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Archive for June 2009

U.S. Corporations Size Up Their Carbon Footprints

Posted Tuesday, June 30th, 2009

Coca-Cola and others use ever more sophisticated tools to measure their environmental impact and meet emissions goals

Businessweek, June 1st 2009

Like many companies, Coca-Cola wants to cut its carbon footprint. The soft-drink maker has pledged to eliminate 2 million tons of CO2 emissions from its manufacturing operations by 2015. To do that, Coca-Cola has become adept at using spreadsheets and databases to measure how much carbon it produces and energy it consumes. It’s even able to track less tangible causes, such as greenhouse gases emitted by vending machines. But when it comes to tracking and managing the projects that will help it reduce carbon emissions and make better use of resources, Coca-Cola is having a harder time.

The company needed a more sophisticated set of carbon accounting and management tools, says Bryan Jacob, director of energy management and climate protection at Coca-Cola. “I’m looking for something to take us to the next level,” he says. “I’m going to either enhance what I’ve got or move to a different platform that’s much more robust.” To that end, the company is testing a product from software company Hara that goes beyond simply measuring carbon footprints. The Web-delivered tools, formally introduced June 1st, help companies manage efforts to actually reduce carbon and more efficiently use natural resources such as water, waste, and paper.

Amid growing pressure from investors, employees, and environmental watchdogs such as Greenpeace, the circle of companies making a concerted effort to go green is widening. But corporations are finding that even in cases where there’s a will to reduce emissions, it’s not easy to measure a company’s environmental impact, much less keep track of the various projects aimed at meeting aggressive carbon reduction targets.

The Carbon Disclosure Project

Demand for better carbon accounting comes not just from corporate brass, but also from investors, customers, consumers, and employees who want detailed information about a corporation’s environmental impact. Among the leaders of the charge is the Carbon Disclosure Project, a nonprofit organization that has assembled the largest corporate greenhouse gas emissions database in the world. The group is backed by 475 institutional investors that manage $55 trillion in assets. Last year, 321 companies that make up 64% of the corporations listed in the Standard & Poor’s 500-stock index responded to a request for emissions information from the Carbon Disclosure Project, up from 235 in 2006.

To hand over data on emissions, a company must first gather it. Most still use fairly rudimentary homegrown methods. “About 90% of companies use spreadsheets,” says Baier. A December 2008 worldwide survey by research firm Gartner found that too many enterprises were in denial about the need for carbon management.

Of 575 companies surveyed by Gartner in the U.S. and 10 other countries, 18.8% had implemented carbon reporting and management systems and 64.7% had not. An astonishing 13.6% weren’t sure.

Intuit Tracks Its Carbon Footprint

They had better find out soon. According to the Carbon Disclosure Project, direct emissions from Coca-Cola and 416 other large global companies account for about 5.8% of the world’s greenhouse gas emissions. While regulations today regarding greenhouse gases are limited in many cases to carbon-intensive industries such as power generation, Gartner and other analysts expect individual countries to pass climate-change bills that would eventually target less carbon-intensive organizations as well. In the U.S., a bill now wending its way through Congress proposes to reduce greenhouse gas emissions and create a market-based mechanism known as cap and trade that would encourage moves toward low-emission technologies and practices.

Most companies that track greenhouse gas emissions use an accounting framework called the Greenhouse Gas Protocol from the World Resources Institute and the World Business Council for Sustainable Development. That tool covers the accounting and reporting of the six greenhouse gases covered by the Kyoto Protocol—carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulphur hexafluoride (SF6). The numbers are converted to a measurement called carbon dioxide emissions equivalents, a standard that allows comparison among different greenhouse gases.

Sony: The Carbon Its Consumers Use

Perhaps the most complex emissions to calculate, however, are those that occur outside a company’s boundary, but over which it has some control. These are referred to as Scope 3, a category that includes emissions associated with employee commutes, business travel, suppliers, and product use. The nature of this work involves estimation. When Intuit’s Shah calculated the emissions from employee commutes, for example, he got an Excel spreadsheet from HR that mapped the addresses for all 8,000 employees and calculated their commutes to Intuit offices—even accounting for vacation time and holidays. The company is trying to make its analysis more precise by taking into account such factors as work from home and Intuit-sponsored alternate transportation.

For some companies, the majority of emissions fall into this third, indirect category. More than 90% of Sony’s carbon footprint – an estimated 19.34 million tons for the 12 months through March 2008 – results from the electricity consumed when people use Sony products. “Sony has a measurable impact on global greenhouse gases,” says Mark Small, vice-president for corporate environment, safety, and health at Sony Electronics. He estimates that the company is responsible for “a little less than .01% of the total man-made greenhouse gas emissions.” That’s why Sony has made energy efficiency in its products a priority. In 2000, a 32-inch cathode-ray tube TV consumed 280 kilowatt hours a year. In 2008, a 32-inch LCD TV consumed about 86kwh. Still, Sony needs to take into account that consumers are now buying larger TVs. Since Sony can’t actually visit each consumer, it uses estimates to calculate greenhouse gases from product use.

Some companies are surprised by what they find when they look closely at the operations responsible for pollutants. Coca-Cola, for example, initially expected most emissions to come from its fleet of trucks or from its manufacturing operations. The company instead discovered that the lion’s share emanated from what it calls cold drink equipment – the coolers, vending machines, and fountain dispensers used to serve up frosty-cold soft drinks. This gear contains refrigerants and insulation with high global warming potential; it also consumes a lot of electricity. Combined, cold drink equipment accounts for about 15 million metric tons of emissions every year, compared with 3 million from Coke’s diesel-powered trucks or the roughly 5 million from manufacturing. Armed with that information, Coca-Cola is now striving to eliminate harmful chemical compounds from cold drink equipment. Says Jacob: “If we had never put pencil to paper and done the calculations, we might not have understood it ourselves – or believed it.”


‘If you do what you’ve always done, you’ll get what you’ve always got.’ Mark Twain

Posted Friday, June 26th, 2009


‘First impressions last but lasting impressions take time to form.’ Mark Twain

Posted Friday, June 26th, 2009


Mercedes Campaign Focuses on Image, Not Recession

Posted Friday, June 19th, 2009

Car companies like Hyundai and Ford have been showing solidarity with consumers recently, running ads promising that the companies will help them should they lose their jobs.

The New York Times, June 18th 2009

Mercedes-Benz USA is trying a different way to get customers to buy cars as it introduces its updated E-Class Series. The ad campaign for the midsize car, available as a sedan or a coupe, is the company’s biggest in two years, estimated at $75 million. It does not talk about great value or good deals. Instead, it focuses on the cars‘ technology and heritage, a somewhat standard approach for the brand.

“Everyone has that trigger that’s going to get them out there in the marketplace again, assuming that they have the means and they’re just choosing not to spend it,” said Alex Gellert, the chief executive of Merkley & Partners, part of the Omnicom Group, which created the Mercedes print and television ads.

The E-Class update is meant to turn around an alarming sales slide for Mercedes, which is owned by Daimler. Its United States sales have declined 28.7 percent this year from the same time in 2008, according to the company. May sales were even further off, falling 33.4 percent from May 2008. The United States turned in the worst showing of any geographic region in May.

Even given the sales challenge, Steve Cannon, the vice president of marketing for Mercedes-Benz USA, decided not to echo the recession-conscious marketing that other car manufacturers have used. Hyundai promised to help customers pay for their cars if they lost their jobs, an offer Ford and General Motors soon matched. A recent spate of ads for Honda‘s Insight described it as “designed and priced for us all.”

“I’d rather tell our brand story, our innovation story, our value story, than join the chorus of everyone else that’s screaming ‘sale’ – that’s about the only message that’s out there right now,” Mr. Cannon said. “Customers have told us, ‘we know there are deals out there,’ so just getting on television with an expensive media plan and shouting, ‘there’s a sale,’ they already know that.”

Although Mercedes wanted to avoid emphasizing sale prices, it did place the starting price for the cars at the end of each television spot and in the print ads. At $48,600, it is almost 9 percent less than the starting price for the last set of E-Class cars, from the 2003 model year. The ads give just the price, though, not the discount. “For Mercedes-Benz customers, $48,600 is a huge value story, and those people know it, so I don’t have to go out and say, ‘value, value’ — that’s not appropriate for our brand,” Mr. Cannon said. “The folks that are looking for a midsize luxury sedan kind of understand the price points.”

For his customers, “I think there’s a level of crisis fatigue and recession fatigue out there, marketing down to, ‘we feel your pain. We’re all in this together,’ versus, ‘this is who we are,’ ” Mr. Cannon said. “All the things that mattered to them before the recession, it still matters to them. But we have to work harder to break through, because the system has been shocked significantly.”


Advertising in a Bad Economy

Posted Thursday, June 11th, 2009

Why You Need to Advertise in a Recession Now to Grow Your Business in the Future
About.com

In a recession, the first dollars that a company usually cuts come from the advertising budget. Advertising in a recession is actually a smart business move to grow your business now and for the future.

McGraw-Hill Research conducted a study of U.S. recessions from 1980-1985. Out of the 600 business-to-business companies analyzed, the ones who continued to advertise during the 1981-1982 recession hit a 256-percent growth by 1985 over their competitors that eliminated or decreased spending.

American Business Press analyzed 143 companies during the economic downturn back in 1974 and 1975. Companies that advertised in those years saw the highest growth in sales and net income during the recession and the two years that followed.

The numbers aren’t a fluke. They prove there’s a reward for companies who are aggressive with their advertising efforts in a recession.

Here are even more reasons why you need to advertise your business in a bad economy:

Your Competition Won’t
Most small businesses have a limited advertising budget. During a recession, it’s easy to make up some of those dollars by holding back on advertising.

All that really does is open up the marketplace for that company’s competitors. The presence the business has spent ad dollars on to build up is now an open field for the competitors that are willing to advertise.

Let’s say you own an auto parts store. Consumers still need your company, no matter what the economy. Cars still break down. They still need windshield wipers and people will even buy those tree air fresheners. Your company can be the one the customer chooses because you’ve made your own presence known.

You Can Create a Long-Term Position for Your Business
Standing out in the marketplace is hard enough when you and your competition are battling it out in the ad world. As your competition cuts back on ad spending, your advertising can cut through that clutter.

Consumers may not be spending as much but they are still spending. If you’re not the company they think of when they do spend, your sales will decrease. While your competition is cutting back, you have the chance to be the company consumers spend with now while gaining their future business as you continue to advertise in good times and bad.

To Establish an Advertising Contact
This is the perfect time to establish a relationship with the person you’ll be doing business with at TV stations, radio stations, magazines, online, etc. An Account Executive can be your go-to contact to get your ads in prime placement, negotiate good deals on rates and even get extras thrown in for your ads.

You can also use this new relationship to further grow your business. Talk with the AE about sponsorships, advertising trades and partnering.

Get Better Deals on Advertising
This is where you can use your new advertising contact. Ad inventory still has to be sold. TV stations, radio stations and magazines still have budgets to make.

Now’s a good time to get deals on your ad space. You can get more exposure through more ad placement and even freebies added into the mix. If you’re trying to get airtime on TV, for example, a station might also offer online advertising on its website as part of the deal. Negotiations are easier for the advertiser in a recession.

You Can Speak Directly to Customers Looking for Bargains
Don’t be afraid to address the bad economy in your advertising. Customers are looking for good deals. Some national advertisers are a prime example of this.

Travelocity aired a simple commercial to announce its Silver Lining Sale. In the first three seconds, you see the words, “We know times are tight.”

Wal-Mart is running an effective ad campaign. The commercials don’t say, “Hey, come on out. We’ve got electronics, clothes, sporting goods, prescriptions and more at a low cost.” Instead, the ads focus on very specific items and how much you’ll save over a year by purchasing these items directly from Wal-Mart. The world’s largest retailer posted its best sales performance in nine months, with a 5.1-percent sales gain in February 2009 as a result.

Hyundai‘s ads touting the Assurance Plus program is another example of an advertiser that’s not ignoring these tough economic times. In its ads, Hyundai announces its program that will pay your payment for three months if you lose your income. If you still can’t pay after three months, take your car back to the dealership.

Is it an effective program? Hyundai has already seen a 4.9-percent sales gain as of March 2009 while Toyota is down 36-percent.

In a bad economy, there are many opportunities to expose your business to new customers that aren’t always possible in a good economy. Every one of them can be explored to help you solidify your place in business and stand out from your competitors.


How to… be innovative in the workplace

Posted Wednesday, June 3rd, 2009

Make innovation a priority

The Times, March 11th, 2009

1. “In this environment, innovation is a real challenge,” Penny de Valk, chief executive of the Institute of Leadership and Management, says. “We are seeing a number of organisations hunkering down.” Such behaviour is dangerous: companies that generate 80 per cent of their revenue from new products typically double their market capitalisation over a five-year period, she says.

Take risks and embrace failure

2. Ms de Valk defines innovation as “the successful exploitation of new ideas”. But to innovate requires many ideas that are unsuccessful. “You have to give people the freedom to fail and to fail fast,” she says. “That’s a real challenge in a risk-averse culture.”

Jaideep Prabhu, of the Judge Business School, Cambridge, says that the rule in pharmaceuticals – one in five molecules makes it to market – applies to other sectors. “Even then, one in three products is likely to fail after launch,” he says.

Eyes on the future

3. “Employees are so busy firefighting that they are blinkered,” Professor Prabhu says. “Step outside your situation and look to future opportunities and threats. Who will be your competitors and customers?” A study of internet banking in the United States looked at chief executives’ letters to shareholders between 1991 and 1995. Those with the highest percentage of sentences about the future introduced new technology the fastest. “What made you successful in the past is not going to make you successful in the future,” Ms de Valk says.

Foster creativity at all levels

4. Jonathan Feinstein, of the Yale School of Management and author of The Nature of Creative Development, says: “Put yourself in the position where ‘light-bulb moments’ can happen. Give people freedom to define their creative interests and help to explore them.” Matt Brittin, the UK country director for Google, says that 20 per cent of employees’ time is spent on individual projects. This practice enabled an engineer to notice that patterns in search terms could be used to track flu outbreaks. Ms de Valk says: “Don’t just create a ‘good ideas’ culture, but decide which ones to put resources behind.”

Break the rules

5. Tamsin Davies, the head of innovation for Fallon, an advertising agency, says: “Think outside categories and be subversive. A clash of genres makes for different ideas. For the Cadbury’s ‘eyebrows’ adverts we didn’t think about chocolate but about ‘what produces joy’.”

Collaborate across boundaries

6. Professor Feinstein says: “Get clients in a room with engineers or product managers.” Professor Prabhu advises getting divisions to compete: “Internal competition is a way of bringing the discipline of the market in-house.” Google involves users. Mr Brittin says: “Open-source software allows us to tap into a worldwide base of millions of software developers who help to improve the product.”

Think global

7. We are in a new “innovation world” where the US no longer dominates, John Kao, chairman of the Institute for Large Scale Innovation, writes in the Harvard Business Review. “High-tech start-ups can be ‘born global’ by availing themselves of talent, capital, R&D tax credits, regulatory relief and specialised facilities in such innovation hot-spots as Helsinki, Singapore and Shanghai.”

Act fast and keep refining

8. “We have a philosophy of trying to launch things early then get feedback,” Mr Brittin says. Although Google‘s search page may look the same, the company is constantly modifying its algorithms, he adds.

Cannibalise your own products

9. “Even when firms spot an opportunity, they may not seize it because it threatens the success of their own products and services,” Professor Prabhu says. Sony had the technical expertise to introduce MP3 players but was afraid of jeopardising the venerable Walkman, allowing Apple to get there first, he says, and Starbucks’ venture into the instant-coffee market exemplifies a company turning cannibal.

Be ambitious

10. Innovation should focus on “making the competition irrelevant”, Ms de Valk says. She credits Cirque du Soleil, the acrobatic troupe, with reinventing the circus. Google never wanted to be “just a search engine” but to “organise the web”, allowing it to apply its technology broadly, Mr Brittin says.

World-beating innovators

1. Team Obama: turned an outside candidate into a “national brand”

2. Google: Search engine

3. Hulu: Video-streaming website

4. Apple: IT company

5. Cisco Systems: Designer and supplier of networking technology

6. Intel: Producer of silicon chip microprocessors for computers

7. Pure Digital Technologies: Makes simple digital camcorders

8. WuXi PharmaTech: A Chinese pharmaceutical research company

9. Amazon: Online shopping store

10. Ideo: Design consultancy

Source: Fortune, March 2009


 
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