Tag Archive: SG&A


How many graduating university/college seniors in communications disciplines (i.e., public relations, marketing, investor relations, public affairs etc.) will utter the  worn-out cliché to hiring managers in the coming weeks and months: “I really work well with people”?

Gag!workwell

What precisely is the return-on-investment (ROI) for someone who allegedly works well with people?

How does one measure how effectively a candidate interacts with other humans?

Come to think of it if one was pursuing a career in anything and everything communications, wouldn’t working well with people be a given?

Tell me something – anything – that I don’t already know.

There are precisely 1.490 billion results when one Google’s, “I Really Work Well With People.” Surprised there are so few web instances devoted to this NOT thinking outside of the box phrase.

Almost DailyBrett will declare now, and will say it forever:

Telling a hiring manager you work well with people: 1.) Makes the hiring manager roll her or his eyes; 2.) Brings into question whether you have any creativity; 3.) Does not differentiate you from your tenacious competition for the legal tender; and 4.) Makes one wonder whether your brain has flat-lined.workwell1

Strong opinion to follow.

Tell Me/Us About Yourself?

At this point in the interview process, the hiring manager is transitioning from the requisite small talk to getting serious.

The above question, which surely will follow with “Why do you want to work for us?” is more than an ice-breaker. It is an opportunity for a candidate to systematically demonstrate ROI based upon experience, results, digital and analog skill sets and education.

Think of it this way: A dollar is a friend (same applies for pounds, euros, yen …).

An agency, corporation, non-profit, governmental agency has to spend a certain amount “friends” in the form of income statement SG&A salary, benefits, time-off and maybe even stock options to hire you as opposed to someone else or no one at all.

Why should they make this investment in your particular personality, talents and skills? Aren’t your type a dime a dozen?

Instead of the throw-away line about working well with people, how about talking about how you collaborate in teams and what you and your teammates accomplished? Everything should be first-person plural: We, Us and Our.

Teaching digitally oriented public relations, advertising, integrated marketing communications (IMC), blogging/social media, corporate communications and investor relations now at Central Washington University and before at the University of Oregon, our students were always required to work together as teams to reach assigned goals for their clients.

This experiential learning approach does not require each student to love or be loved by their teammates, which is asking too much. Instead, a hands-on collaborator needs to respect and be respected, which is the essence of being a good team player.

Instead of tired verbal Pablum, how about demonstrating with concrete examples how you teamed/collaborated with others to cure cancer, climb Mt. Everest, achieve world peace and break political gridlock in Washington, D.C.?

The candidate with real-time results, which can be quantified and verified, and who didn’t take all the credit but collaborated effectively with others, has a better chance – a much better opportunity – of being hired.

The Stark Difference Between Anxious and Interested

Let’s be generous for a second:

In most cases, the candidate who feels compelled to blurt out how well he or she works well with people (or others … a distinction without a difference) runs the real risk of coming across as hungry and anxious.workwell2

Hiring managers are not welfare agencies. They are not there to feed the hungry or heal the sick. They are there to recruit the best and the brightest to solve problems and perform miracles.

Some candidates feel compelled to incorporate “objectives” right at the top of their resumes, declaring they are seeking a position in a given field.

Well, duh!

Didn’t you already make that point in your cover letter?

The smart applicants start with a “profile,” detailing their individual value, accomplishments and what she or he is bringing to the party. These wise contenders immediately demonstrate through concrete examples their ROI.

They also speak in the language of the company, the agency, the non-profit, and the public sector agency.

Instead of “you know,” “you guys,” “me and my team,’ and Almost DailyBrett’s favorite, “stuff,” the prepared applicant talks about driving the top and bottom lines, fiduciary and corporate social responsibility, and enhancing SEO and SEM.

In short, they speak the language and signal it will not take long to become totally fluent in whatever serves as the Raison d’ etat for the entity doing the hiring.

Yes, the wise candidate understands very clearly how the hiring manager’s company makes money, which even applies to non-profits.

As you will note, this is not the first time your author has written about this subject. Just like cock roaches this offending phrase instead of going away is actually multiplying.

It’s time … not it’s past time … deep-six this horrific, “I really work well with people,” before another hiring manager has to excuse herself or himself from the table.

https://www.google.com/?gws_rd=ssl#q=I+Really+Work+Well+with+People

https://www.livecareer.com/interview-questions/how-well-you-work-people-you-prefer-working-alone

http://jobsearch.about.com/od/interview-you/qt/working-with-people.htm

http://www.forbes.com/sites/jacquelynsmith/2013/11/15/the-20-people-skills-you-need-to-succeed-at-work/#74d85a6264b5

https://almostdailybrett.wordpress.com/2015/07/18/online-college-not-good-enough-for-pr/

https://almostdailybrett.wordpress.com/2014/06/08/i-really-work-well-with-people/

 

 

 

“This is a dangerous moment for the life sciences industry that is increasingly vital to the U.S. economy.” — Lead Wall Street Journal editorial, Sept. 23, 2015

There are dirty-little secrets out there …

If one buys low and sells high, there is a resulting profit.

If demand is high and supply is low, prices rise … profits are likely.

And some forward-looking companies may take those profits and plow them right back into R&D (research and development), resulting technological breakthroughs may ensue, which may lead to more profits … and more R&D. Sounds like a plan to Almost DailyBrett.biotech

There are some who just don’t agree with buy low, sell high. There are some who are not enamored with supply and demand. In fact, they are declaring war on capitalistic “profiteering.”

The target du jour is bio-technology, the very folks who produce cures (e.g., Hepatitis C) and management regimes to control diseases (e.g., AIDS). One would think these biotech superstars, such as Gilead Sciences (NASDAQ: GILD), would be regarded as heroes. Alas, you would be wrong.

Certainly, there is a poster-child villain in this story.shkreli

His name is Martin Shkreli, the chief executive officer of Turing Pharmaceuticals, guilty of raising the price of parasite infection drug, Daraprim, by 4,000 percent. The 32-year-young hedge-fund manager beat a hasty retreat last week in the face of a chorus of cat calls. He is a walking-talking, first-rate public relations disaster.

Having made this point, should the entire life sciences industry, its scientists and patients, some in desperate need of breakthrough drugs, be punished for the sins of a hedge-fund manager and presumably a few others?

Here are a few more troubling price-control questions:

  • Will after-tax R&D expenditures of life sciences and by natural extension, technology companies, become the subject of regulatory-imposed quotas (e.g., no more than x percent of net income can be used for R&D)?
  • What impacts will these Washington D.C., or Sacramento-initiated command-and-control limitations have on finding cures for diseases or next generation killer apps? Will there be fewer newer drugs on the market? Will there be less “destructive” game-changing technologies?
  • Will other operating expenses on the income statement also be subject to governmental expenditure controls, such as SG&A (selling, general and administrative)? For example, will life sciences, software and/or hardware companies be restricted in how much they can spend to market a breakthrough product? What impacts will these restrictions, if they become reality, have on the fiscal health public relations and advertising agencies?
  • What happens to heart disease, cancer, Alzheimer’s patients and others facing potentially fatal diseases, if the political class imposes draconian controls on new drug development … pharmaceuticals that potentially could save their lives?

Guess life’s tough, right?

Steve Jobs Turning Over in His Grave?jobsmemorial

There are ballot initiatives circulating in California – the home of Silicon Valley technology and some big league life sciences companies – that would impose price controls on pharmaceuticals and limitations on after tax R&D, marketing and presumably other operating expenditures.

Do you think that once emboldened the political elites will stop at the income statements of life sciences companies? Or would they march onto the next battle: social, mobile and cloud companies in Silicon Valley and San Francisco?

Let’s see, the price for an Apple 6s smart phone is $849.99. There are no deals or discounts on Apple smart phones. Is that price too high? Are we all entitled to have a smart phone? Should price controls be imposed on Apple smart phones, tablets, watches, Macs, iPods …?

Whattyathink Tim Cook?

Looking at the income statement for Q3, Apple generated $49.6 billion on the top line (Is that too much?).

The company paid $3.79 billion in taxes (Is that too little?).

Apple devoted $2.03 billion for R&D and $3.56 billion for SG&A (Are these figures simply way too much for research and marketing respectively?).

The company also devoted $29.9 billion for COGS or the cost to make its breakthrough products. (Does Apple really need to spend that much? Your collectivist thoughts, Sacramento and/or Washington?)

Worse yet, Apple produced a profit of $10.67 billion. Is the company (and many others) guilty of “profiteering.”

These figures are reflections of not only extraordinary success, but engineering breakthroughs, entrepreneurial spirit, calculated gambles of consumer acceptance, and of course, the risk of failure.

The whole notion of venture capital is to spend private equity on ideas that may stick to the wall, but then they may also flop. An idea may be good, but too early for consumer acceptance (e.g., HDTV in the 1990s).

77979722-87e3-430f-b0a1-29933dfa2782

One of the distinguishing characteristics of America, which makes it the land of opportunity, is calculated risk-taking of entrepreneurs. Ultimately, they have the super ideas that may lead to landmark products and with them literally tens of thousands of new jobs – not family wage jobs (whatever they are), but career path jobs.

Should we literally kill the goose that is laying golden eggs?

http://www.wsj.com/articles/the-assault-on-drug-innovation-1442964103

http://www.wsj.com/articles/the-biotech-rout-1443484644

http://www.wsj.com/articles/hillary-vs-cancer-treatment-1443007218

https://gma.yahoo.com/company-lower-drug-price-critics-called-4-000-002025809–abc-news-health.html#

http://www.apple.com/pr/library/2015/07/21Apple-Reports-Record-Third-Quarter-Results.html

 

 

 

 

 

oxymoron  (ˌɒksɪˈmɔːrɒn)
 
n  , pl -mora
  rhetoric  an epigrammatic effect, by which contradictory terms are used in conjunction: living death ; fiend angelical
 
[C17: via New Latin from Greek oxumōron,  from oxus  sharp + mōros  stupid]

A colleague recently approached asking for your author’s humble opinion about a newly created senior manager of Corporate Affairs position for a publicly traded company in the data storage space. In short order while reading the position description, your author’s cerebral alarm bells were going off.

The main responsibility of the soon-to-be anointed senior manager of Corporate Affairs would be to “execute the company’s Corporate Social Responsibility (CSR) responsibilities.” Hmmm …

Almost DailyBrett was left wondering how long it would take the company to “execute” the senior manager of Corporate Affairs responsible for CSR in the face of the next inevitable technology industry downturn. This position has all the sounds of classic SG&A (selling, general and administrative) or a corporate expense, which Finance departments will curtail if not outright eliminate.

Just as widely extolled video news releases (VNRs) of the 1990s made shameless PR firms gobs of cash while being round-filed or cut-up for “B-roll” by television station producers, the virtues of CSR are now part of every pitch made in agency reviews or RFP response cattle calls.

But is CSR in its purest form really an oxymoron? Do the words, “corporate” and “social responsibility” really belong in the same sentence? Please don’t giggle.

aneelkarnani

As Aneel Karnani of the University of Michigan Business School wrote in the Wall Street Journal www.wsj.com there are cases in which companies have done good things for society and the environment, including serving healthier foods at fast-food restaurants and offering more fuel-efficient cars. Yes, companies can be green while chasing green. http://www.bus.umich.edu/FacultyBios/FacultyBio.asp?id=000119664

But let’s keep in mind that the pursuit of profits and delivering shareholder value are the core missions of the executives in corporate boardrooms, not saving the world. In all due respect, Mother Teresa never had to lead quarterly earnings report conference calls or answer questions at annual meetings of shareholders. http://en.wikipedia.org/wiki/Mother_Teresa

“Very simply, in cases where private profits and public interests are aligned, the idea of corporate social responsibility is irrelevant: Companies that simply do everything they can to boost profits will end up increasing social welfare,” Karnani wrote. “In circumstances in which profits and social welfare are in direct opposition, an appeal to corporate social responsibility will almost always be ineffective, because executives are unlikely to act voluntarily in the public interest and against shareholder interests.”

And speaking about shareholder interests, there is this little notion called, fiduciary responsibility, that trumps corporate social responsibility each and every time. And that may not be such a bad thing.

“The movement for corporate social responsibility is in direct opposition, in such cases, to the movement for better corporate governance, which demands that managers fulfill their fiduciary duty to act in the shareholders’ interest or be relieved of their responsibilities,” said Karnani. “That’s one reason so many companies talk a great deal about social responsibility but do nothing—a tactic known as ‘greenwashing.’”

Certainly companies that act irresponsibly and end up hurting society and the environment (e.g. British Petroleum or BP “Deepwater Horizon oil spill) will be punished by vote-seeking politicians, marauding plaintiff’s attorneys, consumers, shareholders…just to name a few. It is good business to maintain a positive reputation and a strong brand…and that means also protecting that brand. http://en.wikipedia.org/wiki/Deepwater_Horizon_oil_spill

oilspillbird

Having said that, expecting companies to worship exclusively at the altar of Corporate Social Responsibility in the face of a potential double dip recession where mere survival maybe job #1 just simply doesn’t jive with reality.

As the late Ann Richards once said: “That old dog won’t hunt.” http://en.wikipedia.org/wiki/Ann_Richards

PR = SG&A?

Speaking before a group of Santa Clara University integrated marketing students recently http://www.scu.edu/, I presented them with an overly simplified but relatively accurate representation of a financial statement for a publicly traded company:

  • Total Revenues: $2.0 billion

–      COGS: $1.0 billion

  • Gross Margin: $1.0 billion

–      SG&A: $300 million

–      R&D: $400 million                  

  • Operating Income: $300 million

–      Income Tax: $50 million

  • Net Income: $250 million.

 

After providing them with a few nanoseconds, I asked the undergrads where does public relations or marketing or brand management fall within this financial statement. The unanimous answer following a bout of serious contemplation was SG&A or Selling General and Administrative. http://en.wikipedia.org/wiki/Financial_statement

I then inquired whether they were comfortable with that answer. What is SG&A? The answer is that selling, general and administrative is an “operating expense” on a financial statement. http://en.wikipedia.org/wiki/SG%26A

Do we really want PR, marketing, brand management, crisis communications etc. to be regarded merely as an “operating expense?” And if we interpret PR as an “operating expense” what will be the view of accountants and controllers in a Finance Department that are looking to control spending and improve the bottom line?

Do we really want to risk having your function zeroed out or greatly diminished in the face of mounting financial pressures? What does that mean in terms of job security?

How about a different way of thinking?

Doesn’t public relations contribute to revenues or the top line? Doesn’t brand management help expand gross margin? Doesn’t marketing play a key role in keeping a company in the black, rather than the red?

Before we go further in this discussion, please keep in mind that public relations/marketing/brand management/social media/crisis communications cannot defy gravity. If customers are retrenching in the face of an economic downturn, if inventory is building rather than declining, then an entire company will be impacted and most likely start reporting red bottom-line numbers.

And also be mindful that PR/Marketing/Branding will most likely always be classified by accounting types as SG&A. Nevertheless that doesn’t have to be our mindset. We need to convince internal decision makers that our responsibilities are not a mere operating expense.

Public relations practitioners can and should always demonstrate ROI or Return on Investment. Our jobs as communicators are not just to spread the good word to external audiences (e.g. customers, suppliers, partners, analysts, editors, bloggers…), but to internal audiences as well. And included in this definition of “internal audiences” are company executives, including the CFO and the company’s Finance Department. Think of it this way, these internal audiences make the hiring and firing decisions and more to the point whether we will receive a paycheck or not.

If the company is publicly traded, then it must report to the SEC and the world. Translated, the company must issue quarterly financial results, pre-announce all “material” differences from prior quarterly guidance, issue an annual report, hold a yearly meeting for shareholders, publicize all major M&A activity, and announce all major executive appointments and restructurings. A good public relations department will know how to effectively manage this information to get maximum mileage out of good news and mitigate the impact of bad news.

Aligning a corporate public relations department with the CFO, Investor Relations, Legal and Corporate Development in not only reporting to the SEC and investors, but becoming an integral part of their daily activities, is battle-tested job protection. We want a seat at the table.

What is the impression of existing customers and prospective customers to a company’s image and products? Obviously, the products have to work and the company needs to execute. Assuming that is the case, then how is the company building and enhancing its reputation? That sounds like an activity that is far more than just SG&A. Is marketing and brand management helping to drive revenues, expand gross margin and contribute to the bottom line? Yes indeed.

We need to document (not exhaustively) what we are doing on behalf of our clients. Whether we like it or not, contributing to our monthly reports should be a daily activity. It is far easier to remember what you did on Monday on that very same Monday, than a month later.  I have always been mystified by those who write their monthly reports two weeks into the new month. How can you accurately recount what you did six weeks earlier, 42 days or more ago?

The bottom line for public relations? Remember ROI, the top-line, gross margin, profitability and stay away from the dreaded SG&A mindsets. Besides who needs career-limiting thinking in this economy?

Almost DailyBrett editor’s note: The following open letter is written to a long-time colleague, who in her own words feels like “fish out of water.” She is presently making the seismic shift from a successful career as a reporter/editor for three regional newspapers to becoming a public relations executive for the first time. Her name, venue and present and past employers will remain confidential, but I will share my humble advice to her on the chance it may help other journalists in making a similar career change.

Even though many of your Fourth Estate colleagues and friends may chide you for abandoning your virtues and taking the plunge to the dark side, keep in mind that most of them are simply envious of your courage and opportunities. Many newspapers will not survive the year, let alone the decade. You have made a proactive change that has the potential of being much more lucrative than if you merely stayed the course.

Keep in mind that not all journalists are cut out to be good public relations “flacks.” Yes, there are the same demands associated with making deadlines, exercising news judgment, getting your facts straight and applying the same journalistic techniques (e.g. adherence to AP style), but that is where the majority of the similarities end.

Now that you have made the switch, here are a few techniques that will hopefully lead to a successful transition to the bright lights of the dark side:

● Your former colleagues at your previous publications are not your friends, especially if they are covering your client. They are now friendly and skeptical (hopefully not cynical) adversaries, but adversaries nonetheless. What you say to them, even in a casual conversation, can be misquoted. You are now a spokesperson for your client, and your client signs your pay check.

● When working with reporters, just assume that everything is “on the record.” Avoid going on “deep background” or the rare instances of employing “off the record” for your conversations. If you assume that everything is “on the record” there will be no misunderstandings and naturally you will be much more disciplined with your words.

● Never be afraid to respond with “I don’t know.” Ask the reporter about her or his deadline and get back as soon as you can with the information that is required in the way that you want to present it. The old joke is: “How many press secretaries does it take to change a light bulb?” The answer is: “I don’t know, but I will find out for you.”

● Only approach reporters to pitch a story that is legitimate news. As a reporter, you inevitably rolled your eyes (if not a stronger reaction) when a flack approached you and wasted your time with a “news story” that didn’t pass the giggle test. The declining number of reporters that remain are inundated with pitches; make every one of your pitches count. One of the toughest parts of your job will be telling your internal clients that their activity is simply not newsworthy.

● As you well know lying is not an option. Having said that, managing information is your job. How a message is developed, how it is presented and when it is made public is what you are being paid to manage. Reporters refer to this technique as “spin control.” I call it managing information for the benefit of your client.

● Your job is 24-7-365. A crisis can occur at any time of day or night. I have taken reporter calls at 1:30 am and before the alarm goes off in the morning. When someone calls and says, “Gee, I hate calling you at home…” you are now on the record. The trick is to be always prepared to respond, while maintaining a healthy work-life balance…easier said than done. I rarely consumed a second beer or glass of wine, particularly during my service as the press secretary to the Governor of California, knowing full well that a genuine crisis could occur at any time of the day or night.

● Crisis communications is not a manual or a three-ring binder (even though key contact information is vital). Instead it is who, what, where, why and how are you going to make it right. Remember when it comes to bad news (and there will be bad news), you can make the disclosure or let someone else (an adversary, competitor, enemy) make it for you. This choice should be easy: manage or be managed.

● Looking at a financial statement, PR should not be seen as “SG&A” or Selling, General and Administrative (an expense) unless you want an unsympathetic Finance Department to zero out or greatly reduce your department. Instead, you need to demonstrate ROI so that your role is seen as positively contributing to the top line (revenues) and contributing to the expansion of gross margin and ultimately the bottom line. The key here is to document everything that you are doing for your client. Aligning your department with Sales, Marketing and in the case of publicly traded companies, the CFO, IR and Legal, is battle-tested job protection.

● Don’t be trapped into just using conventional tools to do your job. Pitching reporters, writing contributed articles, researching editorial calendars and issuing news releases still are effective in the second decade of the 21st Century. The thinning of the journalistic ranks means that self-publishing and using digital tools (e.g. blogging, podcasting, webcasting, social media) are absolutely critical to establishing thought leadership in your field. It is your job to convince management of this truth.

● Don’t allow the perception of your success or failure be dependent on the local paper that your superiors read every morning. You need to feed this 300-pound gorilla, but at the same time the trade publications, bloggers in your company’s field and of course your own self-publishing need to receive equal, if not greater attention.

● You would be wise to remind management that an organization’s most valuable asset is not bricks and mortar, fancy machines, but those women and men who leave each night and hopefully come back in the morning. Naturally, the focus is on customers and shareholders…and this is justified…but employees are just as important, if not more important, to the bottom line.

You have been honest about your feelings when you described yourself as a “fish out of water.” This is normal. Look at it another way: This is an important reset in your life that employs all of your professional skills in a different way. You respect your employer. They have a great story to tell. Go out and tell that story in the best way possible and let the chips fall as they may. This is an exciting time of your life and a challenging new opportunity.

Embrace the spirit of Carpe Diem and seize the day.

 

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