I just read a great article by John Dvorak of PC Magazine, where he asked a couple of great questions – including “would you like the iPhone as much if it came from Redmond instead of Cupertino”. (PC Magazine – “Microsoft’s Brand Image Gets Worse – 30 March 2009). And he brings up a great point in his article. If the iPhone was a Microsoft product, rather than an Apple one – would we still love it?

He maintains, and has for years, that Microsoft has lost control of its brand image. It’s now a negative brand. Now…there could be multiple reasons for this. Negative press back in the late 90’s over the US & European government lawsuits maintaining restraint of trade, due to Internet Explorer being bundled with Windows. But, how is that different than Apple’s control over it’s software & hardware. Perhaps it’s the perspective that Bill Gates is a controlling, uber-rich geek, while Steve Jobs is just “cool”. Or, maybe it’s the failure of Windows Vista in the marketplace.

No, I think it’s something different. Apple has done a spectacular job of listening to the marketplace – and it’s customers – and building exactly what it needs. Nothing less, and nothing more. They’ve made the brand “simple”. Simple to use iPods. Simple to use operating systems. They just “work”. But, Apple has accomplished this over the years because they stayed true to a specific brand concept. Microsoft on the other hand, wanted “more”. They had the goal of owning the desktop. Microsoft would control everything – the operating system was the platform that they successfully built a business off of – that then owned the business computing space with the Office suite of tools, combined with their server technology. When they set a clear goal that meant taking the entire brand in one new direction they were very successful – and a perfect example of this was when they, almost overnight, took over ownership of the browser from Netscape.

But now, it’s too much. Their programs are bloated and heavy. They’ve tried to be all things to all people. Their operating system Vista required so much more computing power when it came out that even new systems that people had just bought couldn’t use it. With the growth of netbooks over the last 2 years, even the best netbooks can’t use Vista. Why? With the new tools to improve usability, it still had to be backward compatible with older programs – and older peripherals. When you buy a new computer, and it runs slower than your old one – and the only difference seems to be what you have on it from Microsoft – and it’s harder to use than your old software – you’re not going to end up having a good image of Microsoft’s products.

Which then translates to the brand itself. There has been the impression over the years that Microsoft’s goal was to own the business-space. And to hell with the end-user. Now, that’s not reality, but in comparison, Apple’s branding has focused on the end user – and with a clean, cohesive branding program surrounding their products, they have given the impression that they are customer-focused.

So, can Microsoft make a phone that is as good – or better – than the iPhone? Definitely. But, as long as Microsoft’s brand identity is one of “corporate monolith that creates products that don’t take the end user’s needs into account” – it’s hard to think that the public would ever believe it would be the better phone! My belief – if Microsoft wants to ever beat Apple, Google, or any Web 2.0 startup – before they focus on the product – they need to focus on their brand. The question now is – is it too late for Microsoft to do this – can we ever believe again that Microsoft is “best”?

Over the course of the last few days, I’ve read a couple of different news releases and articles regarding recent company downsizings, in light of the current economic turndown. One of them concerns Microsoft. Beyond the train-wreck called Vista, it seems they keep making miss-steps that may be why they’ve announced some pretty extensive layoffs this week – 5000 employees.

One release describes  that some of these cuts include the disbanding of the ACES Studio team which is responsible for Flight Simulator, as well as other games. And another describes that even though the revenue stream from some of these games has been small, it has been positive – while the Zune player that’s designed to compete with Apple’s iPod – has been loosing money. And, we see another case of “We have to show that we’re better than XXX company – so let’s cut those areas that are profitable and use the money we save to throw at unprofitable business units!”.

I now read the following article from CNET- based on an interview with Steve Jobs when iTunes was only 8 months old:

http://tinyurl.com/bgazev

Hmmm…seems Steve was right! Now, this doesn’t mean that Steve is a genius. Yes, Steve believes in both his company, it’s products, and his ability to read the market (and understand his customer). But, that’s the point – he understands his customer! Too many companies spend their time – and their marketing efforts – on telling the customer what they need and want. But, I’d say that the most successful companies (at least for the long-term) – spend their time and efforts trying to figure out a better way to deliver to their customer what they ask for.

When you think of Apple’s designs – whether it’s an iPod, a MacBook, or the iPhone – they take the time to make sure that it’s not just “pretty” – it also delivers to the customer what they asked for.

With the upcoming bailout of the “Big 3″ Automakers, it’s got me thinking again about “bad design. Of the three, Ford is actually in the best position financially. GM…is in the worst. GM is also thinking of shedding a few of it’s lines, including Saturn, Buick, and Pontiac.

The funny thing is, with the exception of the Corvette, the upcoming Camaro, and the (of all things) – new Malibu, nearly all of Chevrolet’s products are, well, bland. Yet, the new Pontiac G8 (really a Holden designed in Australia) and the Solstice, the nearly all of the Saturn lines, and the newest Buick products – are actually attractive! With car sales down 37% or more over last year, it seems insane that GM would get rid of the lines that might actually have products worth buying, and keep the lines that, well, pretty much suck. Furthermore, they keep talking about the Chevy Volt – the car that will “save the company” when it comes out in 2010.

Speaking of the Volt, I’ve read complaints that the car is “boring” – not very exciting to look at. Now, it does look a bit less like a toaster than the Toyota Prius does, but here’s a chance for GM to show the world that a breakthrough automobile, that can go 40 miles on it’s batteries before kicking in a small gasoline engine for recharging them, can also be beautiful. Yet, they responded to the criticism by saying that people would buy the car not based on looks, but based on it’s technology.

I believe that this is additional proof that the movie “Idiocracy” was really a documentary!

Oh…and they’ve also announced that they expect that they won’t make a profit on the Volt, due to the enormous R&D costs they’ve incurred during it’s development.

And we wonder why GM is in trouble?

Whether it’s in a business relationship, a friendship, or a marriage – the importance of integrity can not be emphasized enough. I have been forced to think about this topic quite a bit over the last few weeks – due to a friendship that at this point, looks as though it has unfortunately, and catastrophically, ended.

Without identifying the friend, nor their situation, I’ve found myself stuck in a situation that has forced me to re-evaluate the importance of staying true to one’s own values. The problem is, I see my friend making a multitude of errors in their life that has hurt many people. They have sacrificed quite a bit over the last few weeks due to this – and yet, they continue to follow a path that from my experience, will not dig them out of the hole they’ve created for themselves.

One of those sacrifices has been their integrity. The person I thought I’d known for the last few years – now, I hardly recognize. When all of this started, I promised them that as a friend, I would not tell them what they wanted to hear – but what they needed to hear. And, they said they would not want things any other way. So, about 10 days ago, I had to do one of the hardest things I’ve ever done. I had to bring to their attention, the fact that I know the reasons behind their recent choices. And, I didn’t do this in a judgmental way. Rather, I was trying to show them how their current path could lead to more problems.

The problem is compounded by the fact that this person has been one of my best friends. They feel horribly guilty over the pain they have caused others. And, since my warning to “be careful”, they have ended all contact with me. Yet, I have no regrets over trying to warn them – since, it would be a violation of my own sense of integrity, as well as a violation of the promises I’d made to them as a friend, if I hadn’t brought this to their attention.

The tough thing about living a life of integrity – is it’s not an easy path. Whether it’s a friend, a spouse, a business associate, or a customer – taking the path of least resistance may seem at the time to be the best approach. It avoids confrontation at the moment. It allows you to avoid the pain and discomfort of having to face someone that is offended. And, there’s always the excuse that “I can just avoid this now and deal with this later”.

Unfortunately, unless dealt with immediately, the longer you go without dealing with the issue, gives the person that you’ve offended that much more time to question your integrity. And may damage the relationship to the point that you loose that customer permanently. Or the spouse. Or business associate. Or…as in this case…possibly a friend.

Reputation research has verified what you were taught as a kid -  reputations are hard to earn and easy to damage. We filter the behavior we experience through the lens of its reputation. Behavior consistent with the reputation is accepted at face value while events inconsistent with the reputation are discounted.  And, once a reputation begins to move in a positive or negative direction, its momentum is extremely difficult to reverse.

From a business perspective, studies have shown that even a small positive increase in a company’s reputation results in a significant increase in business value, while a negative drop in reputation results in a decrease in business value. For example, a +1% improvement in the reputation of a company is accompanied by significant increases in that company’s value. Unanticipated, however were the strength of the impacts of negative changes in company reputation. A minor decrease in reputation (-1%) has 34 times the impact than an equally minor increase in reputation (+1%)!

Looking at the current economic crisis is a perfect example. A strong positive business reputation attracts customers, investors and employees. This has great benefits for a company because it will book more business, have an easier time raising money and recruiting employees. One of the great gains of a positive reputation is the loyalty it generates in customers and employees. Loyalty will cause customers and employees to stick with a company through tough times. A good reputation also makes a customer more likely to give a company the “benefit of the doubt”. This will make a customer more likely to tolerate a huge mistake and to not resort to the courts to settle a dispute. And, may give that company a competitive advantage over other, less reputable companies

It’s also important that when we end up in a situation where our trust is broken, that we let our own sense of integrity derive the path we should take with that person, company, or organization. Many times, there may be underlying reasons that were out of their control that caused the fault to occur. So, giving them “the benefit of the doubt” is never a bad thing. But at the same time – once should never compromise their own integrity in that process. To do so – may cause others around you to question your integrity just like you’re questioning the integrity of the  person or company that broke your trust.

How do you know if you’re a person of integrity? Simple. There is a wonderful quote from Thomas B. Macaulay. “The measure of a man’s real character is what he would do if he knew he would never be found out”. As well as another one from Martin Luther King Jr. – “The ultimate measure of a man is not where he stands in moments of comfort and convenience, but where he stands at times of challenge and controversy”. And, finally, one from Thomas Jefferson – “In matters of style, swim with the current. In matters of principle, stand like a rock”.

PS. In the event that my friend reads this (which is doubtful) – I would hope they would call me – as a matter of principle, I don’t abandon my friends – especially when I know they are feeling bad. ☺

Now that the election is over, and we’re now inundated with the media’s “Obama-mania” – I have been thinking about what all of this really means.

I just read an article on CNN that Obama is planning on “rebranding” the United States. The full article appears at http://www.cnn.com/2008/POLITICS/11/19/obama.world.image/index.html, but the gist of the piece is that although he’s poised to re-brand the United States image in international markets, his actions will have to live up to his rhetoric.

I, for one, don’t think that this is going to go well for him. Simply because I don’t see how anybody, at this point, could do it. The damage we’ve suffered within the international community over the last 8 years has been huge. From a branding perspective, when your brand has taken a hit – even if your customers want your brand to recover, and want to believe in you, turning your brand image around quickly is extremely difficult.

Think of General Motors. Up until the early 70′s, General Motors could do no wrong. They built large, gas-guzzling vehicles that had gobs of power, but were horrible for the environment, and burned through fuel as if it was always going to be cheap and plentiful. Between tightening emissions and a gas crisis in the early 70′s, they tried to turn on a dime, building cars like the Chevy Vega – pieces of crap that rusted on the showroom floors, that broke down constantly, and depreciated to the point of being worthless about the time they drove off the dealer’s lot.

35 years later, GM has never truly recovered. And, they’ve done a wonderful job of repeating their mistakes of the late 60′s – early 70′s – and are now facing bankruptcy without a huge injection of taxpayer money (which is really what a bailout is) – to keep them afloat. Now, yes, I understand that much of their problems are also due to UAW demands driving up labor costs, keeping their cars from being price competitive to other competing brands. But in terms of overall quality – there is still the perception that GM vehicles are not as reliable as, say, a Honda. Even when the quality of their vehicles has improved to the point where they may very well never break down.

Does this mean that people want GM to fail? No. But they’ve had 30 years to turn around their brand perception, and they’ve had the help of some of the best marketers in the business. Obama – he has 4 years – or less – to turn around the United States brand position. And, he also has to focus on our wars in  Iraq & Afghanistan, an economy in crisis, all while fulfilling the expectations of every voter that believed his promises enough to vote for him.

As a country, I think it’s in our best interest to support our new President. But, it’s not just his responsibility to improve our country’s image overseas. It’s our job too. A 2002 National Geographic study indicated that nearly a third of young Americans could not locate the Pacific Ocean. So, go learn a language. Learn about another culture. Befriend someone that you might have just met from another country – and learn about their experiences growing up somewhere else. And, if you travel overseas – be humble – and appreciate the country your visiting – learn from  it, and bring the best of it back here. Our country was built by people that brought their culture here – let’s show the rest of the world that we can still learn from them, rather than impose ourselves on them.

It might just make Obama’s job a little easier.