Owning Up

Though I have not closely followed everything that has been going on with Toyota, my casual observance of their reaction to the problems and recalls has left me with a good impression. The Toyota ads of the past few weeks have not been directed towards selling cars. Rather, the company is (rightly) owning up to the mistakes they have made and they appear to be genuinely and sincerely focused, for the time being, on regaining consumer trust.

In 1982, several people died after taking Tylenol that someone had laced with cyanide. Though Johnson & Johnson (the manufacturer) was not directly at fault, they owned up and did everything they could to make it right. The company tried to find the culprit, both internally and by working with police. More importantly, however, they changed the way they did business and introduced tamper-proof and tamper-evident packaging. As a result, the entire industry changed and millions of people are safer because of it.

I believe that with the tragedies that has occurred with Toyota's braking and steering malfunctions, there is a great opportunity for both Toyota and the whimpering auto industry as a whole. The first step is owning up, which they seem to be doing. In the end, however, the true test will be whether Toyota can effect a change in the way they do business; a change that makes people safer in the future. If they can do this they will, like Johnson & Johnson, regain our trust and remain a successful company for many years to come.

Foamy Shampoo

Today I used some Dove shampoo that my wife recently bought. As I massaged the white goop in my hair, I thought of how well it must be working because of how thick and foamy it felt.

And then I realized that I had been duped. Shampoo is foamy for the same reason that margarine is yellow and Silk is located in the refrigerated aisle by the milk: because that's how consumers expect and want it. For some reason, people think foamy shampoo cleans better than non-foamy shampoo, even though it's purely psychological. So Dove counts on that assumption when they create their product. And I fell for it.

Nice branding, Dove.

Lunch with Seth Godin

On Friday, Michelle and I went to a charity event to see Seth Godin speak. Seth is an influential marketer/author/blogger whom I follow pretty regularly. I bought his new book, Linchpin, at the event. Michelle knew it would mean a lot to me, so she ran up to Seth and had him sign my copy. Seth's gave a really intriguing presentation about being indispensable. Here are some of the notes that I took from the event.

A genius is simply someone who solves a problem in a new way

A factory is anything that produces the same thing over and over again

Seth's definition of Art
1) made by a human
2) gives a gift
3) changes someone for the better

"If you can write it down, I can find it cheaper"

Don't do something where people expect you to be average

Getting good grades in school only means that you're good at school

On the recession: "Just because the tide is out doesn't mean there is any less water in the ocean"

Anxiety is the feeling of failure in advance

Overall, we had a great time and I really enjoyed seeing Seth in person!

Transparency

At the Hongqiao Pearl Market in Beijing, vendors thrive on the fact that customers (mostly foreign tourists) by in large are clueless as to the value of the items for sale and how little vendors would actually sell them for.

"She's asking $30 for that Ermenegildo Zegna tie. Could I get it for $20? Or maybe even 10?"

"$80 for Adidas or Puma shoes is a bit steep. I could probably offer half that."

With a little bit of negotiating, though, you start to figure out the exact price at which the vendors won't sell. When I visited this market, I used this information to my advantage, spreading real prices to the members of my group and even other tourists whom I didn't know.

"Most people will give you shoes for $5 or $6."

"Thanks. Don't pay more than $1 for the ties."

Once the shopkeepers found out what we were doing, they were furious. Understandably, the more ignorant they can keep people, the higher their margins. They got angry and said they wouldn't play by our rules. But in the end, they had to cave. I'd just go into a shop and skip the entire bargaining process by saying "I'm here to buy 10 ties for $10 or I'll go somewhere else."

Though some customers are able to find the bare-bones price, I'm sure that these merchants often score big on tourists who don't know how to haggle (or even that all the name brands are fake, for that matter).

Most businesses don't have the luxury of feeding off of ignorance. With the internet, consumer reviews, and word of mouth, you can't expect to pull a fast one and get away with it.

One More Beef With Education

Magician
Bus Driver
Park Ranger
Actor
Photographer
Computer Programmer
Entrepreneur


These are a few of the things that remember wanting to be when I grew up. Except for the first two (which were on my radar when I was about five), I realized that I wanted to be these things through the help of school career counseling between 7th and 12th grade. Every year during that time, a counselor would come into one my classes and I would have to take a questionnaire that asked me things like “Do you prefer working individually or as part of a group?” and “Do you prefer having a set, rigid work schedule or a flexible one?” The questionnaire would narrow down all possible careers and tell me what type of career I should pursue.

Looking back on this experience, I can’t help feeling like this was an epic waste of time. While I can’t fault the system for my changing interests each year, I do question their approach and execution of my “career guidance.” I feel that too much emphasis was placed on the “what” and not enough on the “how.” Unless my memory fails me, we spent very little time discussing the best paths for me to choose to make my dream career possible. To make my career become a reality, I was taught, I should go to college and major in that field. However, the older I get, the more I am coming to the realization that going to college and majoring in what one wants to do is only one of many ways to make a dream career possible. As an 18 year old recent high school graduate, I knew next to nothing about internships, work-study programs, specialized vocational schools or other opportunities that might have been a good fit for me.

So what did I do? I went to the educational equivalent of Wal-Mart. At my “big box” university, I got a quality education for a low-price. Seven and a half semesters later, I left my alma mater with an amazingly bland degree in general business. At the time, of course, I didn’t know that my degree was bland. I had been taught to go to college and major in what I wanted to do, and that’s what I did. Yet, in just the first couple of years since graduation, I have learned the (now obvious) lesson that a very general degree gets you a very general job.

In retrospect, I don’t know what more direction on the “how” could have done for me. After all, what I wanted to be changed radically from year to year and essentially has nothing to do with the path I’m now pursuing. On the other hand, with more “how”, I might have gained skills and learned about opportunities that could have opened me up to something other than a bland big box bachelor’s degree and set me on a more efficient track.

Sand Dollars Less, Real Dollars More

In college, I took a course in personal finance. In the class, I studied useful topics like how to buy and finance a house, how to invest and save for retirement, and how to use credit responsibly. I took the class only because it was required for my major, but it turned out to be one of the most practical classes that I took in college.

In my eight years of high school and college I was required to take the following science classes:

High School - Biology, Chemistry, Physics
College - Biology, Physics, Physical Science

In all, I took nine semesters of science. Now this would be well and good if I wanted to be a scientist, or even a doctor. But I don't. I want to be a businessman. I can understand the need to familiarize students with a broad range of topics, but why does our education system insist on requiring so much science when few people will ever use it in their life or their jobs?

Conversely, I believe that our education system has largely neglected the importance of teaching about money and finance. These topics, I would argue, have a much more practical application for more people than science does. I consider myself lucky that I had even one semester of finance training. But if it had not been part of my major, I would have left college knowing more about mushrooms and mollusks than about money.

I don't mean to say that science is worthless. I could have just as easily described all of the humanites, social science, or English classes that I was required to take. I definitely see the need to teach all subjects for a well-rounded education. My point is that I think that our "general education" is a top-heavy with subjects that many people do not need on a regular basis. As a result, more useful topics like finance are glazed over or omitted.

Though blame for the current financial crisis can be appropriately placed upon greedy bankers and businessmen, I strongly feel that there is some culpability left over for our education system. Over the last 20 or 30 years, if our schools had spent more time teaching students how to spend and save responsibly, we as an American people might not have gotten ourselves into this mess in the first place.

On the other hand, my knowledge earthworms have five hearts is bound to pay off someday.

Taste Testing in Politics

Senate Majority Leader Harry Reid has found himself in some hot water over racial remarks he made during the 2008 presidential election. Amidst the stir, one thing is strikingly absent: the outrage of Jesse Jackson and Al Sharpton. It seems like every time a prominent figure makes a comment with even the slightest hint of racial overtones, those two "civil rights activists" pounce immediately. But not in this case. In my opinion, their noticeable silence after Reid's comments further proves my belief that these two Reverends have something other than equality on their agenda.

I just finished reading an excellent chapter in Predictably Irrational called "The Effect of Expectations". In this chapter, the author recounts the Pepsi Challenge, a study that essentially showed that in a blind taste test, a majority of people preferred Pepsi to Coke. Unfortunately for Pepsi, when consumers know which cola they are drinking, they prefer Coke to Pepsi. In other words, somehow Coke has branded itself in a way such that cola drinkers actually change the way they think about how something tastes, depending on the expectations they hold and experiences they have had.

My guess is that in a "blind taste test" (if you read Reid's quote without telling them who said it) that Jackson and Sharpton would be up in arms. Yet when they know that it came from one of their own (a powerful liberal), there is no controversy.