omgteddyposts

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Keepin’ it real vs. Faking it till you make it

“How to Pitch a Brilliant Idea” gives a frame work for thinking about how we are perceived by others, and how we can adapt our styles to make the most of those perceptions. This essay reminded me of the concept of “self-monitoring,” developed more than 25 years ago by a University of Minnesota psychology researcher named Mark Snyder, which suggests that people may be innately different in terms of tendencies that govern their behavior: “Self-monitoring is the tendency to notice visual, vocal, and verbal cues for socially appropriate behavior and to modify one’s behavior accordingly. Individuals can be classified into two groups with regards to their level of self-monitoring. [...] High self-monitors emphasize the public self and, like actors, seem to be asking, ‘What role should I be playing in this situation?’ Low self-monitors are more interested in their personal value systems and private realities. The central question asked by the low self-monitors is, ‘How can I look like the person I truly am?’” (http://nymag.com/scienceofus/2017/03/heres-a-test-to-tell-you-if-you-are-a-high-self-monitor.html).

If indeed a distinction may be made between human beings that are more on the “high self-monitor” end of the spectrum and those that are more on the “low self-monitor” end of the spectrum, what does that say about what it means to be authentic? Are low self-monitors more authentic than high self-monitors because they seek to look like their “true” selves? Are both types equally authentic, but in different ways and in accordance with their own innate tendencies? According to Snyder, “Most people don’t want to change [their style of self-monitoring]. Most people think their way of being is the best way. High self-monitors, for example, describe this approach to life with words and phrases like ‘flexible’ or ‘sensitive to social cues.’ Low self-monitors […] call themselves ‘an open book’ who is ‘true to their own sense of self.’” Based on this assessment, it appears that overall, the second explanation is more correct – both low self-monitors and high self-monitors are simply acting in accordance with their own innate tendencies. Therefore, what may be more important to authenticity than being low vs. high on the self-monitoring scale is understanding one’s own self-monitoring tendencies and then using that self-knowledge in order to find the people and situations that enable one to operate with the least amount of unnecessary friction.

As the author of the same article states, “Nobody is wrong. Nobody is right. Both personalities tend to fare just as well in friendships, romantic relationships, and careers, provided they find the right friends or partner or job that fits their type.” And, I would add, the same applies to interpersonal communications and negotiation – finding situations that fit with one’s self-monitoring style is more important than trying to adapt one’s self-monitoring style to particular situations when it comes to being authentic. I happen to be a low self-monitor, so I should seek out relationships, jobs, and negotiations that feel more compatible with my personality; a high self-monitor, on the other hand, should “choose the job [or relationship or negotiation] where they have a greater sense that they can get ahead in the job [or relationship or negotiation].” Based on this, I would say in response to Dr. Elsbach’s essay that some people should even consider if they are even suited to be screenwriters...

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The Dark Side of Social Media

Social Media - the very name suggests that this new form of technology enables people to augment their social interactions through the power of the internet. But is this the whole story? Does social media really make us more connected?

According to a new study, written up in this [https://hbr.org/2017/04/a-new-more-rigorous-study-confirms-the-more-you-use-facebook-the-worse-you-feel] HBR article, the answer is “No.” In “A New, More Rigorous Study Confirms: The More You Use Facebook, the Worse You Feel,” the researchers (including some well-known people including Nicholas Christakis, Director of the Human Nature Lab at Yale) found that “while real-world social networks were positively associated with overall well-being, the use of Facebook was negatively associated with overall well-being.” As to why this is, the article states, “Exposure to the carefully curated images from others’ lives leads to negative self-comparison, and the sheer quantity of social media interaction may detract from more meaningful real-life experiences.”

So it seems that using Facebook, Instagram, etc. is unhealthy, at least when it’s not sufficiently balanced against meaningful real-world interactions. This is unfortunate, and important.

For Claire, I’d love to hear her thoughts on this. I applaud her efforts to show more diversity in the online influencer space, but taking a step back, I’d also like to hear how she thinks about the downsides of portraying a perfect image online, especially when she has millions of (young, impressionable) followers? To the extent that her position is, “this will happen no matter what, so I may as well get my fair share of the action,” (which I think is perfectly valid) I’d also like to understand how she measures success. For her, despite her success, is she constantly looking at the other influencers that have a few million more followers than she does?

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Protect Ya Check

One of the most striking elements of Bravo’s strategy was how she thought abut protecting the Burberry check pattern: “Over the past several years, the check had appeared everywhere—on socks, scarves, shoes, hats, coats, pants, jackets, bikinis, umbrellas, eyeglass cases, even chiffon underwear [...] As Bravo noted, ‘If I show you our check, you know it’s Burberry. The key is to bring some soul to the thing.’ This meant managing the pervasiveness of the check in a strategic way.” For luxury brands, exclusivity is incredibly important. And that means protecting the visual elements that they are known for, including logos, patterns, and other visual assets. In many cases, people are willing to pay the high prices that luxury brands command only because they know that when people see them carrying something with the Louis Vuitton monogram print, the Chanel back-to-back C’s, or the Bottega Veneta intrecciato leather weave, they will know: “This is someone with taste. This is someone with money. This is someone important.” As a result, luxury brands must always walk a fine line between selling large quantities of product and ensuring that their logos and trademarks don’t become too ubiquitous. (Thus knockoffs and bootleg products, like the one in the image above, are a particular bane to a luxury brand’s existence.)

But is this only for luxury brands? In a word, no. Supreme is an example of a fashion and lifestyle brand that has managed to build in less than 25 years a brand that is as desirable among its customers (who are increasing and growing more diverse by the day) as any luxury brand. And Supreme is extremely protective of its logo, a simple red rectangle with “Supreme” written in futura font (seen above, worn by the same world-famous Kate Moss that was featured in Burberry’s campaigns). They rarely release any items with this “box logo,” and when they do, t-shirts and hoodies with the logo will sell out instantly and then show up in limited quantities on ebay for hundreds of dollars - $200+ for a t-shirt and $600+ for a hoodie are fairly typical (retail prices are around $50 and $150, respectively). So it is definitely possible even for an upstart brand to build its business while protecting its visual trademarks and making them supremely desirable. In fact, Supreme’s approach has been immensely successful. Since its founding in 1994, the brand has grown to become a worldwide phenomenon - they have stores in NYC, LA, London, Paris, and several in Japan. People line up for hours on end (sometimes even sleeping on the sidewalk to be near the front of the line) when new releases occur. And Supreme releases a regular stream of collaborations with a diverse set of fashion juggernauts, including Nike, Air Jordan, Vans, Clarks, Dickies, The North Face, Hanes, Playboy, Levi's, Timberland, Comme des Garçons, Stone Island, Undercover, Visvim, Thom Browne, and many others. A few months ago, Louis Vuitton announced that it would be releasing a collaborative collection with Supreme later this year.

In the end, if you’re trying to be a luxury brand or a brand that is desired like one, it’s important to keep tight control of your brand’s visual assets such that when they appear, they truly make an impression.

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Looking good vs. Living well

As I read the case about Singapore Airlines, the question of whether or not to install the new “Spacebeds” in the wake of the 9/11 attacks is, to me, a clear “No.” There are a few reasons for this:

1. People are afraid to fly because they don’t want to die - a more luxurious bed isn’t going to address that

2. It’s likely that this is a start of a downturn (or at least a period of instability) in the global economy, in which case you want to maintain the flexibility that would be afforded to you by having the extra $100M on hand. Not only is there an upfront investment here, but you are also reducing the number of first class (”Raffles”) seats you have from 58 to 50, a 14% reduction in capacity for your highest-margin class of seats.

3. Related to point 2, a more luxurious product or experience is one that you spend on in good times, not in bad times. And even if you are spending in bad times, you are doing so as a signal that you are still doing well, and there are better ways to signal that than by spending on a airplane seat that few people will know you ever sat in (for example, buying an Hermes Birkin bag that you can show off at fancy dinner parties)

Point 3 is one that I find particularly interesting. I think it’s valuable to consider the difference between a luxury good that you buy for conspicuous consumption purposes vs. one that you buy to “treat yo self,” and how this is affected by economic environments and socioeconomic class. 

Here is my hypothesis: In bad times, members of the low/middle socioeconomic class are likely to spend more on “treat yo self” experiences because they help people escape from the troubles of life, and tend to be smaller dollar amounts - think movies, spa days, etc. This is in contrast to better times, when these people are eager to spend on goods that are physical embodiments of wealth, such as a Louis Vuitton purse. In contrast, people in higher socioeconomic classes are likely to spend more of their money on conspicuous consumption items when times are bad - so they can continue to signal to their friends and colleagues that things are good - and in many cases, these purchases may actually be cheaper (relatively speaking) than the "treat yo self” experiences these people may be spending on (a luxury resort can cost as much per night as a luxury handbag). When times are good, these people are actually spending money on these more expensive experiences, such as luxury vacations and SIA Raffles seats. This is summarized below.

Given this hypothesis, I think it’s even more important that SIA not invest in the spacebeds. Times are about to get tough, so if they create a luxury experience, it’s likely their wealthy clientele will actually prefer to spend their money on luxury goods, and they may end up losing even more customers to BA, which may be relatively cheaper for first class.

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Expensive wine / b-schools / firms taste better?

Does expensive wine taste better? According to several studies, the answers is a resounding “Yes.” A  study done by researchers at Stanford and CalTech found that “$90 wine tastes better than the same wine at $10” and a separate study done by a researcher from the University of Bonn in Germany found that “Consumers were found to rate cheap wine more highly if they thought it had a higher price tag. Experts found that preconceived beliefs created a placebo effect so strong that it changed the chemistry of the brain. By packaging cheap plonk as a fine vintage, the drinker was able to enjoy the cheaper wine in exactly the same physical way as if it was far more expensive.” As we read in the “Fine as North Dakota wine” paper, this perception of tastiness extends to not just wine, but even to the foods that are paired with them.

The ramifications of this are huge, especially when you consider other products and services that undoubtedly benefit (or suffer) from these cognitive and physiological biases. For example, especially at b-school, lots of folks care about the prestige and rankings of schools and companies. Categories that are most susceptible to this phenomenon are summed up by the following line from the Concha y Toro case: “An aura of refinement and sophistication had special implications for a product like wine, whose quality attributes were opaque to most consumers.” That is to say, the harder it is to measure “quality” in a clear way, the more important it is for consumers to rely on other signals like price and prestige. As the authors state in “Consulting on the Cusp of Disruption,” professional services firms share the opacity of wine: “Like most other professional services, consulting is highly opaque compared with manufacturing-based companies. The most prestigious firms have evolved into “solution shops” whose recommendations are created in the black box of the team room.” Thus the top firms are able to charge more for their services, and in fact many customers are happy to pay more because they use higher prices as an indicator of quality, which they cannot measure directly - this has been often been the case for McKinsey, which has benefitted from this consumer behavior given its high standing in consulting firm prestige rankings. Anecdotally, as far as business schools are concerned, I also know of a friend that turned down a full ride from Wharton to go to HBS, which offered her nothing, largely due to their higher prestige ranking (although, to be fair, she also cited many examples of HBS graduates filling out roles in the upper echelons of Google, where we worked before - but perhaps this is an example of the wine tasting better because we think it’s better? Well, as the studies I cited would suggest, it's likely that she'll enjoy her experience more since she expects it to be better.

To bring this back to the Concha y Toro case, I would absolutely avoid the “top-down” strategy. People already don’t know much about wine, except that it’s a fancy product and that price is generally one way to assess quality. Given this, it would be foolish for Concha y Toro to push into the lower price points. This would relegate them to the lower prestige echelons in consumers’ minds, and that is a place that is hard to escape from (as they saw in Japan). Rather they should push as hard as they can into the higher-end, hopefully with marketing and advertising that reinforces this (perhaps by first educating customers about their high scores in tasting competitions, and eventually by selling a brand image of culture and refinement based on beautiful Chilean landscapes). Perhaps that way, they can become the McKinsey or HBS of wines and face less pressure if and when the economy becomes more challenging or competition gets more heated.