Clever Geek Handbook
8 February 2026

The Momentum Effect

Recommendation

Apple’s customers love its products. They line up overnight to be the first to buy its newest offerings. They form user groups, becoming Apple “tribe” members. With such loyal customers, Apple has attained self-sustaining business momentum. How did it achieve this rank? Do its managers spend their time slashing costs? No, Apple’s leaders focus on developing products that people feel they simply must have. In this carefully conceived, comprehensive book, business professor and consultant J.C. Larreche examines the way firms that have such momentum gain it and sustain it. The book is dense and it uses a fair dose of jargon to convey the power of momentum. Yet, Larreche’s lesson that product quality and customer satisfaction (or, better, adoration) are the roots of momentum comes through clearly. It might cross your mind that if you could create products that engender as much devotion as the iPod, well, you already would have done it. This book sets out to show you how. BooksInShort recommends this treatise on innovative, customer-driven products and services to executives who want to pump up their products and their sales.

Take-Aways

  • Business leaders must set their sights high. Aim for spectacular growth and profits.
  • Such growth requires momentum, which comes from great products and services that consumers love.
  • Many companies focus too much on cost cutting instead of concentrating on researching and developing better products and services.
  • Firms without momentum overspend on marketing and underspend on quality and R&D.
  • Firms with momentum do not need excessive marketing. Consumers seek their products and provide word-of-mouth recommendations.
  • To create value, use “value extraction” to boost “internal efficiency,” “value capture” to increase market share and “value origination” to create new products.
  • Superior goods are “power offers” that build customer loyalty and retention.
  • To develop such products, seek “compelling insights.” Listen to consumers to discover what they know they want and what they want but don’t yet recognize.
  • Creating great products is an iterative process of constant improvement.
  • To create momentum, follow the “MDC action roadmap: mobilize stakeholders, detect sources of friction and insights, and convert customers.”

Summary

The Importance of Momentum

Businesses should aim for superlative growth that beats expectations every year and moves them well ahead of their competitors. This type of growth depends on momentum, not just marketing. One study shows that firms that capitalized properly on their momentum increased “shareholder value 80% above the Dow Jones Index” over a 20-year period studded by growing revenues and profitability, effective marketing and lower advertising-to-sales ratios.

“Momentum accumulates energy from its own success, and provides ever-increasing acceleration for firms smart enough to build and harness it.”

“Momentum-deficient firms” bog down with inferior products, fail to develop new, better products, lack creativity or are lacking in some other way. To make up for these inadequacies, such businesses tend to resort to “heavy-handed marketing” to force-feed their products to the public. Because they overspend on marketing, they have less money for the polished operations and innovative research and development (R&D) activities that could result in superior products. Such companies are in a momentum-stifling rut.

“The unique combination of factors that creates exceptional growth is too important to be left to entrepreneurial Darwinism or corporate chance.”

Toyota is a momentum-driven firm. It focuses on satisfying its customers and constantly developing new value (for example, the Prius and the Lexus) so it can stay ahead of the pack. In contrast, American auto manufacturers, while leaner, have created some products that did not earn consumer enthusiasm, despite substantial advertising expenditures, sales promotions and discounts. Meanwhile, Toyota has risen to the top position in auto sales worldwide, “riding a fantastic wave of momentum.” Of course, higher marketing expenditures can build profits, but firms with momentum don’t have to overspend on advertising to grow. Businesses with momentum follow the motto “First build your wave, then ride it.”

“Momentum Strategy”

To achieve momentum, businesses must create value three ways:

  1. “Value extraction” – Develop “internal efficiency.”
  2. “Value capture” – Increase market share by beating your competitors and making sure you are getting the most from your partnerships and alliances.
  3. “Value origination” – Create new merchandise or services that appeal to consumers. Center all your efforts on your customers. Value capture and value extraction depend entirely on value origination, the activity that offers maximum growth potential.
“Momentum is cumulative. As a firm moves forward...constantly improving its power offer, its momentum increases, accelerating its progress as it pulls further...away from its more limited competitors.”

Many firms become mired in value extraction, beset with “restructuring, downsizing [and] outsourcing,” and absorbed by quality management programs. Emphasizing value extraction alone is a mistake. Instead, companies should broaden their approaches and build strategic momentum by trying to achieve these conditions:

  • Create attractive products or services that customers want – This results in growth that companies can nurture and promote to develop momentum.
  • Grow at a competitive rate – Make your competitors play catch-up all the time.
  • Build opportunities with great products and strong customer engagement – Focus on developing products or services that people feel they must have. Firms that achieve this primary goal can use marketing efficiently to reinforce and complement “customer traction.” They do not have to wage costly battles against “market resistance.”
“Momentum-powered firms come in all shapes and sizes, in all sectors, and in different times of business history, but the one thing they all have in common is a positive ambition.”

Restructuring and cost cutting can help companies extract additional value, but they do little to promote growth. Growth requires originating “new sources of value from customers,” as Apple did with the iPod.

To grow, develop a momentum plan based on the “twin engines” of “momentum design” and “momentum execution.” Momentum design, which gives your strategy traction, means creating products customers will want even if you don’t stage massive marketing efforts. Such irresistible products are called “power offers.” Momentum execution creates movement in the market that overcomes customer resistance and generates “vibrant buzz.” Momentum itself comes from linking traction and movement, first by “designing a power offer” and then by “executing” it. This generates momentum only if the offer is truly enticing, like the Wii or Prius. A weak offering kills momentum.

“Compelling customer insights are at the heart of a momentum strategy.”

Momentum design requires these four elements:

  1. “Compelling insights” – Strive to develop a deep understanding of what motivates your customers, what they want and what they value. This element presumes that your company’s leaders share ambitious product development goals.
  2. “Compelling value” – Moving beyond function and cost, product designers must explore the “deepest human drivers,” such as “customers’ dreams” and “fantasies.”
  3. “Compelling equity” – Pay attention to the value your customers provide to you, like innovative product recommendations or supportive public opinions and word-of-mouth.
  4. “Power offers” (design) – Design goods and services your customers will love. “Power” refers to the product’s ability to attract customers and spur business growth.
“Momentum is dynamic. In business, success can vanish in a flash unless it is constantly renewed.”

Momentum execution requires four more elements:

  1. “Power offers” (execution) – Make your great new offering a commercial reality your customers can acquire. This is an iterative process; the initial versions of products seldom are as good as the later versions. Companies must constantly tweak and improve their products, using customer feedback to make them as good as possible. Be aware that “the gap between the design of a power offer and its execution can be enormous.”
  2. “Vibrant satisfaction” – Great products lead to exuberant customer fulfillment.
  3. “Vibrant retention” – Such strong customer satisfaction makes buyers loyal.
  4. “Vibrant engagement” – It also leads to highly engaged customers. iPod customers routinely buy accessories for their iPods and download numerous recordings.
“Customers develop their perceptions of value by intuitively trading off perceived benefits against perceived costs.”

Together, these eight elements can “ignite momentum” for your company, particularly if it is “externally focused, not internally obsessed.” Your product must be new or superior to an old product to increase momentum. Smaller, more nimble businesses often find it easier to develop momentum than large ones. Big firms’ size and complexity can get in the way, though giant firms certainly can achieve self-sustaining momentum. Just look at Toyota.

Getting Started

First, try to develop “compelling insights” about your products or services. Such insights are the “launchpad of momentum.” Highlight ways to serve your existing customers better and to draw new customers. Do not rely solely on “traditional management analysis” to develop these insights. To systematize the way you build insight, create an “insight discovery matrix” that helps you investigate consumers’ desires via four “discovery paths”:

  1. “Knowing-doing” – This relates to needs both the company and its customers recognize. If you are aware of an area where your customers are unhappy, fix it as quickly as you can.
  2. “Listening to customers” – This tells you about needs your customers feel that your firm doesn’t perceive. Listen to your buyers explain what matters in their own words.
  3. “Customer learning” – This deals with things the firm knows that customers may not know, but can learn, such as a product’s special features.
  4. “White discovery path” – Search for needs that are “currently unknown” to the firm and its customers, as Internet browsers once were. This is “virgin land blanketed with snow.” An undiscovered need can inspire new products. Your intense knowledge of your customer is a valuable plus in product development and will help you gain momentum.

The Concept Behind the Products and Services

Your power offers will unfold as you build your perceptions about your customers. Your study of what they value should uncover the right touchstone for developing strong customer traction. For example, for Wal-Mart, this conceptual proposition is “community.” The right concept will resonate strongly with targeted customers so that the product it inspires will sell itself profitably.

“Power offers...deliver compelling value to customers, who in turn offer compelling equity to the business.”

This product design concept, called “power crafting,” delivers superb customer value while reaping profits. Power crafting involves everyone in your organization who works on a product as it goes through “technology, design, manufacturing, pricing, packaging, advertising, promotion and distribution.” Plan to spend a great deal of time polishing and perfecting your power offer, making sure that everyone involved understands its concept and its customer. See the power offer as a two-way winner that delights the customer and enriches the company. Constantly adapt and improve your power offer to make “design and execution” symbiotic. If you do this correctly and satisfy your customers, you will build the kind of enthusiasm that generates cross-selling opportunities and valuable word-of-mouth. This is execution that counts, momentum that builds on itself. The three-step “MDC action roadmap” can help you sustain this momentum:

  1. “Mobilize stakeholders” – Make sure your staff continues to provide “a momentum-building experience.”
  2. “Detect sources of friction and insights” – Eliminate factors that slow momentum; boost factors that enhance it.
  3. “Convert customers” – Draw more consumers with your power offer.
“Even the most talented and experienced business leaders totally underestimate the astonishing returns that momentum can generate.”

Of course, creating this kind of momentum relies on developing a power offer customers truly love. Measure the response it gets to confirm that you’re delivering maximum satisfaction and increasing retention. The longer you keep your customers, the greater your profits will be. Retention “offers an extraordinary acceleration of profitable growth.” Use the versatile MDC approach to guarantee vibrant engagement, where satisfaction enhances retention, which builds more satisfaction, which reinforces retention, in a nice profitable cycle. Thus, your momentum grows and becomes self-sustaining. That’s how Apple, Toyota, Nintendo and other firms that delight their customers benefit from “the momentum effect.”

“Momentum is a journey, not a destination.”

Are you a “momentum leader”? If so, you know your customers are your true “sources of value creation.” That is how Sam Walton built Wal-Mart. He understood his customers intuitively and completely. He made them the center of Wal-Mart’s operations, and the purpose for every action the company took, large and small. Walton never forgot that his stakeholders – his employees, vendors and suppliers – were customers as well. “If you want the people in the stores to take care of the customers, you have to make sure you’re taking care of the people in the stores,” he taught.

“Momentum...Some hold onto it. Most don’t.”

You cannot gain momentum unless your employees and other participants are engaged in the effort. Otherwise, any momentum you develop will fade quickly. Develop a “momentum culture” at your firm that is devoted to customer satisfaction, innovation and exploration. Help your firm adopt Hewlett-Packard’s long-held axiom: “Believe that together we can do anything.”

Create Your Own Wave

Momentum-driven firms build on their knowledge of their customers to “set the momentum effect in motion and to maintain it.” This gives them great potential to create exceptional growth and secure continuous profits. The premise behind the momentum effect approach is straightforward: Find out what customers really want and deliver superior value to supercharge your company’s growth. In the process, you can manage your resources more efficiently and economically. Don’t wait to catch the next big wave that will turn everything in business upside down and inside out. Instead, create your own giant wave, a stream of profitable, beloved products or services that will swamp your competition and leave them foundering as your firm steadily steams ahead.

About the Author

J.C. Larreche holds the Alfred H. Heineken Chair at INSEAD. He is a consultant to numerous global Fortune 500 corporations and the founding chairman of a strategic development consultancy firm.

Read summary...
The Momentum Effect

Book The Momentum Effect

How to Ignite Exceptional Growth

Wharton School Publishing,
 


8 February 2026

Investing in People

Recommendation

Human resources managers work hard to create value for their companies. Still, many firms treat HR as a cost center and outsource a number of its processes, such as benefits management, payroll and recruiting. Wayne Cascio and John Boudreau argue that HR managers need to stop trying to sell their functions based on service delivery. Instead, they say, HR should use decision management tools and analytical models to measure and report on its impact as a fiscal and strategic resource. The authors discuss ways to evaluate and manage major areas of HR practice, including absenteeism, hiring, staffing, benefits, work-life balance, training and employee attitude. They also show you how to apply mathematical models by working through real life case studies. BooksInShort suggests approaching this book as a practical guide rather than an academic or statistical treatise. While handling the math might be a bit challenging, HR professionals will gain a great deal by becoming more familiar with these evaluation tools.

Take-Aways

  • Measuring and analyzing human resources (HR) activities is useful only if the information helps managers make talent-related decisions that improve the firm.
  • HR should use analytical tools to measure the quality of its choices and to assess its fiscal impact on the company.
  • HR can apply these tools to measure and improve every facet of its practices.
  • These areas include absenteeism, hiring, staffing, benefits, work-life balance, training and employee attitudes.
  • If your absenteeism measures are too stringent, you will drive off good employees.
  • Employee attitudes and customer satisfaction correlate, but causality isn’t proven.
  • Measure the utility – that is, the profit impact – of your staffing and talent decisions.
  • Focus on pivotal positions where staff members have a direct effect on profitability.
  • Probationary programs are costly, but they’re often less expensive than firing, and they lead to faster diagnoses of problem employees.
  • Measure the business impact of your training and development programs to make decisions about their utility.

Summary

HR Measurement and Strategy

People keep saying, “You can’t manage what you don’t measure,” because it is true. Some human resource managers measure the wrong processes simply because those activities are easy to assess. To pick productive programs to measure, first identify the outcomes you want as an HR manager. Then determine which activities lead to those results, so you know what to measure to get the data you need to manage those business engines. Measuring HR activities and creating reports is useful only if it enables you to make decisions that strengthen and improve your organization. The most crucial HR decisions involve hiring, retaining, developing, encouraging and promoting the best talent available for any given position.

Decision Science and HR

Most HR measurements track performance, such as how much people learned in training or how their peers rate their work. But that is not all you need to know. You need information that shows HR’s financial and strategic impact, as well as analyses that help you select projects.

“HR measurement is valuable to the extent that it improves vital decisions about talent and how it is organized.”

As you decide what to measure, avoid a few common pitfalls. For example, do not look at two seemingly related events and assume that one causes the other. Correlation does not prove causality, though it can be instructive in your analysis and decision making. To decide if a project would be worthwhile, use basic financial concepts, such as the time value of money, and calibrate the fixed, variable and opportunity costs. Return on Investment (ROI) is very indicative in a cost-benefit or a cost-effectiveness analysis. Use weighted factors to assess a project’s or program’s utility. To build HR’s strategic impact, use the “LAMP” framework: focus on the right business Logic and appropriate Analytics, use the right Measurements and implement the best Processes.

“We envision a future in which leaders throughout organizations increasingly understand and are held accountable for the quality of their decisions about talent.”

Consider how you might analyze crucial factors, particularly cost, in several areas of HR practice, including absenteeism, separation, benefits, staff attitudes, development, work-life balance, hiring, placement, training and cost cutting, whether through layoffs or by other means.

Absenteeism

Set careful goals as you consider the cost effectiveness of your efforts to eliminate absenteeism. At some point, the cost of turnover might become so high that the goal of 100% scheduled attendance becomes counterproductive. Absenteeism is an expensive problem, but punishing it is not necessarily as effective as using positive incentives to get people to come to work. Missing employees create costs by forcing other people to cover for them (and perhaps neglecting their own work or incurring overtime) or by halting business processes that depend on their presence, thus delaying other progress. Absences affect benefit costs, especially healthcare. A company with a large staff and an anticipated absenteeism rate might tend to overstaff, thus incurring expense and lessening efficiency. While encouraging attendance with incentives costs money, it might be more economical than overstaffing and reducing your efficacy.

Employee Separation

Many employers think that recruiting and training are the only costs of replacing an employee. While those steps cost more than most people anticipate, they only hint at the expenses your firm incurs when an employee leaves, voluntarily or not. When good people leave, you lose efficiency because their departures disrupt their teams and their projects. When you fire someone, you cauterize the costs associated with their poor performance, but then you must hire a good replacement and rebuild team effectiveness. Separation costs include an exit interview, management time, a separation allowance, unemployment taxes, lost business, hiring costs and even lowered performance while a new employee becomes acclimated. New hires aren’t cheap either. You have to advertise the open position, interview, test and sign up the new employee, and perhaps pay for relocation or for medical exams to satisfy your insurer. Beyond the costs of replacing employees, expend time, money and effort analyzing why turnover is occurring.

Health and Welfare

Most large companies offer employee wellness and assistance programs in order to compete for and retain talent while controlling some healthcare costs. Lifestyle choices and chronic healthcare issues are connected, so companies try to lower their costs by helping their employees live more healthfully. Some employers even impose lifestyle taxes on staffers who smoke, remain overweight or develop costly health conditions. Some firms screen potential hires for dangerous activities, such as skydiving, while others require employees to be nonsmokers on and off the job. When staffers experience personal problems, providing them with access to counseling and other aid can help resolve these situations quickly, so the firm doesn’t lose a good person permanently due to a temporary problem. Many studies prove the cost effectiveness of Workplace Health Programs (WHP). For every dollar that well-run programs cost, they return $3 to $6 in benefits.

Employee Attitudes

Most HR managers instinctively agree that engaged, happy employees serve customers better, and that this increases customer commitment and, thus, revenues. Studies show a correlation between employee attitudes and customer satisfaction, but they do not demonstrate if one causes the other or if the two are related. Over several studies, Gallup interviewed many thousands of workers and managers. It identified 12 positive “worker beliefs” or “measures of employee satisfaction-engagement,” including, “I know what is expected of me,” “My opinions seem to count,” “...I have received recognition or praise” and “The mission/purpose of my company makes me feel my job is important.” Employees who agree with these statements have lower turnover and better performance. If you embark on a program to change employee attitudes, be patient; neither change nor improvement will be immediate. Try your best, and measure how your efforts seem to relate to the desired outcome.

Work-Life Balance

For the past several decades, executives have competed for top spots by dedicating their entire lives to their firms. Some, such as GE’s Jeffrey Immelt, brag about having worked something like 100 hours per week for more than 25 years. This total commitment to the job filtered down into companies run by such driven executives, and the strain damaged many workers’ personal lives and families. Employees finally pushed back and demanded a more favorable work-life balance. Younger workers prefer companies whose corporate cultures support their personal lives. Those with children want their employers to support healthcare, childcare and flexible work conditions. Many employers find that creating “flexible, cafeteria-style benefits” allows them to be more supportive. While CEOs might have to focus totally on work, most employees do not want to compete for such a position. Some very talented people will share their gifts generously with the company, while still focusing much of their energy on their outside lives. Analyze the cost of work-life balance programs against their benefits in terms of recruiting, retention and the value employees create.

Staffing

Employees can contribute more to your company if you match their individual talents appropriately to their jobs. Most companies have (or want to have) systematic selection procedures to find, recruit and place people in the jobs where they will perform best. Obviously, all staffing systems incur costs, but the right approach will have benefits beyond its expense. Models that you can apply to measure the tradeoffs in staffing systems include the Taylor-Russell Model, the Naylor-Shine Model and the Brogden-Cronbach-Gleser Model. Taylor-Russell produces a selection-system success ratio by dividing the number of successful hires by the total number of people hired. Naylor-Shine tries to increase its criterion score for all employees rather than trying to sort out good and bad employees. In simple terms, the Brogden-Cronbach-Gleser model uses “linear regression” to relate utility (dollar value) to “the cost of selection” and other variables. Each model has its advocates and each one can do some things the others cannot do.

Talent and Value

Getting the right talent in the right slot is a crucial aspect of HR, but some positions matter more than others. As you consider how your firm uses talent to create value, identify which jobs have more financial impact in your value chain. These pivotal positions deserve most of your attention and effort. For example, Disneyland managers found that the performance variation between the best and worst Mickey Mouse actors was small, partly due to the way the job is structured, but the difference between the best sweepers and the worst ones was huge. Given the importance customers place on park cleanliness, high-quality sweepers are “pivotal.” Sweepers also give guests directions and respond to their needs. The actor playing Mickey is obviously vital, but the sweeper job has higher staffing utility because of a bad sweeper’s negative impact. Your utility decisions do not have to be perfect, but do correct any process errors that lead to decision errors.

Selection

Approach hiring decisions as financial investments. Compare the value of the job’s future salary and benefits, plus its current hiring costs, against the estimated benefits and value the employee will generate. If the calculation is positive, make the hiring investment. But you must hire the right person. Bad hiring decisions often don’t manifest until the person has performed poorly for some time. Since dismissing people is costly, make use of probation periods. Determine if the accuracy that a probationary period adds to your hiring process is valuable enough to outweigh its costs. Some companies use multiple selection tools to aid in more accurate staffing decisions. They conduct background checks to verify resume claims, hold multiple rounds of interviews, and use assessments to screen job seekers for work attitudes and soft skills.

Development

HR teams are constantly pushed to prove the value of their development programs. Companies spend vast sums on training and adapting corporate culture, and managers want to know the results. Companies want every competitive advantage, but they must cut any costs that do not add value for the customer. Businesses face radical changes in the nature of the workforce and the skills needed to compete. They must train existing employees in new technologies while evaluating new hires for their ability to learn and adapt. Someone who is a tech expert today, but who can’t adapt to tomorrow, will become a liability and grow obsolete. Some companies are evolving on-the-job training without costly travel or classes. Evaluate your training programs carefully, and don’t assume that you are or aren’t getting benefits based simply on cost and anecdotal evidence.

Using Talent-Investment Analysis to Drive Change

Decision tools can help you avoid mistakes if you need to cut costs because of an immediate financial crisis. Poorly considered layoffs might save money, but they also might weaken your competitive position by driving out pivotal talent. Clear cost-benefit analysis also can help you avoid the groupthink that leads many companies to slash healthcare and employee support benefits to preserve cash flow. Such short-term savings might cost your company more in the long run through higher turnover and lower morale.

“At Disney, sweepers are actually front-line customer representatives with brooms in their hands.”

A contented, committed workforce is an asset. Many talented people are glad to make valuable contributions but do not want to put in the 70 to 100 hours per week required on the CEO track. If you have a passive program that treats all your workers as if they are competing to run the company, think about what it is costing you. Are some of your top recruits choosing to work for a competitor with more thoughtful work-life balance policies? You put a lot of effort into building an effective chain of suppliers, so shouldn’t you be just as careful in how you recruit, hire, retain and develop the employees that convert that supply chain into value? This includes keeping the skills of your current workforce up-to-date. The way you measure the effectiveness of these programs will differ according to your organizational needs, but to get hard numbers, use the basic tools of cost-effectiveness, utility and the time value of money. Then you can understand and manage your HR initiatives according to their financial contributions.

About the Authors

Wayne F. Cascio teaches at the University of Colorado, Denver and wrote Costing Human Resources, which is considered a classic in its field. John W. Boudreau teaches business at USC, and is recognized as an authority on human capital and competitive advantage.

Read summary...
Investing in People

Book Investing in People

Financial Impact of Human Resource Initiatives

FT Press,
 


8 February 2026

Another One Bites the Grass

Recommendation

Author Simon Anholt, an international advertising consultant, says that the dangers of globalization can be just as formidable as the opportunities - if you fail to research the culture of your new markets. We’ve all heard the marketing legends of companies that embarrassed themselves by launching products into foreign markets without checking the translation of their brand names. Anholt retells several of these tales to illustrate the perils that await global firms that don’t take culture into account. Meshing advertising and marketing strategy, he presents a systemic approach to cross-border product expansion. GetAbstract recommends this book not only for its insightful, culturally adaptive marketing methodology, but also for the genuinely entertaining examples that might just make you laugh out loud.

Take-Aways

  • More companies are marketing products and services abroad, but most advertisers don’t understand other cultures.
  • Adapt your advertising to cultural differences.
  • Translated ad copy rings false; it doesn’t reflect the nuances of language that affect readers.
  • Before selecting a product name, research the reactions to it or you could mistakenly choose a name with undesirable connotations.
  • Being culturally sensitive is critical to good advertising.
  • Much advertising is drawn from popular culture.
  • Culture mapping gives you a picture of how people will respond to different brands.
  • To develop a global brand, define its essential idea, and adapt it to different cultures.
  • Aim for conceptual creativity in seeking unexpected angles on familiar things.
  • Use smart centralization by having a single agency clustered around a brand.

Summary

Adapting Advertising to Culture

In today’s global marketplace, more and more companies are marketing their products and services abroad. However, the advertising industry is not keeping pace with this development, because many advertisers don’t understand the needs of other cultures.

To develop globalization, follow a strategy of "smart centralization," which is based on creating real international communications for a brand. Start with the basic idea you want that brand to convey; then adapt it to the culture in which you are promoting it, using a single central agency dedicated to that brand. You need this flexible approach to make your brand "fit to travel." This concept is based on being sensitive to the culture of your overseas consumers. Consider this at the very beginning of the brand development process - not at the end.

“Saying the wrong things in the right language is simply making it easier for consumers to understand how little you understand them.”

Given cultural differences, the traditional network approach to advertising doesn’t work in other countries and probably never will. Rather, in international advertising, small agencies are especially adapted to provide culturally customized services through smart centralization.

Using Words With Care

Be careful how you use words in ads or in naming products, because you can easily offend consumers in another culture or undermine your product. Consumers have very sensitive "cultural antennae," so they can readily recognize when an ad isn’t really meant for them.

“If the bulk of the message isn’t communicated visually, there’s precious little chance it will get through, so agonizing over the correctness of the words rather than the correctness of the visual and cultural language shows fundamentally misplaced priorities.”

Many advertisers think in terms of translating advertising copy. But that approach never works, since the words don’t work alone to make the copy work. The way words are combined and the subtle nuances of language most affect the reader. You can’t convey these subtleties in a translation, because advertising is based on culture, not the words themselves. People may forgive you when you get their language and their cultural references wrong, since you sound like a foreigner. But when you speak like a local, but then say the wrong things, it’s worse, because you show a deep lack of understanding of the culture.

“Some of the most powerful brand names in the world are actually little more than empty vessels, into which one pours brand equity through the diligent application of marketing.”

Thus, don’t get your original copy translated. Rather, have fresh copy written by someone steeped in the language and culture who can convey what you are trying to say. Even if you have a highly competent copywriter, a translation will seem stilted and will lack the fluidity and dynamism of original writing. It will always ring slightly false. Instead, brief a skilled copywriter from that market on the message you want to get across and, preferably, don’t show that writer any copy from another language. Just let that writer write.

Choosing Names and Slogans

Be careful about name choices. Research any product or brand names in the relevant marketplace before you launch it. Otherwise, you can make disastrous mistakes. One company launched an AMC car dubbed "Matador" in South America, thinking the name meant "bullfighter." However, the correct name for bullfighter is a "torero" and, out of context, "matador" means "killer."

“The best advertising in the world won’t get you very far on the international stage unless your brand is fit to travel.”

Even if you have a product name that’s very successful in one country, it may not work in another country. If so, change it. For instance, the Japanese toilet paper "Krappy" is not one that would travel well into an English-language market.

To find a genuinely international brand name, use an international creative team. Brainstorm a longer list of names and do a disaster-check in different countries to be sure you don’t have a problem. Some of the most powerful brand names start off as simply "empty vessels" into which you pour brand equity by good marketing. Start with a name that is distinctive enough for your company to own it fully and then create an aura of greatness around it with your marketing techniques. For example, the word "Nike" - originally the name of the ancient Greek goddess of victory - came to be associated with a cutting-edge brand for youths.

“Translating advertising copy is like painting the tip of an iceberg and hoping the whole thing will turn red: what makes copy work is not the words themselves, but subtle combinations of those words, and most of all the echoes and repercussions of those words within the mind of the reader.”

Be careful about slogans, too, because they don’t travel well. For instance, the "Just do it" slogan for Nike wouldn’t work well in France, since it is too blunt. To be polite, the French normally ask someone to do something, rather than giving an order.

Developing a Sensitivity to Culture

Becoming culturally sensitive is critical to good advertising. It is easy to be blinded by your own culture, because it is so much a part of your identity. You acquired your use of language through a kind of osmosis, so you think of it as very natural. However, your own culture shapes your perception and behaviors, which can be a barrier to understanding other cultures. If you come from a country with a long history of power, such as the U.S. or England, you may approach other cultures with an unconscious sense of superiority.

“Advertising is not made of words, but made of culture.”

By contrast, advertising should be culturally aware. It should speak the consumers’ culture as well as their language. In fact, much advertising is based on popular culture. It builds on what is on TV, what is happening in the news or the latest music. The best ads follow changes in popular culture so closely that you can hardly tell whether the ads or the changes came first.

“Advertising works when consumers believe they are being spoken to by somebody who understands them.”

Build in the cultural needs of your overseas consumers at the beginning of the advertising process. You can recognize the personality of different cultures through culture mapping, which provides a picture of what most people in the country are like and how they will respond to different brands. A number of such models exist. One common model proposes these parameters:

  • Power distance - How do people handle inequality in society?
  • Uncertainty avoidance - How threatened do people feel by unfamiliarity or ambiguity?
  • Individualism/collectivism - How loyal or self-interested are people, and how interested are they in their families, or in larger groups or the society as a whole?
  • Masculinity/femininity - To what degree are masculine values, such as achievement, held to be important, as compared to feminine values, such as altruism?
  • Orientation - Do people have a long-term orientation or a short-term orientation?
“The only way to produce effective, distinctive and creative copy for any market is to brief a skilled copywriter from that market to write the thing in his or her own language, ideally with no reference whatsoever to existing copy in other languages.”

As you apply this model, you can discern differences among cultures. For instance, the success-oriented U.S. is a more masculine culture than Scandinavia, where there is a more feminine culture. Thus, promoting a brand as "big, fast, smart, powerful and success-oriented" might work well in the U.S., but not in Scandinavia, where qualities such as "small, slow and wise" have more appeal. U.S. culture is strongly individualistic and values personal opinions and expression. By contrast, in the collectivist Japanese culture, qualities such as humility, indirect communication and furthering the common good are more highly regarded.

“Failing to research something as crucial as the name of your product in the relevant marketplace before you launch is staggeringly idiotic behavior.”

Even with the globalization of the marketplace, national culture is still very much prized. In many countries, local cultures and subcultures feel threatened by the "erosion of their specialness and difference." And, many are fighting to reclaim their traditional languages and religious traditions. Thus, you need cultural sensitivity to sell products in another culture.

“The marketing and advertising industries’ persistent failure to see culture as their biggest challenge is the main reason why, historically, there have been so many more failures than success in international marketing programs.”

This sensitivity can be measured on four levels, starting with ignorance and intolerance and a kind of condescending political correctness where you try to ignore differences using your "superior influence" to protect those who are different. Then, comes tolerance and respect for differences. True cultural sensitivity stems from wanting to know more about those from another culture for increased understanding. Cultural sensitivity creates successful international marketers and businesspeople, as well as politicians, diplomats and journalists.

Creating a Global Brand

Big corporations that try to develop international brands find that problems reside in their complex chain of command or in the disconnect between those who decide brand policy and those who speak for the brand in each market. Seek richness in a brand as long as it remains true to its essential idea or archetype. Internationally, your brand needs to "embrace many diverse qualities," yet it has to stay true to type. The brand must maintain its core personality even as you show people from different cultures who speak different languages different ways that it appeals to them.

“Because our culture is as much a means of perception as it is a system of behaviors and attitudes, we can only observe other cultures through our own. In order to view another culture objectively, we would first have to abandon our own, and this is something which most of us, most of the time, just cannot do.”

Because you probably don’t know what kind of traits work in each country, don’t decide on your branding construction from the center. Rather, determine the brand’s international characteristics based on the way consumers in each country act and perceive things. Many international companies build their communications and marketing actions from the inspiration of the "lead country," "lead language" and "lead culture." For a successful international campaign, avoid that approach. Instead, define your brand’s fundamental essence in a culturally neutral way so the brand itself is constant, but then use a mode of communication that is tailored to the different needs of consumers in different cultures.

“Cultural sensitivity is specially important for people who wish to sell their products (or their clients’ products) in other countries.”

Make most of your cultural adaptation and changes in the copy itself, since visual elements travel more easily between cultures and that’s where you will spend most of your production budget. Just check your images carefully to avoid problems (such as white being associated with purity in the West but with death in the East). You can probably standardize images, and then use the words in the ad to convey cultural differences. This is where you can encourage the greatest creativity in sharing the message of your brand with another culture.

The basic trick to being creative internationally lies in looking for "unexpected angles on familiar things." Aim for conceptual creativity rather than executional creativity, though such creativity is quite rare. Executional creativity involves finding interesting ways to convey a message, such as a dramatic new digital post-production treatment. But, with conceptual creativity, the focus is on a new idea, and sometimes these ideas can transcend cultural and linguistic difference. A good example is the Avis line: "We try harder." The notion of trying harder works well in any language or culture.

The International Advertising Structure

To achieve cultural sensitivity and greater creativity, restructure the way your advertising is provided. The big network approach may work for large, complex, mature, multinational corporations. Their well-established marketing activities and high budgets help local full-service agencies be effective. However, large networked agencies often aren’t well suited to smaller-budget international accounts. Sometimes independent agencies work in loose alliances or "independent networks" but, problematically, they are actually still part of a traditional network. Instead, use "smart centralization." Centralize your global campaign’s strategic, creative and production processes into a single agency, which clusters around the brand. Then, this agency can be sensitive to both the "culture of the brand" and the "culture of its consumers."

The advertising agency is the link between the brand and the consumer. In the traditional "network agency" international model, a lead agency handles the brand in the domestic market and seeks to influence the local agencies working with consumers in foreign markets. But with smart centralization, there is no lead agency/local agency split. Instead, agency-trained individuals from each foreign market are relocated to a single central agency in one office, where they cluster around the brand and guide its development from that source.

About the Author

Simon Anholt is the founder and chairman of World Writers Ltd., an international advertising consulting firm that provides strategic services to other advertising agencies as well as to clients such as DuPont, Time-Warner, Sara Lee, Sony and IBM.

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