Brand vs Brain...

An unexpected flying visit back to Sydney saw me make a pilgrimage to my old haunt of Auburn, a place which makes a good training ground for those about to be deployed to Helmund Province. However, the establishment of the second Costco store in Australia there has really made it a must visit for those who want internet prices and a real world store safety blanket. And let's pull no punches - Costco is the finest bricks and mortar general goods store on earth, both in concept and execution. When I want to see lean, mean, smart and efficient in retail, it just doesn't get any better than this.

And with this visit, I caught something which made me realize both the power of branding and the sad state of the consumer mindset in much of the Western consumer...or at least the small numbers of Western consumers who can still afford to be choosy.

One thing you notice about Costco is that it is most egalitarian about shelf space: prince and pauper can easily be housemates. Look at this photo: these are $AU prices for jeans (yes, my American friends, laugh all you want at how much Aussies pay...). On the left, the Hugo Boss and Joes, on the right, Urban Star (made in Pakistan) and the Costco's ubiquitous house brand, Kirkland Signature. 

I had a good chance to look at all the brands right next to each other. To me, the quality and feel of the denim, the cut, the stitching and everything about the Kirkland and Urban Star jeans were as good - and dare I say better? - than either the Hugo Boss or Joes. Style I can't comment on (I have none, as people keep telling me), but really, they looked pretty much the same to me. And who honestly looks at the label of jeans?

Now the choice is rarely as stark as it is here: you can compare the product side by side. And those prices are mocking you in the face saying "Are you REALLY going to pay THIS much for THIS when you can get THAT for THAT?". The difference in price between the Urban Star and Joes jeans is 750%, a gap that surely makes anyone who has more than 3 neurons firing between their ears go for the absolute bargain choice.

The thing is...many people seem to be thinking along the lines of "Wow! Hugo Boss jeans are usually $150, what a bargain!". And speaking to the Costco staff, the Hugo Boss and Joes Jeans were selling at a ratio of around 1 to 3 compared to their more pedestrian compeition. 

And that is the power of the brand...overwhelming the power of the brain. But that is the reality, and it is something we all need to accept. 

Jeans are not cars. The utility and feature difference of a pair of jeans is hardly of the same order or importance to that between a Toyota Camry and Lexus LS460. But many people, when they have the money, place a real emphasis on brand even when the utility of the product does not justify it.

To me, clothes exist primarily to stay warm/cool/dry when the weather moves out of the desired upper or lower specification limits...and if the weather is in the acceptable range, about their only justification is to stop me from being arrested for public nudity laws. But is that the sort of thinking that most people have?

Branding is something I am now working more extensively with, and it's a learning curve for someone who comes from a world of statistics, data and the quantitative world of hard, if sometimes hidden, facts. But branding is something that delves into an area where the normal rules of logic and common sense are far less rigid, so it requires a new way of thinking. It's complex and not easy to nail down fully all the time, but it appears that Hugo Boss and Joes Jeans have succeeded, no matter how cheap and equivalent the alternative.

Now that does take some brains...

SharePoint WSS 3.0. Something for nothing that is actually worth something...

It's very to get something worthwhile for free these days. Just about everyone is trying to wring every last cent from you for every possible minuscule non-event or service they can. One that especially irks me is bank and credit card charges. You make a withdrawal...SLUG! You pay a credit card bill...SLUG! You have to pay these guys...well, I guess for the honor of paying these guys. In Australia, the DEFT guys are more brazen than any...perhaps a function of their Macquarie Bank origins.

And IT companies? Ha! They define the essence of getting blood out of a stone.

So it comes as a pleasant surprise when you actually do get something for nothing from an IT firm. And it comes as an even bigger surprise when that something is from Microsoft, the company that turned the blood-from-stone concept into a high-art. And the biggest surprise of all? What you get is actually damn good.

I speak, of course, of Windows SharePoint Services (WSS) 3.0, the free version of SharePoint. This is a little bonus you get with Windows Server if you don't want to fork out for the more capable MOSS version. And whilst MOSS is certainly one impressive toolset for so many business needs, WSS is something that can truly helpful for so many companies where the IT spend is tough to get signoff on...and these days, isn't that just about everyone?

And yet, so many people don't really utilize it. In more than a few IT departments I have worked with, it sits in the background doing little more than glorified file storage, whilst solutions costing hundreds of thousands of dollars - or more - are sought for project management, enterprise risk management and competitive intelligence, amongst others. And all too often, these solutions are either too advanced for the requirement or too difficult to fully utilize by staff.

Whilst it's generally not going to set the world on fire for multinationals needing full ERP solutions, SharePoint WSS is often a superb solution for smaller to mid-size companies, with development costs that hover barely above "free". And with some good developers, it can often be transformed into a very powerful solution.

Guys, do a double take on this: when I occasionally put on my consultant hat and have a look at various business needs in many companies, SharePoint often comes out as a very effective answer that won't break the bank.

Welcome to China: Avoid Breathing...

I am happy to say that I never suffered from asthma as a child, unlike a number of my friends growing up in Sydney, but I recently got a taste of what it's like when every breath is like breathing underwater.

I recently returned to Sydney from a business trip to Shanghai, Beijing, Linfen, Datong, Zhuzhou and Xianyang: over 3 weeks in China and despite the charming hosts and remarkable sites, it was a trip I was glad to see the back end of, namely because after 4 days I felt as if I was in WWE choke hold courtesy of the Undertaker.

The phlegm coming out of my nose had enough coal dust to run a power station for a week after I left Datong - I'll spare you the photo. But the end result was that I was very tired and lethargic for a few days, with a mild headache and difficulty in focusing - pretty evident when I read some of my emails. Normally, it's rare for me to get ill and when I do it does not stop me working - colds and flus are nothing. But with this, I was struggling.

And I still remember the drive to an office at a little after midday there...headlights ablaze to see through the smog on what should have been a fine day.

And it's not just that hellhole. The photo you see was taken around 8:50am, on what should have been a cloudless, sunny Shanghai day. I have seen many photos of this skyline with beautiful blue sky and the odd white cloud and I was assured those days do happen, but that when the air currents are not favorable, it is dangerous for many people to venture outside for more than a few minutes.

I realize now that I am more sensitive to air pollution than most people, but I still cannot understand how locals and especially expats can put up with this over the longer term - and I can only imagine what the health consequences will be like for children growing up here.

It seems I will be making ongoing trips to China now for a while; maybe that SCUBA tank won't have to wait for the Maldives after all...

Lead Me Not Into Temptation...Steer Me Away from a Procurement Career.

I can say with a fair degree of confidence that of all the areas of specialization I have been involved in, the two that have been the most corrupt in the real world have been in privatization of public assets and procurement (I know some of my friends who work in finance may think differently, though I digress). I'll save the privatization one for another time - like when I can afford a B7 armored car and advanced plastic surgery...

Procurement is basically you trying to get a good price from a supplier in return for volume - and you both get certainty.

As you can imagine, with a lot of confidentiality involved with a small group of people looking at large sums, the temptation to resort to the Dark Side can be overwhelming. And often, finding out the evidence for this is just about impossible. And it can be rewarding. For some contracts in the $5-10 million range, a kickback can go into 6 figures. And for contracts in the $100 million level, the payoff is easily 7 figures. On a smaller scale, decisions can be swayed with gifts. This can include dinners and tickets to prime sports events. The trouble is, this is often not seen as bribery but rather hospitality. Whilst the line is blurred, the truth is...it is wrong.

One of the most obvious ones is with Christmas gifts. In many companies, there is a rule that all gifts must be declared and "pooled", to be raffled off to all people in the company. A very real problem is that many individuals then make it clear that any gifts should be sent to people's homes and not work addresses. I recall that in one instance, the buying department of a mid size retailer received no presents from any supplier - zilch. And this was from a business unit which controlled a budget spend of over $100 million. A little investigation soon revealed what really happened. Unfortunately, the end result was not even a slap on the wrist...

In this blog I do not go into great detail about how I resolve complex challenges, but I will state that my experience is that those who work in procurement are in a privileged position and one where temptation is all around them. I am not satisfied that the temptation is resisted effectively.

From what I have seen, so many existing controls are painfully insufficient and more effective ones recommended raise considerable ire as breaches of trust and or privacy. My view is that procurement professionals must realize and accept that they need to be subject to a greater level of scrutiny and accept that this may involve actions which other specialities may not accept.

In the end, it's a balancing act, but one that has for too long given people too much freedom that has been abused. It is high time that procurement professionals recognise that standards need to become tougher - much tougher.

In this game, if you have to have nothing to hide and then you will have nothing to fear.

Memory Lame...First stop, Java Ring!

It never ceases to amaze me what I find lurking in my old jackets. This little gem triggered an alarm at the airport screening in Berlin but brought back many memories of days when I was a hotshot developer - and fell in love with the Java Ring.

The Java Ring was an encrypted iButton (using 1-Wire) made by Dallas Semiconductor and distributed by Sun at the Java One conference back in 1998 (the one where I ran into a 911 with my Boxster whilst trying to get to...). Basically, it was a little smart card that ran a JVM which could be put to various uses.

I had visions of internet commerce and elite membership focused on this ring, but sadly things never panned out that way with competing priorities that had a much shorter payback period and lower risk.

Whilst I wore the ring for a few months, one thing that surprised me was the pitting shown in the photo: I am a sweaty creature and apparently the pH of my sweat is a little lower than normal, thus acidic. Whilst I was told the shank and signet were all stainless steel (which is normally highly acid resistant), the pitting you see shows a yellowish metal underneath, almost certainly brass - el cheapo! The ring became uncomfortable to wear one morning and I slipped it into a jacket and forgot about it...until now.

Digital jewelery is yet to really take off and the Java Ring may have been dead in the water or just a bit ahead of its time. Either way, an interesting example of what could have been, less so of what may yet be...