employment. Since the recession began, 3.3 million service-sector jobs have been lost, a 2.9% decline that is the largest in data going back to 1939. In comparison, the previous two recessions each saw service-sector jobs fall by 0.5%. …

But the biggest reason jobs might bounce back quicker from this downturn than the past two recessions, said Comerica Bank economist Dana Johnson, is that the economy looks likely to see a much bigger bounce as it recovers.

Gross domestic product — the value of all goods and services produced by the economy — has fallen by 3.9% since economic output peaked last year, marking the steepest decline since the end of World War II. In contrast, the 2001 and 1990-91 recessions were among the shallowest on record.

History says that given the depth of the downturn, GDP should grow at a 6% to 8% rate over the next year, according to Mr. Johnson. But because of the financial stress that has come with this recession, he expects it will grow at a 4% rate.

Corroborating that notion, the Journal this morning carried stories that car sales have been very strong in both India and China over the last six months. In fact, General Motors set a new monthly sales record in China in July.

Knowing the Future

“The opportunity is to move from sense-and-respond decision-making to a predict-and-act model.” — Ambuj Goyal, General Manager of I.B.M.’s information management business.

http://www.nytimes.com/2009/07/29/technology/companies/29ibm.html

There’s a lot to be said for not proceeding too quickly in an economy like this one. There’s also a lot to be said for knowing the future.

That’s the gist of the message to learn from IBM’s acquisition of SPSS, whose website features “customer intimacy” and “knowing what your customers will do, before they do it.”

In the old days, there was “test marketing.” In fact, today’s Wall Street Journal shows evidence that the “old days” are still with us. Today’s WSJ features a story about Procter and Gamble and a test market of a product they’re calling “Tide Basic” (a scaled-down version of their industry-leading Tide brand of laundry soap.)

P&G of course wants to know the future. They want to know how this product will be received, and so they have manufactured a little bit of it, which is “currently for sale in about 100 stores throughout the South.”

This is the “sense-and-respond” model of business marketing — P&G will measure actual sales of the new product and decide whether to roll it out, based on those sales.

With its acquisition of SPSS, IBM has just bet $1.2 billion that that model of decision-making is going to be too slow for future marketers. In fact, the NY Times article linked above suggests that most of the major software companies are continuing to invest heavily — to the tune of more than $15 billion — in the notion that more companies will rely on the “predict-and-act” scenario in the future:

Major technology companies have made a flurry of such purchases in recent years, grabbing suppliers of software that helps businesses and governments organize and analyze data to make better decisions. The industry segment is broadly known as business intelligence software. In the last couple of years, I.B.M., Oracle, SAP and Microsoft have collectively spent more than $15 billion buying makers of such software.

I think this is so important to understand that I’m planning a series of postings on this topic. Please stay tuned, and feel free to ask any questions that you might have.

3Q GDP forecasts revised upward

The WSJ’s Real Time Econ Blog has collected a group of economic forecasts that have been revised upward, due to “signs that businesses were paring down inventories.”

A more thorough article on the topic cites the “cash-for-clunkers” program as one predictor of improved consumer spending, making it necessary for car companies to make more new cars than previously planned.

Still, in the largest wave of upward revisions of GDP forecasts since the financial crisis began, UBS AG is now predicting 2.5% growth in the third quarter, up from 2%, and 3% growth in the fourth quarter, up from 2.5%. Wells Fargo & Co. also revised its third-quarter forecast to 3% growth, up from 2.2%. For the fourth quarter, it is now predicting 2.0%, up from 1.6%. T. Rowe Price Group Inc. increased its third-quarter projection to 2.75% from 1.3%.

But as everyone seems to be saying, “The data indicated that consumers concluded the first half under intense pressure from a weak labor market. That suggests the anticipated GDP growth won’t be enough to substantially bring down the unemployment rate.”

But there was more:

Economists already had expected growth to rebound in coming months after companies drew down inventories in the first half of the year. A promising manufacturing report this week showed a jump in new orders and production, building on those expectations. “When you combine leaner inventories with more sales, that’s the fundamental reason for being more optimistic about at least the second half of this year,” said Mark Zandi, chief economist for Moody’s Economy.com.

The article suggested that once the “cash-for-clunkers” program was over (either because it’s not renewed by the Senate, or when it burns through a potential second round of cash), there would be “payback,” presumably in a corresponding dip in car sales.

The best-case scenario for sustained growth is a strong second half, with improved consumer spending and confidence, and without the massive layoffs that have marked much of the recession. Short of that, business investment would have to make a comeback for expansion to continue. New orders are showing encouraging signs, but so far there’s little sign the growth is widespread. Although housing isn’t expected to lead the recovery, signs of improvement in the sector could buoy growth in the economy. The pending home-sales index, which measures housing contract activity and is designed to foreshadow existing home sales, increased 3.6% in June to 94.6 — its highest point since June 2007.

My belief is, now that the worst is behind us, the country will be better able to get back to business as usual. Maybe a bit more wisely.

“Social Media” cited in improvements to customer satisfaction

“A growing number of businesses are tracking social-media outlets such as Facebook and Twitter to gauge consumer sentiment and avert potential public-relations problems,” according to the WSJ this morning.

“Ford Motor Co., PepsiCo Inc. and Southwest Airlines Co., among others, are deploying software and assigning employees to monitor Internet postings and blogs. They’re also assigning senior leaders to craft corporate strategies for social media.”

Ford was able to avert a PR crisis with a fan website because of the quick response of its “head of social media.” PepsiCo responded quickly to criticism of a potentially offensive ad in a German-language publication. And an “emerging-media team” from Southwest Airlines shaped a positive media response to an emergency landing, citing Tweets that praised “great work by crew and customers onboard.”

“Social media have magnified the urgency of crisis communication,” says Shel Holtz, a communications consultant in Concord, Calif., and co-author of “Blogging for Business.” He says seemingly small incidents can quickly spread into bigger PR problems via the Web.”

Companies can’t get away with bad behavior because social media puts them under too much scrutiny; it only takes one blog post or tweet or YouTube video to kick-start a flood of criticism leading to damaged reputations and lost customers. All those conversations are the motivation companies have needed to start providing excellent service, if for no other reason than to avoid fast-spreading conversations about just how bad they are.

http://blog.holtz.com/index.php/weblog/comments/has_social_media_paid_off_with_improved_customer_satisfaction1/

Customer Service Technologies to Watch

As a person in the midst of the job search as well as seeking project work or contract business, I’m interested in finding signs of life in the economy. One area where companies ARE investing right now are Customer Service Technologies.

The Wall Street Journal this morning reports:

Companies are trying harder to please customers amid the recession — and it appears to be working. The American Customer Satisfaction Index, a widely followed survey conducted by the University of Michigan, is at a record high. Other surveys also report gains in customer satisfaction. The results are unexpected, because customer satisfaction typically declines in a recession as companies cut costs, says Bruce Temkin, a vice president for Forrester Research Inc. In this downturn, though, he and other analysts say companies are protecting spending that affects customers.

Here are a couple of examples:

  • Sprint Nextel Corp began a service-improvement plan at the end of 2007. Call-center operators now are rewarded for solving problems on a customer’s first call.
  • Cheesecake Factory Inc last year added an online customer survey to its “mystery shopper” program to assess service in its 146 restaurants. “Chief Executive David Overton cited the service initiative Thursday when Cheesecake Factory reported second-quarter earnings that topped expectations, though net income fell.”
  • Comcast last year introduced software to identify network glitches before they affect service and to better inform call-center operators about customer problems. The tools, and more employee training, helped Comcast cut repeat service calls 30% last year.
  • US Airways Group Inc. last year deployed hand-held scanners to better track baggage, part of an effort to improve reliability, convenience and appearance.
  • Southwest Airlines Co. recently introduced a system that allows customers waiting for a call-center operator to hang up and receive a call back, without losing their place in the queue.

Forrester Research suggests that 57% of large North American companies employed an executive in charge of customer satisfaction in 2008, up from 27% in 2006.

Tom Peters is writing a new book

I note this because Tom Peters is one of my favorite “business guru” authors. As the previous posting relates (just down below), I think Peters is almost always right on the mark with his predictions of the way business is going to go. And I note this too, because it was his book The Tom Peters Seminar in 1995 and 1996 that provided both the inspiration and the blueprint for my own excursion into the freelance world (“Bugay Communications”). And I note this because, right now, as I face the job search, and as I am making the effort to think through what I can do and want to do for the next 10 years or more, his “Reinventing Work” trilogy” (The Brand You 50, the Project 50, and the Professional Service Firm 50) are at the top of my pile of books, again, providing inspiration and a blueprint.

(You may ask, “isn’t it a bit self-defeating to use a business book that’s 10 years old as your “inspiration and blueprint”? But in my opinion, his more recent work, “Re-Imagine,” is not much more than a repackaging and an expansion of the themes in the “50” books.)

At any rate, his new book is entitled The Little Big Things: 179 Ways to Be Excellent and is due out in about January 2010.

It seems to me that as he gets older, he keeps re-circling the same themes — this time it’s “Excellence” — and that in using the number 179, that possibly the packaging, or re-packaging, of the excellence theme, will take on the form of a “to-do” list, similar to that found in the “50” books. So this new work will be re-set in the context of today’s current economic woes. But the “how to” and the “what to do” portions of this work will again, largely, be similar in nature to what I’m reading now.

90% of Jobs Disappearing?

Almost 10 years ago, Tom Peters predicted that “ninety percent of White-Collar Jobs — as we know them today — will disappear or be changed beyond recognition in the next 10+ years.” I think the reasons he gave were sound. But at any rate, it’s a huge restructuring in the workplace. Could this restructuring be what’s happening right now?

Think about this in terms of the way technology and machinery affected “blue collar jobs”. It’s a continuation of how technology caused the destruction of “farming jobs” if it’s fair to think about it in these terms. With machines causing huge increases in productivity in the factories (and on the farms), it freed up huge numbers of people to take on other issues.

In historical terms, this phenomenon has been called “unemployment” — well, maybe not in the case of the “lost farm jobs”. But there was a time when advances in technology enabled huge numbers of people to give up farming and move to the cities to work in factories. Later technology enabled the factories to do more with less manufacturing labor.

The Wall Street Journal’s lead story today notes that “in recent days, [policy leaders] have all talked publicly about the unusual disconnect between growth and employment.”

“Growth” has resumed. The uptick in employment that normally accompanies “growth” has not. So one of two things could be happening. First, the uptick will occur, but it just has not occurred. Or second, it could be that no corresponding uptick is going to happen.

What’s the right way to deal with this? In eiter case, I think that the solution is going to have to be an entrepreneurial one. I’ll have more to say about this in future posts.