Wednesday, December 8, 2010

The Evolving Technology of Learning

The following column first appeared in Southern PHC Magazine...

Training in service companies is about to undergo a revolution. The widespread diffusion of broadband Internet access will make more training available for more people, more conveniently.

Want an example? Omega Plumbing’s Allan Ferguson brought in Charlie Greer to conduct a training class for his plumbers. Omega Plumbing is located in Sydney, Australia. Charlie is based out of Fort Myers, Florida. Charlie trained a group of plumbers on the other side of the world using video conferencing from his personal computer. Charlie was projected on the wall larger than life in Sydney, while he watched the audience on his screen.

This may sound miraculous (and it is), but it’s no longer all that unusual. Well, it’s no longer unusual outside of the service trades. With exceptions, the service trades are likely to be among the last to embrace changes in training technology. It won’t be the first time.

Twenty years ago I ran marketing for the geographic division of an HVAC manufacturer. While I was based in California, I spent a lot of time attending meetings in Texas. During one of the plane flights it struck me that the entire notion of a geographic division was an anachronism. It was a relic of the days when people traveled by train and getting from North Texas to Northern California required days, not hours. Eventually, this was recognized by top management. The geographic divisional offices were closed. Fewer people provided better support from a central location.

Just as the industry was slow to recognize the impact of changes in the economics and availability of travel technology, we’re probably going to be slow to accept changes in training technology. However, there are exceptions. One of the exceptions is the new Service Nation Alliance.

Service Nation is embracing technology at a deeper level than any other contractor group. Here are three ways the organization is using technology to improve training…

Multi-User Video Conferencing

Broadband has made it personal computer based, multi-user video conferencing feasible. Small groups of contractors meet monthly to share financials, hold each other accountable, solve mutual problems, and push each other to higher levels of performance.

The alliance is also using multi-user video conferencing to create support groups of managers and contractor action teams to focus on best practices. While contractors think twice about flying service managers across the country to meet with the service managers of non-competitive companies, it’s virtually free online.

Distance Learning

The office staff of most contracting companies seldom receive much formal training. Yet, the CSR is the public face of the company. He or she is the first person the prospective customer engages. If there’s any position that merits training, it’s the CSR. Thus, Service Nation is using distance learning training so that CSRs, for example, can receive training at the desktop through short training modules that contain specific learning objectives and post-module testing to ensure the learning objectives were realized. Through the alliance’s learning management system, owners can easily track the progress of each employee.


Many contractors have attended a webinar. Most webinars today are glorified sales pitches, disguised as an online seminar. Service Nation is using webinars to reinforce and review their boot camp training class, giving graduates an constant refresher without leaving the office.

Streaming Media

Service Nation is bringing in top consultants, contractors, and vendors to offer short training clips for contractors to use in service meetings. It gives meetings an extra kick and another voice than the boss to reinforce the message.


The proliferation of smart phones and tablet computers is further revolutionizing the training arena, making it possible to easily deliver training resources to field employees.

Will these changes in the technology of learning eliminate the need for face-to-face meetings and in-person training classes? Hardly. There will always be a need for people to interact and converse. It’s built into our DNA. However, the evolving technology of learning will allow us to train more people with better systems for less money.

While it may take longer for the majority of the organizations in the service trades to apply new technology than other industries, it will happen. In fact, it’s already begun.

For more information about the Service Nation Alliance, call toll free 877.262.3341.

Wednesday, December 1, 2010

Year-end tax planning......what should we do?

Congress adjourned in late September without a bi-partisan agreement to extend the tax cuts before the election; apparently many members of Congress were more concerned about saving their own jobs than they were about coming to an agreement on these important tax laws. And important they are: according to the Wall Street Journal, if the existing tax cuts are not continued, taxes will increase for more than 150 million Americans. This issue is now left to the lame-duck session of Congress.

The Bush tax cuts aside, here’s a look at what is clear at this point.

Energy Tax Credit (IRC Section 25C)

This popular industry tax credit expires on December 31, 2010. It allows a taxpayer a 30% tax credit on the installed cost of qualifying equipment (high efficiency furnaces, boilers, water heaters, air conditioners, heat pumps, and wood stoves and main air circulating fan). This credit applies to existing principal residences only. The maximum allowable credit is $1,500 so the credit is maxed out at installation costs of $5,000 and above. This is not an annual credit. If you took any credit in 2009, that amount must be subtracted from the $1,500 limit to see what, if any, credit amount is available for 2010. This provision is not expected to be extended even if the Bush tax cuts are.

Businesses Taxes

Typically, an asset purchased must be depreciated (written off) over a number of years. Section 179 of the Internal Revenue CodeThis deduction allows a business to immediately expense qualified property in the year it is bought.

The Section 179 deduction limits have been increased for 2010 and 2011. The maximum deduction is now $500,000 and the maximum investment limit is now $2,000,000. Any asset purchases in excess of $2,000,000 will reduce the allowable Section 179 deduction dollar-for-dollar from the $500,000 limit. The allowable Section 179 deduction is limited to the taxable income of the business. Any amounts not deductible in the current year may be carried forward. The allowable deduction for luxury autos (i.e. SUVs) is $25,000. The remaining cost is depreciated over five years.

The 50% bonus depreciation provision that expired at the end of 2009 was re-instated for 2010 only by the Small Business Jobs Act passed by Congress in late September. This allows a taxpayer to write off an additional 50% of the adjusted basis of the property placed in service during the year. Again, this revived provision expires December 31, 2010. First year depreciation limits for luxury autos are capped at $10,96011,060 (including the bonus depreciation). First year depreciation limits for light trucks and vans are capped at $11,06011,160 (including the bonus depreciation).

The Work Opportunity Tax Credit allows a business to claim a credit equal to 40% of the first $6,000 of wages paid to employees in a targeted group. The employee must work over 400 hours during the year. Otherwise, the credit is reduced to 25% for those who work at least 120 hours during the year. The 12 targeted groups include qualified veterans of service in the U.S. Armed Forces, vocational rehab individuals, ex-convicts and disconnected youth. For the complete list of targeted groups, go to the U.S. Department of Labor website ( This program is administered at the state level. This credit expires on December 31, 2010 as well.

If you are an “S” corporation that previously was a “C” corporation, the built-in gains (BIG) tax holding period for 2010 is seven years. That means any conversions before 2003 can now sell appreciated assets and avoid the BIG tax (35%). Recent legislation has decreased the holding period to five years in 2011.

If you are considering selling your business, you may avoid higher tax rates by closing the sale in 2010. You may also consider electing out of the installment method and recognizing the entire gain in 2010. It’s important that you do the calculations to make sure it makes sense in your situation. You should also consider selling and recognizing the gain on any other appreciated property.

You also may consider paying out “C” corporation dividends prior to the end of the year. The current dividend rate (maximum 15%) is much more favorable than the dividend rate would be in 2011 if the rates are allowed to increase. In that case, dividends would be taxed at ordinary income rates, which would be as high as 39.6%.

Individual Taxes

In this environment, it is extremely difficult to offer year-end tax planning guidance. Traditional general tax planning strategy is to defer (postpone) taxable income and capital losses and accelerate (pull into 2010) deductions. If the Bush tax cuts are allowed to expire, then the strategy would be reversed: you would accelerate taxable income into 2010 and defer above-the-line deductions into 2011. Above-the-line deductions include: IRA contributions, health savings account, self-employed health insurance, self-employment taxes and alimony, among others. Whether itemized deductions (medical expenses, real estate taxes, mortgage interest, charitable contributions, etc.) should be deferred into 2011 would be determined on a case-by-case basis. This is especially true if the itemized deduction phase-out provision returns for higher-income taxpayers.

The following chart shows the ordinary income tax rates for this year and 2011 if the Bush tax cuts are not extended.

Tax Rates
2010 2011
10.00% 15.00%
15.00% 28.00%
25.00% 31.00%
28.00% 36.00%
33.00% 39.60%

The dividend tax rate (currently 0% for those in the 10 & 15% brackets and 15% for all others) would go to ordinary income rates (which could be as high as 39.6% for some taxpayers)! The long-term capital gain tax rate (currently 0% for those in the 10 & 15% tax brackets and 15% for all others;) would go to 10% for the 15% bracket and 20% for all others (different rates for qualified five-year gain property).

Estate Taxes

There currently is no estate tax for 2010. The estate tax returns for 2011 with the exclusion amount (amount exempt from estate taxes) scheduled to be $1 million and a top tax rate of 55%. In 2009, the exclusion amount was $3.5 million and the top tax rate was 45%. I expect that the estate tax issue will be addressed very quickly by Congress, as five billionaires have died so far in 2010, including New York Yankees owner George Steinbrenner. The government has lost over $8 billion in estate taxes from these five families alone because of this.

As you can see, with all this uncertainty surrounding the tax laws, it is difficult for businesses and individuals to do their year-end tax planning. While I expect that many of the Bush tax cuts will be extended, it may be well into 2011 before this gets resolved. At this point, my best advice is to pay close attention to news reports coming out of Washington, D.C. and stay in close touch with your CPA or tax preparer.

U.S. Treasury Department Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that, unless expressly stated otherwise, any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. This article is not intended to be comprehensive in nature and competent professional tax advice should be sought in determining the issues that impact your specific situation.

Tuesday, November 30, 2010

Are Your Customers Dumping You?

This is a surprisingly good parable put out by Microsoft illustrating the way most companies advertise to their customers and what the customers think about it. This is why customer engagement is so important.

Wednesday, November 3, 2010

The Push

Is there someone in your company who needs a push? How about your family? How about you?

Lessons From Lanny

After a mental breakdown cost Lanny Bassham the Gold Medal for International Rifle Shooting in the 1972 Olympics, leaving him with the Silver, he sought answers. What was it about the Gold Medalists’ mental game that set them apart?
At the Service Roundtable’s recent Las Vegas Roundtable, Lanny shared what he discovered, what helped him win a Gold Medal in the 1976 Olympic Games, reign at the top of his sport for six years, set four world records, and help scores of other professional athletes in all sports, sales people, and business leaders. These principles can help you, your company, and your team, perform better.

Thursday, October 21, 2010

Can You Be Too Anti-Social For Social Media?

I put a cartoon in my social media book with the caption, “Burt is too anti-social for social media.” It turns out there are a few Burts in this world.

One of my co-workers showed me a marketing writer’s screen on Facebook. I recognized her name. She writes a lot and her work appears in a number of blogs. She’s always seemed to have a good grasp of the marketing function. That’s what made the status update curious.
This marketing guru essentially told everyone to sod off. She was far too important to be just anyone’s Facebook friend. Only a select few would be so honored. Everyone else should quit sending her friend requests because she’s going to reject them out of hand. She’s simply too busy for this tripe.

Wednesday, October 20, 2010

The Buzz About QR Codes

Reprinted from Southern PHC Magazine...

Haven’t heard about QR codes?  You will.  QR (quick read) codes are similar to bar codes, but easily readable by mobile phones.  They also contain significantly more information than bar codes.

I can hear the yawns now.   You’re thinking, “So what?  Who cares?  How does this help me?”

It’s true that QR codes are not a magic pill that will rectify your call shortage.  However, they do offer a way to leverage and extend your marketing in new ways.

QR codes allow you to pack a lot of information into a small space that can be instantly read by a mobile device.  QR apps are available today for Androids, iPhones, Blackberries, and other smart phones.  They will basically work with any mobile device equipped with a camera, which accounts for roughly 70% of all phones sold.

Where would it be beneficial to pack extra information in a limited space?  How about a business card?  By printing a QR code on the front or back of a business card, you can deliver more information than the card’s footprint allows.  What would you add to the business card?  Here are a few ideas…

·         Make a special offer
·         Tell your company story
·         List all of the products and services
·         Share customer testimonials
·         Link to positive articles written about your company
·         Link to an article about selecting a good contractor
·         Link to your Facebook fan page

The ability to use a QR code to link to a web address offers the potential to promote a daily special.  If you still have a yellow pages ad, put a QR code for the daily special.  When call volume is light, you can make the daily special more lucrative.  When call volume is heavy, reduce the offer or change it for major purchases.  Adjust the offer based the weather or local events.  Get creative.

If you don’t want to change a webpage, make the QR code a text message.  You reply with a text containing the daily special.

The daily special can work with any permanent or semi-permanent advertising.  This includes yellow pages, billboards and other outdoor advertising.  Put one on the back of your truck for people stuck behind you at a traffic light.

QR codes offer a lot of potential for home shows.  Hire someone to stand in front of the entrance wearing a sandwich board with a QR code.  The message could invite them to your booth for a special offer or gift.  It could direct them to an online map of the show, with your booth highlighted.  You could ask a question, such as the following:

·         Does anyone in your house suffer from allergies or asthma?  If so, come see us at Booth 555.
·         Do you run out of hot water?  If so, we can solve the problem.  Come see us at Booth 555.
·         Are any rooms in your house too hot or cold when other rooms are comfortable?  Don’t put up with it!  Come see us at Booth 555 for a solution.
·         Are there seniors or infants in your home?  Are they at risk of scalding?  We have the safe solution at Booth 555.

Because QR codes are easy for mobile devices to read, they can become an easy way to get your phone number into a prospect’s phone.  Print the QR code for your phone number, above or below the number.  The code serves as a form of speed dialing.

To increase your local search rankings, include a QR code on your invoice with a link to your Google Places page.  In the copy besides the QR code, ask people to go to the site and write a review.

Dozens of free QR code generators have sprung up on the Internet.  Simply enter the desired information and the QR code is created.  Free QR code apps are also readily available for Androids, Blackberries, iPhones, and other smart phones.

QR code usage is growing, but still at the novelty stage for most people.  This can work to the advantage of the contractors who are early adopters.  Put a QR code on your trucks or a billboard and see what happens.  People who recognize it are likely to scan it because it is still a novelty. 

If you would rather sit back and wait, keep an eye out.  If you start seeing QR codes in the newspaper and in your community, it’s time to reconsider.

Friday, October 8, 2010

Embarrassed by the Brand

Yoga by Anna Cervova

Recently, Albert Mohler, the president of a Baptist seminary declared yoga to be inconsistent with Christianity. According to an article in the Fort Worth Star-Telegram the guy wrote that Christian yoga practitioners "must either deny the reality of what yoga represents or fail to see the contradictions between their Christian commitments and their embrace of yoga."

Maybe I'm not with it. I thought yoga was mostly people stretching themselves into contortions and trying to meditate away the pain of their awkward positions. I didn't think it had any more to do with religion than sitting by a serene lake and possibly thinking about God. Shows what I know.

Apparently, it's also a surprise to a lot of people who practice something called "Christ Yoga" and millions more who simply like to stretch and contort their bodies. But it's probably most surprising to the Baptist pastors who are trying to attract new members and converts. Scratch the idea of winning over the yoga crowd, which is larger than the entire membership of the Southern Baptist Convention.

I'm sure many agree with Mohler. Others may not. The point is that all of them are now painted with the same broad, brand brush. Actions like this may explain why two of the nation's three largest local Southern Baptist churches downplay the denominational brand. The pastors of these churches understand that local church brands are built on local relationships. While the big, denominational brand may (i.e., may) help legitimize the local church, it also can hurt the local church when someone like Mohler spouts off. In addition, promotion of the denominational brand promotes other local churches operating under the same brand name.

From Church to Air

Locally, I've been listening to a local air conditioning contractor attack another on the radio. He attacks the owner's accent and the business practices. I don't know much about either company's business practices, though the guy being attacked is a member of the Service Roundtable, which means I'm inclined to give him the benefit of the doubt.

These are not comparative ads where one advertiser compares his features with the competition's. The ads are more like a political attack ad. They come across as mean. I don't know whether they're effective or not, but I suspect many people find them distasteful.

So no harm, no foul to anyone else right? Well, the guy doing the attacking uses manufacturer co-op and hypes the manufacturer brand in all advertising. Thus, it's as though every contractor associated with the manufacturer's brand is participating in the ad campaign. They're painted with the same broad brand brush.

The solution for contractors is the same used by the leading local churches. Don't play up the big national, denominational brand. Instead, emphasize your local brand and your local brand relationships. It's the only way to avoid being embarrassed by the brand.

Thursday, October 7, 2010

It's Time for a New Business Card

Source:  orderedlist from the Kineda blog

The Service Roundtable's business card is starting to look a little stale.  Plus, our graphics designer cringes every time she looks at it.  I'm tired of the grimaces.  If ours is out of date, I'll bet yours could use an upgrade as well.  And poor business cards cost sales.

According to a press release from Fidelity Print...

Two thirds of people won't buy from companies with bad business cards.
A new survey has revealed that buying cheap business cards is a false economy - because they actually put off potential customers.
Self-printed business cards or flimsy ones from low cost, low quality online design companies would discourage two thirds of potential buyers, according to the survey by

Fortunately, good business cards can help drive sales.  Sarah, our graphics designer, pointed out the Vector Tuts blog to illustrate some great die-cut designs.

As the guy who signs checks, my immediate knee jerk reaction when I see these cards is to grab onto my wallet.  How much do they cost, I ask myself.

It's the wrong question.  I should ask how much they can help.

Before I turned Sarah loose to come up with new designs, I stressed that I wanted a QR code on the back of the card.  The QR code is a type of bar code, readable by smart phones like the iPhone, Android, and Blackberry (you might have to download an app).

The QR codes we will use will take the user to a webpage about the Service Roundtable that will promote upcoming events, contain special offers, and other interesting information.  We can change the webpage contents whenever we want while the URL remains constant.

As we were discussing different business card designs, some seemed better for our members, some for prospects, and others for vendors and investors.  Sarah asked the obvious question.  Shouldn't we just create more than one card?  Of course!  Targeting our business cards increases their effectiveness.  And even the most expensive business card is still cheap. Why not carry more than one?

Wednesday, October 6, 2010

Is There a Hole In The Ozone Protocol?

The Montreal Protocol has dealt a death blow to R22 equipment, right? Maybe not.

“I just committed to purchasing the Nitrogen Charged R22 compatible condensing units,” proclaimed a contractor on the Service Roundtable.

Read More at Contracting Business

Tuesday, September 7, 2010

So, You Want to be Steve Jobs

Are you a small business owner? Did you ever question why you are in that business? As in, "I went to college to become an accountant or I was destined to take over the company from my dad. But I sure wish I owned some hip, cool business like Google or Apple."

Okay, we ALL wish we could own some hip, cool business like Google or Apple! But I bet you might have had that thought on a smaller scale. Maybe a motorcycle chop shop, a social media company or an advertising company. The thing is, you probably do have that company now.

Let's watch and listen to Tom Peters explain it. By the way, consider this video as a recruitment tool to your particular industry.

Friday, August 20, 2010

Defining Personal Branding

Personal branding is a hot Internet buzz word. It has been for the last couple of years. To some personal branding means choosing one's own cereal. To others it means applying a hot iron to your favorite head of cattle. And to others it has something to do with marketing one's self...or something like that.

If you were in the personal branding business, do you think that a single, accessible definition of personal branding might be helpful to potential clients? Sure you would! A group of folks in that business thought it might also, so they got together and created this definition:

Personal branding describes the process by which individuals and entrepreneurs differentiate themselves and stand out from a crowd by identifying and articulating their unique value proposition, whether professional or personal, and then leveraging it across platforms with a consistent message and image to achieve a specific goal. In this way, individuals can enhance their recognition as experts in their field, establish reputation and credibility, advance their careers, and build self-confidence.

The method in which our group of personal branding experts defined personal branding is fascinating. You're probably familiar with it. They used a Wiki. You've no doubt used a Wiki yourself... as in

Did you ever want to work on a project with people who are scattered about the country, the world? Maybe you're in a business mix group and you'd like to put your collective brains together and come up with a social media policy for your coworkers. Create and use a Wiki. The cool thing about using one is it could be accessible to more folks at your company. This way they can interact with the workers at the other companies and get stuff done.

Here is the Wiki that our experts are using (it can be an ongoing process) to define personal branding.

Interested in starting your own Wiki? Go here.

Photo credit, Yodel Anecdotal

Wednesday, August 11, 2010

Thriving in Today's Workplace

Kirsten Olson wrote an article last year titled New Learners for the New Economy. She tells college students and those who recently graduated, what habits and attitudes are crucial for thriving in the workplace.

Kirsten's essay is so relevant, that not only does it pertain to students, it pertains to business owners, managers and coworkers. And, if you substitute a few nouns, it pertains to Australian aborigines. Really. It's that relevant.

Kirsten asks her readers, "What learning attributes do employers seek in the flatter, fragmented, and constantly changing workplace?"

Most of us employers are so busy trying to run our businesses, we don't give much thought to what sort of learning attributes we should be seeking in prospective coworkers. Fortunately for us Kirsten did. She calls them habitudes (habits plus attitudes). Check them out:

New learners for the new economy...

1. Are highly adaptive.
2. Ask great questions.
3. Are curious about everything.
4. Have a broad knowledge base that they are always expanding.
5. Are good at seeing patterns.
6. Are team players who share what they know willingly and generously.
7. Are a glass-half-full resource managers.
8. Understand that every contact matters.
9. Know that hierarchy doesn't matter.
10. Are choiceful about how they socialize.
11. Own mistakes and are error alchemists.
12. See learning as a pleasure.

Kirsten expands on these habitudes in her article.
Kirsten Olson bio.
Wounded by School, Kirsten's book.

Wounded by School is an eye-opening journey into the world of the American school system today. A system that is inept in producing the attributes critical for today's business community and one that was around when Abraham Lincoln presided over our country. The book also offers ways to combat the wounds inflicted by school.

Friday, August 6, 2010

The Technician

Chances are you are a service contractor owner or employee. It could be an electrical contractor or solar energy or plumbing or HVAC. It doesn't matter. You or your people enter a home or place of business and repair, replace, maintain or install whatever it is that's your specialty. You try to make a difference for your customer.

Keep that thought in mind as you watch this short film. Notice how technician Simon Oliver Fecteau tries to make a difference for his customer. Maybe it's just me, but I do believe Simon is raising the bar for us all...

Thursday, August 5, 2010

Keeping Cool Under the Heat

My latest article on CB Hotmail...

The series of heat waves sweeping across the country this summer have been a welcome source of business activity for HVAC contractors reeling from successive regulatory blows, mild summers, and the nation’s economic malaise. Yet, the heat not only stresses compressors, it stresses customers, employees, and company owners. Losing your cool under the summer’s stress rarely works well for anyone but is especially detrimental if you’re the boss (i.e., the role model in your company). Here’s 11 ways to keep cool under the heat.

Read more at Contracting Business.

Monday, August 2, 2010

Why Executives HATE Social Media (from DemingHill)

Note:  This excellent white paper on executive resistance to social media and why executives should reconsider is getting a lot of play online.  While it was written for large company executives, it is equally applicable to small business owners.  If you're unsure about social media and consider it a waste of time, it might be worth a small investment of time to read this white paper.

Reprinted With Permission

I’m an executive and I HATE social media.  There, I said it.  It’s finally “out there.”  But before you Twitter a flaming flash mob link to assemble pitchfork-wielding Second Life villagers outside my door, I urge you to take a deep breath, put down your double frappuccino, remove your earpiece, step away from your iPad, and set your iPhasers to stun, for I come in peace.  If you’ve ever wondered why your CEO ALSO hates social media, social networking and, well, socializing in general, I urge you to continue reading.  Just as Fox TV’s Masked Magician series demystified the tricks of the world’s most famous illusionists, I offer the following as both a behind-the-scenes peak and a confessional of sorts, into the mind of the executive.  For to truly understand the conflicting yet predictable stonewalling in this domain, one must search deep below the surface, plumbing the depths of the executive psyche, motivations, and worldviews, for only then will you be able to “crack the code,” engage us in our native tongue and communicate in a vocabulary and language to which we will respond.  Consider this your own personal backstage pass to the inner sanctum of the Executive Suite.

Executive: More Perception Than Position

For starters, the term “executive” isn’t a title as much as it is a mindset or a set of attributes – often leading to career success and the achievement of such rank – but what might surprise most is that this ambition and executive mentality often begins to manifest itself early in life.  For example, while most were partying and hanging out in high school, we were already taking college-level classes while holding down several part time jobs.  And when most were “finding themselves” in college and still deciding on a major after three years, we were serving in student leadership, doing internships, or doubling up on classes to finish college a semester early.  And when most were finally in the workforce, instead of clubbing and playing in multiple softball leagues, we were completing an advanced degree in night school, pursuing professional certifications, and framing out retirement plans.

Executives are high achievers – that’s just how we’re wired.  Give me a mountain and I’ll climb it.  And if you don’t have a mountain, I’ll find my own mountain and I’ll climb it.  And if I can’t find a mountain, I’ll build one – just so I can climb it. But here’s what most people don’t get about executives. Once a CEO climbs a mountain, he doesn’t feel the need to Tweet to the world that he did it.  He doesn’t have the natural desire to blog, “Look what a great climber I am” and include multiple pictures with links to his Facebook and LinkedIn account.  He did it because it’s in his DNA.  He doesn’t require the attention, approval, or applause of others, and therein lies the fundamental source of the problem – executives are non-narcissistic in a YouTube world.  We’re outliers.  In a society that brags, blogs, and Tweets about the tiniest personal minutia, we could care less because, frankly, we expect success, it’s normal to us.  It’s like Vince Lombardi’s admonition to his running back after an overly exuberant display, “Next time you make a touchdown, act like you’ve been there before.”

Eagles Don’t Flock

Executives are “eagles,” and unlike seagulls, eagles don’t flock. We’re not joiners and we’re not groupies, which is why we overwhelmingly prefer challenging single-person sports like running, cycling, weightlifting, and our one concession to “group sports” – golf (which is still technically a single-person sport, but more fun in groups).  Lance Armstrong didn’t win his titles without leaving the peloton, and ditto for greats like Sampras, Tiger, and Arnold.  They had to go above and beyond the group to achieve greatness, and for this reason it truly IS lonely at the top (not that we mind).

Social Networking: The Problem is “Networking”

The reason we hate social networking is the same reason we hate REGULAR networking.  Exchanging small talk for 2 hours in a room full of strangers, with a drink in one hand and a business card in the other, and a “Hi, I’m Doug” nametag peeling off my lapel, and standing – my goodness the standing – and looking unsuccessfully for ANY food with some protein in it, and wondering if this guy with the too-firm handshake is going to see if we can “LinkIn” after sharing an elevator ride, before glancing at my watch and counting the minutes until I can leave and get back to work.  It’s a nightmare.  Why?  Because – surprise, surprise – most executives are actually introverts, who value their time and their privacy and are constantly evaluating the ROI tradeoffs of every hour of every day.  (Quiz:  How many times have you heard a CEO describe himself as a “People Person”?)

To say that we are ANTI-social would be a huge misrepresentation, but when you combine the word “social” with “networking” – let’s just say it sends shivers up my spine.  Do I like the company of others?  Sure I do – but I want the time to be well spent.  Instead of random, shallow, unfocused SMALL talk, CEO’s would much rather sit around with a small group of peers for 2 hours and discuss BIG specific challenges – and their solutions.  In fact, the reason so much business gets done on the golf course is because it’s one of the few places leaders actually congregate and feel relaxed enough to discuss what’s really on their minds.

Social Networking: The Problem is “Social”

The next hurdle for executives with social networking are the implications of the root word “Social”, and, by its very spelling, its association to Socialism. Socialism is defined as, “Any system of social organization in which the means of producing and distributing goods is owned collectively,” and further, “An economic and political theory based on public ownership or common ownership and cooperative management of the means of production and allocation of resources.”  (At least that’s what someone wrote on Wikipedia). The premise and value of the “social media” movement is the power of the collective in the production, distribution, and ownership of goods, and the reason executives resist this model is that it flies in the face of their existing worldview which, quite frankly, has been pretty successful to date.  If it ain’t broke, don’t fix it, right? Most of us have a pretty big chip on our shoulders, attributing our career success to the years of diligence, education, ambition, delayed gratification and sacrifices we’ve made to reach the leadership levels we’ve achieved.  Therefore, the anti-capitalistic notion that my work and contributions would be homogenized with the uninspired masses, and that ultimately my value would be determined by the randomness of the collective is a jarring and unpalatable departure.  I want to control my company!  I want to control my brand! I want to determine my destiny!  It’s too important to leave it to chance (or simply be outvoted by the uninformed bourgeois)!  Unfortunately and tragically for us executives, the beauty and power of social media is only fully unleashed when we LET IT GO, and that, my friends, is the hardest thing for us to do (…and also explains why we hate checking luggage at the airport).

Beware of Geeks Bearing Gifts

Okay, I promised that this would be a confessional, so here’s a shocker.  Over time, there is a tendency for CEO’s to get inflated EGO’s.  Now granted, a healthy ego can serve as a necessary defense mechanism to provide protection from the relentless attacks from subordinates, peers, and the media, but too much amounts to just plain pride.  We like to think of ourselves as a pretty smart bunch, and our position is such that even if we don’t completely understand something, we often project to our colleagues that we do.  A classic example of this phenomenon transpired during the Enron debacle, where ranks of senior executives refused to admit that they couldn’t comprehend the mechanics of this powerful conglomerate, until it was too late.  It’s the same with new advances in technology, which has accelerated during our careers from “hit or miss” to “mission critical,” going from bricks to clicks and from mortar to mindshare, while serving as a platform for everything from infrastructure, billing, and product development, to security, scheduling, and sales.  The rapid rate of change in digital innovation has caused CEO’s to feel EXTREMELY vulnerable around technology because it is something on which we have become VERY reliant, but which we understand and “control” so little, and this vulnerability leads to fear, and this fear to irrational decisions and suboptimal outcomes.  When CEO’s don’t have the confidence in their staff to delegate, or lack the humility to admit their ignorance regarding technology advances, they get defensive and act out in fear – or fail to act altogether.

Social Media: Justified Fear?

Executives justify their fear of social media by pointing back to a historic drumbeat of disappointment and unfulfilled promises.  They recall with vivid detail the never-ending parade of new online engagement vehicles and “paradigms” introduced over the past 15 years by turtleneck-wearing gurus with names like Kip or Seth, which were then propagated by self-proclaimed “New Economy” experts sporting titles like “Chief Innovation Officer” and “Director of Chaos,” and then championed by sideburn-wearing hipster foot soldiers who never metafilter they didn’t like.  In the 90’s, we were promised that customers would beat a path to our door if we created something called a “web page” and then “posted” it on this thing called the Internet or World Wide Web or something.  Then they convinced us to buy electronic lists and send out “Email Blasts” to our target markets, and next it was a website redesign, push technology, pull technology, exchanged links, partner intranets, eBusiness, eCommerce, blogging, webinars, podcasts, search engine optimization, YouTube videos, LinkedIn, Facebook, Twitter, yada, yada, yada.  Each time they promised that THIS TIME it would be different, and that this new product/protocol/portal/potion would somehow (magically??) drive revenue, increase efficiency, and optimize utilization (or some other buzz word or invented metric).  You told me to blog, so I blogged.  You told me to Twitter, so I Tweeted.  What’s it going to be tomorrow – scan my body into a mashup simulator to create a hologram so I can telepresence myself into sales calls in Madrid via FourSquare using Flickr?  All I know is that I’ve spent a LOT of time and money on a series of disjointed initiatives and campaigns and so far NONE have performed as advertised.

Don’t Feed Me Another Fad

Look, executives aren’t that complicated.  While I can handle the many nuanced “grey areas” of business leadership, I prefer to see things in black and white; victories and defeats; profits and losses.   I don’t mind making significant, strategic multi-year investments and committing to enterprise-wide initiatives which will improve the future performance of my company – in fact, I ENJOY it – what do you think got me to the Executive Suite in the first place?  Just don’t insult me.  I don’t want to waste any more time or money on the hype of  “the next big thing” or the newest tool or toy, only to be disappointed when the latest flash-in-the-pan fad fades and goes the way of Harvard Graphics.  It’s not that I have a fear of commitment – frankly, it’s just the OPPOSITE!  I have a healthy fear and distaste for doing things randomly just to be doing something; or because someone saw an article in USA Today, or CNBC did a story on it, or out of fear that I’ll be the last one in my circle to “get on board.”  (Believe me, the things that keep me up at night can’t be solved in 140 characters or less).  The truth is, I would LOVE to commit to social media in a significant way, but so far nobody in my organization has stepped forward with a cerebral, strategic, multi-generational, integrated, systematic, and sustainable methodology and roadmap for synergistically capitalizing on this medium over the long haul.

Your Network is Your Net Worth

Executives are uniquely conflicted because we know better than anyone the power of relationships, and the truth of the old axiom, “Your network is your net worth,” yet we are inherently introverts, and gravitate towards solitude versus socializing.  We understand on an intellectual level that none of us individually are “too big to fail,” and that even the Lone Ranger had Tonto and Batman had Robin, yet we find initiating conversations and exchanges with others to be draining, distracting, and exhausting rather than invigorating and inspiring.  Hence we yearn; as a group we pine; for deep within our heart of hearts burns a great bright hope that somehow and in some way this social media movement or platform or culture or whatever could be harnessed and leveraged to cross that chasm and create valuable, authentic exchanges and relevant, real-time dialogue with stakeholders of all persuasions. If we could just develop an all-encompassing framework for how this would integrate into our enterprise-wide strategy, and manage it like a mission-critical project (complete with milestones, deliverables and accountability instead of fuzzy metrics like “buzz”), I am supremely confident that we could achieve escape velocity and – for the first time – truly establish and be able to articulate a synergistic, sustainable, and quantifiable strategy for leveraging “Best-In-Class” social media options to achieve desired corporate outcomes and maximize financial returns.

A Gift From Media To You

You know, it’s interesting.  Somewhere in the convoluted catharsis of composing this confessional, I came to a surprising realization.  Maybe I don’t HATE social media after all.  Maybe I just hate the Quixotic context in which most social media conversations exist, featuring a perpetually moving target, combined with an obsessive, cult-like worship of the default worldview, “If Something is New = It Must Be Good”, and where subjective criteria like “mindshare” and “impressions” are considered quantifiable deliverables and irrefutable barometers of success.

Come to think of it, maybe it’s high time that a C-level individual engaged this topic, and – once and for all –created a high-level overview and synopsis, crystallizing all of the strategic benefits and critical value streams, and distilling them into a language that speaks to executives everywhere in our native tongue – bottom line stakeholder value.  So here you go.  I’ve done the work for you.  What follows is an “Executive Summary” of my findings.

Social Media Value #1:  Unfiltered Feedback

As you already know, some of the scarcest (rarest) yet most valuable information a CEO can obtain is honest, unfiltered feedback.  Think about it.  You interact all day with managers, employees, and handlers working to keep the boss happy and therefore keep their job.  Sure, being surrounded by “Yes men” can be more comfortable, but it can also insulate you from the stark realities of your business.  If done correctly, social media enables CEO’s to hear raw, candid feedback from real people – people who aren’t afraid of being fired because they CAN’T be fired.  The truth is, leaders with their ego in check are already fully aware that they work for the customer – the customer is his boss – so if the customer doesn’t like dropped calls on their iPhone or the sauce on their Domino’s pizza, it’s their job to make it better.  Now, every customer is not always right (or wrong), but if 850 out of 1000 user comments say that the new Sketcher’s Sport shoe caused them to sprain their ankle, then something needs to be fixed – and FAST!  CoolCleveland’s Founder Thomas Mulready is a perfect example of a CEO with this customer orientation.  After emailing out his weekly eMagazine for 7 years, he decided that it needed to be updated, and set about introducing a new format with much fanfare.  In doing so, he also did something revolutionary – he asked all 90,000 of his readers for feedback on what they thought of the new style – and boy did they reply with scores of comments submitted over the span of a few days. But then he did something else revolutionary – he actually listened, modifying and improving the new site to reflect reader tastes and preferences.  Yes, it takes humility (“Who are these people to give ME feedback?  I invented this product! Don’t they know they can just click the links?) but the end result is an engaged audience who now feel genuinely empowered to provide even MORE feedback, emboldened by the knowledge that their  comments actually impact (and can improve) the end product.

Social Media Value #2:  Authenticity

Hand-in-hand with the unfiltered feedback above is the ability to leverage social media to authentically communicate with your employees, partners, customers (and non-customers), investors, and media, directly engaging ALL of your brand ambassadors efficiently and economically.  Rather than layers of staff, spokespeople, and sterile press releases, social media now offers an elegant and effective medium for disseminating information either “straight from the heart” or “straight from the horses’ mouth” depending on your preferred idiom. Dan Gilbert’s recent LeBron James “rant” would qualify as both, capturing the owners’ anger, frustration, and competitive resolve just moments after James’ announced his departure.  As you’ve probably noticed, NOBODY can tell the company story and embody the company brand like the CEO (think Steve Jobs) and by offering the ability to immediately and directly engage stakeholders – whether on a typical day, during a product launch, and/or especially during a time of crisis – social media provides an invaluable medium for maximizing brand value and minimizing potential brand degradation.  Social media helps firms “Keep it real” but couches it in a positive brand-reinforcing context.

Social Media Value #3: Six Sigma (Low Cost)

In case you were wondering, executives LOVE things like Six Sigma because, 1. It reminds us of our Greek fraternity days in college, 2.  The other soccer Dad’s don’t understand Value Stream Mapping, and 3. Six Sigma and lean processes are all about SPEED and COST SAVINGS, two of our favorite topics.  By its very architecture, social media is positioned to leverage firms’ Six Sigma orientation by expediting interactions, exchanges, customer service, feedback loops, product launches, marketing, and advertising, AND enabling it at a fraction of the cost of traditional media, to a much more targeted audience, and in a far more nuanced and contextual value exchange.  Social media options allow your message distribution format to evolve from shotgun to sniper, from billboard to message board, and from broadcast to narrowcast.  PLUS, it takes your marketing posture from a one-way, blanketing, bullhorn approach to a more intimate, just-in-time interaction; offering the opportunity for a more detailed, valuable and more PROFITABLE conversation and connection with your audience (and you don’t need a Black Belt to do it).

Social Media Value #4:  Balancing Transparency AND Privacy

The only thing worse than NOT using social media tools is using them in the WRONG way.  Your firm could very easily invest time and money on social media, and then end up spending even MORE time and money doing damage control because you did it wrong the first time – talk about a lose-lose situation.  With social media, there’s a “right way” and a “wrong way” to do things – so if you’re GOING to do it, do it RIGHT.  Remember, anywhere-anytime-anyone social media channels must be handled as the “nuclear options” that they are, with the capability to destroy your brand value in a single Twitter, email, or YouTube video that goes viral.

With great power comes great responsibility, and a healthy respect for the global reach and impact of social media must emanate directly from the CEO, who knows better than anyone that the same programs allowing firms to connect and influence the marketplace can also be turned against you to alienate them.  And just as social media can provide the market with a transparent window into the soul of your company, it can also showcase you at your worst, doing more harm than good.  Let’s face it, your firm is ALREADY dabbling in social media as it is – so you might as well manage your risk and liability by codifying corporate expectations, establishing specific ground rules, and educating your stakeholders regarding proper use of these seemingly innocent yet powerful tools.

Social Media Value #5: Supporting Statistics

Executives rely on market research to support and substantiate any designated course of action, and devour facts, stats, and data-points like shrimp at a wedding reception.  Summarized below are a few statistics buttressing the explosion of this social media trend, and detailing how Corporate America is leveraging it to realize significant revenue and market share growth going forward.

  • In the last 7 years, Internet usage has increased 70% PER YEAR. Spending for digital advertising this year will be more than $25 billion and surpass print advertising spending (forever)

  • Lenovo has experienced a 20% reduction in activity to their call center since they launched their community website for customers

  • Blendtec quintupled sales with its “Will it Blend” series on YouTube

  • Only 18% of traditional TV campaigns generate a positive ROI

  • Naked Pizza set a one-day sales record using social media: 68% of their sales came via twitter and 85% of their new customers

  • Software company reports 24% of social media leads convert to sales opportunities

  • Dell has already made over $7 million in sales via Twitter

  • 37% of Generation Y heard about the Ford Fiesta via social media BEFORE its launch in the US and currently 25% of Ford’s marketing budget is spent on digital/social media

  • 71% of companies plan to increase investments in social media by an average of 40%

  • A recent Wetpaint/Altimeter Group study found companies that widely engage in social media surpass their peers in both revenue and profit

(Sources for Statistics: George Wright Blendtec )

Getting Your Board On Board

Lest we forget, even the Boss has a Boss – they’re called the Board of Directors – and these are the people that recruit and hire CEO’s for the purpose of serving as a charismatic and visionary leader of their organization.  And so I urge you, don’t disappoint them when it comes to leveraging social media within your organization.  The “Bang for the Buck” value proposition is too compelling to ignore, and the fact is – your competitors are already entering this arena and establishing new service baseline norms and minimum threshold expectations – so standing still amounts to losing ground and therefore is not an option.  What you need is a plan.

An Offer You Can’t Refuse

My associates and I are going to go out on a limb and try something a little crazy, something we’ve never done before.  We are going to offer senior leaders an exclusive, live, invitation-only Executive Briefing entitled“Maximizing Your Social Media Strategy” and presented by the top brass at DemingHill.  This executive-to-executive webinar will feature a deep-dive into the ROI and business case for leveraging social media, and will allow participants to ask questions and interact real-time with the authors of this article. (Because there is no charge, we must limit this event to executives and/or members of their management teams. Held August 10 & 11th).

Do I STILL hate social media?  No, BUT I’m only going to embrace it on the “executive terms” that have served me so well to this point in my career and they are, “If you’re going to do something, go ALL IN and do it right.”  From now on, all social media, social marketing, and social networking will be discussed in the context – not of a CAMPAIGN (which starts and ends) – but as part of an ongoing, strategic, and systematic DIALOG with our stakeholders and marketplace.

Executives have the focus and vision to roadmap strategies playing out 3, 5, and 10 years into the future.  But, we’re also “plodders” and are comfortable with short, measured, consistent steps – day in and day out – as long as we know that they are aligned with reaching a desired goal.  When we discuss your social media strategy, the focus will be on consistency and sustainability over the long haul.  Remember, executives don’t have the ego needs, risk profiles, or the TIME to be on the bleeding edge, or even the cutting edge.  We just want it to work.

I can confidently predict that every month for the next 100 years there will be a new “Must Have” application, portal or community that one of your employees will discover, and then try to convince you that your company will implode if you don’t immediately join, link, or Retweet.  In five years, all but three of these ideas will probably be forgotten.  During our meeting, we will discuss how to frame out an enterprise-wide social media strategy, predicated on the foundation of proven tools and that have stood the test of time and offer “Best-In-Class” results, so that you will be empowered to handle these conversations proactively in the context of a larger roadmap, rather than reacting to these weekly ambushes in a dismissive defensive way.  Remember, our goal for social media is not a lark, but a LIFESTYLE, and work-shopping a strategy which builds on stable, scalable tools, yet also affords the flexibility to address unprecedented “Black Swan” technology developments, provides you with a welcome buffer from being whipsawed by a weekly website.  Between the two of us, we’ll finally take that reliable “80/20 Rule” and apply it to social media, and then spend time focusing on the 80% of stakeholder value that can be extracted with 20% of the effort (while knowingly and purposefully ignoring the remaining 20% of value which takes up 80% of the effort).

The Bottom Line

In the Forward of Geoffrey Moore’s bestseller “Crossing the Chasm” Regis McKenna writes:

Fundamentally, marketing must refocus away from selling product and toward creating relationships. Customers don’t like to be ‘owned’ if that implies lack of choice or freedom. But they do like to be ‘owned’ if what that means is a vendor taking ongoing responsibility for the success of their joint ventures.  Ownership in this sense means an abiding commitment and a strong sense of mutuality in the development of the marketplace. When customers encounter this kind of ownership, they tend to become fanatically loyal to their supplier, which in turns builds a stable economic base for profitability and growth.”

While there will always be a “me” in media – social media, social marketing, and social networking tools were designed to work best as a conduit for enabling information exchange, establishing a dialog, and creating a two-way conversation with your audience.  At the end of the day, social media is simply about creating and maintaining relationships – and even and executive can do that.


Chief Marketing Officer VendorCert

Chief Executive Officer DemingHill

Executive Vice President DemingHill