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Archives for 2009

Will the $1800 Faulty Prius Headlight Scandal Hurt Toyota?

toyota_priusThe story that’s been traveling through online branding circles over the past several days has centered around the upgraded headlights in Toyota’s eco-friendly Prius model and their tendency to fail, particularly after the car’s warranty is over.  At first glance, this story might not seem like a big deal.  So the headlight goes out.  Head over to the local auto parts store and pick up a new bulb.  But wait a minute!  These are not just any headlights.  These are special upgrade headlights that cost up to $1800 to repair and replace when they go out.  Suffice it to say, a class action lawsuit has been filed against Toyota over these $1800 headlights.

Now, you might ask, if this is a widespread problem, why hasn’t Toyota issued a recall?  Well, despite Toyota’s reputation as being a manufacturer of quality vehicles that will last far longer than American made (I’ve heard that sales pitch at my local Toyota dealership – in fact, it was the only pitch the salesman had), the company is notoriously slow in responding to widespread problems such as this.  That slow to react approach might have a bigger impact on Toyota now for a few reasons:

  1. With economies doing poorly, consumers are ready to switch brands at a moment’s notice.  It’s not time to get slack on any kind of customer service issue.
  2. The Prius is the “it” car for socially and environmentally conscious consumers.  This is not an audience that will respond positively to a company that doesn’t do the right thing.
  3. If consumers don’t feel like they can count on the Toyota brand, then they’ll see little differentiation between Toyota and other car brands whose reputations have been tainted recently, namely, American automobile manufacturers like General Motors.

These reasons don’t even touch on the most obvious question — why does the Prius have an $1800 headlight upgrade option?  It seems excessive for a car that’s supposed to represent the opposite of excess.

So the question remains whether or not Toyota responds quickly enough to turn this black mark on its record into a minor blemish or if it will blow up into a full-fledged PR disaster.  We’ll have to wait and see.  Certainly, given the state of the world around us, one would think that a quick, customer-focused response would be the best path for Toyota to take to keep the promise its brand has come to represent to consumers.

What do you think?

Image: Flickr

International Trademarking Problems for Apple’s iPhone

iphone-chinaApple is facing a problem that is certainly not new to the world of branding and international trademarking.  There are over one billion people in China, and many of them desperately want an iPhone (rumor has it that over 1 million Chinese consumers already own one having gotten them through unofficial channels – via ComputerWorld). 

Apple’s problem isn’t a lack of demand for the iPhone around the world, it’s trademarking roadblocks.  First up — China and a little company named Hanwang who owns the trademark for i-phone in that country.

Back in 2002, Apple registered the iPhone trademark in China, but according to a ComputerWorld article, the registration only covered computer hardware and software, not phones or mobile phones.  Seems like a big oversight.  In 2004, a company named Hanwang registered i-phone in the phone equipment and mobile phone categories.  So now Apple has a big problem.

What should Apple do?  Let’s look at the choices:

  1. Apple can try to purchase the trademark rights from Hanwang (who did sell a handset called i-phone at one point).  Rumor has it Apple has not approached Hanwang to begin negotiations.
  2. Apple can apply to the trademark office asking to have Hanwang’s trademark revoked.  Rumor has it this process takes several years and usually doesn’t work.  To date, Hanwang claims to have not been contacted by the trademark office about any such filing.
  3. Apple can rebrand the iPhone for the China market.  This is not uncommon for brands that don’t translate well into foreign languages.
  4. Apple can ignore everyone and release the iPhone as the iPhone in China and let the chips fall where they may.  Typically, this is not a good strategy to follow for so many reasons.

What do you think?  What should Apple do?  It seems as though they should try to negotiate a reasonable deal to obtain the iPhone trademark in China, but if Hanwang isn’t amenable to a deal, then is it really that big of a deal if the iPhone needs to go by a different name in China?  Which is more important, the name or the product?  While there is value to the iPhone brand name, the Apple name certainly can carry its own weight.  I don’t think a different product name would be a sales killer in this case.  Would you still want or buy an Apple iPhone if it’s name were changed to Apple aPhone?  What if it were changed to Microsoft iPhone?  Would your answer change?  Again, I think the Apple brand name is more important in this case.  I don’t think I’d sweat it too much if I were in Apple’s shoes.  The potential 1 billion audience far outweighs the initial investment in rebranding the product.

Your thoughts?

Image: Flickr

Boards Are Focusing On Risk Management

Top on the list of many surveys of issues that concern Boards of Directors is Risk Management. According to The Institute of Risk Management Standard publication —

Risk can be defined as the combination of the probability of an event and its consequences. In all types of undertaking, there is the potential for events and consequences that constitute opportunities for benefit (upside) or threats to success (downside). …

Risk management is a central part of any organisation’s strategic management. It is the process whereby organizations methodically address the risks attaching to their activities with the goal of achieving sustained benefit within each activity and across the portfolio of all activities.

The current economic/financial crisis is supplying ample risks to corporate boards. For example, in AON’s 2009 Global Risk Management Survey

Respondents told us clearly that the crisis impacting the global economy was the number one most important risk to their organizations. Other key risks cited include staying ahead of regulatory compliance; managing business interruption; meeting the challenges of increased competition; commodity price risk; protecting reputation; managing risks associated with cash flow, supply chains, and third party liability; and hiring and retaining top talent. Every one of these risks has increased in scale and complexity given the state of the current economic environment.

If companies are overwhelmed by these risks, imagine how they impact companies’ stakeholders. Effective communications of how companies identify and deal with these risks is now an overarching issue. Therefore let us take a look at what is out there.

First one of the most comprehensive displays of risks is by Tokyo Electric Power Company —

Click on one of the Challenges and you obtain a thorough explanation of it and what the company is doing to manage it. This technique works so well that the company should use it to display other risks.

For a comprehensive description of a risk management process look no further than UK based Friends Provident an insurance and pension company. Their Internal controls and risk management process displays an extensive explanation of their risk management process and the roles of senior management.

Another UK based company ROK plc uses a very effective visual to describe how it identifies risks —

This is a great example of the power visualization has in business functions. Notice how lots of information is clearly communicated. Suggestions for ROK plc, display this on your website, not only in the PDF of the Annual Report, and explain company efforts to deal with the risks.

One of the best communication of risks and how the company addresses them is on the website of The Bank of China.

This is an example of Credit Risk. Note how they describe, monitor and manage the risk. Visit their site to see how other risks are addressed.

Many companies are slow to embrace the need to clearly communicate risk management issues via their websites. The prevalent practice is to provide PDF links to their annual report. In a number of cases companies have good risk management practices but they bury them in the Annual Report. Better to take the content and enhance it to —

  • Clearly describe risks by category
  • Explain how the company is managing the risks
  • Explain the impact on the company and quantify as much as possible
  • Use visuals (see my post Business Visualization)

The companies mentioned here are good examples to use as benchmarks.

Tick Tock Too: More about Recruiting Hourly Workers

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Leaving off in a recent post, I introduced “How to Find and Recruit the Best Hourly Employees,” a Workforce Institute white paper by Mel Kleinman of Humetrics.  While the paper is full of interesting insights and information, the part I want to focus on is a study of 500 hiring managers from diverse industries, conducted in 2007-2008.  Asked to cite their best recruiting sources (multiple answers were allowed), here’s how they answered:

55% Referrals

39% Miscellaneous media

21% Walk-ins

21% Schools

15% Customers

14% Internet

9% Company Web site

6% Job fairs

The top choice is certainly no surprise, since “Referrals” are not only the most cost-effective source for all types of recruiting, but also the best predictors of good fit.  “Miscellaneous media” (which includes location signage, billboards, newspapers, radio, and TV) and “Walk-ins” are also not surprising in the hourly hiring realm, since in the first instance volume hiring supports volume advertising, and in the second, many hourly job-seekers want to work near their homes.  “Schools” makes sense since hourly jobs are often starter jobs and/or student jobs.

But why do the two online resources rank so low?  An immediate guess would be that hourly job-seekers lack computer access and/or technological skills.  However, that’s (a) not necessarily true, and (b) rapidly changing.  For one thing, just about everyone has a cell phone these days, and the increasing emergence of phone-friendly communications like Twitter, texting, and email in recruiting may be a response to that fact.

Kleinman’s explanation is that  organizations and managers are not using Internet resources effectively.  “Part of the disconnect,” he suggests, “may be due to the fact that Internet tools deliver applicants much faster than the typical organization can respond to them. Another common criticism of Internet recruiting is that it delivers too many unqualified candidates.”  And it’s easy to see how these factors would be more serious barriers in high-volume, high-speed hiring than in the (often) more leisurely world of salaried recruiting.  Along these lines, Kleinman offers some smart tips for process improvement.

That brings us, finally, to the biggest loser:  the corporate website.  The paper cites “anecdotal evidence” that the major problem may be application processes that are “too impersonal, long, and cumbersome with no appreciable ROI for the applicant.”  And there’s no doubt that frustrating, time-consuming, and/or unrewarding procedures will be a turn-off for all job-seekers, hourly or otherwise.

But the problem could be even more acute for applicants who may have short attention spans or little online experience–especially if they are applying for low-paying jobs they don’t expect to enjoy!  And although improving processes is an obvious step, it’s also especially important to sell these applicants on the job before they start the application.  After all, it’s much easier to stay on a path when you really want to reach the destination.

That applies no matter what type of job is being offered, from Courtesy Clerk to CEO.  Employer branding is important (it helps if the applicant wants to work for the company), but so is “job branding.”  The more information and encouragement you can provide about a job–emphasizing day-to-day rewards and the importance of the worker’s efforts–the more likely it is that an applicant will be genuinely motivated.

(Yes, that’s a very early time clock!  Thanks to Pargon for snapping it at the Computer History Museum.)


Fishing expedition or a call from investor relations?

Fishing expedition, or a genuine call?

investment moneyI expect you’ve seen the boiler room scam warnings up on the investor relations pages of most corporate websites. Here’s one, for example, on Rio Tinto‘s site.

The more people are warned about these scammers, the better their chances of avoiding losing their money, so I like to see these warnings. But then, I also go to Hoax-Slayer to check up on those sad stories that arrive in my inbox via forwarded emails, so perhaps I’m just super-cynical.

But what if you receive a call yourself?

Am I being scammed?

This morning I had an unusual cold-call, and I was very dubious. A complete stranger, calling out of the blue to offer me a special deal: a tax-break if I invested in a company I’d never heard of? You’ve got to admit, that does sound distinctly dodgy. And he pushed hard:

  • some name-dropping – trying to wow me with glamour?
  • mention of cutting edge development – trying to wow me with technology?
  • and about having a link from their site to the FSA – does he think I don’t know that putting a link on your site requires no authorisation from the people at the other end?

(Just to be clear: he was calling me as a private individual, nothing to do with Corporate Eye – I asked).

His clear goal was my email address, to send me some information that wasn’t available on the website. And here’s another warning flag in my mind: why wasn’t this information on the site if it was so important?

My thought was: why is he calling me? What has this to do with me and my life? Does he think, like all those stairlift and cruise companies that call, that because of my postcode I’m likely to be a naive, technologically illiterate, little-old-lady?

So I took a name, number and website address, and gave out nothing more than he had already.

But now I think I was wrong.

How can you prove you are genuine?

My caller is listed as a sales manager for the company, which is in turn listed with Companies House. The website looks genuine enough, though there’s no indication of the company number on site (surely a legal requirement these days). And they have a clear internet history discussing their product and company; and I can track the individuals on the internet too. All of which makes them look more convincing.

So perhaps (perhaps!) I was wrong to be so doubtful. Not that I’m going to change my mind about investing. But I think there are a couple of interesting things that came out of my morning’s conversation:

  1. Is it effective — or even acceptable — to cold-call potential investors?

    Based on my reaction, probably not. I have no idea how I qualified to be on their call-list, and so was inclined to be negative from the outset. Moving a cold contact from that position to being willing to hand over thousands of pounds was always going to be an uphill struggle, and may not be the most effective way of raising funds.

    Perhaps it would work better if there was some connection between us already. Facebook? LinkedIn?

    Or if I had some experience of the industry, or a track record of investing in this kind of venture.

    Although we here at Corporate Eye like to see contact between the investor relations department and the retail investor, I don’t think that cold-calling is the way to go.

  2. Provide all necessary information on the website

    My proposal to my caller was that instead of him sending me information, I should get it from the website. But, he said, I’d need the special pack … So here’s the thing: why not put that on the site as well? Then they might, just might, get drive-by investors. Not to mention greater credibility with people like me. Which brings me to…

  3. Not all potential investors are the same

    I don’t really blame my caller. I’m just a name on his list – he has no idea that I regularly review investor relations sites, or am active on the internet. Though he could have found that out with a quick Google search – after all, he had my name and address already. And given the size of the suggested investment, a few minutes to Google search could easily be recouped with a more targeted script. (And, for a shot at big money, making the background noise less of a call-centre would help too).

    Yet cold-call scripts as a rule don’t take account of the variable expertise and interests of the cold-called. Am I going to be impressed by big names and new technology? Not that much, though others might be.

    How about making it more of a conversation, and less of a script? That way I’d be more engaged, and more likely to listen.

What do you think? Should I have been more flexible? Would you contact potential investors by cold-call? Do you engage them in guided conversation or run a script? Can people find out everything they’d need to know about you online?

Tick Tock: Recruiting Hourly Workers

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I was aware that I didn’t know much about the subject of hourly hiring, but it turns out I knew even less than I thought.  There are a lot of moving parts to the process, including several (such as drug testing, background checks, and physical exams) that aren’t as likely to apply in salaried hiring.  And whereas salaried employees are typically inclined to keep their jobs as long as possible, turnover is a huge issue in the hourly world–so the hiring process tends to be constant rather than cyclic or intermittent.

Other differences I hadn’t thought about:  Walk-ins are an important source of hourly applicants.  Location is often especially important to hourly workers, who are likely to work within five miles of where they live.  And time-to-hire is a key factor for many hourly applicants, who may need to find work quickly.

I also had some misconceptions.  Although it’s true that hourly workers have traditionally tended to be young and either under-educated or still in the process of getting educated, today’s hourly workforce is divided roughly into thirds in terms of age (a little over one-third for the under-25 set, a little under one-third for the over-45s, and the rest in between).  And as for education and experience . . . in today’s economy, teenage dropouts may be standing next to down-sized professionals at the application kiosk.

I gathered my new view of hourly hiring by visiting the websites of several specialized recruiting consultants and niche job boards.  The Job Magnet, a site specifically catering to hourly job seekers, has an overview of candidate sourcing (PDF) in their Employer area.  (And while you’re there, check out the nice way they have matched up the look of their seeker-facing home page and their employer-facing home page.  Each shows five photos of audience representatives across the top, and the difference in depiction of the two groups–job-seekers and employers–is quite instructive in itself!)

Kronos, which provides HR solutions specifically tailored for the hourly workforce, offers a case study and a webinar on the ROI of selection.  (Look in the right-hand navigation pane.)  And HRLogix, which specializes in “strategic talent acquisition strategy” for the gaming and hospitality industries (major employers of hourly workers) provides a nice graphic overview of the whole hiring and onboarding process.

Niche board Snag-a-Job offers helpful information in its Employers section.  There are a variety of short, targeted articles in the Hiring Library, and a good round-up of information and tips in the monthly Recruiting Edge newsletter..

But by far the most interesting and useful resource I found is “How to Find and Recruit the Best Hourly Employees (PDF),” a Workforce Institute white paper by Mel Kleinman of Humetrics.  Among the eye-openers included in this paper is a 2008 survey of hiring managers which found that only 9% regarded the corporate website as one of their best recruiting tools.  And a mere 14% listed the Internet as a top tool.

What’s the problem?  Find out in the next post.

(Thanks to Chris Metcalf for the cleverly framed clock.)