The Kraus Project – Jonathan Franzen 2013

One of the best looking books I own. This works against its ideas, but it is fantastic looking and it feels great to own it. 

“Even now, Germany insists on content over form, if the concept of coolness had existed in Kraus’s time, he might have said that Germany is uncool. (…) It doesn’t even matter what you’re creating on your MacBookAir. Simply using a MacBookAir experiencing the elegant design of its hardware and software, is a pleasure in itself, like walking down a street in Paris. (…) As Kraus says of Germanic life, the PC ‘sobers’ what you’re doing; it allows you to see it unadorned.” (Franzen, 2013, p.9). “Die romanische Kultur macht jedermann zum Dichter. Da ist die Kunst keine Kunst. Und der Himmel eine Hölle.” (Kraus in Franzen, 2013, p.12).

“The restlessness of who or what is considered hip nowadays may be an artefact of what Marx famously identified as “the restlessness” nature of capitalism. One of the worst things about the Internet is that it tempts everyone to be a sophisticate – to take positions on what is hip.” (Franzen, 2013, p.10). “But the actual substance of our daily lives is total electronic distraction. We can’t face the real problems, we spent a trillion dollars not really solving a problem in Iraq. (…) Our situation looks quite a bit like Vienna’s in 1910.” (Franzen, 2013, p.14).

“The logic says that if we want things like Zappos.com or home DVR capability – and who wouldn’t want them? – we need to say goodbye to job stability and hello to a lifetime of anxiety. We need to become as restless as capitalism itself.” (Franzen, 2013, p.141). “Denn der Verstand verstand nicht, daß er mit Entfernung vom Geist zwar innerhalb der Generation wachsen konnte, aber die Fähigkeit verlor, sich fortzupflanzen.” (Kraus in Franzen, 2013, p.142). “I don’t mind technology as my servant; I mind it only as my master.” (Franzen, 2013, p.142).

“But read feullitons closely and you’ll see that they are the opposite of personal. Feuilltons are mass-produced, fast-moving, and seriously addictive commodities that are overrunning the space in which actual literature is read, and undermining the ability of newspaper readers to develop their own imaginative responses to the news – or anything else, for that matter.” (Franzen, 2013, p.33). “the feuilleton resembles the blog even more closely. (…) we’re experiencing a re-emergence of the problems that Kraus was fixated with: the ascendance of an impressionistic journalistic form that has institutional cachet but is of questionable quality as both reportage and self-expression.” (Franzen, 2013, p.44).

“Er glaubt an den metaphysischen Weg des Gedankens, der ein Miasma ist, während die Meinung kontagiös ist, also unmittelbarer Ansteckung braucht, um übernommen zu warden.” (Kraus in Franzen, 2013, p.88). “Alles Geschaffene bleibt, wie es da war, eh es geschaffen wurde. Der Künstler holt ein fertiges vom Himmel herunter. Die Ewigkeit ist ohne Anfang.” (Kraus in Franzen, 2013, p.88). “Wissenschaft ist Spektralanalyse; Kunst ist Lichtsynthese. Der Gedanke ist in der Welt, aber man hat ihn nicht.” (Franzen, 2013, p.90).

“Bei Artisten ist jeder Grundsatz unzulässig, denn diese sind Meister des Wortes, handhaben es zu jedem beliebigen Zwecke, prägen es nach Willkür (…) Und die Masse von Autoren, die dem Wort gehorchen, gibt es leider nur spärlich. Das sind Künstler. Talent haben die anderen.” (Franzen, 2013, p.128).

“Fünfzig Jahre läuft schon die Maschine, in die vorn der Geist hineingetan wird, um hinten als Druck herauszukommen, verdünnend, verbreitend, vernichtend. Der Geber verliert, die Beschenkten verarmenen, und die Vermittler haben zu leben.” (Kraus in Franzen, 2013, p.146). “For Kraus, the infernal thing about newspapers was their fraudulent coupling of Enlightenment ideals with a relentless and ingenious pursuit of profit and power.” (Franzen, 2013, p.146).

“Kraus fought to keep open space for the imagination by campaigning against the modern things that got in its way: the feuilleton with its addictive, and thus lucrative, offering of prepackaged emotional responses to the news; (…) But another part of Kraus’s response was to promote Enlightenment in the Kantian sense. (…) to see writing as the result of mystical submission to language.” (Franzen, 2013, p.155).

“Nestroy hat aus dem Staat in die Welt gedacht. Heine von der Welt in den Staat. Und das ist mehr. Nestroy bleibt der Spaßmacher, den sein Spaß, der von der Hobelbank zu den Sternen schlug, kam von der Hobelbank, und von den Sternen wissen wir nichts. Ein irdischer politiker sagt uns mehr als ein kosmischer Hanswurst.” (Kraus in Franzen, 2013, p.162). “Wenn Kunst nicht das ist, was sie glauben und erlauben, sondern die Wegweite ist zwischen einem Geschauten und einem Gedachten, von einem Rinnsal zur Milchstrasse die kürzeste Verbindung, so hat es nie unter deutschem Himmel einen Läufer gegeben wie Nestroy.” (Kraus in Franzen, 2013, p.164).  “Dieser völlig sprachverbuhlte Humor, bei dem Sinn und Wort sich fangen, umfangen, und bis zur Untrennbarkeit, jab is zur Unkenntlichkeit halten.” (Kraus in Franzen, 2013, p.182).

“Die angeschaute Realität ins Gefühl aufgenommen, nicht befühlt, bis sie zum Gefühl passe Man könnte daran die Methode aller Poeterei, aller Feuilletonlyrik nachweisen, die ein passendes Stück Aussenwelt sucht, um eine vorrätige Stimmung abzugeben.” (Kraus Franzen, 2013, p.200).

“Was hat Nestroy gegen seine Zeitgenossen? Wahrlich, er übereilt sich. Er geht antizipierend seine kleine Umwelt mit einer Schärfe an, die einer späteren Sache würdig ware.” (Kraus in Franzen, 2013, p.246). “Daß der Zweck das Mittel ist, das Mittel zu vergessen.” (Kraus in Franzen, 2013, p.246).

“Die Organe dieser Zeit widersetzen sich der Bestimmung aller Kunst, in das Verständnis der Nachlebenden einzugehen. Es gibt keine Nachlebenden mehr, es gibt nur noch Lebende, die ein große Genugtuung darüber äußern, daß es sie gibt, daß e seine Gegenwart gibt, die sich ihre Neuigkeiten selbst besorgt und keine Geheimnisse vor der Zukunft hat.” (Kraus in Franzen, 2013, p.252).

The Loyalty Effect – Frederick F Reichheld 1996

This is not a good looking book. To be precise. It is ugly. Very ugly.

 

But it is an incredibly useful book. It tackles the problem or better chance of loyalty in business. 

“Relative retention explains success better than market share, scale, cost position or any of the other variables.” (Reichheld, 1996, p.23). In the brokerage industry and in the advertising industry customer retention correlates highly with profit. Even better: “A sift in retention of as little as 5 percentage points – from, say, 93 to 98 percent – seems to account for more than 20% improvement in productivity.” (Reichheld, 1996, p.13). Customer loyalty is inherently linked to employee and investor loyalty. (Reichheld, 1996, p.viii).

Loyalty is a better measure to steer your company than profit: If you look only at profits you automatically look for the short term. (Reichheld, 1996, p.5). But there are virtuous profits - result of creating value – and vicious profits: the result from destroying the ability to produce value. (Reichheld, 1996, p.6).

The practice of “carefully selecting customers, employees, and investors and then working hard to retain them – in a word, loyalty-based management.” (Reichheld, 1996, p.18).

The Economics of customer loyalty:

You need to start with making distinctions between sales revenue from new customers and those from loyal customers. (Reichheld, 1996, p.35).  “In most businesses, the profit earned from each individual customers grows as the customer stays with the company.” (Reichheld, 1996, p.37). Reasons:

-       while in the beginning there are acquisition cost

-       over time price premiums increase

-       there will be more referrals

-       operating cost decrease as one gets used to each other,

-       per customer revenue grows via by cross selling,

The right customers

Infiniti and Lexus launched at the same time into the luxury car market in the US. Infiniti went after trendsetters driving BMW. While Lexus went for Mercedes drivers who are older and more conservative. They are harder to get but more loyal. (Reichheld, 1996, p.72).

Since inherently loyal customers are incredibly hard to convince to switch, sales people have a tendency to attract low loyalty customers. (Reichheld, 1996, p.82). “customers who glide into your arms for minimal price discounts are the same customers who dance away with someone else at the slightest enticement.” (Reichheld, 1996, p.82). “As the customer quality declines, so does the firm’s ability to deliver value; which in turn discourages good customers, stifles growths, demotivates employees.” (Reichheld, 1996, p.84).

“The smart competitors will find ways to get the best ones (customers) early. And the smartest of the smart will then shift their growth strategy away from new-customer acquisition and toward building and broadening their relationships with the good customers they’ve already won.” (Reichheld, 1996, p.89).

The right employees

“Employees who are not loyal are unlikely to build an inventory of customers who are.” (Reichheld, 1996, p.91). “it takes time to build solid relationships with customers. (…) loyal employees have greater opportunities to learn and increase their efficiency.” (Reichheld, 1996, p.91).

The way to make employees loyal is to make them the shapers of their own fate: make them participate in success and be responsible for the cost (Reichheld, 1996, p.108).

Productivity

One problem of measuring productivity is that most business “treat income and outlays as if them occurred in separate worlds.” (Reichheld, 1996, p.120).”today, employees either control or represent the lion’s share of cost and at the same time (…) how well they serve customers is directly responsible for the lion’s share of revenues.” (Reichheld, 1996, p.120).

“The complete measure for productivity: revenue per person.” (Reichheld, 1996, p.121).

“Since employee control most of the both revenues and cost, companies must alter their employee policies to produce or enhance two effects: employee learning and the alignment of employee and business interests.” (Reichheld, 1996, p.122).

The right investors.

These days it’s all about managing the value to the shareholders, but no one manages the value that could flow FROM the shareholders. (Reichheld, 1996, p.154).“Benefits include the stability of the cash investors provide as well as the value of their advice.” (Reichheld, 1996, p.154).

“(Nike) segmented investors ans tailored its marketing approach to the shareholders it wanted.” (Reichheld, 1996, p.162). “The way Nike did this was to analyse the earnings growth and cashflow patterns it could realistically deliver, sort through the universe of public companies to find those with similar results, and then identify the investors who owned significant positions in those firms. Bymarketing itself to those investors, Nike was able to shift almost 30 percent of its shares into their hands.” (Reichheld, 1996, p.164).

Transforming the value proposition

Is our value proposition healthy? “Customer repurchase rates of 30 to 40 percent show clear dissatisfaction with the value provided.” (Reichheld, 1996, p.256). “Select customers carefully; learn more than any other company about what those core customers value through the whole cycle of shopping, purchase, ownership, and replacement; then redesign channel partnerships, sales and service processes, communications,m product lines, and logistics to deliver outstanding value.” (Reichheld, 1996, p.273).

Partners for change.

“Loyalty leaders like AG Edwards tend to think of loyalty not as loyalty to the company but loyalty to a set of principles that stand ahead of profit. It is this higher-order loyalty that energizes employees, builds customer retention, and, paradoxically, generates cash flow and profits.” (Reichheld, 1996, p.284).

“The secret of alignment is partnership, and the secret to partnership is compensating each partner with a shared interest  in the value he or she helps to create.” (Reichheld, 1996, p.287).