Two Edges

There was a story online this week that really points out how suddenly going viral after spending years as a mundane and obscure company has become something of a two-edged sword. Having a product or company “go viral” – meaning that some online reference to the company spread suddenly across the Internet, as though it was a fast-breeding virus striking a community with no resistance to the strain – has become the new standard to which all online (and a remarkable amount of real-world) advertising aspires. To go viral – to have an ad or even a reference that cost you only pennies to make suddenly catch the attention of millions or tens of millions of potential customers sounds wonderful enough; as though a single mention on a popular web site could make you a billionaire overnight. But the truth is, it doesn’t always work out that way…

Consider, for example, the case of Dublin Dr. Pepper, from the Dr. Pepper Bottling Company of Dublin, Texas. Dublin Dr. Pepper is just like regular Dr. Pepper in most respects, but instead of being sweetened with high-fructose corn syrup and other chemically altered or processed sweeteners, the Dublin version uses Imperial cane sugar. This made it an extremely popular product during the high-fructose wars of the last few years, and motivated people thousands of miles from Dublin, Texas to sample the product. The company and product spread like wildfire across the Internet, and orders began pouring in for the special version of the popular soft drink. This should have been a happy problem – and it might have been, if all of the Internet publicity hadn’t caught the attention of the company that owns Dr. Pepper…

It turns out that, like most soda bottlers, Dr. Pepper/Snapple has strict territory rules for where its bottling companies (who are mostly franchises) can sell their product. In the case of Dublin Dr. Pepper, the company’s territory was limited to a six-county area in Texas, and by selling the product over the Internet (to thousands of customers outside of that area) the company had violated the terms of their franchise. To make matters worse, the bottler had never received permission to use the name “Dublin Dr. Pepper” in the first place, and doing so was a trademark violation as well as an additional breach of their contract. The Dr. Pepper Snapple group sued in federal court last year, and eventually forced the company to accept a settlement that involved discontinuing both the Dublin Dr. Pepper name and sales of the customized product…

Now, we’ve discussed the concept of depending trademarks and copyrights before in this space, and it’s clear that any company has to defend such properties or risk losing them outright. What makes this case special is that the Dublin Dr. Pepper company had been in operation for over a century, and had been more or less left alone to do as it liked, largely because no one had ever heard of it outside of the six-county area in which it operates. When the company was discovered by online customers and went viral over the Internet it suddenly found itself experiencing demand beyond anything it had ever imagined – which eventually attracted the corporate interest and legal action that destroyed the product after more than a century of continuous operation…

I’m not saying that companies (including yours) shouldn’t attempt to make use of viral advertising, or that marketing efforts of this type are likely to stop appearing any time soon. But just like any other new business development, viral advertising can have consequences you never anticipated, and once you let something loose in cyberspace there’s no telling where it will go, or what the long-term effects will be. As always, it’s a good idea to consider how a given tool works before you try using it and accidentally cut yourself on it…

The Ethics of Mandatory Labor

There was a story this week online about a woman who is suing Britain’s government over a provision in their “Job Seeker’s Act” that requires people to accept internship positions, regardless of how appropriate those jobs might be, if they want to continue receiving unemployment benefits. I had always been in favor of such programs, on the grounds that if we’re going to pay people not to work, and we have a lot of work that needs doing anyway, it makes more sense to pay people to do that work. But the present case raises a few points about the practice that I’ll admit I hadn’t previously considered, and I thought it might be worth taking a closer look…

First off, the lawsuit claims that this practice is effectively unpaid labor – in the sense that the job seekers is being made to work for a company that has applied to their government to receive the use of workers, and some of these jobs are unpaid internships. This might result in program participants not being regarded as well as paid employees, or even in their being given harder and less enjoyable work, but since the point of such an assignment would be maintaining one’s unemployment benefits, it can’t really be described at unpaid. In the case of paid internships, paid positions, or even unpaid jobs that provide valuable training for free, the jobs may effectively be double-paying the applicant…

On the other hand, the program doesn’t appear to take any other factors into consideration. In the case in question, the woman bringing the lawsuit was working an unpaid position in a museum, in the hopes of using the experience to improve her chances of both finding and qualifying for a job, when the government pulled her out of it and ordered her to take a position stocking shelves instead. I’ve worked retail myself, and I can tell you that unless you want to move into retail management this sort of entry-level work is unlikely to prepare you for anything. I don’t know how realistic the woman’s aspirations were, or how likely she was to obtain employment she feels would be suitable working as an unpaid intern at a museum, but I think we can accept her contention that finding such work by means of working retail is even more unlikely…

The problem here is that while there are undoubtedly some people who will decline to take an otherwise unpaid job because they are actually working on getting a suitable position, there are others who will decline the work because they would prefer to get paid without having to work. Or, more to the point, if anyone is excused from working a menial job but allowed to keep receiving his or her unemployment benefit because he or she claims to be “working on getting a real job” then it is probably safe to say that no one will ever work one of these unpaid internships. As much as we might like to see people work for their unemployment benefits, it seems counter-productive to ask them to divert time from activities that might land them an appropriate job in order to work an inappropriate job…

So I have to ask you: do we have the right to demand that people furnish work in exchange for their unemployment benefits? If so, do we have the right to require that they do so during working hours when they might be engaged in getting a job? If not, how do we separate the people who are actively looking for work (or volunteering in unpaid jobs that might lead to paid ones) from people who are just looking to receive money without having to work for it? Or should we just offer voluntary programs (like the “Welfare to Work” projects in the US) that give people the chance to learn skills and get placed into better jobs on completion?

It’s worth thinking about…

Good Fundraising, Bad PR

I noted with great interest a story on the Washington Post website this week about the University of Maryland’s plans to build a new official residence for their President. This is projected to cost somewhere in the range of $7.2 million US, including the cost of knocking down the old official residence and preparing the site. This probably wouldn’t draw much attention, if not for the fact that the University is undergoing some rather heavy budget cuts at the moment, and they’re talking about cutting a number of very popular programs – including as many as eight NCAA sports. The new residence will be paid for out of donations from alumni and friends, not State or University funds, but people associated with the school are asking why those same donations couldn’t be used to save the sports programs – or, you know, for academics, if it comes to that. Right away, I was transported back to thirty years ago, in a place called Santa Barbara…

For those of you joining us late, the University of California has ten campus locations, one of which is in Santa Barbara, about 100 miles northwest of Los Angeles. I went there for my undergraduate degree from 1982 to 1986, and while I was there the Chancellor decided to upgrade the kitchen in his house. As I remember the story, our Chancellor was living in a house that he and his wife had purchased for themselves, partly because the official on-campus residence was not really suited to full-time living quarters, and partly because it was located in the swamp, next door to a dining commons and the dorm I lived in. The remodel was to be paid for from University funds, and every student group on campus was protesting because student services had just been cut for the hundredth time. Unfortunately, while the Chancellor was a world-class scholar and a fairly good administrator, he wasn’t all that great at public relations. Telling the student groups that he wasn’t answerable to them wasn’t a good tactic (he was answerable to the President of the University, who was answerable to the Governor, who was answerable to the taxpayers – many of whom send their children to the University of California), and telling them they didn’t understand the financial complexities of the situation wasn’t a good idea – although it was probably the truth…

Now, we should probably note that one of any university president or chancellor’s primary duties is raising money for the school, and that this includes throwing a variety of parties and receptions, ranging from dinners for a dozen or so guests to gala events of a hundred or more. This can be difficult to accomplish in a single-family home built before 1960 and never intended for such duty; in Maryland if the President wants to host more than two dozen current or potential donors at a time, some of them will be eating in a converted garage, and the off-campus residence in Santa Barbara in the mid-80s wouldn’t have done that well. In the current case, less than a third of the project is actually going towards the President’s living quarters anyway; of the total some $5.2 million is going to create the meeting, banquet and conference space that the President’s office will use for fundraisers in addition to other official functions. But that isn’t stopping people from raising cane at the costs involved…

I don’t know off hand how much money the President raises for the University of Maryland every year, or how much more effective those fundraising efforts would be if he had a better facility in which to hold those events. But traditionally, fundraising events have been more effective if the President invites people to his or her official residence (development officers call it the “house effect”), and the higher up the scale one goes, the more likely donors are to respond to such factors. I can’t tell you for a certainty that the University will make its money back; only that this is the way to bet. And I can’t tell you if the current President will deal with the inevitable backlash correctly as the project goes forward, but he would be well advised to look up the events in Santa Barbara thirty years ago – and then try anything else…

Care for Some Tea?

Over the years I’ve brought you stories about a number of products that can only be described as laughably over-priced for what they are. I personally enjoyed mocking the $200,000 bottle of scotch, the $72,000 mattress, and the $40 bottle of water, but nothing quite touches the granddaddy of them all, the coffee beans that were eaten and then eliminated by a member of the civet family (it’s a cat-like relative of the weasel) before being cleaned, roasted, and sold for up to $200 an ounce. Most of the other products are simply charging too much – the scotch may actually be the world’s best, for example; I just question whether it’s actually 250 times better than your typical super-premium scotch. But from where I’m sitting, not only would I refuse to pay you a 1200% markup on coffee for having it pooped out by a weasel, I’d actually prefer that it wasn’t. I’m not sure how much extra I would pay you for tea that wasn’t grown in panda dung, however…

An article running this week in the London Daily Mail’swebsite tells the story of a Chinese entrepreneur who decided to produce tea grown exclusively in panda manure, which he claims adds “a mature and nutty flavor” and also has valuable anti-cancer properties. To this end, Mr. Yanshi purchased 11 tons of the stuff from a panda preserve, and is looking for national and international distribution partners. These efforts are being complicated by his asking price for the product, which works out to about $35,000 USD per pound, or a little under $2,000 an ounce…

Now, in fairness, an ounce of tea is enough to make more beverage than an ounce of coffee would, and tea (green tea, anyway, which is what the panda tea is) does actually have some nutrients, although its exact medicinal properties remain in dispute. It’s also only fair to point out that most tea (and, in fact, a great many other agricultural products) is grown using fertilizer made from animal droppings, which makes the use of panda dung no more gross than usual. But I still have to question whether the 733,300% markup (that’s right; 7,333 times the price of regular premium tea) is actually worth it. Especially since the only claims for either flavor or medical properties are being made by the guy who purchased 11 tons of panda dung for this purpose…

I suppose that to be absolutely fair about this we should insist on both blind taste-tests and double-blind medical tests (panda tea versus tea raised in the droppings of various other animals) to see if any such properties exist. Hot beverages made by steeping the leaves of a green plant grown in exotic animal waste may sound odd, but people also pay huge sums of money for the eggs of specific fish found only in remote parts of the world – and it’s hard to imagine that anyone who had cancer wouldn’t pay whatever they could afford for a drink that would improve their odds of survival. If such properties are ever conclusively proven I would expect to see lively debates about whether insurance companies should be obliged to cover payments for obscure types of tea, whether there should be a specific Medicare program for panda tea, and whether the government should fund research into other types of animal dung that could be used to raise cures for various diseases…

Until then, however, I think I’ll stick to diet cola…

The Ethics of Drug Tests

Last week I was on a job interview when they asked me one of the classic questions: “If hired, would you be able to pass a drug test?” We’ve been hearing about this issue for at least thirty years now, and the sides haven’t changed much; people on the Left claim that any form of drug testing is a violation of an individual’s right to privacy, while people on the Right insist that society has to be protected from people who might do things while intoxicated that would threaten the safety of everyone else. Hardly anyone ever argues that an employee who shows up for work drunk, or falling-down tired from not having slept for several days, should not be allowed to operate sensitive equipment, handle hazardous materials, or drive on public roads, but most people will also acknowledge that we already have laws that prohibit most of these things (and civil statutes that would allow people to sue for damages if such things were allowed)…

As usual, I’m inclined to leave questions about right and wrong to those better qualified to answer them; the question I’m posing today is whether we, as managers, have the right to ask our employees about their lives outside of the workplace. Clearly, this isn’t a simple yes-or-no question; it’s a continuum that runs from never asking anyone anything about their personal lives once they have been hired, to requiring them to account for every moment of their lives, on the job or off. The exact point on the continuum that is appropriate will vary with every job – and with nearly every employee and supervisor as well. What becomes problematic is when the parties do not agree on where that point is; when management want to know more, employees want to tell less, and third parties start using the situation to score political points. It is this conflict to which I direct your attention…

In a perfect world, no one would care what people do in their off time; they’d still show up every day, do the work assigned to them, and perform within the levels required. Of course, a perfect world also assumes schedules that do not change, lives and relationships that do not encounter crises, employees who are never sick, injured or traumatized, and managers who never use employees to cover roles or duties for which they are not prepared. An employee who normally maintains a perfect 12-hour “bottle to throttle” rule (never drinking within 12 hours of having to drive) may still be buzzed if called upon to pick up an extra shift – and the same could apply to any other recreational activity (legal or otherwise) if you start randomly requiring people to change schedule. The same problem could come up with child care issues, night blindness, random illness, or dozens of other issues if a supervisor does not know about the lives of his or her employees and is not allowed to ask…

By the same token, a lot of people (not just drug users) do kid themselves about their ability to function, and there are jobs on which a hangover (or a drug flashback) would place dozens or hundreds of people at risk. Imagine a school bus driver having a drug flashback, or an air traffic controller with a hangover, and then ask yourself if you’re comfortable with the honor system. A good manager, working with people he or she has known for years, who trusts and is trusted by the employees, can usually prevent this kind of problem, but you don’t really know the employee you just hired; can you be sure that you know what they are going to do?

I’ve never heard of anyone seriously advocating random drug testing of people off the street (anyone who didn’t need to be tested for drugs themselves, anyway), but by the same token I’d like to know that the guy driving the truck loaded with nuclear waste in the lane next to me isn’t tripping on LSD while he tries to change lanes. So I have to ask you, do we have an ethical responsibility, whether to society, to our customers, to our other employees, or to our stockholders, to investigate whether a given applicant has a personal problem (dugs or otherwise) that could make it dangerous for them to do the job we’re going to give them? Or does our responsibility to respect the rights of the individual to privacy also require us to hire any applicant based on skills, knowledge and experience, and let the chips fall where they may?

It’s worth thinking about…

PayPal Strikes Again

I don’t have a lot to add to the story that is now sweeping the Internet about PayPal’s latest atrocity, but I’m going to pass it along anyway because it demonstrates how a company goes from screwing up the small details to screwing up the big details and eventually moves into legal and social problems it can’t get out of (or just ignore). Please feel free to pass these comments – and the associated story – along to anyone you know who still isn’t clear on why it is important to give your first- and second-level customer service personnel the power to handle problems, and the training to do so. And to anyone who isn’t clear on why stupidity is a problem in a business setting…

The story, originally from the Consumerist website, but now spreading out across the Internet, is that a PayPal user sold a vintage violin on EBay, the buyer then claimed it was a forgery, and PayPal told the buyer that he could have his money back if he destroyed the instrument. The buyer did so, and sent pictures of the wreckage to the seller and PayPal; PayPal then deducted the money from the seller’s account and gave it back to him. The seller is now out a vintage instrument and/or $2500 (it depends on your point of view), and is seriously considering legal action against all of the offending parties, as well as planning to avoid PayPal for the rest of her days…

Now, if this story doesn’t make any sense to you, that’s because the procedure followed in this case was the wrong one. There are laws against selling forged goods (over the Internet or otherwise), and if someone does sell you something over EBay that turns out to be a forgery, you can request that the company freeze the seller’s account and return your purchase price to you, assuming the seller didn’t empty out the account as soon as they got your money. But you can’t just declare that you think the thing is a forgery and demand your money back; you will need to find some evidence to support your claim. You also have a duty to report the crime (forgery is a crime; so is fraud) to the appropriate authorities. But apparently the people at PayPal who handled the case didn’t know that…

By the same token, forged goods are often ordered destroyed once the criminal proceedings are over, in order to prevent anyone else from being defrauded in the same manner. But that determination will be made by the court, once the time comes. If all forgeries were destroyed at once no one would ever be prosecuted for that crime due to the complete lack of evidence. For that matter, if the only authority you need to declare something a forgery is to say you think it’s a forgery, what would keep anyone from buying something, declaring it a forgery, putting together a fake picture of the wreckage, getting a refund, and then selling the item at 100% profit?

I feel quite certain that PayPal has a corporate policy about forgeries; I am even more convinced that this isn’t it, or the company would already be out of business. If the violin in our story was authentic then the company is accessory to theft, destruction of private property, fraud, and possibly liable for the value of the instrument (not the selling price; the actual value); if the violin is actually a forgery (although it’s not clear of what) then the company is guilty of obstruction of justice, destruction of evidence, and possibly tampering with a Federal investigation. Even a few such charges would be enough to shut down the company; if we consider that as many as 5% of all EBay purchases are believed to be fraudulent, and that EBay has around 500,000 auctions going at any one time, that would mean that PayPal could be involved with as many as 25,000 fraud cases A DAY. And if even a tiny fraction of them are mishandled this badly, every employee they have would be in jail long ago…

I don’t know where the breakdown happened in this case. It’s possible that PayPal doesn’t train its Level One personnel on how to handle this kind of thing; it’s also possible that the actual procedure takes work, and the PayPal personnel just figured this would keep them from having to do it. But I do know that the more common these stories become, the less likely anyone is to buy or sell anything of particular value this way. Eventually, people may come to believe that you’d be better off buying something off the back of a truck for cash than you would for buying something off of EBay using PayPal – and it is stories like this one that will build such a belief…