Corporate Eye

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Archives for November 2008

Demographics, Twitter and Virtual Meetings

While browsing through some archives recently, I came across … ArcelorMittal using Second Life to hold retail investor meetings – or at least, to hold a mixed reality meeting, with some people present in real life, and others present in a virtual life.

Now, I’ve talked before about using live chat for retail investor meetings, and I’ve mentioned companies using Second Life for recruiting before.

But the use of Second Life for investor meetings is interesting, and – not surprisingly – this caused a fair stir a few months ago.

Not only is the use of this technology for this purpose interesting, so too is the underlying reason: that ArcelorMittal have an aging group of retail shareholders. Apparently the average age is over 65, and, quite rightly, ArcelorMittal have identified this as a problem. (Good for them for recognising this – HR data was covered by Infohrm at their recent conference, but shareholder data is very important too).

I wonder how successful this venture was for ArcelorMittal? Apparently 50-70 avatars (or representations of people) came to the event. I’d like to know the numbers that turned up to the real-life section of the event – and how many of the people that came to the Second Life version were already investors, or were seriously interested in investing.

Is Second Life really full of people who might invest – using real life money – in ArcelorMittal?

There is some information available about age-ranges, and some on how many people regularly use Second Life, but no clear indication of whether these are likely to be investors.

However, Quantcast tells us that 56% of Second Life visitors, at least in the US, earn less than $60k/year (27% earn less than $30k), and that 33% are under 18.

Possibly not ideal investor recruitment territory, then.

Nevertheless, ArcelorMittal deserve kudos for trying this out. But what else could be tried?

The average age of shareholders in the UK is (or was, back in 2006) between 35-54, and 42% of shareholders are classed as A/B (or middle/upper middle class).

The Twitter demographics from Quantcast seem to indicate that Twitter users are more likely to be shareholders: the average age of Twitter users is higher (only 1% of under 18’s), they are wealthier (29% earn over $100k/year compared to 20%) and better educated (63% college-educated compared to 52%).

Now, Twitter isn’t the same as Second Life, but it can be used as part of an online conference, so that the audience is at their desk (as for a webcast), and can see what you are displaying (perhaps a mix of webcast/video/audio/slides) and simultaneously see and participate in the related Twitter stream of comments and questions.

This takes some doing, for all parties:

The company has to

  • arrange for technical control of multiple media streams
  • chair the meeting of those people physically present
  • incorporate the questions and comments being raised by those not physically present.

In order for this to work, the company would have to have someone dedicated to watching the Twitter stream, and summarising it for the chair, who could then invite responses from the Board members/IR team.

The participants who are not physically present have to handle multiple input streams simultaneously. Possibly, the participants who are physically present could have the Twitter stream presented on a large screen too, so that everyone has the same material available … and the same quandary about multiple simultaneous input streams. It isn’t easy to watch a webcast and simultaneously keep on top of the discussion happening on Twitter. I know, I’ve tried!

However, if your potential market is using Twitter, then I think it is worth a try – and I think ArcelorMittal is up to the challenge. I wonder if they’ve considered it?

Generation Y Weighs in on Green Brands

Two buzz topics – Gen Y and green brands.  Put them together and you get an interesting list of brands that the sought after 20-something audience likes and thinks are actually making positive efforts to help the environment.

In a study conducted by Outlaw Consulting, 100 Gen Yers living in New York, Los Angeles, San Fransisco and Miami were surveyed and asked which brands were their favorite “green brands” and why.  The results showed the following:

[Read more…] about Generation Y Weighs in on Green Brands

Full of Croc or a Great Idea? The Croc Shoe Company Does a Good Thing

Donating proceeds for good causes has always been something that major businesses and corporations have done for years. They do this in an effort to spread goodwill AND to bring exposure to their companies. Many times, large corporations will make an all out televised effort to spread cheer, or some will even do local-based community efforts as a way of furthering their mission and objective.

The event has long passed, but some things worth noting that made this public relations effort memorable is 1.) the international significance that it reached and 2.) the product itself.

Since everyone wears shoes, it’s a given that the campaign would appeal to the majority of customers nationwide. Crocs are heralded by many as being one of the most comfortable shoes available. Although it lacks a bit in fashion and style, is rather large and clunky looking and doesn’t seem quite certain as to what gender, age group or social group that it wants to market to, it remains a popular shoe choice. However that doesn’t stop the company from branding itself and making it one of the most popular consumer shoes available today. 

The shoe campaign that Croc started along with Dispatch, a popular American Rock Band, was certain to bring in record crowds who loved this music style and those who either wore or liked the Croc shoe. Companies who sponsor events such as this are not always necessarily appreciative of the drawing crowd attraction, but that the crowd does get what they’re selling…and in this case, it’s the shoes. Crocs specifically.

The other element about this program that was impressive was the international significance of how the company marketed itself. They coupled with another international effort, pooled their ideas and resources and offered an incentive for customers to buy. For every purchase that the customer made, there would be a recycled pair of Crocs donated to the foundation, Soles United, and the shoes would be given to  Zimbabweans. There were over 10,000 shoes donated to this effort, so in essence there are now about 10,000 Zimbabwean residents walking around in their country fashionably sporting an in-demand pair of classic Croc shoes.

What’s so special then about a company and a donation effort? The way they reach the consumer. Some media outlets especially like special interest stories that make a difference in the lives of others. Even more so, stories that reflect a giving nature and that highlight on the good that companies are doing rather than all of the wrong things are also especially nice. With Croc, they are not just giving away money, but they’re being a part of an effort to give people something that they also need…shoes. How ingenious could it be to have your name tied into an effort that helps a group of people, in a way where the help is wanted and needed, and at the same time bring classic exposure to your company and product? Sure it’s savvy marketing, but it also scores high media points and limitless warm and fuzzies with consumers. Shoes and people go together, well, like shoes and people.

Not a bunch of Croc. Just a great idea!

Financial Crisis + Recession (Usually) = Layoffs

Once again business conditions are difficult and once again companies respond with a hair trigger reaction: employee layoffs. According to the US Labor Statistics, layoffs are approaching peak levels since 1995 —
layoff statistics

What happened to that idea that ‘our people are our most important asset?’

There are alternatives to layoffs, however too often corporations, especially large corporations, feel they must appease investors by taking ‘bold’ financial steps. But there are some exceptional exceptions. An article on Salary.com identified some creative alternatives to layoffs.

Company

Strategy

415 ProductionsThe company offered either an overall 5 percent pay cut, or a four-day work week reflecting the appropriate decrease in pay.
Acxiom CorporationA 5 percent mandatory pay cut, plus an additional 5 percent volunteer pay cut is tempered with increased stock options.
Charles Schwab Corp.The company guaranteed a $7,500 bonus for any affected employee who gets rehired within 18 months. In addition, company founder Charles Schwab and his wife have created a $10 million educational fund for these workers. The fund will cover as much as $20,000 worth of tuition over two years at accredited academic institutions.
Texas InstrumentsThe chip maker began “lending” several human-resources staffers to vendors for as many as eight months, with the intention of bringing them back to their original jobs at the end of that period. The supplier reimburses Texas Instruments for the staffers’ salaries during the loan period and agrees not to offer them a permanent job.

Then there’s Lincoln Electric in Cleveland, Ohio USA who proudly state —

Guaranteed Employment after three years of service. The company has not exercised its layoff options in the U.S. operations since post war 1948…We will distinguish ourselves through an unwavering commitment to our employees and a relentless drive to maximize shareholder value.

And they delivered, Lincoln has consistently outperformed the S&P 500 over the past 5 years.

I had repeated personal encounters with layoffs when I worked at AT&T. In the 1990s, there were repeated massive layoffs at AT&T. I was given a unique opportunity to work with a small team whose mission was to develop an alternative to layoffs. We developed a proposal for an internal contingent employment unit. Instead of using outside contactors and temps, we would give these assignments to our employees who faced losing their jobs. When I left AT&T in 1998, the unit called “Resource Link” had over 2000 employees.

Finally, Challenger, Gray & Christmas, the noted authority on layoffs, has a worthy blog that offers advice to both employees and employers.

Even Category Leaders are at Risk in a Weak Economy

Over a year ago, I wrote a post on a blog about branding that I used to write where I pointed out that Toyota might be the automotive category leader, but based on my experience at the time with a local dealership, Toyota was also quite arrogant about that position in the marketplace.  In that post, I suggested that Toyota should rethink its brand strategy to remain in the leadership position in the long-term, because no matter how great a product is, consumers won’t stick with it if they don’t feel valued by the faces of that brand.

So today, I read an article on BusinessWeek.com that talks about Toyota’s tumbling profits.  It seems even the arrogant, untouchable category leader is at risk in a weakened economy.  The question is, will Toyota change its brand strategy from one of arrogance as in, “we’re doing customers a favor by letting them buy our cars,”  or will the typical road of finding places to cut costs and reduce value to both employees and consumers be followed?  I think we can assume the latter will be the likely path taken by Toyota, but of course, that remains to be seen. [Read more…] about Even Category Leaders are at Risk in a Weak Economy

Why Sustainable Businesses Need To Fight Corruption

The crowning of Lewis Hamilton as Formula One’s Youngest World Champion has some parallels for businesses keen to show they’re not corrupt.

I cannot have been the only one thrilled by excitement of last weekend’s Brazilian Grand Prix and Lewis Hamilton’s crowning as the youngest ever Formula One World Champion.

However, you must feel sorry for Filipe Massa. When he crossed the finish line HE was World Champion. Seconds later, Hamilton passed a suddenly slower Timo Glock, wresting the crown away from Massa by one point.

There have been the inevitable accusations that Glock was bribed to let Hamilton through. This has been a season of dubious decisions and, whether the allegation is true or not, it’s difficult not to wonder if there is some truth in at least some of the whispers.

Transparency International and Dow Jones Unite Against Corruption

Corruption is as much an issue for ordinary businesses as it is for Formula One. While the CSR facet of sustainability is about restoring corporate trust, corruption is all the betrayal of all trust for personal gain.

Thankfully there has been an organisation fighting against corporate corruption for over fifteen years: Transparency International (TI).

TI doesn’t conduct investigations into individual cases, although it will lend assistance in special circumstances. It’s focus is upon advocating transparency in the business arena as the means to stamp out corrupt practices once and for all.

Now it has entered into a two year partnership with Dow Jones, publisher of the Dow Jones Sustainability Index. The deal will considerably strengthen the efforts of both organisations to promote transparency and eradicate corruption among the business community.

As part of the deal, Dow Jones will give TI free access to two of its products. The first is Factiva, a news service which amalgamates various sources including the Financial Times, the Wall Street Journal, Associated Press, Dun & Bradstreet and Reuters.

The second is their Watchlist product. This tracks Politically Exposed Persons (PEPs); people from all over the world who could use their current or recent position in public office for private gain. There are nearly half a million PEPs worldwide: many have the same opportunity for corruption, though only a few take it.

World Map
Corruption Perception Index 2008

Bribery and Corruption In Your Western Country

But what, you may be asking yourself, has all this to do with enlightened Western democracies? Surely there’s no corruption in the UK, EU or USA?

Just over a month ago, the UK was described by TI as “a place where corrupt business is done”. It went on to call upon the Government to “stop procrastinating and address the fundamental weaknesses” in its approach to bribery and corruption.

This criticism was prompted by a stinging assessment of the UK’s anti-corruption framework by the Organisation for Economic Co-operation and Development (OECD).

This included four sweeping recommendations and the requirement that the country produce quarterly written reports to the OECD’s Working Group on Bribery.

However, according to TI’s 2008 Corruption Perception Index, the UK is seen as the sixteenth least corrupt country, with the USA ranked eighteenth.

If leading countries such as these are finding it difficult to meet their international obligations then you have to wonder about the businesses they are charged with regulating.

The Suspicion of Corruption

There are persistent rumours in Formula One about backroom deals and bias towards certain teams and drivers. No matter the veracity of these rumours, it’s the perception of a fixed championship which will stick more than any denial.

So it is with business. One or two questionable decisions (such as the UK-Saudi Al Yamamah Defence Programme) can lead to a wholesale collapse in trust and leave many companies unfairly tarnished with the same brush.

It therefore seems sensible to recommend that all businesses should include in their sustainability reporting a statement on transparency, preferably from the Global Reporting Initiative or another internationally accepted standard.

After all, everyone knows that if you’re not transparent you must be hiding something. Or at least, that’s what we all suspect …

Picture Credit: “World Map Index of perception of corruption” from Wikimedia Commons under GNU Free Documentation License.