Blog of Jeff

Obama’s administration is now pushing for more regulation of the banking sector That’s something that Europe has been asking us to do, and recent high bonuses have probably sparked enough populist anger to make it politically possible.

In general, I do support some regulatory changes. But there are some major questions that need to be answered first. Elliot Spitzer has pointed out a couple of times that there were plenty of regulations already on the books that could have been used prior to the financial crisis but they were not. The reason they were not used appears to be the conflicts of interests between our nation’s financial leadership (Federal Reserve Bankers, SECC senior officials, Secretary of the Treasurer, etc.) Tighter regulations may help, but there is a good chance they won’t unless the inherent conflicts of interest between high level financial minds chosen from Wall Street and their buddies still on Wall Street. Those guys are getting picked because they were really good at gaming the system while on Wall Street, which doesn’t necessarily mean they are committed to fixing the system.

There’s also the issue of whether it is wise to invest more power in the Federal Reserve, which has almost zero transparency to the public. Hardly anyone in the country knows what it does, how it does it, or how to measure its effectiveness. Most Americans that can articulate anything about the Federal Reserve generally think that their job is to reduce inflation and as a long as we don’t have inflation, they must be doing everything right. But the Reserve’s role and responsibilities in our monetary policies are much greater than just controlling inflation.

We got a different type of toothpaste at the store the other day and I am now wondering if the world needs this many different types. There is toothpaste for smokers, toothpaste for people with sensitive teeth, toothpaste with whiteners, toothpaste that fights plaque, toothpaste that fights gingivitis, toothpaste with mouthwash, plus all of those different flavors.

Do we really need all those types of toothpaste? I mean, I like the new toothpaste. But I also liked the old toothpaste. In fact, I don’t remember ever having a type of toothpaste that made me go, “Wow, that is totally unacceptable.”

Despite all the conventional wisdom about humans not liking change, apparently people like changing their toothpaste every time they buy a new tube. My guess is companies do this is because 99% of the ingredients in toothpaste are the same in every type, brand, and flavor. And those ingredients probably cost less than a nickel, leaving dollars of pure profit for every tube of “new and improved, mouth-whitening, germ-killing, plaque reducing, sensitivity reducing, kiss improving” variety they can bring to market.

By the way, I would really like some chocolate toothpaste …

I was listening to the radio today and a guy started talking about famous bad rulers like Hitler, Attila the Hun and Vlad the Impaler. Then he said I could be a good ruler and build my own Luann Platter at Luby’s. At which point, I thought “huh?” I mean, what advertising team recommended that Luby’s associate their brand with mass murdering psychopaths? If they were after a strong link between their ad and the product they were got it. I drove by a Luby’s tonight and immediately pictured it surrounded by a field of corpses stuck on spears. Then I decided that I didn’t feel all that hungry.

I still can’t believe that ad. Vlad the Impaler? For an eating establishment?

It gets even better when you Google “Luby’s” and some of those bad rulers because it brings up references to George Jo Hennard and his killing spree at a Luby’s in Killeen, TX in 1991. I had totally forgotten about that incident until Luby’s decided they need to reference themselves with some of the most evil men in history. I wonder if a little research by the ad company might have suggested that “Luby’s” and “mass-murderer” aren’t a good combination.

This wasn’t a bad advertisement in terms of being annoying or innefective. This was a bad advertisement in terms of giving me an incredibly strong and negative reaction. I’m sure they meant well but, really, what the hell were they thinking?

I’ve been mulling over mission statements for a while because I recently found myself back in one of those long meetings where managers and consultants try to hammer out the heart and soul of an organization in 25 words or less. It’s the traditional job of creating a unique identity and framing the outer parameters of an organization’s strategy. Yet more and more, I am thinking it is really a waste of time. Corporations can be sued for violating shareholder rights if they turn down a profitable buy-out offer yet no corporation has a mission of being sold. It comes back to the idea that all corporations exist to increase shareholder value no matter what the plaque on the wall says.

Non-profits tend to agonize over mission statements even more but then managers play games spinning the descriptions of their favorite programs to fit the mission. In some cases, they violate the mission on purpose for the greater good. A classic example is the big government contract that has 75% of its money tied to something directly in the mission but requires 25% of the work be something completely outside an organization’s mission. They’re still going to take that contract 10 times out of 10 if it’s a big pot of money.

Even from a strategy viewpoint, mission statements may be more trouble than they are worth. In an age where everyone is aiming to be flexible, adaptable and nimble, does it make sense to chain your strategy to a single sentence that is supposed to last for years and years?

My new unified theory of mission statements is that every organization on the planet has one of two mission statements. You’re either an organization dedicated to selling stuff or an organization dedicated to helping people. Beyond that, there are strategic decisions. What stuff do you sell, to whom, where, when and for how much? Which people do you help, where, when, how? Those strategic decisions can be changed when necessary (or simply advantageous). Whether you are a giant government agency, a small mom and pop store, a corporation, a church or any other type agency, one of those two mission statements will apply to you.

I still believe in the conventional wisdom that you don’t want to be changing strategy on an everyday basis because it takes time for strategic changes to be implemented and measured. But I think a lot of agencies could save a lot of time and money if they just accepted that mission statements aren’t that important because, at the end of the day, they all come down to selling stuff or helping people.

Several recent articles have talked about Americans becoming more tolerant of higher gasoline prices. In the past, Americans indicated that $3 a gallon would change their behaviors (buying hybrids, driving less, etc.) but it now seems that the pain threshold has moved upwards. Some polls even show people being willing to go up to $5 per gallon without changing their behaviors.

My thought question on this issue is whether or not low interest rates and the convenience of paying for gasoline with plastic has played a major role in that change. I’m sure there are a number of people who just pay with plastic and don’t even think about it. But even more important, my theory is that plastic is also encouraging the more responsible amongst us (people who actively work at living within a budget) to pay the higher gasoline prices at the pump and simply reduce some other part of the monthly spending. They substitute anything, a fancy dinner for example, to make up for the higher gas prices.

Another big part of this argument is that paying for everything with plastic delays the pain of the gas price until the credit card payment for due. It is basic behavioral psychology that the pain  for any behavior needs to be immediately after the behavior to effectively discourage that behavior. It hurts to pay an extra $50 for gasoline in a month, but not nearly as much as paying that extra $10 immediately at the pump on each fill-up.

I’m sure there is some research on this development and I’m going to look around for some more myself. I know there is some about it being pschologically easier to make big purchases on credit cards than paying cash, but I’m not so sure there is some specific to gasoline price elasticity.

The reason I think this theory matters a lot is because some politicians and environmentalists advocate a gasoline tax to encourage consumer conservationism. That tax won’t help if gasoline prices have truly become irrelevant to American consumerism.

A good policy solution might be to involve credit card companies. Instead of adding taxes to gasoline and taking a bite out of the entire economy (because of that substitution factor), why not give tax breaks to credit card companies for highlighting fuel expenditures and printing conservation tips on credit card statements? Even printing a running total of annual expenditures at gasoline stations might make a small impact as more Americans might notice the pain a little more.

Now, for a truly out-of-the-box, free-market solution,  auto manufacturers should advertise hybrid vehicles through credit card companies by having them include advertisements in bills that have high expenditures at gasoline stations. It wouldn’t be a privacy issue if the credit card company is sending the advertisement. It would be niche marketing at its finest to encourage those who use the most gasoline to switch to a more efficient vehicle. The credit card company can even include advertisements for auto loans. It would be a win-win without any government intervention at all.

I’m pretty sure this idea is brilliant, but I don’t happen to know any credit card company marketing folks who can implement it. I don’t think this idea needs anything other than a “Toyota marketing guy, meet the Capital One marketing guy. Let’s talk advertising rates …”

After much thought, I have finally nailed down my mission statement.

 My mission is to:

• Create original and effective writings
• Find readers and
• Captivate audiences

Basically, it all comes down to the 3 core functions of most businesses. Build it, market it and sell it. But I feel good that I finally defined those 3 areas in a way that will let me build goals and metrics for my business plan. Some of the pieces are finally starting to fall into place.

I saw a demonstration today of some pretty impressive technology and business models. It is through a company called Motionpoint (http://www.motionpoint.com/corp/). They use a team of human translators with the use of technology tools to tell them which parts of a website have changed and then they build a translated version of it. The really cool part is that they do not use a mirrored site. Instead, they actually replace the graphics and text from the original site and layer the translated version on top. They make updates within 24 hours of the original site being changed with robotic searches of the site to pick up changes and put them in the translator’s queue. I am really not sure how this compares in cost to other approaches, but in theory, it seems to have big advantages in economies of scale and technology over many translation services. The sales person suggested that it for companies already using a mirrored site approach, Motionpoint generall represents a big savings and that would make sense.

It also means that it is easier than ever to make a business global. For $20,000 or so a year, a company can use the internet to reach audiences that used to require dedicated staff or extremely expensive translation services. I am not sure that I will use their company any time soon, but I definitely think they have a good idea. It seems that every year, language becomes less and less of a barrier for businesses.

My business plan still has some holes, one of which is my mission statement. I researched this a bit, pulled out some old MBA books and looked at some that are considered “best practices” style mission statements. I also looked at the Dilbert mission creator (http://www.dilbert.com/comics/dilbert/games/career/bin/ms.cgi) just to make sure I wasn’t heading into that category.

At the end of my careful analysis, I basically discovered that there is little consensus on what a good mission statement should be. Some companies advocate hard and fast goals, even possibly including sales or profit targets. Others preach broad encompassing principles that can guide a range of decisions by the staff. The one thing that they all agree upon is that it should be memorable and honest.

I also studied the websites of several authors and other artists and found that they seem to be lacking in mission statements. For that matter, there also seems to be a lack of sample business plans for artists/authors despite a gazillion samples in other industries. I know there are a lot of authors that are extremely marketing/business savy, so it may just be they don’t publicize their plans.

But back to the problem at hand. I need a mission statement that doesn’t make me vomit, something succint that clearly articulates what I do and how I do it. I am not going to choose a mission statement that ties me to specific sales or revenues targets, because I think the business plan addresses those in plenty of detail. Plus, those are boring and ostentatious to most readers. (OK, ostentatious was my bonus writer’s word of the day. I’m not really sure what it means, but I think it means boastful or self-important. (Alright, I decided to be professional and look it up. http://thesaurus.reference.com/browse/ostentatious. My definition was close enough …))

Enough of these ramblings. What will my mission statement be? How shall I fill this gaping hole in my business plan? I am thinking that my mission might be ”creating quality writings for audiences to read.” Now, here is where my journalism experience comes into the picture. I instantly want to chop off the prepositional phrases, leaving the first three words. And the MBA side of me thinks quality is meaningless unless it has a clear definition.

My mission is to create writings that captivate readers. I think this is the winner. I can measure how many writings I create. I can measure the captivation of readers through a variety of measures, such as sales and numbers of clients.

Another day of feeling that only an idiot would think about walking away from a perfectly good day job to become a struggling writer. In fact, my business plan practically screams “idiot” from it. I have little to no start-up capital, no confirmed clients, no proof that anybody will every buy enough of my writing to scratch out a living and no good fall back plan. But, my heroes have always been eccentric writers who make stupid career decisions. Mark Twain, Edgar Allen Poe and Benjamin Franklin all lost or quit numerous good jobs during their careers. And only one of them died drunk and penniless in a ditch. (And another fought hard for the turkey to be national bird, but discovering electricity ought to balance that out …)

Speaking of writing, I did put some good work in this weekend on a short story that I hope to publish by the end of April. I will probably sell it for $5 through one of the online publishing companies to see how it works. I will probably put an excerpt and synopsis on the fiction part of my site, but I don’t intend to make any copies freely available. My business plan is pretty clear that I should stick to my guns on trying to sell my work. I think my business plan also says something about selling 1,000 units, but I’m pretty sure that was PUI. (Planning Under the Influence)

I just finished another page on the website. Hopefully, it will be complete in about two weeks and I can really start focusing on the writing and marketing side of the business. I also have a writing contest coming up in about 3 weeks. Aside from the obvious publicity and solid portfolio entry that a winning story would generate, it really is a fun concept and I am looking forward to it.

The contest is formatted so that 500 writers get an e-mail announcing the start of the contest, the topic and the allowable word limit. Then everyone has 24-hours to write their story and submit it. I like that concept and it is particularly helpful to people like me who can consistently start stories but fade on the finishing side. Knowing that is a one day event with a shot at winning something adds a little competitive juice.