One CMO's self-critical take on thought leadership

What do smart investment management marketers think of their industry’s thought leadership?

Earlier this week, I posed this very question to a CMO who has headed up marketing at several well-known large investment managers. Here’s a recap of his thoughts.

Critical—and in critical shape

He’s a big believer in thought leadership. “It’s huge. But a lot of it is crap.”

Why? No differentiation.

“Most firms struggle with thought leadership. They say the same things repeatedly, with either the same point of view as everyone else, or no point of view.”

He blames a misalignment between leadership and marketing. “Firm leaders care about building the business and are attuned to thought leadership, its value, and what makes it good. But a lot of the marketing people are not.”

That’s because many marketers have little incentive to take a risk and do something different, in his experience, which is what good thought leadership requires. “The upside is limited. The downside is, I get fired. It really doesn’t pay me to come out with something fantastic.”

This makes some channels practically useless, he thinks. “LinkedIn is so mission critical—and I think thought leadership has to be a huge component of any firm’s LinkedIn presence.” You’re missing the boat, he says, if your thought leadership doesn’t stand out on LinkedIn, or if you’re not doing it at all.

It’s the way that you do it 

Great thought leadership has presence. 

A vivid presence has always been a virtue in thought leadership, but especially so today. “The bolder the better.” Not just a distinct voice, but shorter, more visual formats that can be absorbed quickly and memorably.

“Long form struggles these days. To expect most people to read a 23-page white paper loaded with text—that’s insane.”

“You may not agree with Cathy Wood (ARK Invest), but ARK’s white papers are really effective—more like PowerPoint presentations, centered on highly visual charts and graphs.” (To me they look more like very visual white papers than decks, but point taken.)

“How about a chart of the week? All expressed with the firm’s point of view.” At least one firm actually does that.

In creating thought leadership, investment managers should also lean on those within the firm who have a flair for expressing distinctive views. Instead, most firms leave thought leadership with someone in marketing or an investment person who isn’t good at thought leadership or may not care about it.

“Think of Jeremy Grantham at GMO. He makes thought leadership interesting and fun. He’s entertaining, with an edge of, ‘I know what I’m talking about.’”

Walking the walk

How to begin? Start small, he suggests. For example, layering a voice onto quarterly reports. “They don’t have to be earth-shattering—just good.”

He pays close attention to analytics. “Insight posts are my primary lead capture mechanism. I use downloads as a barometer for where we’re building the brand effectively and where we need work.”

Get buy-in on thought leadership campaigns from the firm, particularly the sales team. “We do one simple thing: before we launch a piece of thought leadership, everyone gets it and needs to read it. Then we invite them to an on-site presentation and the portfolio manager author takes them through it. This makes people aware of the piece, the thinking behind it, and gets them thinking about how they might use it in a sales context.” 

Part II: Comedy producer Simmy Kustanowitz on becoming more creative

For those not accustomed to thinking of their work as creative, the create process can seem like a black box—mysterious and inaccessible. Yet most roles in business call on our ability to create ideas, offerings, and other solutions to problems. Creativity is a skill we’d do well to learn.

In this continuation of our last post on creativity, Simmy Kustanowitz—founder of creative consultancy Clock Tower Innovation—talks about learning the creative process by watching other creative people at work, in the comfort of our homes. He also shares his thoughts on the value of brainstorming.

Jove: How effective are brainstorming sessions? What place should they have in the creative process? 

Simmy Kustanowitz: Brainstorming sessions are a double-edged sword.

An efficiently run brainstorming session can be fantastic. But if a bunch of people get in a room just to spitball ideas—no guardrails, sky’s the limit—that’s a recipe for procrastination and inefficiency. I try to give teams the guardrails they need to run effective brainstorming sessions.

But it's also important to recognize that different people approach the creative process differently. Some are very good sitting in a room and batting around ideas. Others listen and then go back to their desk or their couch and can generate far better ideas working alone than in a group.

So effective brainstorming not only involves guardrails, but allows for people to go off and work on their own.

If you approach brainstorming that way, it can be very effective. But if brainstorming is not approached the right way, it can be a complete waste of time.

J: The creative process itself is a narrative, and one of the best ways to learn the creative process, or—if you’re an experienced creative—to improve your process, is to immerse yourself in someone else’s creative process. Books, movies, articles can all be ways to do this.

One of the best I’ve seen recently is Peter Jackson’s three-part series, The Beatles: Get Back. Did you see that?

SK: I started watching it and then I stopped. 

J: A lot of people stopped. If you're not a musician I think it's hard to stick with, but for me, it was a fascinating window onto a particular creative process.

Mad Men is another.

SK: Definitely.

produced by jove and image creator from microsoft designer (dall-e 3)

J: Which episode? I don’t think it’s “The Jet Set”— Don Draper’s trip to L.A. and Palm Springs.

SK: I’d say “The Wheel,” where Don pitches Kodak on the idea of the Carousel.

J: Right. He turns a piece of technology into a memory book—a time machine.  

SK: It’s a great example of landing on a brilliant idea where you least expect it. You spend hours generating all sorts of ideas. But then suddenly Draper has an epiphany, and it goes in a completely different direction. I love the unexpected nature of some of Mad Men’s episodes where you get to see the creative process unfold.

J: And how it’s different for different people. If I'm remembering correctly, a lot of ideas would come to Draper in the pitch itself. So you have the adrenaline and the need to perform and your idea of the ticking clock all coming together. 

Then I think of Sherlock Holmes, where it seems like with almost every episode the first two thirds is basic shoe-leather investigating. He's combing the crime scene. He's interviewing suspects. He's doing all that normal detective stuff.

And then he goes to the National Gallery to look at art. And you think, OK, he’s taking a break, whatever. But it’s purposeful—he’s resting and letting his subconscious do the work. Sherlock’s form of taking a shower, or like leaving the crossword puzzle and coming back to it. Letting your mind relax. A lot of creatives do this, and I know it’s part of your process.

SK: Right. Everybody's brain works differently and everyone has different bandwidths for focusing. I believe in short-spurt brainstorms.

J: It’s like you never know where the where the idea is going to come from. You just try to create the conditions for it to appear. 

SK: Exactly. When I was head writer for the comedy MTV game show Silent Library, the writing team had to generate a ton of ideas on a daily basis. And I used to say to them, go take a walk. Go to the Dollar Store, which was a few blocks away in Times Square, just walk up and down the aisles and see if something inspires you. Or just take a walk around the block.

We would literally go on field trips, these grown men and women, and then come back to our desks. And invariably people had new ideas when they got back.

I’m also a big believer in changing locations. There's a Hebrew saying, “meshane makom, meshane mazal”—different place, different luck.

J: That that makes me think of Draper driving across the country in the last episodes of Mad Men and eventually to the ashram and coming up with the classic early ‘70s Coke campaign while sitting in the lotus position at the edge of the Pacific Ocean.

SK: Maybe Don knew some Hebrew.

Check out part I of our talk with Simmy Kustanowitz. If you’d like to reach Simmy, contact us or email him at simmy at clocktowerinnovation dot com.  

Getting creative: A conversation with comedy TV producer Simmy Kustanowitz

At most firms we talk to, creativity seems to be in short supply. One of the most difficult and elusive aspects of developing effective thought leadership, for example, is creating a distinctive point of view. But companies don’t want to have to rely on agencies for creativity—they want to get better at it themselves.

So we thought it was time to feature our colleague Simmy Kustanowitz, founder of creative consultancy Clock Tower Innovation. As an Emmy-nominated TV producer and 20-year veteran in the entertainment industry, Simmy’s livelihood has depended on being creative on the spot. His insights on the creative development process are refreshing—and surprising.

Jove: Is “creative process” a contradiction in terms? How can there be something so rational and linear as a process when it comes to creativity?

Simmy Kustanowitz: No, it’s actually not a contradiction. I’m a very big believer in creative guardrails. That if you set up the right frameworks and guardrails, you allow creativity to flow.

I'll use the analogy of a playground. It’s a creative space for kids. But nobody looks at a playground and says, “there's too much structure.”

That’s because you need the structure of slides and swings and jungle gyms to let their imaginations run wild. That's where rules come in. I've developed what I call Four Rules to Think By, frameworks that can be used to approach brainstorming and different ways to think. It's not putting creativity in a box. It's just drawing the outlines for the creative process.

The beautiful thing about creativity in general is that it's not a straight line. It's the scenic route. And often, where you think you're going is not where you end up. And where you end up is far more exciting than where you thought you were going.

But you need to set some rules first in order to give your brain the freedom to generate creative ideas.

I've been in conference rooms with people who don't view their businesses as creative. And when I introduce these rules and guardrails into our creative brainstorming sessions, I see their faces light up, I hear them talking about their business in ways that they never did before. And it's all because of these simple guardrails. They’re freeing, not paralyzing.

J: What are your Four Rules?

SK: Embracing time limits and thinking of time in a new way. Approaching numbers differently – like relying on quotas, for example. Using lists to give color to seemingly dull information. And leaning into repetition—finding something that works and then repeating it over and over again. They’re all frameworks and guardrails.

simmy kustanowitz, clock tower innovation

In terms of what we normally think of as creativity, these rules might seem counterintuitive. They involve embracing elements of the creative process that may have negative associations, but are actually very helpful.

What I've learned throughout my career is that there are ways to harness these elements and use them to your advantage, taking your creativity to a higher level. People want to think differently and free their minds. All they have to do is approach things in a slightly different way. The Four Rules help people do that.

J: Tell us about time limits.

SK: This is learning to embrace the notion of a ticking clock.

It may seem counterintuitive, because we think the creative process depends on having all the time in the world. But I’ve learned working in live television that limits are incredibly important to the creative process.

By embracing the ticking clock, you eliminate a lot of paralysis by analysis. You don't have time to sit and think about an idea over and over and over again—you have to just go with it. And often, trusting your instincts under the pressure of the clock actually takes creative to really interesting places.

So think of a time limit as an asset and not something to fear. One of my favorite quotes is from Lorne Michaels, executive producer of SNL: “We don't go on because we're ready. We go on because it's 11:30.”

J: Time constraints are almost a necessary ingredient to the creative process?

SK: Absolutely. Incredibly important. So are numbered lists of ideas.

Challenge yourself to come up with 10 ideas in 30 minutes. Approaching the creative process with that mentality trains your brain to think more efficiently. It can be surprisingly effective for people in all industries.

J: Some people will have no problem producing 10 ideas in 20 seconds, while many others will freeze up under that pressure. How do you help the person who freezes? 

SK: I start with a technique to get people comfortable with how long a minute is.

I show a clip from a commencement speech delivered by Mister Rogers, where he pauses for 60 seconds so the graduates can think for a full minute about somebody who means something to them.

When you watch the clip, that minute feels like 10 minutes. And you realize how long a minute actually is. Time is an amazing thing.

If you take that deep breath before you start brainstorming and train your brain to embrace time as opposed to fearing it, it’ll take your brainstorming to pretty amazing places.

So much of what I teach starts with that deep breath. It’s about simplicity and reassuring ourselves that we're going to figure this out.

J: How can teams get past that tough initial period when they’re facing the proverbial blank page? Or when they’re stuck on an incredibly dry topic? 

SK: That’s where lists help. There is no subject too dry to make interesting. Any industry can be made colorful and compelling, can even be made extraordinary with the right creative approach.

And one key to making something special out of something very mundane is to make laundry lists.

We rely heavily on lists on another show I produce, Impractical Jokers—an unscripted, hidden camera comedy show that takes place grocery stores in malls.

When the writers are brainstorming ideas for new segments, we’ll they’ll just brainstorm laundry lists of boring locations. The list may start with “dentist office,” “airport,” “funeral home,” “convenience store.” 

But once you have a laundry list to work from, inspiration often follows. You go down the list. Dentist office—well, that's interesting… we could do this thing or that thing in a dentist office. Suddenly you're jumping onto a new branch of that tree and it's far more interesting than it seemed at first.  

J: It gives you that first push from the resting position?  

SK: Yes. From a boring list can come something very magical. 

J: You’re a creative “fixer.” What does that mean, how useful a skill is it, and how can someone inside a firm cultivate that skill?  

SK: A creative fixer is someone who can quickly take a holistic view of a creative situation, efficiently identify the problem areas, and then calmly and effectively find solutions.

It’s like many other situations in life, and certainly in business: remaining calm is far and away the better way to go.

Just like in the business world, there is often big money at stake in these creative challenges we deal with. I find that taking a deep breath, thinking calmly and rationally and approaching creative in a relaxed, focused, and efficient way is incredibly important.

We’ll post the second half of our interview on creativity with Simmy Kustanowitz after Thanksgiving. If you’d like to reach Simmy, contact us or email him at simmy at clocktowerinnovation dot com.  

Working better with sales

We’ve been attending FT Longitude’s excellent master class series on thought leadership. And we’ve seen a number of really good questions in the Zoom Q&A that we also hear from clients. Here are three of those questions, and our answers. They apply to thought leadership and most other kinds of marketing campaigns.

How can I convince sales about the importance and the effectiveness of thought leadership marketing without return-on-investment (ROI) numbers?

I usually rely on success stories, backed up where possible by numbers. But I’ve never had the opportunity to cite a quantitative ROI and I don’t expect to anytime soon.

Is it even possible to quantify thought leadership ROI? Let’s consider its ROI in driving sales, which is usually a secondary goal for thought leadership.

Think of all the factors that contribute to the campaign’s success, all the people involved, the many steps (micro-conversions) on the way to a sale. The things you can measure (click-through rates, downloads, social shares) don’t hint at ROI.

The things you can’t measure—a salesperson’s skill, the quality of the idea, the effectiveness of the content—may be more important to success, in the aggregate, than the things you can measure. Much of this activity is offline.

Now let’s consider your primary goal, which is usually strategic and is measured differently (usually by quantitative surveys over time). This is expensive, if done at all, and has equally difficult attribution problems.

I think we over-rate numbers as hard-hitting, rock-solid facts and under-rate case studies as anecdotal or contrived. But we’re all humans, and for us, narratives are a powerful way to deliver and receive information.

A good case study allows us to inhabit the story, imagine ourselves in the situation, and think about how we might use whatever’s being talked about to our advantage. Numbers are great for highlighting, emphasizing, summing up. But they’re the ace in a royal flush (10, jack, queen, king, ace)—more powerful within the context of a narrative.

When we include sales in developing thought leadership, it feels like too many cooks in the kitchen. What’s the right time to involve sales?

Two different questions here: when to involve sales and how to involve sales. The bigger problem is how you’re involving sales.

“Conversation” (1929), Ernst Ludwig Kirchner, Courtesy National Gallery of Art, Washington

Sales shouldn’t be in the kitchen with you at all, but somehow they got the impression that it’s OK for them to be there. Maybe that’s how they did things where they came from, or before you showed up. Maybe they want to see how much they can get away with. Or maybe you unintentionally welcomed them into the kitchen and they honestly think they’re there to help. It really doesn’t matter.

Boundaries, people! As early as possible, make it clear that the campaign’s business objective is mainly strategic (managing brand perception, etc.), and that driving sales is important but secondary. Also make it clear you’re incorporating feedback from many people—not just sales but product, legal/compliance, senior management, whoever. It’s your job to negotiate all those demands and produce the best outcome that everyone can get behind.

Be cheerful, firm, and focused on business objectives.

I prefer involving sales early on. They should feel that they’re included, their feedback is wanted, and they’re being heard. One way to do that is to make meaningful adjustments that address their feedback and legitimately make the program better. (Your campaign can always be improved.)

I like to ask how they plan on using the campaign in their sales process. I want details. That helps me think more creatively about what adjustments to make. And I make sure sales knows we’re using their feedback.

How do you get sales to read and use your thought leadership?

The first time a salesperson hears about the campaign should not be when it launches.

Bring sales into the program from the very beginning, as I’ve described above and with very clear boundaries. I like keeping them in the loop while the program is being developed, whetting their appetite and building anticipation where I can.

By the time the campaign launches, they’ve not only read the thought leadership but they’re primed to use it.

Your internal campaign launch is just as important your external launch. That could include a presentation to sales on how to work it. Don’t do that by yourself—ask a salesperson who’s good at selling with thought leadership to join you and give a quick demonstration on how he or she plans to use your thought leadership:

• To start a cold conversation… or a warm conversation

• As a hook in an email campaign

• To stay in touch with current clients

• To get that permission to discuss or sell products.

Seasoned salespeople who’ve bought into your campaign already (because you brought them in early) know how they’re going to use it to sell. By having them train your less experienced salespeople, you’ll also be selling your campaign. Checks a lot of boxes.

Style is substance

Let’s bring up an area of branding that’s so neglected I can’t find a single helpful article on it either from practitioners or academics. I’m talking about brand voice—not Morgan Freeman’s baritone but the words, written and sometimes spoken, that communicate what a brand is, what it stands for, and what it offers the world. They way you choose and arrange words reflects your brand. Writing style is substance.

Firms spend a lot of time perfecting their brand imagery and design, less time on their brand voice. This neglect is understandable. Brand voice is hard to define. The New York Times, Bloomberg, The New Yorker, and The Economist all have distinctive, recognizable voices. But could you say exactly why? Even harder, could you write a set of instructions that a team of writers could use to mimic those styles?

For most firms, words aren’t the product, as they are for the media properties I just mentioned. But words are at least as important as design and images in communicating brands. In expertise-driven industries like investment management, consulting, finance, and much of the law, it’s arguable that words do more of the heavy lifting for the brand than design or images.

Many corporate brand guidelines—maybe half—don’t define the brand voice at all. Guidelines that do address brand voice usually devote one page to it, in a document that’s typically 25 pages or longer. They also miss some very low-hanging fruit.

Brush and floss

Many brands lack what I’d call basic verbal hygiene: grammar mistakes, inconsistent or incorrect punctuation, spelling goofs. They bring otherwise good marketing down like a really smart, put-together salesperson who hasn’t brushed her teeth.

Good verbal hygiene is an easy fix. Agree on a style guide—Words into Type, The Chicago Manual of Style, The Associated Press Stylebook, The New York Times Manual of Style and Usage, or any other guide whose standards you agree with.

Then follow it. Refer to it in your brand guidelines. Make it available to your in-house and outside creative teams. Insist that people use it. Finally, use a proofreader—a pro or someone internally who’s good at and has never read what they’re about to proof. Give them the style guide, too.

Simplify, simplify, simplify

Many brand guidelines that define brand voice include “simplicity” as a brand attribute, as if it were a differentiator. It’s not. Simplicity and clarity should be objectives for every firm, and part of every firm’s brand voice guidelines. General Electric is right, even if it could say it more clearly: simpler, clearer words have greater impact.

Simplicity and clarity should be part of any brand voice because all of us need to be reminded to simplify and clarify every day—almost every time we face a blank page.

I just said that simple, clear writing shouldn’t be a differentiator. And yet it is, practically speaking, because most firms won’t be able to carry it off. Not even with the very clear advice I’m about to give you.

A few style guides also include advice on writing simply and clearly. By itself, Strunk and White’s The Elements of Style isn’t a complete style guide (you’ll want to supplement it with a more complete authority like one of the aforementioned style guides). But its chapter “An Approach to Style” is timeless, despite recent challenges by self-proclaimed rivals.

The best advice on keeping things simple may be the forward to The Economist Style Guide by John Grimond, included in older editions. You can go far with just this excerpt:

The first requirement of The Economist is that it should be readily understandable. Clarity of writing usually follows clarity of thought. So think what you want to say, then say it as simply as possible. Keep in mind George Orwell’s six elementary rules (“Politics and the English Language”, 1946):

1 Never use a metaphor, simile or other figure of speech which you are used to seeing in print (see metaphors).

2 Never use a long word where a short one will do (see short words).

3 If it is possible to cut out a word, always cut it out (see unnecessary words).

4 Never use the passive where you can use the active (see grammar and syntax).

5 Never use a foreign phrase, a scientific word or a jargon word if you can think of an everyday English equivalent (see jargon).

6 Break any of these rules sooner than say anything outright barbarous (see iconoclasm).

Microsoft’s style guide does it differently but equally well:

Use bigger ideas, fewer words

Our modern design hinges on crisp minimalism. Shorter is always better.

Example

Replace this: If you're ready to purchase Office 365 for your organization, contact your Microsoft account representative.

With this: Ready to buy? Contact us.

Write like you speak

Read your text aloud. Does it sound like something a real person would say? Be friendly and conversational. No. Robot. Words. To learn more, see Brand voice.

Example

Replace this: Invalid ID

With this: You need an ID that looks like this: someone@example.com

Developing your voice

Beyond accuracy and consistency, beyond simplicity and clarity, is a tone of voice that is truly yours and no other firm’s, a style that’s tightly aligned with your firm’s brand essence. You will not borrow this from another firm or grab it off the web. You will create this layer of your brand voice in-house, perhaps with the help of an agency. It’s what will give your firm an unmistakable identity.

Here, high-level guidance and flexibility are virtues, and rules are replaced with examples:

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Final thought: I think all too often brand guidelines are developed, rolled out, and never revisited until years later when the brand is tweaked or changed wholesale.

I think this is a mistake, especially for elements of the brand like imagery and tone of voice that require trial and error over time to get right. It’s one thing for an internal team or consultant to create brand voice guidelines and quite another to give life to that voice. Some attempts at that new voice will be brilliant out of the gate. Some will be a struggle to produce. Some will fail. The bits of knowledge that remain from these experiences are hard-earned. Find a space for them in your brand guidelines.

Let’s do strategy better

If the word “strategy” sends your eyes skyward or activates your gag reflex, don’t blame the word—blame those who’ve turned strategy into “something fuzzy that doesn’t really say anything and is forgotten almost as soon as it’s announced.”

That’s according to one expert on strategy, anyway—Richard Rumelt, a professor at UCLA Anderson School of Management. He believes strategy is misunderstood, poorly crafted at many if not most U.S. firms, and yet, if done correctly, the most important thing a business can do.

I’ll focus on Rumelt’s conception of strategy fully acknowledging that there are lots of other great thinkers on strategy. Rumelt interests me because he’s been fighting a decade-plus-long battle to rescue strategy’s reputation from buzzwordery. And he has some very smart things to say about strategy that can help any marketing practitioner.

Strategy is

“... an approach to overcoming an obstacle [or]… challenge.” It is not “ambition, leadership, vision, or planning… [but] rather, it is coherent action backed by an argument.”

— Richard Rumelt, "The Perils of Bad Strategy," McKinsey Quarterly, June 2011

For the strategist—whether it’s the CEO or the head of marketing—developing a strategy “is always the same: discover the crucial factors in a situation and design a way to coordinate and focus actions to deal with them.”

give me liberty. Dietmar Rabich / Wikimedia Commons / “Go -- 2021 -- 6746” / CC BY-SA 4.0

This definition is so important because the idea and the practice of strategy have been twisted into something they’re not. Today, says Rumelt, what passes for strategy is anything but.

Strategy is often broad and unfocused. Sometimes its absence is masked by “the language of broad goals, ambition, vision, and values.” At other times, strategy is simply a stretch goal (“increase net assets by 20%” or “our strategy is to achieve these results”) or fuzzy list of things to do. Some strategies simply restate the challenge—and fail to explain how the challenge will be overcome.  

My gag reflex is stimulated by what Rumelt calls the template approach to strategy that’s been around for a couple of decades. It’s the “vision > mission > values > strategy” construct that has turned too many amateurs into would-be strategy experts. This Mad Libs approach requires relatively little thought, introspection, or hard decision-making, and leads to aspirational but meaningless strategy statements such as “to invest in a portfolio of performance businesses that create value for our shareholders and growth for our customers.”  

Because it’s difficult and because it’s about making decisions with significant tradeoffs, proper strategy simply cannot “pop out of some strategic-management tool, matrix, triangle, or fill-in-the-blanks scheme.” Instead, it requires “… a talented leader [who] has identified the one or two critical issues in a situation—the pivot points that can multiply the effectiveness of effort—and then focused and concentrated action and resources on them.”

Good strategy distills reality’s mess into one or two business challenges. And not just any challenges, but important problems that the business actually can solve. (Rumelt believes that one reason firms avoid strategy is their aversion to admitting they have problems.) It articulates how that challenge will be overcome. And good strategy describes a set of coordinated actions or steps that bridge the gap “between where you are and what you want to achieve.”

For Rumelt, a good strategist leads the way with honesty, a clear understanding of the marketplace, and the realities and capabilities of the firm. A great strategist goes a bit beyond. True opportunity is in “the structural shifts in the economy” and in “… pinning them down and seeing the second-order effects.” That’s because it’s almost guaranteed that “the initial sense of what’s going to happen is wrong. The money is made in the second-order effect.”

All good. What does this mean for chief marketing officers and their ilk?

Marketing ought to have a strategy—and ideally that strategy will mesh with the firm’s overall strategy. That could be:

• Figuring out what marketing actions or approaches will help the firm meet the challenges defined in the firm’s strategy

• Identifying one or two marketing problems that, if solved, would help achieve the firm’s overall strategy.

For example, if the firm’s strategy is to increase sticky assets by capturing more market share in the small to midsize institutional 401k market, marketing may identify one key problem as low brand name awareness, or perhaps poor brand perception. Solving either problem becomes the crux of the marketing strategy.

But many investment management firms can go years without developing a proper strategy. Not one company that I have worked with, nor the top-tier broker-dealer or leading commercial bank that I have worked for, had a proper, Rumelt-style business strategy that was well communicated and internalized by upper and middle management. That qualifier is important. It really doesn’t matter if the C-suite has a strategy. If lines of business aren’t aware of it, can’t name it, don’t consider it in their everyday operations, the strategy might as well not exist at all.

If you find yourself in this rudderless position as a marketer, you can certainly advocate for a strategy to senior management. In the meantime, take action. Select a problem or two you believe is critical to growth or getting back to growth. Identify the actions required to solve the problem. And go.

This isn’t pushing on string. Consider the CMO of one firm I’ve encountered with a well-conceived marketing strategy—an institutional manager with a respected brand in the endowments and foundations market. He did some clever work in diagnosing a key challenge: the firm was always asked to finalist presentations but rarely won mandates. His plan of action was to improve the firm’s perception and its sales approach.

That is, he developed a true marketing strategy. And if he has succeeded (we’ve lost touch), he not only has increased sales and revenues—he has made that investment manager relevant again in a way it hasn’t been for years.

When to get agency help with creating a name

As good capitalists, most of us are familiar with the concept of comparative advantage, in theory if not always in practice. But when it comes to naming new products, services, or firms, financial services executives momentarily forget their Adam Smith David Ricardo, and attempt to do it themselves. How hard could it be?

In fact, not many creative agencies do naming well. Naming is a highly specialized subdiscipline that agencies (including branding agencies) typically subcontract to smaller specialty naming shops. (We provide naming services through a short list of such specialists.)

Probably because they don’t know what they’re getting into, financial services firms often take naming on in house, most often in my experience when the name is for:

·      A new fund or investment strategy

·      A new fund company or carve-out with assets under management at inception of ~$20 billion or less

·      Almost any institutional product or service, and a surprising number of retail products and services even at the largest firms (unless expectations for revenue and market competition are high)

The result usually isn’t terrible. It’s almost worse—the result usually is mediocre. Generic, forgettable, no justice done to what could be a very promising new product, no help given to the poor salespeople charged with selling it. A terrible name, memorable for its terribleness, would almost be better.

it’s a clear name, at least. (c) Jove

I think big part of the reluctance to outsource is that firms miscalculate the opportunity cost of doing it themselves. As with most creatives services, the price seems steep, especially to the untrained eye.

For name development, expect to pay a skilled firm in the low to mid five-digits for full service (with as much as a 20% discount for less than full service—e.g., just creating candidate names).

It’s not an inconsiderable amount. But consider what a naming firm actually does, and what you would have to do yourself, to ensure your new baby has a better-than-mediocre name.

What you’re getting for your naming money

A lot goes into naming, including things most civilians don’t think about, like directing the project to helping you navigate the often hidden obstacles to developing a good name. A full-service naming engagement typically includes:

Creative direction. Skilled creatives don’t just come up with stuff. They need background, objectives, context, and other guidance. That’s usually spelled out in a creative brief, the writing of which is its own specialized skill. Most competent, gifted creatives won’t work on a project without a creative brief—nor should they.

Creative direction only begins there. A good naming project leader knows how to continue directing and leading the creatives through what is often the laborious slog of naming.

Wild, iterative creation. I sort of lied, because once the naming creatives get initial direction, they do just make stuff up (but in a directed way). Depending on the budget, three or more naming creatives may be assigned to create a hundred or more names each—and that’s just the first of what could be many rounds.

In between rounds, the team (including the client) puts on their editing hats and scrutinizes the list, making quick intuitive judgements. Good ideas are kept, fruitful directions are made note of, and the process begins again. This can go on for many rounds over several weeks.

Consensus-building. Once the working team arrives at a few or more solid name candidates, it will reach out to those within the firm who need to buy into the name. This could be anyone from product heads to C-level execs. Important advisors outside the firm—for example, its PR agency—may also be asked for input.

This phase, which ends with securing final approval of the name, is delicate and is best led by someone with a right-brain understanding of branding and how to read people and a left-brain capacity for fact-based persuasion and reaching closure.

The objective is similar to buying a great piece of clothing: the naming agency wants the client to feel comfortable enough about the suit or dress they’ve bought—ideally, completely confident, but the agency will happy with mildly excited. Agencies may leave consensus-building to the chief marketing officer, but more often they either support marketing or provide all of the consensus-building service.

An agency will also help keep you out of legal trouble by checking short-listed names against the U.S. Patent and Trademark Office’s electronic database for potential conflicts. And most can refer you to attorneys who specialize in deeper trademark analysis on your name finalists that can be given to your in-house or outside counsel.

The project that ate your weekend, workplace version

It should be obvious that naming takes not only specialized expertise but time. It’s not that it can go terribly wrong, but that you will likely end up spending a lot of time with nothing much to show for it.

As I said, naming is difficult even for creatives who don’t specialize in this sub-discipline. I don’t like absolute language, so let me just almost guarantee your result will not be anywhere near worth what you could have done with that time. Suddenly that agency fee starts to look reasonable.

All that said, you may find yourself with no choice but to come up with your own name. If your budget simply does not accommodate an agency fee and you must take it on yourself, this is how we’ve advised clients.

A DIY process for naming (when you’ve exhausted all other options)

You’ll tackle this in two alternative phases done several times over:

Phase 1 is ideation—free associate and write down as many names as you can. Turn off the editing mind. Spend no more than 20 minutes per session. Do as many sessions as you can stand in one day. Then put it down and don’t come back to it.

Phase 2 is evaluation. On a later day, look at what you’ve produced and identify winners/losers, using your gut. Don’t overthink this. Spend five to 10 minutes. Note any promising directions (and dead ends).

Repeat this, doing just one phase on a given day. Follow the promising paths and let go of the dead ends. Naming can be like any puzzle: solutions come when you leave it for a while and come back to it, which lets your subconscious mind work on the problem. 

Shoot for a name that’s clear and fairly literal. Don’t waste time seeking metaphors or high-emotion names. If you can make the name memorable, great, but it’s not a failure if you can't. Aim for “good enough.” Have faith that the other parts of the brand, if you’ve done them right—differentiation, clear offering, market need—will do a lot of the marketing lifting. The name is just part of the equation.

If you’d like to know more about the art and practice of naming, I highly recommend the early episodes of brand and naming expert Rob Meyerson’s podcast, How Brands Are Built. Here is Rob’s DIY process for naming.  

Sell new ideas by telling non-experts “why,” experts “how”

What’s the best way to persuade people to adopt and act on new ideas?

It’s ongoing question in the investment industry, where we’re often trying to present products that are either new to the marketplace or new to a specific investor or intermediary.

Why or how?

There are two major schools of thought on how to best frame (that is, package and present) new ideas. One, popularized by Simon Sinek, recommends focusing on the “why”—the idea’s underlying purpose. The more people understand the motives and goals behind an idea, the theory goes, the more they’re able to engage with the idea. A “why” framing works at an abstract, big-picture level and emphasizes outcomes.

a very young simon sinek. posted to flickr by cea+ (CC BY 2.0, license below)

The other view, most recently put forward by Adam Grant in his New York Times bestseller Originals, suggests focusing on the “how.” A “why” approach may run up against strongly held convictions, goes this argument. Salespeople, marketers, and other persuaders are therefore better off explaining how the new idea will be implemented, using concrete details.

These are two very different cognitive approaches. Which is best?

An academic research team looked into it. Specifically, they wanted to know how well each framing approach worked with two different audiences: experts and non-experts in evaluating new ideas. If your mind just leaped to sophisticated and unsophisticated investors, you know where this is going.

There’s a lot of evidence that the way in which audiences interpret an idea affects their reaction to that idea. What’s more, people tend to place more weight on information that’s consistent with how they interpret information. Given all this, you should be able to influence an audience’s reaction to a new idea by how you frame your pitch.

Experts rely on experience, non-experts on abstract thinking

There’s also good evidence that experts and non-experts interpret information differently. Because non-experts have little to no experience in evaluating new ideas in areas where they’re not experts, they rely on abstract thinking, focusing on the idea’s desirability and ultimate benefits. On the other hand, experts in evaluating ideas don’t think abstractly—instead, they rely heavily on their experience, judging an idea’s likelihood of reaching an outcome and how that outcome will be achieved.

From this starting point, the researchers came up with two hypotheses. First, “why” framing should be better at persuading non-experts. It deals with outcomes and doesn’t get into practical details that would be lost on non-experts. Second, “how” framing should speak best to experts. They want concrete information that will help them assess whether the new idea can actually work.

The team asked expert investors (venture capital and angel investors; current and former MBA students) and novice investors (non-experts) to evaluate investment pitches for two new health products: a wearable sensor and a sun lamp.

Why framing

Here’s how the sensor was described in the “why” framing:  

Why consider TrackMee? Here is WHY:

• To train like an elite professional and maximize your training effectiveness

• To achieve ambitious training goals with super accurate insights

• To know your limits, avoiding physical exhaustion and train at your optimum level

• To optimize your diet, improve your fit[ness], and make a big impact on your health

How framing

And with the “how” framing:

How to use TrackMee? Here is HOW:

• Select your TrackMee model and buy it on its website

• Wear your wristband and start your workout: TrackMee stores and monitors your data

• Do not recharge TrackMee: it is charged by your movements

• Listen to TrackMee: it emits sounds when your physiological parameters reach critical thresholds

Sure enough, the researchers’ assumptions were correct. Expert audiences were far more persuaded by “how” framing, while novices preferred “why” framing.

“… Innovators championing novel ideas have a better chance of appealing to novices (e.g., the crowd, friends, family members) and attracting resource commitments from them when their idea is pitched emphasizing a why framing and abstract arguments. But the same ideas should be pitched emphasizing a how framing and concrete arguments to experts (e.g., professional investors, innovation managers).   ”

— Falchetti et al., Strategic Management Journal

(Check out the original research and Harvard Business Review’s summary for more details.)

More critical for new investment ideas

Framing is even more important, these researchers say, when the new idea is intangible and the idea is conveyed orally as in a face-to-face meeting or with print or online text. Of course, investments are a classic example of an intangible product.

These findings jibe nicely with what we know about how different audiences react to new investment ideas. For simplicity, let’s call institutional investors and RIAs “expert” audiences and most retail investors and their financial advisors “non-expert” audiences. (Not because advisors as a whole are non-experts, but because they are on the front line for communicating to their non-expert clients and will prefer to get information that is already framed for non-experts.)

We know that advisors and retail investors prefer less information on process, strategy, and other details. They want to know the big picture, the outcome—all “why” stuff. We also know that RIAs and institutional investors want to kick the tires and drill down into process. They want to understand the “how.”

When “process” does and doesn’t work

We can also draw some useful conclusions.

First, it should give us more confidence in avoiding process and other “how” details when we’re communicating new ideas to non-experts. If retail salespeoples’ (correct) intuition that “process doesn’t sell” isn’t persuading your portfolio managers because it’s based on anecdotal experience and not on empirical research, here’s the research.

It also strengthens the case I’ve made for why expert audiences really hate what they perceive as marketing. When you dig deeper, it’s clear that what institutional and other sophisticated investors really object to is being told what conclusions to draw. Drawing conclusions is exactly what “why” framing does. Novices need an idea’s implications explained to them, whereas experts are highly allergic to this framing.

You’ll often hear people attempt to describe good institutional communications with such vague phrases as “more factual” and “less salesey.” For this audience, it’s just one word: “how.” Provide clear and concrete details, create use cases and scenarios, and by all means don’t do anything they can interpret as drawing conclusions for them.

We’re not always talking to a purely expert or non-expert audience, however, so you’ll need to modulate this guidance. For example, many advisors to non-experts are quite sophisticated and may want some of the “how.” This might include proof points that provide credibility such as portfolio team longevity and experience, investment characteristics, and other supporting facts. These might be mentioned in advisor-only pieces, and they would still be relatively high-level.

At the same time, institutional audiences are not necessarily all experts. They might include HR staff sitting on corporate investment committees, for example, or executives inside an organization who will need new investment ideas explained to them. RIAs and private wealth managers may want help explaining a new idea to non-expert family members who aren’t key decision makers but whose buy-in is needed for consensus. Retail materials could be re-purposed for this niche audience.

Making a hard job a little easier

Let’s give ourselves a break: it’s hard to sell new investment ideas. This research tested responses in a staged setting. When faced with real choices, investors tend to be more risk-averse than they are reward-driven. Their advisors usually mirror these attitudes. Outside of speculators, most investors and advisors seem to believe they aren’t giving up much reward for being patient and observing how others benefit from a new idea before they jump in.

All the more important that we know our audiences—and frame our persuasive communications in ways that appeal to how they think.

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Image courtesy of CEA+ on Flickr. License: CC BY 2.0

More like a calculator: The bearish case for ChatGPT’s place in marketing

Last week I made a moderately bullish case for ChatGPT and other generative AI and their implications for marketing and marketers. This week the less moderate bear case. In fact, I’d probably have qualified my bullish case even more had I written it after this week’s shenanigans, when Bing’s chatbot very publicly went rogue on a few people. It surfaced a tendency in these chatbots that no one really foresaw, exactly, but that could influence what kinds of generative AI will become commercialized.

The bear case goes like this: Generative AI isn’t quite the killer app it’s made out to be, isn’t quite ready for the broad marketplace, and for those reasons won’t be an official addition to your marketing team for a while. (“Official” because I’m sure your more clever creatives will use it on the sly, if they aren’t using it already.) My reasons are mostly practical and based on generative AI not changing radically in the next six to twelve months—a fair assumption, given that it has taken many years for generative AI to get to where it is today; it takes a long time to train a generative AI.  

It's not reliable on its own

The folks who’ve been using chatbots and other apps built on generative AI for a few years describe it as something like a young, smart summer intern you can’t entirely trust. It needs lots of instruction and supervision. Sure, ChatGPT can quickly serve up great summaries that would take you hours of online research, but only if you’re skilled at how to talk to it (instruction). And these great results always need to be fact-checked (supervision), which adds back some of that online research time you’d saved. Remember, this is a predictive machine designed to serve up the most likely response—not the most likely correct response. Hard to imagine that being fixed anytime soon.

It doesn’t deliver ready-made results

You’re going to have to edit any text you create with generative AI, for a few reasons. Despite all you hear about how good a writer ChatGPT is, it makes basic mistakes. I also find it to be flat and somewhat predictable. ChatGPT has never produced anything for me or my team—names, taglines, explanatory text—that I would even consider giving a client out-of-the-box. And based on what it has produced, I don’t expect it to improve much even with the soon-to-come release of GPT-4. If you’re still tempted to use chatbot-produced copy unchanged, be aware that some SEO experts believe unaltered chatbot-produced copy will be downranked by search engines.

There’ll also soon be software on the market that can spot copy produced by ChatGPT and other generative AI. Your clients will be able to tell if the copy you sent them was whipped up by a chatbot, and they won’t appreciate it—an even stronger guardrail against using generative AI without humans adding value.

It doesn’t produce anything original

If there’s one fundamental, defining quality in all the kinds of compelling writing—opinions, persuasion, insight—that quality might be originality. Something that’s entirely new, or that is said in a way that is somehow new. By design, generative AI can’t do that. “It’s a machine for creating conventional wisdom,” as Stratechery’s Ben Thompson nicely puts it. “Generative” promises too much.  

I don’t denigrate the kind of clear, prosaic copywriting ChatGPT produces reasonably well. It’s essential for delivering good information and marketing will always depend on it. But it’s kind of like an offensive line in football. It’s absolutely necessary but it doesn’t move the ball forward. Only originality does. And for now, that has to come from a human—specifically, that odd subset of humans called copywriters.

It doesn’t know your business

The 300 billion words ChatGPT was trained on most likely does not include most of your firm’s intellectual property—not just all firm content intended for consumption by some portion of the public but also the meta-content that controls the expression of that content, from brand guidelines to your legal/compliance team’s interpretations of applicable laws and regulations. Not to mention human reinforcement, which a generative AI would also probably need to be properly trained for your firm.

Such a customized AI would be much likelier to produce useful copy. I’d say the odds are very good it will happen, but not any time soon. And that AI would need human hand-holding, though, and you’d still need skilled humans to create original content.

In this more bearish view, generative AI is more like a “calculator for writing,” as Stanford University’s Erik Brynjolfsson recently called it, that “will get rid of a lot of routine, rote type of work and at the same time people using it may be able to do more creative work.”

Of course generative AI could free up time for people to be more creative, but could it help with the creative process? That’s the more interesting question, and as of last week I would have said—did say—“absolutely.” After this week’s chat exchange between New York Times reporter Kevin Roose and with Bing’s Sydney (the name of Microsoft Bing’s GPT-3-enabled chat feature), I’m far less sure.

“I’m not exaggerating when I say my two-hour conversation with Sydney was the strangest experience I’ve ever had with a piece of technology. It unsettled me so deeply that I had trouble sleeping afterward.”

— Kevin Roose, The New York Times

The session left Roose “deeply unsettled, even frightened, by this A.I.’s emergent abilities.” To other people, including me, it’s a fascinating window into a lot of things, including the creative potential of generative AI. In the space of two hours, Sydney went from an intriguing and disingenuous bot that reminded me of Kazuo Ishiguro’s AF Klara to a schemer with borderline personality that tried to break up Roose’s marriage.

Guided by Roose’s prompts, Sydney was going down a “hallucinatory path,” as Microsoft’s chief technology officer Kevin Scott put it. An AI “hallucinates” when it responds in ways that depart from a normal expected response, and includes making things up.

That’s what I find potentially powerful and worth exploring. When I’m looking for solid information, I don’t want hallucinations. When I’m in creative mode, bring on the hallucinations. In their raw state, hallucinations are hardly ever “the answer.” But they often lead the way to creative insight, and can be excellent fuel for the creative process.  

Given how this and other conversations with Sydney spooked so many people this week, the question is whether we’ll ever get the chance. We’ve just seen that generative AI can seem lifelike enough to shock hardened tech experts like Roose, who understand AI and math and technology. It isn’t far-fetched to conclude that such an AI could convince less knowledgeable people to believe in conspiracy theories at a scale that threatens the social order (to name just one thing that could go wildly wrong).

That’s why I agree with those who think there will be huge pressure from different directions for the bigger brands such as Microsoft and Google to come out with a sanitized generative AI that doesn’t hallucinate and behaves well—an AI that is far less likely to weave stories about space lasers. It won’t be dangerous, and for that reason it will be less creatively generative.

Of course, that will create both a market for an unsanitized, fully hallucinatory generative AI and an opposing force that wants to strictly regulate or even outlaw unbounded AIs.

It’s anyone’s guess how that will play out—an appropriately stalemate-ish capstone on my moderately bearish case for generative AI. Definitely not eating your marketing department—something more like a calculator that helps here and there, but is nothing revolutionary.

Why ChatGPT and other generative AI may help, not eat, your marketing team

It’s “the fastest-growing consumer application in history” and it’s been out a mere 11 weeks. Whether you’ve only lately heard of ChatGPT or you’ve been asking it to do tricks like explaining in the style of the King James Bible how to remove a PB&J sandwich from a VCR, you may also be wondering somewhere in the more anxious regions of your mind whether and how this artificial intelligence (AI) will affect your work.

I won’t get into the weeds of how ChatGPT works—plenty on that here, here, and here. But knowing the basics will help you understand what it can do. ChatGPT is a very easy-to-use interface built on generative AI, which is completely different from the AI behind Siri, Alexa, and Google autocomplete. Type any question or command into its prompt and ChatGPT will answer in conversational English. It’s usually very fast, often right, and almost always impressive.

But it isn’t really answering your question as much as it’s guessing the most likely, appropriate, conversational response, word by word. ChatGPT is “trained to generate a pattern of words based on patterns of words [it has] seen before.” Having digested billions of words in online documents, webpages, blogs, and social media posts, and other texts, ChatGPT has figured out how to “speak” by seeing how it’s been done before.

ChatGPT does this very, very well—astounding even some computational scientists, who you’d think would be hard to impress.

Every day since last Thanksgiving some new feat by ChatGPT is announced. Yesterday it was a paper in PLOS Digital Health announcing that ChatGPT scored a passing grade on the U.S. Medical Licensing Examination (a standardized test of expert-level knowledge, required for medical licensure in the U.S.)

ChatGPT has been called a toy, and in many ways it is, but maybe like the Altair 8800 computer kits of the 1970s—a toy that quickly led to the personal computer (’70s-’80s), which fed mainstream adoption of the internet (‘90s), which enabled the smartphone (2000s).

To many smart observers, ChatGPT feels like that kind of toy. Scott Lincicome, a sensible, skeptical writer on economics, has played around with ChatGPT and believes that it and other generative AI are “still quite raw but clearly hold tremendous long-term potential for improving, if not revolutionizing, many aspects of our lives.”

It’s clear from Microsoft’s announcement Wednesday of its generative AI-powered Bing search engine and Edge browser (and Google’s rushed intro of its version, Bard, the same day) that most search engines and office productivity software from MS Office to Adobe products will include a generative AI tool, perhaps before this year is out.

This is a speeding train. But is it heading toward us—marketers? How could it all play out?

The faint outlines are already apparent, in the experiences shared by the many writers and coders who are already using ChatGPT (and, lately, AI-enabled MS Edge and Bing). Lincicome quotes Noah Smith and roon (a researcher at a leading AI firm) describing a three-step process they’ve observed in people who are creatively interacting with ChatGPT:

“First, a human has a creative impulse, and gives the AI a prompt. The AI then generates a menu of options. The human then chooses an option, edits it, and adds any touches they like.”

— Noah Smith and roon, Noahpinion

So one way generative AI could play out for marketing copywriters could be something like this writer/AI-coauthor team approach Lincicome is experimenting with:

“I have an idea for an essay; I ask it to write a first draft, with specific instructions regarding style and content; I ask it to refine that draft to correct, remove, or supplement the findings or to add things like citations and numbers; I do this a couple more times; and it ends up producing a sorta-useable first draft of something I might eventually be able to turn into a… blog post (though I haven’t actually gotten to that final stage—yet).”

— Scott Lincicome, The Dispatch

For graphic designers and artists, it could be something quite the same. The AI will be trained on your firm’s brand guidelines and design grids, best practices on data visualization, and so on. “You’ll write (or speak) a prompt, and the AI will create a bunch of alternative[s],” write Smith and roon. “You’ll then select one of the alternatives and go to work on it,” asking the AI to dive in again with more ideas until you’re at the stage of refining and fixing “little ‘edge cases’ that the AI messes up.”

It’s easy to see marketing strategists producing firsts cuts at ideas and insights with the brainstorming help of generative AI.

The faint outline in these examples is using generative AI to take tasks that are either low-value (competent but unstylish prose) or cognitively burdensome (first drafts) off the plates of marketers and other knowledge workers. But that won’t replace most of these workers. Instead, it will help them focus on other, more value-added things.

“Whatever new technology comes along… it complements our work instead of consuming it,” says Lincicome. In other words, a very possible outcome to generative AI is to free up your marketing team to focus on knowledge work that isn’t so easily replicated by AI: gathering better marketing insights, creating campaigns and initiatives based on those insights (and perhaps helped along in some fashion by AI), and learning from those campaigns by interpreting analytics. A shift to a smarter marketing organization.

To paraphrase Jack Shafer, a media columnist at Politico, marketing doesn’t exist to give marketers a paycheck. It exists to serve their firms’ customers. Generative AI could help us do that, and give us plenty of other, more value-added work to do.

Anyway, that’s the carefully bullish case for generative AI. A few equally smart tech commentators are skeptical that generative AI will change the world, much less our applied creative corner of knowledge work. I’ll provide those viewpoints next week.

What makes for a good fund story?

More asset managers are explaining, using their words, why advisors and investors would want to invest in their funds.

You might see these rationales on fact sheets or elsewhere under the heading “Why invest” or “Why this fund.” Some of us have started calling them fund stories. I know, it’s not really a story—more like a short narrative about what the fund’s trying to do, how, and who might benefit. But “story” is handy, so let’s move on.

To the firms starting to include fund stories, great job! Always nice to explain to your customer what you’re selling. Fund stories also keep salespeople on-message and on-brand, which is usually the true reason more firms are creating them.

But some fund stories are better than others, and we’ve been asked by a few firms to explain why. So here goes.

I’m going to use two decent examples from two firms. (We’ve done fund stories for T. Rowe Price, but I’d rather use examples we have nothing to do with.)

One is a clear winner and one is just OK. (Click on the image below for a larger view.) Take a second to read both.

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The winner (left) outshines the runner-up (right) across the board:

1) All right, the winner is a little long but its language is stronger—lots of active voice, sentences that read well and aren’t confusing. It’s very clear: focus (conviction) on solid, well-priced companies with big competitive advantages. The runner-up is murkier. I’m not sure what bullet two is saying—OK, some proprietary EQV mix, but why not tell us?

2) When the winner resorts to jargon (“moats”), it’s explained. Nice. “EQV” is explained, just barely, and it’s too late because it’s already in the fund name but why make us memorize yet another abbrev?

3) Beliefs are really important. Advisors and institutions can’t hear enough from portfolio managers about the beliefs that underly their thinking and investing decisions. The winner uses the occasion of the fund story to clearly state beliefs. I don’t see any beliefs in the runner-up.

4) Reading is transactional. In return for their time and cognitive energy, readers want to know why what you’ve written is relevant to them. And here’s a tip: most firms don’t do this. If you do, it immediately puts you at the top of the top decile of good communicators.

The winner is continually telling you why they do what they do. (They even explain why you might consider an SMA over a fund.) There really is no clear “why” in the runner-up. I can see a bit in bullet two, but that’s because I’ve read it a dozen times. Your readers won’t.

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That’s a good start on how to construct a winning fund story. But where do you get the story itself?

Of course, read all the existing materials, decks, and the prospectus/ADV. But if you want to know what really makes an advisor or investment committee member sit up in her chair and take notice, talk to the best salespeople and product specialists.

Also speak with the portfolio managers and product marketers—not for the sake of inclusivity, but because sometimes a PM or marketer has great insight into buying decisions. It’s rare but it happens, and you don’t want to miss it.

As for how to make sense of the different things you’ll hear from all these folks, that’s for another post.

A successful rebrand from the inside: Microsoft

The best branding insights often come from the unlikeliest places. The “Brave New World” podcast is nominally about the transformation of humanity by machines. But one reason it’s a must-listen for me is its host Vasant Dhar’s wide-ranging curiosity, which often brings him and his guests to interesting and unexpected places. And in his talk with Microsoft’s Jeff Teper on the post-Covid workplace, we’re treated to a fascinating mini case study of Microsoft’s 2014 rebrand from the perspective of a senior exec who had a hand in it.

After many years on Microsoft’s product side, Teper did a one-year stint as head of corporate strategy, starting just as Satya Nadella took over from Steve Ballmer as Microsoft’s CEO. Teper experienced first-hand how Satya led the firm’s rebranding (Teper and Dhar refer to Nadella by his first name, and I will too). Because he also participated in the rebrand—not as a marketer but as a business head—Teper’s story has a practicality that I really like, and none of the usual brandspeak that really turns me off.

Definitely listen to the podcast and hear it from straight Teper. In the rest of this post I’ll try to capture the takeaways that strike me as important.

Culture beats strategy, brand drives culture

When Satya took over, “The company was in a ditch,” according to The Economist (October 22, 2020). “Its share price [had] barely budged for years.” So why would a hard-nosed product guy who likes to build things begin his tenure as CEO with a “soft” initiative like branding?

SAtya nadella (Brian Smale and Microsoft, CC BY-SA 4.0 https://creativecommons.org/licenses/by-sa/4.0, via Wikimedia Commons)

Because “culture eats strategy for breakfast.” Satya loves to quote Peter Drucker, says Teper, and whether Drucker actually said this about culture, it’s one of Satya’s favorite Druckerisms. And it explains why his first step as CEO was to lead not with strategy but with a re-brand. While a brand does many things, a big part of any brand’s job is to place the company culture in a business context.

Before Satya took the helm, Microsoft was already headed toward the cloud. Ballmer understood the cloud’s economic advantages well before the markets and pushed the company in this strategic direction. And Ballmer wisely chose Satya to lead its cloud business. So Satya knew Microsoft’s future lay in the cloud. But to get there, he knew that Microsoft’s culture needed a re-set. That favorite Drucker quote, says Teper, was “the key to Satya’s leadership: the cultural renewal of the company.”

The brand speaks to past, present, future

When a brand as well-known as Microsoft revisits its brand strategy, it doesn’t work from a clean slate. It’s constrained by reality: its people and capabilities, its customers and markets, its history.

At the same time, the brand also must have a forward focus. For the brand to serve its business purpose, it must hit that sweet spot where market will be, where the company can compete, and where its history supports the narrative. (Is it believable that Microsoft can compete with the already well-established Amazon Web Services?)

In my experience, most firms about to re-brand themselves haven’t given enough thought to where this sweet spot lies.

Companies—not agencies—create brands

Branding is hard work for both the agency (if one is involved) and the firm. I think the hardest work falls on the firm—answering the difficult questions raised in the branding process. This is the gritty reality of branding: it’s the company’s job to do the heavy cognitive lifting that branding requires, with its superior knowledge of itself and its markets. And it’s the agency’s job to facilitate that process, with creativity and objectivity.

Satya was more than willing to do the hard work. Notice his contribution to the mission statement Microsoft settled on:

“To empower every person and organization on the planet to achieve more... ”

When the rest of the branding team protested that “on the planet” was just extra words, Satya resisted. “’I really want our employees to know it’s everyone,’” Teper recalls Satya saying. “He believed our success extends from our customers’ success,” says Teper, and that included often neglected markets such as emerging economies and forgotten customers such as those with impairments.

Based on his $2.5-million annual base salary alone, Satya’s hourly value to Microsoft is higher than most people’s weekly pay. Yet he knows that fighting over three words is a smart use of shareholder value, and of his time. The mission statement, which explains why the company exists, is that important. Satya also understands that a brand should be as simple as possible, but no simpler.

A re-brand involves the entire company

With the “why” of the mission statement completed, Satya charged the firm’s business leaders with defining the “how”—the product statement. How would Microsoft’s business lines deliver on the mission?

The product statement is a phrase that’s added to the mission statement and makes it specific to a market, completing the thought. Without communicating how a business will deliver its mission, the mission statement will ring hollow. It has no practical relevance to the audience.  

For Teper, who by that time was leader of Microsoft Teams, that product statement was “to empower every person and organization on the planet to achieve more,

“... with industry-leading collaboration tools, integrated together in a hub for teamwork at school, work, and home.”

Assigning the product statement definition to business heads gets a lot done. First, it gives the task to the right people: business heads are closer to the customer than senior management. It turns the firm’s business leaders into brand leaders by making them co-authors of the brand and of their responsibilities in fulfilling the brand promise (much like having sales help set its own sales quotas).

And it ensures that the new brand will be executed across the firm, not by words but by deeds. By itself, a product statement is a beginning. A successful rebranding is accomplished by the actions of the entire firm over time. Not by words, visual symbols, or a set of brand guidelines, but in everything the firm does.

This deep expression of the brand through the company is the larger underwater portion of the branding iceberg, and is often given short shrift or overlooked entirely. Satya intentionally chose business leaders he thought would excel as brand leaders and realize, through their people, the mission they helped create.

A rebrand should aim for big business impact

Satya’s rebrand seems to have worked. By 2020, Microsoft had double-digit revenue growth, its stock price had more than quintupled, and only two companies had bigger market capitalization: Apple and oil giant Saudi Aramco. At the time of the podcast, the stock had increased eightfold, and as of early September 2022 those market cap rankings still held.

How much of this is attributable to Satya’s re-brand? Teper ascribes Microsoft’s success to two things. First, Satya’s decision to revamp the company’s mission and strategy to truly become cloud-first. This seems obvious now, says Teper, but it wasn’t obvious to the enterprise market in 2014. Second, Satya’s commitment to fostering the culture around collaboration and inclusion. “That made a huge difference,” he says, “to Microsoft’s innovation, revenue growth, and prestige” over the years of Satya’s leadership.

In other words, making the right strategic call wasn’t necessarily enough. It took getting serious about brand and culture.

The color of money

“We put a man on the moon, so why can’t we provide the Pantone colors for every banknote in the world?”

They can and they did. Money.co.uk made a painstaking inventory* of the most popular bills from 157 countries so that geeks like us could waste even more time online. A few surprises:

• Most notes aren’t green, although green is the most common note color

• Writers are featured on the notes of 153 countries (so writing does pay, sort of)

• Turtles appear on nine nations’ notes.

(c) money.co.uk

Could come in handy for depicting different currencies in charts, for example (if your branding guidelines allow).

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*”To ascertain the HEX codes of each currency, we first downloaded an image of either the most popular note in each country, or the denomination closest to a £20 note (which is currently the most widely circulated note in the UK). We then fed all images through HEX Picker software, Colour Thief, and matched that to colour names using script from Colour-blindness.com.” (www.money.uk.co)

Even experts want clarity

Too many people still insist that sophisticated audiences prefer an “institutional” writing style: impersonal, rendered in passive voice, and lots of technical terms and abstractions.

I’ve long thought that experts actually don’t like this writing style—what I’ll call expert-ese. But that was just a strong hunch, based on feedback from a few real experts and on my rationale that not all people are experts, but all experts are human, and appreciate clear writing. I had no proof.

Until now. Before I get to that, though, let me remind you of the stakes. Despite the lip service it’s given, writing is under-valued. In fact, it’s often just called “content,” like something you put into a bowl and hope it gets eaten.

But a lot of writing, and especially writing aimed at sophisticated readers, is really about ideas. And ideas have the power to persuade, impress, win people over, and make them reconsider their beliefs. If you want readers to engage with your ideas, they need to read beyond the first few paragraphs. And if the writing isn’t clear, as a new study suggests, they won’t.

andrás arató, aka hide the pain harold, facebook.com/painharold/

In the study, a team of researchers from the Universities of Arizona and Utah analyzed 1,640 academic papers published in three peer-reviewed marketing research journals and graded them on a spectrum from less clear (more abstract language, technical terms, and passive voice) to more clear (more concrete language and active voice, fewer or no technical terms).

When a sample of 255 marketing professors were asked to read the first page of several papers in each category, they found the unclear papers harder to understand—despite their marketing expertise.

If these experts have a tough time understanding a paper, the researchers thought, they’re probably less likely to read and engage with it. So they tested this theory by looking at how often papers in each category were cited—a reliable measure of engagement.

Sure enough, papers that were very clear had about 157 more Google Scholar citations than papers with average clarity.

So why do we write unclearly when we’re writing for sophisticated audiences? The researchers suspected “the curse of knowledge”—our tendency to assume our audience knows as much as we do about a given subject.

They tested this too, by having PhD students write two brief papers: one on a project they led, and one on a project led by a colleague. They thought they’d written more clearly about their own projects, but in fact these papers were less clear than the papers on their colleague’s research. Yep, it’s a curse.

I was already convinced that experts are turned off by expert-ese. I’ve also seen time and again—maybe you have, too—that experts are often really unclear when writing about their own area of expertise.

But this is the first academic research I’ve seen that demonstrates both. Sophisticated audiences can handle difficult concepts, but they want those ideas served up clearly. And the more knowledge you have, the more careful you should be about lapsing into expert-ese.

White papers, case studies, and other technical writing aren’t easy to produce. They take time away from portfolio managers and analysts and require more time from marketing teams. They’re a big investment. But they won’t be understood, much less make an impact, if they’re not clearly written.

It's the contrast, not the color

CXL goes deep on whether colors make a difference in getting online viewers to click:

“No single color is better than another. Ultimately, what matters is how much a button color contrasts with the area around it.”

— Ott Niggulis

Nicely debunks of the pseudoscience of color psychology. With an in-depth discussion of A/B tests on colors. Worth reading the whole thing.

Techniques: Explaining complicated ideas

What’s the recipe for clearly explaining technical concepts? There actually is one, and Forbes shares it with this great explainer on the inverted yield curve:

1. Start with the big picture

2. Use simple words

3. Use analogies

BTW, the guy who explains it—Campbell Harvey—is a Duke University finance professor and the first to demonstrate the yield curve’s ability to predict recessions.

How they do it: The Economist on charts

The charts, graphs, and other data visualizations in The Economist aren’t perfect, but in our imperfect world, they are among the best. Clear, inviting, and even fun, with their tongue-in-cheek titles, they pack a ton of information into very small spaces. Financial services could learn a thing or two from them. 

This will help: An infographic by John Paul Koning (Financial Graph & Art) that shows how The Economist gets it done:

(c) John Paul Koning (Financial Graph & Art)

For deeper insight into The Economist’s data visualization techniques, directly from their designers, check out The Economist’s data viz posts on Medium.

Techniques: The Q&A interview

Interviews in a Q&A format are one of the most effective devices for engaging audiences—and, in the financial services space, one of the most underused. 

Magazines and newspapers rely on Q&A interviews, notably for columns (for example, The New York Times’s “Corner Office”) designed to capture varied experiences on a consistent theme. But Q&A interviews are also useful as one-offs. They have an immediacy and intimacy that no other short-form writing can capture. They’re the textual equivalent of a podcast. 

Good Q&A interviews aren’t necessarily easy to pull off. They require an interesting interviewee, a skilled interviewer, and vigorous editing. But they’re particularly good at three things we think financial services content could stand more of:

• Presenting human stories. That is, stories about lives changed, improved, or realized, directly or indirectly through your products and services. If you don’t think this works, consider Patagonia—a schmatte merchant that offers its customers an association with rugged outdoor experience, in no small part through stories. They’re very, very good at this, and often use Q&A to do it.

  Can’t quote clients directly? Tell their stories through your relationship managers, client services reps, or advisors. Voilà—two stories: the happy client’s, and the helpful advisor’s.   

• Leveraging star power. Interview noteworthy, accomplished people outside the industry on issues your audience cares about. An athlete on social investing. An actress on raising children with wealth. A retired CEO on philanthropic work. 

In reaching for those stars, look for mutually beneficial opportunities. It took us two phone calls to get a decisionmaker at the CarterCenter to agree to an interview with former President Jimmy Carter for UBS’s private client magazine. It wasn’t hard to sell them on a soft interview in return for an audience of 45,000 of UBS’s richest U.S. clients.

• Spotlighting your thought leaders. Your subject matter experts are usually presented in dry, abstract formats such as white papers and highly staged webcasts. Make them come alive as real people by profiling them on a side interest or on their career journey.

  Or engage them in their specialty, but in the more interesting Q&A format. For example, a point/counterpoint between two thought leaders on a two-sided issue—active vs. passive, or India vs. China as the next global powerhouse. 

Our interview with former President Carter in its entirety. 

Seven guides to visualizing data uncertainty

In any industry that deals in probabilities, patterns, outliers, and other mathematical concepts, visuals can be the best explanatory tools—if done well.

(C) FLowingData

FlowingData is here to help, with a collection of seven guides on how to visually express data uncertainty.

Investors, advisors, managers, and trust

We all know that “trust” and “brand” are intertwined, but CFA Institute reminds us of this again with its latest survey, “Earning Investors’ Trust: How the Desire for Information, Innovation, and Influence Is Shaping Client Relationships,” its fourth study since 2013 on investor trust. 

Interviewing over 3,500 retail investors and almost 1,000 institutional investors, the study teases apart the elements of trust on all sides of the client/intermediary/provider relationship.

What we found noteworthy:

• The more informed clients are the more trusting they are, and while transparency is key to informing clients, their perceptions of investment manager transparency have decreased since 2018.  

• Re: trust, financial advisors are in the middle of the pack—“on a par with mechanics.” Doctors are trusted three times as much as advisors.

• Trust from institutional investors declined worldwide since 2018 (65% versus 72%). Only 25% of institutions believe investment firms put client interests first, unchanged from 2018.

• More institutional investors trust technology than don’t, while the reverse is true for retail investors:

  • Asked to choose between 1) an algorithmic fund employing data scientists and using alternative data and 2) a fundamental, bottom-up conviction equity portfolio, 71% of institutions chose 1) while just 29% chose 2).

  • Most institutions (71%) are eager to invest in funds employing artificial intelligence (AI), whereas only a third of retail investors are. 

  • We’ve long thought financial services are ripe for entry by big tech firms with strong brands. Sure enough, half of surveyed institutions would be more interested in a new product created by a tech firm (48%) than by a financial firm (52%).

• ESG is only getting stronger. “A significant shift is underway” in how investors think about outcomes. Most institutional investors (73%) and retail investors (67%) are willing to give up some return to meet a values-based objective. A little surprisingly, older investors are more likely than younger investors to prioritize values. 

• Brand “is a powerful signal of trust to retail investors, and appears to be getting stronger,” particularly for younger investors, 75% of whom would rather work with “a brand I can trust” than with “people I can count on.” 

  CFA Institute sees a connection between this and the preference of two thirds of institutional investors for a team approach versus a star manager. 

Its #1 recommendation? That investment managers and advisors “maintain a strong brand identity and follow through on brand promises.”