Know-how, red wine, and communications

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I am just back from an excursion into the Bordeaux wine region.

Bordeaux, France is seen by many sommeliers as the undisputed king of red wine. This region has been cultivating vines for more than 2,000 years and has perhaps the highest reputation for fine wines in the entire world.

There are 111,150 hectares under vine broken down into 65 appellations - easily it is one of the largest wine-producing regions in France. Some 60,000 jobs are connected to the nearly 7,000 vineyards working in the region.

So vital is wine to the area, even the BOD airport authorities planted vines between the terminal and the taxistand.

To better appreciate the area and see some of the vineyards up close, joining a small group tour was a must.

En route to the first chateau, the tour guide exalted the benefits of Bordeaux's terroir.

The French are notorious for over-indexing on terroir - for more on this - check out Judgement in Paris which explores the Paris Tasting of 1976 which is a landmark event that transformed the wine industry forever. At this legendary contest—a blind tasting—a panel of top French wine experts shocked the industry by choosing unknown California wines over France’s best.

Of course, any weekend winetaster who has visited even the most humble of wine regions has heard about terrior.

The idea that wine you are consuming is special and tasty all because the grapes were cultivated in terroir which is unique due to geography, from the soil composition of a region to the climate /the weather.

The tour guide added a third element to terroir - something I had never heard before.

He asked the group what the third element might be, I cheekily suggested marketing.

My answer drew some laughs from the other passengers in the minibus and even from the guide, but the correct response according to him was know-how.

That is the tradition, the knowledge, the special sauce that is only known by the vineyard and the winemaker.

The special know-how that cannot be read in books or learned in school. The know-how that can only be obtained by working in the fields, smelling the soil, tasting the grapes before harvest, working the barrels, passing down secrets, embracing apprenticeship, to proper marketing and selling of your product.

I loved this added terroir concept of know-how.

When working with clients, one of the foundations needed to benefit from successful communications, marketing, and branding is know-how.

That special essence that only you and your organization know how to produce on scale, repeatedly, and successfully enough for customers to keep you in business.

Know-how is seen but not fully understood.

When you stay at the Four Seasons, you know it is there.

When you exercise at Soul Cycle, you know it is there.

When you dine at Eleven Madison Park, you know it is there.

When you travel via Lufthansa Business Class, you know it is there.

Know-how.

Important for century-old vineyards, but also your communications, marketing, and branding efforts.

Sharing your know-how, embracing your know-how, celebrating your know-how is powerful.

How are you using your extraordinary know-how?

- Marc

Marc A. Ross is a globalization strategist and communications advisor working at the intersection of globalization, disruption, and politics. Ross specializes in helping global business leaders make better connections and better communications. He is the founder of Caracal Communications.

Book club is back

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I consume loads of media and have an instinct for the topics that will shape commerce and culture. Clients consult me daily, plus I am interviewed frequently by leading media outlets to provide essential and accessible insights into issues at the intersection of globalization, disruption, and politics.

As a member of the Brigadoon Book Club, now you’ll have the same information I use to provide expert advice to senior business executives, political candidates, advocacy thought leaders, and use to identify speakers and topics, all curated and sent to your address.

Hit the image below for all the details.

-Marc

Marc A. Ross is a globalization strategist and communications advisor working at the intersection of globalization, disruption, and politics. Ross specializes in helping entrepreneurs and thought leaders make better connections and better communications.

Be a pro

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Some Brigadoon participants have asked for more services and more engagement.

This offering is called Brigadoon Professional.

The service provides premium resources, coaching, and year-long experiences to drive new connections and a deeper understanding of the emerging issues shaping commerce and culture.

With four levels of activity to choose from, Brigadoon Professional is the platform with the strategy and tactics to help you upgrade your competitive advantage in the fast-changing global business environment.

Brigadoon Professional is a twelve-month membership program and begins the day of your first payment, plus you can make a one-time payment or opt for monthly subscription payments - monthly subscriptions can be canceled anytime.

Learn more - here.

Europe's lacking service economy - what it means

Services companies on balance are more productive than those manufacturing goods.

This productivity translates into higher salaries for employees and more robust returns for investors. However, services companies dominating the global marketplace is a recent phenomenon. Consider America's five most prominent companies are tech giants mainly focused on services (and in the case of Apple, some hardware), with an average of three decades existence and markets caps totaling $4.3trn between them, 35 times last year's profits.

While Europe's most prominent firms all existed in one form or another a century ago— for example, Unilever and Royal Dutch Shell, combined, they are worth under $1trn, about 23 times last year's profits.

It is not just European MNCs that are compact; the fragmented European market means there are three times as many services companies in the European Union as in the United States.

In Italy alone, Bel Paese has roughly as many firms as America, despite an economy one-tenth the size. Being undersized reduces productivity as enterprises cannot harness new technologies. Around 30% of Europeans work for a business with ten or fewer employees, three times the figure in America and over twice the rate in Japan.

Restricted market opportunities make it more challenging for companies to raise venture capital or secure favorable loans. Local, national banks can charge higher interest rates to corporate borrowers.

Similarly, markets dominated by protected national champions can get away with higher prices. This practice gives an unfair advantage against market competition as well as promoting economic nationalism domestically and global pre-eminence abroad, contrary to more traditional free markets seen in North America.

In telecoms, Europe has dozens of operators—but in no country can consumers pick from more than three or four. That means the telecoms firms have all the rent-seeking advantages of oligopolies, but none of the economies of scale available to their Chinese or American rivals.

An immediate fix would be to allow (and encourage) more European companies to merge as a first step, and then scale in Europe followed by global expansion.

"Europe's companies are too small," said Carlo Alberto Carnevale-Maffè, professor of strategy and entrepreneurship at Milan's Bocconi University in the Financial Times. "European champions could start a new cycle of exporting, not just goods but also intangibles, such as services."

With corporate Europe fostering merger enthusiasm, a strengthening economy, and a greater need for cohesiveness as a backstop against Brexit, closer organizational Europe integration is high on agenda.

Besides, the arrival of French President Emmanuel Macron and his Jupiterian vision of a "Grand Europe" has also provided a political drive to create these champions even as Chinese companies push on with potential deals.

However, there is another more matter-of-fact hurdle to creating European champions: Integrating Europe's wide range of corporate cultures that are as different as the region's cuisines.

The merger of Italian multinational eyewear manufacturer Luxottica, an exemplar of Italian family capitalism, and French lens maker Essilor to create a €50bn eyewear group is one such example.

The deal gained EU competition approval and closed earlier this summer. Reuters reports, EssilorLuxottica said it was "on track to achieve synergy targets," putting forward some 160 dedicated projects involving more than 800 employees out of a global workforce of more than 150,000.

Supply chains of both companies are to be united while the network of laboratories is reshaped to improve efficiency. The company is also searching hire a CEO by 2020.

However, even former employees and analysts are dour on the deal - mainly due to the challenges of merging cultures.

That issue is for a future post. As it is today, for the perspectives of European companies making and selling glasses, the merger of Essilor and Luxottica was a much needed positive step to make European commerce more globally competitive.

-Marc

Marc A. Ross is a globalization strategist and communications advisor working at the intersection of globalization, disruption, and politics. Ross specializes in helping entrepreneurs and thought leaders make better connections and better communications.

Talking vehicle design and urban mobility in Detroit this Thursday

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Vehicle design and urban mobility have been on my mind a lot lately. In fact, the upcoming guest speaker at Brigadoon Detroit | Salon Dinner this Thursday (October 3) will lead a discussion on the intersection of moving people with transport and moving people with design.

Growing up in Detroit I have had a long love affair with the automobile. Both of my grandfathers worked at the famous Ford River Rouge plant and my father was a senior executive at an auto components company. I grew up with the Big Three and many members of my family were employed and able to build a rich life because of the car.

I have always loved being in a car - so much so I couldn't wait to drive. I would frequently take one of my family's car on little spins around town even before the great state of Michigan officially sanctioned such behavior. Even today I find a road trip to be one of the most pleasant experiences.

But that seems to be all changing. The desire to get behind the wheel - heck even owning a car seems antiquated these days.

Young people are not getting driver’s licenses so much anymore. In fact, no one is.

According to a 2016 study by Michael Sivak and Brandon Schoettle at the University of Michigan Transportation Research Institute, the percentage of people with a driver’s license decreased between 2011 and 2014, across all age groups. For people aged 16 to 44, that percentage has been decreasing steadily since 1983.

It’s especially pronounced for the teens—in 2014, just 24.5 percent of 16-year-olds had a license, a 47-percent decrease from 1983, when 46.2 percent did. And at the tail end of the teen years, 69 percent of 19-year-olds had licenses in 2014, compared to 87.3 percent in 1983, a 21-percent decrease.

Among young adults, the declines are smaller but still significant—16.4 percent fewer 20-to-24-year-olds had licenses in 2014 than in 1983, 11 percent fewer 25-to-29-year-olds, 10.3 percent fewer 30-to-34-year-olds, and 7.4 percent fewer 35-to-39-year-olds. For people between 40 and 54, the declines were small, less than 5 percent.

Kara Swisher penned her March 2019 New York Times column with the headline = Owning a car will soon be as quaint as owning a horse - The shift away from private vehicles will happen faster than we think.

In business as in politics, it is important to be mindful that demography is destiny and the trend is your friend.

So what do the trends of fewer people getting driver’s licenses and a major thought leader using the word quaint to describe car ownership mean for the future of vehicle design and urban mobility?

I have some ideas, but I am not completely sold on my viewpoints. I am fully aware I biased because I love a car and the freedom and purpose it provides. At the same time, I know living in a dense urban core is far different than living in a sprawling suburban metroplex.

Just last week I took a meeting just outside the gates of the White House and used a water taxi and a shared pedal-assist electric bike to get there.

My transport choices have come a long way from breaking the law to go on a joyride.

Even if you live in a one-vehicle household like me, it is clear at certain times we want some private mode of transportation as well as access to shared and public modes of transportation.

In the editor's letter at the start of June's Monocle magazine, Tyler Brûlé recalls his experience in Milan where one of his most interesting observations came for an industrial designer who proclaimed that mobility design isn’t going to be all liquid, streamlined shapes but that, rather, we’re heading for a very boxy future.

“As speed isn’t going to be the key aspect for future personal mobility, we don’t need to have pointy vehicles,” said the designer. “City roads will all have speed limits that will be 30km/h – max. This means we’ll be looking for space efficiency and that will mean boxy shapes allowing for more headroom, bigger doors, and more seats. For designers and auto brands this is a huge challenge as differentiation will be very difficult: a box is a box is a box.”

Brûlé suggested the designer seemed frustrated by the challenge ahead for transportation but it could be argued that the industry has already found itself in a place that’s not far from where mobile-phone design has ended up.

Just as a Huawei device looks very similar to an iPhone as well as any Samsung smartphone, the same will probably happen to automotive design: shared designs and similar shapes produced in the same factories but with different badges.

If our vehicles of the future do end up being boxier, more of the same, and less unique, Brûlé suggests it likely that much of what will make transportation experiences more premium will be what happens on the outside. That is, where our vehicles are taking us and hopefully allowing us to pursue other more productive tasks than crawling through commuter traffic.

Regardless of the shape and speed of the vehicles of the future - to make any of this successful and useful will call for proper infrastructure.

As cities figure out how to get more people off the road, they need to make public transportation and shared options feel more premium and more useful.

If you’re keen to discuss this topic and learn more on the vehicle design and urban mobility, then join me in Detroit this Thursday for a Brigadoon salon dinner.

- Marc

Marc A. Ross is a strategist and advisor working at the intersection of globalization, disruption, and politics. Ross is the founder of Caracal Global and specializes in helping entrepreneurs and thought leaders make better connections and better communications.