A few times each year a friend and I meet for lunch at Romano’s Macaroni Grill, conveniently located about halfway between our two offices. Last week we enjoyed our latest visit, and along with the bread and pasta we learned a valuable business lesson.

The lesson came as a result of the service we received from our waiter. He was attentive. He kept our water glasses full. He got our order right. He even asked, at the end of our meal, if everything had been to our satisfaction. Not being privy to the Macaroni Grill training manual, it sure seemed to us that he did everything by the book. That, however, is not the lesson.

What was reinforced to my friend and I that day is that it doesn’t matter how technically excellent you are if you forget that business is about rhythm and pacing. While our waiter’s interaction with us was technically correct, his timing and sensitivity left quite a bit to be desired.

It began shortly after we sat down, when he asked us if we were ready to order before we even cracked the menus. Recognizing that he may think we were in a hurry, we politely asked him to give us a few minutes. When he came back a second time, he cut off my friend in mid-sentence–an interruption that happened at least twice more during the meal. When we were finished, he asked one last time if we wanted additional water. We said “no thank you” and soon after he returned and began filling our glasses. Through these and a handful of other examples, we noticed that the young man was simply not paying attention to our needs. His insensitivity was so noticeable that we ended our time together reflecting on it–and now it’s the topic of my blog.

What our waiter didn’t appreciate is that people don’t dine together merely to eat, they dine together to relate with one another. There is a rhythm and pacing to a meal, just as there is to a song. It is the job of the waiter to sense the tempo and become part of the melody, gracefully moving things along if his patrons are in a hurry and trying to escape notice altogether if they’re not. In this case, the stakes were pretty low since I was having lunch with a old friend. But if I had been dining with a new (or prospective) customer, the experience would have left a bad taste in both of our mouths.

I was a waiter in college, and it provided wonderful training for what I have since experienced in business. Not only did working for tips help me grasp the connection between performance and income, it taught me how to sense my customers’ needs and relate to them accordingly. Hopefully, the young waiter that served us last week is learning the same lessons. Sometimes the fastest way to succeed is to slow down, and the best way to be appreciated is to stay out of the way.

* With apologies to Billy Joel

OK, I’m going to get in trouble here. I think Southwest Airlines should start charging for baggage. Before you start yelling at your computer (or through it), listen to my reasoning.

First of all, I’m not speaking as a passenger. As a frequent traveler myself, I am flabbergasted by how poorly the big legacy carriers tend to treat their passengers, and I love the fact that Southwest doesn’t ding my credit card at the check-in kiosk. And as a marketer, I know the public relations firestorm doing so would create. But the move makes sense from both a financial and branding perspective.

As of June 30th, Southwest had lost $37 million. For the first time in 37 years, the airline might be facing an annual loss (of as much as $70 million, according to industry analysts). While not the largest airline by revenue, Southwest does carry more passengers than any other airline–more than 100 million in 2008. If just ten percent of those passengers paid $10 per checked bag, that’s an additional $100 million in revenue. And at ten bucks per bag, Southwest would still be well under the $20 and $30 per bag that other airlines charge.

Charging for checked bags wouldn’t be as odd as you might think for Southwest. The airline already charges $75 to carry a pet on board. It charges $25 for unaccompanied minors. Its Business Select fares allow passengers priority boarding and “one premium beverage of your choice” for an additional $10 to $30. And in a little-noticed footnote on its website, Southwest says, “Effective June 17, 2009, the charge for checking a third bag or a bag weighing 51-70 pounds will be $50.” Sure, if Southwest started charging for checked bags some passengers might defect, but there’s really nowhere for them to go. And even if they did leave for a period of time out of protest, Southwest’s other strengths would likely bring them back.

Of course, there is the matter of Southwest’s high-profile “Bags Fly Free” campaign. The company has made hay out of the fact that while its competitors are nickel-and-diming their customers, Southwest won’t. It’s true that if Southwest were to change its policy it would have a short-term public relations challenge on its hands, but from a long-term branding standpoint charging for bags makes sense for a low fare, no-frills airline. Over the course of time, the protests would die out. Especially if Southwest quietly stops promoting its policy for a period of time before the change is made.

Baggage charges are here to stay–there’s no way the airlines can afford to give them up. To remain competitive, sooner or later Southwest will be forced to capture the revenue that it’s currently leaving on the table (or counter, as it were). While the idea may be highly unpopular, Southwest has an obligation to its shareholders and employees to prepare for that day. Given the track record of this smartly-managed company, I suspect it’s already doing so.

OK, let me have it.

I recently came across an interesting quote from Michael Schumacher, the seven-time Formula One champion. He said, “To perfect things, speed is a unifying force. To imperfect things, speed is a destructive force.”

Business, like auto racing, is a world of imperfect things. Always has been. But as the pace of change continues to increase, both the danger and the likelihood of a company hitting the wall grow exponentially greater. Strategic mistakes that in the past might have required a pit stop now could be fatal.

A lot of companies are learning this the hard way during the protracted downturn. We’ve all read about Lehman Brothers, GM and Washington Mutual, but a number of lower profile yet still well-known names have also joined the bankruptcy club, including Six Flags, Crunch Gym and Nortel. According to the American Bankruptcy Institute, business bankruptcies in the first half of 2009 are 64 percent higher than they were in 2008. More than twenty thousand corporations have gone belly up since the beginning of the year.

What does this mean to those of us that are still in the race? We have to stay calm, stay focused, and keep a tight but responsive grip on the steering wheel. The pace of change requires that we drive faster and faster, but bumps in the road and the inches that separate us from our competitors can change in an instant and send us careening into the wall. As Adam Hartung, author of Create Marketplace Disruption, puts it, “When a new technology can go from invention to market in weeks, adaptability becomes far more important than size.”

Adaptability. The true test of today’s environment isn’t simply which companies have enough cash or market share to ride things out, but which can best adjust to the changing environment–both outside and within their organizations. While power has always been important, smart strategy is more vital than ever. This challenging race calls for cool-headed drivers.

Dot one…Recognizing the remarkable success of Apple’s iPhone, Palm launches the Pre, which (according to its ads), “does things iPhone can’t.” True enough, and as an iPhone user I must say that the Pre’s exclusive features are appealing. There’s just one problem–I don’t believe for a minute that the iPhone won’t adopt the same features within months. Given the time and psychological costs associated with switching not just my phone, but my service provider, I’m content to wait.

Dot two…Ford launches the all-new Taurus by touting “radar that monitors and alerts you when sensors detect vehicles in front of you…” and “hands-free, voice-activated communications and entertainment.” Like those of the Palm Pre, these features are highly attractive and I would like to benefit from both when I purchase my next vehicle. In all likelihood, I will, because if they’re as appealing to most people as they are to me, soon enough they’ll be available options (if not standard equipment) on most cars.

Connecting the dots…good luck trying to differentiate your brand based on features. As Joseph B. White, automotive columnist for the Wall Street Journal put it in his review of Mercedes’ new E550 Coupe, “Electronic gadgets such as radar-assisted cruise control or blind-spot hazard detection are falling down the technology-cost curve so fast that premium brands have only slits for windows of exclusivity on much of this hardware.”

Slits for windows of exclusivity. It’s true for cars, and it’s true for cell phones. It’s also true for computers. And hotels. And hamburgers (witness the recent scuffle between McDonald’s and Carl’s Jr over their “angus” burgers). Feature filching is a fact of life in just about every category of product or service. Unless an innovation is protected by intellectual property laws (and often in spite of that), not only can a given company not “own” it in consumers’ minds, but by hanging its hat on a feature it may inadvertently be sowing seeds that its competitors will reap.

What, then, is a marketer to do? Keep innovating, of course–that’s the ante. And when you do develop an exciting advance, do all you can to make the most of it. But keep in mind that it’s not individual innovations that will build brand equity, it’s your unique arc of innovation, presented in a credible, relevant, winsome and consistent context, that will ultimately differentiate your brand from its competition.

“The chief executive as visionary leader is a thing of the past.”

That’s the revealed wisdom from Drs. Philip Tulimieri and Moshe Banai, management professors at the Zicklin School of Business, Baruch College, City University of New York.

In a recent Wall Street Journal opinion piece, the two professors proclaimed, “It’s time to make room at the top for co-equals: leadership by the CEO and the chief financial officer—with equal authority and accountability.” The reason, they say, is because “the top job has simply become too large, too complex and too demanding for one person.” Tulimieri and Banai believe that the CEO and CFO are now “necessary counterforces” in the “new-millennium corporation” which is focused on “ethical behavior, sustainability and true stakeholder value.” They go on to claim that corporate management is fundamentally changing because young managers are being raised on “principles of mutual respect and corporate pluralism.” Ah, yes (to quote Ron Alsop), the trophy kids grow up.

Pardon me for saying so, but this is a bunch of hooey. Beyond their simplistic inference that “old-millennium” corporations are, by definition, unethical, unsustainable and neglectful of their stakeholders, Tulimieri and Banai paint a simplistic picture of corporate leadership. They make a cliched characterization of the CEO as “eternal optimist pushing ahead at full speed,” while the CFO is a “realist, urging caution and remaining wary of risk.” This horrendous oversimplification is an insult to CEOs and CFOs alike, and leaves the chief operating and chief marketing officers out of the picture altogether.

As a student of the dynamics that fuel and hinder growth, I understand the flaws of the autocratic CEO and the need for strategic consensus-building. But management by committee–even a committee of two–is never a good idea. Tulimieri and Banai recognize that under their model, “inevitable differences on strategy, growth and other issues will make timely decision-making impossible.” But they brush that aside, claiming that when conflicts arise “appeals” can be made to “a higher or independent authority” such as the board or–their word, not mine–a “subcommittee.”

My research demonstrates that lack of strategic consensus is a stumbling block over which many companies trip, often without realizing it. Far from improving the corporation, the structural changes proposed by Tulimieri and Banai would further institutionalize conflict, freeze out key corporate influences, and introduce unnecessary power struggles. While there are two ends to every conference table, the buck can only stop at one of them.

I’ve heard it said that government should be run more like a business, but never that business should be run more like government. I guess the times, they really are a-changin’.

Yesterday I met with about a dozen smart, aggressive CEOs, all of whom run successful companies. Most of them, like most of us, are struggling in the current economic environment.

The conversation turned to the pressure on margins they’re facing, particularly in industries where distinguishing one competitor from another can be difficult. The question on the table ultimately became this: if you’re operating in a “commoditized” industry, what choice do you have but to compete on price?

Plenty. I happen to believe that there is no such thing as a truly commoditized industry. Think about it–if milk or orange juice can be branded, anything can be. Even if your offering is virtually indistinguishable from what competitors provide, the way it’s promoted and delivered–from packaging to timeliness to inventory management to the terms offered–can set your brand apart.

It all goes back to the fundamentals of marketing and the Four Ps. While your “product” might be very similar (even identical) to that of your competitors, there are three other Ps in the toolbox with which you can differentiate. For example, while Coke and Pepsi might take issue with being called commodities, to most people they are acceptable substitutes as far as the caramel-colored beverage in the bottle is concerned. Yet both companies relentlessly work to differentiate themselves along packaging, distribution and promotional lines, often with a great deal of success.

Don’t cop out if you operate in a highly competitive industry, complaining about having to compete on price. It’s not true. Find a way not to be “better”, but “different,” using all of the tools in the marketing toolbox. Accepting “commodity” status is a choice you make. Or don’t.

Sometimes the Twitterverse gets it wrong.

A random scan of tweets over the past week or so reveals a lot of people scoffing at RadioShack’s newest campaign, which refers to the store simply as “The Shack.” I’m not ready to pass judgment on the campaign yet (one of the things I’ve learned is when it comes to advertising–as with fashion, architecture and automobile styling–people often judge too quickly), but I have to give RadioShack and its agency, Butler, Shine, Stern & Partners, credit.

Think about it. RadioShack was a brand left for dead. The fact that it’s doing something–anything–is a good sign. True, “The Shack” initially confused me, since I had just read the book by the same name, but that’s little more than a speed bump. And yes, it’s a little out of character for a store that, according to one Twitterer, is only relevant “if you’re over 65.” But I tend to think of it more like the nerdy kid in high school who one day shows up with a good haircut and hip clothes. Sure, the “cool kids” will tease him a lot that first day, but if he keeps it up over time they will not only get used to it, they may realize he’s not so nerdy after all. That, I believe, is the core strategy behind this idea.

Which brings me to the key for “The Shack.” Consistency. If RadioShack runs this effort for three months, six months, even nine months and then moves on, it will be just like the nerdy kid going back to his highwater pants and short sleeve dress shirt. RadioShack’s commitment to being relevant–and being present with notable advertising–needs to be permanent. As in forever. As in this is the way retail business is done.

I hope that Lee Applbaum, RadioShack’s chief marketing officer, realizes that. And that he has the support of the company’s CEO. Some elements of this campaign will perform better than others, and some may fall totally flat. But when an advertiser is consistent, it can drop what isn’t working and keep what is, continually honing its message to be more relevant in the marketplace.

RadioShack, for all its recent problems, is a great old brand. And it still has a relevant place in the world of retail electronics. So to all of the cool kids on Twitter, I say relax, back down, and give “The Shack” some breathing room. After all, some of those “nerds” in high school grew up to be rock stars, supermodels and Internet multimillionaires.

“We sell a bunch of junk.”

Those are not words you’d expect to hear from any corporate CEO, let alone John Mackey, the iconoclastic founder of Whole Foods. Yet that’s exactly how he described the nutritional value of much of Whole Foods’ merchandise in a Wall Street Journal column.

Reading those words was somewhat surreal for me, as was the article’s headline: “Whole Foods Tries Health Push.” Isn’t health what Whole Foods is all about?

Apparently not–or at least not recently. Mackey wants to re-embrace Whole Food’s “original emphasis” and reposition the chain “as a champion of healthy living in a return to its natural-foods roots.” In addition to its product revamp, the company is developing a number of new initiatives including an employee wellness program, customer education effort, and even in-store reference materials.

I’m no stranger to a loss of focus, and I know it can happen to the best of companies. But this is somewhat of a head scratcher. True, Mackey was distracted by Whole Foods’ 2007 acquisition of rival Wild Oats and the drawn-out antitrust battle he had to fight with federal regulators. But the context of that battle was about Whole Foods supposedly cornering the market for organic foods. Perhaps Mackey could have convinced the FTC to back down by inviting them into the store for some “prime beef, crusty white bread and rich chocolate cake,” as the article described. Or maybe Snickers and a Red Bull.

Just goes to show you how easy it is to veer off course, particularly when you’re battling sales declines in a rotten economy. But if a company founded on healthy food, named for healthy food, and fighting an expensive public battle with the government about its supposed dominance of the healthy food industry can end up peddling, well, a bunch of junk, it’s pretty depressing.

Sigh. I think I’ll have some ice cream.

As long as we’re on the topic of trouble at the top (see my last post here), keep your eye on Office Depot. The struggling retailer just gave up three seats on its board to a private-equity firm that came to its rescue with a $350 million investment. The new board members are unlikely to be shy about their opinions.

While Office Depot’s CFO told the Wall Street Journal the investment will carry the company through the current business cycle, he was speaking about its capital structure, not its board. If Office Depot continues to struggle (sales in its most recent quarter dropped 22%) you can bet there’s going to be animated discussions about how to turn things around. And the back-to-school season is expected to be brutally competitive.

Hopefully, Office Depot can avoid the fate of Target, Dial-a-Mattress and Children’s Place and maintain alignment at the top. But if not, the battle in the boardroom will make Office Depot the latest victim of the most destructive internal dynamic that tends to bedevil companies when growth stalls. And it will be one more (big) distraction hindering its recovery.