That is, until our elected “leaders” decided to organize a chicken race over the federal budget. The unseemly spectacle over the debt ceiling and the following Budget Control Act of 2011 on budget cuts and taxes did nothing but postpone the important decisions, and create more insecurity both domestically and overseas. For a Eurozone suffering both slow growth and bailouts of underperforming countries like Greece or Ireland, this was not good news at all. The last weeks events have increased the risk of a second recession.

So, what needs to be done? It is a demographic fact of life that the population is aging, and will require more health care. This will put cost pressure on programs like Medicare and Medicaid. Long term the budget must be balanced, which can only be done by tax increases and/ or reduced spending. Not doing anything is not an option, politicians must step up to the plate and start making the difficult decisions. There can be no holy cows, everything must be scrutinized: defense spending, agricultural subsidies, education, all manners of entitlements, housing programs, a new value added tax, and so on. An honest discussion along these lines will unto itself have a calming effect on the financial markets. Nobody expects the problems to be solved immediately, but everyone expects something to be done.

Finally, to call the proceedings between Republicans and Democrats a negotiation is a stretch. As the dean of the Kellogg School Sally Blount points out in a recent blog entry “For anyone who has studied negotiations in organizations in any depth, it’s clear that the organizational structures, prevailing culture and job incentives that now make up our political process are not effective. With a public stage always ripe for grandstanding, an embedded culture of partisanship, and a lack of clarity regarding facts versus opinions in debate, the strategies for effective negotiations that we know work are just not possible here.” http://www.kellogg.northwestern.edu/Dean_Blount/blog/whither-washington.htm

Clearly there are political changes needed. I have always wondered why the US stubbornly sticks to a two- chamber parliament? Why not follow the example of many modernizing economies, and put emphasis on the proportionally elected House of Representatives? Giving them broader authority and longer terms would enable more responsible politics, and better accountability to the voters.

Brands are used to facilitate the buying process, for example by projecting stability and expertise (ITT, GE or IBM) or innovation (Godwin Pumps, Intel). Brands take some anxiety out of the buying process, and give the buying agent something familiar to hold on to when looking for solutions needed.

Now, with a lot of uncertainty and lack of visibility in the economy, brands are taking on additional importance. In a recent article in Kellogg World (http://www.kellogg.northwestern.edu/kwo/spr11/features/carpenter.htm), Professor Gregory Carpenter holds that brands can help slow down competition by carrying over a company’s good reputation across ever shorter technology cycles.

He also points out that we no longer fully understand how buyers learn, and where they get their information in a hyper- competitive slow growth environment. Hence, brands are becoming more important as differentiators, since a strong brand is more difficult to build or copy than a product or service offering.

The great challenge for organizations now is to be nimble, to have a clear strategic direction and the organization structure to be able to quickly make and implement important decisions.

What used to take months now has to be done in weeks and days… This entrepreneurial mindset is difficult to marry with large organizations, but with proper decentralization and delegation it can be done. Perhaps a closer study of how Venture Capital companies manage their portfolio businesses could shed some light into speedy decision-  making and implementation?

1. Technology, communications, social networking and multitasking are second nature. The best and brightest among Y-ers are also strong in teamwork and presentation skills
2. Work is something you do, not a place you go to, there is a desire to have the workplace adapt to you instead of the other way around. Expectations are high in terms of pay, career progression, vacation and other (simpler) perks like casual dress or listening to iPods at work
3. Loyalty to an organization is low, employees can bolt if they perceive better opportunities somewhere else
4. Upbringing has seen great emphasis on building and preserving self- esteem, so a premium is placed on “Success” and “Rewards”, even when perhaps there is not much success to reward. On-going positive reinforcement is expected and well received, corrective feedback or coaching is not always received equally well
5. Used to direction and guardrails, many Gen Y individuals are not great with unstructured situations, but prefer detailed instructions and guidelines

With staffing oftentimes skeletal already, managers have new issues to deal with when managing Generation Y. How do you motivate them? Provide feedback when something is wrong? How can you trust employees will take initiative or be accountable? What about decision- making, do managers have to make all decisions?

As somebody with managerial experience with employees of different ages and from different cultural backgrounds in different organizations, I offer up the following idea: management by objectives/ MBO works well with all kinds of employees, if they have correct skills and are empowered to make decisions. In the military, elite units in many countries are managed using a version of MBO called mission tactics.

Under mission tactics the leader does not give detailed orders and directives. Rather, she communicates the desired outcome or result, what resources are available, and gives teams or subordinate leaders opportunity to plan an approach based on their skills and expertise.

The leaders role once plans are in place is not to micro- manage, but make sure there is reporting, alignment and progress against milestones. Coaching is provided as needed, and successes duly celebrated.

Mission tactics were first used in combat situations where lack of communication made information difficult to share, and orders difficult to give. Instead soldiers understanding the commander’s intent could make independent decisions, be flexible and use initiative for a mission to succeed.

The big advantage of managing civilian organizations in a mission tactics mode is employees are free to tackle each task as best they know how, instead of having a manager commanding and controlling. Work teams that are well put together will help individuals from Generation Y be assertive around planning, to take initiative, and receive feedback from their peers.

If the task is important and there is a reward for successful completion, employees of all ages and level of experience will apply themselves, work hard and do their best.

Many geographical locations invest in people and incentives like tax subsidies to create a good climate for new business. Access to transportation for goods and people, suitable office space, and trained workers are also part of the picture.

However, that difficult to define Quality of life is what, all things equal, sets places apart.

Arizona has a nice climate, spectacular scenery, endless clean solar and wind energy, unique native american culture, plenty of real estate, good airports, improving schools, and good universities. But it has an image problem. And it is of its own making.

Regardless of what political views we may have, the sorry fact is:
In national and international media, Arizona comes across as a backwards, primitive place where people carry and use concealed guns, and vigilantes roam the border, intercepting destitute immigrants. Law enforcement wastes time and energy chasing immigrant construction workers and nannies , instead of dealing with serious crime like drugs or violence. http://www.lemonde.fr/opinions/article/2010/05/12/l-arizona-un-etat-policier-par-francois-vergniolle-de-chantal_1349921_3232.html 

http://www.timesonline.co.uk/tol/news/world/us_and_americas/article7113838.ece 

http://www.spiegel.de/international/world/0,1518,692119,00.html

This image is difficult to change, but to make things worse the new Arizona SB 1070 set to take effect later this summer is making illegal immigration a state misdemeanour in addition to a federal civil violation. This makes the state (where perhaps 1/3 of the population is Hispanic) come across as downright racist. http://www.economist.com/world/united-states/displaystory.cfm?story_id=16060133

Other places vying for foreign investment, say North Carolina or Michigan for manufacturing, or California for clean energy companies, must be squealing with delight: one of their potentially most difficult competitors has shot itself in the foot.

In this day and age of social responsibility, companies, States and other organizations are vulnerable to negative publicity. Boycotts from a slew of organizations are already taking a toll on the Arizona economy (http://www.marketwatch.com/story/phoenix-hospitality-business-is-hit-by-boycotts-2010-05-18) and are now starting to eat into the State reputation, which may be an ever bigger long term problem http://insight.kellogg.northwestern.edu/index.php/Kellogg/article/why_boycotts_succeed_and_fail 

From a PR perspective, decisive political action is needed to restore investor and business confidence in Arizona:

1. Eat humble pie, but confidently explain what problems SB 1070 is intended to tackle, and work jointly with the federal government and other states for effective and fair solutions
2. Visibly and decisively deal not with the symptoms, but the underlying issues: a porous border, illegal drug use in the US, weapons smuggling to Mexico
3. Show leadership in immigration reform, allow importation of the labor needed, when it is needed. Many countries have guest worker programs that work well and help their economies grow
4. Emphasize the demographics and sustainable competitive advantages Arizona offer. Listen to potential investors, and offer what they look for, be it trained workers, access to credit, commercial real estate, or tax breaks
5. Target specific industries and countries for investment promotions, like solar and wind energy generation, tourism and real estate, with investors from places like Germany, Spain or, for that matter, Mexico
6. Keep an eye on the competition. Benchmark, identify best practices and keep refining both messaging and incentives for investors.

To get this done, a strategic vision and a broad consensus is needed between business, civic organizations, and politicians on the State and Federal level. The perspective must be market- driven and fact based. There is no room for emotions or lack of flexibility.

If the strategic marketing work starts now, maybe Arizona can be the top-notch destination it deserves to be in time for the centennial celebration next year?

To read more about marketing of locations, I recommend “Marketing Places” by Kotler, Haider and Rein, on Free Press.

In most other cases it is not.

In B2B markets, customers buy if an offering economically meets an otherwise unmet need. Very seldom are competitors products completely interchangeable, and there are usually switching costs and risk.

For example, in used construction equipment many dealers offer the same brand and make of equipment. The differentiation is in the service augmentation: a well maintained piece of equipment will start in the morning and hence provide better productivity than a lower priced klonker may. In this case the lower price is not the best value.

In a recent WSJ article, 

http://online.wsj.com/article/SB10001424052748704240004575085513717202880.html?KEYWORDS=raise+price

Cespedes, Ross and Shapiro make a convincing argument for defining and communicating value, rather than joining the Death Dance of price cuts without corresponding cost reductions.

With a measured approach, keeping customer needs in mind, companies can develop offerings that protect margins, at the same time position themselves for profitability now and when the economy improves.

This is a change for the better. Large as it is the US economy is still very dependent on domestic consumption. The more international trade there is, the more opportunity for manufacturing companies to grow and prosper.

The language of business is universal and understood everywhere, it is a force for cooperation and prosperity, but businesspeople must always understand the local culture and guard rails to be effective. The best way to learn a culture and language is to immerse oneself in it!

Here is the article: http://www.usnews.com/money/careers/articles/2010/05/21/what-the-rsums-of-top-ceos-have-in-common.html?msg=1

• concrete know- how
• effective project management
• a highly collaborative approach

The solution is to focus on concrete renovation projects. In Florida there are many hotels, condos, timeshares, parking garages and similar structures experiencing weathering and damage. Since the building replacement cycle is slow with limited financing, owners and managers are interested in renovation and refurbishment as ways of protecting their property investments.

In their market, ConTech is well known for a collaborative approach involving all project stakeholders, resulting in beautifully restored buildings done on budget and meeting aggressive schedules. 



Being a small company, ConTech is using a specific job in Daytona Beach, the Royal Floridian renovation, as an opportunity to pool their marketing resources with other companies, for greater reach and resonance. This Daytona Beach landmark, owned by Spinnaker Resorts, will receive new balconies, windows, doors and added coatings at a cost that is a fraction of new construction.

Partners in this joint marketing effort (http://www.contechrestoration.com/concreterestoration/) are:

• BASF, providing coating solutions for everything from foundation to exposed balconies, concrete repair, waterproofing, corrosion mitigation and moisture protection
• RSC Equipment Rental, supplying lifts, jackhammers, compressors and other construction equipment
• CEMEX, providing the concrete

So why is this joint marketing effort innovative and interesting?  

1. The project is brought to life in successive videos by recognized documentary film maker George Billard, showing tasks, approach and advantages in a very effective and aesthetic way. http://www.contechrestoration.com/concreterestoration/multimedia/video
2. The beauty of this effort is how the interests of large and small co-suppliers intersect: ConTech can attract new customers up and down the East Coast, outside their core market. RSC with a national scope can get rental business from other construction companies doing refurbishment work. Finally, the multinationals BASF and CEMEX have an opportunity to further consolidate their brands, and show nimbleness and agility to their global audiences

Gentlemen, start your jackhammers!

Check back often, and let me know what you think!

Per