Monthly Archives: February 2008

• Saving Sears by Selling It a Piece at a Time?

  Tuesday, February 12th, 2008 by Wes Ball

  Edward Lampert, 47% owner of Sears through his ESL Investments firm, has fooled quite a few people into believing that you can make a lot of money by killing a once great retailer slowly.  He has followed a plan of “harvesting” (see pages 111-114 of The Alpha Factor), selling off pieces of Sears wherever he can and cutting capital investment so much that some stores have bare fluorescent bulbs showing. 

  This is the classic example of “harvesting” - taking value that was created over decades of wise strategic investment and quickly turning that value into cash to show what looks like short-term profit, while actually just converting balance sheet value into ephemeral value that disappears once it is stated. 

  Harvesting is like burning wood.  Wood has great strategic value.  It can be used to provide immediate needs satisfaction, but it can also provide the opportunity to create even greater value.  It can even be used multiple times to provide even greater needs satisfaction and opportunity for creating greater value and wealth. 

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  Posted in Applying "The Alpha Factor", Business | Comments (0)

• Why Barack Obama would win big this election, if it were held today

  Friday, February 8th, 2008 by Wes Ball

  The Democratic nominee has not even been chosen yet, but Alpha learning can tell you a lot about the coming Presidential election.  Alpha learning would predict that Barack Obama could win the 2008 Presidential election over Republican nominee Senator John McCain by one of the largest margins of any election in recent history.  It’s also not hard to predict that, if Hillary Clinton becomes the Democratic nominee, it will be a close race, although Senator Clinton would probably win that one, too.

  This has nothing to do with political preference or ideology.  It has everything to do with what the candidates are saying and how they are being perceived by the public based upon the Alpha Model.

  For anyone who has not yet read The Alpha Factor, it is based upon more than a decade of intense research plus more years of real-world testing (not just ”test markets”) to understand what customers really want and why marketers who use these principles generate greater, more profitable success, while other companies struggle even though they are doing things that seem to emulate those successful companies. 

  The secret is fairly simple in principle, but extremely difficult in application - not because it’s all that hard, but rather because the “normal” model for trying to influence people is so wrong and so counter-productive.

  By using the needs satisfaction pyramid (also called the Hierarchy of Purchase Drivers on page 63 of the book), it is fairly easy to see the difference between these candidates and predict how they would fair in a general election today.  The issue that was discovered in our research that undermines success is that, when trying to influence decisions, most companies and people focus upon “function,” meaning they try to show that they are better by describing how what they have ”works.”  That approach can work, but it costs more and takes more time to convince people with no guarantee of success.  However, if you focus upon fulfilling a person’s need for personal significance and self-satisfaction (the two ways we perceive ourselves), you can generate passionate loyalty faster with less investment and with far greater impact.

  Now, look at the candidates.  Who has taken this learning to heart? 

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  Posted in Applying "The Alpha Factor", Politics | Comments (2)