3.22.2012

Men, Women and Makeup: The Importance of Cate Blanchett's Naked Faced Magazine Cover

Cate Blanchett is on the cover of "Intelligent Life," The Economist's bi-monthly lifestyle and culture magazine.

Normally, this wouldn't get - or deserve - any more attention than any other lifestyle magazine cover with a beautiful and famous face on the front. After all, that's what magazine covers are for - to sell, in one way or another, the beautiful whatever that the cover portrays (famous person or not).

Why this cover is getting so much attention, however, is because Ms. Blanchett's face is naked. No makeup. No Photoshop. And she's still beautiful.

The move was so different, however, from what the rest of the magazine industry does, that it warranted a comment from the Editor, Tim de Lisle, who said:
She looks like what she is - a woman of 42, spending her days in an office, her evenings on stage and the rest of her time looking after three young children. We can't be too self-righteous about it, because, like anyone else who puts her on a cover, we are benefiting from her beauty and distinction. But the shot is at least trying to reflect real life. It's a curious sign of the times that this has become something to shout about.
Which leads us to Fabrizio Freda, the Chief Executive of Estée Lauder and a comment he made in an otherwise seriously great interview he did with the Financial Times.

In that interview, he was asked about the new Tom Ford line of makeup which includes a lipstick for $45. Frankly, when you're buying that level of quality with that level of branding investment and a known name like Mr. Ford's, a $45 pricepoint is neither surprising nor unexpected.

Why this deserves attention, however - and correlates with the Cate Blanchett photo shout-out - is because when Mr. Freda was describing the lipstick, he described it as being "aspirational." Technically, that makes this is a market entry issue. It translates to a woman's ability to purchase what is, ultimately, the lowest priced item in a high-priced line.

The underlying message, however, is that, every time she pulls that lipstick out of her purse and uses it, she'll feel that she's 'more' or 'better' than before - which will lead her to want to buy even more of Mr. Ford's product line.

But it's the use of the verb 'to aspire' that is at the heart of the problem - and leads us back to Mr. de Lisle's comment.

The reason that Ms. Blanchett's naked face is something to shout about is because the men who run the corporations that sell to women have spent eons of time and bazillions of dollars convincing women that what they are isn't enough. That they have to aspire to being more in their personal appearance.

That their naked face - no matter how beautiful - is remarkable because it is naked. Not because it is beautiful.

All of which leads us to the original Estée Lauder, herself. She founded her company with a face cream that she developed, marketed and sold. Then she built an empire. But what's most important here is the quote that is attributed to her:
There are no ugly women. Only lazy ones.
According to various versions of her story, she said that before she entered into the world of make-up - which means that the lazy women were the ones not taking care of their skin. Covering it with makeup wasn't an issue. Yet.

Maybe the guys - in and out of her company - should pay attention and aspire, themselves, to being more supportive of women defining their own aspirations and goals. Then, having beautiful, naked faces like Ms. Blanchett's on a magazine cover won't even raise an eyebrow.

3.20.2012

Can Sony Win Again?

There's a great video report by Reuters on how Sony lost its cool.  The question is: Can it get it back again?

The short answer is: Yes.

This is the dilemma of every company that focuses on "quality" and then commoditizes it into nothing.  That's what happened at Sony.  They lost their focus on creating exquisite, innovative products with an exquisite user experience and went for speed-to-market instead.

This was a multi-faceted mistake.

  • First, for those who trusted the Sony brand, the company has as good as lost that trust - and it's WAY harder to regain trust than it is to establish it.
  • Second, for those who didn't know the brand - most importantly, the young consumer - all they know is that Sony doesn't cut it in experience or innovation.
  • Third, even while they were cutting their quality to near nothing, they kept their prices high.

What that left them with was a company that doesn't produce anything consumers can be excited about buying at too high a price to want to pay for it anyway.

Real good strategy, Sir Howard.

The good news is, the company is going back into the hands of the Japanese.  Their new CEO, Kazuo Hirai, is a "detail" guy, according to Reuters - and that puts the Japanese right back into their comfort zone and where they perform best.

I worked with Sony before Sir Howard Stringer took over as CEO.  Even then, they were looking with awe and envy at what the Silicon Valley was able to achieve - and rightly so.

But, what they forgot in the process is that they do things with their way of doing business that, demonstrably, take markets worldwide.  But only when they work to their strength.

Can anyone say Toyota?

So, good luck Sony.  I'm rooting for you to find your cool again.

3.19.2012

Why Failed Executives Always Get Another Job

Here's a pop quiz for you:

What makes these the same?
If your answer was: "The CEO is a failure but there were no consequences," you're correct. If you added: "Even worse, they keep getting rewarded and being asked to take on new positions," you get extra credit - both for the "even worse" and for the answer, itself.

And that's the one of the biggest problems with big business today. There is no real scarcity of talent available at the senior level - but you would never know it based on the business pages. Because these failed and failing executives keep getting the jobs - even as their decisions negatively impact the employees of and investors in the companies they're 'leading.'

Worse yet, a lot of those investors are institutional pension funds - which means that you can have worked your whole life and expect a certain level of retirement remuneration, only to find out that the fund has been hit so badly the money just isn't there anymore.

So where does this problem come from? What creates the illusion of scarcity?

There are two aspects to this problem. The first is a "better the devil you know" scenario. The other is institutionalized, intentional and profit-driven.

In both cases, it's coming from the executive search firms. They're creating and perpetuating a perception of scarcity with their "recycled executives" policy.

For them it's a highly profitable, cheap and cheerful way of doing business. For industry, it's a killer. Here's how it works:

You get a call from a recruiter. You've either worked with their firm before or you've been recommended by someone who has. They have a job prospect that might be of interest. In fact, according to them, it's just perfect for you.

You get the job. (Or one of the other candidates does. It doesn't really matter because they're all being paraded in by the same firm.)

Now it's time to negotiate salary and broader compensation. Stock options, anyone? Bonuses? Perqs? This is the time to ask - and get.

You, of course, want the highest compensation package possible. The recruiter wants exactly the same outcome. That's because, in the majority of recruitment pay models, the search firm is paid - at least in part - based on a percentage of your annual salary and sometimes part of your broader package. So the more you're being remunerated in every form, the better.

Some time goes by - maybe a year, but no longer than two. The recruiter has been in touch periodically - to say hello, ask how things are going, maybe get a recommendation from you for another position that isn't right for you, but you just may know the right person….

But now, at least according to the recruiter, it's time to move you on to your next position - and they've got the perfect fit. It's you all over.

And it begins again. You're theirs now. Part of their executive recycling program.

Wait, you say. What about all those resumes I've submitted to the search firms' websites? Sorry. The sad fact is, the recruiters neither had to nor bothered to look. They just churned - even if you would have been the better pick.

And so we keep seeing the same faces. Over and over. With the same results.

Maybe it's time to adapt the financial services disclaimer, "Past performance does not guarantee future results" to one specifically for executive search firms who put forward candidates with histories of failure. Something like:
"Past performance is your best guide to future results - so if you want to pay someone tons to lose your and the company's shirt, here's your guy."
[This article appeared on Technorati.]

3.15.2012

Genius or Sucker? The Dilemma of Being a Goldman Sachs Client

So there you are - a bazillionnaire. Or, possibly, someone responsible for overseeing the bazillions of others. Like the investment manager of a pension fund.

You're always being approached by the Big Boys - from investment banks to private equity houses. They want your money. And why wouldn't they? After all, their job is to turn your money into more.

But for whom?

That's the big question - now more than ever - if your bazillions ever touch the corporate shores of Goldman Sachs.

All because of Greg Smith.

If you've missed the excitement, Mr. Smith resigned from Goldman in a big way. Fifteen minutes after emailing his resignation to management, his NY Times Op-Ed piece was published.

That one little piece of personal journalism led to media hordes over-crowding outside Goldman's portals, innumerable articles being written on every conceivable platform and medium and commentators of all kinds (yours truly included) talking about the lessons learned and yet to be learned.

Which brings us back to our bazillionnaire Goldman client - because, let's face it, Goldman only deals with bazillionnaires. Even the low end of the 1% isn't that interesting to them.

The question for this person, based on all the media coverage, is: So? Are you a genius or a sucker for doing business with these guys?

Why that has become just as compelling a question as the hue and cry that Mr. Smith's writing raised is because it makes one wonder.

Here's a company that has been indicted and settled with the Government (to the tune of $550 million) as a result of their 'questionable' practices toward their clients. Like selling an investment instrument to their clients that another client developed specifically to bet against the suckers who were doing the buying.

Nothing like having your cake and eating it, too - especially because Goldman was making money on all sides of the deal.

And that's just one case. There are others still pending.

Because what everyone learned is that rich people are just as big suckers as everyone else when they get just the right pitch from just the right person. Or company.

Which leads us to the clients - anonymous and otherwise, individual and institutional - who are telling anyone who's willing to listen that they know what Goldman is doing. That they've known it all along. That there's no surprise there.

And that means, of course, that even as they were doing business with Goldman, they didn't trust them as far as they could throw them.

Or so one hopes - especially if that client is a fund manager who has just dumped a good portion of what will be your retirement into Goldman's - or, to be fair, most any other investment bank's or broker's - hands.

Where does that leave us?

The answer is: With a system that is gamed by the institutions that pay big bucks to hold the cards by pushing legislation exactly where they want it to be. On their side. With no accountability in sight.

Until that changes, all the Greg Smith's and unhappy bazillionnaire clients will just have to take it as it comes.

As suckers.

[This article was published on Technorati.]

3.14.2012

Goldman Sachs' Culture: When Making Money Isn't Enough

You know you've hit a nerve when not only are the Twitter stream and blogosphere overrun with comments and links - but the originating publication has to close its comments on your article because the volume has become too much...and run a live blog on the commentary that has ensued.

Normally, you'd think that this is a Lady Gaga announcement about her new Foundation getting her Little Monsters going. Or Justin Bieber doing something Justin Bierber-ish. Or something.

But no. This is Greg Smith's doing.

Who's Greg Smith? You might well ask - because, until today, unless you knew who he was there was no way you'd know his name. Or need to. Or care.

Mr. Smith is - until tomorrow - an executive director of Goldman Sachs and head of their US equity derivatives business in Europe, Middle East and Asia.

Now, because he's written an Op-Ed piece for the NY Times taking the lid off of Goldman so that we can all see what he's been seeing - and what has led him to decide to resign - there's no stopping the commentary. For the business and finance types - and everybody who's still angry at all the banks and investment houses that caused the 2008 crash - he's the ultimate celebrity.

It's better than who the contestants are for this round of "Dancing with the Stars"...by a long shot.

In fact, as interesting as what Mr. Smith has to say - and he doesn't pull his punches - the reaction from within and outside Goldman is just as compelling.

First, let's start with what Mr. Smith wrote about his soon-to-be former employer. Then we'll take on what his well-written rant has wrought.

Integrity and Disillusionment

When Mr. Smith joined Goldman twelve years ago, it was an organization that respected its clients.  Now, not so much.  In fact, from what he describes, not at all.

How could they be respected when it's acceptable for staff to refer to them as "muppets" and the best way to move up Goldman's corporate ladder is by:
  1. Persuading clients to invest in stocks or other products Goldman is trying to "get rid of" because they don't have a lot of potential profits
  2. Getting your clients to trade "whatever will bring the biggest profit to Goldman" and
  3. Trading any "illiquid, opaque product with a three letter acronym."
What he describes - and is the basis of his decision - is that any integrity attached to selling clients a product that is in their best interests is gone.  That's because the culture has shifted so that the only focus is on making money for the organization, itself.  Not its clients.  For Goldman.

Which makes its clients roadkill.  Institutionalized roadkill.

He puts the blame for this directly on the current CEO, Lloyd C. Blankfein, and President, Gary D. Cohn.  As far as Smith is concerned, the two titans leading the organization lost sight of what had been the culture long ago - and this is the outcome.

For Mr. Smith, who had real pride in having gotten a job at Goldman, moving up the ranks and, most particularly, pitching the company as the go-to answer for best-of-the best graduating students, his own integrity was on the line.  His disillusionment with this company he loved - and which had treated him so well - was complete.

Which leads us to what the rest of the world has to say.

From Within and Without

Not unexpectedly, Goldman is doing its best to counter the arguments that Smith put forward.  Citing everything from employee surveys to their own personal commitment to clients, Blankfein, Cohn, et al are doing their best to make it seem as if:
  • what Mr. Smith describes is a surprise to them
  • there's no basis for his comments and,
  • he never said anything about it to them anyway - so  there was no way they could have known of his perception or his disillusion...
...which, of course, is wrong.  So they say.

As for the rest of the writing/blogging/Tweeting/commenting world, the reaction depends, in part, on which side your bread is buttered.

For those who want to stay in good with Goldman (which, after all, is still one of the largest, most successful investment banks in the world), the tendency is to demean Smith.  That's typical and to be expected.

Among the financial types, there's a lot of skepticism with not a lot of support for Mr. Smith or his position.  Of those, though, the most surprising to me came from Joshua Brown on his blog, The Reformed Broker.

Brown is a Vice President at Fusion Analytics and the author of Backstage Wall Street - an expose of how Wall Street really works.  So, while he states, quite correctly, that there's nothing new in financial service companies like Goldman being out for themselves - to the point that he cites Goldman's complicity in moving the 1929 Crash forward after they had protected their assets - given his intolerance for the behaviors of his Wall Street brethren, his impatience with Mr. Smith's Op-Ed was unexpected.  At least to me.

Which leads us to the leadership lessons learned from this very big and public debacle for Goldman.  If you're the leader of your organization:
  1. Make sure you're clear about what you want your organizational culture to be, and
  2. Make sure your employees know - and are rewarded - for perpetuating that culture.
Most important, if the culture of your organization is not something you'd want discussed by everyone and their cousin on the front page of every newspaper, blog and Google News search, either do something about it or find a way to rewrite your employee handbook's section on proprietary information, non-disclosure and confidentiality.

Because, if you don't, one day you may find yourself with a Greg Smith on your hands.  And it's not pretty.

Just ask the boys at Goldman.

[An earlier version of this article appeared on Technorati.]