The|Intangibles

Buying in a Downturn

Although it may appear counterintuitive when the economy seems totally derailed, the most successful companies use turbulence as a time to acquire undervalued assets.

A McKinsey study (requires registration) of 200 companies released in September of this year found that "The best growth companies take a different approach. They view the downturn as a time to increase their leads and make acquisitions. They pounce on the opportunities it creates with an alacrity that is the stuff of legends: think of GE's speedy dispatch of deal makers to Asia after the financial markets took a downturn in 1998."

Here are some other things to think about:

A company that approaches a downturn with laser focus on what will create value for shareholders in the long-run may see better returns, but will most certainly have that opportunity-hunting personality accrue to its reputation account. Why? Because investors reward confidence and foresight. As the McKinsey authors put it "countercyclical investment can separate the leaders from the also-rans." 

Confident companies that target undervalued assets must still plan for post-acquisition integration. It is common knowledge now that most acquisitions and mergers fail to realize the anticipated value because the after-deal integration is so badly managed. In the haste to acquire and demonstrate a willingness to take countercyclical risk, companies must still have a well thought out internal communication plan to ensure the newly acquired operations add value, again for the long run.

Markets (and even analysts) won't intuitively recognize the value of an acquisition, and may even be doubtful because the business crowd is standing still waiting for 'better times'. The case has to be made immediately, publicly and continuously that the risk of acquiring in a downturn is outweighed by the upside of significant future value to shareholders. That means using all the tools in the communications arsenal to position the deal in this way . . . including web, social and mainstream media strategies.   

Lessons from Obama's New Media Campaign

There will be books written about the brilliant use of social media in the Barack Obama campaign for the U.S. presidency. Richard Edelman, head of the eponymous public relations agency (and a competitor), pointed out recently: 

Consider this single statistic from the recently completed Obama for President Campaign. Three million donors made a total of 6.5 million donations on-line adding up to more than $500 million in funds raised. Of those donations, 6 million were in increments of $100 or less. His email list has 13 million addresses. A million people signed up for the text-messaging program. Two million profiles were created on MyBarackObama.com, his social network, plus 5 million supporters in other venues such as Facebook and MySpace.

I don't know if she has a book planned but Canadian Rahaf Harfoush, who was deeply involved in the social networking aspects of the campaign at new media HQ in Chicago, gave a captivating presentation last night at the University of Toronto's Rotman School of Management on lessons learned from the campaign from the inside.

Here are her six lessons:

1. Give new media a seat at the strategy table.
2. The new digital tools are useless without a blueprint. 
3. As with any communications campaign, social media campaigns require consistency in messaging.
4. Map out the digital landscape of your target audiences (find the conversations relevant to your strategy).
5. Include a call to offline action.
6. Be ready to give up control to your communities

None of the lessons are unique in and of themselves. Our digital team recommends them to our clients all the time . . . as do I. But the success of the social media dimension of the Obama battle may be the final proof needed to get senior executives and Canadian political campaigners out of their obtuse fog and increasingly strained and silly denial of the obvious about the power of a crowd-sourced innovation and influence . . . even in the exercise of democratic action. 

I took four additional lessons away from the presentation that aren't part of Ms Harfoush's list, but are central to her thesis: 

1. Social media strategies should be built on smoothing the progress of intimacy, connection and conversation among target audiences, consumers or voters;
2. A new media strategy slapped on to an old business or political strategy framework will fail (The Obama new media campaign's success was achieved in the context of an innovative political strategy, including a willingness to let online communities create their own offline actions and events);
3. There are no off-the-shelf social media solutions;
4. Find the digital sweet spot but prize agility. 

Digital Issues Management

Ten days or so of campaigns being waged online:

1. Young drivers in Ontario are using Facebook to challenge a new piece of legislation adding new restrictions on licensing of teenage drivers, including zero tolerance policies on speeding and drinking for drivers under 21 years old. Facebook group membership is at 79,000 or so and growing. The provincial government in Ontario says it will have no impact on progress of the legislation, dismissing the protest as involving what the Ontario Minister of Transportation James Bradley calls "for the most part, kids who are 16 or 17". I wonder how he determined that demographic mix of group members? A bit presumptuous I think and likely to push a spike in membership.
2. The now famous Twitter assault on Motrin has apparently occasioned backlash from advertising executives because such campaigns may "kill creativity." The value of such hand-wringing aside, I wonder what exactly was creative about such copy as "It totally makes me look like an official mom." Judge for yourself whether this is creative or discourteous.

And finally, although I can't find a Facebook group or Twitter campaign underway on it yet, there's a movement just waiting for a digital hero. Here's the story. It was reported this week in Canada's National Post that "Queen's University in Kingston, Ont., has hired six students whose jobs as "dialogue facilitators" will involve intervening in conversations among students in dining halls and common rooms to encourage discussion of such social justice issues as race, ethnicity, gender, sexual orientation, ability and social class." This followed hard on the heels of the university moving the controversial -- although very popular -- homecoming celebrations (read 'street party') to May when most students have all left the university. Anyone for re-reading Orwell's 1984? 

Social Networking for Business Explained

With a hat tip to @Monika29 (Twitter) for bringing to my attention this - albeit pretty basic - visual demonstration of social networking for business from VizEdu.

It is valuable in part because it summarizes in about 30 seconds case studies of the effective use of social networking to solve business challenges: Cooper Systems use of 'Linked in' as a recruitment tool; and H&R Block's 'Facebook' presence as a means of creating awareness of its products and maintaining relationships with its "fans". 

Beyond that, VizEdu's simple visual platform is an example of how social media can be used to communicate, teach or present through creative application of animation and words.

I have an idea for my next new business pitch presentation!

Spin, Media, Books

Former senior journalist and media executive Adrian Monck, who blogs at --well -- Adrian Monck has come out with an apparently critical book called Can You Trust the Media which according to one commentary argues the need to "understand the media's limitations and its boundaries, and make information as freely available as possible."

I'll buy that . . . and indeed Monck's book, although it seems the only place it is available at the moment is the U.K.'s The Parliamentary Bookshop. There you can also add to your check-out cart, these two. . . 

 

Podcast on Crisis Communications

I was interviewed on crisis communications recently by Ian Hamilton, editor of Profit magazine, for his Business Coach Podcast series sponsored by Bank of Montreal.

The podcast was posted today and can be found here.