Good luck, @diegopia !

Interesting news yesterday: Amazon’s VP for International, Diego Piacentini, will take two years leave of absence to head the Digital Technology Office of the Italian Government.

Screenshot 2016-02-11 10.30.49

I had the good fortune of meeting mr. Piacentini back in the ’90s when I had Amazon as a Client: a very capable manager with profound understanding of Digital.

IMHO a great coup for the Government, and no doubt a daunting challenge for him, as he is asked to tame the fearsome tiger of the resistance to change that is so ingrained in the Italian economic business system.

I am sure his leadership will unite the energies towards the common goal of taking Italy into this century.

WCF Davos Program Declaration

I am very proud to be one of the signatories of the mission statement for the World Communication Forum in Davos:

Davos Logo.png

The Forum program draws upon the following ideas and principles:

  1. Professional community identity. Communication has ceased to be a “service”; it has become a “mission”. It is a mission to make the world more open and connected, to find platforms for communication and collaboration among political opponents, competing companies and different nations. Overall, it is a mission for promoting humankind that, although diverse, is even more willing and able to work together. The shorthand for this mission is – Stop the War, Communicate! More on that in the Roundtable: Communications revolutionized – seen as a Mission, not as a Service!
  2. Opportunity to touch the Globe. Humankind has not yet developed an effective infrastructure to shape and express global interests; therefore, a reflection on diversity, aligned understanding of cultural/behavioral/market differences, and the impact of country/nation reputation on investor confidence, is an important objective of this Forum. More on that in panel discussions: Country reputation – who’s in charge of communications, identity and trust? Global Tourism in the age of Communications, Professional Associations and their Market Influence, as well as the addresses by the WCF Regional Forum Directors.
  3. Communications = Mobility. The ability to digitally reach the rest of the world is mirrored by the abundance of cheap physical travel. Physical mobility is expanding at an accelerated clip and digital narrations about far-away countries or regions are spurring the desire to visit and experience those countries first-hand. We have invited speakers from various segments of the industry – from tourism ministers to hotel chain and online travel service owners – to discuss the magnitude of this change and the openness of various markets to it.
  4. Integrated communications. The Forum was initially created on the belief that digital communications are making the world more connected and the industry more integrated. In other words, all sorts of Communications (media, PR, government, social, financial, etc.) have started converging in terms of objectives, not just the tools and techniques. We discuss it at WCF every year, but in 2016 we shall emphasize this new “Media reality” of modern consumers / voters / employees / people.
  5. People to people communications. We believe this is the eternal key to communications. As one of our Committee members beautifully puts it, “People are the killer application of the Internet”, so we shall also talk about talents. In the Blind Insight session, we shall apply the skills of communication agencies to the cases of large corporations. The same principle inspires our Global Education Program that will draw students from different countries to experience first-hand collaboration and direct learning.
  6. We are about the community. WCF is not only about content and expertise, business or new markets; it is also a community that is precious for us. So we shall find time to discuss the new books published recently by community members and reward best personal and corporate achievements at the C4FDavos Award Ceremony. And then, some karaoke fun-time: we shall sing together!!!

See you in Davos!

Signed by 20 members of WCF Committee 2016:

  • Alaimo, Kara – Assistant Professor of Public Relations, Hofstra University (USA)
  • Behar, Maxim – ICCO President, WCF Committee co-Chair, Chairman of Hill+Knowlton Strategies in Prague, CEO & Chairman of the Board of M3 Communications Group, Inc. (Bulgaria)
  • Belenko, Natalia – Founder of TOP Communication GmbH (Russia)
  • Bruce, Stuart – Digital Corporate Communications, Online PR Trainer and Consultant (UK)
  • Carreño, Lorena Díaz – CEO of Marketing Q Strategies & Communications, Vice President of CICOM, Advisory Board Member at PROPR and CONAR (Mexico)
  • Catalfamo, Gianni – Web 2.0 evangelist, Founder of cc:catalfamo (Italy)
  • Dubeykovskaya, Yanina – WCFDavos Founder and Content Director, President of the WCFA association, CEO of Тоp Communications LLC
  • Fahlman, Scott – Research Professor at Carnegie Mellon University (USA)
  • Hegyi, Gábor – WCFDavos Committee co-Chair, Founding Managing Director of Capital Communications
  • Joshi, Yogesh – WCF Committee co-Chair, President of ABCI (India)
  • Kaiser, Guntram – Chief Executive Officer of KaiserCommunication GmbH (Germany)
  • Kehar, Tanuja – Vice President, Corporate Communications at Unitech (India)
  • Moeng, Solly – Managing Director of DonValley Brand, Marketing & Communications (South Africa)
  • Nejem, Rana – Founding Director of YARNU (Jordan)
  • Ramos, Luis – Head of Communications, ThyssenKrupp Elevator AG(Portugal)
  • Romanowski, Dymitr – Co-founder and CEO of The Story digital branding agency (Poland)
  • Shamsuri, Nurul Ashiqin – Head of Program at UCSI University, Program Director at the Information and Communication Secretariat of Wanita UMNO (Malaysia)
  • Uboweja, Saurabh – Founder, CEO & Director Brand Strategy at Brands of Desire (India)
  • Zolotarevych, Iryna – Head of PR&GR Services at AGAMA Communications (Ukraine)
  • Zverev, Sergey – Founder and President of CROS PR & Public Affairs (Russia)

One fine Sunday…

…actually not. It rains, but it’s a welcome rain after a very long dry spell, so nobody’s really complaining.

This afternoon we’re all off to see my daughter’s piano essay, on which she’s worked so hard over the last couple of months. Nervous as she is, I know she’s going to pull a great performance, always gives her best under pressure.

Me, I would like to record how I feel on this day, which probably in retrospect I will see as pivotal in my professional life.

The details will come in due course, but for now it’s the feelings that matter, and the best way to capture them is another imaginary interview.

Q: When an opportunity is “the right one”?

A: I always wondered myself and, so far, the answer for me was always: “I will know”. I will know because it will unlock a wave of excitement and unbound energy; because I will sleep short and deep, because I won’t be able to think about anything else. Literally not another thing.

Q: Does serendipity exist?

A: I think it does. Now was exactly the right time for me for this to come about: current client projects concluded, new client projects still on the drawing board. If it wasn’t the case, I would not have been able to do 16hour stretches on developing the concept and the business case, would not have been able to switch day and night without impinging on performance to paying clients.

Q: Is your perception of risk blunted? 

A: It’s not that I am not aware of the risk, right now. It’s more that given the size of the potential reward, I feel appropriate to risk a lot to keep things in balance. If I wasn’t risking anything, I guess it would not feel right that I had the opportunity to be so richly rewarded.

Q: Was this a case of social network harvesting?

A: I hate that buzzword. People who use it sound cold and heartless, and I hope I am not that. I take pride in my social networks being exactly what I wanted them to be. In this case, the network that’s supposed to connect me with the people I know IRL (LinkedIn) brought to my stream a piece of news that did not match what I thought I knew about someone, prompting me to reach out to clarify, closing a key connection.

Q: Is it reasonable that you plunge into start-up mode again at almost 60?

A: “Start-up mode” depends only on energy output. Age has nothing to do with energy output and, besides, western world societies now require their members to be productive until much later than they used to, as they cannot afford to pay them retirement benefits, so I am merely fulfilling what’s expected of my role.

Q: Why an industry segment you have no previous experience about?

A: Industry experience is overrated. Cross-pollinating an industry with best practices coming from another industry is what is really valuable and you cannot do this if you’re not willing to venture into a territory you don’t know. Curiosity is much more important than experience.

Q: What if you fail?

A: Possible, not likely. My unconscious brain has made a thorough assessment and it’s telling me the odds are extremely good; I do not understand how it works, but it served me well in the past, so I’m trusting it.

Q: Is this your life #4?

A: No doubt: it brings to fruition what I have learned about growing a business, focusing on the things that really make a difference, the value of speed, the beauty of Big, Hairy, Audacious Goals, the importance of making sure your dream is understood.

Q: Are you going to change the world?

A: Yes.

[to be continued…]

The peak of my PR career

In the course of “the Great Digitization” I just scanned the pictures I shot in July, 1999 during what is perhaps my greatest achievement as a Communications professional which, to the best of my knowledge, is known only to the small group of people who participated and has never been told in its entirety.

I think this a story worth telling: a crazy idea, whose crazy originators did not even know whether is was technically feasible, convinced a huge client to invest a lot of money in a crazy PR stunt which delivered amazing returns.

Why did we not think of entering this project in Awards and contests? Well, this can only be explained considering we thought of ourselves as outsiders to the “regular” PR agencies, relishing other types of recognition.

In fact, when I emailed the person who was then my client at European level to ask his permission, his warm words (some of which you will read in the tale) were the best Award I could ask for.

Most careers – and all of mine are no exception – have ebbs and flows. However, only in retrospect you can assess what was the most extreme points you reached. In my life as a Public Relations professional, the story of what was the lowest point is written already, but I cannot bring myself to publish it because it’s, well, a bit depressing.

Much more positive is the story of my highest point, so read on.

#TGD – update 1

Over the Christmas break I initiated a process I dubbed “the Great Digitization” to bring my stash of analog photographs into the world of digital. This is a status report as of january 7th, 2016.

The process is somewhat slow and tedious:

  • mounting images on the sliding frame in batches of four
  • a pre-scan, to center the picture in the scanning area, balance the color and other parameters to make the image as readable as possible (remember, some of these pictures are 40 years old)
  • the actual scan – I am using a 2400dpi resolution: the scanner goes up to 3600, but at that resolution it becomes REALLY slow
  • after the scan, the software does its best to remove dust and scratches – after some experimenting I have settled for a mid-level detection and removal, also given the fact that the images are not that sharp to start with (the consequence of not enough money to buy top quality lenses, but also the fact no true autofocus existed at the time).

I then try to organize images in a logical sequence and file them in Events folders (nested if necessary) included in a Year folder because I was forward-looking enough to note the date and event on the negative folder.

So far, I have scanned about 1,200 images, consisting largely of 35mm slides dated mostly in the years before 1984: at that point I realized that 35mm slides were extremely unwieldy and risked never being viewed ever, so I switched to color film: judging from the box where negatives ate stashed, there may be another 2,000 images which I will try to scan next.

Once this process is complete, I have already relatives asking me to scan their stack of old images, in most cases nowhere near the quantity of yours truly, but still worthy additions.

Having fully sorted out the backup organization of all that, I will need to look for software to build slideshow playlists: file systems allow you to select a folder or a group of folders to view them in a slideshow mode, but there must be a way to attach metadata such as tags to images and build tag-related slideshows.

Although I am only about a third along the way, predictable trends are starting to appear: the lower cost of digital photography means I have increased frequency of snap-worthy events (from one every 60 days or more to one every 15 days) and the number of pics per day (from 0,3 to almost 2) – will be interesting to look at the completed graph.

2016 01 08 TGD post 1 captioned

 

Book review: The Big Short (Michael Lewis)

I am partial to Michael Lewis.

In fact his only book I am missing is “Liar’s Poker” which I surely will read next. And “The Big Short” even has its own star-studded casted film coming.

In a nutshell, this is the story of four people who made a fortune betting against the market that in 2005/2006 was generating the bulk of Wall Street’s profits, subprime loans.

However I must say I expected a little more both in terms of explanation of the underlying mechanisms and in terms of what actually went wrong. Here is what I understood, even though I am ready to stand corrected.

2016 01 07 The Big Short scheme

  1. Lending money to people who do not qualify as “prime borrowers” (i.e. very likely to pay back the loan) expands the pool of loans enormously, expanding therefore the profit of those who lend.
  2. The teaser rate mechanism made those loans very attractive, even though a 6% “teaser” rate seems sky high now that we are dealing with ~1% rates.
  3. A booming real estate market made it easy for borrowers to refinance when the teaser rate expired, on the back of an appreciated asset (the house) and un-scrupulous lenders took the opportunity to increase the loan amount to totally unreasonable levels.
  4. BBB-rated loans got securitized as bonds (MBS) representing bets that “no more than (say) 5% of this loan pool will default”; by pooling them together in large numbers they earned an AAA rate upgrade because “at no time in history house prices went down across the country at the same time”.
  5. Depending on the pecking order of repayments, MBS could be sliced in tranches, the worst of which got shuffled up again to create CDOs and again these got upgraded thanks to the further distribution of risk.
  6. The rate upgrades were largely instigated by the investment banks who created the instruments, as the rating agencies did not have adequate models of their own.
  7. Each of these bets (alongside the stocks of all players) could be shorted; in fixed-income parlance, shorting is done with credit default swaps (CDS) which, due to the high rating of the bonds, costed very little. Think of shorting as purchasing an insurance policy against the security not reaching maturity.
  8. At this point, the very banks who originated the instruments forgot (or maybe did not understand really) that the rate upgrades were based on the unproved assumption of a very weak correlation between real estate markets in different part of the country, and started treating them as “true” triple-A bonds: instead of dumping them on “dumb money” (as was the original plan), they started accumulating them.
  9. When teaser rates ended in a real estate market that had ceased to grow, debtors defaults increased and a whole avalanche of bets became due.
  10. At reckoning day, the bill was footed not by rich, dumb investors but (in part) by the failed investment banks’ shareholders and (the majority) by the U.S. taxpayers.

What I still am not sure I understand:

  • What was the faulty assumption of uncorrelation in #8 based on?
  • Why did loan defaults (historically geographically uncorrelated) suddenly became correlated in 2007?

I wish the Author had spent a little more time on these two crucial questions; my best guess is that – hence my interest – what caused the rout was not the defaults in themselves, but rather the run to cover positions due to the sudden collapse of the Trust that had until then propped up the castle of lies.

Christmas project: the Great Digitization

As some know, I like to use the holiday breaks for projects that are too time-consuming for the rest of the year.

This year’ Christmas break will be dedicated to the Great Digitization: I will use my brand-new film scanner to digitize the Analog media library I have accumulated before I switched to Digital, in 1999.dsc_0562.jpg

In fact, I have been snapping using a film camera since I was 17 and, although I did not save everything, I did save what I photographed since I got married in 1982.

And when I say everything, I mean it. Every single frame has been preserved, the good, the bad and the ugly.

All of this material (whose technical quality is dubious to be generous, even though the documenting quality is without question) has been sitting, carefully stashed away in plastic boxes, while I grew increasingly worried about their future as photographic paper or negative film are hardly synonymous of eternity.

Moreover in my first years I was fanatically using 35mm slides for everything, so these first images  I haven’t seen for at least 25 years: in fact this was exactly the reason I switched to regular film, as at least I could print them to browse them over and since the switch (to the best of my knowledge), every single frame has been printed at least once.

I remember this was an obsession that I developed very early on, and which as a student made photography (already an expensive hobby for my meager finances in its own right) almost impossibly expensive to support.

In the 70s I used to print my photographs myself, but I could only afford equipment and consumables for B&W so that’s what I did, supposedly artistic looking black & white pictures. No doubt some of these will emerge from the archive and you will be able to judge yourself. Eventually, however, the printing part of the hobby grew weary on me, especially because I did not have a spare room I could use as a permanent dark room and setting up the kit every time was cumbersome to say the least.

So I started taking my pictures to be printed at a shop, where they offered a “test” print format that would print every frame on a single 7′ x 10′ sheet of paper for me to peruse with a lens to decide which ones deserved the expense of a full print. I doubt I have kept these test print, but I certainly saved (I hope) all of the negatives.

I do not know the exact number of images, not their distribution over time – these are all things I’ll find out during the Great Digitization – and I also have no idea of the time required to perform it; finally, I do not know how much storage I will need, but since the images from 1999 to date are only about 20GB, unless the files created by the scanner are enormous, I don’t think that will be a problem.

More as the work progresses…

A sensible approach to Digital Transformation

I get asked this a lot, so I thought a standard document could be useful.

  1. What is Digital Transformation?
  2. Everybody is talking about Digital Transformation, these days – how is your approach different?

Obviously the two questions are asked by very different sets of people, but they are equally poignant, so I will try to answer each one separately.

What is Digital Transformation?

Most large companies cannot be described as early adopters when it comes to innovation. At some point, however, certain innovations are seen as inevitable and they start climbing the corporate pecking order. This means resources are diverted from other endeavours to explore and hopefully define how they will be adopted by the whole organization.

The “reason why” that triggers the sense of inevitability may vary: in some cases it will be a new channel to sit alongside the existing ones to sell line extensions or ancillary products, sometimes it will be a way to enter geographies where the company has little or no presence or, again, it will be a way to approach a new demographic target. But it may also be a new, more efficient way to support existing clients or a more direct way to connect management and rank-and-file employees.

There is hardly a process within any given organisation that is free of interference from Digital: sales, marketing, communications, channel management, employee relations, customer service, after sale support.

In fact you could say that:

An enterprise will be digitally transformed when Digital will have permeated every way in which its Brand connects with its internal and external stakeholders.

How is your approach different?

Let’s assume now that a company has reached the tipping point, deciding it must dip its toe in Digital: walking the beaten path of innovation introduction, typically it will create a Special Team with the task of running  a Pilot Project.

This approach is doomed: if the Pilot Project is a success, everybody else in the organization hates it because it perceives a threat to the existing statu quo which may challenge the established nomenklatura. If it is a failure, the conclusion is that “…we have demonstrated Digital won’t work here”.

In either case, the Special Team loses impetus and (not rarely) its best talent, change-resisting forces, sensing its fragility, throw more sand in already gripped cogs bringing the process to a halt so that no Digital Transformation occurs.

Most Digital Transformation experts will therefore try to shake companies from this torpor use scare tactics, a.k.a. the Disruption Slide:

The forbidden slide

This slide means that however painful Digital Transformation may be, the alternative – extinction at the hands of newcomer competitors – is way more painful, so you better bite the bullet and act.

My approach (described in the Digital Transformation Workshop) is more gradual and walks the company through a journey: each leg of the journey delivers actionable, valuable results and the Pilot Project becomes nothing but the “fil rouge” following which various company functions can be infected with the benign transformational virus.

2015 07 10 Digital Transformation Governance roadmap.011

At the end of the journey we have involved Marketing, Communications, Information Systems, Sales and Top Management: Digital is not an isolated asset, the turf of an enlightened elite, but a shared competence woven in the fabric of the company’s business.

Transformation complete!

 

Russia vs. Turkey: check the numbers!

erdogan vs putin

I have no sympathy for the strong compression of civil liberties ex-PM Erdogan has enacted in Turkey; since the Gezi Park incidents, my heart beats with that of my numerous friends who wanted Erdogan out.

Having said that, the Kremlin’ “smoking gun” thesis of massive oil exports from Syria into Turkey and the ROW is ridiculous: not only because it is supported by evidence (aerial pictures of trucks) that makes Dubya claiming he had proof of Saddam’s WMD a beacon of credibility, but because numbers don’t fuckin’ add up.

Smuggling of Syrian gasoline in Turkey is old news: a liter of gasoline in Syria costs (subsidized) around €0,70, while it is more than €1.40 in Turkey: the whole economy of the sub-region subsists on this (illegal, but long tolerated) trade. So this is what probably those trucks are, and mr. Erdogan must be truly worried that the Russian Air Force are bombing the living daylight out of the PKK’ main source of income.

Now let’s look at the numbers: Syria’s oil production was 560k bbl/day at its peak, now down to < 100bbl/d; smuggled product sells at around 50% of market price, so now around $20/bbl; marginal extraction cost of Syrian oil (imagining it is similar to Iran’s) is around $16/bbl so what does the lucky smuggler make? Maybe $2/bbl?

Syria, however battered by the war, is still a sizable country and needs >250k bbl/d but even assuming Da’esh was able to function WITHOUT Syrian oil and trade it all through this nefarious scheme, we’re talking about – best case – $200k/day.

Some smoking gun !

Sick & Tired

C’mon people!

The shameless abuse of the word “disruption” is bad, but it’s even more sad how to illustrate it this the only slide the industry has come up with:

The forbidden slide

Attendance to any event remotely linked to Digital Transformation guarantees you will see this slide at least four or five times.

I suggest that next time you go, you bring a Charity Jar, proposing to the audience a five euro fine for speakers who are so braindead they can’t do better than repeating that tired meme.

glass jar