Inventors: Leverage the Power of Specialized Thinking

Apparently, there’s never been a better time to be an inventor. According to Doug Hall, in his recent BWSmallBiz column, “Inventors, Pick Your Industry,” big companies are desperate for new ideas. Procter & Gamble, for instance, now gets more than half its ideas for new products from outside inventors. Five years ago, that number was closer to 20 percent.

Like our founder, Ken Makovsky, Hall believes that a specialized, sector-specific approach is the best. Here is his list of the top 10 industries that provide the “most fertile ground” for inventors:

1. Finance, credit, commercial banking and other financial services head the list, with gross margins topping 50%. (“Of course,” says Hall, “recent events show this may not be a good time to enter the financial-services industry.)
2. Landlords (47%)
3. Recording/movie industry (more than 40%)
4. Computer software publishing (40%)
5. Specialized manufacturing equipment (40%)
6. Bakeries and tortilla makers (31%)
7. The “sin” industries, such as breweries and gambling (30%)
8. Soft drinks (27%)
9. Publishing, both the online and old-line (27%)
10. Pharmaceutical and healthcare industries (25%)

Hall’s list was based on research undertaken by mathematician Greg Lemmon, who evaluated the profit margins in more than 200 industries. Those sectors with the highest margins, he reasoned, should offer the best opportunities for people who are interested in licensing an idea, innovation or invention in return for a royalty payment, which can be 25 percent of the gross profits.

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Thought Leadership in Action

Thought leadership is an important strategy in the tool box of virtually all PR practitioners, whether they work within a corporation, or as a consultant in a public relations firm. At Makovsky + Company, we define “thought leadership” as “building and promoting the expertise and/or image of an individual regarding the issues, trends or personal qualities that key constituents are most concerned about.”

At this point in time, the issues, trends and personal qualities that most concern the American public are 1) the current financial crisis and 2) the personal qualities of the candidates for president and vice president of the United States.

If you’re a senior corporate executive, you probably want to steer away from commenting on the presidential race. (Whatever you have to say automatically runs the risk of alienating half your constituency.) But you can certainly address the upheaval in the credit markets.

Procter & Gamble Co. Chairman-CEO A.G. Lafley did precisely that, when he urged congressional passage of a financial rescue plan in his op-ed — “How [the] Financial Crisis Affects You, and Why You Should Sound Off” — which ran in the October 1 issue of the Cincinnati Enquirer.

Lafley notes that “consumers are feeling the credit crunch very directly” and some P&G suppliers are “hampered by the inability to get the capital they need to run their businesses.” He calls on Washington to come up with a proposal that Americans can support and urges folks on Main Street “to let our legislators know that it’s impacting them.”

This is thought leadership at its best. It serves to underscore the fact that consumer understanding is one of Lafley’s — and, by extension, Procter & Gamble’s — core strengths.

There Is Nothing like a Nap

Ken Makovsky, the CEO of our public relations firm, has written about the benefits of “power napping” on his blog, My Three Cents. He passionately believes that naps enhance information processing and learning, reverse information overload and increase productivity. He’s definitely not alone in his views.

If you too want to deploy a napping strategy to become “smarter, healthier and safer,” it’s worth checking out the Boston Globe feature, “How to Nap.” It’s not just a great in-depth look at the myriad health benefits of naps and how to attain them, it’s also a great example of how to use a well-designed visual to effectively communicate complex information quickly and easily.

The Demise of Truth?

A couple of years ago, in his My Three Cents blog, PR guru Ken Makovsky wrote about the concept of “truthiness,” a word coined by the Stephen Colbert, host of the Comedy Channel’s Colbert Report. Truthiness is believing what you feel or wish were true, without reference to logic, evidence or facts.

There’s new book out called True Enough: Learning to Live in a Post-Fact Society, by Salon.com staff writer Farhad Manjoo. In it, he explores the idea — well supported by cognitive scientists— that when the facts don't fit a person’s frame of reference, the frame stays and the facts are ignored.

Manjoo cites a study by Stanford professor Shanto Iyengar and Washington Post columnist Richard Morin who tested Republicans and Democrats’ reactions to a list of headlines covering topics ranging from politics and race to travel and sports. The headlines were randomly paired with one of four logos: BBC, CNN, Fox and NPR. Not only did the Fox logo triple Republicans’ interest in stories about politics and Iraq, it even increased Republicans' interest (and decreased Democrats' interest!) in headlines about travel and sports.

The rise of the internet and the disintermediation of the mainstream media were supposed to help us get to the truth faster than ever before. But when people choose to read only the news that supports their ingrained prejudices, those of us who are responsible for public relations and brand management must recognize that we are facing a bigger challenge than ever before.

An Unintended Side Effect of the Subprime Fiasco

Since our public relations firm is based in New York — a world center for banking and financial services — we’re following the ins and outs of the subprime mortgage crisis with more than average interest interest. In fact, our president, Ken Makovsky, has written about it on his My Three Cents blog.

One of the more interesting side effects of the scandal was reported by Bloomberg News: “Judges in at least five states have stopped foreclosure proceedings because the banks that pool mortgages into securities and the companies that collect monthly payments haven't been able to prove they own the mortgages.”

The article goes on to report that a man named Joe Lents in Boca Raton, FL, hasn’t made a single payment on his $1.5 million mortgage since 2002, when his mortgage bank, Washington Mutual, first tried to foreclose on his home. The efforts ceased when WaMu couldn’t find the paperwork!

“If you're going to take my house away from me, you better own the note,” said Lents.

He’s one of the lucky ones. Millions of other subprime homeowners are on the verge of bankruptcy and foreclosure. If the banking industry doesn’t address its own shortcomings, it better be ready for the inevitability of regulatory intervention if we want to protect consumers and the U.S. economy.