Yahoo's Very Public Lay-off

Last December 10, Yahoo laid off 10% of it's work force. This is equivalent to about 1,500 employees losing their jobs just a couple of weeks before Christmas. Affected departments include sales, marketing, content, administration, engineering, and acquisitions like Maven Networks and Right Media Exchange. Yahoo has been in trouble for a long time. Ever since the Microsoft billion dollar offer or probably even before that when they were so obviously lagging behind Google in advertising revenue.

This laying off was magnified because it became very public given that Yahoo is an advanced company plus everyone and their mother is online. The scenario was adjudged negative for Yahoo as a company but possibly redeeming for the newly unemployed.

"People in this business know the internet as their go-to place to express themselves," said managing director Don Leon, Stephen Bradford Search, to AdAge. "The benefits of […] getting your name out there and letting people know you're available outweigh the potential downside of being perceived as bitter."

Now care of Valleywag, here are some leaked power point slides that indicate how to lay-off people during this time. Apparently it is not to be called "firing" but "getting fit." Nevertheless it's still having people jobless and no matter what that is called, that still hurts

It's just sad when things like this have to happen. I have experienced having to lose a team of 12 before and compared to this the numbers are smaller ~ true. But that didn't make it any harder. I cried when the news was relayed. It's never easy, but it's management decision. Apparently cutting off some of the branches would make the tree grow better (or more financially stable - whichever turned you on)

For managers out there, this might be useful I think. I for one, am not good at following such orders and would have most likely lost my nerve and ended up getting fired myself. Here are the Yahoo "how to sack employees" slides

Management Advice For Yahoo

Many have made it a big deal how Yahoo has become so deep in trouble with regards to legal issues and other management concerns. Here are some advice from analysts and opinionated individuals as reported by Businessweek.com

1. Bernstein Research analyst Jeffrey Lindsay advised in a Jan. 11 report that Yahoo fire 2,000 employees. He said that would give Yahoo more profits to pursue initiatives such as mobile search and video as well as acquisitions. The company is mulling layoffs, but more in the range of hundreds of employees. Deeper cuts, flagged privately by people at Yahoo as unlikely, sound more like wishful thinking by investors than sound advice. They presume that Yahoo is stumbling toward death's door when it's not: In its fourth-quarter report Jan. 29, the company is expected to show a 15% gain in sales, to $1.4 billion, though profits are expected to fall.
   

   Yahoo's major acquisitions over the past year, such as Right Media, BlueLithium, and Zimbra, surely created redundant positions. If they haven't been eliminated already, it's time.
   
   

2. Lindsay and others also think Yahoo should give up on its search efforts and just pay Google to drive its search engine. It's easy to understand why. Yahoo keeps losing search market share to Google, whose engine handles from 56% to 66% of all queries, depending on who's counting. By contrast, Yahoo's share is usually from 18% to 21%. "The text-ad war has been lost," says Scott Rafer, CEO of ad network Lookery and former CEO of MyBlogLog, which Yahoo bought a year ago.

   But others think Yahoo would be crazy to cede such an important front, not to mention control of the Web's most lucrative advertising opportunity. "It's a pretty critical component of getting people to start with Yahoo and stay there," says Ned May, director and lead analyst at market researcher Outsell. Just as important, data from searches, still the most important indication of a user's intention to buy, ultimately may prove crucial for targeting display ads to individuals as well.

   Notably, marketers and ad firms are rooting for Yahoo because they want a stronger No. 2 just to keep Google honest. "I would hate to see Google become almost a monopoly," says Lee. If Yahoo can keep making even mild progress in search advertising—its revenue per search rose 20% in the third quarter—keeping it in-house seems worthwhile.

3. If there's one rumor that keeps coming back again and again, it's this one. And with every replay, the speculation seems ever more driven by investors looking for a quick exit than by any actual deliberations by Yahoo or Microsoft. The software giant, which only last year spent the most it has ever put into an acquisition with the $6 billion purchase of aQuantive, seems unlikely to put up the upwards of $27 billion it would take to buy Yahoo. Such a deal would also carry big risks, as the merged company would likely lose even more ground to Google in the time it would take to integrate Yahoo's and Microsoft's operations and businesses.



4. In an impassioned call on the blog GigaOm on Jan. 22, Mitra advised Yahoo to forget about downsizing and "please put up a fight." She said Yahoo has an unmatched opportunity on the emerging new Web, which she views as being dominated by highly specialized services. So, she advises, Yahoo should consider buying jobs site Monster.com (MNST) to complement Yahoo HotJobs, photo service Shutterfly to go with Yahoo's Flickr site, travel sites such as Expedia (EXPE) or Priceline (PCLN) and more, to fill out the portal's strengths in these specialized markets.

   Problem is, Yahoo doesn't seem to have the resources to get this aggressive. Its cash position of $2.2 billion trails laughably behind Google's $13 billion stash and Microsoft's $19 billion trove. And the stock market clearly isn't valuing Yahoo's shares enough to make them a powerful currency for deals. As much as Yang may want to follow this path, it's unlikely he can.

Management Tips As Chrysler Goes Global

Weak revenue streams from the US market now has Chrysler taking a more serious look at global markets.

According to Wall Street Journal, the auto maker, which relies on North America for about 90% of its sales, is planning to bolster its dealer network in Russia and China this year in hopes of benefiting from the rapid growth in those two big, developing markets, Mike Manley, Chrysler's international-sales chief, said in an interview.

So what's the strategy? Well here are some of them as quoted from Wall Street Journal

1. Chrysler boosted the number of products offered overseas to 20 from nine. In China, Chrysler said it is reintroducing Dodge-brand vehicles after a 62-year absence. The Caravan minivan is in production. The Caliber hatchback and Avenger sedan are also slated to be sold in that country.
2. The auto maker has started using recruitment teams, investment forums and the promise of large territories with more products to expand its dealer network overseas.
3. They hired key management - CEO, Philip Murtaugh, who spurred GM's growth in China, this past September.
4. U.S., incentives will be kept to a minimum as the auto maker sticks with its vow to curtail production rather than fill dealer lots, North American sales chief Steve Landry said.
5. Chrysler is in the midst of eliminating shifts at five North American plants, resulting in job cuts of 8,500 to 10,000 hourly workers. The cuts are slated to be completed by April.
6. Introduction of the Dodge Journey, Chrysler's redesigned Dodge Ram pickup truck and the hybrid version of the Chrysler Aspen and Dodge Durango to bolster sales.

These are their plans, whether they'll work or not only time will tell.

Lessons From Chrysler's Billion Dollar Loss

USA Today reported that Chrysler will lose about $1.6 billion this year, worse than the $1.4 billion operating loss it posted for 2006, a source says CEO Bob Nardelli told a group of designers and engineers recently, and the automaker still plans to break even in 2008.

Apparently the Chrysler CEO told employees during a webcast last week that although he believes the automaker has cut as many workers as it needs to, Chrysler will continue slashing jobs if it cannot meet its goals. The company said previously it would cut 25,000 jobs, including 1,000 buyouts. Chrysler announced 12,000 of those in November, just after employees represented by the UAW ratified a new four-year contract.

It is worth noting how difficult it is for businesses these days that even such a well-known brand such as Chrysler is reporting such major losses. The way they are handling it though is quite respectable. The open communication lines and transparency with regards to what is happening and what is going to happen is far better than just laying off employees with a slight of the hand.

A rule of thumb in business strategy is that if you're not meeting top line, then you'll have to cut the bottom line. This is what they're doing by letting go of so many people. It's sad how thousands will lose their jobs, but the entire ship will sink (and everyone in it) if it is not done.

I have experienced having to let go of so many people because the business can no longer handle the cost. And it's quite painful. Nevertheless nothing can be done if management decides to do so.

Chrysler's other strategy to picking up business is a review of their existing products. Weeding out the non-profitable ones and launching more competitive brands. Chrysler already has said it will eliminate four products through 2008: Dodge Magnum wagon, convertible version of Chrysler PT Cruiser, Chrysler Pacifica crossover SUV and Chrysler Crossfire sports car. Chrysler plans to add two new products: Dodge Journey crossover SUV and Dodge Challenger sports car, along with gasoline-electric hybrid versions of its Chrysler Aspen and Dodge Durango SUVs.

There is significant cost to swallow as this is done, but if they've done their homework and market research, the newer lines should sell better compared to the products they are letting go.

(image from diseno-art.com)

Holiday Marketing Targeting Young Adults

An article from eMarketer reports that young adults will spend $634 per person, according to researcher Youth Trends.

Tops on their shopping lists:



Most of them will be shopping online too



Not only that but $158 of the average $634 in spending, young adults will spend on other purchases for themselves. That's a ttal of $48 billion on discretionary purchases this year made by young adults 18-30 years old.

What does this mean for retailers? If you have products that are within the $158 range and are directed towards the young adult market, it would be beneficial to conceptualize promotions right now in this relation

What does this mean for management? Strategies should expand in terms of targeting the market. Although most businesses are geared towards the working population, because of convergence through the internet, the world has become so much smaller. More and more markets are becoming available online - younger and older.

Holiday Marketing Targeting Young Adults

An article from eMarketer reports that young adults will spend $634 per person, according to researcher Youth Trends.

Tops on their shopping lists:



Most of them will be shopping online too



Not only that but $158 of the average $634 in spending, young adults will spend on other purchases for themselves. That's a ttal of $48 billion on discretionary purchases this year made by young adults 18-30 years old.

What does this mean for retailers? If you have products that are within the $158 range and are directed towards the young adult market, it would be beneficial to conceptualize promotions right now in this relation

What does this mean for management? Strategies should expand in terms of targeting the market. Although most businesses are geared towards the working population, because of convergence through the internet, the world has become so much smaller. More and more markets are becoming available online - younger and older.

Organizing To Launch A Lead-Generating Campaign

Before launching any lead generation campaign, make sure all involved teams are on board and on the same page. The goals should be clearly defined and applicable to the different parties. The strategies should be in place to effectively be geared toward this similar goal

To start off, the campaign flow should be outlined carefully. Where does the process start and how will it end? How will you define its success or failure?

- Correlate the promotional material, collateral to be used with the goals

If the goal is to increase leads online, then the promotional material will be correlated to this goal. Most if not all efforts will then be concentrated online. You can start with search engine optimization (to enhance sign ups via the website), email campaigns, online linking campaigns and even search engine marketing if you've got enough money to play with

- Identify different response mechanisms

How do you want people to respond to your campaigns? Will there be a hotline number or d you want to course all campaign responses through your website or maybe a particular email address? These should be outlined carefully so your teams will be well-prepared to entertaian in-coming prospects and follow through on possible sales.

- Define the marketing message in line with the goal

Position the goal of your messages in the collateral in such a way that it will not be drowned by other content. Make this the focus of the entire piece. This should be the same for all pieces and for all campaigns if you're doing multiple campaigns at the same time

- Ensure that the user makes the most of your campaign

For the campaign to be effective, the user has to enjoy the experience. The campaign should be targeted enough to be appreciated by the right market. The flow of the campaign from ad to landing experience to response acceptance should be smooth and directed towards the goal.

Once these steps are properly outlined, the campaign should be able to push through without a hitch. These are macro perspectives of any campaign and not designed to sweat the small stuff. But once these are in place, the details will fit perfectly like pieces in a puzzle.

Can You Manage A Kindergarten Class?

I was a kindergarten teacher for a year and it's NOT easy. Imagine more than a dozen kids screaming and running and wanting to do other things while you try to teach. In the midst of all this chaos, you have to establish discipline and some form of learning. The good thing about children is that you will always grow attached to them. A level of responsibility, care and trust is given to a teacher by parents and this is what we try to live up to.

That's not to say managing adults would be much easier. Although more mature individuals know that they are paid to work and some people will succumb to what needs to be done because that's what the job entails, a manager should take the same responsibility for these people. As a manager, you won't always have brilliant or disciplined staff members, it will then be up to you to teach your staff not only to be better at the job they do but also as individuals.

According to "The New Dynamics of Strategy: Sensemaking is a Complex and Complicated World," from IBM Systems Journal, last 2003 by C.F. Kurtz and D. J. Snowden, one of my most admired knowledge management theorist David Snowden said that effective leaders manage chaos the way a kindergarten teacher manages her students...

"Experienced teachers allow a degree of freedom at the start of a session, then intervene to stabilize desirable patterns and destabilize undesirable ones, and when they are very clever, they seed the space so that the patterns they want are more likely to emerge."

And so my challenge to managers is just that. Can you manage a kindergarten class? Maybe you should start managing your department the way you would a kindergarten class.

(image from Strategic Talent Management)

Ready, Market, Shop! Holiday Shopping Statistics

4 out of 10 will reduce spend of the holidays. However even if Americans are projected to spend less this holiday, total revenue as a result of gifts purchased expected to remain the same compared to 2006 according to 22nd Annual Holiday Survey

Areas where spending is likely to be down include home improvements, socializing/entertaining, charitable donations, home/holiday furnishings and non-gift clothing. However, people intend to buy an average of 23 gifts this year - highest over the last 6 years, with women planning to buy more. Older consumers (61-74 years old) plan to spend more than a quarter more than the average consumer.

The backdrop to these spending expectations:

• American consumers are less optimistic about the economy, with only 57% of consumers surveyed saying the economy will improve or remain the same next year.
• However, the vast majority (85%) say they feel secure about their jobs, which is about even with last year.

What does this mean for businesses?

• Would be best to capitalize on the status quo and generally compliment existing product lines with what consumers are most likely to buy or are interested in buying.
• Marketing campaigns should be geared towards the holiday season.
• Management should be aware of the trade-offs of the season: exchanging cost of offers for more volume sales resulting in hopefully more absolute dollars at the end of the day.
• Target markets should be considered carefully in accordance with product offerings. In this case though, the more mature market will likely be competitive

More Readers Putting Down Newspaper To Visit Websites

The Audit Bureau of Circulations reports that American newspaper circulations declined by 3% over the spring and summer, reflecting how readers are shifting to the Internet for news.



Web readership on the other hand has climbed. What does this mean for major newspapers? An overall business strategy to move from print circulation to the online medium. Executives noted that newspaper Web sites — unlike their print counterparts — drew a lot of young adults, who are sought by advertisers. But advertisers have generally not considered an online reader to be as valuable as a print reader, so it remains to be seen what effect the numbers will have.

If we let economics run its course, the internet has definitely overtaken the print industry. More of almost every market is located online. This doesn't mean though that print will die. Whereas the web is virtual, print is still tangible and since it still has an edge in terms of seniority, I doubt print will go away but business-wise. Management should start thinking about exploring the online medium vs. the long trusted print industry. This shows that the better business strategy for now would be for major newspapers to start beefing up their online portfolios.

Marketing And Finance Cease Fire (Part 2 - 4 Steps To A Resolution)

Finance, while always aiming for top line is also much concerned about the bottom line as well as close measurement of returns on each type of spending. This then manifests in their desire to make sure that marketing is bridled and audited to properly show returns. This is where the marketing's planned projection comes in (also termed marketing budget, marketing plan). It will be a little more complicated and will necessitate the following characteristics:

1. Reflect core business perspectives - The requirement of each marketing campaign must align with the business itself. Branding will go hand in hand with lead generation efforts or the campaign is merely marketing faux - a feeble imitation of a campaign that will only ruin user experience (confuse prospects and mislead potential clients) as the company's overall brand is inconsistent with the marketing efforts. If you're company wants to be the classy chick in the bar then allocate time, budget, effort and marketing design that suits this image.
   Marketing communication to Finance: Align marketing spend with expected incoming revenues. Where possible, equate spend as a percentage/ portion of what is to be expected. Quantify in dollars generated the multiple effects of one campaign. How many additional leads will this campaign generate as a spill over? How much more revenue will it make in this related revenue stream?


2. Consider timing - Revenue generating campaigns in marketing aren't instant success stories. More often they have a cumulative effect that will be seen over a period of time.
   Marketing communication to Finance: Commit to metrics that can quantify success or failure. Apply IRR (Internal Rate of Returns) calculations to arrive at expected long term revenues in the context of current performance. Where possible use Finance jargon as well - they'll appreciate that too.
   
3. Don't put all your eggs in one basket - avoid allocating the entire budget to one or two marketing efforts. Although it is wiser to specialize and perfect one campaign than to launch a dozen mediocre ones, take the opportunity to explore and test other activities. These will serve as fall-back mechanisms should campaign efforts be hindered by technical issues or natural calamities that may be beyond your control.
   Marketing communication to Finance: This is a tough one as finance by the very nature of that function will always require returns on any allocated spend amount. In this case, commit to returns on any test campaign - even if it is just enough to break even with the cost. Never commit to making a profit from it though. Keep the spending to a minimum at all times. And when possible, assimilate the cost into existing marketing efforts.
   
4. Be realistic - Market research is vital to any campaign. From the point of product or campaign development (so called marketing reconnaissance), to tracking and monitoring campaign performance (this might also be termed the point of auditing). Marketing efforts and projections are more solid when grounded on baseline data. The results or revenues expected should be proportional to the allocated marketing budget as illustrated by data that has (at the very least) already been achieved.
   Marketing communication to Finance: This will be a conservative projection, but it will be real. Finance professionals are more likely to lean towards conservativism. Marketing spend is not just an activity that takes place in the present, it is an investment in the future. The revenues will not come back at once, but over a period of time as explained in point #1 - timing considerations.

Finance will be able to understand the metrics when it is properly presented. Finance after all is the mother of all mathematics in any given company. However onus is still on marketing to relay the adequate key performance indicators (KPI's) of each campaign as well as the management information to fuel the continued support.

In sum, marketing campaigns have an overriding effect. It can impact various audiences and create elements that will generate a spill over towards other goals (such as brand awareness) and other revenue generating streams. But this will occur over time and not instantaneously. Finance will need some help to understand that.

Oftentimes, Marketing and finance don't see eye to eye because of the nature of their functions. But that doesn't mean they can't get along. The key here is communication. Even if it means marketing will have to speak the terms of finance in order to relay the need of the campaigns and finance will have to understand some marketing concepts in order to understand and be able to justify spend - the knowledge transfer will be worth the effort.