In June, I blogged about Fuqua professors Rick Larrick and Jack Soll and their push to improve fuel efficiency and consumer behavior by simply changing the measurement from MPG to GPM. Today, Duke Research Advantage blogged that this work was featured in the New York Times Magazine’s “Year in Ideas” issue. They’ve also launched a new GPM calculator to find your current GPM, compare cars, or see the GPM for all 2009 cars. More information about this research, including an interactive fuel-efficiency quiz and a video of Larrick and Soll discussing their work is available at mpgillusion.com.
Posted in business, eco-smart, marketing, sustainability
Tagged blog, business, duke, duke research advantage, eco-smart, fuel efficiency, fuqua, fuqua school of business, gallons per mile, gpm, green, green business, innovation, jack soll, larrick, measurement, psychology, rick larrick, soll, sustainability
Michael Jordan seems to me to be one of the forerunners in terms of thinking of himself as a brand and then licensing that brand and actively managing it. He went beyond the traditional endorsement, and even seemed to take an active role in brand management across various endorsements and companies owned (e.g. when his gambling became a potential PR issue, he worked with Nike to market the “I am not a role model, I’m a professional athlete” message). I may be completely off base with the above, but the point is that personal branding is now rather common, and I found HBS professor John Deighton’s study of author James Patterson to be a fascinating case study:
While he doesn’t enjoy the same name recognition, Patterson regularly outsells other “brand-name authors” such as Stephen King and Tom Clancy by simply publishing more books, averaging three titles each year with the occasional assistance of a coauthor…Whatever the genre (he has also published romance novels, science fiction, and children’s books), readers expect a “good read” from the James Patterson brand.
We all know how important language is in persuading people to think certain ways, and that certain words and phrases in common use are politicized rhetoric (think pro-life and pro-choice). However, I never thought of “miles per gallon” as one of those potentially misleading phrases. Until I read this in a Fuqua Alumni email:
For example, most people ranked an improvement from 34 to 50 mpg as saving more gas over 10,000 miles than an improvement from 18 to 28 mpg, even though the latter saves twice as much gas. (Going from 34 to 50 mpg saves 94 gallons; but from 18 to 28 mpg saves 198 gallons).
These mistaken impressions were corrected, however, when participants were presented with fuel efficiency expressed in gallons used per 100 miles rather than mpg. Viewed this way, 18 mpg becomes 5.5 gallons per 100 miles, and 28 mpg is 3.6 gallons per 100 miles — an $8 difference today.
“The reality that few people appreciate is that improving fuel efficiency from 10 to 20 mpg is actually a more significant savings than improving from 25 to 50 mpg for the same distance of driving,” Larrick said. (See table.)
See the full article here, including a video link.
Posted in business, eco-smart
Tagged business, consumer behavior, eco-friendly, eco-smart, environment, fuel efficiency, gallons per mile, gas, gas pump, gpm, green, mileage, miles per gallon, mpg, saving gas
Struggling for years with a decreasing market share and tumbling stock price, Nortel is going negative with a campaign against Cisco. This Wall Street Journal article details their PR blitz utilizing bloggers, YouTube, anti-Cisco websites, and trade show demonstrations. The message? Use Nortel to avoid “the Cisco energy tax.”
Nortel is countering with the argument that Cisco’s technology, as successful as it has been in the marketplace, is an energy hog. In its ads, Nortel claims that Cisco’s data networks “are costing you 100% too much.” At trade shows, Nortel staff attach wattage meters to comparable Nortel and Cisco gear in an effort to show that Nortel’s gear is much more energy-efficient. The company posted a film of the demo on YouTube.
Energy prices are finally rising to a point where being energy-efficient is not just something to make a consumer feel good, but something that affects purchasing decisions by price-sensitive customers. That Nortel is taking this message to large corporate customers is evidence that at least some people in corporate purchasing departments are concerned with cutting costs by conserving energy.
In a previous post, I talked about the strategy of going negative with marketing, and why it’s rarely done. This is one of those cases where a very small company with much to gain and little to lose takes on the market leader with a campaign aimed at gaining some awareness and hoping to steal just a bit of the leader’s market share. Or, as pointed out in the WSJ article, survive and keep their current customers as their competition makes persuasive presentations to switch. It’s not unusual for a smaller company to paint the larger one as evil, and it’s not that unusual to use an environmental rationale to make that argument. What might be unusual is that with the price of energy rising so quickly, customers might listen.
And frankly, Cisco’s response that “there are no industry standards to measure “green”; and Cisco’s gear meets the environmental requirements of the product-testing company Miercom” falls a bit flat with me. Not a counter-argument about green manufacturing or building initiatives, but a lack of industry standards? No pledge for improved performance or details of why the additional energy usage creates a superior product? This lack of rebuttal leaves me thinking Cisco either isn’t taking Nortel seriously or isn’t taking energy efficiency seriously – either case may not be a big mistake now, but could be a huge mistake in the future.
Posted in business, marketing
Tagged business, cisco, eco-smart, efficiency, energy, energy efficiency, environment, environmental, green, marketing, negative advertising, nortel, power, sustainability, sustainable, wall street journal, wsj
I think I’ve mentioned before that I find the McKinsey Quarterly’s free resources available by signing up for their newsletter to be top notch. This quarter’s entries for top strategy articles are no exception. The descriptions below are taken directly from the e-mail newsletter. I’ve deleted the ones that are only available to premium (paid) subscribers. I’ve only read the climate change and Brad Bird/Pixar ones so far, but both were excellent.
Posted in business, eco-smart, strategy
Tagged brad bird, business, carbon footprint, climate change, mckinsey, megatrends, pixar, prediction markets, strategy, sustainability
The New York Times reported today that Virgin Atlantic will conduct a test of one of its Boeing 747s using biofuels. The most interesting thing to me is that there seems to have been a lot of thought put into both the sustainability and the business aspects (even though this first step is actually a blend of 20% biofuel and 80% conventional jet fuel).
Sustainability: Virgin spokesman Paul Charles is quoted as saying the company rejected fuels derived from crops like palm oil because of the land that would be needed to cultivate such crops, and that the biofuel production would not compete with food or freshwater resources.
Business: This joint project between Virgin, Boeing, and GE Aviation splits the costs of innovation among several companies, and had smart business requirements. For example, the test plane will use one of GE Aviation’s CF6 engines as a “drop-in solution,” meaning the use of biofuel requires no modification, and will not affect the engine’s performance or range.
I recently read a New Yorker article about Branson and his work with Al Gore to create the Virgin Earth Challenge with its $25 million prize. I’m impressed that he’s so intent on solutions that are market-driven, commercial, and don’t require major lifestyle changes, as I believe that these are the ones that are truly scalable. An excellent article that shows that for Branson, business is very personal. I just wonder whether he’ll consider himself eligible to win his own prize?
Posted in business, eco-smart, sustainability
Tagged al gore, boeing, branson, business, environment, GE, green, innovation, richard branson, sustainability, virgin, virgin atlantic
Consulting giant McKinsey & Co has a free subscription service offering a subscription to their business publication, the McKinsey Quarterly. While they do have some articles that are “premium” and require you to purchase full access, a startlingly large percentage of what they put out is free. It’s shocking, but they offer more free content than any of the other business knowledge services I subscribe to (HBS, SSIR, Net Impact) with the exception of Origo Inc’s cross-sector news which is totally free and published less frequently. N.B. All of these services require registration, which means giving out your name, e-mail address and company affiliation, but I find that the information I receive is worth far more than this small amount of personal data. Also, links to each of these services can be found at the right side of this page in the “Social Entrepreneurship Resources” list – no time to create individual links today – sorry!
Today I received an e-mail with the McKinsey Quarterly’s top interviews of 2007. I thought that folks might be interested in one with Al Gore and David Blood on investing in sustainability.
The others from the list that I found particularly helpful and/or interesting were:
Strategy’s strategist: An interview with Richard Rumelt
A giant in the field of strategy ruminates on strategic planning, diversification and focus, and the role of the CEO.
Crafting a message that sticks: An interview with Chip Heath
The key to effective communication: make it simple, make it concrete, and make it surprising.
Promoting growth and social progress: An interview with the president of Chile
Michelle Bachelet discusses her views on the roots of political upheaval in Latin America, and the link between economic development and the fight against poverty.
Leading change: An interview with the CEO of Deere & Company
Bob Lane details the steps his company took to engage the whole organization in an operational and cultural transformation.
Posted in business, eco-smart, strategy, sustainability
Tagged al gore, business, business intelligence, chile, chip heath, communication, deere, interview, organization development, rumelt, strategy, sustainability
In college, my friend Jesse and I often discussed the “night guy vs. morning guy” phenomenon. Night guy would say, “I can totally get by on four hours of sleep – let’s stay up.” Morning guy would curse night guy as he rushed to class late and tired.
A HBS Working Knowledge article documents and codifies this type of behavior and provides a link to the PDF of a working paper by Todd Rogers and Max Bazerman. Here’s a brief overview from the executive summary:
Rogers and Bazerman show through four experiments that people are more likely to choose what they believe they should choose when the choice will be implemented in the future rather than in the present, a tendency they call “future lock-in.” They also discuss directions for future research and applications for public policy, an arena in which citizens are often asked to consider binding policies that trade short-term interests for long-term benefits. Key concepts include:
- Tension occurs between an individual’s immediate self-interest and the interests of all others, including his or her own “future self.” Individuals tend to think that their future selves will behave more virtuously than their present selves.
- Four studies demonstrated the future lock-in effect, which describes a person’s increased willingness to choose and support a binding “should-choice” when it is to be implemented in the future rather than in the present.
- Policymakers could leverage the benefits of future lock-in by advocating for reforms that would be decided upon in the present, but go into effect in the future. Future lock-in would encourage citizens to more heavily weight a policy’s abstract merits rather than its concrete costs.
The working paper presents several studies, including one on donation. They find that “the future lock-in effect… suggests changing the structure of the donation such that the prospective donor can commit now to donate in the future.”
This work obviously has implications for development professionals in nonprofits, and also brought to mind another HBS Working Knowledge article from July 2007 (thanks, Gmail, for making email archiving and search so simple!) which was, in fact, also co-authored by Rogers and Bazerman with Katy Milkman. It also chronicles the “want” vs. “should” cognitive dissonance, and study it in terms of grocery shopping and DVD rentals. You can read that article, an interview with Rogers and Milkman, here.