The annual Best Global Brands ranking from Interbrand and Business Week has been released, and not surprisingly, the Coca-Cola brand remains No. 1 with a value of $68.7 billion. That’s up 3 percent from last year.

Coke was one of the few gainers, however, and for the first time in its nine-year history the study revealed an overall decline in value among the top 100 brands, which dropped by a collective 4.6 percent. In addition to Coca-Cola, individual gainers included IBM (No. 2), McDonald’s, Amazon and Google, while losers included Microsoft, Toyota, Intel, Disney, and GE, among many others. Harley-Davidson saw the biggest decline outside of the financial sector, losing 43 percent of its brand value.

I must say that I wasn’t surprised, given the year we’ve had, that the value of the world’s top 100 brands has declined. Interbrand uses a sophisticated methodology to calculate its ranking, and it can’t help but incorporate the dismal numbers many of these companies have turned in over the last several quarters. What did surprise me, however, was the conclusion I drew from it: little more than a yawn.

Why? Well, while the relative value of non-competing brands is fascinating (e.g. IBM is worth more than Toyota), it’s not terribly relevant to either company. And while the absolute value of any one brand–especially those with values in the tens of billions of dollars–is stunning, the most significant measure is how one brand stacks up relative to its competitors in a given category. If a brand is losing ground while its competitors are gaining, then it has something to worry about.

Brand values are not like stock values; there’s no ready market of exchange, and it’s not as if a company is going to dispose of its brand when its value temporarily declines. If anything, such a decline should encourage the brand’s stewards to step up their efforts, a message than can’t be emphasized enough during a time when too many companies are cutting their investments in brand building.

I suspect if Interbrand ran every brand through its valuation analysis, most of ours would be showing some decline right now. But every race has its pace, and the most important measure is how you’re running against your competitors. As for my company, we’re redoubling our efforts to stay ahead of our pack. How about yours?

Six months ago the Blockbuster Video store a mile from my house closed. Last week, the store three miles from my house closed. I don’t even know where the next closest location is, so I guess my family has rented its last Blockbuster video.

While I was surprised that both locations near me were shut down, I had read that Blockbuster recently announced it would be closing up to 40 percent of its locations in order to shore up operating profit and reallocate its growth capital. Whether or not the move will save the company is an open question, but it does offer a good case study of the never-ending cycle of creative destruction that continues every day in a free economy.

The video rental business has always been a game of distribution. A generation ago Blockbuster put thousands of mom-and-pop video stores out of business by offering better selection, efficiency and convenience. Today, Blockbuster is a victim of those same forces via a host of competitors, from premium cable to pay-per-view to Netflix to Redbox. As technology rapidly evolved, Blockbuster’s bricks-and-mortar strategy increasingly looked like an anachronism.

The company is trying to evolve by experimenting with its own mail-order, online, kiosk, and even cellphone download options. But it may be too little too late. The lesson for those of us in other industries isn’t if you live by the sword you’ll die by the sword–in business, we all live by the sword. The lesson is no matter how big, strong and successful any of our companies may be, there are always competitors out there honing their blades. And their advances may not come from the avenues we expect.

Stay sharp.

The news is out. Sales of the much-ballyhood Palm Pre are…a disappointment. The new smartphone, launched to compete head-on with Apple’s groundbreaking iPhone, has lost its momentum.

The Pre, which was launched June 6, got off to a good start but has faded in recent weeks. According to the Wall Street Journal, analysts projected lower sales in the current period than had been expected, and Palm reported a loss of nearly $165 million for its most recent quarter–the first full quarter to include Pre sales results.

Jon Rubinstein, Palm’s CEO, says the company “will face near-term pressures until we transition to a more diversified carrier base and expand our family of webOS products, but we are confident we’re on the path to success.” Makes you wonder if this is a case of actions speaking louder than words, as Palm recently cut the Pre’s price by 25 percent (tied to a two-year service agreement), and is issuing 16 million more shares of common stock to overcome a cash problem.

The Pre, by all accounts, is a terrific phone, and offers some enhancements that the iPhone doesn’t yet have (see “Features, Smeachers”). But drafting behind the leader isn’t the same as taking the lead, and being a little bit better often isn’t enough. Especially when the guy up front has his own race strategy (Apple cut the price of its first generation iPhone to 99 bucks within two days of the Pre’s launch).

Perhaps Palm will do better with Pixi, a phone targeted at youth, which should be available in time for Christmas. If it’s different enough from other offerings in the marketplace, Palm may get it share of attention (and accolades). But if it’s another me-too product, the Pixi will get little more than a yawn.

Sometimes a company, like an athlete, falls behind and simply has to catch up. But “catching up” is not a strategy for victory. Innovation is all about finding a way to get–and stay–out front.

Toys ‘R’ Us has faced its share of difficulties over the past several years. The company has had to contend with the likes not only of traditional competitors including Sears, KB Toys and FAO Schwarz, but bricks-and-mortar bruisers like Target and Walmart and Web behemoth Amazon. Not so long ago the company faced what appeared to be an existential threat from a very-well funded (and heavily advertised) “new economy” competitor, an online startup called eToys. There was a period when I thought Toys ‘R’ Us not only had seen its better days, but would have very few days left.

My how times have changed. Toys ‘R’ Us now owns–that’s right, owns–the FAO Schwarz, eToys and KB Toys brands. And in a gutsy move that runs counter to the loss of nerve by which most retailers are still being tripped up, the company, which has fewer than 850 stores, will launch an additional 350 temporary locations during the upcoming holiday season. That means more rent, more people, more inventory, and more risk. It also means significant potential to gain market share.

In a Wall Street Journal interview, Toys ‘R’ Us CEO Gerald Storch said about the decision, “The current economic disruption provides an opportunity. The people who made their fortunes during the Great Depression where those that moved when everyone else was pulling back.”

He’s right, of course. The same Wall Street Journal article cites a CIT Group study which suggests that two thirds of retailers plan on hunkering down during the upcoming holiday season. While they make their toys easier to buy (with bigger discounts) but harder to find ( by stocking less inventory), Toys ‘R’ Us is positioning itself to be in the right place at the right time as harried shoppers look to cross items off their list (given the category, often impulsively). That will help the company not only pick up share, but protect its margins.

Rather than sitting around, wringing its hands about another potentially difficult holiday season, the Toys ‘R’ Us team has decided that disruptive times often call for disruptive measures. I predict their stockings will be full this year.

Last week, I wrote a BusinessWeek.com column entitled, “Why Your Advertising Isn’t Working.” Last weekend, GM launched its “Satisfaction Guaranteed” marketing campaign. With uncanny timing, GM’s new effort embodies many of the reasons I identified as to why advertising underperforms. (Judge for yourself here.) And for a number of reasons, GM’s campaign just doesn’t sit right with me.

First, in its news release introducing the effort, the company said, “if consumers give us a fair chance and look at the facts…our vehicles are the best choices.” The premise on which this statement seems to be based is odd to me, as if GM (recipient of billions of bailout dollars) has somehow been wronged by the public. Last I checked, people buy those vehicles which in their estimation meet their unique needs the best. “Fairness” (whatever that means) never even enters into the equation.

Second, GM went on to say it understands that to encourage prospective customers to give its brands a second look it will need to “work very hard to get people’s attention.” Fair enough, but the company didn’t work very hard to get people’s attention with this advertising. It’s flat, it’s boring, and (despite GMs protestations to the contrary) it’s been done before (see Chrysler/Lee Iacocca, circa 1981).

Third, I’m not sure a 60-day money back guarantee is the right strategy to reach people who have historically turned their noses up at GM brands. The question is less about how the company’s vehicles hold up in the first 60 days, but how they perform after 60,000 miles. I suspect this new offer will appeal strongly to GM fans, but won’t do much to move the needle among the buyers GM really needs to convert (who are currently loyal to dependable foreign makes).

If GM wants the public to give its vehicles a good second look, it must begin with a foundation not only of well-designed, well-built cars, but well-designed, well-built marketing. The fact that it didn’t shows a lack of understanding not only about how branding works, but how auto buyers think. Neither of which is a good sign.

Today is an anniversary of sorts, as six months ago When Growth Stalls was officially released. That day, March 10, the stock market began a sustained rally that has essentially continued to this day (just thought I’d point that out).

The past six months will probably be seen as the recession’s bottom, assuming the snippets of good news we have been getting of late continue to gain momentum. In that sense, the book couldn’t have been more timely, and judging from the feedback I’ve gotten it appears to be hitting the mark. Here are just a few comments I’ve received:

“It’s been a long time since I read a book that had this many ‘ah-ha’ moments.”

“Having read a large number of leadership books in the last several months, I found this work to be truly the best of the best.”

“This book is one of the few resources that I will go back to again and again.”

When Growth Stalls has received some terrific press coverage, from Bloomberg to BusinessWeek.com to Fox Business. Perhaps the highlight of the past six months was the window placement the book received at the nation’s #1 business bookstore, Barnes & Noble at Rockefeller Center (click here to see a photo). Rights to the book have been purchased for both Spanish and Portuguese translations as well.

The subtitle of When Growth Stalls is “How It Happens, Why You’re Stuck, and What to Do About It.” In the coming months, as companies throughout the nation pick themselves up, dust themselves off, and get back to business, the “what to do about it” element will become even more relevant. Companies that follow the proven, practical advice I offer in the book will speed their recoveries and get a leg up on their competitors.

If you haven’t yet picked up a copy, I encourage you to do so. It’s available directly from Amazon, Barnes & Noble and Borders, or if you’d like a signed copy you can order one directly from WhenGrowthStalls.com. I also encourage you to become a fan of the book on Facebook (click here) and share the book and this blog with a friend. And keep an eye on this space, as on October 1 I’ll be announcing an exciting new grassroots initiative tied to the ideas in the book.

Thank you for your support in this effort. It has been a terrific adventure, and I hope it can make a difference for even more company leaders that are sick and tired of being stuck.

Well, Labor Day is behind us, autumn is upon us, and we’re about to come up on a year since the fall of Lehman Brothers.

The recession itself is almost two years old, having officially started in December, 2007. Most companies began to feel the slowdown early last year, followed by an unanticipated shockwave that rippled through the economy in September. Since that time there has been a steady drumbeat of bad news, and businesses have had to find ways to cope with and adjust to continuous uncertainty about what’s going to happen next. Washington hasn’t helped, taking on one of history’s most consequential and divisive arguments about the role of government at a time when the economy needs rest. No one has any idea what the outcome–or the consequences–of the argument will be.

So how ya doin?

It’s not a trivial question. When the story of this recession is written with the benefit of hindsight, I believe we’re going to see significant analysis about the psychological effect the protracted downturn has had on corporate culture, and particularly corporate leadership. Fatigue makes cowards of us all, as the saying goes, and as business leaders we’re nothing if not fatigued.

As a consultant I’m seeing an increasing amount of decisions made based on emotion, many of them ill-advised. The kindling of internal conflict is dry and dangerous, vulnerable to the slightest spark of insult or dissent. Longstanding customer relationships are weakened as tensions rise and trust declines. Managers are struggling to manage not only the financial challenges at work, but those at home as well.

There’s no easy way out. There’s only a way through. And we have to get through it together. The good news is that, like most things in life, recognizing the struggle is the first step towards overcoming it.

Take a minute today and reset your perspective. Determine to persevere. And offer a word of encouragement to someone you know who needs it. It might just make you feel better too.

One of the questions I’m frequently asked by corporate leaders struggling to manage in the current environment is how far to go with their cost-cutting measures. With their companies suffering sales declines, they’ve got to trim somewhere to maintain profitability (and in some cases to stay afloat), but they don’t want to cut the wrong things.

Recent moves by Jean-Paul Agon, CEO of L’Oreal, offer a good example. The luxury cosmetics maker has had a difficult year so far, in part because it “scrimped” on brand promotion, reports the Wall Street Journal. In light of this Agon knew he had to cut back, but he has done so wisely. He launched a reorganization plan which included a hiring freeze. He trimmed travel expenses and even closed three factories. What Agon did not do was cut off the company’s lifeblood, marketing and R&D.;

Says Agon, “We’re strengthening our media and promotion. It’s a brave strategy because when you face a crisis, most companies say I’m going to reduce my media budget. We decided to do just the opposite.” When it comes to R&D;, Agon is even more resolute: “The last thing to do would be to give up innovation because cosmetics is really about permanently inventing new products, new technologies, new benefits, new results.”

There is no cookie cutter answer for how a struggling company should cut back to make its numbers work. But when you’re faced with those difficult decisions, do your best to trim expenses and leave the investments in place.