Where did you come from and does it matter?

This weekend, Clay Shirky wrote on Twitter:

Nokia products say “Made in China” on the back. Chinese-made Nokia-knockoffs say “Made in Finland.”

Interesting point, isn’t it? Let’s ignore for the purpose of this post that my Nokia N97 actually says “Made in Finland” inside it (although given my publicly declared love for it, I have cause to wonder if it really is a Chinese-made-knockoff in which case Vodafone is in real trouble!). I have made interesting discoveries about some of my stuff since this tweet appeared. My kettle doesn’t say where it was manufactured; two pairs of American branded shoes are Made-in-China while two other pairs of Italian shoes are Made-in-Italy; the English brand of lotions says Made-in-England while the French cast iron pots are variously Made-in-France, Made-in-Thailand and Made-in-USA.

What do these “Made-in-X” labels mean anymore? Do they mean anything any more at all?

In some industries, such as automotives, the supply chain is componentised (sic!) and truly globalised (pdf link) to such an extent that only the brand is ever owned by an entity whose national identity can be named. In others, the lax labelling laws mean that products made in China and finished in a European country can sell at huge prices as “Made-in-EuropeanCountry” products. Rights to some otherwise unrelated and disparate brands, for specific product categories, such as eye wear, have been licensed out to specialists who maintain the brand’s identity but the consumer may not quite know (or care) where her sunglasses were manufactured.

What is clear is that it doesn’t matter where the product comes from but it sure matters where the brand comes from. Many strategies are emerging by which brand owners are outdoing or trying to contain competition.

Champagne or sparkling wine: Legal protection

In Europe, several regimes are enshrined in EU Law to protect the names of regional foods. These include Protected Designation of Origin (PDO), Protected Geographical Indication (PGI) and Traditional Speciality Guaranteed (TSG) labels. Foods that can only be labelled as such if they come from the designated locations include Parmigiano-Reggiano, Melton Mowbray pork pies, and Camembert de Normandie. Of course, sparkling wines can only be called Champagne if they come from the eponymous French region and this privilege is protected by the Treaty of Madrid. Indeed Mumm made and bottled in France is champagne while Mumm from Napa Valley in the USA is sparkling wine!

Bespoke or custom-made: Consumer education

Indeed not all products can fight for such protected status. So they seek to rely upon the key attributes of their brand and to promote them. In the now well-known Sartoriani v. Savile Row row,the Advertising Standards Agency ruled that although Sartoriani did not make its suit entirely by hand and did some cutting abroad, it was allowable to let them use the term “bespoke” in their advertising. Sartoriani’s products do not all match the 21 characteristics of a Savile Row suit but it may be ok for some. Savile Row’s name is synonymous with “bespoke” for many and Savile Row Bespoke Association continues to reiterate its commitment to high standards of craftsmanship.

All examples so far have been about consumer goods. What about technology-led businesses?

Value appropriation: knowing what matters and claiming it

All Apple products – whether a weather-beaten Powerbook, a bright new Macbook Pro or an ordinary iPod – say the following at the bottom:

Designed by Apple in California. Assembled in China.

To the Apple consumer, the whole Apple legend matters and Apple knows how to appropriate it cleverly. Apple is a California company in many respects – innovative and iconoclastic. Apple is also known for its design coups from the iMac to the iPod. For a technology-led business, such as Apple, design and engineering excellence matters, über alles. And Apple knows it. The manufacturing information label on Apple products says it just right. It makes it clear who creates the value and claims it. That the products are assembled in China almost does not matter.

Except that there is a twist in this story. Which is worth pointing out as many of my clients are British technology-led businesses.

The designer of Apple’s recent bestsellers – the Powerbook G4 (on which I write this post), the iMac, the Macbook, the Macbook Pro, the iPod and the iPhone is British, a man named Jonathan Ive.

Then another thing happened yesterday just as Clay Shirky’s tweet appeared. For the second year in a row, a British man, Jenson Button, won the Formula 1 Drivers’ Championship. A British team, Brawn GP, also won the Formula 1 Constructors’ Championship. Yes, there is a touch of globalisation there too – with a French head of aerodynamics, a Brazilian driver, a German engine powering the cars – but the team achieved the near-impossible give its difficult beginnings for the 2009 season. Or as Doug Ellison told Lord Drayson, our Minister For Science and Innovation:

And a British engine even if it says Merc on the badge, designed and built in Northamptonshire. A VERY British championship.

So what’s in it for technology-led businesses?

  • Great engineering and design skill;
  • Recognition of the value of your skill and your brand;
  • Appropriation of that value; and where necessary,
  • Leveraging the value of the technological excellence of another, probably unrelated sector with whom you may share a common, positive characteristic.

If as the leader of a technology-led business, you focus on these strategic building blocks, then it doesn’t matter where the product comes from, just who owns the brand.

And your being a British technology business may just work in your favour too.

Related reading:

The dilemma of Savile Row brands

Obama's Nobel Prize: Lessons for Business

To say that all hell broke loose on Twitter, when the annoucement came in on late morning on October the 9th, is to euphemise. For once, world peace was achieved as a chorus rose in unison wondering why Mr Obama had been given the Nobel Peace prize. Jokes at his expense flew around, without fear of people being labelled “racist”. I confess I contributed too. People wondered how it could be an award for future performance, I called it his “anticipatory No-Bail”. Several Alice In Wonderland references were inevitable but I spare you those in this post.

Mr Obama is the President of the United States, one of the world’s largest democracies and an economy with an eye-watering deficit, fighting two seemingly never-ending wars away from home, facing-off with Iran after tough talk during the elections, and facing tough fights regarding healthcare and other reform at home. He humbly accepted the award and promised to donate the prize money to charity.

So what lessons can a business leader learn from the episode? I see three main things of varying importance depending on one’s business and its place in society.

Don’t drink your own Kool-Aid (or sometimes, just say “no”!).

Awards can be irresistible even to the most limelight-eschewing people. Indeed many industry awards require business leaders (or their PR departments) to nominate themselves/ their companies for the scrutiny of a deciding panel. Notably the deadline for this year’s Nobel peace prize nominations was within two weeks of Mr Obama having been in office.

But whether one accepts an award humbly, like Mr Obama did, or with a wild celebratory party, the main question to consider is if it is well-deserved or simply a case of the business lapping up its own PR.

If it is not well-deserved, customers and other interested parties will soon let the business know. But if PR is the objective, then, provided you did not self-nominate, saying “no” can garner as many headlines as, if not more than, accepting may. Could Mr Obama have said “no”? Possibly. It would be precedent-setting but no more than the prize itself being given for expected performance in the future.

Can you imagine how much more discussion and positive PR about Mr Obama’s humility and general wonderfulness as a human being and a leader might have come if he had said “no”?

Celebrate success, not potential.

Companies hire business leaders for their past successes and their future potential. The salary may be negotiated based on both, but bonuses are contingent on actual results, for delivering on the promise.

Can you imagine giving your “Business Development Star of the Year” award to a new recruit, however senior she may be or however wonderful her prior record in the industry? What possible impact could such a decision have on the morale of others on the team? Does such a decision burnish or tarnish the team’s view of the leaders’ judgement?  From many perspectives, it is wise for business leaders and firms to celebrate success, not just potential. This is one of the reasons why the Nobel Peace prize being given to Mr Obama has generated so much unwelcome buzz.

A funny and poignant mnemonic to remember this golden rule comes from another Nobel Peace prize recipient, Al Gore, who famously said in a speech: “I am Al Gore, and I used to be the next president of the United States of America.

Engage with your publics but do not become the instrument of their appeasement.

The Nobel is unlike any other prize. It is decided upon by a committee nominated by elected representatives of a country. It is generally given out ex-post and not in anticipation. Some scientists wait 3 or 4 decades to gain Nobel recognition. Two things – both political – stand out about this year’s Peace prize.

In the history of the Nobel prize to date, with 800 prizes awarded, only 12 black people have been given the Nobel, of which 8 were for Peace, 3 for literature, 1 for economics and none for Science. Why is this worth a mention? Because much coverage of the prize deems necessary that Mr Obama’s racial heritage be mentioned.  Wangari Maathai, a former Nobel Peace prize recipient, speaking on BBC’s News 24, also said that it was one of the reasons why Mr Obama’s prize was well-deserved. Mr Obama probably does not want to be the poster-boy of the Nobel Committee’s “race-inclusive” decisions. Especially at a time when he is at pains to say that race is not behind his policy measures being opposed at home. But having been given the prize, he is caught in the middle of this politically sensitive issue.

Further, I am not sure if describing the Nobel Peace prize as a “call to action” is very smart. As a visionary statement, it is all warm and fuzzy, I agree. But as a pragmatic step, it sounds like a mere prize is going to be allowed to influence, however subtly, a sovereign state’s foreign policy! The Nobel is unlikely to win him plaudits and friends inside his own country. His current battles and his real publics are at home, not in the wilderness of Europe.

Many business leaders face such dilemmas when engaging with their broader publics. How far should they go before the publics try to influence their decisions or nudge them along inflexible or undesirable strategic trajectories? And how to avoid being exploited to serve the objectives of another firm or organisation?

I am sure others see different lessons in the episode. Feel free to agree, disagree and contribute your thoughts below.

Related reading:

Henrik Hertzberg in the New Yorker on Nobel Surprise;

Lost opportunities: Mahatma Gandhi and Gwen Thompson

To most people, Mahatma Gandhi stands for truth and non-violence. There is also a subtext of renunciation, austerity, simplicity and community. There was a predictable outcry when Montblanc announced a limited edition, 18 carat gold pen with Gandhi’s image and a saffron garnet on the clip. Only 241 gold pens would be made available for the price of Rs1.1M (or $23,000, €15,800, £14,400). Gandhi walked 241 miles in the Salt March of the 1930s.

Gandhi’s great grandson Tushar Gandhi had opposed the auction of Gandhi’s spectacles earlier in the year. He however sees nothing wrong with the pen and his charity will receive a small sum from each pen sold. Montblanc’s CEO says the company wanted to talk about Mahatma Gandhi’s values including non-violence, peace, education and tolerance. There is now, however, a court case in India for Montblanc’s violation of the Emblems and Names (Prevention of Improper Use) Act, 1950 which specifically cites Gandhi’s image. So much for discussing Gandhian values – between commerce, marketing, image rights, blame and counter-blame.

Let’s talk about Gwen Thompson then. She is a doll launched by the American Girl Doll company in 2009 and costs $95. What’s so special about Gwen? Well she is homeless and lives in a shelter with her mother. Her deadbeat father has apparently abandoned them. Beside the obvious ‘homeless people cannot spend $95 on a doll’ argument, the doll faces other flak too such as portraying men as irresponsible, women as helpless and the fact that some people are homeless as just another reality of society.

American Girl Doll company, who will not be donating any proceeds from the sale of the doll to shelters or charities helping the homeless, says: “Our singular goal with these stories is to help girls find their inner star by becoming kind, compassionate and loving people who make a positive and meaningful difference in the world around them.”

The similarity between both stories is that companies sought – whether strategically or as an after-thought – to spark a broad conversation about certain values. And that the way they went about it backfired. The companies look cynical and exploitative and their noble explanations a hasty ex post rationalisation.

Why? In Montblanc’s case, they have misread how Gandhi’s memory is revered in India. I say this with confidence as an Indian who also recognises the cynicism which makes it legitimate for some to exploit the Gandhi name more than for others. But in the case of the American Girl Doll company, I only offer a working hypothesis. The company underestimated the conflict between the American value of self-help and the collective guilt a society feels about not helping its unfortunate members enough.

Leaving aside the question of taste, in both cases, genuine opportunities were lost for the brands to get more real, more involved with the issues at hand. With my sceptical hat on, I would not be surprised to know if both companies are secretly rubbing their hands in glee over the free publicity and dialogue generated about them and their products. Very Skokie-like. Not very smart.

So, should companies not touch some topics and some people? That is definitely not my suggestion. But it is wise to pick the person, the message, the timing, the marketing message and any beneficiaries carefully. All public conversation should not be sought or courted. Sometimes the best conversations are those that are private, low-key and purposeful without publicity.

Related reading:

Gandhi sells and how (from India Today; may require registration)

Top 10 Dubious Toys where no. 1 is Homeless American Girl (from Time magazine)

Beyond privilege: managing information asymmetries