SCHMITTblog

Business Ethics—A Religious Perspective

Last night, here in Jamaica, invited by Synergy Communications, I gave a talk over dinner to senior executives on Big Think Strategy. Before I spoke, Father Ken Richards said a few words to the audience on business and ethics; he also said grace and spoke a short prayer before dinner began. I was touched by his words but disappointed, as I told the audience, that he did not include increased sales of my book in his prayer.

I also chatted with the Father before and after my talk. He is working on an article on business ethics. When I asked him about the relevance of his thoughts to the current financial and economic crisis, he pointed out the spiritual immaturity of many movers and shakers who view business just as business, that is, “business dealings are transacted on the sole basis of one’s own business interest,” excluding moral considerations. Perhaps this compartmentalization of life can explain, in part, the mess that we are in.

Twitter and Work

Jack and Suzie (Welch), in their Business Week column, report that they now tweet.

How sweet.

They don’t know exactly why they do what they do but assure us: Just try and you will find out.

More and more otherwise reasonable people seem to be using Twitter, not knowing exactly why they do. Could  it be that they are just afraid being left out? But left out of what?

On my visit to UCLA, I had a conversation about this phenomenon with my co-author and friend, Professor Shi Zhang. We concluded that maybe some day soon there will be a counter-movement that stresses that it is cool to work again—and not waste time.

Lots of Creativity, Little Innovation

Carlo Fei, as he dropped me off with his Audi back at my hotel, after a dinner and ride through Milan, made a great off-the-cuff remark, “There’s lots of creativity here, but little innovation.” He’s so right about this distinction between creativity and innovation, and Milan this week is a perfect showcase.

I had been giving a couple of presentations at Bocconi, the business school, to students and executives on experience. I had also stopped by briefly at parts of the Salone Internationale del Mobile, perhaps the most important design and furniture trade show in the world (http://www.cosmit.it). Lots of creativity there, especially outside the big trade location at the cutting-edge Zona Tortona, or in the inner city where fabulous projects happened between retailing and designers. Creativity, yes. Installations, thought pieces, animations of ideas – really weird, sweet, stylish stuff; but little innovation in actual furniture design.

I also stopped by, as I always do when in Milan, in the retail fashion district (Via Monte Napoleone, Via della Spiga, you know). Still all branding, and little customer experience! Moreover, luxury brands have extended their lines into furniture (stores), and flowers (stores), and chocolates (stores), and hotels, and some have done all of it (see Armani). There are brand accessories stores (see Ferrari), flagship stores, pop-up stores. But they are all stores (or, alright, hotels) plastered with the brand name, designed by this-and-that designer—yet, with the usual opening hours and salespeople and merchandise. Frankly, there has been far more innovation in customer service, customer interactivity, and in merchandising by mass-market retailers than luxuryretailers. Think of some of the classics: Apple Store, Whole Foods, American Girls Place. Luxury brands have been, sadly, followers of mass-market brands; shouldn’t they be leading? Not surprisingly, the research that Carlo conducted with his firm on the retail experience shows that many luxury stores in key cities (not just Milan) fall short of providing a great customer experience.

Luxury and Recession

The other day, in Hong Kong, I was wondering whether the old rule that luxury is recession proof still holds. Miles and miles of empty shopping malls in Central, Pacific Mall, and, across the harbor, in Kowloon convinced me that this time consumers have changed: this time they are  counting their pennies.

Or have the excesses of the luxury industry gone too far this time, irrespective of the recession? Consider casual fashion lines. Half a year ago, designer jeans for around a thousand US dollars were piled up at Lane Crawford’s and at Joyce.  Every designer was moving into athletic shoes at a huge price premium beyond Puma’s and Adidas’ (some of those shoes were running around USD600-800). Luxury makers were dancing on the volcano; and now they are getting buried under the fire.

Big Think CSR in Korea

I just returned from Seoul where I had been for the last few days to write a business case, together with my friend and Yonsei Prof Dae Ryun Chang, on Yuhan-Kimberly.  The company produces diapers, tissues and napkins under the Huggies, Kleenex and Kotex brand names. But it also has been doing good: its "Keep Korea  Green" campaign has been running for 25 years. Aside from using recyling procedures, they have planted  21 million trees on public land and near schools. When many other companies are  "strategizing" how "green" they should  be, or, better, how to fake green cheap -- they have shown Big  Think corporate social responsibility for many years. For more information, see http://www.yuhan-kimberly.co.kr/renewal/sustn/sustn_01.asp
 

On Managing and Conducting

Musicians of the New York Philharmonics seem to be upset about Gilbert E. Kaplan, a wealthy businessmen, who recently conducted Mahler’s Second with them.  Mr. Kaplan stands accused to be a talent-free conductor who only got to conduct the New York Philharmonics because he donated a  lot of money to the orchestra. (see  http://www.nytimes.com/2008/12/18/arts/music/18kapl.html?hp) 

Mr. Kaplan is not the first to raise eyebrows within the classical music community.  Former Sony Chairman  Norio Ohga, a classical  music lover,  received similar reactions when in 2000 he conducted the Berlin Philharmonics at the opening of the Sony Center in Berlin.

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Maybe the community of musicians could be placated a little bit by letting one of them manage a company rather than play in an orchestra or conduct it.  After all, who knows – maybe conductors are as good as managers, as managers believe they might be as conductors.  Thus, how about Maazel running General Motors?

 

The Hottest Business Book

Question: What’s the hottest business book these days?

Answer: Das Kapital by Karl Marx.

I have been telling this joke for a couple of weeks now. I first came up with it when I was in London on the day when the British government announced that it would nationalize, in part, its banks. Since that type of approach, with variations, seems to be the way to go (and what bankers are asking for) all around the world, including the U.S., the joke really seems to capture the spirit of times. And it’s not only bankers – and the free market economist with their theories of rationality and perfect information -- that are crying for government intervention. It’s consumers as well. Which consumer has not diversified his or her bank accounts, and only trusts those savings that are guaranteed by the government?

So, time to brush up our knowledge of this classic text! Now what’s really funny is that I just read in the German weekly Die Zeit that sales of Das Kapital have quadrupled over the last few weeks! Who would have thought? Maybe a Nobel Prize in Economics, given posthumously, will be next.

Market Innovation During Market Turmoil

Over the last few days, I have not been glued to a computer or TV screen, like many of you, watching the meltdown and then rescue of Wall Street. I was too busy.

I had to teach -- and just finished -- a one-week Executive MBA course on "market innovation" at Columbia Business School. The course was intense, yet rewarding, and, in fact, real fun.

It was rewarding and fun to watch how all of the student projects were truly focused on “big think"; Projects included: leapfrogging the existing healthcare system in a developing market; providing a green “box” (and “no box”) alternative to the existing pizza box; a "watch ‘n’ buy" launch at a major TV channel, a privacy index that tracks buyers' vulnerability to identity theft, and, finally, a project on neutraceuticals in yoghurts.

I am always amazed when I teach innovation and when I conduct short-term innovation workshop how much a team can achieve in a short time frame when there is a true focus on “big think” rather than incremental solutions.

I guess, by the end of this week, Washington has reached the same conclusion!

Experiential Marketing in Johannesburg, South Africa

I gave a keynote on experience at the  Experiential Summit in Johannesburg, organized by EXP, an experiential agency with presence all over Africa. It’s my first  visit to Africa (well, I  have  been in  the North, but, as I have learned, they define “Africa” here as “below-the-Sahara”).

And I am truly amazed!  Experiential Marketing is in full swing here, and EXP has done as fabulous job to create a community. In other words, experience is now a global movement, and no longer limited to certain markets.  All of this, within less than 6-8 years.    At the summit, many came up to me, saying that they started their  company after reading my  book “experiential Marketing. That was rewarding. 

So,  I am sure the Soccer Worldcup here in South Africa will be a big splash!  I saw three stadiums in various states of construction; guys, hurry because creating an all-out fan experience is more than just running the operations.  And I hope South Africa will create an experience innovation like  the Fan Fests in Germany. I know they will be running those Fan Fests again, and this time perhaps with 3D screen projections. I saw a demo at the Summit.

Schmitt Interview on Arirang's Heart to Heart Talk Show

Due to popular demand, I have now posted my half-an-hour interview from global Korean Arirang's "Heart to Heart" TV show on my web site. Enjoy.

Here's  the link: http://www.meetschmitt.com/Videos.htm