Jim Collins: "Those who panic die on the mountain"

Finally getting to my Feb. 2 issue of FORTUNE. There is a terrific interview with Jim Collins, author of Good to Great and other books.

This is a must read piece. Collins addresses questions from FORTUNE's Jennifer Reingold regarding our current global economic crunch and how companies can and should navigate this extremely difficult time.

The thrust of his argument is about values, character.

The interesting point he makes is that the economic prosperity we've experienced since the 1950s is what was unprecedented, pointing a few periods in history with similar golden eras, such as the Egyptian empire or Rome in 200 A.D.

So the anomaly isn't the turbulent times we face, but rather the prosperity we've enjoyed over the past five decades.

As he puts it, "what we're experiencing now, get used to it. It's life, and it's the normal life."

His point is that companies that survived extremely difficult periods of economic uncertainty had certain characteristics. From my vantage point, these qualities are the essence of public relations -- articulating a set of values and then models those values with employees, customers, shareholders and other constituents.

One, a deep fabric of values. He mentions P&G. When faced with difficulty, the company insisted it would not skimp on quality. It cost more, but in the long term it built a stronger relationship with customers and forged its reputation as a quality brand people could trust.

Two, invest in talent. During difficult times, companies like HP post WWII chose to hire engineers laid off from other companies or the government. It proved to be the foundation for the HP Way of the future.

Three, have a quarter-century view, not a quarter-by-quarter view. During tough times, it's easy to go micro, Collins says. We zoom in to tightly manage the current situation yet fail to assess the landscape and make long-term choices. His point is that most executives zoom in, and it's the rare (and successful) execs and companies that have the ability to zoom out. He points to Boeing after WWII. Boeing's revenue was based on the military. Post WWII Boeing had lost 90% of its revenue (staggering). But CEO Bill Allen decided to invest 20 years out in the jet age. What vision.

Four, the results of the company is the responsibility of the employees Sounds obvious, but the point is people have to look at their work not as a job but as a responsibility. At all times, but especially during challenging economic periods, people must deliver on their commitments and actions that support the longevity of the company. It's a personal commitment.

Five, focus on prevailing, not just surviving. His final point is that companies need to make decisions and investments that will enable it to prevail, or gain market-share or come out stronger during the up cycle, not merely survive the down cycle.

And all of this, he sums up, is about our core values that transcend good or bad times, and not deviating from those values in good or bad times.

His final point, and a great one: "Our characters are being forged in a burning, searing crucible."

It is in difficult times that true character reveals who we really are, and what we truly value. And nothing matters more than character. It separates those focused on short term gains (whether personal or political or business) from those focused on enduring, long term values.

A Glimmer of Hope for the NYT (all Newspapers)

Good post from Dr. Leslie Gaines-Ross at Weber-Shandwick in Reputation XChange blog.

"The incongruous juxtaposition of reading about the potential death of newspapers and this morning’s long line at my local newsstand with people beaming with pride, speaking languages I could not place and knowing that seeing President Obama on the front page of the most reputable paper legitimized everything will not be forgotten."

My Morning

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Gartner: Top CIO Priorities in 2009

Gartner announced findings of their annual CIO survey. It shows top priorities for CIOs in 2009.

Top 10 Business Priorities
1. Business process improvement
2. Reducing enterprise costs
3. Improving enterprise workforce effectiveness
4. Attracting and retaining new customers
5. Increasing the use of information/analytics
6. Creating new products or services (innovation)
7. Targeting customers and markets more effectively
8. Managing change initiatives
9. Expanding current customer relationships
10. Expanding into new markets and geographies

Top 10 Technology Priorities
1. Business intelligence
2. Enterprise applications (ERP, CRM and others)
3. Servers and storage technologies (virtualization)
4. Legacy application modernization
5. Collaboration technologies
6. Networking, voice and data communications
7. Technical infrastructure
8. Security technologies
9. Service-oriented applications and architecture
10. Document management

From the press release ...

"In 2009, executives face challenging global economic conditions that have not existed for more than 50 years," said Mark McDonald, group vice president and head of research for Gartner EXP. "This environment is reflected in IT budgets, priorities and strategies as one third of CIOs reported no change in their budget from 2008, while 46 percent reported a slight increase, and 21 percent reported a cut in IT budgets."

"All CIOs will face the need to restructure their budgets, cutting in some areas and investing in others, including those reporting no change in their overall spending level," Mr. McDonald said. "Enterprises expect IT to contribute results in an uncertain economy. CIOs need to be decisive and resourceful in building an effective enterprise that can meet current and future challenges. Leading enterprises recognize the seriousness of economic conditions, but they are not paralyzed by them. Their leaders have confidence in their ability to use IT to achieve results."

Do more with less -- a significant Microsoft message -- has never had more meaning for IT professionals.

Defining "A-list" authorities

Good post by Mack Collier at the end of December.

Basically, it's the age old question of defining who is influential (whether traditional media or "new media") -- the A-list of media (bloggers, journalists, etc.).

But as Ted Weismann from Beyond the Hype mentions Jan. 9 (What is Authority), the wrong question isn't who is the A-list, but who is your A-list. In other words, don't try to influence those who others define as top tier, but invest your time influencing those speak "passionately about your specific market segments' problems and concerns."

For a business-to-business IT services firm like Avanade, our A-list is going to be a lot different than an enterprise software vendor, even if that A-list is extremely well known and "influential."

By way of comparison, when I worked at Fleishman-Hillard, I would have clients who would tell me they wanted to be in The New York Times or The Wall Street Journal -- not because the outlets were strategic to reaching a target audience, but because they were perceived to be influential. Yes, absolutely, they are highly influential, but they are only influential to those they influence. And if the people they influence are not the ones your company is seeking to influence, then it was a wasted effort. Sounds like a duh statement, but it's true.

The same principles apply to social media as they do to "traditional media" (side note, let's drop "social media" or "new media" from our lexicon -- it's all just "media").

Google's Schmidt Wishes He Could Save Newspapers

In a FORTUNE interview with Eric Schmidt of Google (Google News), he confirms what I've been saying lately. Watching mainstream news disappear would be a real "tragedy in the sense that journalism is central part of democracy."

When asked what if the newspaper industry does go down? I love Schmidt's comment:

"And if [newspapers] can't be funded because of these business problems, then that's a real loss in terms of voices and diversity. And I don't think bloggers make up the difference. The historic model of investigative journalists in any industry is something that is very fundamental."

Amen, Eric.

When asked about ideas he'd have to save newspapers: "I wish I had a brilliant idea, but I don't." As I said last month, lots of questions and few if any answers about what to do for the news industry in general, and newspapers specifically.

But even almighty Google admits their powers are limited. It raises one question: if the news industry crumbles, there will be fewer opportunities for Google to sell advertising. I believe a viable, vibrant news industry is vital to Google's future, and democracy's future.

BusinessWeek Contradicts CES' Shapiro

Earlier I wrote about Gary Shapiro of CES saying that consumer electronics will be instrumental in getting the economy back on its feet. The reason he said?

Innovation creates investments. Innovation creates new jobs and new ways of doing things. There is a lot of innovation still yet to come. It (the downturn) is disruptive in the short term, because it causes some business to win and some to fail.

The cover story from the current issue of BusinessWeek regarding Silicon Valley (Is Silicon Valley Losing its Magic -- subscription might be required). The premise of the piece is that Silicon Valley isn't producing the next Cisco or Microsoft or Intel, and that the big established companies are wresting away innovation from start-ups.

As Steve Hamm concludes the article he says this: "The Valley's and the tech industry's contribution to the national economy is likely to wane."

So who is right -- CES' Shapiro or Steve Hamm's assessment of Silicon Valley's innovative malaise? We have 12 months to find out.

TechCrunch: No more embargoes

As you can tell, I'm catching up on news of the past couple of weeks. Many of you probably saw this, but if not, TechCrunch's Michael Arrington declared Death to the Embargo.

But don't miss his bigger point: PR agencies are not serving their clients well. He makes an argument that's hard to combat.

PR firms are out of control. Today we are taking a radical step towards fighting the chaos. From this point on we will break every embargo we agree to.

Background:

Tech companies are desperate for press and hammering their PR firms for coverage on blogs and major media sites. That in turn means that PR firms hammer us to get us to write about their clients. Gone are the days of polite pitches and actual relationship building. Today, PR firms email a story to us as many as 20 times, and call every TechCrunch writer on their cell phones repeatedly.

This is so important a post for PR professionals, that I'm including more of his direct comments:

A lot of this news is good stuff that our readers want to know about. And we have the benefit of taking some time during the pre-briefing to think about the story, do research, and write it properly. When embargoes go right, we get to write a thoughtful story which benefits the company and our readers.

But there’s a problem. All this stress on the PR firms put on them by desperate clients means they send out the embargoed news to literally everyone who writes tech news stories. Any blog or major media site, no matter how small or new, gets the email. It didn’t used to be this way, but it’s becoming more and more of a problem. As the economy turns south, PR firms are under increasing pressure to perform and justify their monthly retainers which range from $10,000 to $30,000 or more. In short, they have to spam the tech world to get coverage, or lose their jobs.

This is really serious, and I believe Arrington's comments are spot on.

In defense of the embargo, it is not something exclusive. There is nothing inherently wrong with seeking to pre-brief under embargo to any number of reporters. Personally, I think a proper strategy is to limit the number of pre-briefs to a few (three, four or so).

In my view, what contributes to this "spam" that Arrington speaks of is the demand for coverage volume. When the expectation by the client is on clip count or coverage in a certain book ("get me into the Journal"), you end up with a smile-and-dial media strategy. If you're approached by a PR agency that promise some form of coverage volume or coverage in a certain media outlet, run.

Instead, hire a firm that will focus on developing an effective competitive positioning strategy, and execute media relations program that supports that strategy ... the right media coverage in the right outlets reaching the right audience at the right time.

Finally, his comment about the broken embargo -- whether intentional by PR agencies or not -- is really unfortunate.

One annoying thing for us is when an embargo is broken. That means that a news site goes early with the news despite the fact that they’ve promised not to. The benefits are clear - sites like Google News and TechMeme prioritize them first as having broken the story. Traffic and links flow in to whoever breaks an embargo first.

There has always been a love-hate relationship between journalists and PR "flacks." To be balanced here, there are good PR firms and bad PR firms (I am on record of valuing good PR firms as strategic business partners), just as there are good doctors and bad doctors, good lawyers and bad lawyers, and so on. But when I read accounts like Arrington's I'm struck with the realization that PR agencies (I'm speaking in general) need to work on their own reputations.

CES Pres: "2009 will be 3rd Largest Ever"

"Our industry is the one that this going to get the economy through this recession." Such is the optimism of Gary Shapiro, CES CEO. While most economists say we haven't seen an economic climate this bad since the 1930's, Shapiro is brazen about his prediction.

In an interview on Dec. 31 with The Wall Street Journal Digits blog (formerly Business Technology blog), Shapiro explains why he's so optimistic.

Innovation creates investments. Innovation creates new jobs and new ways of doing things. There is a lot of innovation still yet to come. It (the downturn) is disruptive in the short term, because it causes some business to win and some to fail.

When I first started out, a travel agent booked my travel. Now I don’t think too many people use travel agents any more, and there were a lot fewer of them. A lot of things we just use the Internet for.

When I started out, the issue was whether the VCR was going to destroy Hollywood, and obviously it didn’t.

The real cool thing about this CES is it is in a time when Americans have voted for change. They voted for a digital president.

Our industry’s message has always been about change, and openness to new ideas. The incoming Obama administration’s vision is very consistent with our theme.

It's a good argument except for the fact that if people don't buy the innovation you're selling -- because they don't have jobs or being extremely cost conscious -- it makes it hard for an industry to extricate the rest of the economy out of a recession. But, I'm all for hoping for the best.

He says this year square footage sold is down by 6 or 7%, but with over 130,000 people expected to attend, it will still be the third largest in history.

That's certainly a nice indicator.