Recharging: How Self-Engagement Helps

Worry Is Like Interest Paid In Advance On A Debt That Never Comes Due. — The Spanish Prisoner

While also attributed to Will Rogers, the quote was reintroduced in the 1997 suspense film The Spanish Prisoner. We might even go one step further by saying it is interest paid on money you never borrowed. And even so, it's also an increasingly common prognosis for Americans.

The only thing bigger than the American debt is the amount of worry that has been levied on its people by politicians, news media, propaganda shills, and everyone else who wants to attract attention. Fear marketing has become the singular biggest influencer of all time.

Looking at the most popular stories parlayed into major news headlines — child abductions, governmental collapse, pandemics, debt default, stock shocks, climate change, health care crisis, economic ruin — it's a wonder more people aren't depressed. By comparison, the children of the 1950s and 1960s felt safer clamoring under desks in preparation for a nuclear war.

That's not to say all these other issues aren't important. Remaining vigilant against such threats can be prudent. But being paralyzed by them is not. Most of the worries people embrace are issues they can do nothing about on the grand scale.

Sure, they can take steps on a small scale: safeguarding children, living within their means, encouraging companies to be green in practice and not public relations, and so on. But beyond what can be done on the small scale, none of these issues are worth the worry. Most are well beyond our control, with the zombie apocalypse outstripping Y2K in eventual likeness.

One small study that reaches further than its intent.

Last week David H. Rosmarin of the Harvard-affiliated McLean Hospital released a study that suggested people who trust in a benevolent God tend to worry less and are more tolerant than those who mistrust an indifferent or punishing God.

At a glance the sampling sizes seemed rather small, but there is something to take away from it regardless. While Rosmarin suggests several applications for his findings, it might be worthwhile to consider something else too. Those people who are more tolerant and less prone to worry are also more comfortable letting the world run and then adapting the best they can.

Whether you accomplish that by placing faith in God or a god or simply recognizing that as individuals we are pretty small specks on a planet hurling itself around a sun that is hurling itself around a galaxy that is hurling itself around a universe, it works out the same. Don't take on worries that you have no control over. Stick to what you can do. Take action, not worrisome non-action.

"What would you do if you weren't afraid?"

For all the emphasis by the media and other interested parties peddling fear, take some time to turn it off and do something you can do. Or, to illustrate with an old proverb Chinese farmers used to say — forget about the emperor and get down to milking cows. You might be surprised to discover how much cooking a challenging dinner, painting miniature figures, working out, or choosing some other engaging activity can do for your head.

For even that brief period of time, as long as you can focus on whatever task you've picked up without distractions from social networks or the outside world, chances are that all those worries — most of which you can only do a little about — will slip away. And, even better, there is no risk of a hangover (although I understand some people pour on to supplant this intent too).

It's especially critical for creative types to unplug or become otherwise self-engaged for a few hours a day. If you allow too many voices and worries and calls for alarm in your head, you won't hear those sparks of inspiration. So let those who took on the debt worry about how to pay it back for awhile. It's their job for as long as we let them keep it.

The comments are yours. If you have any tips and tricks you use to tune out and then tune back into things closer to home, I'd love to know. They might make a worthwhile post all on their own.

Communicating Poorly: Politics Sack Confidence

A new study by TNS, which is one of the world's largest research firms, reveals that 87 percent of Americans with $500,000 or more in investable assets are increasingly concerned about the deficit and its potential impact on retirement funds.

Although about 40 percent said they would pay higher taxes to offset changes to Social Security and Medicare, they are even more concerned about the growing deficit. In fact, 40 percent would accept changes to both Social Security and Medicare if it would help reduce the deficit. Their sentiment is shared by a growing number of Americans.

• 43 percent feel the current state of the economy will jeopardize their retirement plans.
• 40 percent plan to reduce the amount of money they spend compared to last year.
• 56 percent are concerned that the U.S. government may default on its debt obligations.
• 60 percent do not think the U.S. government should increase the federal debt ceiling.

Along with increasing concerns about the long-term prospects, investor confidence has dropped 11 points to its lowest level in about a year. Joe Hagan, senior vice president of TNS, speculates that increased stress and discomfort among investors will continue to cause declines in consumer confidence.

In fact, that has already happened. Confidence is lower than in 2009.

Marketers share similar concerns over the economy.

According to the Financial Times, investors are not alone. A recent IPA/BDO Bellwether survey reveals more companies in the United Kingdom — about one-fifth of those surveyed — were trimming advertising budgets. Even those that are not trimming budgets are looking at the remainder of the year with caution.

“Our view is that the economy may have slipped back into a slight contraction in the second quarter," Chris Williamson, chief economist at Markit, told the Financial Times. "This confirms that picture of very little growth in the economy. We expect marketers to remain cautious over the rest of the year.”

The United Kingdom is not alone. Marketers are cutting budgets again. This time it seems the decision has less to do with spending cuts as much as it relates to consumer confidence. While some people are attempting to look at the positive side of budget reductions, the more recent economic shakes have less to do with budgets than marketing executives reacting to a marketplace with lower returns on marketing investments.

While it is often prudent to increase marketing during a recession (because ad rates are cheaper and competitors are spending less), marketers are more concerned this time around because consumers seem frozen. Those who have limited or even disposable income are not spending it, believing they will need it in the face of increased taxes and budget deficits or default (both of which weaken the dollar).

What's the best course of action for the balance of 2011?

While cutting marketing budgets may seem like a viable option, it would be more prudent for most companies to re-evaluate their marketing strategies — focusing on long-term brand and relationship building as opposed to immediate hard returns on investment.

Keith Turco wrote a column for Forbes recently, attempting to shock a few readers away from what he attributes to analysis paralysis. He more or less believes that companies are not committing enough of their marketing budgets because they are too busy trying to make every cent trace back to a sale.

Analysis paralysis is certainly part of the culprit, but it is not the only factor. Market research is finding that more and more people aren't ready to buy because the political climate has remained heavily uncertain. This isn't isolated to any segment of the market, but rather the entire world. In terms of changing confidence, some economists see an end to the debt ceiling debate in Washington as the only chance for a reversal. (Others say it is the continued broken promises to ease the burden of unemployment.)

But even if it doesn't, marketing ought not to care so much. The simple reality is that the economy will eventually climb out of the recent hole it has been forced deeper into and consumer confidence will rise with better leadership. (And if it doesn't climb out, then it hardly matters how anyone plays their cards anyway).

And thus, marketing departments that shift tactics toward long-term strategic models will be able to better position their companies on an economic upswing than those who treat their marketing budgets like yo-yos tied to economic forecasts.

Or, in other words, when economic outlooks improve, any company would be better off with relationships in the wings than those who attempt to restart at the first signs of life with a very different kind of consumer. Changing consumer confidence is psychology.

Banking On Outlooks: Business Startups

According to new study released by Silicon Valley Bank (SVB), U.S.-based private and venture capital-backed tech companies are more optimistic in their near-term outlooks. More than 83 percent said they will be hiring this year, which is up 10 percent from last year.

The study focuses on a survey of 375 executives (80 percent at the C-level) of U.S.-based, early-stage companies in four high technology sectors: software/Internet (206 companies), hardware (63 companies), life sciences (83 companies), and clean tech (23 companies). The survey was conducted by a third-party market research firm, Koski Research, in February.

Key Findings From The Startup Outlook 2011.

• Nearly one in four companies (23 percent) exceeded their 2010 revenue targets, up significantly from 2009 (15 percent).

• Two in three executives say that business conditions in 2010 were better than they were the previous year, and three in four expect they will get even better in the coming 12 months.

• The vast majority of surveyed companies (83 percent) plan to hire in the coming year, up from 73 percent a year ago.

• 65 percent of respondents say business expansion and new markets are a top priority for them in 2011.

• The life science sector is more cautious in its outlook, citing regulatory/political issues as its primary challenges. Across all sectors, regulatory/political issues ranked as the third biggest challenge faced by startups.

• The top two concerns are the uncertainty created by our regulatory environment and the overall negative impact this environment is having on risk taking.

While the outlook is positive, government is slowing the recovery.

In order, the biggest challenges faced by these companies included equity financing, scaling operations for growth, and regulatory/political environment. While equity financing topped the list, the cause is also tied to government.

According to survey respondents, venture capital fundraising and investment levels are hindered by a tone set by the administration. While government claims that innovation is the key to success, it has also maintained a tone that suggests an aversion to risk. Unfortunately, innovation and risk go hand in hand.

"Probably my biggest concern (after equity financing) vis-a-vis operating as a startup in the U.S. is the stifling regulatory/tax environment here," said one survey respondent. "The sheer number of regulations and tax issues that have to be dealt with are staggering and the corporate (and related) taxes are highly punitive relative to other developed countries."

According to several respondents, the environment created by the government is driving more companies to move operations overseas. Along with regulatory issues, respondents said that they tend to hire slowly, given the high cost of compensation packages and the high cost of living in the U.S., along with the scarcity of qualified tech employees.

That doesn't mean executives are not bullish on America. On the contrary, only 13 percent would recommend their peers look elsewhere to start a company. The primary reason for their sentiment, respondents said, is because of the country's entrepreneurial spirit. In order to move beyond current challenges, SVB says the U.S. needs to adopt a more entrepreneurial environment.

Innovation remains the key in helping turn the U.S. economy around.

Among the suggestions included in its policy perspective, SVB suggests that the government promote risk taking and reward successes that result from it, remain open to disruptive innovation (even if it turns older companies upside down), provide a stable, predictable legal and business environment (without the back and forth of sweeping policy changes), and avoid excessive regulation. In addition, the government needs to reform education to ensure the country remains competitive in providing a strong pipeline of talent or allowing more qualified immigrants to bring their skills to America.

Other suggestions included government-sponsored R&D, tax credits for R&D, maintaining a sound system for protecting intellectual property rights, promote the flow of adequate risk capital into startups, and remove subsidies, regulations, and other market-distorting forces that favor incumbents.

These changes are critical for tech companies to help increase the speed of economic recovery, the study suggests. Otherwise, the U.S. will continue to discourage venture money, driving more technology away to India and China. The full report can be found here. It includes insights specific to each sector.

Shopping Online: Clicks vs. Bricks Or Something Else?

"Trust, over getting the best price, is most important to consumers when shopping electronic stores and clothing stores," said Craig Elston, senior vice president, Integer. "This is not a surprise considering these channels offer bigger ticket items and consumers are willing to pay more for quality and experience in these channels."

Elston was speaking about a preliminary finding related to an ongoing shopper experience study currently under way by The Integer Group and M/A/R/C Research. Early research shows that shopping experiences, time saving, and trust are outpacing discounts this year. And, according to the study, department stores are scoring higher for convenient last minute gifts.

Conversely, another report conducted by comScore shows that online retailers already have something to smile about. For the holiday season to date, more than $17.5 billion has been spent online, marking a 12 percent increase over last year.

"Without a doubt, free shipping has become a critical driver of e-commerce purchasing, with the majority of consumers indicating that they will abandon their shopping carts if they get to check-out and find that free shipping is not included," said Gian Fulgoni, comScore chairman. "Retailers have increasingly responded to this consumer demand, with market leaders Amazon and Walmart, for example, both offering free shipping on virtually all transactions this season."

Free shipping does more for online retailers than offering a discount. From the consumer's perspective, it levels the playing field, giving the online retailer an advantage in terms of time saving and trust. With the exception of a few items people still hold in their hands before making a purchase, the online shopping option is easier (and sometimes more convenient for returns).

In fact, according to yet another study (StrategyOne's Annual Holiday Shopping Index), while 59 percent of consumers still prefer to do their holiday shopping in stores, the experience is beginning to vary widely among income groups. Fifty-one percent of consumers earning $75,000 or more prefer to gift shop in stores; 63 percent of consumers earning between $25,000 and $40,000 shop in stores.

This doesn't mean department stores and specialty shops are going to have to continue to lose to e-commerce. But it does seem to indicate a need for brick retailers to rethink the shopping experience. When an online shopping cart seems friendlier and most trustworthy than a check-out counter clerk after facing lines of tired bargain hunters, it's time to rethink the strategy.

Changing Communication: Front Line Workers Over Leaders

According to a study by CNBC, the communication industry (advertising, public relations, and marketing) may see some more major transitions in the near future. This time around, the changes aren't expected to be external like the advent of social media. It will be internal, driven by changes in workforce positions, which will eventually cause cross-industry changes.

In the next decade, as media continues to consolidate, public relations (those who really worked in media relations) will face increased position competition by journalists. And, given the journalists will have a leg up on demonstrating "inside knowledge," many public relations pros will be absorbed into advertising (if they are creative), marketing (if they are not), or social media (for less money). As each position's exodus occurs, others within the field will likely be forced out or regulated to increasingly task-oriented jobs.

Communication-Related Positions Expected To Decline.

1. Reporters and Correspondents. According to the report, reporters and correspondents at media outlets will decline as much as eight percent in the next decade. This could increase competition in the fields of advertising and public relations as reporters and columnists on the top of the chain compete for better paying public relations jobs while new entrants are likely to consider advertising and public relations a backup.

2. Computer Programmers. While the software segment is expected to increase by as much as 32 percent in the decade, computer programmers (the people who write the instructions for computers to run software) will drop three percent. Either computer programmers will become increasingly independent or find new ways to adapt their work. We think it may impact the communication field as more marketers add tech savvy programmers to their creative teams.

3. Advertising, Marketing, And Public Relations Managers. While the industry is expected to grow 13 percent, communication management is expected to drop by two percent. This could impact the industry two-fold. More people but fewer managers will reduce the entry level positions to a subprofessional level and decrease opportunities for advancement. Beyond that, the industry has been trending toward tactical solutions, requiring more task work and people to fill chairs. And no, this isn't a good thing.

4. Editors. If you're tried of seeing typos in everything from media articles, company Websites, and blogs — get used to it. Editing positions will remain flat, with more of them being contracted as opposed to brought in house. Part of the decline is attributed to problems within the publishing industry, but the bigger picture is that companies want editors who are more than editors. They have to have some tech skills too. Interestingly enough, while there is less demand for the position, there is greater demand for the skill set.

While some of these changes seem insignificant, they represent sweeping changes in the industry. As media outlets continue to trim staff, public relations professionals (there is almost a reporter: public relations ratio of 1:2 already) will be expected to develop more direct-to-public campaigns. Unfortunately, they won't oversee the campaigns as — across the board — management is being diminished, leaving more communication professionals with less room for advancement in a field that was already competitive.

The net result is more tactical and less strategic work. And while this will appeal to number crunchers who believe everything is a formula based on the total number of people vs. the dollars spent, the net result will be weaker brands and a profession that increasingly feels less professional. For all the good social media has done, it is also stripping away some of the significance of the industry as entry-level communicators are much more likely to find their positions much more similar to online customer service than content creation and management.

Remembering Workers: Labor Day

It seems fitting to cite a recent poll conducted by Hart Research Associates on Labor Day, which is meant to recognize workers for their contributions. The small voter poll (801 likely voters) found that even those who are employed have been impacted by the recession.

Three-quarters of respondents to the survey said that either they or someone they know has been affected by wages that lag behind the cost of living. Sixty-five percent said that they or someone they know has suffered a reduction in wages. One-third of those polled has had a family member directly impacted. (Keep in mind, only 801 people were surveyed.)

Highlights From The Hart Poll.

• 62 percent of non-college graduates are facing challenging/difficult times.
• 49 percent of college-educated peers are facing challenging/difficult times.
• 62 percent of blue collar workers are having personal economic difficulty.
• 51 percent of white collar and 52 percent of professionals are having personal economic difficulty.
• 71 percent of Hispanics, 66 percent of African Americans, and 53 percent of caucasians are struggling.

The challenges that have impacted these Americans the most have been wages and salaries not keeping up with inflation (46 percent), reduced hours at work (32 percent), and loss of job (27 percent). Change to Win, which commissioned the survey, is using the data as part of a campaign to lobby government to promote higher wages.

Unfortunately, higher wages generally diminishes the number of workers and increases unemployment. This, in turn, diminishes demand and companies are forced to lay off even more people or suggest pay freezes and/or salary reductions to retain staff. Even local, state, and federal governments operate under this model.

Government workers are being asked to forego merit pay to help keep departmental budgets in line. And when government cannot come to such a consensus, it cuts workers and adds to unemployment. In addition, more regulations tend to convince companies to delay hiring by the private sector.

The Economy Relies On The Success Of Small Business.

If anyone wants to understand the American economy, look to small business owners. Currently, small businesses represent 99.7 percent of all employer firms, staff more than half of all private sector employees, and are responsible for generating 64 percent of net new jobs over the past 15 years (SBA). These firms are also the most likely to have owners who make marginally more than employees (unlike corporate CEOs, whose salaries are often cited in these studies).

Likewise, the study also shows why most Americans have an aversion to higher taxes. The majority consists of individuals who are already struggling against a dollar that doesn't go as far and small business owners already struggling to keep the doors open and wondering how they are going to pay for additional mandates.

While this might seem dour for a day most Americans consider the last day of summer, there are three takeaways. Good employers and employees are in this together. The private sector, especially small business, is the key to turning the economy around. And if you're a marketer, it might give you pause in considering the environment in which your messages are sent.

Countering Negativity: Flip The Thinking

A survey by Zillow helps put public sentiment about the economy in perspective. Homeowners are more pessimistic about future home values than they were in the last three quarters.

Specifically, 33 percent believe housing prices will fall further; 38 percent believe they have already reached bottom. Few people anticipate a real estate turnaround in the near term. Most believe any increase in home valuation could be more than one year away.

Worse, more homeowners are lining up to create a self-fulfilling prophecy. According to Zillow research, more than 4 million owners are ready to put their homes on the market in the next six months. If they do, increasing surplus could drive prices lower.

"Our forecast remains largely unchanged: We're in for an L-shaped recovery that will likely keep annualized home value appreciation very low for the next three to five years," said Dr. Stan Humphries, chief economist at Zillow. "Given this sentiment, we're surprised so many homeowners believe their market has already bottomed."

As recently as last March, the Obama administration had reworked its troubled $75 billion plan to prevent foreclosures. The idea was to give people a three-to-six-month break on their mortgage payments until new jobs materialized. Unfortunately, jobs didn't materialize, at least not long-term private jobs. The rush to push forth any plan didn't work.

Rethinking Customer Communication Can Improve Outcomes.

The question more organizations need to be asking is how they can help consumers as opposed to helping themselves. Sure, in a robust economy, traditional marketing works because it's based largely on either innovation (creating need) or out positioning the competitor (more common). In a down economy, organizations that aren't innovating need to find other ways to add value.

After all, it doesn't do any good to have the best marketing proposition for a product no one is buying. And marketing needs to consider this in their communication. What specifically are they offering consumers? But more importantly, what is it that consumers need that they might offer?

This falls right in line with some of the best performing Web sites. The Wall Street Journal offers information on business and finances. Lower My Bills provides a place to compare long distance services. Federal Money Retriever provides government grant advice. Facebook offers a popular way to stay connected with friends and family. Google is the most popular search engine for helping people find information they are looking for. And the list goes on.

What does your company's Web site do? If you're like most organizations, your site is not designed to do anything for the consumer. It's designed to help your organization. If it has a blog, it's probably written to sell products or share company news. If it has a social media presence, it's probably designed to attract new friends and followers. Perhaps it includes promotions and coupons, as if discounts somehow add value to something that has no value.

A 5-Second Solution Using Home Improvement As An Example.

Lowe's and Home Depot provide a great example. In the second quarter, Lowes posted an earnings increase of 9.6 percent. Home Depot rose 7 percent. Both have employed a business-as-usual marketing stance.

Home Depot will have a Labor Day sale with gas grills. Lowe's is asking people to imagine new appliances. Meanwhile, consumers are asking themselves whether they will be in the same home next year, negating the need for big home recreation items that won't move with them.

It's mostly the same on Facebook. Home Depot is telling people to do more (grill more, paint more, garden more). Lowe's was telling people to organize their life. Recently, however, Lowe's switched to "Back 2 Campus" ideas, except they aren't ideas as much as they are posts about one discounted product. The latter idea is close to being helpful, but falls short without a choice.

Imagine what might happen if Home Depot or Lowe's did more than justify cautious consumers are a reason for on par sales. If they did that, maybe they would focus on simple renovation projects that can lift homeowners' spirits or, even better, increase the resale value or home valuation of their homes.

Redefining Leadership: What Do We Need?

There is a bit of a buzz about the Netflix vacation policy. It mirrors our vacation policy (with the caveat that all the work gets done) in that there is no policy.

But really, this simple discussion point is much bigger than all that. It goes all the way to the top of the leadership totem pole. Too many rules kill innovation.

Where Leadership Continues To Miss In Modern Times.

A few years ago, I read an article in the Harvard Business Review that focused on how many emerging leaders didn't necessarily have the leadership skills needed for the post they were pursuing. If I recall, the article pinpointed the lack of critical thinking skills as the problem. New leadership seems paralyzed by adversity. But it's not just new leadership. It's almost everybody.

It's almost everybody because there is propensity in many organizations to eliminate autonomy. In many cases, children are taught this all their lives. It's subtle, but it comes in the form of which books they are allowed to read (specific books based on specific skill levels), the structure of their day (get tasks done, earn free time), and how lessons are taught (rote memorization).

Basically, some of these kids are learning you need to do A to get to Z. Never mind that D takes you to Z more effectively. It doesn't fit the program, policy, or rules. It doesn't matter that you can start with any letter in the alphabet and get to Z. Someone has already eliminated all of the other letters as starting points. The place to start and the pace to learn is set in stone.

I've been fortunate to have several dozen great interns and employees over the years, but I have noticed some slippage in the desire for autonomy, even among the good ones. They are increasingly likely to wait for instructions. They want their work day planned out. And, if they complete the tick list, they want a reward. This used to perplex me, because I believe this video (hat tip: Angie Alaniz)...


Dan Pink's lively RSA animate is awesome. It suggests that if you give people autonomy, they excel. I believe he is right, but there is another dynamic that is undermining the concept. Some of the people coming up through the ranks now aren't used to autonomy at all. Some don't want it. And the reason they don't want it is because with autonomy comes accountability.

Sure, as Pink points out, people get very excited about autonomy in their personal lives. But what he misses is that being autonomous in our personal lives doesn't require all that much accountability. If you don't get it done or no one likes the YouTube video that was one month in the making, there are no consequences. If I don't work on my book today, there is no editor or publisher to follow up with me on the deadline. At least, not yet.

Ironically, if there are consequences (such as poor health choices or bad investments), there is an increased pressure to hold other people accountable, e.g., it's McDonald's fault if we eat too many burgers and the investment firm's fault if we pick the riskiest venture for the hope of a higher return. It's kind of weird, when you think about it. Where does this come from?

I'm starting to think it starts when kids enter school, especially public ones that have more rules and regulations than their private counterparts that tend to outperform. And this anti-autonomous training carries over into adulthood.

Guidelines Are Fine If They Don't Box Thinking In.

Modern organizations don't need "sandbox covenants." They need to teach people that it's okay play in the sand. That it's okay to make policy exceptions. That autonomy is okay with accountability. And that they ought to be prepared to stand up against regulations because of one so-called questionable decision.

Who knows? If our leadership had better decision making skills, they might even realize that working to end a recession and working to end a recession a certain way are two very different things. I won't hold my breath. Mostly, I ignore the recession. But the way I see it, the more more rules we make will keep us stuck in the muck for another two years or longer.

Looking For Miracles: Retailers

Most retailers are looking for an economic turnaround miracle. And as early back-to-school sales fizzled, many of them aren't sure if they should look for another traditional peak shopping season or push off hope for the holidays.

The bad news for retailers hit when monthly figures for July showed only modest growth over last year. Overall, retail sales increased 0.4 percent in July, and rose 5.9 percent over sales in July 2009. It's movement, but most fear that the movement isn't sustainable.

"Retailers continue to persevere in an uncertain economic environment, relying on cost controls rather than sales growth to maintain profitability," noted Sandy Kennedy, president of the Retail Industry Leaders Association. "Retailers continue to deal with considerable market and regulatory uncertainty."

With the exception of automotive, retailers saw a decline in virtually every category. Department stores, clothing, furniture, and building materials were all slightly down. The most common reason for the sales slump is attributed to 14.6 million Americans remaining out of work.

Finding New Solutions In A Down Economy.

In days of old, most retailers relied on location. It was the reason that malls were mapped out all over the United States. As a retailer, you wanted to choose high traffic areas in order to capitalize on pedestrian traffic. The same was true for high traffic streets and urban centers. The people were already there. You only had to be there among them.

One change seems certain in this economy: people need a reason to visit beyond location. In a tightening economy, most consumers are trying to cut back on necessities in favor of occasional luxuries. So maybe, just maybe, retailers need to stop waiting for the people to show up and start trying to find them.

Proximity mailing and online market penetration are good starting points, but even those alone are not enough. You have to do something and that something has to be more than host a sale. Mini-events, new line launches, and educational series are smart starting points.

I'm not making this up. Two of the retailers we work with have seen the most success building connection-centric communities online (helping consumers meet each other) and complimentary or low cost events that people cannot find anywhere else. They don't have to be huge events. Some can be as simple as a local chef hosting a cooking demonstration or authors signing books.

As long as the marketing that accompanies these events includes traditional event listings (citywide), proximity mailers (store radius), and online (interest focused), more people are likely to attend than if the establishment simply handed out in-store flyers to a dwindling walk-in consumer base.

As for the freeze created by regulatory uncertainty? I don't blame retailers for being concerned. However, at some point, you have to forget what the emperor is doing and get down to the business of milking cows. The day to worry about future regulations is best saved for the day they happen. And the day to wait for a miraculous economic sales surge is, well, never.

Splurging Consumers: Are They Cash Crazy?

Bloomburg Businessweek calls it the new abnormal. Americans, they say, are broke and depressed but also buying $3 lattes and waiting in line for iPhones. The compelling Businessweek cover story provides plenty of examples, including a woman who explained how tough the economy was while splurging in Las Vegas.

A few numbers behind the article citing the new abnormal.

• Businessweek cites the success of companies like Apple, Starbucks, Mercedes-Benz, and BMW.
• 17 percent of consumers are spending outside their means; 20 percent struggle with needs and wants.
• 20 percent of Americans have bought something in the last 30 days they wouldn't have 6 months ago.
• 51 percent of Americans have fallen behind on their their annual savings plans, but still splurge shop.

Some of these percentages certainly seem far off from the report that The Futures Company put out last year. That think piece, A Darwinian Gale, said that consumers had reshaped their entire thinking, with an emphasis on responsibility, vigilance, resourcefulness, prioritization, and network orientation. In March, another study from Euro RSCG Worldwide, said there were more prosumers than ever before.

Have consumers gone crazy, trading in the "new" society for schizophrenic shopping?

They aren't crazy. Devin Leonard touches on some of it in the podcast, but doesn't go deep enough in understanding consumers, especially those who are broke or feel stressed by the lackluster economy and low consumer confidence.

It's not impulsive shopping as much as it is backlash against the pressure of isolation, intense savings, and preparation for the worst (which he does say). But even more importantly, most consumers, especially those who had not faced any hardships in previous economic downturns, splurge now and again because they remain unbalanced.

This is one of the reasons most financial planners I know always suggest building entertainment in to a budget, no matter how small that budget might be. Simply put, it's little luxuries (scalable to our financial picture) that help lift our spirits up and keep us moving forward. It may also represent a re-prioritization to a mindset that tip earners tend to have all their lives.

Since tip earners have unfixed incomes, they tend to avoid fixed expenses such as magazine or newspaper subscriptions. They also cut back on other fixed expenses as they can, such as grocery shopping or gas consumption or premium cable. Why? So they feel like they have more control over their daily finances even if that means they purchase something some would consider "luxurious."

The same psychology played out during the Great Depression. Despite being the worst economic collapse in the nation's history, this era also helped launch the major motion picture industry. The same psychology prompted hungry children in Europe during World War II to buy candy instead of soup if they happened to find a few cents. And the same psychology may have even been present during the Renaissance, when theater for the masses become an important part of life.

For a few minutes (if it's a cup of coffee) or a few hours (if it's a movie) or a few weeks (if it's an iPad), consumers can take the edge off a repressive economy and chronic uncertainty. And the need to do so grows exponentially if they didn't balance out their finances prior to the crash, which increases the pressure to splurge rather than spend a smaller amount on themselves every week or every month.

Marketers can empower consumers with fewer fixed costs.

Does this change how consumers spend? Sure. From a big picture perspective, it skews purchases much like the Businessweek article says. However, it tends to be for very different reasons. This behavior isn't a new abnormal. It's very normal. And as long as consumers can limit the pendulum swing between feast and famine, it might even be healthy too.

The question marketers ought to be asking themselves is how do they adjust their message to meet the mood? Some might make the mistake of cutting prices. But others will likely find some lift in removing "fixed" costs and giving consumers more flexibility.

Cutting Budgets: Reinvest It Instead

After what seemed like several steps toward economic recovery, the second quarter has shaken the confidence of some U.K. companies. Almost 20 percent cut marketing budgets. Business confidence is tuned to consumer confidence, according to the IPA/BDO Bellwether survey.

To some degree, it is expected. Last week, Diane Swonk, chief economist of Mesirow Financial, said it is likely that Europe will stay in a recession through 2011. (Report.) The United States is anticipated to recover quicker, but its recovery hinges on how many new regulations and increased taxes are passed in 2010.

The real bellwether for economic recovery, of course, isn't businesses or financial advisors. U.S. consumer confidence remains low, with a recent USA Today poll revealing as many as 54 percent of Americans surveyed believe their standard of living has not improved, when compared to that of 5 years prior. Fifty-five percent believe that things will not improve for their children.

In a different poll, just over 20 percent are satisfied with the direction of the country. The problem is private sector job creation. Even companies that are succeeding have been slow to hire new employees because there is no certainty.

The Alternative To Cutting Budgets Is Recreating Culture.

Conventional wisdom suggests that companies ought not to cut their marketing budgets. But as companies face a diminishing return on their marketing, they often feel compelled to make marketing cuts to forestall another round of layoffs.

What could they do instead? Almost every recession success story seems to have a common thread. The companies that win have successfully identified a company "culture" inside and out. They recognize that they cannot win with being faceless commodities no matter how deeply they slash prices. Instead, they rely on a culture with which consumers can identify.

• Wal-Mart. Say what you will about Wal-Mart, the company is still succeeding with what it calls servant leadership. The concept is so deeply rooted in the company that it has become part of its culture.

• Ikea. A growing global company, Ikea places its emphasis on leadership that reinforces its core values and culture. Even without knowing what is on sale, there is an immediate emotional connection with the name.

• Apple. Even as critics continually knock the company, it remains steadfast on success. The reason is simple. It focuses less on reputation and more on character or, specifically, a "culture."

• Zappos. Make no mistake, Zappos did it right. Ask anyone who worked at the company then and they will tell you. The most critical component to the longevity and success of Zappos is its culture.

So maybe cutting the marketing budget is less important than funneling some that money into defining the culture of the company inside and out. The challenge for those who recognize the need is easy to see. They don't know how.

The First Step Toward Recreating Culture.

Great communication happens from the inside out so never mind external crowd sourcing at the moment. As good as customers are at telling companies what is wrong, the people inside have to believe that they can deliver on the promises that their leaders make.

In order to recreate a new culture, it requires bringing internal stakeholders to the table and the deeper down the better. Not only do employees hear from customers day in and day out, but they are keenly aware of what can or cannot be done. Accept their input, pick from the clear differentials, and let them make that commitment before you take the message to the marketplace.

Reputation is the by-product of action, not communication. Communication and marketing merely make the promise.

For Apple it's innovation. For Ikea, it's affordable designs. For Wal-Mart, it's everyday savings. For Zappos, it's friendly online customer service. And sure, some people don't like those messages or those companies. But that is okay. Monopolies and market dominance make most companies lazy anyway.

Developing Leadership: Performance Beats Persuasion

As consumer confidence cratered in June, the question that seems to be resurfacing over and over again is "where is the leadership?" The easiest answer?

We don't have enough leaders. According to one new study, only one-third of companies offer formal HR leadership development programs. And of those that do, there are no guarantees that what these companies are lacking are adequate leadership skills. Even at a company like Time Warner, the advice seems much more like employee manipulation than motivation.

Have We Forgotten Leadership Requires More Than The Art of Persuasion?

Persuasive figures play games with their followings. They push subjective ideas, obscure facts, and promote their own interests. They also make demands while denying anyone's attempt to hold them responsible or accountable.

If their ideas work, they leap for the spotlight. But when their ideas don't work, they immediately suggest the failings must belong to someone else. In the public sector, it comes across as claiming to be ready to move forward but assigning the responsibility of moving forward to those who aren't in a position of leadership. In the private sector, the same holds true.

Persuasive figures tend to be more obsessed with the "failings" of their employees or other departments than any other factor. If only the other guys, they say, would have done their job...

Effective leaders operate from a different vantage point, without ever making the story about them. Instead, they look for objectivity and truth, taking responsibility for their actions and winning the hearts of any following. As their plans succeed, more employees or people become motivated by the success of the group. And even if the plans don't succeed, they immediately begin to look for other solutions. They don't have time to find fault. They are too busy focused on the goal.

Consumer Confidence Is Shaken For Lack Of Leadership.

While the tone of the nation might be set by the public sector, many private sector companies have not been quick to lead either. Their excuse might be the regulatory uncertainty, but true leadership doesn't pin the success or failure of an organization on the economic climate.

It seems clear enough to me that any economic growth will be fueled by a handful of private sector companies focused on solutions regardless of the current climate. To do it, companies need to find or nurture leaders who are less focused on being persuasive and more focused on performance.

Related Posts On Leadership.

• Owning Communication: Be Your Own Voice
• Creating Success: The Psychology Of Winners And Losers
• Changing A Down Economy: It's Psychology

Growing Businesses: Slow And Steady

If you are looking for any signs of economic recovery, think small. Small business is continuing to grow at a slow and steady pace despite economic challenges and some uncertainty over the impact of the financial overhaul bill that serves as a contrast to the Federal Reserve's call for increased small business lending.

According to the 2010 Small Business Scorecard/May by SurePayroll, small business hiring continued to increase slightly in May (+0.3 percent over April), bringing the year-to-date increase in hiring to 3.7 percent. The reason is simple enough. There is a psychology behind the optimism.

Small Business Scorecard By Region

• Midwest, up 4.3 percent with Illinois leading growth
• Northeast, up 2.3 percent with no distinguishable leader
• South, up 3.5 percent with California leading growth
• West, up 3.9 percent with Texas leading growth

In most states, the trade-off for improved employment is smaller salaries and slightly diminished optimism (down from 68 percent to 63 percent from April to May) as small businesses accept greater risks to take their companies to the next level.

One Quick Tip For Developing Businesses

As small businesses grow, owners quickly learn they have to wear many hats. Most of them serve as human resources director, purchasing agent, sales agent, bookkeeper, etc., etc. In fact, the number one complaint I hear from many business owners is that they eventually feel pulled away from the passion that prompted them to open their business in the first place.

Even with marketing, social media may have opened up a low cost opportunity that is being readily adopted, but relatively few really have time to follow the "owner online" model prescribed by some social media experts and authors.

Likewise, most small business tips smack of common sense that still can't be executed, e.g., avoid distractions, limit e-mail usage, organize time slots, and tackle the big rocks first. Sure, such tips work but only on a tactical basis. But to succeed strategically, business owners should focus on two things: what they love to do and their overall vision for the company.

Sure, they need to learn some basics across several subjects to ensure they hire the right people and outsource to the right consultants or small businesses. But they don't have to wear all those hats. They only have to wear one, besides whatever it is that they love to do, and that is the hat of an executive who is capable of hiring people who take on dual roles within the company. It's a strategy worth detailing later this week.

Exploring Leadership: How To Re-Energize Teams

Despite everyone hoping the economy will overcome five economic fault lines, the task of recovery will ultimately fall to the leadership of individual companies and nonprofits. The deciding factor for many organizations will be whether they will re-energize their teams or demoralize them.

Generally, immediately after an organization faces an extended period of uncertainty or adversity, team members are likely to exhibit some fatigue. It makes sense. It's not all that different from running a marathon, where a struggling runner works harder and harder to either retain their position or even advance one or two positions around the final lap.

When the race ends, marathon runners tend to take a breath, place their hands on their hips or head, and walk off some of the stress. Imagine your team members much like that. It's natural. The last thing they want to think about is the next marathon.

However, smart marathon runners and their coaches also know it isn't that simple. For example, in 2003, marathon runner Lisa Golaszewski discovered first hand that runners suffer from symptoms equivalent of postpartum depression. If the post-marathon plan was too big, she felt ill-prepared and overwhelmed. If the post-marathon plan was too lax, she felt drained of energy and inspiration.

Team members respond much in the same way. Recovery plans that are too big cause burnout. Recovery plans too small are a disincentive. And no plan whatsoever, well, that is a recipe for disaster.

Where Some Will Fail.

Over the next year, some organizations that seem like they've weathered the storm will fail to meet less visible challenges. The most likely candidates will be those with leadership that will present a plan too big for team members to immediately embrace or those who attempt to motivate with negativity but no plan.

The latter occurred at one organization were I once served. Immediately after recovering from a near financial collapse that had team members fighting for the organization's survival, leadership decided to send communication to guilt members into new action with an ultimatum. While the communication was meant to target members that leadership felt were underperforming, it only served to demoralized the entire team and earned early resignations from under and over performers alike.

What went wrong? It morphed what ought to have been an opportunity to re-energize on a win into a rehash of bitterness that they did not take action on during the crisis because they were too afraid such action would have consequences. In all my years of service, the incident ranks second among the worst leadership decisions ever made. I had advised against it.

"The last thing you want to do is force racing again if your body isn't ready," Jason Lehmkuhle, another marathon runner, said in the Runner's World article.

Where Some Will Win.

The companies mostly likely to win can easily be divided into two types. The first, my favorites, will be those that never ran a marathon during the recession. They consist of companies that decided the recession was optional.

Relatively rested, these companies are among the most likely to see continued growth built on a foundation of success established during the recession. In essence, they have been running shorter races that were stressful all along.

The second type of organization that will excel will be those firms that invested equal time into recovery as they had preparing for the worst. They already have a course of action, many of them are ready to capitalize on shorter term goals through a recovery process that will position their organizations in a positive place.

The general feeling among those organization is significantly different. They knew all along that surviving the economic crisis wasn't an "end goal," but rather an opportunity to reposition. As a result, their leadership likely has a series of short-term goals that will rebuild confidence as each one is reached in record time.

"A great benefit of planning ahead is that you're not setting yourself up for the idea that this marathon is the culminating event," Sonja Friend-Uhl, a running coach, said in the Runner's World article.

Leadership Sets The Direction.

For marathon runners, the best course of action is to provide a breath for recovery and then gradually add quality and volume so that you emerge injury-free, mentally fresh, and able to capitalize on the fitness you built during marathon training. For organizations, provide team members with a breath and then focus on short-term, less stressful goals that the team can rally around. Doing so can only energize everyone.

If there were under performers, give them an opportunity to excel in the renewed positive environment or address those concerns on an individual, private basis. The last thing you want are over performers throwing their hands up in disgust over another crisis created by people who ought to know better.

Increasing Confidence: Three Surveys See Optimism

After months of economic uncertainty, most people have had enough. And while there is much more that needs to be done to grow out of the recession, the majority of companies are optimistic about sales in the near future. This is especially promising for advertising agencies and public relations firms with experience marketing to affluent and/or young consumers.

American CEOs Express Rising Optimism For Business.

According to the Young Presidents' Organization (YPO), more than two-thirds of U.S. respondents expect sales increases by more than 10 percent over the next 12 months. Not surprisingly, small companies are among the most optimistic. Construction remains the least optimistic in the United States.

"The YPO survey shows a continuing trend of improving results and rising CEO confidence in the United States and globally," said Dave Maney, co-founder and chairman of Headwaters MB and former YPO international board member. "CEOs are more bullish about the prospect for higher sales."

Financial Advisors And Retirement Planners See Improvement.

USA Tax & Insurance Services conducted a survey with its affiliates and found 52 percent of financial advisors and retirement planners are cautiously optimistic about the business climate outlook over the next 12-18 months. Thirty-three percent are highly optimistic.

Part of the optimism is related to increasing client activity in the financial services industry. Joseph R. Karsner IV, president of USA Tax, attributes the increased client activity to consumers who are seeking out financial services in this confusing economic climate. People want to move forward, but are unsure how.

Workers' Confidence Increases In Personal Employment.

The SFN Group Employee Confidence Index, which measures measures workers' confidence in their personal employment situation and optimism in the economic environment, increased in April. According to Roy Krause, president and CEO of SFN Group, Inc., the confidence index has reached its highest level since November 2007. Highlights include:

• 31 percent of U.S. workers believe the economy is getting stronger, up 7 percentage points from March.
• 60 percent of workers surveyed believe there are fewer jobs available, down 3 points from March.
• 68 percent of workers report increased confidence in the future of their current employers.
• 72 percent said that they are unlikely to lose their jobs in the next year, decreasing one point.

What These Collective Surveys Mean For Marketers And Everybody.

Almost every survey suggests sales are slowly increasing as companies have found a new core of confident consumers, which predominately consist of younger workers (ages 18-34) and those who already earn more than $75,000 (generally affluent consumers and/or management). Middle and low income and older workers are slightly more optimistic than they were, but considerably less optimistic than younger employees and top wage earners.

Trends in optimism will likely increase over the long term, provided the optimistic core (young and/or affluent) are not derailed by over regulation or increased taxes. As a result, marketers working for companies that target either of those consumer groups will continue to see gains, helping spur the economy to inch forward. Companies that rely on lower to middle income consumers or older consumers will grow at a much slower pace if they can demonstrate a competitive value proposition.

The real hold up on the economy is jobs. While most companies predict increased sales, relatively few are planning to increase employees until the full impact of health care, new employment costs, and increasing federal debt are clearly understood. In essence, the uptick is the economy seems to have more to do with companies settling into a smaller consumer base.

If there is good news for people in communication-related agencies and firms from this data, it seems likely that growth companies will eventually rely on outsourcing until they determine the feasibility of adding more employees. Expect companies with long-term vision to be among the strongest competitors. Many of those companies grew last year, disregarding recessionary pressures.

Creating Success: The Psychology Of Winners And Losers

Some people don't understand how 73 percent of small business owners can remain optimistic about their business futures despite 52 percent thinking it is worse than it was twelve months ago. And even while the financial stressors are considerable, the Pitney Bowes survey reveals most small business owners have two or three more options before they would have to consider closing their companies (hat tip: MarketingProfs). Even if they did, 28 percent would start a new business.

Top Financial Concerns For Small Businesses

• 74 percent say decreased sales is their top concern.
• 52 percent say health care costs are a top concern.
• 42 percent say late payments from customers.
• 42 percent say greater restrictions on corporate financing.

But there is something else too. Small business owners tend to be among the most adaptive and resilient during the worst economic conditions. They tend to be optimistic even in the face of adversity, especially those that had the audacity to start their businesses during a recession.

It strikes at the heart of the challenge. Many small business owners opted to believe that the recession was optional. It was a case I made on a couple of occasions during the last two years, asking leadership to start by engaging their employees.

Some bigger companies agreed with me too. You can see it based on performance. United Services Automobile Association, Republic Services, Wells Fargo, Dollar General, Visa, PNC Financial Services Group, JPMorgan Chase & Co., CenturyTel, Merck, and O'Reilly Automotive (among others) all posted profit gains of 65 percent or more. For them, the recession was optional.

And while we all might wish that the media covered more success stories to help lift the general population out sooner, most were too busy covering the recession. In fact, most were covering the pending recession as much as two years before it happened. Now, many news outlets are trying to shift the story in a new direction; expect to see more success stories soon.

What Makes Some Companies Succeed And Others Fail?

The only answer is their outlook. Earlier today, Ernie Varitimos shared a link to his video about winners and losers as it relates to investors. While there is a certain combatant mentality in the video that I don't personally share, Varitimos nails the psychology of it all.

He applies it to investing, but it accurately describes the relationship of trends and reversals to several arenas. As he points out in his video lesson, trends are easy because they move in straight lines and, unless you're a loser, you follow the trend to the end. That is how many companies, good and bad, made money in the last three decades. You didn't have to be good. You only had to follow the trend.

Reversals are not so easy. It begins when one trend ends and another begins, marked by a change in attitude. Basically, when the trend changes, people who were winners during the trend begin to feel like they are losing control. And as they lose their belief in themselves, this allows others — the anti-group as Varitimos calls it— to snatch control away from them. How does it happen? In defending their position, the previous followers make mistakes and eventually lose.

It doesn't just happen in investing. It happens in politics. It happens in business cycles. It happens with marketing. It happens in social media (with blog traffic or whatever). The psychology of success is directly linked to the optimism of leadership and their willingness to adapt to changes in the marketplace. It's also why my company will end in a better position than when the recession started. How about you? How are you doing today?

Deciphering Diatribe: Arizona, Alabama, Immigration

diatribe (noun) [dahy-uh-trahyb]. Definition: A bitter, sharply abusive denunciation, attack, or criticism.

That is the definition, but the history of the word tells the real story. It's Greek, derived from the verb diatrībein, made up of the prefix dia-, "completely," and trībein, "to rub," "to wear away, spend, or waste time," "to be busy."

It's a word every American ought to know. And if they knew the word, they might recognize it as the perfect definition of the political climate today, fueled by one of the most divisive administrations in history. When you see it, it's easier to dismiss it.

Diatribe In Arizona

The Arizona law didn't start as diatribe, but it certainly has ended up there.

While national estimates bear out a decline in illegal immigrants (sometimes called unauthorized immigrants), Arizona has seen a 42 percent increase in the number of illegal immigrants from 2000 to 2009.

The intent of Arizona Senate Bill 1070 was to curb illegal immigration apparently propelled by a recovering economy and talk of amnesty (with U.S. Sen. Harry Reid among the biggest supporters of including amnesty in immigration reform). Among the most debated provisions in the law is whether police officers in Arizona can ask for identification based on suspicion or whether such a provision leads to racial profiling and subjects legal citizens to unnecessary scrutiny.

The entire issue has drifted into diatribe after the law has been branded "racist" and "anti-immigration." When the conversation shifts in that direction, it's diatribe. There is nothing left to be discussed because it is a waste of time.

Diatribe In Alabama

In Alabama, the driver's license test is currently offered in twelve languages. The expansion of multiple languages likely came into existence because once the test was offered in an alternative language, the state could hardly discriminate against other alternative languages. The cost to the state is considerable.

For whatever reason, Tim James decided to make the issue one of his platform planks as part of his gubernatorial campaign. He produced a television commercial that has since been called controversial.


The entire discussion has drifted into diatribe, being branded as "racist." On the heels of Arizona Senate Bill 1070, it's now considered another example of "racist" legislation with diatribe thwarting any reasonable discussion.

Immigration And English

When my grandmother immigrated to the United States in the 1960s, she did so legally. Still, she remembers how frightening it was arriving in New York City without being able to speak a stitch of English. Doubly so because the person who was to meet her arrived late. For a few hours, she was on her own and was occasionally asked for identification.

There were no special provisions for her. She had to learn to speak and read English. And even when she did learn, her accent frequently drew derogatory comments like "kraut" from some citizens still reeling from World War II. Over the years, she came to realize that the discrimination she experienced was the same as anyone who was part of any mass migration into any country.

Immigration requires something from everyone. It requires citizens to accept a certain enthusiasm (or, at minimum, tolerance) for cultural differences. And it requires immigrants to accept a certain amount of responsibility to partially assimilate, starting with a respect for the law and language. Until people figure this out, there seems to be little room for discussion.

Guessing At Recovery: Expect A New Consumer

"The question is whether [March retail sales] are a trend or a blip, and my guess is that this is more of a blip." — Ken Goldstein, economist for Conference Board

He is not alone. That seems to be the assessment from many economists despite the sudden strength of consumer spending across several categories. In addition to an upturn in the auto industry, consumers are eating out more, buying more apparel, and are less likely to wait for coupons or price promotions to buy cosmetics and toiletries than they were a few months ago.

Understanding A New Economy And Slow Recovery

However, not all data is so rosy. Consumer confidence remains at levels typically seen in the depth of recessions, reports Advertising Age. Even in a recovery, sentiment will likely lag behind. Bruce Kasman, JPMorgan Chase, suggests it is indicative of a shift in the U.S. economy from a debt and consumption economy to a savings and export economy, not all that dissimilar from what The Futures Company suggested last year in its Darwinian Gale white paper.

So what's the hold up on recovery? The Associated Press Economy Survey, released today, tells the story. Most of it is related to what many consider the pillars of the financial security — jobs and the housing market.

• Unemployment will remain high over the next two years, perhaps 8.4 in 2011.
• Home prices will remain flat, with no gain this year and only a 2.3 gain the next.
• The economy will grow 3 percent this year, which means a very slow recovery.
• The Federal Reserve will begin raising short-term interest rates in the fourth quarter.

What this means for marketers is settling in on a new but smaller base of consumers, those people who are employed but operating with a much more conservative approach to spending. More than likely, the uptick in some sectors indicates that this group is tired of waiting, waiting, and waiting for the economy to improve on its own.

It also means marketers need to get back to the basic tenets of marketing and rethink strategies that used to work in an optimistic growth economy. Michael Shepherd, owner of The Shepherd Group, will be one of those who can help. Like our firm, Shepherd believes a marketing message must be tied to a business strategy to succeed.

The New Rules Of Marketing Are Old Again

In some ways, this better explains why consumers pushed back against brands as social media became mainstream. It wasn't because brands needed to give up control over their marketing messages to consumers as much as consumers finally having the opportunity to tell companies that their marketing messages were out of sync with their business strategy (and some companies didn't even have sound business strategies).

Specifically, when marketing messages are aligned, things tend to work. Apple provides a great example, selling 300,000 iPads on its first day. The iPad is not a must-own product, but it represents something Americans haven't seen enough of lately — innovation, even if that innovation is a first step toward fully functioning tablets that may one day replace laptops (trust me on this, it all depends on what such technology can dock to and not what many critics keep crying about).

Selling the iPad was only the tip of the iceberg for Apple. Three hundred thousand iPads means a surge in application purchases, no matter what anyone thinks about the product. But this isn't an iPad post. It's just an example of what sound marketing does despite the economy, shift toward a more cautious consumer, and how marketing tied to business strategy syncs with social media.

It also represents a better tact for marketers than the new mood of government, one that opens: "Over the past year, the Recovery Board has received its share of gratuitous criticism from some journalists and Internet grouches." It then goes on to explain that it didn't waste $18 million on a site redesign. The site only cost $6.8 million to date.

This isn't about politics. It's about contrast. Apple accepted the criticism and still stayed true to its marketing message. Government has been leaning heavily on push back public relations, feeling secure in winning a shrinking percentage.

Successful marketers in the near future are best served if they understand the difference. Marketers can no longer rely on mass media alone to reach the optimistic spenders made up of the sons and daughters of the generation that survived the great depression. The new consumer is looking for innovation, authenticity, and value. Count on it.

Accounting For Recovery: Chief Financial Officers

According to a fourth quarter survey conducted by Financial Executives International (FEI) and Baruch College's Zicklin School of Business, optimism in the economy is coming from what many would consider the least likely source: chief financial officers.

"CFOs overall closed 2009 with a much improved sense of optimism than when it began, but they are realistic about the challenges that still lay ahead," said John Elliott, dean of the Zicklin School of Business at Baruch College. "CFOs are indicating that they have learned lessons from the downturn and can face the coming year looking forward to the opportunities at hand."

Highlights From The FEI/Baruch Survey.

• Net earnings expected to rise by 22 percent by the third quarter.
• Gross revenue anticipated to grow by 10 percent this year.
• Technology spending anticipated to increase by 6.1 percent.
• Inventory anticipated to increase by 2.5 percent, reversing reductions.
• Prices are expected to increase by 1.13 percent this year.

Where CFOs are more reserved is on employment. Nearly nine out of ten CFOs reported they are looking for efficiencies over new employees. Two-thirds said they would invest in technology; one-third said they planned additional restructuring.

Companies seem hesitant to hire new employes for several reasons, including cost containment (uncertainty of future costs associated with new employees); an increased emphasis on public perception (slower, more manageable growth); a shift from growth-orientation toward leadership-orientation (restructuring to serve a smaller, affluent base); and concerns over the current government administration. Sixty-four percent said the U.S. economic outlook has weakened since Obama took office.

What It Might Mean For Communication.

Another study, conducted by integrated marketing services provider Alterian, found more than 66 percent of marketing professionals would be shifting more than 20 percent of their direct marketing budgets toward social media. However, the same survey reveals most companies are still unsure of how to implement a social media program, with only 7 percent of companies making a significant effort toward multichannel customer engagement.

“2010 marks the start of the digital decade for marketing," said Alterian CEO David Eldridge. "Untargeted and irrelevant marketing techniques are now redundant and the results of this survey show many in the industry recognize this."

There are two takeaways from this post today. First, communication professionals at larger companies might invest more time expanding a dialogue with their CFOs to develop communication points that may boost employee morale. Second, while most marketing trends point to social media, it produces fewer results unless those efforts are integrated in traditional marketing and executed with customer engagement.