Psychological Prescription for Economic Recovery

Are sales flagging in your business? Is staff morale down? Are you losing customers?

Do a quick and simple audit of your organisation and you may be surprised to discover that the cycle of negativity that may be prevalent is having a dramatic effect on your culture and bottom line.

The following model presented by Sekizawa Yoichi, Senior Fellow of RIETI, Japan, is an excellent illustration of how people’s psychology influences recession and the inherent dangers if you bury your head in the sand and delude yourself that things will change by doing nothing.

Study the model and think about how the “energy” and subsequent self image of the business could be bringing down the house.

Psychological Prescription for Economic Recovery

By Sekizawa Yoichi

Economic recovery is one of the most important issues facing Japan, and there is a call for coming up with effective measures to put the Japanese economy on a growth track. With the aim of contributing to tackling this important issue, a psychological model of a recession and a psychological prescription for getting out of a recession are shown below.

Psychological model of a recession

The following chart shows a psychological model of a recession. The keywords of this model are “emotions” and “thoughts”. The area enclosed in the blue line in the upper left of this chart shows that anxiety, depressed feelings, and other similar emotions trigger pessimistic thought patterns, based on psychological research on the relationship between emotions and decision making. For example, numerous research results have shown that natural worriers, people who feel a sense of anxiety, and people who are depressed tend to estimate higher risks of negative events and think pessimistically (arrow 1) compared with ordinary people (Note 1). In this chart, it is shown that anxiety or depressed feelings trigger thoughts such as, “I will become unemployed, and I will be in big trouble unless I save a lot of money.”

Chart: Psychological model of a recession

The area enclosed in the green line in the lower left of this chart shows a cognitive model, which is a basic framework of cognitive behavioural therapy (CBT), a leading psychotherapy. According to the cognitive model, people frequently hold thoughts with “cognitive distortion,” and as people believe such thoughts, they develop negative emotions and inappropriate behaviour (Note 2). In the chart, it is shown that people who believe the pessimistic thought, “I will become unemployed, and I will be in big trouble unless I save a lot of money,” come to have a sense of anxiety, etc. (arrow 2) and display risk averse behaviour to reduce consumption (arrow 3). In contrast to the area enclosed in the blue line in the upper left, the area enclosed in the green line shows an aspect in which thoughts trigger emotions.

When people reduce consumption because of anxiety or depression, a lack of demand results. When there is a lack of demand despite the existence of sufficient supply capacity, the economy enters into a recession (arrow 4) (Note 3). Once in a recession, in response, people develop a sense of anxiety, depressed feelings, or pessimistic thoughts (arrows 5 and 6). Due to this vicious circle, the recession is prolonged.

Psychological prescription for getting out of a recession

What type of psychological prescription is needed to get out of a recession? Based on the above chart, it seems possible to reduce the level of pessimistic thoughts by alleviating anxiety and depressed feelings through certain means (to stop the flow resulting from arrow 1). It also seems possible that reducing the level of pessimistic thoughts prevents a decline in motivation for consumption that is triggered by the negative thoughts (to stop the flow resulting from arrow 3).

Even though there is room for improvement, progress in clinical psychology and psychiatry has made it possible to ease anxiety or depression and reduce the level of pessimistic thoughts without depending on medication. For example, CBT aims to reduce negative emotions or make behaviour appropriate by modifying the thoughts behind negative emotions into rational thinking. If the degree of belief in the pessimistic thought that “I will become unemployed” is reduced by using the techniques of CBT, it may be possible to alleviate anxiety or depression and prevent a decline in motivation for consumption (Note 4).

CBT can be taught to groups through corporate training and school education or to individuals via the Internet. Even people who are not suffering from mental health issues can use it as a health management method to prevent such issues. This shows that efforts to prevent mental health issues may produce a secondary effect of helping the nation climb out of a recession. In addition to CBT, research on various methods to reduce the degree of belief in pessimistic thoughts and to ease negative emotions is underway. For example, the “writing cure” is a remedy that can be easily used by individuals on their own as long as they have a pen and a piece of paper (note 5).

The cognitive-bias modification (CBM) approach enables people to reduce anxiety or depressed feelings by using computers (Note 6).

Importance of joint research by economists and psychologists

It is not fully known how much of the psychological model of a recession is correct. But recent research has proven to a certain degree that shocking events such as the bankruptcy of Lehman Brothers in 2008 deteriorate the economy through the worsening of people’s anxiety and increased risk evaluation (Note 7). On the other hand, as for chronic recessions such as the prolonged downturn of the Japanese economy, people may rationally determine to choose saving over consumption without being driven by emotions. In order to come closer to the truth regarding these yet-to-be-clarified issues, it is important for economists and psychologists to cooperate to conduct scientific verification through experiment and data analysis.

The Research Institute of Economy, Trade and Industry (RIETI) launched a project titled “Research on Mental Health from the Perspective of Human Capital” in July 2012. In this project, we are planning to work on themes that are likely to connect economics and psychology. I hope that many economists and psychologists will be interested in this project and participate.

Issues facing the Japanese Economy was first published in January 2013 by REITI.

©2013 REITI

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Get Inspired – from the archives, Steve Jobs says go for it

If you sincerely want to make a mark in this lifetime, step out from the “norms” of life and embrace the possibilities that truly exist. The following vision from the archives reminds us about Steve Jobs – Secrets of Life.

“Look in the mirror and ask, ‘If today were the last day of my life, would I want to do what I am about to do today?” – Steve Jobs

 

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Radical Openess – Don’t Be Afraid

Release your ideas freely and set your life free.

An excellent illustration how executed ideas transform our lives and the communities we live in.

This video by Jason Silva is brilliantly made. He talks about the birth of an idea and how it evolves over time. Anyone involved in creative pursuits knows the transformative power of a single ‘idea’. The ability for it to transform as we iterate to refine it further. To create something of value where there was nothing before. This video does a great job of encapsulating these ideas into a 2 minute video masterpiece.

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9 unmistakable symptoms of an entrepreneur

Entrepreneurship is the fuel that drives the engine of prosperity. The following story illustrates some of the symptons of an entrepreneur. How do you fit the profile?

By Mohul Ghosh | Burn Media

In almost every article and story written about entrepreneurship, I have found symptoms and traits which are common among all those who finally made it big.

One of those is that entrepreneurship is not for everyone. I realised that entrepreneurs have some specific traits which should be closely observed.

For example, if you are afraid of failures and adventure, then you should definitely keep out of this.

So, here are nine symptoms that you will definitely find in an entrepreneur.

Absolute hate for the normal and boring

You just cannot accept the status-quo; you hate the normal and boring things in life. You often wonder why a particular area can’t be improved and made more exciting and adventurous.

Bad employee

Just track the job history of any entrepreneur and you will get an idea. Entrepreneurs are generally bad employees, and this is a bitter truth.

Bosses can’t easily manage an entrepreneur, and more often than not, entrepreneurs will quit their job before management decides to fire them.

Famous as a rebel

More often than not, entrepreneurs are rebellious; they cannot follow the existing rules and regulations of the society.

You think that these limitations and rules don’t apply to your domain. Normal human beings follow rules, not entrepreneurs!

Gets bored easily

Steve Jobs dropped out of college because the classes bored him. Bill Gates was always sleeping in his classes, hence he opted out. Entrepreneurs get easily bored, which is considered as a problem by others.

The attention span of a typical entrepreneur is very small.

Detests authority

The norms of society don’t apply to you. As a kid, you must have had problems with your teachers, parents and elders.

Authority is something which you absolutely resist and detest. Possible explanation? Maybe you consider yourself as an authority and master of your own destiny.

History of being bullied

It has been observed that some of those with entrepreneurial and artistic behaviour have been bullied in their youth. A possible explanation can be that as these young would-be entrepreneurs detested authority, they were targets of bullying and criticising.

And once these kids grow up, they need to prove themselves as a force to be reckoned with. And often entrepreneurship is the solid route for that!

Ideas create restlessness

Ever encountered an idea which made you restless and sleepless for days and nights? Logic and counter-logic for that idea kept you busy for hours? Do you have an absolute obsession with some of your ideas and plans?

These are definite signs of an entrepreneur. Don’t worry, it’s quite common among your breed.

Eager to improve anything and everything

Whether you’re dining at a restaurant, strolling in a park or vacationing, you will try to change things. You will talk with the restaurant’s manager and let him know that this particular strategy is wrong. You will try to convince him of a brilliant idea which can sky-rocket the sales of his business.

Entrepreneurs have this strange habit of trying to improve anything and everything.

Love for wealth

And lastly, entrepreneurs are never shy of declaring their love for wealth. Notice here, I am not mentioning being rich; but creating wealth. There is a major difference between being rich and being wealthy, and entrepreneurs are those who believe in creating wealth for themselves and for society. If you do have such intentions, then be frank and celebrate them. You are definitely an entrepreneur.

Do some of these symptoms resonate with you? Or do you feel that these pointers are just work of fiction?

This article first appeared in ventureburn.com on 29 April 2013.

© 2013 Burn Media

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Trust and your money – financial planners need a makeover

A recent professional image survey by Roy Morgan Research highlights what you probably knew all along, the guy advising you on your investments is someone you don’t overly trust and possibly more broke than you are. The following article includes other professions, like share brokers and bankers, among others that also don’t rate confidently with the public.

Your Hip Pocket

Karina Barrymore  |  Herald-Sun 

Why do we continue to hand over money to people we don’t trust? How dumb are we?

AHA, the inquisitive mind is winning. Or is it that we are just more cynical these days, or perhaps our trust is completely burnt out? Whatever the reason, it’s a good thing.

Despite ongoing and extensive efforts by financial planners to improve their image, they have failed.

We (you, me, aunty Pam, uncle Joe) trust them less now than we did before. And rightly so, I say.

Yes, OK, I have met and know lots of good honest, ethical and expert financial planners but when I hear of advice gone bad, it’s hard to trust them as a group.

Unfortunately, the financial wreckage strewn around the country by misled and deceived investors easily overshadows the good these guys and gals can also do.

However, the latest professional image survey by Roy Morgan Research this week caught my eye for a number of reasons, one; because financial planners were among a very small handful of professions that fell in their ranking for honesty and ethics, and two; because the survey provides a stark reminder that we have a very low opinion of all our finance professionals.

For example, for someone we are prepared to bare our financial secrets to, take advice from and trust with our hard-earned dollars, only 25 per cent of us rank them as trustworthy — if that’s the definition of being ‘‘honest and ethical’’.

That means 75 per cent of us don’t trust financial planners or, at the least, don’t think highly of them.

Phew, that’s some kind of slap across the face for the multi-billion dollar planning industry supposed to be built around getting people to trust them enough to part with their money. Or does the slap belong across our faces?

Why do we continue to hand over money to people we don’t trust? How dumb are we?

Take insurance brokers, they’re only trusted by 13 per cent of us, yet how many people do you know have insurance?

What about share brokers? Only 15 per cent of people rank them highly for honesty and ethics.

And while we’re on the subject of being a shareholder, you’d think we’d at least place our trust in the mob running the companies we invest in, or else why buy shares? Well, no. Listed company executives get a ranking of just 26 per cent in the honesty and ethics stakes. So for all those people out there with shares, 74 per cent of you don’t trust the managers running our companies.

A little higher up the trust scale we have bank managers. Phew, you might think, finally someone we can rely on. Nope. Only 38 per cent of us rank them highly.

In fact, the highest we go, in the finance professions, are accountants with a honesty and ethics ranking of 49 per cent. Sure, that sounds good compared with the others, but in the big scheme of things it’s not even a 50/50 chance of getting a good one. It’s a terrible indictment on our government and regulators that we are forced to do business with these professionals (unless we all get finance degrees).

After all, we entrust our life savings to them, our household finances, our children’s futures, our family’s financial well being and our retirement dreams when in reality we don’t trust them at all — with good reason, I say.

But, hey, don’t take my word for it, only 19 per cent rank journalists highly — but we’re up from 12 per cent last year.

What have been your experiences trusting financial advisors?

This article first appeared in the Herald-Sun on 4 May 2013.

© 2013 Herald-Sun

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Is this the most narcissistic generation we’ve ever seen?

The headline of the attached article only re-iterated what our clients have been sharing with us for the past ten odd years, only the criticism in recent time has accelerated.

We have witnessed behaviours noted first hand and I can tell you, giving authentic feedback to some of these spoilt brats does not always work.

The honest question to ask in this dilemma is how did it ever come to this? Who promoted an environment that allowed this to happen in the first place?

And please , before I am told it’s complex and any other politically correct weasel language, it still does not explain the sutuation we are in. We need to address the causes as well as the symptons if we are serious about transformation and our futures.

Enjoy the following story.

Is this the most narcissistic generation we’ve ever seen?

Are narcissistic youth the future of Australia?

Wendy Squires | The Age | April 20, 2013

The following I’m assured is a true story, although I wish it wasn’t.

Several months ago, a 48-year-old single mother informed her two teenage children that the cancer in her breast had returned, more aggressive than ever.

She had no idea how they would react, so wasn’t surprised when her stunned son asked incredulously, ”What does this mean?”

”I’ll tell you what it means,” her daughter interjected angrily. ”It means we’re not going to Fiji for Easter!”

Now, if you’re anything like me, you are probably contemplating the many ways in which you would suggest to that girl that she get a grip. But some of you are also possibly cringing, aware that that teen could be yours. Because today, such a display of narcissistic personality disorder (NPD) is no longer an anomaly in teenagers, it is beginning to be the norm.

”Narcissistic personality disorder is a mental disorder in which people have an inflated sense of their own importance and a deep need for admiration,” the Mayo Clinic says. ”Those with NPD believe they’re superior to others and have little regard for other people’s feelings.”

Common symptoms it lists are: fantasising about power, success and attractiveness; expecting constant praise and admiration; believing that you’re special and acting accordingly; failing to recognise other people’s emotions and feelings; expressing disdain for those you feel are inferior; being jealous of others and vice versa; being easily hurt and rejected, and; appearing as tough-minded or unemotional.

Before I go on, yes, this could be viewed as another Gen Y bashing piece full of stereotypes and broad generalisations. And no, I do not believe all teenagers have NPD. I agree hormonal changes play havoc with teenagers, always have. Emotional development is still in play and there are good, solid, grounded, generous, empathetic, humble and inspirational kids out there doing their best. But surely you’d agree they’re getting harder to find?

The American authors of The Narcissism Epidemic: Living in the age of entitlement, Jean Twenge and Keith Campbell, write that the US is suffering badly.

Citing data from 37,000 college students, they discovered that narcissism rates rose just as fast as obesity from the 1980s to now.

Australia is following suit. My girlfriends and I have coined our own term for the syndrome: severe narcissism overcoming teenagers, or SNOT. We give points for spotting SNOTs, sullen types slouching over their phones bored with the company they’re keeping or sulking in restaurants, indignant at having to endure fine dining with their parents yet again. They’re the ones who state their ambition is to be a Big Brother contestant. They’re the work experience kids expecting to go straight to the corner office. They’re mugging for whatever camera is closest – usually their own – then posting their selfies on line. They are staying at home longer and staying in jobs shorter. Wanting a cool place of their own and retirement simultaneously.

Yes, they annoy me. Infuriate me even. But mostly these kids sadden me. Because they are lost and don’t even realise it. They don’t know how to find themselves because they don’t know how or where to look. They have been told they can be anything they want, and in the process, lost the sense of being happy with who they are.

There is no app for life experience. We can’t all be good-looking, rich, famous, successful – and now! Some of us have to run at the back of the pack and not expect a ribbon. But it appears a generation has missed this message, not just striving to get over the line first, but expecting it.

The Australian psychologist and author of Working with Mean Girls, Meredith Fuller, is only too aware of the endemic of SNOTs, and despairs daily in her practice as to what is to become of them.

”It’s like the kids want everyone to go clap, clap, clap over everything they do all the time,” she says. ”They are not achieving for their sense of self. It’s for the applause and approval of others. It means no one is really content, because it’s impossible for everyone to clap all the time. They don’t seem to grasp the reality we don’t need everyone to clap. Just a few are good – a partner, parents, godmother or whatever. It doesn’t need to be your 17,000 friends on Facebook.”

Twenge and Campbell also fear the generation now entering the workforce is unprepared to face the reality that they are not the centre of everyone’s universe – just their own. ”They got trophies for just showing up as kids, but as adults many of them might be struggling just to find a job,” they write. ”The culture of the last few decades has not prepared this generation for the challenges they will face.”

There is no quick solution to NPD, but a good start is for parents and adults to take a more active role in SNOTs’ lives. ”Gen Y is not getting enough time with a varied age range of people,” Fuller says. ”They aren’t hearing about the benefits of these mysterious things we talk about, like kindness, manners and commitment and gratitude. It has no currency for them. They just don’t get it because they don’t see it.”

Twenge and Campbell concur: ”Young people, especially from wealthy families, should be encouraged to do some difficult work in order to learn humility, compassion, the link between work and play, and the value of the dollar. Such work would teach young people a sense of connection to those who make careers of these jobs, rather than a vague sense of superiority over them.

”One of the best ways to combat entitlement is to be grateful for what you already have,” they conclude. ”Gratitude is the opposite of entitlement. You think about what you already have, instead of what you deserve to have but don’t.”

Wise words, worth encouraging teenagers to pull their earphones out long enough to listen to.

©2013 The Age | This article first appeared in The Age on 20 April 2013.

Another story on youth, make no mistakes, narcissism is associated with going broke:

Young Victorians falling deep into debt trap | The Telegraph

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Why are there so many haters in the world?

According to some people, Marissa Mayer, CEO of Yahoo, should be an apologist for her own hard work. Attractive, assertive and smart, mainstream and social media has gone into overdrive criticising her for what she stands for. Some of the commentary has little to do with her disownment of feminism in the role it’s played in her career success but rather an attack on who she is “being”.

Check out the following story and let me know what you think; does Ms. Mayer really deserve this criticism?

Yahoo CEO Marissa Ann Mayer

‘Feminism’: Why it might be time for a rebrand

By: Kelly Exeter | 22 Aprill 2013 | womensagenda.com.au

And each time a high profile and powerful woman dares to distance herself from a movement that specifically advocates for her rights, the same thing happens: feminist commentators tell them how incredibly stupid and ill-informed they are. (Check out this response by Feministing website with regard to Mayer: “Marissa, it is too bad that feminism has become a negative word. You know what’s also too bad? Your failure to acknowledge that without feminism, you could never have become the CEO of Yahoo.”)

What these feminist voices are ignoring, however, is that there is a much bigger problem at hand when women don’t want to be associated with the word.

What is feminism?

When you type “What is feminism” into Google, you get a pretty concise definition:

“The advocacy of women’s rights on the grounds of political, social, and economic equality to men.”

It’s hard to imagine how any woman could believe this doesn’t apply to them, so the very fact that high profile, influential women are not identifying with the term means modern feminism has a big problem. A branding problem.

Modern women are finding it hard to embrace the label. As blogger Janine Fitzpatrick, who is one of those women, describes it: “I did once regard myself as a feminist, but today, not so much. I get mad at the time and energy wasted on trying to convince everyone to embrace the label (and then the infighting about who is worthy to wear it or not). Today I still believe passionately in equality but I’m not into labels. I really believe that at the end of the day we have to find a way to work together to improve things for everyone.”

The infighting Fitzpatrick mentions could currently be doing the most damage to the feminist brand.

Dissent within the ranks

Facebook COO Sheryl Sandberg is one of the most powerful women in world business. She describes her recently released book Lean In as a “sort of feminist manifesto”. Where many of her peers (such as Mayer) scorn the feminist label, Sandberg embraces it and advocates for it. But not all fellow feminists are ecstatic that their movement has such a strong voice behind it. Much of the response seems to be that if you are rich and powerful, then you are not marginalised enough to be truly in touch with base feminist ideals.

Closer to home, some influential women are said to be “doing feminism wrong” including Mia Freedman, publisher of Mamamia. Freedman is often accused of being unsupportive of women as she covers the full spectrum of female relevant topics and views on her website.

Freedman is not the only one in the firing line. Jenna Price is the public face of Destroy the Joint, a new and unique Australian movement which aims to bring sexism and misogyny to public attention. Boasting a following that is now more than 25,000 strong, Destroy the Joint has enacted some real change in its short history. Yet Destroy the Joint, and Price herself, have also repeatedly come under attack.

Freedman believes brand feminism may have a problem. “I think there has been a lot of heat and noise recently around who is and isn’t ‘allowed’ to call themselves a feminist,” she says. “Like this idea that it’s an exclusive club with strict membership guidelines. Frankly, brand feminism has such a bad rap, particularly with younger generations of women, we should be encouraging people to identify with it rather than kicking them out.”

A bad rap

Right now brand feminism does have a bad rap. It’s not just the fact that younger generations of women are unsure about what feminism stands for. The infighting within feminist ranks makes all women wonder why they’d invest time in a movement where the ‘rules’ are so ill-defined.

So is it time for a re-brand?

As Perth-based branding strategist Bernadette Jiwa explains: “Organisations and movements generally re-brand when they want to attach a different set of meanings to their ‘product’. The goal being to change how people feel about them and get more people or a different set of people to buy into the brand.”

Take a moment to consider that many people outside of the movement think feminists have hairy armpits and are mouthy, angry, extremist, ball breaking and man-hating. Meanwhile, those on the edges of the movement are frustrated and confused.

It’s not hard to make the case for a new identity.

Yet you will be hard pressed to find a feminist voice who thinks there is a need for anything this drastic. In fact, most of them are in line with the thoughts shared by Australian Prime Minister Julia Gillard in a recent interview with blogger Eden Riley: “It’s not [about] the bloody word. Put the word to one side. It is actually about women and women’s lives and women’s empowerment and women’s equality.”

Amelia Grevis-James, editor of online feminist publication The Peach agrees with the Prime Minister: “Feminism to me has always been more about action than ideology and ultimately I think we can get too caught up in discussing the semantics of the label ‘feminist’, which we are never going to agree on. While discussion is obviously very important, we demonstrate being feminist in our everyday actions- by working hard, by negotiating and fighting for equality at work and within our relationships. And by demonstrating compassion and acceptance of human difference.”

So where to now?

Blogger Cate Pearce thinks it’s time to re-claim the word ‘feminism’ and attach it to the concept of choice: “The key to feminism, for me, is equal choices. If a female chooses to wear a business suit and carry a laptop, good for her. If a female chooses to wear an apron and carry a Household Hints handbook, good for her. If a female chooses to wear black leather and carry a whip, good for her. As long as it is her own choice.”

Freedman also agrees that “it’s about believing in equality and freedom to make choices”.

Unfortunately, there are still many situations where women don’t get to exercise the choices they’d like to. Megan Dalla-Camina, author of Getting Real About Having it All and a PhD student whose current studies are focused on the next wave of feminism, believes the feminist movement needs to both recognise what’s been achieved, and identify where change is still required.

“The pioneers who came before us laid the foundation for the rights we now have and largely take for granted. We need to celebrate our freedom to make choices while continuing to agitate for real change where barriers still exist,” she says.

©2013 womensagenda.com.au | This article first appeared on womensagenda.com.au on 22 April 2012.

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Fact! Government does not create wealth… business & individuals do

 

 

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New Qantas uniform a winner for team morale

By Jon-Michail

New Qantas uniforms designed by Martin Grant

Big ticks all round for Qantas’ new classic uniform – at least they have decided to go back to classic style with a contemporary twist.

Designed by Paris-based couturier Martin Grant the new uniform represents a powerful image that is guaranteed to be accepted by most people (employees and customers) compared to the tacky past uniform that compiled aboriginal prints not suitable for human wearing. The word from staff was that they hated them.

Old Qantas Uniform

Speaking to the media, Chief Executive Alan Joyce said, “The new uniform speaks of Australian style on the global stage. It’s a uniform for the age. The design brief was to create a unique, functional and durable uniform suitable for a premium airline operating across Australia and around the world”.

Continuing Joyce said the new uniforms were part of the bigger program of renewal at the airline, which is looking to shed the negativity associated with industrial brawls and the airline grounding in late 2011.

“We’ve had the highest levels of [staff] engagement that we’ve had since records began, and these new uniforms are an important part of that,” the CEO said. “The number one thing that everyone keeps saying is it makes you feel proud, and that renewal is a very important part of what we need to do.”

I agree with the Chief’s comments. The uniform is an essential part of the professional brand of an organisation and not something you can afford to stuff up. Qantas this time has got it right.

What do you think of the new look?

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6 Branding Lessons from the Ed Hardy failure

The Ed Hardy Australia Fail

By Simon Dell

There aren’t many brands that command an outpouring of emotion like Ed Hardy Australia. Banks generate hatred through increasing interest rates in the face of static bank rates. BP is a good example of a brand hate campaign; spill that sort of oil over cuddly wildlife and the bile aimed at you is obvious. Lawyers, real estate agents and sometimes even fast food companies all generate their own amount of negative response. And of course, there are hundreds of great example of people loving certain brands. But watching Ed Hardy Australia tumble into administration, there has been an unusual amount of, well, clapping and cheering. People are actually glad to see the back of Ed Hardy Australia. Look at some of the Tweets from Wednesday 11th August, the day they went into administration.

@arozenbachs ‘how will we spot bogans now?’
@Angry0ldMan ‘What will the average Surfers Paradise tramp wear now?’
@markthehulk ‘Thank the good lord that Ed Hardy Australia stores are not going to be around in Sydney any longer.’
@thevike ‘what am I gonna wear when I turn 50 and bleach my hair?’

It goes on. That was in just 20 minutes. And there were very, very few disappointed people to see Ed Hardy Australia go. These weren’t angry old men either (except for Angry0ldMan of course); they were younger, opinion-driving consumers.

So what on earth did Ed Hardy do to generate this emotional response? Well, a few things really.

The Wrong People

Firstly they hung their hats on the wrong people.

Christian Audigier, licensee of the rights to produce the Ed Hardy brand, has had success before – significantly with Von Dutch – and employed the same marketing technique with Ed Hardy: marketing direct to celebrities.

Sadly though the icons they choose to ‘sponsor’ were washed out sports stars or unsuccessful Australian gangsters. The former tend to generate ridicule, especially when they move into politics or porn. And whilst the general public have a fascination for Australian gangsters via Underbelly, the Australian belief of a ‘fair go’ shows that eventually criminal fashion goes six feet under. This is, after all, a country of kangaroos, BBQs and beaches, not drive-bys and Tec-9s.

The result of these associations meant that a certain ‘type’ of Australian society member tended to gravitate towards wearing Ed Hardy clothes, and probably not the members of society whose sense of style and fashion the rest of society wanted to replicate. Those wearing the clothes became labelled very, very quickly with very, very derogatory words.

The Price

Secondly price was an issue. They were a ‘street wear’ brand, intrinsically linked with tattoo culture, but the average shirt was $200. And by that I mean a t-shirt, which, when washed, expanded beyond its original size and faded badly. It went from brand new vintage to very vintage, vintage in the space of a few spins of the delicates cycle. The quality just simply didn’t match the price.

The Designs

Next was design. Ed Hardy Australia had such a distinct design that you could see them coming a mile off. And couple that with the first issue, this meant that people wearing Ed Hardy clothing, stood out like a sore thumb. Those with tattoos often complain that they’re unfairly negatively judged because of those tattoos. Sure those with full sleeves might be genuinely nice people but we all know that level of ink generates a certain sense of fear and, right or wrong, they knew that before they sat down in the chair. People wearing Ed Hardy all of a sudden realised the same thing. Except, unlike a sleeve tattoo, you could take a t-shirt off.

On The Fence

If you look at Jean Paul Gautier’s aftershaves, there’s no denying a strong homosexual theme in the communications, but they still attract straight male purchasers. But Ed Hardy’s designs were frequently labelled as ‘gay’ without directly communicating that. Subsequently there was a sneaking suspicion by male owners of their fashion items that they did actually look gay in the clothes. The macho Australian male psyche that lets idiots like Jason Akermanis argue there’s no room for homosexuality in AFL does still get a bit worried about how they look in public. And feeling like they might be on the wrong side of the fence gave them a sense of disquiet. And if the target market is uncertain about the sexuality of the brand, they won’t engage. With no core target market engaging, there’s no market at all.

Brand Extensions

Ed Hardy Australia also branched out into different areas. One of those was energy drinks. I remember visiting the Surfers Paradise store and there was a little fridge packed with mini cans of Ed Hardy energy drinks. The point? Well, none whatsoever. There was no core strategy behind launching them into the mainstream (or if there was, it was very well hidden) and it was tenuous to see the link between a fashion brand and an energy drink. Well, not that tenuous actually but really, why launch a brand off-shoot into an incredibly busy and competitive market where you’re faced with Red Bull, Mother and V, just to name a few? The words ‘doomed’ and ‘failure’ spring to mind.

Not ‘Me Too’

It also became very obvious of the limited appeal that Ed Hardy Australia held when the major department stores held stock of ‘me too’ brands for a very limited time. One minute they were there, and then they were gone. If Myer and David Jones couldn’t see a market there for them to mimic, it was probably a good signal that the consumer was tired of the brand.

There are lots of lessons to be learnt here. But my personal favourite and the most important here is about aspiration. Consumers want to aspire to something. A new car. A new home. Even beer companies use aspirational people in their adverts – people we want to be, not people we are. Ed Hardy failed by linking their brand to people we didn’t want to be. Australian consumers don’t hang the same importance on celebrity style that other cultures and countries do and when those people haven’t really done anything for Australian’s to be proud of, there’s little chance of their face selling anything.

Deloitte will be trawling through the Ed Hardy Australia business to see what they can salvage. Unfortunately it probably won’t be many friends.

The artitcle first appeared in TwoCents Blog by Simon Dell on November 10, 2010.

 

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