Less is More

I have a challenge for the email marketing community in 2009. Let’s make this the Year of “Less is More.”

Marketers are turning to email more and more in this down economy. There’s no question about that. My great fear is that just means they’re sending more and more and more emails out without being smart about their programs. That will have positive short term effects and drive revenues, but long term it will have a negative long term impact on inboxes everywhere. And these same marketers will find their short term positive results turning into poor deliverability faster than you can say “complaint rate spike.”

I heard a wonderful case study this week from Chip House at ExactTarget at the EEC Conference. One of his clients, a non-profit, took the bold and yet painful step of permissioning an opt-out list. Yikes. That word sends shivers down the spine of marketers everywhere. What are you saying? You want me to reduce the size of my prime asset? The results of a campaign done before and after the permission pass are very telling and should be a lesson to all of us. The list shrank from 34,000 to 4,500. Bounce rate decreased from 9% to under 1%. Spam complaints went from 27 to 0 (ZERO). Open rate spiked from 25% to 53%. Click-through from 7% to 22%. And clicks? 509 before the permissioning, 510 after. This client generated the same results, with better metrics along the way, by sending out 87% LESS EMAIL. Why? Because they only sent it to people who cared to receive it.

This is a great time for email. But marketers will kill the channel by just dumping more and more and more volume into it. Let’s all make Less Is More our mantra for the year together. Is everyone in? Repeat after me…Less Is More! Less Is More!

Please, Let There Be Another Explanation

One of the things I was most excited about with an Obama presidency was that it finally seemed as if we had a real leader in the hot seat.  Someone who might actually be able to run an effective government instead of a bureaucracy paralyzed by partisanship.  I still have this hope.

But I also hope what we’re seeing around the stimulus bill is not what we’re in for the next four years.  What I’m seeing is a complete absence of leadership around the problem.  Seems to me, taking lessons from the corporate world, that Obama should have done two things that would have gotten the program passed in a bipartisan way much more quickly:

1. Build true consensus ahead of time and make the congressional leaders do the sales job in a bipartisan way.  It’s great that Obama went up to the Republican caucus to talk to them and get their point of view, but shouldn’t he have gathered the top 2-3 leaders of each party and each house of congress in his office (or in theirs) to whiteboard this whole thing out ahead of time, so that those people could be bought in and then go on to convince others?  Few successful major corporate initiatives are launched without a careful eye to how all major stakeholders will react so that the majority will be on board.

2. Link the plan to the election in an obvious way.  Obama can credibly claim that the election was a decisive call for change.  He can also credibly claim a small number of priority items that clearly emerged as points of change — reducing/eliminating our dependence on foreign oil, vastly expanded access to health care, reducing taxes on the middle class, and fixing the problem of the revolving door between lobbyists and government as the relevant ones here (there are others around foreign policy and the wars, of course).  Why isn’t the stimulus package pumping money in the economy to the specific ends that were articulated during the campaign, at least for 60-80% of the money, anyway? Seems to me like that’s the best way not just to sell the program to Congress and the American people, but to actually have it stand for something other than 535 people’s pet local projects.  Again, in corporate America, once everyone has agreed on a strategy and goals, it’s much easier to define a path forward around how to execute the details.

I hope something else is going on here — perhaps Obama just wants to make Congress look like a bunch of idiots, so they self destruct and ultimately yield more power to the White House — but my fear is that our new leader needs some lessons in leadership.

Desperately Seeking an Owner for “Other”

A couple weeks ago in Living with Less…For Good, I mentioned that we’re on a crusade against extraneous expenses at Return Path these days, as is pretty much the rest of the world.

After a close review of our most recent month’s financials, we have a new target:  “Other.”  A relatively inconspicuous line on the income statement, this line, which different companies call different things such as “Other G&A” and “General Office,” is inherently problematic NOT because it inherently encompasses a huge amount of expenses, although it might, but rather because it inherently doesn’t have an owner and rarely has a budget.

As we dug into the gory details of “Other” our accounting system (btw – we LOVE Intacct – great web-based application for better information flow and transparency), our Exec team came to this realization the other day.  It’s not that we buy too many pens, per se.  It’s that the absence of someone being in charge of that line item means that no one manages it to a budget – or even just manages it to some kind of reasonability test.  What we found in the details was that there are definitely more areas we can do better at managing expenses here.  No individual item is going to change our income statement profile, but little things do add up to big things in the end.

Whether it’s duplication of expenses, too much FedEx, forgotten recurring items, or the storage locker that we don’t even know what’s in any more, we’re spotting little ways to save money left and right.

For us going forward, we are going to put someone in charge of this line item, develop a budget, and without forcing big-company-like procurement policies on the rest of the organization, manage it down!

Twitter

A small administrative note…I changed my Twitter name to mattblumberg from its more obscure predecessor.  Not sure I'll tweet a lot more, but I may give it a try.

Book Short: The Joys of Slinging Hash

Patrick Lencioni’s The Three Signs of a Miserable Job is a good read, as were his last two books, The Five Temptations of a CEO (post, link), and The Four Obsessions of an Extraordinary Executive (post, link).  They’re all super short, easy reads (four express train rides on Metro North got the job done), with a single simple message and great examples.  This one is probably my second favorite so far.

This book, which has a downright dreary title, is great.  It points to and proposes a solution to a problem I’ve thought about for a long time, which is how do you create meaning for people in their day to day work when they’re not doing something intrinsically meaningful like curing a disease or feeding the homeless.  His recipe for success is simple:

– Get people to articulate the relevance in their jobs…the meaning they derive out of their work…an understanding of the people whose lives are made better, even in small ways, by what they do every day

– Get people to measure what they do (duh, management 101), IN RELATION TO THE RELEVANCE learnings from the last point (ahh, that’s an interesting twist)

– Get to know your people as people

All of these are things you’d generally read in good books on management, but this book ties them together artfully, simply, and in a good story about a roadside pizza restaurant.  It also stands in stark contrast to the book I reviewed and panned a few days ago by Jerry Porras in that it is nothing but examples from non-celebrities, non-success stories — ordinary people doing ordinary jobs.

Brad has blogged glowingly about Death by Meeting, so I’ll probably make that my next Lencioni read next month, with two more to go after that.

Book Short:  Long on Platitudes, Short on Value

I approached Success Built to Last:  Creating a Life That Matters, by Jerry Porras, Stewart Emery, and Mark Thompson, with great enthusiasm, as Porras was co-author, along with Jim Collins, of two of my favorite business books of all time, Built to Last and Good to Great. I was very disappointed in the end.  This wasn’t really a business book, despite its marketing and hype.  At best, it was a poor attempt at doing what Malcolm Gladwell just did in Outliers in attempting to zero in on the innate, learned, and environmental qualities that drive success.

The book had some reasonably good points to make and definitely some great quotes, but it was very rambly and hard to follow.  Its attempt at creating an overall framework like the one used in Built to Last and Good to Great just plain didn’t work, as two of the three legs of the stool were almost incomprehensible, or to put it more charitably, didn’t hang together well.

This isn’t a terrible book to have on your shelf, and it might be good to skim, but remember that “skim” is only one letter away from “skip.”

Symbolism in Action

A couple months ago, I wrote about how the idiots who run the Big 3 US automakers in Detroit don’t have a clue about symbolism — the art or the science of it.  Yesterday, I wrote about how I think the non-headcount cuts to G&A that we’re making at Return Path during these challenging economic times will be positive for the company in the long run.  The two topics are closely related.

Obama announces on Day 1 that White House staffers who make more than $100k won’t be getting a pay raise this year.  Presumably all of those people just started their jobs on January 20 and wouldn’t be eligible for a raise until 2010.  Return Path cuts pilates classes in its Colorado office — an expense that must cost around $3,000/year.  Practically speaking, it won’t make a difference to our budget one way or another.  Microsoft lays off 1,400 people — a real number, certainly for those families — but that’s the equivalent of Return Path laying off 2 people. 

Sometimes the symbolic is just that.  It is something designed to send a signal to others, and not much more.  You could argue that all three examples above mean nothing in reality, so they were just symbolic.  A waste of time.

You can also make the argument that sometimes, when done right, symbolism turns into action as it motivates or serves as a catalyst for other changes.  Obama’s cuts may be fictitious, but they set the tone for broader action across a 2mm person bureaucracy.  Pilates in the office?  Feels too excessive these days, even for a company obsessed with its employees and their well being, in an era where we’re cutting back other things that are more serious.  Microsoft has gobs of cash and doesn’t need to worry about its future, but it wants to tell the other 99% of its employee population that it’s time to buckle down and fly straight.  And they will.

Anyone who thinks the synbolic doesn’t influence the practical should think again.  Or just talk to Caroline Kennedy about the impact of her admission that she hadn’t voted in years on her political ambitions.

Living With Less…For Good?

Like all companies, Return Path is battening down the hatches a bit on expenses these days.  Our business is very strong and still growing nicely, but in this environment, the specter of disaster looms large, so there's no reason not to be more cautious and more profitable.

We weren't an extravagant company before this, and we never have been. But there is almost always room to save. Less travel, leaner budgets for office cafeterias, no more pilates classes in the Colorado office.  We've been very clear internally that our three priorities are protecting everyone's job, everyone's salary, and everyone's health benefits.  Hopefully things continue to go well and those can remain sacrosanct.

We are now a few months into our various cost savings plans, and it's great to see the results on the income statement and balance sheet.  More than that, it's great to see how everyone in the company is rallying around the common cause and looking for other ways to save money as well.  We've made it chic to be cheap.  And so far, there's no impact on the business. 

It will be interesting to me to see what happens on the far end of this economic badness.  It's often said the companies that make it through times like these emerge stronger on the other side, and I think I now understand why:  it's clear to me that some of the changes will work long term and some will only work short term, which means that we'll learn during this period that we can live with less. 

That doesn't mean we were profligate in the past; but it does mean that I think we are going to retrain ourselves.  We don't have to send 10 people to a big trade show to have an impact and drive the business forward.  We don't have to be the vendor who picks up the tab at the end of the night.  We don't need to pay for half the company to have cell phones (a very 1999 policy) to retain top talent.  I bet we will learn those things — and a bunch of others to come — in the next few months.

Angry, Defiant, and Replete with Poor Grammar

I didn’t see Bush’s farewell address on TV on Thursday, but Mariquita and I did see his press conference on Monday.  It was exactly what you’d expect it to be and quite frankly just like the last eight years:  angry, defiant, and replete with poor grammar.

I’ve said repeatedly that I think Bush has destroyed the Republican party and will go down in history as one of the worst presidents this country has ever had, if not the worst.  It’s not surprising that his tone at the end is as the title of this post describes.  But it is a shame.  His whole administration is a shame.  The really sad part is that it didn’t have to be.  People make mistakes — even really bad ones.  And they can recover from them and go on to do great things in life if two conditions exist:

1. They solicit feedback on their performance, and

2. The internalize and act on that feedback

Bush not only didn’t “get” these two points; he seemed to revel in them.  “Not paying attention to polls” and “At least you know where I stand” seemed to him to be pillars of strength as opposed to pillars of ignorance and complete and total lack of intellectual curiosity.  You don’t have to try to win a popularity contest to find out when something is going wrong on your watch.  And you can be bold, admit a failure, learn from it, and move on instead of just digging yourself deeper and deeper into the same hole.

I read a great article in The Economist last night that summarized its current view of Bush’s legacy, and in fact it noted a bunch of areas in which Bush appeared to learn from his mistakes, though he probably wouldn’t phrase it that way.  The fact that his second administration did do more to reach out to key allies in Germany and France is one example.  And to the article’s credit, it even noted some of Bush’s accomplishments, or at least the areas in which his thinking was right — those those are just dwarfed in the end by his failings.  

At any rate, I’m delighted he’ll be leaving office on Tuesday.  Inauguration day is one of my favorite days in America, and I look forward with optimism to the incoming administration as I always do, regardless of how I voted.

But as for Bush, I think I’d rather have the pilot of that USAir flight as my commander in chief.  Now there’s a guy (I don’t even know his name, and I probably never will) who had a quick grasp of a difficult situation and produced a brilliant and elegant solution in short order!

Fig Wasp #879

I have 7 categories of books in my somewhat regular reading rotation:  Business (the only one I usually blog about), American History with a focus on the founding period, Humor, Fiction with a focus on trash, Classics I’ve Missed, Architecture and Urban Planning (my major), and Evolutionary Biology.  I’m sure that statement says a lot about me, though I am happy to not figure it out until later in life.  Anyway, I just finished another fascinating Richard Dawkins book about evolution, and while I usually don’t blog about non-business books, this one had an incredibly rich metaphor with several business lessons stemming from it, plus, evolution is running rampant in our household this week, so I figured, what the heck?

The Dawkins books I’ve read are The Selfish Gene (the shortest, most succinct, and best one to start with), The Blind Watchmaker (more detail than the first), Climbing Mount Improbable (more detail than the second, including a fascinating explanation of how the eye evolved “in an evolutionary instant”), The Ancestor’s Tale (very different style – and a great journey back in time to see each fork in the evolutionary road on the journey from bacteria to humanity), and The God Delusion (a very different book expounding on Dawkins’ theory of atheism).  All are great and fairly easy to read, given the topic.  I’d start with either The Selfish Gene or maybe The Ancestor’s Tale if you’re interested in taking him for a spin.

So on to the tale of Fig Wasp #879, from this week’s read, Climbing Mount Improbable.  Here’s the thing.  There are over 900 kinds of fig trees in the world.  Who knew?  I was dimly aware there was such a thing as a fig tree, although quite frankly I’m most familiar with the fig in its Newton format.  Some species reproduce wildly inefficiently — like wild grasses, whose pollen get spread through the air, and with a lot of luck, 1 in 1 billion (with a “b”) land in the right place at the right time to propagate.  At the opposite end of the spectrum stands the fig tree.  Not only do fig trees reproduce by relying on the collaboration of fig wasps to transport their pollen from one to the next, but it turns out that not only are there over 900 different kinds of fig trees on earth, there are over 900 different kinds of fig wasps — one per tree species.  The two have evolved together over thousands of millenia, and while we humans might take the callous and uninformed view that a fig tree is a fig tree, clearly the fig wasps have figured out how to swiftly and instinctively differentiate one speices from another.

So what the heck does this have to do with business?  Three quick lessons come mind.  I’m sure there are scores more.

1. Collboration only works when each party benefits selfishly from it.  Fig wasps don’t cross-pollenate fig trees bcause the fig trees ask nicely or will fire them if they don’t.  They do their job because their job is independently fulfilling.  If they don’t — they probably die of starvation.  They’re just programmed with a very specific type of fig pollen as their primary input and output.  We should all think about collaboration this way at work.  I wrote a series of posts a couple years back on the topic of Collboration Being Hard, and while all the points I make in those posts are valid, I think this one trumps all.  Quite frankly, it calls on the core principle from the Harvard Project on Negotiation, which is that collaboration requires a rethinking of the pie, so that you can expand the pie.  That’s what the fig trees and fig wasps have done, unwittingly.  Each one gets what it needs far more so than if it had ever consulted directly with the other.  The lesson:  Be selfish, but do it in a way that benefits your company.

2. Incredibly similar companies can have incredibly distinct cultures.  900+ types of fig tree, each one attracting one and only one type of fig wasp.  Could there be anything less obvious to the untrained human eye?  I assume that not only would most of us not be able to discern one tree or wasp type from another, but that we wouldn’t be able to disdcern discern any of the 900+ types of trees or wasps from thousands or hundreds of thousands or millions (in the case or urbanites) types of trees or bugs in general!  But here’s the thing.  I know hundreds of internet companies.  Heck, I know dozens of email companies.  And I can tell you within 5 minutes of walking around the place or meeting an executive which ones I’d be able to work for, and which ones I wouldn’t.  And the older/bigger the company, the more distinct and deeply rooted its culture becomes.  The lessons:  don’t go to work for a company where you’d even remotely uncomfortable in the interview environment; cultivate your company’s culture with same level of care and attention to detail that you would your family — regardless of your role or level in the company!

3. Leadership is irrelevant when the operating system is tight.  You think fig wasps have a CEO?  Or a division president who reports into the CEO that oversees both fig wasps and fig trees, making sure they all cross-pollenate before the end of the quarter?  Bah.  While as a CEO, you may be the most important person in the organization sometimes, or in some ways, I can easily construct the argument that you’re the least important person in the shop as well.  If you do your job and create an organization where everyone knows the mission, the agenda, the goal, the values, the BHAG, whatever you want to call it — withoutit needing to be spelled out every day — you’ve done your job, because you’ve made a company where people rock ‘n’ roll all night and every day without you needing to be in the middle of what they’re doing. 

I’m sure there are other business lessons from evolutionary biology…send them along if you have good thoughts to share!

Bundle of Elyse

Mariquita and I are pleased to introduce our newest family member, Elyse Joy Blumberg, who arrived this evening!  Quite an experience today – just doesn't get boring, no matter how many you go through.

The official announcement is here.