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Strategies for the Downturn from BNET.com

Don't let the recession get you down. Lean times are a great opportunity to get more competitive and position your business for future growth.

Barack O' Blogger

Originally posted on CBSNews.com

Just like the Obama's date night shamed married men into taking their wives for a night out, the President is driving a surge in executive blogging. 
No surprise there as Obama is the first "iPresident" who used the Internet to beat his competitor John McCain, who admitted during the campaign to being a technology Luddite. 

Now the president is using social working and so-called Web 2.0 technologies to forward his agenda. He is an Internet marketing maven who has used YouTube, Facebook, Twitter and MySpace to market his message to the Muslim world and to sell his new health care plan. As master of its own message, the newadministration has basically turned into its own Internet marketing platform. 

All this e-marketing is working. According to Gallup Obama's approval rating is 61%. There are three reasons this is a powerful strategy for the president: 

1) Love him or hate him, Obama has engaging ideas and is a very effective communicator. 

2) Social Media is ubiquitous, easy to use, and loved by young people. 

3) The president has surrounded himself with a masterful team of technology and marketing experts who have figured out how to use the medium to maximum advantage. 

Obama has proven, beyond a shadow of a doubt, that the Internet is a seminal marketing device for the modern executive. But, according to SocialText company CEO's are lagging the president when it comes to this use of technology with only 12% of Fortune 500 companies blogging. 

Indeed, only, a few high-profile CEO's have been blogging for an extended period of time. Most notable among them, Mark Cuban,owner of the Dallas Mavericks and Jonathan Schwartz, the CEO of Sun Microsystems. 

But the ice is breaking. ABC TV talk show host George Stephanopoulos just conducted a "twitterview" with Senator John McCain while Governor Sarah Palin is now a regular tweeter And the legendary Jack Welch (former General Electric CEO) recently penned an article on the virtue of using Twitter. 

Obama's Web success will surely cause a jump in executive and company blogging. The question is will this be compelling content or just a load of corporate PR crap? Unfortunately, chances are it will turn out to be the latter. What makes me think that? Just read the average company Web site or press release. Most make you wonder how stupid CEOs are if they think anyone with a brain would actually want to read their babble. These communications are full of confusing indirect language, business jargon, and legalese. Other than that, they are awesome. 

Clearly most Fortune 500 CEOs and their marketing chiefs do not understand the new social Web world. Unlike Obama, most spend little time thinking about how to use the Internet to create a competitive advantage. Never mind, how to author compelling blog entries. So most companies treat blogging at best, like an electronic newsletter. When was the last time you read a company newsletter and thought, `That was great. Can't wait to read the next one.' I know. These things are often long-winded and self-indulgent. Making matters worse, most company communications today are over-controlled by legal and public relations committees. These groups tend to sanitize, restrict, and script every word that comes out of executive mouths. 

So what should you look for in a good executive blog? Short, clear, compelling, posts. One company getting it right is Google, whose official blog was was named one of Time Magazine's Top 25 Blogs "Top 25 Blogs." Another example: Whole Foods whose whole story blog shares recipes, and tries to educate readers about food in an engaging way. 

In many cases CEOs of private or smaller companies feel freer to share their true thoughts and insights with their readers, or at least more so than their colleagues at large public companies. One example: My buddy, Mike Damphousse, founder and CEO of Green Leads, a marketing company has built a strong following by sharing free advice on his blog, Smash Mouth Marketing. 

And so as the president continues to use Web 2.0 approaches to market his policies, he will no doubt inspire others to do the same. The unanswered question is whether these new executive blogs be just another way to disseminate propaganda or a compelling new source of content from provocative movers and shakers? 

By Christopher Lochhead
Special to CBSNews.com

AOL, Is There Life After Love?

Remember when Tom Hanks and Meg Ryan fell for each other in the film, “You’ve Got Mail”? Time Warner produced the 1998 date flick, which was basically an ad for AOL that coincidentally foreshadowed the love affair which consumed the two companies a couple of years later. 

In the 1990’s, AOL represented the Internet to tens of millions of people. Its dial-up service made the Web accessible and easy to use. The company did great marketing and by 2000 had built a huge following. Its stock price rocketed and then, in an act of Internet bad-boy hubris, AOL used its stratospheric valuation to woo and marry Time Warner. 

The new media mavens had officially taken over the old media stalwarts. The marriage costapproximately $160 billion, one of the largest acquisitions in history. But the honeymoon did not last long and by the end of 2000, the AOL-Time Warner romance was already on the rocks. 

Where do you want to start? Within months of the nuptials, the dot com economy blew up and took nearly ever company’s stock price with it. Executive egos at the merged entity got in the way as old media and new media cultures clashed. Over time, AOL also lost the battle for consumers on the Internet to Yahoo and Google, and more recently, Facebook and Twitter, among others. It seems that almost everything that could go wrong did. So it is that nowadays, the once mighty AOL is barely relevant. 

Now it's divorce time with AOL being spun-out of Time Warner to become a stand-alone, public company. The question is whether the newly-single AOL can make its own way as a solo act. 

Probably not. 

Most turnarounds fail. Regaining lost momentum is hard as time is a thief. And most turnaround management teams lack the Three C's - cojones, craniums, and cash - to make it work. What's more, Time Warner CEO Jeff Bewkes may be planning to saddle AOL with some of Time Warner’s debt and that might stall AOL’s much needed mid-life makeover. So it is that many predict the likely outcome for AOL is a continued slide into the Internet graveyard with the company taking its place alongside that of fallen highflyers like Webvan and Pets.com. 

But if fallen Canadian heavy metal band Anvil can stage a comeback with a bold move - they made a heart string tugging, spinal-tapian rock-umentary that is gaining them new fans rapidly - why not AOL also? 

OK, so how could AOL thrive as a divorcée? Successful turnarounds need fresh thinking, energy, and experience. Hiring a new CEO is a good first step. In March Tim Armstrong an ad sales exec from Google came over to AOL/>. 

Unfortunately, AOL has lost a lot of its best people. Armstrong must immediately fire the dead weight and start promoting the smart, aggressive, risk-taking people. He also needs to go hunting for new top talent to infuse the company with creative ideas, products, and services. Some of this new talent needs to be very young. Bill Gates, Steve Jobs, Michael Dell, and AOL founder Steve Case were all kids when they created their first big innovations. History is repeating itself nowadays with young leaders at the helm at social networking companies such as Facebook, Twitter, and Digg. 

Additionally, Armstrong should reach out to Steve Case and ask for advice. Case is a smart guy who did it once and he might be able to help AOL. Making Case an advisor, or potentially an AOL board member, is also an option. 

Once Armstrong figures out the internal organizational issues, he needs to push AOL to take big calculated risks. One of the reasons that startups generate so much innovation is because they act like they have nothing to lose. So they go for it. Bigger established companies can become protective, so they tend to play it safe. AOL needs to act like a horny young startup, not an old jilted lover. 

To kick-start the process AOL should sell its Internet access business. It may be a major contributor to AOL’s revenue, but it doesn't figure as part of the company's future. AOL lost its battle for the Internet access market a long time ago, when it was slow to adopt broadband services. Get over it. Sell the business. Generate some cash and move forward. 

Next AOL needs a major revamp of its services. Its Web sites generally look dated. CEO Armstrong said recently after Time Warner's annual meeting, "We are first and foremost concerned with the consumer experience for AOL." 

No wonder. AOL needs to come up with a dramatic breakthrough in design, one that creates a new, easy to use Web browsing experience. Apple killed the competition in the MP3 player market by creating a whole new paradigm for buying and listing to digital music with the iPod. YouTube did the same in Internet vidoe by using Abobe’s Flash to create a new way to publish and consume video on line. AOL needs to do the same for the way we experience Internet content. 

Next, AOL should become more than a portal or search engine. It needs to aggregate everything you and I use on the Web into one central place. The truth is that the Web is still too hard to use and it takes too long. If they were able to become a personalized, uber-portal that manages everything we do on the Web in one simple front-end, new users would flock to them. It appears that Google may be taking a stab at this with its new Wave communication offering. Creating a new user experience needs to be done in the context of the social computing revolution. AOL must find a way to combine social networking, user-generated content, email/messaging and traditional media content so that we are compelled to use their services. 

“AOL needs to act like a horny young startup, not an old jilted lover.”

- Christopher Lochhead

Additionally, it's time to go shopping for some cool new companies. Today in Silicon Valley - and beyond - there are hundreds of small startups that are trying to make the Web user experience better. AOL should buy several and accelerate its ability to create the next generation user experience. With the explosion of mobile devices like the Blackberry and iPhone AOL must figure out how to become one of the top 10 mobile services on smart phones. So buying some mobile companies would also be prudent. 

Additionally, AOL also needs to forge strong partnerships. They should attach their brand to Apple’s ASAP. Apple, not Microsoft or Sony is defining the future of user experience for technology consumers. It should also explore content distribution deals with some of Time Warner’s competitors. 

After all that, AOL lastly needs to launch an aggressive marketing campaign to gain new users. It must also make us care about AOL again. And try their new services. In the old days AOL bombarded the public with zillions of startup CDs to get people to try the service. The CDs were so ubiquitous people called them AOL coffee cup coasters. Now it's up to management to figure out how to blanket the world again and to get us to try AOL 2.0. 

As I noted earlier, fixing a broken company is one of the hardest tasks in business. But if AOL can pull this feat off, anything is possible. At that point, maybe there's a chance Tom Hanks and Meg Ryan might even do a sequel.

7 Signs Your Company Is About To Crash

It went horribly wrong the second my bike hit the tree. As I flew over the handle bars, it was clear that my misjudgment was about to cause a lot of pain. Thanks to my Giro helmet, buddy Troy, and the E.R. team at Dominican Hospital in Santa Cruz, CA., I made it through the crash with only a dislocated clavicle, bruised ribs, and torn ligaments. 

Today, a lot of companies are crashing and their employees are similarly winding up getting tossed into the dirt. In fact, recent jobless data show a record 6.5 million people are now on assistance in the U.S. Clearly, it's dangerous out there. But there is a way you stay ahead of the wrecking ball. Here are seven signs (learned the hard way) that your company is about to crash and how to avoid ending up in the “career E.R.” 

1) Great People Are Leaving & Dumb People Are Staying 

Great people build great companies. When you start to notice that more than a few great people are leaving, something is wrong. When a company’s best people start leaving, it sets off a chain reaction. Here’s what happens. 

Great people (let’s call then “A-players”) love to work with other super talented A-players. They create a winning culture, which creates a winning company. Just like Michael Jordan who famously pushed his teammates to be their best. 

Not so with B-players. They tend to hire, work with, and promote people who are less talented than them (“C-players”), in an effort make themselves look better and/or to feel superior. This behavior sets off a chain reaction of poor company performance. Which then rots the culture of a company. As the A's leave and the B's and C's take over, one day you wake up and are working with a bunch of morons. 

2) You Don’t Understand Your Company’s Strategy 

Great companies have a game plan for winning. A plan that is clear and simple to understand. They can show you their strategy on one piece of paper and can explain it in about thirty seconds. Poorly run companies either don’t have or can’t articulate their strategy. If you can’t explain what your company does, why you matter, and what makes you different in 30 seconds, it’s mostly likely because your company does not have a strategy or your executives can not communicate it. Either way, it is a sign that you may be going over the handle bars. 

3) Growing Slower Than Your Industry 

Successful companies grow faster than their market does. This means they are expanding sales while taking market-share from competitors. For example, Apple has been growing its market share for the last few years as Dell has been shrinking. Every day customers vote with their wallets. Losing sales is a sign you may be working for a loser. If your industry is growing at five percent and your company is growing at two percent you are losing market-share. Over time, this will catch up with you sending you flying into the unemployment line. 

4) Frequently Missed Targets 

Most companies, especially in tough economies miss their targets from time-to-time. But, when a company misses its quarterly Wall Street earnings (or internal budget targets if your are a smaller business or privately held) frequently in a short period of time, it is a sign of more than a bad economy. It signals bad planning, bad forecasting, bad sales management, bad expense controls, or a company being badly beaten by competitors. No matter what the cause, this is a sign of weak executive management. And weak executives can destroy a strong company quickly. So if this is happening at your company, make sure you are wearing a helmet. 

5) Repeated Layoffs 

Many companies have done layoffs in this economy, but if your company is doing it regularly it is another sign of poor management. Most executive teams underestimate how much trouble they are in when things start going sideways. So when it comes time to cut expenses and people, they have often don’t go deep enough. Then, three to six months later they are forced to do another layoff. If this turns into a vicious cycle, you have incompetent management and probably an out of touch board of directors. Their ineptitude will cause more and more jobs losses. This will continue until your board-of-directors wakes up and lays off the real source of the problem: the CEO. 

6) Running Out Of Cash 

Cash is the life blood of every company. The cash a company generates tells you a lot about its health. A company’s cash position is also one of the purest metrics to track. It’s not subject to interpretation the way revenue, expenses, and earnings are. So pay close attention to it. If there is more cash going out than coming in every quarter, the bike ride ends badly for employees. 

7) Poor or No Communication From Executives 

If your executives are not communicating effectively with you and your co-workers it’s a warning sign. In tough times incompetent executives go into hiding. If and when they do communicate they do it in dumb `bizno-babble' ways. To wit: "This quarter we experienced some negative earnings growth resulting from the current economic pressures and global mitigating circumstances. We expect to incur some challenges going-forward due to visibility issues and other macro-spending trends." Etc. etc. If you don’t understand what they are saying, it’s because the executives don’t know what they are doing. 

Most executive teams underestimate how much trouble they are in when things start going sideways.

So if your company is showing some of all of these seven signs it is time to get proactive. You could start looking for another job now (most experts think it is easier to get a new job, while you are currently employed), wait to get a laid-off (and hope for a solid severance package), or wait it out in hopes that you company will get healthy. No matter what it is smart to raise your profile in your profession by attending industry events, getting to know some recruiters, and making sure you have up-to-date profiles on social networking sites like Linkedin.com, Facebook.com and Spoke.com 

Whatever you choose to do, do not wait until your flying over the handle bars to make a plan. If it looks like your company is about to crash, be proactive about weighing your options, make a decision, then take action. 

Good luck and always wear a helmet! 

By Christopher Lochhead

The Scapegoating of Craigslist

Where's Mainstream Media's Perspective Gone?

SAN FRANCISCO, CA.

(Originally posted on CBSNews.com)  This commentary was written by Christopher Lochhead, a former technology executive who now works as a strategy advisor.

Fueled by inflammatory media coverage of a man branded the “Craigslist Killer,” the government has decided to single out Craigslist ever since a woman who offered massages on the site was murdered. 

The irony here is that the unfair treatment of Craigslist by many in the press could harm Internet freedoms at the very time when many old media companies are turning to the Internet for salvation. More about that in a moment. 

Complaints by state and local law enforcement agencies about Craigslist's erotic services section escalated after the tragic murder of Julissa Brisman in April. Police believed she was lured to a Boston hotel by a man suspected of using Craigslist to rob masseuses and escorts. South Carolina Attorney General Henry McMaster even threatened Craigslist CEO Jim Buckmaster with the possibility of criminal prosecution if he didn't remove the erotic services area from the web site within 10 days. 

Last November Craigslist was forced to change its approach to ads for erotic services by 40 states attorneys general. And now the three state attorneys general are pushing for anan out-right ban on the ads. 

It's perhaps coincidence but all this occurs at a time when Craigslist has become the poster child for all that ails the newspaper business model. While old media companies have been threatened by online upstarts for the last decade, the emergence of Craigslist, in particular, hit newspapers hard as it garnered an increasing share of the classified ad market, traditionally a big source of income for newspapers. Nowadays, Craigslist, which claims over 50 million users, posts more than 40 million classifieds each month. 

The dramatic damage to newspapers has forced the shutdown of longtime metro dailies like the Rocky Mountain News in Denver and the 146-year-old Seattle Post-Intelligencer. The rest of the industry isn't faring much better. (RealClearPolitics.com has published a list called “Top Ten Newspapers In Trouble.") Just this month, Senator John Kerry declared newspapers to be an "an endangered species." Keep all this in mind as we consider the press’s treatment of Craigslist. Why didn’t the media choose to brand this guy the “Internet Killer”, “Boston Killer”, “Hotel Killer” or something else? Whether or not it was intentional, the decision to repeat the phrase, “Craigslist Killer,” has caused material brand damage to Craigslist and fanned the flames for the censorship hawks. 

I think Craigslist is also getting way more blame than it deserves. Craigslist is a marketplace. Its job is to provide a platform for people to exchange goods, services and ideas. Just like a shopping mall, market, or square in the physical world. Good and bad things can happen in a marketplace. Because people are good and bad. When someone gets killed, raped, or mugged in Times Square, we don't blame Times Square. 

But while Craigslist is being singled out, there are hundreds of websites that offer classifieds, dating services, and social networking. They all create an opportunity for evil people to prey on victims. Most local yellow pages have a section for “entertainers” or some other forms of adult service. This has been going on for years. What do we think those ads are for? And there are hundreds of places in the off-line world (parks, shopping malls, street corners, etc.) where people can and do commit horrible crimes. 

For Craigslist, this crisis is akin to the Tylenol or Odwalla tragedies, in which users of those products died. Johnson and Johnson and Odwalla, both took quick action with their business practices and showed tremendous public relations acumen as their crises played out. As a result, both still have strong brands today. While the fate of Craigslist can’t be known yet, it is clearly in trouble. 

What should it do now? 

Craigslist has since announced that it will manually review every ad placed for "adult services," a section that was previously labeled "erotic services." But that does not go far enough. Good controls are good business. Many Internet companies have been too lax, relying on users to govern themselves. Craigslist (and other new media business) need to do the online equivalent of installing new street lights, having more patrols, and hooking up security cameras. We need better warnings, additional screening, a rating system for users in the community (the way eBay does), and stronger tracking capabilities of users online. If people know they will be turned over to the authorities when they commit crimes using the Internet, they may think twice. 

Next Craigslist (with the support of other new media businesses) should set up a foundation for victims of violent crimes that are committed by people using the Internet. 

Finally, Craigslist must to do a better PR job. The future of Internet freedom will be voted on in the court of public opinion, before the government rules on it. Craigslist (and most new media companies) have been to quiet and defensive on this issue. Both Craig Newmark, Craigslist’s founder and Buckmaster need to come out of hiding. They need to passionately evangelize what company is doing to help protect users, how it works with law enforcement to catch bad guys, and be an advocate for freedom on the Internet. 

And while we're at it, how about a bit more balance from the old media as well as from the government? It's time to get a handle on things. Nobody has an interest in letting this escalate into a media-driven, government overreaction, which, if left unchecked, could destroy many of the Internet freedoms we now accept as a given. 

By Christopher Lochhead

Why Yahoo MUST Buy Twitter

(Originally posted on CBSNews.com)  This commentary was written by Christopher Lochhead, a former technology executive who now works as a strategy advisor.

Carol Bartz took over a dejected Yahoo in January. Talk about entering 

the lion's den. In her quest to restore the company to its former glory, 

she has to overcome years of blunders, a bad economy, and the continued 

beatings dealt out by Yahoo's dominant rival, Google. In this game of 

corporate survivor, it's going to take all of Bartz's moxie-and then 

some-gained during years as the successful CEO of software maker 

Autodesk. 

On the surface, at least, it appears that she signed up for Mission 

Impossible. Google has been body slamming Yahoo for years. It lays claim 

both to a superior search technology and a stronger advertising business 

model. As for Yahoo, well, think of Mickey Rourke's character in the 

film, `The Wrestler': a one-time star with fading looks and dwindling 

skills in search of one more win. 

Then, last year Microsoft's Steve Ballmer came calling. Microsoft 

offered to buy the company for $44 billion, a 62 percent premium over 

Yahoo's share price at the time. Like a drunk who won't go to rehab, 

Yahoo's board of directors said no. It was a bad bet. Today, Yahoo is 

only worth about $20 billion. 

But give Bartz, who came on board this winter,some credit for trying to improve the company's execution. She's not been afraid to make the tough decisions to reduce costs by laying people off and shedding dead weight. The company recently announced it would shut down GeoCities an early Facebook-like web site that Yahoo purchased during the Internet bubble. That's probably not going to be the end of it. Recent rumors have it that Yahoo plans to sell HotJobs(an online employment site that has consistently lagged Monster.com) as well as Yahoo Personals in an effort to get the company more focused on its core business. 

To be sure, Bartz has got a lot of work to do just to get Yahoo back into fighting trim. The company needs to improve search results and services like 

email, news, weather and sports-all the while reducing costs and 

improving results for advertisers. But that won't be all. Bartz also 

needs to make bold moves to get Yahoo growing. Specifically she needs to 

expand her focus on the future: social and mobile computing (the company 

is No. 1 in mobile search, according to 

rkStudyYahooinTopSpot.html m/>a new report by Gomez, Inc. and 

dotMobi. That's a good start but Yahoo still lags behind when 

it comes to the social revolution taking place on the Internet. To wit, 

Facebook now claims 200 million users. 

This is where Twitter comes in. Twitter has experienced mind-boggling 

1,382% year-over-year user growth, according to Nielsen Online. It's not 

just the geeks: Twitter has attracted the likes of Ashton Kutcher, P. 

Diddy and CNN et al. to the service. In the process, Twitter's got both 

Facebook and Google running scared. 

A Yahoo/Twitter combination-I hereby dub it, "Yatter"-would allow Yahoo 

to combine all of its email and messaging with Twitter into a modern, 

social communication platform. If done well, it would be a very 

compelling service where users could integrate all of their Web 

communications in one place. 

What's more, it would provide Yahoo with explosive new user growth, not 

to mention, a "Who's Who" of celebrity users, and an opportunity to 

cross-sell and up-sell Yahoo services to those tens of millions of 

Twitter users. Even in a recession, advertisers are salivating like 

starving dogs sniffing barbecue steak to get at all those tweets (the 

messages & postings on Twitter). For advertisers, the ability to sell 

ads around keyword searches and Tweets simultaneously could be 

irresistible. 

Buying Twitter would also rate as a savvy defensive move. If Google, 

Microsoft, or Facebook got there first and snapped up Twitter, it would 

leave Yahoo on the mat. Yahoo already missed out on buying MySpace and 

YouTube. Microsoft was first to do an investment in Facebook and now 

there are rumors that Apple might bid $700 million for Twitter. Yahoo 

can ill-afford to let another new Web sensation slip through its hands. 

Also, if the ultimate plan is to sell Yahoo to Microsoft, a Twitter deal 

makes good sense. Who knows? With a few more quarters of clean-up, an 

uptick in the economy, and a growing user-base fueled by Twitter, 

Microsoft may yet be inclined to pay a significant premium (again) for 

Yahoo. Given a second chance, Yahoo's new board hopefully will be sober 

enough to do that deal. 

By Christopher Lochhead