Sunday December 8, 2019
 

Consulting Fees

Consulting fees can be a crisis when working for the government.  That’s because contracts are usually made public and are subject to criticism.  Few like the dollar-per-hour charges consulting firms have.  They don’t understand that overhead, salary and profit are worked into the billing amount.  They do have a point when juniors are elevated to sky high rates.  There are few young consultants who have a deep understanding of the challenges an organization faces. They lack experience for which there is no substitute.  Answers might seem right on the surface, but they can be wrong given the culture of an entity and its history.  Firms like McKinsey trade on their brand names and get away with higher billings, but they are going under a microscope.  They might not be able to do that for much longer in government contracts.  Critics will rejoice.

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NASA PR

NASA has a built-in PR machine — discovery of new phenomena in space.  It just released early results from its Parker satellite, which is close to the sun.  One might think the public would grow weary of hearing news about the universe, but that is not the case.  Each new observation gains press attention, as it should.  The 20th and 21st Century of exploration has fundamentally changed our view of the world.  We really are a blue marble isolated in a solar system in which all planets but our own are hostile to life as we know it.  Dreams of alien worlds and new peoples are science fiction.  Unless something violates physics, we will never investigate planets light-years away in other solar systems, but what we have learned is already enough to keep scientists working for decades.  And there is more to come.  Each new satellite, rover and space lab divulges unanticipated secrets.  We are living in an era of the new Columbus.  It’s exciting.

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Was Cash The Problem?

Senator Kamala Harris has dropped out of the Democratic race for the presidential nomination.  Was cash the primary problem as she alleged?  Only partially.  She didn’t have a message that gained voters’ attention.  It is the same problem most of the contestants have.  They are me-too or worse.  They don’t have effective ground games.  They are scraping for dollars wherever they can get them.  It is as much a PR problem as anything.  They aren’t relating to the public.  They can’t make their voices heard over the noise of  other candidates.  There is no good answer to this.  Advertising can help a little but it is only for awareness.  The voter might know a name but not what it stands for.  Even front-runners are having trouble this year.  Most are looking at Iowa but the state is fluid.  The next six months will tell the tale.  At this time, it is hard to place a bet on who will survive.

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Infrastructure

Infrastructure can be a major PR problem when situations happen like this.  EV’s don’t have enough charging stations nationwide.  They need to be as available as gas stations but they aren’t — not yet anyway.  The lack of rechargers can make the difference between purchasing an EV or a hybrid, which doesn’t need them.  Tesla understands this and is moving quickly to put in stations in all 50 states but until they become commonplace, many consumers will think about EVs but choose something else.  Press releases won’t solve this PR challenge.  It takes infrastructure.

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Ripe For Disruption

This is a product ripe for disruption.  Texas Instruments has sold the same graphing calculator to high school students and their teachers for more than 15 years.  It has a lock on the market and lesson plans of math instructors throughout the US.  Essentially it has no competition, and it can afford to charge what it wants — around $100 for an instrument that might cost $20 to make.  One wonders why no technology company has taken TI on.  Maybe because the niche is small and there isn’t enough revenue for everyone.  Still, that shouldn’t be a barrier for a hungry manufacturer to introduce a better product for the same price.  TI isn’t dependent on the calculator business for its annual revenue and earnings, but it is a nice fillip to its bottom line.  It is getting away with gouging students and teachers and will continue to do so until a competitor emerges. 

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Embarrassment Explained

By now, the world knows that during the Tesla presentation of a new pickup truck, the armored windows, which weren’t supposed to smash when hit by an iron ball, did break.  Elon Musk gamely went on with the presentation and the company has counted 200,000 preorders for the vehicle.  It wasn’t enough for Musk, however.  He had to know why the windows caved when they weren’t supposed to.  It turns out that a sledgehammer blow to the door of the truck to show its durability had cracked the base of the glass.  When the iron ball hit the window, the crack became shattered glass.  Musk tweeted the explanation to his millions of followers and moved on. Tesla’s challenge now is not broken windows but whether it can produce the truck profitably.  That has been an unmet challenge for the company since its beginning.

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RICO Suit

In an extraordinary move, automaker GM has targeted a competitor, FCA, with a Racketeer Influenced and Corrupt Organizations Act (RICO) suit.  GM alleges that FCA bribed the United Auto Workers union officials and union members to keep its labor costs down while forcing GM to pay more.  It’s a crisis for FCA and potentially a reputation problem for both companies.  If GM loses the suit, it will sustain a black eye as a corporation.  If FCA loses, it will be a blow to a struggling company.  One cannot believe that GM undertook this suit lightly.  It must have sufficient evidence to make the claim.  The question now is whether it can prove it in court. 

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Cynicism Allowed

President Trump has said he might be willing to testify to the Congressional committee.  Democrats are skeptical and well they should be.  Trump is a president who lies constantly, whenever it benefits him.  He prevaricates so frequently that he has trouble remembering what his last lie was.  The Democrats’ cynicism is justified.  Trump fancies himself as a powerful communicator, but his egotism defeats him again and again.  He comes off as a spoiled child who wants what he wants when he wants it.  He has no understanding of how to work with Congress, never did and never will.  He appeals to a small base of disaffected Americans for whom nothing he does is wrong.  Independents are largely abandoning him, and he needs their votes to get re-elected.  He is a case study of what proper behavior and communications aren’t.  History will not be kind.

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Self-made Crisis

Google has a crisis on its hands that it alone has created.  It has gone into partnership with Ascension healthcare to codify and store the large medical chain’s records and the information of millions of patients.  It has apparently failed to tell its own people or the public what it plans to do with all this private information.  Now, there is a whistleblower who raises serious issues that the company has yet to explain.  It didn’t need to be this way.  Google could have prepared the ground for the partnership with abundant internal and external communication.  Why it chose not to do so is unknown at this time.  Perhaps it feared it would be barred from operating if the word got out too early.  Now the company is being forced to defend itself and is the target of a HIPAA investigation.  Maybe next time it will know better.  

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Bankrupt

The nation’s largest milk processor has gone bankrupt.  Dairy consumption continues to drop and the company couldn’t hold on.  Clearly advertising and PR haven’t worked.  The question is what to do now?  There are still millions of milk drinkers, and they expect to find the product on supermarket cold cases.  The market might need to devolve into regional co-ops that can handle reduced volume and still make a go of it.  Creativity might not be able to overcome a shift in consumer opinion. The milk mustache might be on its way out as a symbol.  One wonders what farmers will do.  They have been consolidating herds for decades under the idea that bigger is better, but if there is a smaller market, it isn’t.  The milk industry is living in turbulent and uncertain times.

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