An article in the Harvard Business Review stated the following: Surveys have shown that 80% of Americans don’t trust corporate executives and–worse–that roughly half of all managers don’t trust their own leaders. Mergers, downsizing, and globalization have accelerated the pace of change in organizations, creating a crisis of trust that didn’t exist a generation ago.

Given all this uncertainty, trust has been at an all-time low.

When it comes to analyzing and facilitating trust, Brain Science is fascinating. In order to make Brain science interesting and easy to understand, we have to make the following statements:

1) The brain controls our actions,
2) We all have a brain,
3) As a leader you are not only managing people but you are also managing their brain. I know it’s an unorthodox way of looking at this but it’s extremely relevant and logical.

So far, so good. Problems start when you factor in how trust has broken down in your organization. Trust is broken down by fear (ex. losing one’s job, making mistakes, damaging or losing assets). Fear is that always-on emotion that is controlled by your amygdala. Your amygdala (a pair of small organs in the brain) is the fear and emotion center in your brain. It’s the area that prepares you eventually for ‘fight or flight’.

In its most simple terms if the amygdala is activated or overheating because of fear, this will also affect other parts of your brain such as the reward system, your gut feeling and another area called the ‘Accountant’ which essentially tells the ‘action brain’ either Go or No Go or in other words, to carry on a particular task.

According to a Brain Science leading authority Dr. Srini Pillay:
“Trust and fear are inversely related and affect the brain in opposite ways. Fear increases amygdala activation while trust decreases it. Developing a trusting work environment is important in similar ways to creating a non-fear based motivational space. It frees up the thinking brain to focus on relevant issues rather than using up thinking resources to resolve trust conflicts. Trust is also rewarding since it affects several components of the reward system. These components feed back to the action centers in the brain, preparing the brain to act. Without trust, action is inhibited or infused with fear; this compromises actions.”

So now we know that Trust frees up thinking resources in the brain by decreasing amygdala activation.

Armed with this scientific yet logical insight through your leadership style, you can address trust. By instilling trust in your organization you will notice a difference in staff performance and morale. It won’t happen overnight but it can become contagious if you follow some basic steps:

1) Be honest and sincere. Why? It only makes sense. People will feel that you are hiding things and will respect you as leader if you communicate without hesitation. By being direct, employees will stop the rumor mill and concentrate on the task at hand. Remember that for any news – good or bad, You need to communicate it! One of my CEO clients delegated the delivery of bad news to the HR Director. It bombed and created more fear! Staff needs to hear it from you.

2) Be appreciative. If you have fallen in the trap of not thanking people then you better change your approach. I don’t care what cultural background you are from. In the ten countries I have worked in, saying Thank You goes a long way. I challenge you: If you speak to one of your line staff and remember to say thank you, that person will go home that evening and tell his spouse or loved one that the boss thanked him/her…Imagine that!

3) Be open to feedback. Encourage feedback. Listen but remembering the most fundamental rule of encouraging feedback: You have 2 ears and one mouth…use them accordingly. Listen, acknowledge and don’t defend the idea/feedback since this is counterproductive.

4) Remain focused on the task at hand. You still need to sell, serve or create something. Employees need to be reminded of the obvious – the job has to get done. Remind them that their individual contributions matter to the organization.

5) Trial and error. It’s OK for employees to fail while trying. Implement an attitude of ‘trying without asking’. Then tell your staff member ‘if you mess up, that’s OK as long as you learn in the process’.

If you cannot empower your team members to make decisions without you, how will they ever succeed? Sometimes you need to let them try, fall flat on their faces and learn in the process. In my experience this is by far the strongest message of trust instilment you can deliver.

Trust is intangible. It can be a dark cloud or a motivator. By tapping into the brain of your team members you may discover that removing fear by instilling trust will give you an exponential effect on team morale and performance.

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I heard the benefits a long time ago and decided last year to test it again and to see what works and what did not work. I tried different nap times, durations. In my case the best time was at 1930 or so for about 20 minutes max! Anything longer made me feel groggy for almost 45 minutes to an hour after the nap and I had difficulty to wake up or worse, decided to turn my power nap into deep slumber for the whole night – there goes the productivity I was looking to gain!

Less than 20 minutes for me was not enough since I was not completely sure that I dozed off. I also realized that if I had dreamt about something, it was sure way to know that I had in fact slept for a 20 minute period. Research tells us the ideal time is between 10-25 minutes but varies person to person.

Napoleon used to do it and so did many leaders through history including many of today’s athletes so why is that we don’t find the time if they are supposed to make us more productive?

First of all, maybe you need proof? I would encourage you to discover it on your own. First, set a time when you come home after work despite all the personal and family demands you may have – dedicate just 20 minutes. Set your alarm, shut the door and after 20 minutes you will see a difference, if of course you slept…just lying in bed for 20 minutes won’t do it.

Secondly, sleeping on the job is not exactly a great way to promote one’s career. Only a few employers encourage it which is a pity. Many studies have found that naps render employees more productive than conventional coffee breaks and that power naps are best taken in the afternoon. Even if your employer can’t help, you should test a power nap and enjoy the benefits in early evening.

If for the first time you did not feel or see the results, try taking a power nap 3 times that week. At first you may feel guilty or in denial to actually take a nap. Don’t get hung up on this since the time you gain by having a power nap will more than compensate at the other end in terms of added productivity that evening.

When you wake up, you will notice about 30 minutes later if you go back to fine tune some outstanding issues from your day, you will feel reenergized, you’ll wonder where this new found energy came from.

Rest is repair.

According to Brain Science leading authority, Dr. Srini Pillay, ‘Power naps are brief periods of sleep (15-30 minutes) that give the brain a chance to rest. It has been found that these brief naps may be rejuvenating and therefore help register and consolidate memories’

It’s also been proven that adequate sleep and daytime power naps are critical to faster, more efficient new learning.

A power-nap captures the benefits of the first two of the five stages in the sleep cycle. These first two stages take place in the first twenty minutes. In addition to making you feel more rested and alert, the electrical signals in your nervous system strengthen the connection between neurons involved in muscle memory, making your brain work faster and more accurately.

So there you have it. Historical leaders, today’s athletes and a leading Brain Science authority telling us that power naps make you more productive which has positive effects on your brain, learning and memory.

Want to get more work done in your day or get that extra little edge? You may find that giving your brain anywhere between 10-25 minutes of rest and by shutting down your system for a nap this may be the best investment in You.

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As you gather your ideas for your presentation, 3 more problems occur and at this point you want to either, 1) kill the next person that shows up at your door or, 2) you wish you could disappear to a remote island in the Caribbean with a Mojito in your hand as you swing back and forth in your hammock – both choices not possible. Worse, for some reason you can’t focus on the presentation. What’s the problem?

Brain Science tells us that your amygdala (a pair of small organs in the brain) is overheating. This is called ‘Amygdala activation’. The Amygdala is the fear center in your brain. It’s the area that prepares you eventually for ‘fight or flight’. The amygdala stores and perpetuates the anxiety response and anxiety disorders.

In fact the amygdala orders your brain to go into a state of alert with its first instructions going to your unconscious mind indicating that danger is imminent.

Hopefully your amygdala is not overheating the entire time like it’s the case in this moment.

According to a Brain Science leading authority Dr. Srini Pillay ‘An overloaded amygdala can also explain your fatigue. You may think that you have no reason to be tired but Brain Science tell us that your unconscious brain may be absorbing the stress and fears of your daily life’.

Suggestion: Take a time out!

Of course this is what your spouse or partner means when they say: “Why don’t you take a break’ when you are really stressed but I really mean it here. Take a time out for about 3-5 minutes.

Get up from your office and get away where you can concentrate, meditate and forget what is currently stressing you.

Ok nothing new here – you have done this before without thinking too much about it in the past or perhaps the suggestion came from someone to go for a break. Some smokers claim that they think better after a cigarette break – I can’t comment here. Once you come back from a break however you seem to have found your inspiration or ability to think, but what really happened in this process?

Here is how it works:

Find yourself a quiet spot where you can be alone, without interruptions like cell phones, internet and sms free your mind of the work issue. This place should facilitate a quiet moment for 3-5 minutes where you need to concentrate on your breathing.

The idea is to focus your thinking on only one thing. When you focus on your breathing, inhaling oxygen, holding it only for 1-2 seconds (actively recognize that little moment between inhaling and exhaling) then completely exhaling the air out of your lungs, continuously focusing on your breath. While focusing on your breathing process, it is impossible to be able to think about anything else.

Try it now for a few moments. As you concentrate on your breathing – you will not be able to think about anything else…pretty cool eh!

This is not so much a relaxation technique bur rather a method to reduce this amygdala activation. By not thinking about anything except your breathing for 3-5 minutes you are essentially setting your amygdala in a more relaxed state. You of course can’t see this happening but trust me, this is what is happening which explains why after 3-5 minutes you regain focus, composure and inspiration.

What I want to emphasize here is that if you are stressed, from reading this article you will know in the future that consciously taking that Time out will help you.

Next time you are in a Board meeting and you are really stressed, try taking a washroom break (no one can blame you when nature calls) and instead of using the washroom for its real purpose, use the toilet stall to hide, close your eyes and focus on your breathing for 3-5 minutes.

Apply this to any issue that stresses you: Personal, business or social.

I have used this practice often including one particular event I was organizing. Everything was falling apart and the guests were arriving in one hour and my thoughts were frozen, I felt paralyzed. I could not decide on easy, basic matters yet having done this time and time again before.

I took a time out and after 5 minutes I regained my ability ‘to put out the next fires’.

The brain is an amazing tool but at times it can go into meltdown and easing off on the amygdala can put you back in shape. The best way to fix this is to ‘Take a time out’.

For a cool video presentation on amygdala activation, check out this link: http://www.youtube.com/watch?v=6GdALwuYtG8

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Rule of thumb (again): Don’t ask yourself how this works. It just does. Most people will act in disbelief till they spend an inordinate amount of time questioning or wondering how Peak Performance tools really work.

Ask/Believe/ Receive is different than plain ‘wishful thinking’ or ‘positive thinking’. I know these other methods since I have tried them and the Ask/ Believe/ Receive method has worked for me.

I initially thought that this method was metaphysical liking it to the practice of some of my peers in the Democratic Republic of Congo (DRC) . I had once joked with some staff about the existence of metaphysical phenomena only to get a cold reminder that the Congolese and a lot of Africans do in fact believe in it. And by the way, who am I to convince them otherwise that metaphysical phenomena do not exist? Who am I to know better?

However after taking a Brain Science coaching certification with a leading authority in Neurosciences , Dr. Srini Pillay I have come to the conclusion that the reason we receive what we ask and believe is probably due to some really creative programming in our brain.

I am firm believer that we shape our destiny and by doing so, we are one step closer to greatness. One sure way to do this is to focus one’s thinking. Of the many authors I have read on positive thinking and optimism, there are traits that leaders have developed in which they repeat over and over again which explains why these leaders always seem to do better than their peers and have more success than most of us.

A lot has to do with Ask. Believe. Receive.

Here is how it works:

Find yourself a quiet spot where you can concentrate and think without interruptions like cell phones, internet and sms.

Think about the task you wish to accomplish. It can be delivering an important presentation, overcoming a tough negotiation, convincing a new client to agree with your proposal, ending a dispute with a loved one. You need to have in mind the objective first, before you can ask for its attainment.

Then quite simply ask for what you want. Ex. ‘ I want this presentation to go well and people to say Wow great presentation’.

Now focus on what you want by saying to yourself (in your mind) ‘I want the following’ or basically, Asking for something (hence Ask. Believe. Receive )…this should last about 5-7 seconds.

At this point you will notice or feel a little jolt or shock in your body. It may be subtle or strong or almost nothing.

Once you asked for what you wanted try to imagine agreement, or someone agreeing or nodding to your request. It can be a person’s face or a person’s head nodding in agreement. It does not have to be a person you know and it does not have to be you, or you imagining that your head is nodding in agreement.

As you picture someone agreeing with your request, this is forming the Believing (hence Ask. Believe. Receive) part of the method.

Then, exhale because you would have kept your breath throughout this 10-15 second exercise. This is the Receive part.

After this is done, don’t think about it anymore. Go straight or proceed to what you are planning to do. In this case proceed to the meeting room and get ready to present. Let it go. It will come to you.

Remember to only ask once. You don’t need to repeat over and over what you asked for. Asking repeatedly actually messes up the process; it sends the message too many times ‘out there’. To make it easier to understand, think of a similar case such as when you order a pizza from your favorite pizza shop. You call and order a pizza only once. You don’t call 5 minutes later to say “I want a pizza’ and then 5 minutes later again to say “I want a pizza’. You call once and the pizza shows up in about 30 minutes.

The Ask/Believe/Receive process is the same here – ask only once. In some scientific way you are programming your brain, you are calling on a metaphysical phenomenon, the stars align, magic happens; whatever…It doesn’t matter – it just works.

Apply this to any endeavor you undertake, personal, business or social.

What this exercise does is it focuses your brain on a particular objective or outcome. If you focus, ask and sincerely believe that you can achieve this outcome, then you will receive it – pure and simple.

My track record? Answer: Probably 95%. In fact I was so surprised of its efficiency that I don’t even think of the other 5%.

This method has an effect of building up your confidence. Once you have done the exercise, exhaled and proceded to the task at hand, you forget about your fears, doubts or confusion enabling your mind to be free and to concentrate on the task at hand.

I have used this practice for simple tasks and even for more complex objectives or milestones.

My own belief is that the success rate is due to a combination of focused brain programming, enhanced confidence, added lucidity and to some extent you are influencing the people or audience by sending positive energy ‘out there’. Perhaps this is where the metaphysical comes in.

Again, I apply the rule of thumb: I don’t ask myself how or wonder how this works. It just does!

Besides what’s the worse thing that can happen for having spent 10-15 seconds of focused thinking is well… nothing . Not a big loss for the level of investment.

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Imagery is quite simply creating images in your mind.

Rule of thumb: Don’t ask yourself how this works. It just does. Many people kill the benefit of an idea, tool or concept when it comes to Peak Performance since they spend way too much time on trying to understand how it works. If you wish to gain from this nugget of learning, don’t bother asking how it works – just apply this simple principle.

Athletes do it all the time and win so why would it not be the same in Business. It is in fact!

Philosophers over the ages had different ways of teaching us. Earl Nightingale wrote ‘What the mind can conceive and believe, it can achieve’ or ‘ You are, what you think about ‘. Of the many authors I have studied and read including Napoleon Hill’s ’Think and grow rich’, the words are different yet the message is the same.

How many times have you heard the famous Chinese proverb: ‘Be careful what you wish for?’

Most recently, Brain science is a research based method developed by a leading authority in Neurosciences called Dr. Srini Pillay where he explains that there are important areas in the brain that are affected when Imagery is activated.

Dr. Pillay states that Imagery acts as a precursor to action. Imagery warms up the action brain.

‘By imagining what you want, you stimulate the action centers of the brain. Also, if you observe other examples of this being achieved, it will make it feel more real. It is important for this to feel real and when you do imagine it, try to imagine yourself doing (or thinking in the first person) it so that you are in the picture’.

Another effective way of creating imagery is think and concentrate by seeing yourself do something ( or in this case, thinking in the third person). For example if you were running a race you could see yourself running, hitting the ground and looking at your opponents as you strive for the finish line. Alternately, try looking at yourself in the same race but this time in the 3rd person; in other words observing you in the race as if you are filming yourself from above looking at yourself progress to the point of coming from behind and winning the race.

In both cases (you, in the first person or third person) you are effectively creating a mental image of you, achieving something important.

Now apply this to your job or company; Closing that important deal, delivering an important presentation, winning a negotiation, getting the partner you need, getting that important funding approval.

This concept works. Case in point my nephew was a backstroke swimmer in the Atlanta 1996 and Sydney 2000 Olympics. Before any race he would go through his imagery exercise; he would put a towel over his head concentrate and imagine himself in the pool, going over every move and turn, in/out of the water and seeing himself hit the finish wall.

His imagery method worked. It got him to represent Canada in both Olympics!

As a reminder of the rule of thumb: Don’t ask yourself how this works. It just does. Try it and you just might be shocked by the results.

In my next post, I will talk about Ask/Believe/Receive which is line with Imagery.

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There is one stretch of my cycle routine I now call the gauntlet. It’s a long narrow space where I can’t fully see what’s coming up and this is where the street dogs greet me. My first experience was eventful. As these street dogs caught me by complete surprise, I felt this cold flash starting from the back of my spine all the way to the back of my head sort of the fear that can dogs smell. Pretty ironic for a dog lover but I can tell you that the fear although automatic, was real even though I did not want to show it.

As they surprised me I then got into survival mode and I did what comes natural: I pedal faster.

I’m thinking, ‘I can do this’ so I start to pedal even faster as they start catching up to me. Two of the 6 dogs gave up, then 2 more and even with the last two on my tail (pardon the pun) I am pedaling even faster. By this time I am feeling like Lance Armstrong trying to win another Tour de France or dodging the anti-doping officials, depending on when you read about Armstrong.

Then I think Uh-oh. I need to come back through this gauntlet to get home. Turns out they were too busy looking for breakfast and did not want to wait for me. The next trip I gave the dogs some food while moving like a ‘bat out of hell’ and that did not work either.

The last time I was pursued something unusual happened. As I saw them running after me (showing teeth and not being too friendly) I slowed down to offer them some food. What happens? They run away! It seems that as I stopped pedaling and became a pedestrian, it was their turn to be scared.

I had done the complete opposite of what I thought was the solution and it worked!

Business is like that too.

How many times does this happen to you when you are trying to finish a project, or you are dealing with a difficult peer or boss or you are trying to close a deal before a deadline? What do you do in these circumstances ? You pedal faster. You do what comes natural to you thinking this is the solution.
Try doing the complete opposite.

Ask yourself; are the project and its direction really the best for you or your organization?

Instead of fighting or avoiding a peer…listen, process and then reply, as opposed to mixing up this order.

Is this deal good for all parties? Sometimes ‘No deal is better than a bad deal’.

We all get caught up so much in what we do or what is keeping us busy that we miss the obvious. We never really pause, process and say to ourselves… what if I did a complete 180 degrees on this product, project or sales call? It may very well be what the business needs. Sometimes obvious is not obvious enough.

Sometimes, it’s worth stopping, stepping back, slowing down and re-assess if you are following the best route and ponder…what if I did this differently? In fact ask your boss: What if we could do this differently?

How will you know if you don’t try? It takes courage to stop and re-assess.

Like in my case, you may be surprised to find out that to pedal faster is not always the solution.

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Paul Renaud moderating an Evernote Meetup with Phil Libin, CEO of Evernote on November 7th, 2012

I get the chance to meet and moderate interesting people. Phil Libin, CEO or Evernote (www.evernote.com) was in town and I was asked to moderate an Evernote meetup. I like to get to meet/know my guests since I need to know a bit about their leadership style and values. This makes it more interesting for the audience which in this case, ‘is my customer.’
Evernote is a $1billon (USD) company based in Silicon Valley and currently have 40 million customers. Evernote is a solution that helps you remember and act upon ideas, projects and experiences across all the computers, phones and tablets you use.

I had asked Phil what were the reasons of Evernote’ s success and after a few push backs indicating to me a touch of modesty, he admitted one of his guiding principles.
‘Paul, I hire smarter people than me’. I smiled and I let him finish. He went on to say, ‘I need to hire smarter people so we can progress. If I don’t hire someone that is smarter than me, then I end up doing the job myself which is counter-productive’.

I later told Phil that I smiled because I agreed with him and I adopted this principle in the emerging countries I had worked. I also smiled since I remembered the look of shock on some of my managers’ faces when I told them they too, had to hire smarter people. Then the question came…Well, if I hire someone smarter than me he/she will take over my job!’ which is a normal reaction to the unknown. At this moment, I would explain the difference between Leadership and Management.
The difference between Leadership and Management is that ‘Management is doing things right; Leadership is doing the right things’. A Leader will do what is right for the organization by having the best possible talent and will hire smarter people. Leaders such as CEOs cannot manage every aspect and have the same deep level of knowledge of every facet of the organization.

Therefore the CEO must lead the experts in IT, technology, audit and product management in order for the organization to adapt, progress and win in the most efficient manner.

The Leader does exactly that…he leads. The Manager on the other hand, gets the job done.

Think about this distinction in your case. Are you a Leader or a Manager?
Are you doing what is right for your organization or are you managing the finite details?
Chances are your employer hired you to lead. Like Phil Libin, when you hire subject matter experts, this person understands that he/she was hired for their specialized skills and that you are the Leader, a fact that will remain.

Leaders don’t need to establish that they are in charge; ‘doing the right things ‘establishes them as Leaders!

http://evernote.com/

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Michael Ruckman
Relationship Centricity Pro, Founder, President and CEO
Michael presents a framework for building mutually beneficial relationships with customers. This man has a vision, a different approach. Although using a banking approach first, Michael’s holistic approach to reaching out to customers and securing relationships can apply to other industries as well such as telecoms, broadband, cable and utilities.

What has he done?
Michael worked in his twenty-year career both as a banker and as a consultant for retail banks in over twenty five countries around the world. He is also known for his leadership in promoting the value of Customer Experience in retail banking, he has a tremendous experience in distribution network development, alternative channel roll-outs, sales development, alliances and ventures, systems implementation, and corporate culture development.
He has authored a unique methodological approach to operationalize the Customer Experience principles in practical use, resulting in greater customer loyalty, increased sales, and better customer service. He regularly writes articles for a number of professional publications in Europe and the United States and makes appearances in international conferences as a guest speaker. In addition, Michael has been a guest professor at an Eastern European MBA program, introducing students to modern economic theories and their practical implementation in the business field.
Michael’s work portfolio includes a number of large-scale transformation projects for brands such as Abbey National, Alfa-Bank, Atlantico (Millennium BCP), Banco Venezolano, BNP- Paribas, Citibank, ING, Vneshtorgbank, Bank Menatep SPb, Nadra Bank and many others.

What will you learn?
Like in any business, the most important stakeholder is the Client. Michael explains that relationship-centricity is the concept that a provider and a customer can have a mutually beneficial relationship. Learning what your customers really want just might be the key to creating a relationship-centric relationship.

Actionable learning for you to take home?
“We must stop selling products. Instead, we need to sell solutions that help people to achieve certain results. Regardless what can be found in the package, it is important to that it offers a solution for a specific purpose. First, we should find out the customer needs and then start developing a plan for ways to achieve those goals. And I am not talking just about the goals that the customer has today, but those that he may have in six months, a year or two…”
Join us at Leaders in Marketing on October 18, 2012 in Bucharest, Romania to hear more about Michael Ruckman and our roster of international Marketing heavyweights. See http://leadersinmarketing.ro for more details.

Leaders in Marketing
Get Smart …stay Smart!
Smart people welcomed

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On a recent trip to Canada, a former boss and mentor (In fact to think about it…a lot of my former bosses are now friends and mentors!) shared this article with me which is really an interesting article about Brand building on the web, Facebook’s latest performance and companies like GM dropping Facebook. I mean c’mon now…GM dropping FB! Is this the beginning of a new trend? Is this the beginning of ‘Facebook bashing’?

Typically I would attach the link and wish you ‘good reading’ but this time with this article I thought maybe you‘d like to go through the same experience I did.

The fellow, Robert V. Green is writing about Marketing. So in order to make this interesting (no peeking) while you read this article, think about these questions:
1) Is this fellow a marketer? Either MBA or perhaps a Marketing prof? Perhaps he’s a CMO for a large multinational?
2) Do you agree with his belief on FB?
3) I would like to see attendees ask this question to our lineup of Marketing heavyweights at Leaders in Marketing in Bucharest, Romania on Oct 18, 2012. (http://leadersinmarketing.ro/). In fact, as moderator I intend to make this a topic of debate in one of our panels.

Hint: At the end of the article I will reveal what Robert V. Green does for a living.

In the meantime enjoy the article like I did. It’s a bit long yet thought provoking for anyone who considers him/herself a Marketing Pro.

Ahead of the Curve

Updated: 02-Aug-12 09:49 ET

Facebook and the Great Internet Advertising Dream

The collapse of Facebook since its IPO is generally being attributed to shares being overpriced originally. However, there may also be other reasons. Is there perhaps an extreme oversupply of advertising space, not just on the Internet, but in the media in general? How much advertising can we really absorb as consumers? Is Internet advertising even effective? Here are some thoughts, and how it applies to Facebook.

Advertising on the Internet – The Great Promise

Advertisers have always sought to direct their message to precisely the persons most likely to absorb the message and be motivated by it.
This concept is called targeting, which means that information about the type of person who is likely to see the message is known to the advertiser. The more accurate and more detailed the information about the user can be, the more effective the advertisement can be, presumably.
The great promise of the Internet, since the very early days, has been the idea that advertisers could accurately target their message to the user. The pursuit of this dream has been the foundation of many a startup company.
After all, the Internet is the greatest spying tool ever invented for advertisers. By tracking a user’s actions on the web, a detailed profile of the user can be created.
Television show audiences are measured by surveys of individual users that are extrapolated to a larger audience. The content of the show and the ratings metrics are then used to create a demographic profile of the entire viewing audience. This has always involved an element of uncertainty, which the Internet has promised to remove.
To date, the company that has done the best job of fulfilling this dream of the Internet as supreme advertising vehicle has been Facebook.
But is this dream actually real?

How Facebook Targets Advertising

Targeting an audience has always been important, even before the Internet.
The key elements for targeting an audience know the particular demographics of that audience, from which the likelihood of an ad being effective can be estimated.
DoubleClick was the first company to truly begin to target individual users by developing a detailed profile.
DoubleClick did this by tracking the surfing history of a user, recording each visit to a page where a DoubleClick ad was displayed. The ad is drawn from the DoubleClick database, but the database also records the unique ID of the user (stored in a cookie) and tracks the user over time.
DoubleClick’s value proposition was that improved targeting could be provided by the detailed profile created by a history of surfing. Using this profile, an ad most likely to appeal to that user could be displayed.
This value proposition was so strong that Google bought the company in 2007 for $3.1 billion.
DoubleClick’s value proposition was eclipsed by Facebook, however, as Facebook promised an even more detailed and more accurate profile.
This profile is created in part by the user themselves, as data such as birth date, education history, geographic location, and much more is actually given up freely by the Facebook user.
Furthermore, since the “like” button can be placed on other web sites, or persons can sign in to other sites with their Facebook profile, Facebook promises an even more precise profile than DoubleClick can create, since the user themselves has defined the details of their interests.
Add to this the incredible number of users that Facebook has been able to sign up – almost one-quarter of the adult persons on earth – and it seems like Facebook has finally cracked the problems faced by all advertisers.
At least, that is certainly what the advertisers buying space on Facebook believe, or are led to believe.
Does it actually work, though? Or is the Facebook promise more of an illusory dream of perfect advertising?
To answer this, it is first important to consider the various types of advertising.

The Types of Advertising

Historically, there have been three main types of advertising:
• Name recognition
• Sales generating
• Brand building

The Internet has created a fourth type, which can be called “traffic generation.”
Name recognition is simply the idea that the advertiser’s name becomes common and accepted in the potential customers perception of the everyday world. Little, if anything, is conveyed about the product, service, or company except the name.
Companies that purchase the naming rights for stadiums, for example, are not able to communicate anything about their product or service except for the idea that they are large enough to spend millions of dollars annually simply to place their name on the team’s stadium.
Name recognition is the least effective of all advertising in terms of generating revenue for the advertising purchaser. It is very difficult to measure the effectiveness of name recognition advertising.
Sales generating advertising is a very specifically targeted message that is intended to generate immediate revenue. Coupons are the most obvious example, although media advertising promoting lower prices or promotional financing rates are also in this category.
Sales generation advertising is generally easily measured, as the promotions usually have expiration dates and revenue during the sales promotion period can be compared to those before and after the promotion.
Brand building advertising is the most powerful form of advertising, although measuring the impact in precise metrics is difficult. Nevertheless, this type of advertising is considered the best-spent
Brand building advertising, however, requires the “telling of a story.”

Brand Building Advertising

This type of approach generally uses a story, of whatever level of detail, to communicate a particular feeling. This feeling is then associated with the product or company, sometimes by no more than displaying the brand name at the conclusion of the story.
The best example of this type of brand advertisement is Budweiser beer, particularly the advertisements developed for the Super Bowl. These ads usually tell a short, humorous story that either provokes laughter or warm-hearted empathy. The story is then associated with Budweiser simply by displaying the brand name at the end of the ad.
Although some of Budweiser’s ads include the beer within the context of the story, it is very rare for the ads to make any type of statement about the features or qualities of the beer itself.
It is enough to simply associate the good feeling created within the viewer with the brand name. The hope is that this same feeling is then regenerated in the viewer at the moment of decision at the liquor store, either consciously or unconsciously. The purchase decision then revives the good feeling created by the ad’s story, resulting in sales.
This is the core concept of brand advertising: the telling of a story that evokes a certain emotion that is then associated with the product, service, or company.
The effectiveness of brand advertising is difficult to measure, except by comparing regional sales with and without a particular ad campaign. However, most companies choose to purchase brand advertising when they can afford it, particularly if overall revenues have been, and continue to, rise.
Perhaps the purchase of quality brand building ads makes the advertising companies feel good about themselves as well, just as it is intended to make potential customers feel good about themselves.

Advertising on the Internet

Brand building advertising’s greatest media vehicle has historically been television.
On the Internet, however, we would argue that no one has – at least, not yet – created a meaningful vehicle for true brand building advertisements.
In fact, the bulk of Internet advertising since the beginning of the world-wide-web in 1994 has been banner ads, which are primarily either name recognition or sale generation advertisements. In recent years, the development of traffic generation ads has become important, but the difference between traffic generation and name recognition is blurry.
Measuring the effectiveness of banner ads has been much easier than other types of advertising, however, as the user’s reaction to ads can be instantly tracked and measured.
This measurement, over time, has led to the now-common practice of extremely low prices for banner ad placement, with a much larger payment made for a “click-through” — which means that the user has intentionally seen and reacted to the ad (unless the click-through was accidental).
The Internet has developed its own type of advertising category, which can be called “traffic generation.” This category is intended to guide a user to a particular web site where that site can make its own value proposition without having to pay someone else for displaying the message.
The greatest seller of traffic generation ads has been Google, who sells advertisements based upon the information typed in as a search string by the user. The purchaser of the ad intends to steer that potential user directly to their site as a result of the prominent placement of the ad in the search results.
The market for this type of traffic generation ad has been so strong that Google can actually price the ad’s placement in accordance to how prominent it appears on the page. Higher placement in the list of returned links costs more than placement of the ad’s link on the side of the search results.

No Brand Building Advertisement Vehicles on the Web

Almost the entire amount of advertising displayed on the Internet since 1994 has been in the traffic generation, sales generation, or name recognition category.
We would argue that there has been almost no brand building advertising on the Internet, at least in a historical sense.
Why?
It is simply difficult to “tell a story” in the current incarnation of the wide world web.
The only real attempts at this have been short ads that precede a video that the user has requested, such as are now appearing on YouTube and other video-based information sites.
However, in almost all cases, the user has the option to “opt-out” of the ad after a short time period. We are curious how many users do this. Certainly it could be easily measured, but we have seen little public information about this practice.
Perhaps the absence of data on this practice is telling in itself.

Where This Leaves Us

The Internet, therefore, is primarily a vehicle for the least effective types of advertising: name recognition, traffic generation, and sales generation.
Even though Facebook has done the best job of creating a detailed profile of users for advertisers, they still haven’t created a meaningful vehicle for brand building advertising.
Furthermore, the continual creation of new websites whose business model is advertising has led to an almost incredible overcapacity of advertising sites.
We wonder if venture capitalists have any interest in supporting a new Internet startup whose business model is based upon banner advertising. We would not be surprised if they didn’t.
After all, the total advertising budget of all advertisers put together isn’t growing. When the potential supply for placing ads increases, it simply reduces the prices that websites can command for advertisements, particularly banner ads, which fall in the least valuable category of all advertising.
Perhaps now is the time for some young entrepreneur to start pitching the “I’ve solved the brand building advertising problem on the web” idea to venture capitalists (whether they actually have solved it or not).

GM’s Dropping of Facebook

Perhaps the greatest clue in how the industry is viewing Facebook and Internet advertising in general was the announcement by GM, just weeks prior to Facebook’s IPO, that they were canceling all ads on Facebook.
GM simply discovered that Facebook ads just weren’t selling cars.
And since Facebook has no vehicle for creating brand building advertisements, GM found no reason to purchase ads on Facebook.
We think that the primary impact of GM’s decision was to prompt other advertisers to start asking the exact same question about their own advertising budgets.
We suspect most people who buy ads on Facebook also buy ads elsewhere, probably in other mediums as well, such as magazines and television.
How many of those advertisers bought ads on Facebook simply because it was the latest fulfillment of the advertisers dream?
How many of those advertisers have actually started to examine the effectiveness of those Facebook ads, as General Motors did?
We wonder.
Certainly if they haven’t yet done so, they will eventually. No business entity makes ineffective purchase decisions forever, although many certainly do for short periods of time.

Conclusions

The decline of Facebook stock’s value since its IPO is being attributed to the IPO being overpriced and oversold to poorly informed retail investors. Those investors associated Facebook’s explosive growth with a near-certainty of future revenue growth, and value.
We have begun to wonder if the decline in Facebook’s value is instead associated with an increasingly prevalent re-evaluation of advertising on the web in general.
Certainly, GM’s decision to stop purchasing advertising on Facebook had nothing to do with Facebook’s IPO pricing. It was simply an informed advertiser’s assessment of Facebook’s effectiveness.
We think that the decline in Facebook stock has as a lot to do with a widening reassessment of the value of Internet advertising in general and, in particular, the absence of true brand building advertising on Facebook.
If such a reassessment leads advertisers to view Facebook as other than the fulfillment of the ultimate advertisers dream, and instead to view Facebook as yet another Internet promise that just didn’t last, then Facebook stock probably is likely to drop much more over time.

Facebook (FB) August 2, 2012: $20.37 -0.51 (-2.4%)
Comments may be emailed to the author, Robert V. Green, at aheadofthecurve@briefing.com

Answer: Robert V. Green is a Senior Investment Strategist for Briefing.com (http://www.briefing.com/corporate/our-experts.htm), not a Marketing expert!
Paul Renaud

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The Coach was my friend’s father when I played Baseball and Hockey when I was 9 years old.
When I was 16, my Basketball Coach was closer to my age yet I still respected him since he was helping us work together and win.

Later it was my turn to Coach my sons at Hockey (it was better than sitting in a cold arena and waiting for an hour to pass). As it turns out those Coaching moments for me were some the most exhilarating and the most cherished for 2 reasons:

First, I was helping a bunch of 8-9 year olds play, have fun and work as a team.
Second, for that one hour I was focused on the game or practice, showing them their positions and how to score goals. I noticed that I was able to forget about my problems, issues and life for a while. What a cool experience that was -I highly recommend it!

As an Executive I needed to coach my staff and mentor since this is part and parcel of the job when you lead people.

Given my passion to help people and seek peak performance, I always considered myself a Coach. Recently however I got a much clearer view of what Coaching really means. In other words, I ‘got it ‘.
Change… Coaching implies a change. A Coach facilitates change.

You use a Coach to change something about your leadership style because:

1) You realize that you need to change,
2) You realize that you want to change,
3) You need help to make that change.

Changing is not easy. In fact a lot of us resist change. Changing makes you uncomfortable, uneasy and it’s a bit disorienting.

So why do people change or better still recognize that they have to change? Why is this a big deal?

A great book on Coaching and the need to change was written by Marshall Goldsmith and it’s called ‘What got you here won’t get you there’. The title is straightforward. If you are where you are today in your current position, you most probably got there because of your skills, hard work, the right environment, a nice break or even luck.

However as you strive to get to the next level you may have noticed that you are not reaching that new promotion or you are being bypassed. Why is this?
Perhaps the very reason that you got you there in the first place is preventing you from getting where you want to be.

This is where change comes in. The Coach can highlight your weaknesses and less than optimal behavior since it is virtually impossible to assess one’s behavior or style objectively and identify the reasons our career is on ‘stand by’. The Coach will identify areas that you need to change.

The good news is as adults, we can change. Our brains have enough neuroplasticity; in other words we can change the way we interact with people even if we’ve been leading in a certain way for many years. The brain can change, therefore we can change.

Goldsmith talks about 20 behaviors that are holding you back and perhaps alienating your peers, staff and clients. A few examples are ‘Playing favorites’, ‘Interrupting staff by not letting them speak and ‘Punishing the messenger’. These are all examples of where the Coach can help recognize these behaviors, re-wire your thinking and help you change.
Caution: Change requires commitment and time.

Given that we are all aware of the pace in which events and conditions are moving (markets, products, clients, competitors) and that ‘change’ is really the only constant that we can predict, isn’t it time that you give yourself a reality check to see what you need to change in order to adapt ?

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