Faculty Insights

 

 Apparently, most Americans don’t think they are living up to their creative potential – according to new research from Adobe only 39% of Americans say they are. If you want to see the data from Adobe for yourself, click here. At the same time, I am sure that most marketers would say being creative is an important characteristic to have. Okay, so what’s the definition of being creative?

Creativity has a wide variety of definitions. According to Wikipedia, there are over 100 definitions of creativity and being creative. But, there are some common themes – being able to see something new, unusual, and/or novel that is of some value or is useful in some way.

In Kelley Indianapolis' undergraduate marketing degree program, students have to develop a complete marketing plan for an existing, local brand. One of the reasons that these local companies work with Kelley students is because they are hoping the students will help them figure out something new and different they could be doing to be more successful. So, it makes sense that we might do some exercises to expand or highlight students’ creativity. Here’s one assignment. At the beginning of the semester, students are given the page below and told to come up with the most creative way to use these patterns.

This semester, I also encouraged them to not feel restricted to two dimensions – they could use these patterns in any creative manner that occurred to them. Over the next 10 weeks, I reminded them about the assignment and gave them the opportunity to pick up additional copies or patterns. Well, I was totally amazed at how creative some of our students are. I thought you might enjoy seeing some of the most novel ways these patterns were used:

• How about a diorama of a foreign community or village?

• Anyone interested in a flower? Or, a pinwheel?

• Or a hanging twirlie?

• A caterpillar? Or, a set of coasters?

• 3D versions of the pattern?

• A story depiction of Fat Tire beer, a brand we’ve been analyzing all semester?

• Or substituting your face for one of the patterns?

• And even creating a fractal?

Bottomline – our students found a wide variety of novel ways to use these patterns several of which would also be quite useful. Which do you think is most creative?

Thank you to all the Kelley School of Business faculty, staff, and students that made this year’s Race for the Cure another success.  Each year the race starts right in the center of the IUPUI campus.  It was a bit chilly starting out, but once I was running the temperature was just right.  I’m proud to say I finished in under 28 minutes this year.  Not bad for little if any preparation.

Here is a picture of the brave souls walking and running for the cure.  I also want to recognize the many individuals that slept in for the cure.  In all we had 63 people on the Kelley team this year.

 

One of these years we will find the cure for cancer.

To see a video of parts of the race, click on the link below.

 http://www.indystar.com/VideoNetwork/1575440055001/2012-Susan-G-Komen-Race-for-the-Cure

 

As a marketing professor, I am always keeping my eyes open for examples of strong marketing. At the same time, I try to think of ways to help my marketing degree students experience these examples for themselves rather than having me just tell them about it.

For the last several years, I’ve kept track of TOMS Shoes. Actually, one of my students first shared the story of this company with me. He was one of those students who cared both about business and doing good. His team did a presentation about TOMS’ dual focus of making a profit and giving back to the community. In case you don’t know TOMS story, here’s the elevator pitch: With every shoe you purchase, TOMS gives one to a child in need. As part of his Amazing Race experience, Blake Mycoskie (TOMS’ founder) discovered a lot of children without shoes. He set up his company to help change that.

There are many things from a marketing perspective that TOMS does right:

• Product – the basic shoe is comfortable and interesting. They constantly change up the designs to keep customer interest. They work with designers to add extra cachet. They even have seasonal offerings. But, the basic shoe is great. Product also includes packaging, which again is a hit for TOMS. Check out the photo below from Savannah Smiled’s Tumblr(http://savannahsmiled.tumblr.com/). The box reminds you of the cause and TOMS story. Inside, there’s a shoe bag, a logo sticker and a letter from Blake.

 

• Price – these are definitely not the cheapest shoes around. But, that’s not really the point is it? Instead, the price point is acceptable (basic shoes are $44 - $58) especially when you realize that you are really buying two pairs – one for you and one for another. TOMS does little discounting; the most frequent is free shipping.

 

• Place – TOMS is primarily sold in their own online store. But, they can also be found online at Amazon and in select bricks & mortar stores including Nordstrom’s and independent specialty boutiques.

 

• Promotion – this is where TOMS excels. Great website. Having received TOMS emails for about 2 years, great email marketing strategy. TOMS also does all of the social media – twitter, Facebook, Pinterest. This year, they’ve direct mailed one catalog (which I know got my mom to buy another pair after seeing all her choices). And, the blog is very engaging. TOMS doesn’t rank in organic search for shoes, but that’s a highly competitive category. The cause marketing initiative “One Day Without Shoes" is where TOMS’ efforts are unparalleled. One April Tuesday every year, One Day Without Shoes asks people all over the world to take off their shoes to see what those without experience every day. This initiative has its own website, highly linked to TOMS of course. The website itself has a lot to offer – a robust story; an event locator and ability to register your own event; a national challenge to get organizations to register their members with a Blake party for the winner; downloadable event materials including rally signs, street stencils, DIY shirts, pocket cards, stickers, banners, displays and toolkits; an iPhone event locator app; videos; a photowall; even a way to do it virtually via Sims and all of the social sharing integrations you could want.

 

So, this year I asked my undergraduates to participate in this event for extra credit. Although they thought it was a way to earn bonus points, I hoped they would experience the power of word-of-mouth marketing. Lucky for me, my class meets on Tuesday so they could come to class without their shoes. Naturally, I too went without shoes for the day – yep, those blue toenails are mine.

 

 

Afterwards, they have to reflect on the day and share their thoughts with me. Their reflections covered a couple of key themes:

1. You become a champion of a cause and play a key role informing others:

“Fortunately, right before my M450, while walking through the hallway between the library and the business building, a student stopped me and thanked me for participating, claiming she did not have the courage to do so. It made me feel amazing. It’s funny how one person can make that big of a difference.”

 “Also, I realized that very few people are aware of this issue. With many people unaware of TOMS or the event, I found enjoyment in explaining my slightly kooky appearance in the middle of the library. I felt like I was an insider with great information about a good movement/cause.”

“I love being able to explain to people why I am walking around looking like a crazy person, it brings a spirit of humility upon me.”

“One thing that I learned during my experience of “One Day Without Shoes” was how much awareness that simply one person can make by going barefoot. I never believed it until I did it on April 10. More and more people kept on asking me about why I wasn’t wearing shoes and just like the website had mentioned raising awareness can be achieved by drawing attention to certain things.”

“It was cool how people would ask you the reasoning behind being barefoot, because I was able to spread the word about one day without shoes.”

2. Without shoes, you spend more of the day looking down to try and protect your feet:

“Before this experience, I didn’t realize how much I took shoes for granted. Every step I took was calculated and not one went without me looking down to see the next. I think it was a good experience to essentially walk a mile in someone else’s shoes... Only walking that mile barefoot. When I was walking barefoot outside, it was the thing on the top of my mind. Whereas when I have shoes on, I think about what I’m about to do next, what I have to do later that day, etc. I never think about the next step I’m going to take.”

“Today, I was without shoes. I spent a great deal of my time looking down in order to make sure I didn't step on anything sharp or jagged. Walking without shoes also made me walk a little slower than normal.”

3. Without shoes, your feet get dirty and they hurt:

“At times it was painful and agonizing to think about how dirty my feet were getting.”

“At the end of the day, my feet hurt in spots that don’t usually hurt!”

“My feet became very dirty and they were starting to ache after awhile.  I also realized that you use different muscles in your feet when you walk without shoes.”

4. We take our shoes for granted, worrying about which ones to buy rather than being glad we have them

“Sometimes I spend so much time shopping for the 'perfect' shoe when in all actuality I should be grateful to have shoes period. It is important at times to step back and be thankful for the basic needs of life.”

“We as Americans don’t realize how good we have it in our country. We take for granted the fact that the many people in the world do not have one pair of shoes while we all tend to have several pairs of shoes for different occasions.”

 

Dear TOMS Shoes –

Kelley School of Business Indianapolis undergraduate marketing students and I want to thank you for giving us an opportunity to undertake a worthy experiential education activity. 

We vow to go “One Day Without Shoes” again next year!

(FYI – in case you didn’t know, IUPUI won The Challenge in 2011 and Blake will be visiting our campus on April 30, 2012 to celebrate our efforts and share his story)

While I usually share ideas about marketing on this blog. Today, I am drawing from the right side of my brain to share some funny happenings at our house. Hope you enjoy the story.

“Why is my daughter calling my husband’s cell phone?” I wonder as I start to rouse in the middle of the night. Before I fully awake, I realize this is impossible – I saw her go to bed upstairs several hours ago. I roll over to go back to sleep thinking that the noise is coming from outside the house and wondering what can be making that strange ringtone-like sound?

Over breakfast the next morning, my husband and I discuss our last night’s sleep. Turns out we both were awoken several times by the weird, X-Files spooky, whirring and chirping. Neither of us recognizes the sound. Living on the lake, we are used to a wide variety of bird sounds – ducks and geese, blue herons, woodpeckers, song birds and even an occasional owl. But, this sound is new, different, annoying and LOUD.

We take in the view of the backyard, our pool and the lake from the sunroom where we eat breakfast. We notice our chocolate lab, Bella, is intently staring into the pool. Of course since it’s spring and still too cool for swimming, the pool is winterized with a discreet blue cover. Still, there are three to five inches of water on top from accumulated rains and melted snow. This water is gritty, murky and laden with dissolving leaves. She’s intently focused on something in the muck.

We head straight down to see what is amiss. Hah, looks like Bella has found a frog! But wait, in the pool skimming net we see the “frog” is actually a toad. Oh no, looks like we have March Madness in reverse. Our Elite Eight recruited their friends and we have a Sweet Sixteen. Apparently, it’s mating season in our pool. Mystery solved!?

Want to learn more about these slimy backyard friends? Check out their call at the Indiana DNR website.

Recently, Kissmetrics (which hosts one of my favorite marketing blogs) had a post called “What You Can Learn From These 10 Infographics.” So, here’s what I learned – mostly, I don’t like Infographics and they are multiplying at a rapid pace. Hope I don’t sound like too much of a wet blanket and grumpy academic. Kissmetrics tells us that although infographics have been around for decades (think about graphic representations of data you’ve seen in printed brochures), they have become the go-to tool of choice on the web. There are lots of good reasons why people are interested in infographics:

• Rich visuals are helpful in web marketing and search engine optimization – they showcase expertise, they are shareable and they can be linked to. Oh, and sometimes they go viral!
• They can be more engaging and content marketing is all about engaging your audience
• There’s so much data bombarding people today that they welcome something that makes data easier to understand

But, after viewing several hundred infographics over the last six months, I’ve come to a different conclusion – most Infographics give me a headache. So, here’s my list of reasons why:

1. Data Confusion. The point of an infographic is to help us “see” data more clearly. Many infographics are stuffed full of data, but they don’t actually help us see what the data mean. Instead, they take a lot of time to interpret. So, kudos to Time Inc. for a great infographic showing wear Americans live – you should definitely check out the visual at this link TIME INFOGRAPHIC
2. Data Inundation. My theory is that someone said, “Let’s stop making PowerPoint slide decks. Instead, let’s take 10 slides and smash them into one giant slide.” I actually like the content, look and feel of this St. Paddy’s Day infographic on Visual.ly. The graphics are easy to interpret – you can see the data quickly. But, they’ve jammed about 10 data tables into one graphic. I lost the point about halfway through. Maybe I am just lazy. But, I need my data chunked out in smaller bits.
3. Impossible to print or reuse. When I do find data I love and key points I want to make later in my classes and presentations, I can’t actually leverage the materials. These graphics are intended for the web. So, they are not traditional print sizes. And, because they are so visually dense, the file size is huge. Don’t believe me, just try it for yourself
4. The data gets dated. Because infographics are meant to be shared via the web, they tend to stay around for a long time. Even in the Kissmetrics post, they highlight two infographics where the data is stale. Even so, this infographic about the progress of BP relief well drilling in 2010 is cool to look at and pretty easy to interpret.

But, here’s the real challenge. As a quantitative marketer, I love data. I desperately want to see people taking data and making easier for others to visualize. So, I really, really want to like Infographics.  But alas, I keep finding myself disappointed. I am coming to believe that it might just take video to help us visualize data, especially big data. So, here’s my list of great videos that really helped me visualize data:

• Jer Thorpe talking about his experiments with data visualization and a new software he created to analyze twitter feeds based on NY Times stories – It’s a TED talks
• Visual.ly has an area where you can see the interactive timeline of how rumors spread – I like the one about the London Zoo
• Here’s another TED Talks where Drew Berry has found a way to visualize the molecular process of DNA replication. I am not even a biologist and I was captivated.

Granted, these videos take more time. But personally, I find them very engaging! Oh and I did truly appreciate this infographic one of our Kelley marketing students created last fall. I think it gets the point across nicely.

 So, what are your favorite infographics? What are you doing to help others see your data more clearly?

One of my favorite media sources is This American Life.  It is an hour-long quirky journalism program that reports on off-beat stories that can be compelling, heart-breaking, or hilarious, and sometimes all three at once.  The show is produced by Public Radio International, and can be heard on public radio stations or the podcasts can be downloaded from iTunes or the This American Life website.

In January, they broadcast an episode written by Mike Daisey, an actor with an off-broadway show about Steve Jobs and Apple.  The episode specifically centered around Apple's Chinese suppliers and the working conditions in the factories there.  Mike's story met all the criteria of a great story (compelling, heart-breaking and funny), and, in fact, became This American Life's most downloaded episode.

There was only one problem:  it was all bs. 

Much of Mike's story was fabricated.  He told of meeting with underage workers and workers who were disabled and/or poisoned by the production process and then terminated.  His story included armed guards, government blacklists, and inhumane living conditions.  Most of it he made up.   A real journalist who has experience in China thought a lot of it sounded fishy, so he followed up on the story.  He tracked down Mike's translator (using Google) and she confirmed that none of the above things happened when he was researching the story.

This American Life has published a retraction episode in which they investigate what went wrong.  The NY Times has covered the story as well.

I listened to the episode.  Since it was related to outsourcing, supply chain, and all that kind of stuff, I shared a link with my class (to my M303 students, sorry about that).  I told my friends about it.  Now I feel as if I've been duped.

There is a raging debate going on now (type Daisey into Twitter) about whether Mike Daisey is a lying self-promoter (a la Greg Mortenson of "Three Cups of Tea") or is being attacked for attacking Apple.  You can put me in the first group. 

What are the lessons we can take from this?

Don't lie.  I'm sure that when he started adding some details, he thought it was for dramatic effect.  But one thing leads to another and in this connected world, things come back to haunt you.  That little resume "enhancement" will come back to bite you. 

Mike Daisey is out there arguing that the truth (that Apple allows the mistreatment of workers) is more important than the fact that he made up interviews.  However, he has probably done more harm than good.  What better ammunition for Apple than the fact that its most well-known and outspoken critic is a liar?

What else?  I don't want to be the media basher.  In fact, I think the problem with this country is that too many people are skeptical of quality journalism, rather than that people are too trusting.  However, maybe I need to be more discerning about what I hear and what I pass on to others.

What is your take?  Do the ends justify the means?  What can we learn about ethical decision-making in journalism and in business from this episode? 

 

 

 

 In my last post, I mentioned how much I love snow skiing and shared my latest downhill ski adventure. I also love cross country skiing. Over Spring Break, I was out for a long, long cross country ski when it hit me that successful marketing ends up being a blend of these two types of snow skiing. How so? Well, let’s see what all three have in common:

• They get your heart pumping – in cross country, you are doing a lot of hard work that can leave you out of breath if you don’t hold back. Downhill is an adrenaline pumping rush of high speeds. But, great marketing can be an awesome rush too. When you launch a new product or new campaign and you see how well it’s working – the phones are ringing, people are clamoring to try it, prospects are saying, “yes, I do want to hear more”, you send an email and donations jump $1,000... It feels great!

 

• They take focused concentration – cross country skiing may look easy, but trust me that if you get your weight unbalanced, down you go. The speeds of downhill feel awesome, but you have to be looking out ahead of where you are going to make sure there are no hazards. And, marketing means being strategic – understand your prospects’ behavior, lay out a plan to change that behavior and be ready to adjust because every marketing plan needs adjusting in implementation. Oh yeah, and you better be monitoring how it’s working so you know when to adjust.

 

• They all take practice to master – need I say more?

 

• You have to expect the unexpected – there are very few flat surfaces in cross country skiing. Once you climb a hill, you never know what’s on the other side but it’s typically treacherous. After all, cross country skis are about as wide as your foot and not that easy to control. In downhill, it’s all fun until you are out of control or another skier suddenly looms right in front of you or you realize that the rest of the slope is covered in moguls (these are those large bumps on the slope) and exposed rocks. And, there are plenty of examples of marketing campaigns that went awry – how about product delays that leave buyers searching for your product since the ads were bought before you knew there was a delay, or a Groupon that’s so successful it crashes the website, or even worse, no one even noticed your latest campaign or product? In fact, when you are laying out your plan it probably makes sense to come up with Plan A, B and C.

 

• Finally, they all work better when you have great equipment and tools – in both kinds of skiing, better equipment usually means more comfort, more responsiveness and easier maneuvering. With marketing, better software makes it easier to create, manage and monitor what you are doing. But, I’d argue that marketers also benefit from the tools we typically teach in our marketing classes – frameworks for understanding what’s happening in a market and with customers, strategies for how to manage through these situations and best practice examples to guide future decisions.

 

Okay, so why do I say successful marketing is a blend of the two? Well, cross country skiing is a lot like the planning and strategizing part of marketing – you are doing a lot of hard work and you’ve got to have a bigger picture in mind. Most cross country trails are several miles in length and take you out to somewhere and back. You provide the power that gets you to your destination.

Downhill skiing, on the other hand, is a lot more like marketing execution. You get things started and watch how they unfold. Your job now is to keep things moving and remove hurdles along the way. The execution is all the more fun when you know you’ve already done the hard work to plan for success! Likewise, I relish my downhill skiing days after a day spent going cross country.

With all three, I’m glad I still have plenty of time to practice my craft. If you believe Malcom Galdwell's assertion in Outliers, it takes 10,000 hours of practice to be freakishly great at something. So, at least with skiing I've got quite a long way to go!

While I love teaching students working on their marketing degrees, I have to admit that I do look forward to Spring Break because it usually means a chance to get in some snow skiing. I've gotta be honest, downhill skiing is one of my favorite activities. And, there is a limited window of time when you can easily do it. Plus, skiing at spring break gives me a chance to reflect how what's happening in my classes and rethink how I want to finish out the semester.

Now, I've been skiing for quite a while...let's just say more than 20 years. And, I've been using the same skis since before Dick's bought Galyan's (which was some time in 2004). I know this because my right ski still has a Galyan's label on it. But, when it comes to skiing my motto has been "if it ain't broke, don't fix it."

But still, even a loyalist like me sometimes lets their eyes be distracted by a bright new shiny toy - you got it, the latest rocker skis. So today, I demo'd a pair. And, they were really playful. A few runs hitting some moguls and I was feeling very comfortable and confident. So, we decided to head into the bowls. Now, those of you not familiar with bowls might not realize that these are considered "extreme" trails. Actually, trails is an overstatement as they are more typically just snow-covered ground through the woods on steep faces of the mountains. You make your own trail, being as aggressive as you dare.

So, we hit The North Face and Hawk's Nest. At this point, we could have taken the "easier way" to the "Paradise Lift". But, we felt good and decided to take the risk of doing even harder slopes. Then, we hit the Sock-It-To-Me Ridge followed by The Last Steep. As we were making our way down what was clearly the steepest slope of the day, I started to go across some rocks and in seeking a way to avoid them lost my confidence and my edge and started sliding right down the mountain sideways. Then, my first ski flew off. I figured that wasn't good and really jammed my remaining ski in to try and stop. Instead, I had too much momentum and rolled head over heels. I figured this was not good, but as they say, "a rolling stone gathers no moss." Neither did I.

Lest you worry, the story ends well. I eventually stopped sliding downhill and was completely uninjured. The picture at the right gives you sense of how steep the mountain was. And, I only started sliding about 2/3 of the way down which although hidden behind the trees was actually the steepest part. As I picked myself up and tried to find my 2 skis and 2 poles, I started reflecting on how I had survived. Then, it hit me that it was much like the last corporate reorg that I survived. So, here are my rules of survival:

1. Protect your head. In skiing, this means wearing a helmet (which I did). In a corporate life, this means finding some powerful mentors to shield you. Of course, it helps to have these folks in place before the reorg starts
2. Tuck your head in. In either situation, having your head or neck sticking out is probably too risky right now
3. Bring your arms and legs in as close to your body as possible. Your goal is to avoid peripheral damage. Same as #2 above in terms of the payoff for taking a risk
4. Be calm because this too will pass. Don't panic and start acting crazy. Take deep breaths. Find your "happy" place...
5. When it's all over, breathe a sigh of relief and thank god you were lucky this time.

I am not suggesting that knowledge, experience, and capabilities have nothing to do with survival. Quite the opposite. Being knowledgeable and increasing knowledge through education definitely help. I've been scuba trained and have done rescue first aid training several times. Experience gained through hard work help ensure you are doing the right things most of the time. And, both of these traits will help others want to support you. Still, I do believe that every now and then we all need a little luck. And boy did I feel lucky today!

One final thought - always remember your support team too. While I was busy shaking all the snow off and checking to make sure I was intact, my constant support team known as my husband was at the ready to jump in and help out when he could. This time, it was just to help recover skis and poles. But boy was I thankful he was there.

Today, trying something new was a calculated risk. While that risk had a few questionable moments, in the end it paid off: I found a new pair of skis that help me perform better than before, I had an awesome day, and I had an adventure worth sharing with others. What's your next calculated risk?

On Friday March 2^nd, Kelley hosted its 66^th Annual Business Conference in downtown Indy. I always look forward to attending this conference as it gives me a chance to take a deep breath and think about something more than what’s going on in my classes. But, this year I was especially excited given the theme of “Incite Innovation”. You know it’s going to be a great day when you start by hearing what John Kao and Ray Kurzweil are thinking (click on their names if you want to see what they are up to). And, they both had some very interesting and futuristic ideas to share. But as a marketer, I really enjoyed the luncheon talk by Don Knauss, Chairman of the Board and CEO of The Clorox Company. He shared several ideas that anyone working on their undergraduate marketing degree or marketing MBA needs to remember:

1. It’s not competition that will kill your business, it’s not paying attention to customers that will kill it. So many companies seem to focus on what others are doing instead of understanding what customers are doing. Customers’ needs change. If you don’t keep up with them, they’ll find their own alternatives and fire you.

 

2. In order to innovate, you have to start with what problem customers are trying to solve. Then, apply advanced technologies to help them solve that existing problem. My favorite example was how Clorox has improved Glad Bags. People want to send less plastic to landfills. But, trash bags that rip are a nightmare. So, Clorox borrowed collaborated with P&G to bring diaper technology to create a stretchy, thinner trash bag.

 

3. Be careful when you are trying to understand what customers want. Often, they aren’t great at figuring out what they really want or need. But, they are great at complaining. So, figure out what problems are causing them to complain. We used to call this Problem Detection research. It’s still a great idea for existing products and services. Sometimes now, we refer to this as focusing on the Customer Experience.

 

4. Let’s not forget the macroenvironmental trends. Since innovations are only good when people want to buy them, it helps to look forward at trends that might be impacting your customers. Clorox apparently looked at future trends and identified four that they think will affect their products: 1) Increasing concern for health and being healthy, 2) Making sure that what we are doing leads to a sustainable future, 3) Keeping products and services affordable (a nice way to say we are more price-sensitive), and 4) An increasingly multicultural US consumer. As they choose between innovations to move forward, they compare them to this set of trends and tweak their improvements or prioritize them against future potential.

 

Thanks, Don. It was great to be reminded about how to understand customers and innovate solutions to keep them happy and productive using our products. So marketers, let's create the innovations that add value and excite our customers to support our brands!

Like many in Central Indiana and beyond, I anxiously awaited (dreaded?) the news about Peyton Manning. And like many I was disappointed by the outcome. But I am not here to join the pundits waxing poetic as why it happened, where #18 will go, or who is to blame. No, as a Management professor with a focus on Strategy and Entrepreneurship, I’d like to focus on one aspect about the news over the last 3 months that disturbed me: The distinction that this was a “business decision” and the implications of what that entails.

So what does this mean? A business decision as opposed to…what? I looked back through much of the press over the breakup announced today, and interestingly there are few direct alternatives explicitly named. A business versus a philanthropic decision? Versus a “non-pareto optimal” decision (a nod to our economist friends)? Perhaps the alternative would be a Ouija board decision?

A decision based on relationships seems to be the preferred interpretation of an alternative. This was all about the Benjamins, not the good will Peyton may have generated, his role in the community, or what this means for the team and NFL. No, this was just about $$. And that makes it a “business decision.” (You almost want to spit that out, don’t you?)

I teach strategy to practicing managers and executives in Central Indiana and in the Kelley Direct online program, which reaches savvy business folks worldwide. I have had the privilege of advising executives and boards of firms large and small, old and new. And I doubt that ANY of the experienced businesspeople I have come in contact with would tell you that “business decisions” are purely economic. In fact, most would argue that it is the people and the relationships between them that most directly affect the success of an organization, whether a new venture or ongoing concern, for-profit or not-for-profit. To aver that business decisions and relationship decisions are on opposing ends of some rationality continuum is an insult to businesspeople, as well as the readers of the articles that directly or indirectly imply such a contrast. Business is ALL about relationships.

As such, Peyton leaving Indianapolis was a relationship AND business decision. The two are inextricably linked. I am sure that the powers that be (OK, might as well say it—Mr. Irsay) recognized that this was not a decision about just dollars and one person, or even A Tale of Two Quarterbacks (Mr. Kravitz, a great title idea for a book you might publish in the future on this chapter in Colts history!).  The relationships involved extend to the team, the community, and the public perception of the NFL overall. We can only assume that someone of Mr. Irsay’s experience and savvy fully understands that we know it is about more than money. Do people pay crazy amounts of money for tickets because of the “product?” For access to the good value beer, hot dogs, and NFL gear? I think not—it is to be part of an experience that gives meaning to our lives. Anything that reduces that to a “show me the money” mentality really misses the boat. So I trust that the decision here weighed these intangibles appropriately.

Corporate America has gotten a bad rap over the last few years as being self-indulgent, greedy, and full of hubris. This is a far cry from the majority of entrepreneurs, managers, and corporate leaders I have had the opportunity to know and teach or work with over the years. So yes, this may have been a business decision, but relationships were first and foremost—and to associate “business decisions” with a lack of soul, devoid of sensitivity to the people involved, is inaccurate and unjust.

A closing note…I look forward to cheering for Peyton Manning wherever he ends up. I also suggest we not hold Andrew Luck, assuming he is the choice come draft day, to any specific expectations or blame him or the Colts organization if he does not measure up to #18. He is by all reports a promising quarterback and a fine young man—let’s let him decide how he will express that in coming years.

An article in the Indy Star a week or so ago caught my attention. The headline reads: Gum may not stick around. My first thought was, “What are they talking about? I love gum.” Well, hold on. The main thrust of the article is that gumball machines are falling out of favor. While I was surprised to discover that only 27% of gumball machines dispense gumballs any more, it does make sense. Those huge gumballs are not really a great experience – they are huge and sometimes hard to bite into. When you do bite one, you sometimes discover that it was kind of stale. But even worse, you get a big, immediate shot of sugar that quickly disappears. Instead, you are left with a flavorless bit that’s often difficult to chew. So, I do get why we are not chewing too many gumballs any more.

But, the end of the article suggests that total gum sales are down in 2011. So, this data also made me pause. How is it that Americans are chewing less gum than they used to? So, I set my undergraduate marketing degree students to figure out what’s going on. We started by brainstorming what needs chewing gum fulfills, that is what job do people hire gum to do? Here’s what we came up with:

• Freshen your breath
• Remove food from your teeth after eating
• Give you something to do when you are bored
• Stave off hunger so you can avoid calories
• Keep your mouth wet when you are thirsty
• Help you quit smoking
• Get your vitamins

Then, we started thinking about all of the alternatives to meet these needs. It turns out that there are lot so alternatives. Think about some of the new choices we have:

• Mints and Mouthwashes – there are plenty of new choices here including all kinds of long lasting ones. They’ve innovated functional features too.
• Anyone hear of Wisps, the baby on-the-go tooth brushes?
• iPhone and other smartphone apps – I don’t know about you but I am almost never bored when I have my iPhone.
• Low cal snacks – hey the snack people discovered people were worried about their health and we have an explosion of 100 calorie, baked and other better for you options.
• Waters – what kind of water do you like: tap (on the go Brita filter bottles), flavors (any, and I do mean any flavor can be found), and even vitamin-enhanced

This is one of the ongoing challenges for marketers. Part of getting your marketing degree is learning how to figure out who your real competition is. Your real competition is always changing. It’s not just the alternatives in your own product category you have to think about. You also have to monitor all those options that can substitute for your category and do the same job you do. The customer is hiring a product after all, not a product category. So, think more broadly – what other choices are preventing your brand from being chosen?

 

Like any other field, business has its own language, cultural references, and media.  If you want to speak the language and get the inside jokes, you need to spend some time immersing yourself in the ideas.  So I humbly present to you the "B-List", which is my recommendations of books, movies, websites, media, and general stuff that may be of interest to you.

This month,  I'm focusing on Spring Break.  Here is what you might want to be reading, watching, or consuming over the month of March, especially if you have a free week in the middle of the month:

1.  Switch, by Chip and Dan Heath.  This book is phenomenal because it works on so many different levels.  The subtitle is:  "How to Change when Change is Hard."  And when is change (for the better) not hard?  The over-riding theme of the book is that you have a rational self and an emotional self and that any change that gets made has to deal with both.  The authors provide a guide for making change along with dozens of examples that resonate with readers.  The great part is that it works for personal change (e.g. how to motivate myself to exercise) to organizational change to change at a public policy level. 

2. Boiler Room (2000).  A classic business movie about a 23 year old guy whose illegal apartment casino gets shut down.  So he takes a job as a broker in a high pressure, high intensity Boiler Room brokerage, where he has to convince new clients to sign up using the time honored tradition of "smiling and dialing."  Good performances by Giovanni Ribisi, Ben Affleck, and Vin Diesel.  Put it in your Netflix queue, and when your roommates ask you why you're sitting around watching movies, tell them your studying the financial services industry.

 3.  RadioLab (www.radiolab.org) is a podcast and radio show about all things science.  The hosts explore many areas of science, history, sociology, psychology in short or long podcasts that are ridiculously engaging.  OK, so it's a little nerdy (NPR and science) but the stories are extremely well done.  What does it have to do with business?  Nothing and everything.  Load it on your iPod and listen to an episode or two in your car as you drive around.  As entertaining as Bob & Tom and not quite so juvenile.

 That's the B-List for this month.  I would love to hear your thoughts about what the essential books, movies, TV shows, podcasts, websites, etc. are.  Let me know what makes you laugh, cry, think, etc.  Post them in the comments or e-mail them to me at kyjander@iupui.edu.

 

Why are we still stuck driving to work and school everyday?  In my lifetime, we've had enormous change in so many aspects of our lives, but I still get where I'm going in the same way I did 20 years ago.

In many ways, the slow pace of change in transportation has been a disappointment for many of us.  If you think about it, very little has changed since the 1950s.  Yes, we have more and larger interstates, and nicer and faster and cheaper (in real terms) cars.  But all of these changes have been incremental.  Our world is incredibly different than it was 50 years ago, but our transportation systems are little changed.  We are still driving our own gasoline powered cars whereever we want to go.

Economists have an explanation for why change has been slow.  Transportation has a lot of what are known as "network effects."  Network effects occur when the value of a good is dependent on how many others use that good.  Facebook is a classic example - the value of a Facebook account increases as more people use it, because you now have more friends to connect with.  The network effects in transportation are slightly less obvious, but they are still important.  In our case, the more drivers we have, the more incentive we have to build more roads.  The more (and better) roads there are, the higher the value of the automobile.  By using taxpayer money to build roads, the government  has been increasing the value of cars and trucks.

Likewise, the more gas stations there are, the easier it is to find one, the easier it is to drive a car around. While this might seem like a  trivial example, it is a problem that is preventing a wider adoption of electric cars.  If there are few re-charging stations for electric cars, then few people want to buy one.  But if few people buy electric cars, then there is no market incentive to invest in re-charging stations.  So the network effect prevents the adoption of electric cars.  Economists describe this as "lock-in" - we are locked in to gasoline powered cars.  That is why the "hybrid" is so successful, it doesn't require any new network to power it.

Economists also study network effects to understand public transportation.  Some in Indianapolis suggest that we should invest in better public transportation, including a light rail system between downtown and suburban areas.  However, it is unlikely that this will be successful.  The reason is that we will never overcome the network problem.  The network problem is that you can't afford to invest in a great light rail system until many people are willing to use it, but many people won't be willing to use it until you have a great system.  Since we have already invested in roads and cars, it is too costly to have the significant investment required to create a light rail system.  You need a system in which public transportation is popular and extensive (New York) or in which you rely on cars (Indianapolis).  We can't afford both, and once one is in place, it is hard to replace it with the other.

We are "locked in" to our current system.  As a result, we see a transportation system that hasn't changed in 50 years.  And efforts to massively overhaul it are likely to fail.

However, I see radical change coming (relatively) soon.  The reason that this time is different is because the radical change won't have to overcome the network effects in transportation.  And, I won't have to drive myself to work everyday. 

Next blog post, I'll expand on how I think the system will change. 

 

A chocolate company has found a solution to the lack of credit from the banks. They borrow money and pay interest in Chocolate. The company pays 7% interest in chocolate.

http://www.marketplace.org/topics/business/british-chocolate-maker-offers-sweet-deal
 

I enjoyed sharing this article with my Finance MBA class this last week.

Edward De Bono is a business management consultant whose primary focus is in fostering creativity in businesses and indivduals. To anyone interested in creative thinking (and everyone should be), I would highly recommend both "Lateral Thinking" and "Six Thinking Hats" as seminal works on purposefully creative thinking.

Was the Indianapolis Super Bowl an economic success for the city?  This question seems to be asked a lot these days, and the opinions are all over the place.  My answer is a qualified "Yes".

Estimates will vary, but the overall impact is on the order of $100-$150 million to the area.  Of course, some of that has already left town in the form of profits to the NFL and profits to the hotel owners and other businesses that do not reside in central Indiana.  But that which remains will still exceed the costs of putting on the game.

The issue that makes the economics look worse is when you factor in the cost of Lucas Oil Stadium.  While building the stadium did not ensure that Indy would get a Super Bowl, we surely would not have gotten it without a new stadium.  Taxpayers funded about $600 million of the construction costs of Lucas Oil, and the financing means we will be paying for it for years to come.  The economic benefits of hosting a Super Bowl certainly do not exceed this amount.

However, at this point (and when the Super Bowl was awarded) that was a sunk cost, one the citizens of Indianapolis could not recoup regardless of whether the game came to town.  So the Super Bowl is economically beneficial to Indianapolis.  Whether having an NFL franchise here is economically beneficial is an open question.

Personally, I would love to see the Super Bowl come back in the next 6-10 years.  We've already built the stadium, the J.W. Marriott, Georgia Street, etc.  Might as well get as much return on those investments as we can.

The excitement of the Super Bowl is great and I am looking forward to joining the crowds downtown.

I have been impressed with the many ways that faculty have planned classes to overcome the difficulty of traffic and ensure the continuation of student learning.

During the Super Bowl classes in the Kelley School are not being held on Friday (Feb 3) and classes will not be held on Monday from 7 am to 4:30 pm. Faculty were still allowed to have classes on Monday evening. Similarly on Thursday evening. However, many faculty are using the Super Bowl as a test for our continuity plan. Our continuity plan considers how to continue even if campus would need to close.

Several faculty are using Adobe Connect (Breeze). This is a software program where I can have students join me in a virtual setting online. Students can view exactly what is on the faculty members computer or the faculty member themselves, much like Skype or Go-to-Meeting. Students can use a chat room to ask questions of the faculty member. Or in a smaller class setting, the faculty member has the option to turn the microphone over to the student to interact through a video dialogue.

Other faculty members have used Presenter, which permits a faculty member to record their voice and overlay it with a video of the PowerPoint presentation that they have on their computer. This allows a video production of a lecture to be presented. I like the use of Camtasia for my class. With Camtasia, I can record anything on the computer screen. So it allows me to record information that I might review not only from PowerPoint, but also from Excel and the internet. As a finance professor, I find Excel is a great tool for analyzing data and the internet has loads of financial data that can be used in the Finance MBA classes or the Finance Undergraduate classes I teach.

Another faculty member is requiring students to watch the movie Beer Wars. It is a 120 minute movie about the beer industry and the competition in the industry. The following class period, students will discuss the different strategies of the competitors and use the movie as the foundation for a case.

Other faculty have included readings for the day and assignments or group projects that can be done outside of the classroom.

The ingenuity of faculty to continue despite a campus shutdown and the technology available today is fantastic. It makes me proud to be part of the Kelley School of Business where our faculty have the confidence and expertise to teach in multiple contexts.

Enjoy the Super Bowl!

One of the key ideas I share in my marketing MBA and undergrad courses is that marketing is much broader than advertising. Yes, we use a lot of examples of advertising to help key concepts come alive. And yes, there are a lot of marketers who basically spend their days creating advertising or marketing communications of some sort. And, probably if you ask a bunch of salespeople what marketers do, they’d say, “create ads.” But, I do like to stress that “Promotions” is just one of the aspects of marketing.

Okay, I realize that some people will disagree with me right from the start when I tell students there are 4Ps in Marketing – Promotions, Product, Price and Place (Distribution). Of course, I also tell them (although I might not repeat it enough to really stick) that not everyone agrees about the 4Ps. Actually, what I say is that one way to think about Marketing is via the 4Ps. We can argue whether there are 4, 5, 6, 7 or an infinite number of Ps. But, really what I want them to realize is that there are multiple dimensions to marketing that should work together to accomplish a brand’s positioning and market goals. I suspect they kind of feel beat over the head with this idea based on an email I received last week:

I was reading this article this morning and noticed that a PROFESSOR at George Washington said the goal of marketing is to create some sort of buzz, create memorable campaigns, something edgy. But I associated these comments more with advertising than marketing. I know advertising is a part of marketing, but I thought it was interesting that the quote sounded like she was substituting advertising for marketing.
http://news.yahoo.com/nd-tourism-director-ad-wasnt-meant-racy-000559311.html

Right away, I was proud of this student for asking a great question. But being curious like I am, I went ahead and clicked the link to see what had caused this brouhaha for a Kelley student. That’s when a bolt of lightning struck me – in some markets, maybe the domain of marketing is mostly that promotions “P”. The quote above was about a campaign for tourism to North Dakota that was quite controversial. Well, let’s put on our North Dakota Tourism Marketer’s hat: you have no control over Product (ND either has fun places to visit or not, you don’t create fun places), or Price (individual locations set their prices), and very little over Place (actually, New Zealand has done an awesome job of helping people buy their NZ destinations online). So, what the marketer really controls is how it is promoted. To this marketer, it is possible that marketing=advertising.

I contrast to one of our Kelley supporters up the road in Carmel, IN – Delta Faucet (click if you want to check them out). The marketing group at Delta Faucet not only recognizes the importance of all 4Ps, but product development and R&D report into the marketing function. Great, innovative products are a key component of their brand strategy. So, it makes sense that product development should be tightly aligned with the rest of the marketing team.

So, I guess my new advice to our students seeking marketing degrees is to understand what the real domain of marketing should be in your product category. If it really is primarily advertising, then do it really, really well. But, if there is any way to see marketing more broadly, try to manage that too. So, what’s the domain of marketing in your product/service category?

One of the best parts about being a Kelley professor happens when your students reach out to tell you about the cool, new things they are doing. In the last few weeks, I have been lucky enough to re-connect with several of our grads.

But today, I want to share the story of Peter Brasovan and Jared Byczko, two friends who graduated from Kelley with their undergraduate business degrees a couple of years ago. Peter was a student in two of my undergraduate marketing classes. After graduation, he traveled the US doing event marketing for Sony Playstation. A couple of years of daily and weekly travel later, he settled in Chicago and worked in marketing for the Chicago WhiteSox. What a great way to put his marketing degree to good use. But, what's a young professional to do in a big city when he isn't incredibly busy with his marketing job? Peter's answer - take up Crossfit.

Now for those of you not familiar with Crossfit, it's the principal strength and conditioning program for many police academies and tactical operations teams, military special operations units, champion martial artists, and hundreds of other elite and professional athletes worldwide. CrossFit is a core strength and conditioning program. It's designed  to elicit as broad an individual adaptational response as possible. CrossFit is not a specialized fitness program but a deliberate attempt to optimize physical competence in each person over ten recognized fitness domains:

• Cardiovascular and Respiratory endurance
• Stamina
• Strength
• Flexibility
• Power
• Speed
• Coordination
• Agility
• Balance
• Accuracy

Bottomline, Crossfit is a hard-charging, get your body in peak shape kind of workout. I don't know about you, but I am sure my body could stand some improvement. Of course, the key to being successful to these kinds of hard workouts is having a coach who teaches you proper technique and helps keep you from doing too much, too fast. As experienced Crossfitters and certified coaches, Peter and Jared are prepared to do just that.

For my part, it's great to see our grads taking charge of their destinies and committing themselves to something they feel passionate about. So, check out Crossfit Naptown and say "hi" to a couple of our Kelley grads. http://www.crossfitnaptown.com/

Oh yeah, here's Peter showing off what Crossfit has done for him!

Watch Peter with fellow Kelley alumnus and business partner Jared Byczko discuss running their own business.