Our two political parties each champion a set of recommended economic policies. For the GOP, tax cuts are always helpful. For the Democrats, not so much—but government spending can solve a lot of problems. As an economist, the rigidity of political views – not just among the politicians but their distinct tribes of voters – dismays me. Why? Because different contexts demand different solutions. In early 2009, Captain Sullenberger went against traditional thinking when he safely landed an Airbus A320 on the Hudson Bay after it hit a flock of birds, cutting off all engine power. He didn’t follow standard procedures because he and co-pilot, Jeffrey Skiles, recognized the uniqueness of the situation. An economy is a far more complex system than a plane and its interaction with air. With any complex system, physics proves that starting conditions matter for what you do…
Five mistakes to avoid in your brand’s experiential marketing effort
With the pandemic easing in most of the US, brands are increasing their marketing budgets. It’s no wonder that some of that spending is focused on providing people with experiences (vs. advertisements). After all, we customers have been hunkered inside for more than a year. We’re approaching outdoor events as Rip Van Winkle reacted after being asleep for a long spell — eyes and hearts wide open to anything. As with all marketing efforts, there are ways to do experiences right and ways to do them wrong. For the latter, we need to look no further than the North Face X Gucci “Pit Stop” that was part of the 2021 Desert X event based in Palm Springs, California. Desert X presents art installations across 40 miles of the breathtaking Coachella Valley. This year, the event sought “to explore the idea of the desert…
Profits at what price?
Profits at what price? Pfizer had two choices when it discovered that each vial of its vaccine held six rather than five doses. One was to push the FDA to declare a vial contains six doses. With this decision, Pfizer would make more money. Because it gets paid for each dose, each vial could now be priced twenty-percent above the agreed-to purchase price. The premium would all drop to Pfizer’s bottom line. The alternative was to remember the original price met or beat Pfizer’s expected return rate, which would be huge given the quantity of vaccinations involved. Producing a vaccine for an unpredicted global pandemic is a once-in-a-lifetime opportunity for a pharma company. The extra dose could be a contribution, helping nations vaccinate more people than they had planned. Pfizer’s leadership team decided on the FDA route, choosing higher profits over societal benefits….
Be careful in deciding what to incentivize
Ohio State football coach Ryan Day earned a $250,000 bonus when his team beat Clemson in the Sugar Bowl. His quarterback, Justin Fields (who received no compensation), was unfortunately injured during that game. If you were Coach Day, would you have asked Fields to play in the upcoming national championship game against Alabama? A similar situation confronted Fields’ high school coach, who kept Fields out of his final game as a high school senior. The coach did not want a broken finger to damage his star player’s long-term career prospects. The high school coach placed player well-being over other measures, as coaches should. But was this true for Ohio State? I doubt it, owing to this indicator: Coach Day would earn another $350,000 bonus should Ohio State beat Alabama. But the bonus he receives for coaching his players to maintain 3.0-grade averages is…
What is the opposite of leadership?
After the final episode of The West Wing aired, my brother in Texas called me asking, “Are you crying?” “Yes.” “Me, too,” he added. We had both enjoyed the TV show about an imaginary President of the United States of America fighting for righteous causes. It says a lot about our nation that the next TV series about a President — Scandal — showcased an administration characterized by deceit and trickery. My heroes have always been the men and women who shaped our nation from its birth. They are the courageous individuals, who, despite the odds, helped turn the nation’s arc in the right direction. John Lewis, Lincoln, Dr. King, and the Suffragettes are just a few. Heroes are leaders in my book – recognizing what needs to be done and stepping into the fray to get it done. Some lead from behind,…