A Good Laugh at Microsoft’s Expense, Part II

Three minutes of quick video entertainment awaits you.  What if Microsoft redesigned the iPod packaging?  Watch here.  This could be any big company, not Microsoft.

Makes you really realize how much “less is more” in terms of product design and packaging.  Like Google.

Thanks to Frank Addante from StrongMail for turning me on to this clip.  See Part I if you want another quick clip about punishing developers for buggy code.

Use Your Powers for Good

Neil Schwartzman, our compliance officer for our Sender Score Certified whitelist program, wrote a great post on the Return Path blog entitled How the Sender Community Can Help Fight Spam.  If you’re a commercial mailer, I’d encourage you to read it.  It’s a great perspective from a long-time anti-spam leader.

In the Land of Too Many Conferences, This is a Good One

It’s rare that I’m sad to leave a conference — usually I can’t leave fast enough.  But such is my mood today leaving Mediapost’s third Email Insider Summit.

Our industry is way over-conferenced in general.  I’m guessing that our company’s full conference calendar has 40+ events on it over the course of a year.  It’s more than we can afford to exhibit at, participate in, speak at, attend.  We do our best, and what money we spend is much more carefully monitored and measured than it used to be, but usually it’s with that sick feeling in the pit of our collective marketing stomach that we’re throwing money away just because our competitors are there.

But the Email Insider Summit is different.  While there are some aspects of the show that I don’t love — four days is a long time, and three half days of golf and snorkeling is a little too heavy on the boondoggle side for my personal taste — the content and attendees are fantastic.  Mediapost’s formula of comping marketers and charging vendors very high prices to attend ensures an intimate, high level, and vendor-light crowd.  That’s a recipe for success in my book!

The two most interesting nuggets from today:

1. John Stichweh from Coca-Cola’s observation that brand marketing and direct marketing continue to rapidly converge, and that measurement of outcome (e.g., ROI) as opposed to measurement of process (e.g., GRPs or impressions) are gaining steam, never to look back.  I couldn’t agree more.  What can be counted will be counted.  And it can all be counted in the world of advertising, somehow.

2. Lisa Galli from CNET’s discussion of mobile marketing and what they’re doing to take advantage of the channel.  The best example I’ve heard in years of a marketer leveraging a medium is their new SMS Reviews product — just text message CNET1 the words Review xxx (insert name of product here), and you’ll get a text message back with a product review.  Now THAT ought to make shopping for electronics much more interesting.

I’m ready for more conferences like these, and fewer mammoth trade shows.

Book Short:  A Good Dose of Introspection

I rarely blog about non-business books since this is a business blog — and I read a lot of them!  But occasionally, one manages to slip in, and this time, it’s The Five People You Meet in Heaven, by Mitch Albom.  From the author of Tuesdays With Morrie, which I also liked quite a bit, this one is excellent.  And a very, very quick read.

The book, in short (i.e., a book short <g>), is about a guy who dies, and who, in heaven, meets five people who have shaped his life and died before him.  Some he knows well, some he knows barely, some he’s never met.  Each one tells him a story that explains some part of his life to him and in doing so, helps him understand more about himself and why/how he lived on earth.

The book, as I said, is a short read.  But more than that, it’s a wonderful story and provides an opportunity for a structured moment of introspection, one that I found very valuable.  Quite frankly, this book should be a “once every year or two” read.

Drawing the Line:  Where We Come out

In the first post in this series, I laid out a dilemma we’ve had internally at Return Path in recent months: whether and how we accept clients who are in “grey” businesses like alcohol, pornography, and neutriceuticals, and whether that applies uniformly across all of our products (software vs. consulting vs. whitelist). In the second post, I reposted a summary of all the comments we received from readers. Now comes the fun part — the so what.

We had a good series of conversations internally on this issue that included some very spirited debate. Here’s where we come out.

First, we drew a distinction between three types of potentially “troublesome” clients: those whose businesses are illegal, or who advertise or sell illegal products; those whose businesses are involved in litigation around email, data, privacy, or security; and those whose businesses are in the grey area, or what we called in our discussions “morally hazardous.” In the end, we decided that for us, there’s no difference by type of product in terms of how we handle the situation. But each class of client has its own issues as well as enforcement mechanisms.

Let’s start with the easy one. Clients who break the law or whose businesses encourage others to do so have no place in our company. The challenge here is more on the edge cases — what about companies whose products or advertising are sometimes illegal (by geography or by age of target audience)? I will come back to that topic.

Next, we move on to those companies who are involved in email-related litigation. We added this category to our thinking because we view ourselves as advocates for end users, the champions of good, high quality email. Ultimately, the decision about whether or not to take on a client who is involved in email-related litigation is subjective. One example of a client we would take on is a very reputable company that has a single instance of a CAN-SPAM violation or investigation by the FTC. But there are other companies who are in much deeper. I will somewhat impolitely refer to them as “pissing in the pool.” As advocates for good email and as stewards of the email ecosystem, we can’t in good conscience allow some of these people to be clients, even of our software, if they have the potential to use the software for evil and not for good. Of course, once the litigation is finished we can re-assess, assuming the company was found to not have violated any laws.

Finally, the tough category, the “morally hazardous.” There certainly is something that resonates with us around one user’s comment that, to paraphrase, if you’re not comfortable telling everyone around the dinner table that you work for Client X, you shouldn’t work for Client X (or, Client XXX, as it were). But at the end of the day, legislating morality is impossible to get right for everyone, at every time. We think it’s not our business what kind of legal business our clients are in. In fact, we go so far as to say that as advocates for end users, our criteria around which clients to accept should be as objective as possible — that is to say, much more around their email reputation (how much do users like the content) than about some arbitrary judgment about what’s right and what’s wrong. We feel like as long as we maintain our policy of allowing employees to opt-out from working with clients or seeing clients’ content that makes them uncomfortable, we’re in as good shape here as we’re going to be.

Of course, that’s not to say we won’t, on a case-by-case basis, turn down a client because of their business. We aren’t a public utility. We have the right to walk away from a client for any reason (or, not to put too fine a point on it, no reason at all). But as a matter of policy we’ve decided to focus on email practices as a basis for who we work with and leave questions of morality of certain types of business aside.

As a final note, we clarified our policies for vetting and enforcing these standards. These do differ a bit by product. For our by-application whitelist, Sender Score Certified, we will continue to ask questions around the types of products and content that prospective clients include or link to in their emails. We will perform extra pre-client research on clients that check a number of boxes on the application that indicate they might be in a grey area or are involved in litigation. We will ask clients to self-certify their goodness. We will perform spot audits of these clients to make sure they stay in compliance with the things that are impossible to automatically monitor, even those tricky ones which are “sometimes legal.” And we will not be shy about terminating those who aren’t.

For our software and professional services, we have a “client vetting” document that asks some of those same questions, and against which we will research and audit as appropriate. For clients of our professional services, we require that sales/client services fill out this document 100% of the time for our standards and compliance team to review. For software clients, we leave it up to sales/client services management to flag the cases where there might be an issue and to run only those clients through the same vetting process.

I think that about wraps this topic up, at least for now. We do our best on this stuff, but it’s tricky, and I have no doubt that however we handle these situations, we will upset someone. I appreciate everyone’s input on this, and I welcome more by commenting below.

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.

Stuck In Legal, Responses

Well, I certainly struck a nerve with my Stuck In Legal rant/post last week.  As of now, there are 32 comments on the blog — my typical post generates 0-1 — and I've picked up between 50 and 75 new followers on Twitter, probably mostly because Fred tweeted about the post. 

Most of the comments on the blog were cheering me on; a couple were from lawyers, one well reasoned and another just a counter rant against stupid business people that had one or two good points buried in it.  You can certainly click through the link above if you want to read them.

But two comments didn't get put on the blog, which I thought I'd post here.  Keep the good thoughts coming on this topic.  It's an important one.

First, Jonathan Ezor (a professor of law and technology) posted his response — not a rebuttal — on the Business Week blog here.  He makes some very good points about how both sides, businessperson and counsel, can work better together to eliminate a bunch of the hassles I noted in my original post.

Second, Joe Stanganelli, a lawyer, emailed me the following, which was too long for my Intense Debate comment software to handle:

In defense of my profession…

EXPLANATIONS:

•Why companies' legal departments or outside counsel aren't directed to be as efficient in doing their work as their other departments

How exactly do you mean?  I'm not sure this is true.  Given the average amount of hours our profession works as it is, we *have* to be efficient.

I can tell you, however, that a huge pet peeve of us lawyers is when our clients essentially say (typically when they’re being billed hourly), "Gee, I want an answer to this very complex legal question that will require a lot of research because no statutes or case laws are directly on point, but don't spend a lot of time on it."

This is a bit like saying, “Look, don’t spend a lot of time on this transplant…I’ve got a meeting in an hour, and I’m trying to save money besides."

Also bear in mind that lawyers are not widget-makers or assembly line workers.  We aren’t even (usually) executive decision-makers.  We are in the knowledge and information industry.  We read, we think, and we write.  If you can provide us with some tips as to how to read, think, or write more efficiently, we would be delighted to hear them.

•Why companies insist on using their standard form of agreement if they're going to staff a legal department to review contracts anyway (this clearly wouldn't work if everyone in the world behaved this way)

The standard form of agreement has already (presumably) been determined by the company’s legal department to be the best form for the company's interests as part of the legal department’s careful legal analysis (i.e., the job they are paid to do).  Often, however, other companies, clients, etc. don’t use the standard form, or send their own form, or modify the standard form, or any number of other idiosyncrasies can happen with the execution of a contract.  All of these things have legal ramifications and have been the subject of past litigation.

•Why lawyers insist on answering questions with "because that's how all our contracts are" instead of applying their brains and logic to situations

(I'll try not to take too much offense at that last part.)

This generally happens because the answer “because that’s how all our contracts are” is a lot easier to say than to give the CEO a crash course in contract law.  It’s not fair, but it’s true.

A good lawyer, however, should at least be able to explain to boil it down to a few bullet points without being arrogant about it.

•Why business people seem to have no leverage with their legal departments, especially in larger companies, therefore surrendering the negotiation of business terms and the timing of relationship launches, technology usage, etc. to lawyers

This criticism is, if you’ll forgive me for saying so, a bit mind-blowing.  It’s not a matter of “leverage" at all.

Companies have legal departments as a preventative measure because they recognize that the best time to hire a lawyer is before you actually need one.  Most of law practice, in fact, is this “preventative law” and compliance work.  It saves the client (in this case, the company) time and money down the road by staving off lawsuits and liability.

These lawyers are in the business of protecting their clients from themselves – which the clients willingly pay them for because the clients (usually) recognize that they did not go to law school, pass the Bar Exam, and gain years of experiencing practicing law.

So when a company wants to launch a potentially harmful product via a distribution agreement that allows the distributor to get more money than he should because of a technicality, the legal department has to step in and tell the company, “YOU WILL GET SUED IF YOU DO THIS AND LOSE X AMOUNT OF DOLLARS!!!” or they aren’t doing their jobs.

A lawyer is a counselor – an advisor.  Any leader who totally disregards his advisors is not a good leader.

Again, this is not a matter of not having leverage with legal departments; it is a matter of not being able to change the law.

Please don’t shoot the messenger.

•Why in-house lawyers make the same dumb changes to wording and formatting that lawyers who bill by the hour make

The law is the law is the law; how the lawyer gets paid does not impact what the law is.  Those “dumb changes” are tried and true terminology that mean certain things in the courts and (usually) all the lawyers and judges know what they mean.  If the lawyers left it alone, your document or contract would potentially (perhaps even likely) mean something totally different.

Overall, please recognize that lawyers – at least in the legal department / “preventative law” context that you discuss – are in the risk management and compliance business.  They don’t make the law (at least, not the ones who work for you); they’re simply the guides who are navigating you – the layperson – through the legal system (one that took us years to understand).

After all, if you were blind, and you had a seeing-eye dog, would you get mad at the seeing-eye dog for not letting you cross the street when it’s a green light and a Mack truck is coming down the road?  Would you think that seeing-eye dogs were conspiring against you to not let you cross the street?

I will say this, though: Joshua Baer makes a great point.  A good lawyer should be able to provide you with a list of options, and explain (at least in a rudimentary fashion) the dollars-and-cents consequences of each one.  As J.P. Morgan said, “Well, I don't know as I want a lawyer to tell me what I cannot do. I hire him to tell how to do what I want to do.”

The Good, The Board, and The Ugly, Part III

To recap other postings in this series:  my original, Brad Feld’s, Fred Wilson’s first, Fred’s second, Tom Evslin’s, and my lighter-note follow-up.

So speaking of lighter-note takes on this topic, Lary Lazard, Tom Evslin’s fictional CEO who ran Hackoff.com, now has his own tips for effective board management.  You have to read them yourself here, but I think my favorite one is #3, which starts off:

Never number the pages of what you are presenting.  Lots of time can be used constructively figuring out what page everybody is on.

Enjoy.

Getting Good Inc., Part II

It was a nice honor to be noted as one of America’s fastest growing companies as an Inc. 500 company two years in a row in 2006 and 2007 (one of them here), but it is an even nicer honor to be noted as one of the Top 20 small/medium sized businesses to work for in America by Winning Workplaces and Inc. Magazine.  In addition to the award, we were featured in this month’s issue of Inc. with a specific article about transparency, and important element of our corporate culture, on p72 and online here.

Why a nicer honor?  Simply put, because we pride ourselves on being a great place to work — and we work hard at it.  My colleague Angela Baldonero, our SVP People, talks about this in more depth here. Congratulations to all of our employees, past and present, for this award, and a special thanks to Angela and the rest of the exec team for being such awesome stewards of our culture!

Book Short:  Is CX the new UX?

Outside In: The Power of Putting Customers at the Center of Your Business, by Harley Manning and Kerry Bodine from Forrester Research, was a good read that kept crossing back and forth between good on the subject at hand, and good business advice in general.  The Customer Experience (CX) movement is gaining more and more steam these days, especially in B2B companies like Return Path.  The authors define Customer Experience as “how your customers perceive their interactions with your company,” and who doesn’t care about that?

A few years ago, people started talking a lot more about User Experience (UX) as a new crossover discipline between design and engineering, and our experience at Return Path has been that UX is an incredibly powerful tool in our arsenal to build great technical products via lean/agile methods.  The recurring thought I had reading this book, especially for companies like ours, was “Is CX the new UX?”

In other words, should we just be taking the same kind of lean/agile approach to CX that we do with technical product development and UX — but basically do it more holistically across every customer touchpoint, from marketing to invoice?  It’s hard to see the answer being “no” to that question, although as with all things, the devil is in the implementation details.  And that’s true at the high level (the authors talk about making sure you align CX strategy with corporate strategy and brand attributes and values) as well as a more granular level (what metrics get tracked for CX, and how do those align with the rest of the companies KPIs).

The book’s framework for CX is six high-level disciplines: strategy, customer understanding, design, measurement, governance, and culture — but you really have to read the book to get at the specifics.

Some other thoughts and quotes from the book:

• the book contains some good advice on how to handle management of cross-functional project teams in general (which is always difficult), including a good discussion of various governance models
• “to achieve the full potential of customer experience as a business strategy, you have to change the way you run your business. You must manage from the perspective of your customers, and you must do it in a systematic, repeatable, and disciplined way.”
• one suggestion the book had for weaving the customer experience into your culture (if it’s not there already) is to invite customers to speak all-hands meetings
• another suggestion the book had for weaving the customer experience into everyone’s objectives was one company’s tactic of linking compensation (in this case, 401k match) to customer experience metrics
• “Customer Experience is a journey, not a project. It has a beginning but it doesn’t have an end.”

Thanks to my colleague Jeremy Goldsmith for recommending this book.

The Problem with Titles

This will no doubt be a controversial post, and it’s more of a rant than I usually write. I’ll also admit up front that I always try to present solutions alongside problems…but this is one problem that doesn’t have an obvious and practical solution.  I hate titles. My old boss from years ago at MovieFone used to say that nothing good could come from either Titles or Org Charts – both were “the gift that keeps on giving…and not in a good way.”

I hate titles because they are impossible to get right and frequently cause trouble inside a company. Here are some of the typical problems caused by titles:

• External-facing people may benefit from a Big Title when dealing with clients or the outside world in general. I was struck at MovieFone that people at Hollywood studios had titles like Chairman of Marketing (really?), but that creates inequity inside a company or rampant title inflation
• Different managers and different departments, and quite frankly, different professions, can have different standards and scales for titles that are hard to reconcile.  Is a Controller a VP or a Senior Director?  And does it really matter?
• Some employees care about titles more than others and either ask or demand title changes that others don’t care about.  Titles are easy (free) to give, so organizations frequently hand out big titles that create internal strife or envy or lead to title inflation
• Titles don’t always align with comp, especially across departments. Would you rather be a director making $X, or a senior manager making $X+10?
• Merger integrations often focus on titles as a way of placating people or sending a signal to “the other side” — but the title lasts forever, where the need that a big title is fulfilling is more likely short term
• Internal equity of titles but an external mismatch can cause a lot of heartache both in hiring and in noting who is in a management role
• Promotions as a concept associated with titles are challenging.  Promotions should be about responsibility, ownership and commensurate compensation.  Titles are inappropriately used as a promotion indicator because it inherently makes other people feel like they have been demoted when keeping the same title
• Why do heads of finance carry a C-level title but heads of sales usually carry an EVP or SVP title, with usually more people and at least equal responsibility?  And does it sound silly when everyone senior has a C level title?  What about C-levels who don’t report to the CEO or aren’t even on the executive team?
• Ever try to recalibrate titles, or move even a single title, downward?  Good luck

What good comes from titles?  People who have external-facing roles can get a boost from a big title. Titles may be helpful to people when they go look for a new job, and while you can argue that it’s not your organization’s job to help your people find their next job, you also have to acknowledge that your company isn’t the only company in the world.

Titles are also about role clarity and who does what and what you can expect from someone in a department.  You can do that with a job description and certainly within an organization, it is easy to learn these things through course of business after you join.  But especially when an organization gets big, it can serve more of a purpose.  I suppose titles also signal how senior a person is in an organization, as do org charts, but those feel more like useful tools for new employees to understand a company’s structure or roles than something that all employees need every day.

Could the world function without titles?  Or could a single organization do well without titles, in a world where everyone else has titles? There are some companies that don’t have titles. One, Morning Star, was profiled in a Harvard Business Review article, and I’ve spoken to the people there a bit. They acknowledge that lack of titles makes it a little hard to hire in from the outside, but that they train the recruiters they work with how to do without titles – noting that comp ranges for new positions, as well as really solid job descriptions, help.

All thoughts are welcome on this topic.  I’m not sure there’s a good answer.  And for Return Pathers reading this, it’s just a think piece, not a trial balloon or proposal, and it wasn’t prompted by any single act or person, just an accumulation of thoughts over the years.