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Archives for March 2009

Corporate Governance Issues in 2009

(image from Hera Grupo Italy a good website)

Recent developments in the world economy and the financial markets are placing a sharper focus on Corporate Governance in 2009. I see headlines such as “Corporate Governance Hot Topic in 2009”,  “Poor corporate governance makes business headlines” and “Time to kill Sarbanes-Oxley”. Then there is Directorship magazine that says in “A New Era–From the NACD”

Never before has the need for vigilance and attention to corporate governance been so imperative.

Indeed!

Well I thought it might be useful to look a some surveys and forecasts about what are the top issues for Corporate Governance. First,  The 2008 What Directors Think study (PDF), cosponsored by PricewaterhouseCoopers LLP and Corporate Board Member, and available on the CFODirect network, indicates that Boards are focusing on

  • Risk management
  • Strategic planning
  • Succession planning
  • Recruiting of new members to enhance board strength and skills.

Next, Directorship magazine in the “Pre-empting Future Shock: How Boards Can Address the Economic Crisis Now” article, December 18, 2008, indicates five critical areas–

  • Strategy Boards should …consider whether their companies’ foundational assumptions regarding the nature of their markets, customers, and business economics are changing and, if so, the implications for strategy.
  • Operations/Organization Boards can make sure that scenarios have been tested under several different assumptions of sharp volume and pricing changes of, for example, 10, 15, and 20 percent drops in volume and a pricing decrease of 5 percent.
  • Balance sheet/liquidity The consideration of various operational scenarios should also look at whether the liquidity of the company is sufficient under each set of assumptions.
  • Compensation Because the current environment presents compensation committees with unique problems and will continue to do so for some time, they will have to consider whether and how to modify the compensation system.
  • Enterprise Risk Management (ERM) Now is certainly the time for boards and management teams to think about how to integrate ERM into the short- and long-term planning processes.

Then I found an interesting article “Ten Areas For Enhanced Board Focus In 2009” on a less well known but informative website —The Metropolitan Corporate Counsel. The areas are —

  • Apply judgment in tailoring governance structures and processes to the current needs of the company.
  • Take a fresh look at board composition and director competency.
  • Consider implementing some form of independent board leadership..
  • Ensure that risk oversight is on the board’s agenda, as a matter of substance and process.
  • Understand the impact of risk on strategic aspects of operations.
  • Reemphasize (and review) disclosure controls and procedures to ensure timely and accurate disclosures, as well as effective internal controls, compliance and ethics systems generally.
  • Scrutinize compensation incentives through a risk-focused lens.
  • Build risk management into CEO and senior executive evaluations.
  • Exercise caution in adjusting previous equity compensation grants (for example, repricings or exchanges) or in otherwise adjusting compensation with respect to missed performance goals.
  • Ensure the vitality of the tone at the top and its alignment with risk profile, strategic direction, compensation incentives and financial reporting and controls.

Now let’s see what Corporate Governance experts are saying.

Writing in Compliance Week on January 21st, Rick Steinberg, founder and principal of Steinberg Governance Advisors and the author of Corporate Governance and the Board — What Works Best and Audit Committee Effectiveness — What Works Best indicates–

Risk management and corporate culture — are two of the areas that Steinberg believes need to be focused on by boards to help reverse the frightening trend that as manifested itself recently. Additionally, strategy and implementation need to be monitored by boards, as well as an analysis of whether performance measures are in alignment with strategy and compensation.

Common themes seem to be Risk Management, Compensation, Succession Planning and Strategy. Boards are beginning to learn that they must not abnegate this vital function to management. Strategic Planning touches all corporate areas and requires the active involvement of the Board.

Strategy will be covered in more depth in future posts.

Should Consumers Believe Their Eyes or Ears? The Case of Shrinking Consumables

Customers know when they’re getting a bargain or when they’re getting something other than a bargain. Advertisers tell us what toothpaste is better, what detergents clean better, what food tastes good and even where we need to buy our cars. With all of this dependence on the media for our thoughts on shopping and bargain-hunting, is there any need for us to ever worry about quality…or even size?

Global economic conditions have made financial situations quite bleak, with the necessary budget-tweaking, numbers-crunching and overall cutbacks by both consumers and corporations. With all of the attention on money or the lack thereof, is there reason to give pause when we see that packages that hold our favorite foods or drinks are shrinking while the price for said packages is growing? What gives?

Manufacturers are feeling the crunch of these economic times in a major way and when they try to move their products, they may also see that what used to be a healthy bottom line with black numbers is slowly giving way to smaller numbers with twinges of pink in them, about to go red. What’s a company to do? What is noticeably being done is that companies are simply starting to put less content in our packages, yet still charge us the same price, if not more for the item(s). Consumers are noticing and they do not like it. (news story)

Then, to possibly frustrate the consumer even more, they’ve re-designed the packages, with brighter, bolder colors and font changes. There may even be new models on the box or a new background. This is all in an attempt to make the customer think that they’re getting more, or better, or different content. Essentially, and sadly, the consumer is getting the same thing, for more, in a different package with brighter words. That’s all.

Media advertising is a very tricky animal in that they know that customers purchase with emotion and they buy what they see and what makes them feel good. Think about your favorite brand of something and what you would do if they had a price increase or worse, if the item was about to be discontinued. Let’s say that you were held hostage and told that if you don’t pay slightly more for your favorite thing, that it may go away and never come back. With some manufacturers, brand hostage is happening and consumers are in the middle of it. We know that businesses are in business to make money and to be profitable, but at what expense. Should the customer be tricked or cajoled into paying more for less? Is it right?

ice-cream

Ben and Jerry’s ice-cream giants recently brought attention to a move that their rival competitor, Haagen-Daaz made by shrinking their packaging yet keeping their price the same on their pint-sized goodness. Ben & Jerry’s said that it was a “bad move” on the part of their competitor and that they would never, EVER do such a thing to their customers or with their products. They even Tweeted about it on Twitter saying thanks to their fans for their support and that

Apparently size matters to our fans as well. tinyurl.com/bjmeam Thanks for the support here & on facebook tinyurl.com/5acu3y 9:04 AM Mar 5th from TweetDeck “

Good for Ben & Jerry’s for making us aware of this! But what does Haagen-Daaz have to say? Apparently, they’re being genuine with their move and intention and go into detail to explain it here on their site. I applaud them for being upfront, open and direct and for involving the customer. The worst thing that a company can do to their customers is to insult their intelligence (is this package really smaller or is it just me), and then not offer any explanation about it (your favorite cereal just jumped up $0.75 more per box without any warning). In these economic conditions, that is not a good move and can lose customers for you quicker than anything.

Paying more for less is never a good idea, no matter what it applies to or what industry it’s in. Consumers want what’s fair and they want the value of what they’ve paid for. If you change your prices, tell your customers. Let them decide what they want to do with their dollars. If you change your packaging, tell your customers. Don’t make them wonder if their eyes are playing tricks on them or if they “thought” they saw something different. Consumers appreciate it more when you’re up front with them, like Haagen-Dazs was. Do I like that I now get less in my pint? Absolutely not, but at least I know why.

Lights and Bushels

In case you haven’t spent quality time customizing your personal information environment, I highly recommend it. My home page of selected news pays off daily, bringing me several Careers-related RSS feeds and much (much) more.  On a recent morning, one “buzz” source offered an item about five radically healthy yet inexpensive foods. I wanted to know what the five foods are . . .

Could I find that out in the five seconds it would take to read five words? No indeed. I had to watch a five-minute video. A perfectly okay video of an ABC News segment, but I didn’t want to spend time watching it. I just wanted the information. (Here’s a gift of three minutes, in case you’re interested: frozen veggies, canned salmon, edamame, sweet potatoes, and brown rice.)

In reviewing Careers sites, I very often experience the same frustration. In some cases, and particularly in employee testimonials and day-in-the-life videos, the medium is necessary for the message. There is no bullet point version, and seeing/hearing the people and events is an important aspect of the information.

In other cases, though, I’d like to get the info without the video—or at least have that choice. And even where the video is key information, I’d like to have something left over from my investment of viewing time. Could I have a text summary after the video? Maybe even a transcript?

Deloitte does a great job on this!

deloitte-video

Merck is another company that offers video transcripts—but the implementation is less appealing, since you have to open a PDF to see the transcript.
This same lament applies to Flash maps. It’s neat to click on a city or country and see where jobs might be available. But if the map isn’t connected with actual, available positions—what have I gained?

Once again, Deloitte is on track:

deloitte-map

From the Deloitte map, you can click through to a specific location and see not only detail about the office, but available jobs. And if you prefer a text search, just change tabs.

deloitte-linkDoes Deloitte have everything right? Not quite. And that’s the reason for the post title.

Deloitte hides its nice video/transcript offering under a bushel. It’s not in the left (main) navigation, and not reached from any text links. To get there, you would have to decide to click on a rather vague graphic titled “Career Insights,” which is located at the bottom of a right-hand column.

So as a practical action item . . . consider these suggestions:

  • Gizmos should make sense and connect with functionality.
  • Videos should be connected with a print message at some point.
  • High-value content should be clearly labeled–and placed where the visitor won’t miss it!

Too Much Teleprompter? Can the Crutch Dilute Your Message?

United States President Barack Obama has been criticized of late for his overuse of the teleprompter, the device which aids him as he offers his riveting speeches and ongoing campaign of change for America. Even in the midst of a jostled economy and uncertain end, there is still criticism and focus on those things that can be considered non-essential or mundane at best. Can a teleprompter really be overused?

Some of the greatest speeches ever given by U.S. Presidents have not been without the aid of notes and teleprompters. They are quite handy if the orator forgets his lines or train of thought. Not to mention the awkwardness that can result if he loses his place in his paper notes, having not given the teleprompter a chance. The actual device itself is quite useful but has many organizations and individuals in a quandary because they feel as if Mr. Obama relies on it too much. The feeling is that he is not really “connecting” to the American people and talking to them instead of at them. CEO’s and other heads of companies use this media tool quite effectively as well to convey their own messages. But is this little contraption over-used and over-rated?

The media wants to get the news and developments first-hand, when-they-happen and not miss one complete iota of information that can be beneficial to their audiences. They want fresh, natural and relaxed news that they can use to report the news and entertainment. Perhaps the teleprompter hinders that? Maybe they are used a little too much and make the person appear less than genuine or that they are delivering a “canned” message?

CEO’s can and should use notes, teleprompters or any other aids they may need to effectively convey their message, but never to a point where their messages may appear less than genuine. This is where they may lose their audiences interest and sometimes even their own credibility. Delivering a speech should be with facts of course, but always, always from the heart.

Does your company’s CEO use teleprompters or any other speech aids? Does Obama’s use of his teleprompter affect you in any way or make you believe him less?

Has Your Brand Been Twitterized?

When I say “Twitterized”, I don’t just mean, is your brand on Twitter?  I think by now, that’s a given.  What I’m referring to is the Twitterization of branding, advertising and marketing messages overall.  In a world that’s becoming more and more reliant on instant updates, real-time communication and short clips of information, is your brand on board and communicating the same way?

There is certainly no doubt that communication has changed significantly in recent years.  Who would have thought less than 20 years ago when instant messaging was all the rage that today we’d be talking about the mainstreaming of short, real-time, communication snippets.  That’s basically what communication has turned into – sound bites.  [Read more…] about Has Your Brand Been Twitterized?

Stand Out—or Fit In?

skittles-collage

There’s no doubt that Skittles created attention with their extreme makeover! Not only here at Corporate Eye (Media and Brand), but all over the web—discussed and debated by bloggers, social media mavens, and even the relatively staid Wall Street Journal (which provides an interesting analysis).

An interesting part about this: the Skittles site was already more than a little bizarre. (If you don’t recall–or never saw–the “before” version, visit the Wayback Machine. ) So the change may be more noteworthy for its wholesale embrace of postmodern media than merely for novelty per se.

Of course my investigation has to focus on the Careers aspect, which leads to Skittles’ parent company, Mars. And switching to the Mars site is like going back over the Skittles Rainbow to land in Kansas again:

mars-careers

It’s a pleasant design and the site has pleasant functionality. In short—it fits into a visitor’s expectations. But it doesn’t stand out.  (Even when you discover that you can drag the M&Ms around.)

If you are planning a makeover of the Careers site, or even starting from scratch, one of the fundamental design decisions is whether to play it safe or spice it up. A Careers site that looks like 85% of all others runs the risk of boring visitors—or at least, not getting their attention. On the other hand, a site that is radically different from the mainstream is open to one of several visitor interpretations:

  • These guys don’t know what they are doing.
  • This company looks interesting!
  • This site is confusing/awkward/unfriendly.
  • I feel right at home here!

And so on. Individuals bring their own assumptions and motivations to the site with them, and (at the risk of over-generalizing) visitors who are looking for security may favor something safe and traditional, whereas visitors looking for a challenge may be attracted to something adventurous and creative. Age may also be a factor—though not necessarily in a predictable way, since older-somethings could be ready for a big change while younger-somethings may be looking for a safe place to get started.

There’s no pleasing everyone, of course, so it’s important to consider the target audience for your industry and your company, as well as the main types of jobs to be listed. And of course, it’s important to maintain a constructive connection to the company’s brand image. But as food for thought, here are three principles that would hold up pretty well across the board:

  1. A site that looks as if it were made with a Careers-shaped cookie cutter leaves the impression that no one cared very much about the site.
  2. A site that looks great but doesn’t work well leaves the impression that no one cared very much about the visitor.
  3. A site that makes the visitor jump through hoops to get information (or to send a resume or apply for a job, etc.) leaves the impression that no one cared very much about recruiting.

(For an example of the middle ground–mainstream done with pizzazz–visit Umpqua Bank.)