Author: w13colleen

Advertising and Project Management Cross Over

Posted on by w13colleen

Advertising agencies need more than creative talent or media experts. In order to run your client’s business there must be efficient and effective project management. It starts with the right partnership between agency and clients. Often times a project does not come to life because of poor management, inaccurate budgets, or unreachable timelines. Agencies and clients are cutting ties due to poor planning and management along with creative issues. In recent ad agency news one of the biggest beer companies pulled their work from BBDO in Canada. Ad Age reported the news this week in the article titled, “Molson Coors Yanks Coors Light from BBDO in Canada.”  There has a been a wave of agency reviews and new accounts where creative was not the reason for the break up. Another article in Inc points to several key factors in reviewing the right agency that points out the importance of proper management, “How to Choose an Advertising Agency.”

BBDO is a super power of creative talent in the U.S., Canada and across the globe. It recently picked up Bud Light account in the U.S. which the stated primary reason why Coors Light pulled the account. On the surface it appears to a conflict of interest however, Bud Light in Canada is managed by Anomaly. Coors Light is behind Bud Light in volume sales however the margin is small which means they are looking for their agency to differentiate the product in advertising and media. Creative differentiation must start with proper management of the account and projects.

Bridgestone has used a private firm out of Dallas for over seven years and most recently ended part of their agreement. Bridgestone creative work is now with Publicis Dallas which is also well-known agency in the industry. However, The Richards Group will retain the sports marketing business. This will require extensive management and coordination between agency partners and clients. The scope and clear definition of roles between the two agencies will be critical to the growth of Bridgestone.

It all starts with the client selection process. Agency selection process is extensive and requires a high degree of management and collaboration. Project management was a key factor in the two examples of why the agency lost the business. The client through the RFP process which includes budget, media targets, creative goals and general agency-client operations defines the scope of the agency’s role.  This is critical for both parties so they produce the right campaigns and drive results for their clients.

Does your company work with an ad agency? If so how is the relationship managed? How does internal project management practices transfer to managing outside partners?

Resources:

http://adage.com/article/agency-news/molson-coors-yanks-coors-light-bbdo-canada/242987/

http://www.adweek.com/news/advertising-branding/bridgestone-tires-moves-publicis-dallas-150988

http://www.inc.com/guides/201108/how-to-choose-an-advertising-agency.html

Connected cars: what is it and are they safe?

Posted on by w13colleen

The wireless technology and connectivity is making news out of Detroit because GM just announced that they will offer wireless connectivity in 15 vehicles. In addition GM CEO spoke at Boston College on the plans GM has around wireless and connected car application development.  The trends, features and safety concerns require extensive management by teams at the carriers and manufacturers.

The statistics outlined in the article show how the trends in wireless and car industry are crossing paths. Smartphone usage is up to 2.5 hours a day which exceeds the amount of time people spend in the vehicles. According to JD Power study two-thirds of people who buy a new car have a smartphone. GM sites that 80% say that connectivity “strongly influences” their car purchasing decisions. Smartphone penetration is well above 95% the wireless companies will develop and new ways to connect customers. This is adjacency move by the wireless carriers while the car manufacturers are enabling features to sell more cars.  The carriers are investing billions of dollars in their wireless infrastructure and the connected car is the next generation of products to utilize the technology. It requires strategic partnerships between industries and ongoing management. It is a strategic decision by the carriers and car companies that is of high importance to both industries. According to ABI Research, the percentage of new vehicles with factory-install telematics globally will increase from around 10% in 2011 to 53% in 2016.

Customer’s lives are digital and connected car is more than getting children watching movies in the back seat. The articles reference connected car but do not say what it means to have a connected car so it is worth mentioning some of the connected features.  There will be vehicle to vehicle connection to send an alert if someone is in an accident.  There will be connectivity exchanges about operational and safety data between vehicles and highway infrastructure to avoid accidents. Customers will be able to purchase music on the go from the console. The features and connectivity are extensive and project managers for the connected car test the features before it is released to the customer.

The experience in a connected car is hands free and the carriers and car manufacturers believe makes driving safer.  The AAA Foundation for Traffic Safety finds that proliferation of hands free devices in vehicles increase drivers distractions. As connected car reach the market there will be ongoing monitoring by project teams to investigate accidents related to distracted driving.

Questions: Is connectivity in your car influence your purchase decision? Does a connected car make the driver more or less distracted?

Resources:

http://www.detroitnews.com/article/20130613/AUTO0103/306130103#ixzz2W8bKjzNR

http://www.bostonglobe.com/business/2013/06/13/chief-boston-talks-connected-car/umypf4s5tX5m71tBcBiRQI/story.html

Walmart: Ally or Villain

Posted on by w13colleen

Over the past several weeks Walmart has made headlines for employee protests rather “everyday low pricing”. Walmart has opposed unions since they opened in 1962 and there have been several failed attempts to organize the over 1.4 million Walmart employees.  The efforts in the past few years are gaining momentum and even Walmart executives have acknowledged their efforts.

Employees of Organization United for Respect at Walmart , OUR Walmart coordinated protests on the busiest shopping day of the year. It involved 1,000 stores, 4,000 members and thousands of others sympathetic to their position. The members of OUR Walmart want more full-time positions, predictable schedules, and respect. The members of OUR Walmart say that they some of the employees aren’t making enough for a decent living. Some of the Walmart representatives rely on government support and food banks where Walmart is a contributor.

The claims against Walmart extend beyond the complaints from the employees. Many activists say that Walmart’s growth has come at the expense of its workers, environment, and the law. The articles sited that since 2005 Walmart has paid $1 billion in damages related to unpaid work. There are also allegations of corruption in its Mexican subsidiary and a potential cover up by Walmart executives. In November there was a fire at a factory in Bangladesh that Walmart uses for sewing clothes. The previous year declined to sign an agreement among retailers that would have improved working conditions.

On Walmart’s side, CEO Mike Duke told Bloomberg that “This tension for me is not a tension.”  Walmart executives stand firmly that they are supporting their workers better than their competition and claims that their turnover rate is lower. David Tovar, a spokesman for Walmart said “we have human resources teams all over the country who are available to talk to associates”. Walmart says that their benefits are affordable and comprehensive and overall they are proud of the jobs they offer.  The protests on Black Friday only impacted one tenth of one percent of the company’s workforce. If Walmart employees unionize they are risking vacation time, bonus, discounts and other Walmart employee benefits.

Each side of the fight has brought a team of experts to tell their side of the story. Walmart brought in a strategist for the Democratic campaigns to improve Walmart’s reputation. Leslie Dach specifically focused on reducing waste and energy use and supported Obamacare. OUR Walmart is working with ASGK Public Strategies and the UFCW. ASGK is making OUR Walmart a brand and using tactics such as social media to build the base of supporters. Their efforts have been highly organized and effective compared to previous union attempts.

QUESTIONS: Walmart’s strategy to ignore the efforts is not working as it did with other attempts. I questioned if Walmart make OUR Walmart an ally rather than an opponent? Do you think Walmart employees are treated and compensated fairly?

SOURCES:

http://money.cnn.com/2012/11/18/news/walmart-strike-black-friday/index.html

http://www.businessweek.com/articles/2012-12-13/walmart-vs-dot-union-backed-our-walmart

Who is running the company?

Posted on by w13colleen

If you asked this question prior to 2006, the response would likely be the CEO. The Board of Directors does have oversight of the company, but they are the same group of people that elected that CEO. In recent years the investors are using an active investment and management strategies which is overshadowing CEOs and the board. In 2006 only 28 directors at public companies in the Russell 3000 Index did not receive a majority vote. In 2011, that number increased to 79.  According to Harvard Business School Professor Rakesh Khurana, “… investors are telling directors who should be the CEO and how management should run the company.”

 

As I read the articles on this material, it comes down to return. Investors, individual or companies, want to make a return. The return for their investment since 2008 has not met their expectations. It has prompted majority investors to take long hard look at the executive level.  New York hedge fund, Royal Capital Management sent the board of directors a letter directing them to oust former CEO Angela Braly. The letter said “ … financial forecasting process is manifestly dysfunctional, subordinates are openly (and rightly) critical of her performance, and a revolving door of senior management ensures these problems will persist.”  Royal also took steps to discuss this direction with Barrow, Hanley, Mewhinney & Strauss and T. Rowe Price. Although it is not unprecedented that investors push out a CEO, it is uncommon. It is more uncommon that investors collaborate before “imploring” the board to take action.

 

The other prevailing reason for more active investment strategies is that, control is the primary driver for the investment. Carl Icahn and Bill Ackman are known for their large investments and their investment comes with power and influence. Their role in the company goes beyond investment to authority over the management and crosses the line of who is actually running the company.

 

The shift of control has major implications on the company’s strategy. By investors selecting the CEO and/or board members, they are shaping the future direction of the company. It can be seen through competitive advantages, shareholder value and their decisions about what to do and what not to do. TPG-Axon’s Singh wrote in his letter to the SandRidge board of directors regarding their role,  “…in instances where we come to believe that management is acting in a manner that is destructive of value, we believe it is important to actively engage.” 

 

Shareholder value is maximized when the CEO and Board of Directors execute on the right strategy. Investors are now directing the directors on who should be running the company. It is a change in the way the CEO, directors and their investors interact.

 

QUESTION: If investors are more active in the management of the company, should they also be just as accountable as the CEO?  

 

Do you think it is within the right of the majority investors to collaborate and oust CEOs from their position? If so how much time does a CEO have to execute their strategy?

 

SOURCES:

http://www.businessweek.com/articles/2012-11-21/more-ceos-are-learning-whos-the-boss#p1

 

http://www.businessweek.com/articles/2012-05-14/the-good-barbarian-how-icahn-ackman-and-loeb-became-shareholder-heroes#r=lr-fs