Understanding Economics: Recessions Are Optional

On the day before Thanksgiving, the National Association for Business Economists predicted real growth in gross domestic product for 2010 would be 2.9 percent, up from its October forecast. The forecast is cautiously optimistic, even if the association anticipates the jobless rate might hold at around 10 percent through the second quarter of 2010.

While the estimates seem promising, and mirror other economic data, public sentiment remains stalled. Even among the readers of SmartBrief for CFOs, 42 percent of those surveyed predict the U.S. economy will not begin adding jobs until 2011 or later and almost seven percent wouldn't even hazard a guess.

So who is right? Economists? Employers? The general public?

While it might matter, its significance is about as important as knowing that the sun requires 226 million years to complete one galactic orbit or that our galaxy also moves up and down on a 62-million-year cycle, with biodiversity increasing and decreasing in relation to where we might be. Abundant biodiversity as well as planetary temperatures have historic relevance to our planet and how entire civilizations rise and decline. The people who measure this stuff are astronomers.

How outlook and communication play a critical role in experience.

My grandfather once told me a fable about a gas station attendant and two road-weary travelers looking for a new town to open a new business. While they arrived at different times, both asked the same question. Do you think this town would be a great place to start a business and settle down?

"I dunno," said the gas station attendant. "What was the last town you lived in like?"

The first man frowned: "It wasn't very good for business. The people were lazy, and genuinely unfriendly. Unemployment was high, people wanted to be paid too much, and the housing market had bottomed out. I can't say anything good about it."

"Oh," said the gas station attendant before leaning over to whisper. "You wouldn't like it here then. This town, it's exactly like that. You'd be much better off continuing on and finding a better place than this miserable place."

"Wow," said the man, smiling. "You sure saved me a big waste of time. Thank you."

When asked the same question, the second man smiled: "The people were optimistic, and genuinely friendly. Even in a tight economy, people were willing to work hard, appreciated our efforts in the community, and were generally optimistic about the future. If it wasn't for our expansion, we would have stayed there for years to come."

"Oh," said the gas station attendant. "You'll love it here. This town, it's exactly like that. You can continue on and look if you like, but mister, I think you just found yourself a new home."

"Wow," said the man, smiling. "You sure saved me a big waste of time. Thank you."

When people ask me about what I think about the economy and our outlook, I have two different answers because they are two different questions.

The big picture is pretty obvious, I tell them. As long as employers are waiting for consumers to spend more, and consumers are waiting for better employment, the best anyone can hope for is slow growth through the first two quarters for 2010. And for the most part, that is in line with most economic forecasts.

Our outlook, of course, is different. Since the recessionary pressures took hold, I have always said participation is optional. It is optional because we can either fret along with those best described as the 42 percent who now predict the U.S. economy will not begin adding jobs until 2011. Or, we could invest in finding the 17 percent who predict the U.S. economy will begin adding jobs in the first half of 2010. I'm interviewing my first hire for 2010 next week.

The same can be said for individuals. As much as I think Pat Olsen's post on How to Survive in an Unhappy Workplace might help some people, his third point is the most important of all. With the exception of abusive leadership, workplaces and cities and economies and galactic positions don't make you unhappy. Only you can do that.

It might be the day before Thanksgiving, but it's never too early to be grateful. Until tomorrow then.

Blacklisting Best Buy: When Ads Go Bad

Best Buy seems to have found more than it bargained for after it ran a national Black Friday advertisement inviting the world to celebrate Thanksgiving and Eid al-Adha. Eid al-Adha?

In case you do not know, Eid al-Adha is a Muslim holiday, "Festival of Sacrifice" or "Greater Eid," celebrated to commemorate the willingness of Ibrahim to sacrifice his son Ismael as an act of obedience to God. The date it is celebrated is variable; this year it falls on Nov. 27. Regular charitable practices of the Muslim community are demonstrated during Eid al-Adha by the concerted effort to see that no impoverished person is left without sacrificial food during these days.

And from now on, Best Buy discounts too. The national retailer is standing by its decision.

Three reasons Best Buy is setting the foundation for its own crisis.

1. Thanksgiving. Thanksgiving is identified with as a secular holiday in the United States. It began as an annual tradition in 1863 and a federal holiday in 1941. While it is sometimes tied to a religious observation in that some people give thanks to God, the primary celebration consists of bringing two cultures together for a harvest feast.

2. Christians. Christians are increasingly frustrated because tolerance does not seem to be a two-way street. In recent decades, it has been noticed that public, corporate, and government mention of the term "Christmas," for example, has been replaced with a generic term while other non-Christian holidays seem to have no cautionary constraints. Best Buy, specifically, does not allow Merry Christmas in its advertisements. It hasn't since 2006. (A Best Buy spokesperson has said it may be reversing that decision this year).

3. Muslims. While a spokesman for the Council on American-Isamic Relations said it makes perfect sense for a retailer to acknowledge and celebrate the holiday, one wonders if Muslims will feel the same way in considering the long-term commercialization of Eid Al-Adha. For example, national retailers do not generally recognize exclusively Christian holidays like Ash Wednesday. It is probably best if they do not.

The motivation, more than the message, is why Best Buy perplexes.

Best Buy's response — which draws attention to the fact that its customers and employees "around the world represent a variety of faiths and denominations. We respect that diversity and choose to greet our customers and employees in ways that reflect their traditions" — does not accurately reflect its past decisions to diminish other holiday greetings.

That seems to underpin the complaint and call to boycott Best Buy by some Christians, and not the lack of tolerance as suggested by anti-boycott proponents who have taken to defending the Muslim faith while making fun of those offended. The company, apparently attempting to capitalize on the confused state of the nation in regard to specific groups receiving a temporary "politically correct" pass, deserves some public backlash for its lack of public relations savvy.

From a public relations perspective, Best Buy is better served by a policy that embraces all faiths and denominations specifically or generally and not selectively or by PC popularity if it hopes to simultaneously include all those faiths and denominations. This might be especially true for a holiday like Thanksgiving, which is largely meant to be a non-religious, multi-cultural and national celebration regardless of how specific faiths and denominations choose to celebrate it.

From a more personal perspective, I neither support or oppose the ad nor do I support or oppose the boycott. I do, however, think that the pairing of Eid al-Adha and Thanksgiving demonstrates significant ignorance over the meaning of both holidays.

Stepping Backwards: Wellness & The Economy Study

According to a 2009 survey by Saatchi & Saatchi Wellness (SSW) on Wellness & The Economy, the current economic climate is having an adverse affect on wellness. Only 10 percent of the population feel wellness is related to being healthy, down from 47 percent before the recession.

Today, people tend to define wellness as changing behaviors, plans, and aspirations. And, the net result seems to be making the population collectively unwell. Their definition of wellness has been redefined as something as simple as paying the rent.

"While consumers haven't completely given up on the goal of health and balance, the definition of health has changed," said Johanna Skilling, director of strategic planning at SSW. "This means that as marketers, we have an important role to play in helping our constituents adapt to new realities in the marketplace."

As a whole, consumers are eating more carbs and sugars, exercising less, and investing less in their appearance. Equally striking was the assessment that most survey participants could be classified as affluent. Less affluent households are suffering even more.

Dropping another notch on the Maslow hierarchy of needs.

Maslow's hierarchy of needs, which is a model proposed by Abraham Maslow in his 1943 paper, outlines a prioritization of human needs. It suggests people tend to pursue physiological needs first, security second, belonging third, self-esteem fourth, and self-actualization last.

Last year, it seemed apparent that the population was mostly focused on security — employment, resources, morality, and health. So if there is any validity in the SSW study, this might be another another step down. Today, people are satisfied with the status quo, provided it can meet their most basic needs.

Even among business leaders, meeting the most basic benchmarks seems to be enough. Marred by a global decline in perceived opportunities, increasingly competitive venture funding, and an over-pronounced fear of failure, 58 percent of companies are employing tactical, short-term initiatives that stress cost cutting and deferred investments (Ronin study) while, in the United States, there has been a 9 percent decrease in entrepreneurs under the age of 45 (Global Entrepreneurship Monitor study).

In other words, it seems older companies are being weighed down by institutional barriers that encourage protectionism (fight) and younger companies or would-be entrepreneurs are leaping toward the next opportunity before their existing projects are nurtured (flee). Ironically, both reactions come from the same emotion. Fear continues to be the primary economic driver, with relatively few exceptions.

What does that mean? The first companies that can remove fear from their planning will be the market leaders in the next decade. And the people who aspire to move their thinking beyond scarcity will likely be the more secure.

Frustrating Employees: American Airlines

It only took an hour for American Airlines to find and terminate Mr. X, a UX user experience architect working for the company, after he responded to a Web site critique offered up by Dustin Curtis, a designer who creates user interfaces and experiences.

"The problem with the design of AA.com, however, lies less in our competency (or lack thereof, as you pointed out in your post) and more with the culture and processes employed here at American Airlines." — Mr. X

In reading through more than 150 comments left on Curtis' post, I couldn't help but wonder about the confusion. Some people said the firing was warranted. Others said it was another example of the company's incompetence. Some said that it was somehow Curtis' fault. Very few seemed to find the truth. What's that?

Two wrongs don't make a right, they make a mess.

1. We can remove Curtis from the equation. He didn't do anything wrong in offering a public pitch. In a world where many people with experience and expertise can become a content publisher, companies and their employees have to expect and accept both praise and criticism. The only question: How will the company choose to respond or react to the communication?

If any company operating in the 21st century hasn't answered this question by now, they are inviting, even encouraging, crisis.

2. It is always unfortunate when someone is terminated over carelessness because they care. However, Mr. X clearly violated one of the most basic ethical tenants. Aside from American Airlines' non-disclosure agreement, it is generally understood that communicators protect confidential information and, at the same time, comply with all legal requirements for the disclosure of information affecting the welfare of others.

If Mr. X truly cared about the company, his response to Curtis would have been better sent to his supervisor to affect change.

3. Appreciating that there may be other grounds for termination that we may be not aware of, American Airlines demonstrates they clearly have an international communication problem. When employees feel more comfortable confiding about their experience to external sources of information over internal channels because they feel powerless to be the catalyst for positive change, then that is a problem. And now, it's a public problem with a greater consequence than any breach of non-disclosure.

American Airlines has to know it has flaws in its communication strategy given that everyone else does. A warning might have been enough.

Companies need to develop clear and concise response guidelines.

Without a more comprehensive understanding of American Airlines internal communication components, there isn't much we can do. However, it does seem clear that they need to develop clear and concise online response guidelines. Here are a few:

• Define who will respond and under what circumstances.
• Respond in a timely manner when the topic is still hot.
• Read the greater body of ongoing work to ensure you understand it.
• Recognize who the person, people, or media might be before you respond.
• Remain positive, reasoned, and focus on clarifications (unless your brand is satirical).
• Stay focused on the topic if you hope to maintain credibility, authenticity, and transparency.
• Recognize that engagement is a limited commitment, which may require a follow-up response.

Imagine how even a handful of points might have made a difference at American Airlines. Mr. X would have been allowed to respond as himself or known to forward any notes along to a supervisor. The authorized representative could have responded, possibly generating goodwill for American Airlines. Or maybe not, since the original post was obviously a public pitch.

The psychology of criticism and the art of the pause.

There isn't a tremendous body of worthwhile research revolving around the study of criticism and how people respond to it. Most people simply respond to it badly. Generally, it is because they tend to react as opposed to respond, which is why media relations training has a tendency to focus on the trappings of pointed questions.

Professionally, I try to teach people to accept criticism, provided it isn't cynicism. As I've proposed before, critics strive to be open, objective, and offer suggestions for improvement or make an effort to understand various points of view. Cynics are generally closed, biased, and reject that any merit exists or tend to promote their point of view while dismissing the validity of any other.

As a general rule of thumb, people are almost always better served by pausing anytime they feel an immediate emotional response to any particular comment. The pause allows us to process the information and ascertain intent.

Teachers, for example, are paid to provide constructive criticism. Managers are charged with evaluating performance. And the best reporters always ask tough questions to find the truth. Some bloggers too, employ criticism as a means of driving conversations forward.

In all of these cases, the intent is grounded in compassion for education, employee, public welfare, or special interest. We ought not to shy away from it, but embrace it. You don't have to accept every idea as valid, but critics often lend a few gems.

Unifying Topics: In An Era Of Infinite Choices

The most blatant mistake being made by public relations and communication professionals focusing on the increasingly crowded space of social media is employing a methodology that can be best described as the last remnant of mass media.

The tactics are as simple as delivering a product, service, or brand message to as many people as possible as many times as possible. The outcomes are sales calls, junk mail, media pitch lists, and spam. The objective is to stand out in the onslaught of useless communication. The measurement of success is confined to playing a game of eroding percentages.

Ten years ago, a 10 percent response rate was the mark of success. Last year, a two precent response rate is the new high water mark. And more recently, some organizations have told me they'll take one percent any day of the week. The fix remains the same. Buy a bigger list to offset the diminishing return. Except...

Mass Media Has Given Way To Infinite Choice

Social media empowered consumers to trade in mass communication in favor of infinite choices. The consequence of this transition was profound, but not in the way most people think.

Mass media, which was largely ushered in by Baby Boomers in the 1950s, has had a much shorter life cycle than objective journalism, which was largely the advent of Walter Lippman attempting to professionalize journalists in the 1920s. As a footnote, it might be important to mention mass communication has a longer life cycle, taking form in the late 1800s.

Although most people conclude the Internet is a new medium within the greater context of mass media (including myself on occasion), it is more appropriately defined as an environment that has accelerated the adoption of infinite choice much faster than cable and satellite television.

Infinite choices are profound in that they move consumer thinking to the era that predates mass media, objective journalism, and mass communication not because of limited accessibility but through a means of self-selected exposure.

For example, if a consumer is faced with a choice of more than 10,000 local and national news outlets, they might pick three or five or ten (depending on their information tolerances). The impact increases the competition exponentially, forces specialization, and fragments audiences to such a degree that the entire mass media model crashes.

The tragedy is that despite knowing this, organizations are attempting to plant various mass media models in an environment of infinite choices. The result is increasing the number of their competitors to include not only direct competitors but every company on the Internet vying for fans (people cannot and will not friend 100,000 product pages), forcing them to amplify their message, and increase the risk of consumer brand fatigue.

Infinite Choice Requires A Better Model Than Mass Media

While there have been many early attempts to develop infinite choice tactics, most of them are nothing more than an attempt to modify the mass media model. Ergo: influencer targeting is nothing more than replacing one objective journalist with people who are more malleable (Edleman) and crowd sourcing is nothing more than an attempt to convince consumers en masse that they are stakeholders much in the same way vanity poetry press scams made poets out of everyone (Jarvis).

Neither construct breaks away from a mass media model. Neither is sustainable nor scalable as consumers have a finite amount of time. The same can be said for equally flawed models that include leveraging employees or elevating individual quasi-brand celebrities. All of it, not surprisingly, is mass media without the benefit of objectivity.

While not all of it can be solved within the confines of a single post, we do know that organizations operating within an environment of infinite choices have to remove degrees of separation between their products, services, and brands and the consumers they hope to reach. By removing degrees of separation, I do not mean leveraging employees and product fans to monetarily or emotionally blackmail family and friends to peddle products as some sort of multi-level marketing scheme without the benefit of revenue.

What I mean is that organizations have to develop points of communication that consumers can selectively connect to beyond the buzz of 'buy our product,' as illustrated by the top model in the illustration. (You can find a larger image of the Topic Unification Model right here.) Companies developing social media programs have to provide content that gives various publics different reasons to connect.

For example, if we apply the Topic Unification Model to fashion, a fashion designer not only has to talk about the product, but also about industry trends, points of inspiration, the fashion industry as a whole, and so on and so forth. Doing so allows different publics to find self-selected value from the online communication provided, and allows each designer to customize their topical context so that it reinforces the preferred company brand.

Individuals have been very effective applying this as a strategy of sorts (consciously and subconsciously). They attract friends, followers, and readers because those consumers connect with them as parents, photographers, communicators, political viewpoints, type of drinks they prefer, and so on and so forth. These conversations and connections have almost nothing to do with their professions.

Unfortunately, their success in selling personality like this sometimes leads to the mistaken belief that personality can supplant organizational communication. In reality, organizational communication still requires some semblance of an organization. Consumers don't just want to know what Jane Doe thinks about a complaint (despite how empathetic Jane Doe might be). They want to know what the organization will do about it.

To that end, organizations hoping to integrate social media are better served by broadening their communication from a narrowly defined product (can of soda) into a communication model that includes any number of topics that are much more interesting.

While the communication still needs to be managed within a context (soda marketers don't need to offer opinions about toilet tissue makers), broadening the scope of communication to a select number of related topics opens up connections with consumers who might not care about a specific product today. It also provides a better contrast among competitors, ensuring people will become engaged when they are interested as opposed to when it is convenient for a marketing accountability report.

Retiring A Deck: Social Media For Strategic Communication

Since my first presentation on social media in 2005, it didn't take long to appreciate that the entire communication field is a moving target. So I've made it a point to periodically retire the decks I've used at the University of Nevada, Las Vegas in order to avoid having to teach the same class twice.

Integrating Social Media

View more presentations from Richard Becker.

This version of Social Media For Strategic Communication evolved into 100 slides as the backdrop of a 3-hour open conversation. It was followed with a 3-hour live session, which allowed more flexibility in pinpointing specific applications.

Highlights From A Near Dead Deck

• Slides 1-10: Social Media. Every social media class begins with a working definition of social media, even if the participants are familiar with the term. I prefer the simplest definitions, which makes it easier to understand the complexities of what happens within this environment.

• Slides 11-14: Demographics. This year, more than any other, it seemed important to dispel the myth that Gen Y owns the Internet. The fastest-growing segment of the U.S. population consists of people over the age of 50. Another conversation point that has evolved this year is understanding that while everyone is on the net, not every demographic participates in every network.

• Slides 15-41: Media History. While many participants are surprised how much time I spend on the historic context of media, I've always considered it important to dispel the myth that such a change in communication in new. It's not. The only thing new is the medium and the accelerating speed of adoption.

• Slides 42-47: Declining Media. Some people might consider it stating the obvious, but the rapid uptake of communication on the Internet and decline of traditional distribution models remains a relevant part of the conversation. The additional communication point that has surfaced this year is how increased amounts of information will likely lead to a resurgence of objective content sources.

• Slides 48-64: Applying Tactics. Since almost every class includes people with varied exposure, I do dedicate some time to sharing practical knowledge beyond the conceptual models. This section also included four very different accounts, which allowed me to illustrate how social media is largely situational to each organization.

• Slides 65-73: Social Networks. With the addition of the live session, I didn't include new content within this section, which was originally created in spring. It's important to note that the numbers have changed considerably. BlogCatalog has added 40,000 members since the original slide was created.

• Slides 74-81: Content And Discovery Again, with the ability to offer live session examples, I spent less time on this section, preferring to underscore that the social media environment allows tremendous flexibility in sharing content from the ability to condense our portfolio into a Flickr presentation (and iPhone presentation) to the success story of Does It Blend.

• Slides 82-100: Changing The World While the slides were essentially lifted from our Shaping Public Opinion presentation earlier in the year, walking participants through a Bloggers Unite campaign proves extremely useful in illustrating that communication is fluid and how to better integrate crowd-sourcing (participation input) while providing guidelines that still allow for some sense of a managed communication plan.

What Might The Next Deck Look Like?

Since every deck I develop is tailored to meet the objectives of specific audiences, there might be any number of solutions for 2010. However, it seems increasingly obvious that presentations with case studies and panels, while still important, will be breaking away toward conceptual modeling that spans multiple disciplines and multiple destinations.

I'll be sharing one of those conceptual models tomorrow as an extension of last week's Rushing The Net: Public Relations post. The model illustrates why so many companies are developing limited connections that revolve almost exclusively around their products while the online environment is much more valuable as a means to eliminate degrees of separation.

Other topics I'm especially interested in pursuing in the near future include the loss of content objectiveness in the media, the advent of portable content experiences as they apply to radio, the application of our measurement model on a specific campaign (we're waiting on numbers), and next year's pendulum swing that will place a greater emphasis on expertise over popularity.

The latter will include a comprehensive research study we commissioned with a deliverable on or around SXSW, pending my increased travel schedule that is shaping up to include London, San Francisco, and Washington D.C., among others.