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When it comes to branding, Starbucks’ cup runneth over

Starbucks’ chairman Howard Schultz recently told his top executives that they may be “watering down the Starbucks experience [and] soul.” If the Starbucks “experience” and “soul” have anything to do with coffee, Schultz may be right that books, CDs, movies, stuffed animals, and egg, bacon, and cheese sandwiches distract from that soulful experience. What’s fascinating to me is how Starbucks has managed to display this diffused branding in the most public of places – on its coffee cups. Starbucks’ cups, of course, were never just containers. They are also large, sorry, grande billboards.

On one side is the ubiquitous Starbucks’ logo – the wavy-haired, large-breasted woman in the green circle. But the real branding begins round back where, on my particular cup today, a musician named Dan Zanes envisions in “The Way I See It #193” a “21st Century America where families, friends, and neighbors gather together at the end of each day… to tell stories and jokes, to sing and dance with wild abandon.”

This is a branding hat trick. First, Starbucks endorses open speech and wants to connect their customers with the trendsetters of today. Second, there’s Zanes, who is, presumably, cool (which I have to take on faith because he exists only in the world of Starbucks, not iTunes). Third, if you do want to hear Zanes’ music, you are told to go to “Starbucks Hear Music” on XM Satellite Radio. More cool.

By now, Starbucks is already way too cool for me. But, wait, this cup overflows with even more branding. The cup also tells us that it is “made with 10% post-consumer recycled fiber.” I’m not sure what that means. Post-consumer is a little scary, even apocalyptic sounding. The fiber part is, hopefully, not nutritional information. Anyway, this reminds us that Starbucks is not only cool, but also responsible. Cool and responsible is a little oxymoronic, but the company seems to pull it off. So, at this point, Starbucks has done as much branding as can be done on a single cup – even a grande one.

Now, it’s the lawyers’ turn. Lest anyone think that Starbucks’ actually endorses Zanes’ zany vision, we are told that “this is the author’s opinion, not necessarily that of Starbucks.” Are there really lawyers in Seattle who think I’d sue the company just for endorsing a silly, utopian idea? I know our judicial system is messed up, but I can’t imagine that suit would go very far, even in “21st Century America.” However, if while reading Zanes’ world view I spill scalding coffee on my crotch, I damn well would sue. But that’s covered, too. The cup warns, “Careful, the beverage you are about to enjoy is extremely hot.” In other words, you won’t enjoy it in your lap.

You’ve got to hand it to Starbucks. It has carefully parceled out the real estate on its cups to the branding department, the music promotion department, the legal department, and the department of silly ideas. Cool, very cool.

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Newspapers finallywaking up to innovation’s role in survival

I have just finished reading The Washington Post over a cup of Starbucks coffee – a morning ritual that occurs less regularly now than it used to. The Starbucks part still happens every morning. But the Post part happens a few days each week instead of every day as it once did. It seems to me the contrast says something about Starbucks and about newspapers.

Traditional papers are in decline. We’ve all heard the familiar explanations: the Internet, consolidation of advertisers, a new generation’s short attention span, increased competition. Wait a minute. There’s something wrong with that last one. In fact, it is dead wrong. The greatest cause of newspapers’ troubles – and the one seldom mentioned – is their historic lack of competition. And, if anything will save the medium, it will be the fact that they now have to fight for every reader. Monopolies are not good for their customers nor, ultimately, for the monopolies themselves – and most major papers were monopolies until very recently. And, they acted like monopolies with arrogant disregard for the customer and a dismal lack of innovation.

They probably would also have adopted the third characteristic of monopolies – price gouging – except papers make their money off ads and have always subsidized the subscriber in order to boost circulation.

Starbucks, by contrast, was an upstart startup just a few years ago, taking on the coffee giants like Dunkin’ Donuts and McDonald’s. And Starbucks acted like startups do – it broke the rules, listened carefully to customers, and innovated like crazy. The greatest threat to Starbucks now is that it has become so ubiquitous it may soon look – and act – like a monopoly.

But Starbucks and newspapers have (or,at least, had) one important trait in common: They are driven by habit. Therein lies more depressing news for newspapers. I have two college-aged sons. Both have already developed the coffee habit. Neither has developed the newspaper habit. Unless newspapers can find a way to reverse this trend, they will soon look like tobacco companies – dependent upon a dying generation of “addicted” users.

The good news for newspapers is that they seem, finally, to understand their new situation. Increased competition – mostly from nontraditional sources like all news Web sites and blogs – has caused them to think competitively, to listen to their customers, and to innovate with their own Web sites, online communities, localization, blogs, and RSS feeds. Even the traditional dead tree product is susceptible to innovation, as The Wall Street Journal has recently shown.

If newspapers can continue this pattern of innovation and find ways to make newspaper reading – in whatever format the reader chooses – a habit again, they will not only survive, but prosper. The invention of TV was supposed to doom radio. The VCR was going to kill the movie theater. Neither prediction proved true, but only because radio and theaters started innovating and finding new ways to meet customers’ needs (think Howard Stern and the multiplex). Papers can survive in the same way – now that they have finally woken up and smelled the coffee.

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Dems have the right message for the 2006 election – ‘not’

If the Democrats wake up on November 8 having seized control of one or both houses of Congress, it will be for one reason – they had the better message. This is ironic, since throughout the campaign Democrats have been accused of having no message. That is wrong. Their message is: “We’re not them.”

What their critics really mean is that the Democrats have no program, which is true enough. But, in politics, if you’re the “out” party, you don’t need a program to have a message.

Politics in this country is a binary system – all zeros and ones, and voters get to pick one or the other. This keeps it easy – a good thing because voters have more interesting things on their minds – like their kids’ soccer games or who’s getting thrown off the island next week.

It has become a political cliché to say that elections are about the future. Not really. Elections are about the past – did you like it enough to continue it, or are you willing to risk the unknown? In that sense, voters in this midterm election face a dilemma.

Most like their own congressman or senator enough to return him or her to office. But most are sufficiently disgusted with the status quo to want a new Congress – which can only happen with new congressmen. Democrats understand this dilemma and have crafted their message accordingly. They’re not George W. Bush, Dick Cheney, Donald Rumsfeld, Mark Foley, or Jack Abramoff. Forget that none of those folks is on a ballot. If you don’t want more of the same, vote for something different. Vote Democratic.

This may be remembered as the “election of ’49” – not 1949, but ’94 in reverse. In 1994, after 40 years of control of the House, the Democrats were tossed out resoundingly by the voters who had finally had enough. Newt Gingrich got a lot of credit for this because he had crafted the Republican “Contract with America,” which helped galvanize his party’s case. But, in all likelihood, the “revolution of ’94” would have occurred with or without Newt’s contract.

This year, the Democrats have offered no such clear-cut alternative policy. But they have understood the importance – in politics, as in business or life – of a clear, simple, unified message. And, they’ve had the courage of their non-convictions – refusing to be bullied into taking unnecessary stands by frustrated Republicans or high-minded media.

Is a “throw the bums out” election good for the country? It is tempting to say the country is voting for a “pig in a poke,” but the fact is that voters seldom know in advance what a new President will do, much less a new Congress.

Will a Democratic Congress end the war in Iraq, refocus the war on terror, repeal tax cuts for the wealthy, and rid the Congress of sexual predators? Probably not. But it would restore political balance and accountability in Washington, and that’s no small matter. That’s why “we’re not them” is not only an effective message, it’s an important one.

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When it comes to wartime comms, Bush is no Lincoln

In business and in life, we all depend on role models to help shape our decisions and behavior. Countless “how-to” business books testify to this. I was reminded of this when I heard that President Bush’s summer reading list includes two books on Abraham Lincoln.

I suspect Lincoln is Bush’s presidential role model. After all, Lincoln faced a defining moment in our history – a mortal threat to our nation’s existence. Bush sees the “global war on terror” as just that. Lincoln had a singular focus – to win the war at all costs. Ditto, Bush. When others wavered, or thought the cost of war was too great, or the outcome too uncertain, Lincoln was a rock. Just like Bush. Lincoln would not be deterred by constitutional niceties like habeas corpus. Bush remains determined to adopt “all necessary means” – Lincoln’s phrase – to win the war on terror.

To those worried about the direction of Bush’s war in Iraq, the Lincoln analogue might be reassuring. But if Bush is modeling himself on Lincoln, he seems to be doing so selectively. Particularly in terms of communication with the American people, Bush would do well to study Lincoln’s example more closely.

Lincoln understood the importance of maintaining popular support for his war effort, famously assertingthat, “With public sentiment, nothing can fail; without it, nothing can succeed.” He also understood the importance of language in rallying the support of the nation, and no President has been more eloquent.

Bush disdains eloquence, preferring to use language to convince the average American that he is one of us. Americans want their leaders to lead in words as well as in deeds, especially during wartime.

Lincoln also grasped the practical and non-ideological nature of the American people. Pressed by Abolitionist supporters to declare the Civil War one of emancipation, he refused, claiming that he would free all the slaves or none if either course would bring victory and preservation of the union.

Bush insists on framing his war in Iraq as one of liberation and democracy (at least since the WMD rationale evaporated).

Lincoln’s flexibility of character helped him maintain public support throughout the Civil War. He ran through five “Generals-in-Chief” before settling on the successful Ulysses Grant. Bush, however, seems determined to stand by failed appointees in order to avoid the perceived sin of his father – vacillation. And, in contrast to Bush’s “God is on our side” view of world affairs, Lincoln said, “In the present civil war it is quite possible that God’s purpose is something different from the purpose of either party.”

Perhaps Bush should add one more book to his list: a biography of Franklin Roosevelt. The most eloquent president since Lincoln, FDR was committed to government by trial and error – always experimenting, acknowledging mistakes, correcting them, and moving on. If Bush considers Roosevelt too liberal and flexible a model, he might consider that FDR was the preferred model for a recent and, so far, more successful conservative President – Ronald Reagan.

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Initiating and communicating change is corporate necessity

One of many famous quotes from former General Electric CEO Jack Welch is: “Change before you have to.” That’s sound advice, but why do so many large, proud, successful organizations have so much trouble initiating their own necessary change before being forced by others to accept the inevitable? And why do the professional and seasoned communicators within these companies so often stumble when speaking to consumers and investors about change? The front pages of newspapers have recently been full of stories of companies run by smart, savvy people doing and saying seemingly stupid things.

Take General Motors. Fortunately for our country, the saying “As goes GM, so goes the country” is no longer true. GM is on the ropes. CEO Rick Wagoner belatedly announced a “restructuring plan,” which so failed to impress his largest shareholder, billionaire Kirk Kerkorian, that Kerkorian is now pressing for an “alliance” with rivals Nissan and Renault.

Wagoner’s failure to “get it” does not stop there. While Nissan’s and Renault’s CEO (one and the same), Carlos Ghosn, expressed enthusiasm for the possible combination, Wagoner acts for all the world like an unhappy child not getting his way. GM’s market capitalization has fallen 33% in the past year.

Computer giant Dell has recently been playing out a similar story. Dell has become so large and smug that it’s begun to act as if it no longer needs customers. Last year, blogger Jeff Jarvis blasted the company for its abysmal customer service and ignited a firestorm of response from fellow sufferers in what came to be known as “Dell Hell.”

Dell also took awhile to “get it” – if, in fact, it yet does. It recently launched its own blog, but, committing the cardinal sin of the blogosphere, Dell treated it and its readers like remnants of the old PR world: “We provide the spin; you take our word for it.” Dell’s market capitalization has plummeted 46% in the past year.

These colossal miscalculations reflect an inability to anticipate, understand, and embrace change. But, just as important, they display an ineptness at public communication about change in today’s world.

While Ghosn has made no secret of his enthusiasm to explore an alliance with GM, Wagoner has repeatedly referred to the proposal as “not helpful.” With GM looking not unlike the US economy in 1933, he should have considered paraphrasing Franklin D. Roosevelt: “Take a method, and try it. If it fails, admit it frankly, and try another. But by all means, try something.” Likewise, Dell should have recognized the futility of trying to cut corners on customer service and keep it a secret in the new interconnected online world.

And, once recognizing the need to join the online discussion, Dell should have done it on its customers’ (and the blogosphere’s) terms, not its own. As thepace of change speeds up, and the means, technologies,and rules of communicating with consumerschange just as rapidly, the need for strong corporatecommunication has never been greater. I hope GMand Dell will learn this lesson before it’s too late.

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