Archives for April 2013

David Ogilvy on Why It Pays to Advertise

April 29, 2013 By Nagesh Belludi Leave a Comment

I’ve been reading Ogilvy on Advertising, written by David Ogilvy (1911–1999,) the founder of Ogilvy & Mather.

Ogilvy is one of the founding fathers of modern advertising and spent his life preaching the benefits of research in salesmanship, long informative copy, creative brilliance, and results for clients. Ogilvy famously said, “It is useless to be a creative original thinker unless you can also sell what you create.”

Ogilvy on Advertising provides excellent sage advice into the art of selling smart. Many of the principles in this book are dated, but the ideology and creative thought processes discussed are timeless.

Ogilvy cites this anonymous poem on why it pays to advertise.

The codfish lays ten thousand eggs,
The homely hen lays one.
The codfish never cackles
To tell you what she’s done—
And so we scorn the codfish
While the humble hen we prize.
It only goes to show you
That it pays to advertise!

Inspirational Quotations #473

April 28, 2013 By Nagesh Belludi Leave a Comment

While it is possible for intelligence to increase the range of benevolent impulse, and thus prompt a human being to consider the needs and rights of other than those to whom he is bound by organic and physical relationship, there are definite limits in the capacity of ordinary mortals which makes it impossible for them to grant to others what they claim for themselves.
—Reinhold Niebuhr (American Protestant Theologian)

An expert is a person who has found out by his own painful experience all the mistakes that one can make in a very narrow field.
—Niels Bohr (Danish Physicist)

Know, first, who you are, and then adorn yourself accordingly.
—Epictetus (Ancient Greek Philosopher)

Man is endowed by nature with organic relations to his fellow men; and natural impulse prompts him to consider the needs of others even when they compete with his own.
—Reinhold Niebuhr (American Protestant Theologian)

Any intelligent fool can make things bigger, more complex, and more violent. It takes a touch of genius—and a lot of courage—to move in the opposite direction.
—E. F. Schumacher (German Mathematician)

Two-Minute Mentor #5: Present Perfect

April 25, 2013 By Nagesh Belludi Leave a Comment

In “Awakening of the Heart” Vietnamese-French Buddhist monk and teacher Thich Nhat Hanh offers a translation of the Bhaddekaratta Sutta:

Do not pursue the past.
Do not lose yourself in the future.
The past no longer is.
The future has not yet come.

Looking deeply at life as it
is in the very here and now,
the practitioner dwells
in stability and freedom.

We must be diligent today.
To wait until tomorrow is too late.
Death comes unexpectedly.
How can we bargain with it?

The quality of your life depends on how you live at this moment. Within the span of a few minutes, you may experience the darkest part of your life or the brightest. In one instant, you may suffer the painful pinpricks of stress; in the next, you may revel in the fullness and mystery of life.

By meditating on these experiences, you will realize that your memories and daydreams are actually illusory. They are not happening now; they are simply mental images flickering in the mind. Most of the strands of your mind’s apprehensions are fleeting and ultimately unimportant.

The first step towards achieving harmony, joy, happiness, and well-being is to recognize that your upheavals are nothing but your own mind’s projections. You are in control and can prevent yourself from being overwhelmed by them.

Mindfulness comes from paying attention to what you are doing right now and letting go of regrets, worries, and fears. Far greater joy is in the living process than in the outcome. Be in the moment.

Idea for Impact: Your past has created the present; create your future by focusing on the present.

Inspirational Quotations #472

April 21, 2013 By Nagesh Belludi Leave a Comment

An idea, to be suggestive, must come to the individual with the force of a revelation.
—William James (American Philosopher)

Night has come! Leaning from the window, we gaze at the vast sombre stretch of the city below us, pierced with multitudinous points of light. Jeanne presses her hand to her forehead as she leans upon the window-bar, and seems a little sad. And I say to myself as I watch her: All changes, even the most longed for, have their melancholy; for what we leave behind us is a part of ourselves: we must die in one life before we can enter into another!|And as if answering my thought, the young girl murmurs to me.|My guardian, I am so happy; and still I feel as if I wanted to cry!
—Anatole France (French Novelist)

A baby is God’s opinion that life should go on.
—Carl Sandburg (American Children’s Books Writer)

Doubts and jealousies often beget the facts they fear.
—Thomas Jefferson (American Head of State)

Your purpose is to act on the resources God gives you. If God gives you a bucket of fish, you have to distribute those fish. If you don’t, they’re going to rot, attract a bunch of flies, and start stinking up your soul.
—Russell Simmons (American Entrepreneur)

Valuable advice can sometimes come from an unexpected source, and chance events can sometimes open new doors.
—N. R. Narayana Murthy (Indian Businessperson)

The answer to your prayer is not according to your faith while you are talking, but according to your faith while you are working.
—Wallace Wattles (American New Thought Author)

It is not work that kills men; it is worry. Work is healthy; you can hardly put more on a man than he can bear. But worry is rust upon the blade. It is movement that destroys the machinery, but friction.
—Henry Ward Beecher (American Protestant Clergyman)

Love doesn’t just sit there like a stone; it has to be made, like bread, remade all the time, made new.
—Ursula K. Le Guin (Science-fiction writer)

The cruelest lies are often told in silence.
—Robert Louis Stevenson (Scottish Novelist)

We mean by “politics” the people’s business—the most important business there is.
—Adlai Stevenson (American Diplomat)

Why I Don’t Drink Alcohol

April 18, 2013 By Nagesh Belludi 1 Comment

Drunken Man During my travels, I am asked why I don’t drink alcohol more often than I am asked why I am lacto-vegetarian. I do not even consume food and desserts that use cooking wine or liqueur to enhance flavors.

Deep inside, my abstention from alcohol might perhaps be a subliminal sense of superiority that comes from always being in control of my senses.

Long ago, I determined that the most eloquent justification I could provide for why I am a teetotaler is by merely quoting an adaptation of the fifth precept from Pancasila, the Buddhist code of basic ethics. The fifth percept calls for practitioners to abstain from intoxicants, liquor, and drugs that confuse the mind and cause heedlessness and a lack of restraint. (To be precise, the original Buddhist texts in Pali call for abstention from three fermented drinks in vogue in ancient India.)

Health Benefits?

One assertion that I hear often is that red wine is supposed to have health benefits and that antioxidants in red wine may help prevent heart disease. Research has focused on an antioxidant called resveratrol. Studies done so far on animals—not on humans—propose that resveratrol might fight cholesterol, avoid damage to the blood vessels, and inhibit blood clots. The resveratrol in red wine comes from the skin of grapes. The higher content of resveratrol in red wine (vis-à-vis white wine) comes from a lengthier fermentation cycle involving the skin of red grapes. Therefore, my counter argument is that I gain all the associated health benefits by simply eating grapes and drinking grape juice.

Extra: “From The First Glass To The Grave”

Many people wonder, “Do I drink too much?” and consider the consequences of drinking too much alcohol. “The Drunkard’s Progress: From The First Glass To The Grave” by Nathaniel Currier is a well-known lithograph from the temperance movement of the 19th century. See more temperance posters from that era at the Pictorial Americana collection from the Library of Congress.

Overwhelmed with Things To Do? Accelerate, Maintain, or Terminate.

April 16, 2013 By Nagesh Belludi Leave a Comment

If you are overwhelmed by extensive demands on your time or by the number of projects that seem permanently stuck on your to-do list, here’s a technique to organize your projects more effectively.

Make a table with three columns: “Accelerate Mode,” “Maintain Mode,” and “Terminate Mode” and classify your projects.

“Accelerate mode” projects have the potential for significant benefits and therefore will need additional investment in time, effort, and resources.
Projects that you can sustain at the present pace and projects where additional investments may not necessarily translate to larger payoffs go in the “maintain mode.”
Choose the “terminate mode” whenever in doubt, especially for projects that have been lingering in the “someday I will get to” and “maybe” categories. Also, terminate those projects that are on your list because you feel that you should do but need not.

One of the key characteristics of successful people is to recognize and invest their resources in projects that really matter and to do everything else adequately enough.

Inspirational Quotations #471

April 14, 2013 By Nagesh Belludi Leave a Comment

An unruly patient makes a harsh physician.
—Publilius Syrus (Syrian-born Latin Writer)

Gratitude is not only the greatest of virtues, but the parent of all others.
—Cicero (Roman Philosopher)

He has achieved success, who has lived well, laughed often and loved much.
—Bessie Anderson Stanley (American Poet)

At very best, a person wrapped up in himself makes a small package.
—Harry Emerson Fosdick (American Baptist Clergyman)

There are good and bad times, but our mood changes more often than our fortune.
—Jules Renard (French Novelist)

The great successful men of the world have used their imagination…they think ahead and create their mental picture in all its details, filling in here, adding a little there, altering this a bit and that a bit, but steadily building – steadily building.
—Robert Collier (American Self-Help Author)

Let thy child’s first lesson be obedience, and the second will be what thou wilt.
—Benjamin Franklin (American Political leader)

Those indeed who attain any excellence commonly spend life in one pursuit, for excellence is not often gained upon easier terms.
—Samuel Johnson (British Essayist)

He has achieved success who has worked well, laughed often, and loved much.
—Elbert Hubbard (American Writer)

Learning organizations may be a tool not just for the evolution of organizations, but for the evolution of intelligence.
—Peter Senge (American Management Consultant)

How bitter a thing it is to look into happiness through another man’s eyes!
—William Shakespeare (British Playwright)

I wish more of us could understand that our increasing isolation, no matter how much it seems to express pride and self-affirmation, is not the answer to our problems.
—Arthur Ashe (American Sportsperson)

The cultured give happiness wherever they go. The uncultured whenever they go.
—Swami Chinmayananda (Indian Hindu Teacher)

Three Leadership Lessons from Ron Johnson’s Debacle at J.C. Penney

April 11, 2013 By Nagesh Belludi Leave a Comment

Monday’s dismissal of J.C. Penney CEO Ron Johnson comes as no surprise.

In late 2011, J.C. Penney had hired Ron Johnson from Apple to revive the sagging fortunes of the storied retailer. He was deemed as a retailing genius who had proved himself by creating Target’s hip-yet-inexpensive cachet and then by leading Apple’s highly lucrative retail stores.

During his 17-month tenure, Ron Johnson had poured hundreds of millions into rapidly remaking the retailer. Mostly, his attempt at the high-stakes makeover of J.C. Penney hadn’t worked. Revenue deteriorated sharply, feedback from customers and employees was persistently negative, and the J.C. Penney share price declined by over 50%.

Lesson 1: Don’t disenfranchise your traditional customer base

Over the years, J.C. Penney’s economic moat had declined considerably. J.C. Penney lost customers to higher-end retailers and specialty stores who had started to offer better value at lower prices. At the other end, Wal-Mart and Target wooed price-sensitive customers with better-than-basic goods.

When retailing relatively undifferentiated merchandise, one of the key levers to revenue is discounts and promotions. Like other retailers, J.C. Penney had trained its customers to buy largely when its stores had a sale. Shoppers recognized that J.C. Penney’s tag prices were made-up to be marked down during sales events and were fixated on coupons, discounts, and promotions. Shoppers had come to regard of shopping at J.C. Penney as a treasure hunt for significantly marked-down merchandise.

Within weeks of joining J.C. Penney, Ron Johnson observed that three-quarters of everything sold had been discounted by at least 50% from list price. Instead of marking up the tag prices and then using deep discount sales to attract customers, he initiated a new “fair and square every day” pricing strategy. By offering good prices every day he attempted to change customer bahavior and dissuade them from waiting for markdowns. Further, by minimizing sales, promotions, and coupons, Ron Johnson eliminated the thrill of pursuing markdowns, a key characteristic of J.C. Penney’s conventional customer. When the pricing strategy flopped, Ron Johnson reinstated sales and coupons, and even brought back “fake prices.” The successive changes confused employees and customers. Additionally, J.C. Penney stopped carrying some traditional brands that many of its long-time customers had favored and injected trendy brands to appeal to younger customers. Ron Johnson’s team created exciting marketing and advertising that was seen as too edgy and further confused traditional customers.

Lesson 2: Don’t be so hubristic as to wager big on hunches without prototyping

At Apple, Steve Jobs frequently shunned extensive consumer research because he had the exceptional genius to introduce the right products, with the right features, at the right time. Drawing from his success at the helm of Apple stores, Ron Johnson was perhaps overconfident that he had all the right answers and could therefore forego the crucial feedback from employees and customers before embarking to “revolutionize retailing” by “teaching people how to shop on their terms” and “fundamentally disrupting the traditional retailing paradigm.”

The gravest error Ron Johnson made at J.C. Penney was not testing his new pricing strategy in a handful of stores. According to this WSJ article, when a colleague proposed a limited store-test of the new pricing strategy, Johnson allegedly responded, “We didn’t test at Apple.”

Clearly, what Ron Johnson thought of value was not what its customers saw as value. As a result, J.C. Penney overlooked the reality that, for its customers, pursuing discounted goods on sale was part of the fun of shopping at J.C. Penney. Ron Johnson set about to tear down an old business model before he had switched over to a new business model without prototyping.

Ron Johnson possibly had a compelling out-of-the-box vision for J.C. Penney. However, he did not stay closely connected to J.C. Penney’s customers and employees before the launch of a radical strategic change. It is challenging to be an effective leader when customers and employees don’t understand and buy major changes.

Incremental improvements to J.C. Penney’s merchandising strategy through extensive prototyping and measured makeover could have provided the opportunity to learn through trialing and encouraged ownership of the strategy by employees, especially those in customer-facing roles.

Lesson 3: Beware of the “Halo Bias” in rating leaders

We tend to attribute a manager/leader’s success to his apparent genius and we overlook the role of the context (team, product, industry, timing, and luck) in his success. Thus, we come to expect him to have the same success in a different context. We anticipate that the very tactics and devices that proved successful in the past would work for him in the new context. (See my earlier article on the halo and horns biases in rating people.)

Ron Johnson certainly proved his retailing genius by first creating Target’s hip-yet-inexpensive brand image and then, for ten years, by leading Apple’s highly lucrative retail stores where he most famously introduced the Genius Bar concept. Nevertheless, his experience with selling premium-priced products at full price all the time with no promotions at the Apple stores did not translate well to J.C. Penney’s undifferentiated merchandise and its customer base of bargain hunters.

In June 2011, J.C. Penney stock spiked by 17.5% when the company announced Ron Johnson’s appointment as CEO. Wall Street saw in him a proven leader with the silver bullet. Investors got overly optimistic that he would remake the embattled retailer and overlooked the fact that J.C. Penney lacked the brand image of Apple and its most-sought-after products. Alas, J.C. Penney stock slid by over 50% during Ron Johnson’s 17-month tenure. The golden boy of retail never hit his stride.

Leadership: Stay out of the kitchen if you can’t handle the heat

April 8, 2013 By Nagesh Belludi Leave a Comment

Not everybody is prepared to endure the demanding responsibilities of a leadership role:

It’s tough to challenge status quo and to pilot your organization forward into unfamiliar territory
It’s tough to be long-term oriented and to propose transformative ideas that may fall eventually short of expectations
It’s tough to see around the corner and to rely on gut intuitions to develop an “end state” vision
It’s tough to prioritize decisiveness over inclusivity and to take tough—and sometimes unpopular—decisions
It’s tough to resist the urge to settle and to avoid letting circumstances define your strategy
It’s tough to gain strong credibility and communicate the direction and priorities of your organization
It’s tough to face censure and be verbally graceful under fire
It’s tough to be decisive, to acknowledge setbacks, and to change course midstream, if required
It’s tough to rationalize seemingly irrational actions and to ask for resources
It’s tough to be tough-minded without being inflexible or insensitive
It’s tough to do the right thing while resisting the temptation to please your constituents
It’s tough to say no when you must; it’s tough to say yes when you can’t

If you cannot come to terms with the pressures of a leadership role, perhaps leadership may be the wrong kind of work for you.

It is acceptable to be an individual contributor; although you must still develop your leadership skills to succeed in any role in the modern organization.

Inspirational Quotations #470

April 7, 2013 By Nagesh Belludi Leave a Comment

Yes, there is a Nirvanah; it is in leading your sheep to a green pasture, and in putting your child to sleep, and in writing the last line of your poem.
—Khalil Gibran (Lebanese-born American Philosopher)

Fortune leaves always some door open to come at a remedy.
—Miguel de Cervantes (Spanish Novelist)

An ounce of application is worth a ton of abstraction.
—Booker T. Washington (American Educator)

Home is the place where, when you have to go there, they have to take you in.
—Robert Frost (American Poet)

Habit is habit, and not to be flung out of the window by any man, but coaxed downstairs one step at a time.
—Mark Twain (American Humorist)

Most of the shadows of this life are caused by standing in our own sunshine
—Henry Ward Beecher (American Protestant Clergyman)

Do not free a camel of the burden of his hump; you may be freeing him from being a camel.
—G. K. Chesterton (English Journalist)

A society in which women are taught anything at all but the management of a family, the care of men, and the creation of the future generation, is a society which is on the way out.
—L. Ron Hubbard (American Scientologist Religious Leader)

A thing is worth precisely what it can do for you; not what you choose to pay for it.
—John Ruskin (English Art Critic)

Much rain wears the marble.
—William Shakespeare (British Playwright)

In preparing for battle I have always found that plans are useless, but planning is indispensable.
—Dwight D. Eisenhower (American Head of State)

Experience is the child of thought, and thought is the child of action. We cannot learn men from books.
—Benjamin Disraeli (British Head of State)

Archives for April 2013

Wondering what to read next?

Wondering what to read next?

Health Benefits?

Extra: “From The First Glass To The Grave”

Wondering what to read next?

Wondering what to read next?

Lesson 1: Don’t disenfranchise your traditional customer base

Lesson 2: Don’t be so hubristic as to wager big on hunches without prototyping

Lesson 3: Beware of the “Halo Bias” in rating leaders

Wondering what to read next?

Wondering what to read next?