computer code

Posted: January 27, 2015
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How technology is shaping the new business paradigm and where marketers fit in – Part One

As I write this the world’s fastest computer, The Chinese Tianhe-2A super-computer, can make around thirty-four thousand trillion calculations per second (or for the initiated – operates at 33.8 PetaFlops) – Incredible, isn’t it? However the critical part of this statement is the term “as I write this…” because, what is more incredible still is that by the time you read it, this number will undoubtedly have risen. Such is the pace of technological progress.

I can remember being hired by the first company I had worked for that had a computer. It occupied a room, comprised towers of reel-to-reel tapes and all it did was the accounting for a modest independent advertising agency. Prior to that, accounting tasks like this were undertaken by rooms full, not of electronics, but men and women with thick books and sharp pencils. Today anybody can do the same thing on a smartphone.

DunnHumby, the company that manages the data for the international supermarket chain Tesco, record millions of transactions a day, comprising tens of millions of individual items that DunnHumby can cross-reference to define the profile of individual customers and accurately predict their grocery shopping needs. This in turn enables them, theoretically, to make a unique, tailored offer to each of their customers every week with a reasonable expectation that the customer will buy it.  Thirty years ago, no retailer on earth had as many customers as the big players have today and there was certainly no expectation of ever knowing what they were buying with any degree of certainty, let alone predicting what they would buy next week.

Right now it’s possible to order the product of your dreams. From cars to clothing we can dictate colour, size and other features without even having a conversation with a human being. The tennis racket manufacturer Head already offer, not just a choice of colour and shape of our racket, but the stiffness at different points in its construction, so you are directly involved and influence the manufacturing process. Yes, we’ve come a long way in a short time, but hang on to your seats, it’s going to get a whole lot faster

We haven’t even begun to exploit the capability that technology currently affords us and already someone, somewhere is working on a way to increase that potential.

Just to get a better appreciation of how far we have come, here are five things that we now consider “everyday” that we couldn’t even do ten years ago:

  1. Order your weekly grocery shop for home delivery at a specified time
  2. Play just about any music track you wish on subscription without actually buying it.
  3. Pin-point any address in the world on a map and have the quickest route from your present location to that point plotted and dictated to you as you travel by foot, public transport or automobile.
  4. Back-up all your computer files, operate applications that you don’t have installed on your machine and share files via a cloud.
  5. Make a list of thousands of people just like your best customer and send them all a personalised e-mail about your product.

So, what does this mean for your business and how are you adapting to keep pace with this change?

In Part Two of this editorial, I’ll look at what this means for the shape of organisations and in particular marketing and marketing services businesses around the world.


Leonardo's helicopter

Posted: January 5, 2015
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Corporate aggregation and the da Vinci effect

As the role of marketing changes and expands at a rate never known before the profiles of the people doing it have to change too. There are new things to do, new disciplines to master and skills to perfect. Today’s markers have to understand areas like finance, HR and supply chain enough to influence the way they operate within the organisation, because we have come to realise that they are all contributing to marketing. There are also entirely new disciplines, like technological integration, data analysis and strategic development that haven’t featured in a marketer’s job spec before. Today, marketers have to be like Leonardo Da Vinci – creative and technical, equally left and right-brained and how many people like that do you know? Great marketers are very rare animals!

The truth is that organisations that wait for candidates with the breadth of skills marketers need these days, to apply for roles, will be waiting a long time. So long in fact that they’ll probably not survive. Being the complete marketing package is something that, as individuals, we either have within us or we don’t. No amount of training is going to produce Frankenstein’s marketer. There is, however, an alternative and that is what I call corporate aggregation.

If you can’t find a single person with the range of skills you need you must hire a number of people whose individual skills combine to create the whole. It looks expensive of course, but it’s not as costly as submitting to your competition and if you are working with the kind of truly integrated strategy that teams like this are capable of and that businesses worldwide are now turning to, you’ll find more than enough savings and efficiency to cover the investment.

Of course, I am simplifying a little here, because if you just put a random bunch of specialists together you’ll rarely generate any output. You need a process, a way of working and a set of tools to keep it all on track.

I’ve been aware of this growing need for a while now and in response some years ago I created Full Effect Marketing, which I’ve since shared with organisations around the world. You can create your own process, of course, but it’s complicated and plugging into a ready-made template suits most businesses best. It’s quicker and you are more likely to get it right first time.

The Full Effect Company is a group of people with diverse skills, but a common understanding of how businesses work these days. They’ve all signed up to my Full Effect Marketing philosophy and have adopted the tried and tested processes that we have created together that enable us to turn the strategies I create into reality. We come together in tailored implementation teams that can either supplement or replace entirely any organisation’s marketers.

Over the years we have learned to adapt to pretty well any situation. We’ve confined ourselves to creating the fully-integrated end-to-end business strategies that incorporate all that was previously part of an organisation’s separate business and marketing strategies. In other cases we’ve built, trained and managed their existing marketing team, mentoring at every level. In some instances we’ve even replaced in-house marketing departments altogether, at least for a while.

I’m convinced that this is the way forward for the vast majority of businesses. In fact, aggregation is the only alternative to waiting for Leonardo to turn up and other than doing it yourself, with all the delays and pitfalls associated with the unavoidable process of learning on the job, out-sourcing has to be the quickest and most efficient means of transforming a business and making it fit to compete in today’s marketplace.


Classic sales pattern

Posted: December 15, 2014
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How your brand influences the shape of your sales curve

Back in April Phil Morettini posted a really sensible piece on his PJM Consulting blog about managing the growth curve. I have spoken on this subject myself at conferences and seminars in the past, but, in recent times I’ve focussed on other subjects. Phil’s post made the rounds again this month and prompted me to revisit the subject.

While I like his approach, my take on the subject hinges on an additional observation. Critically, the shape of the growth curve has changed over time. As the introduction of new technology has accelerated, so too has the rate of change adding vastly to the potential agility of businesses. This all helps leaders get innovation to market quicker, which serves to steepen initial growth. However, it also enables followers to catch up even faster.

Think about what this means to you. With competitors breathing down your neck, the cost of all that research and new product development has to be recouped sooner than ever before. When competitive products arrive on the shelves things start to get tough, so the threat to your growth arrives sooner and you want to have your initial investment largely covered by then. When competition arrives sales will usually flatten and soon start to decline proportionate to the quality and number of the competitors.

What this highlights more than anything else is the need to maximise the efficiency of your organisation. An efficient organisation will have more great new ideas and get them to market quicker. It will also sell more in a shorter period of time and the key to efficiency is having a strong brand.

One of the most significant benefits of a strong brand is focus. A business with strong brands will have employees that fully understand the brand promise and the role they can play in its delivery. This means that innovations will be more appropriate with ideas that don’t accurately represent the brand being thrown out earlier. This in turn means time, human resource and investment are available to back the winners, quickening the pace of development of ideas and adding to the robustness of product concepts that go all the way. The last play in the product launch scenario though is getting it into the homes of consumers and anybody will recognise the role that a strong brand plays here.

One of the greatest assets of a strong brand is familiarity. People know its name and they understand the promise it makes. It won’t hold any bad surprises and consumers trust its consistency. It offers the reassurance that makes any new product that carries its logo more readily acceptable to existing customers, hence, fewer obstacles to the purchase.

The “knowing and trusting” aspect also manifests itself in the readiness of customers to recommend it. So all your existing customers banging your drum every aspect of your advertising at every stage of the path to purchase will be far more effective and bring a far greater return.

As a recent European survey revealed, the majority of shoppers around the world are not motivated primarily by price. This has come as a bit of a surprise to some people and a great many retailers in particular that I encounter fall into the trap of responding to competitive pressure by reducing prices. They get an immediate business up-lift of course, but it’s a fool’s paradise that ultimately introduces uncertainly into the relationship with customers and in the long term reduces both revenue and profit.

You should never forget that the keys to success are a) the consistency that fuels the feelings of knowing and trusting that drives both sales and recommendations. This also drives b) the efficiency that will enable you to get the right innovations to market quicker, at less cost, sell more in a shorter period of time whilst reducing reliance on expensive, traditional advertising. That’s how your brand influences the shape of your sales curve.


abercrombie ceo. Mike Jeffries

Posted: December 11, 2014
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Abercrombie & Fitch – the re-birth?

My post back in March this year where I explored the demise of Abercrombie and Fitch has proven to be one of my most popular ever. So, I guess it’s fitting that I should acknowledge the news today that the beleaguered retailer has finally managed to dispose of its founder and CEO Michael Jeffries. Does this mean they’ll now be able to fix their business?

Frankly, and not because the I owe them for the traffic that my previous piece generated on my blog, I hope it does. Having largely avoided American chain stores in the past I’ve been keeping an eye on this retailer as well as a few others and even bought stuff there. Maybe A&F have been making a few small changes along the way, or maybe the gym membership is paying off, but at least the stuff on their shelves seems to fit me these days!

I noted before that the business’s biggest investor had been trying to oust Jeffries for years. It certainly seems that he was a major obstacle to progress, so maybe, now that looks like a done deal, they can start to rebuild. However, I’ve seen this before – a young and vibrant management team forces out the founder of a business and then proceeds to send it bankrupt within six months, so onlookers have to be wary of the possibility that it was the conflict within that was causing the problems, while the founder’s reticence to change was actually serving to reduce the negative effects of the other managers’ efforts.

If that’s so, the clue would have been in the quote by Jeffries cited in the Retail Gazette article: “In every school there are the cool and popular kids, and then there are the not-so-cool kids. Candidly, we go after the cool kids. We go after the attractive all-American kid with a great attitude and a lot of friends. A lot of people don’t belong [in our clothes], and they can’t belong. Are we exclusionary? Absolutely. Those companies that are in trouble are trying to target everybody: young, old, fat, skinny. But then you become totally vanilla. You don’t alienate anybody, but you don’t excite anybody, either.”

While this is presented here as a mistake, Jeffries was absolutely bang on the button. In fact he has been with some of the other so called “howlers” he’s been responsible for over the years. Maybe it’s just that people don’t like the bloke so they disagree on principle with everything he says, but the strongest brands are exclusionary, I’ve been saying this for years, so he wasn’t wrong there. Its also true that brands that try to be all things to all people fail. Again, as he suggests, being a panacea is just not something you can build a strong brand on. It may well be that A&F are aiming at the wrong group or not understanding their “brandships” well enough, but if this statement had been made by Steve Jobs, who I would argue was also exclusionary in his own way, we’d be hailing it as wisdom and printing it on bumper-stickers, so don’t let’s be too hasty in damning Jeffries for this.

Nobody could doubt that the next three years will be very exciting at Abercrombie and Fitch and I’d love to be involved with them as they lay the foundations of their future (Just in case anybody at A&F is reading this!) but you can be sure I’ll be watching the new initiatives roll out. Don’t waste this chance folks and definitely don’t become “vanilla”. Get it right and you could be featuring in editorial for all the right reasons for a change!


journalism

Posted: December 9, 2014
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So, who is wearing the content marketing hat in your organistion?

There was an interesting piece in B&T this week by Lauren Quaintance, who explores the battle that’s emerging between hacks and content marketers for ownership of the designation “journalist”.

These days it seems you can set up shop and call yourself anything. You only have to glance at the conversations on LinkedIn groups to realise that most of the people who call themselves marketers don’t have a clue. But while, practices like this can give a profession a bad name, frankly, there’s no point in getting het up about it, you just have to accept that there are rubbish “marketers” and there are bad “journalists” just like everything else.

There’s no doubt about it, content marketing is here to stay and I would argue that its not the shiny new toy that the industry makes it out to be.  In fact, it’s little more than what many have called PR for years. The skills are the same they are just combined and applied in different ways. The main difference is that marketers, for better or worse, now have direct access to the media that matters and don’t have to go through PR people, who have always largely failed to understand their true role in the marketing process anyway and are now trying to defend their crumbing ivory tower.

This doesn’t mean that marketers are the best people to produce content, but then again neither necessarily are journalists. The thing is, as Lauren and others have said and I’ve written numerous times, the only trick to producing great content is that it is of interest to your target audience and is well written and produced. Now, you might say that most of the content out there fails on both levels and I would tend to agree, but that’s where the opportunity lies for brand owners and content marketers who “get it” to step up to the plate.

Right now the choice is between highly polished content that any business would be pleased to call their own, but which only the few can afford and stuff that frankly looks more like a high school project that isn’t going to do anything but harm to any business that puts its name to it. Neither delivers what’s needed, which is easily accessible and affordable content that represents any business that associates with it in the most favourable light. Content doesn’t have to deliver direct sales. That’s not its job and anyway I think we’ve pretty well proved that this is a route that will turn off more of the audience than it appeals to. As with marketing generally these days and for good reason, the emphasis with content has to be on building relationships. Sure, your content does have to be relevant and don’t let people tell you that there can’t even be a hint of salesmanship in some of it (but definitely not all) so it can feature your business and your product, but the most important thing is that it represents your values and beliefs and your brand promise. That’s why you can’t really even start to put together a content marketing programme without first having established a brand model such as those that I create with my Brand Discovery programme.

Right now, I am working with a group of journalists, fiction writers and film makers on a project that picks up on the foundations of my brand models to produce content that will make organisations look their very best, but that any business can afford. I’ll let you know how that goes. Meanwhile if you are thinking that content marketing can play a useful role in your marketing strategy you’ll need to have a brand model, a clear brief with clear objectives and create a project team that collectively has the skills you need to produce a polished result. Oh, and you’ll definitely have to have a methodology to ensure that your office doesn’t turn into the battlefield that Lauren Quaintance mentions!


business-plan

Posted: November 29, 2014
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Where smart marketers add to the value of a business.

Every now and then I come across a marketing services firm that has got it right. Cognition, a provincial UK agency with an international perspective are one of those that have made the transition I am always talking about, from a traditional advertising agency approach and proven beyond any doubt that a strategy-led consultancy that is able to provide the support today’s businesses need, is the road to success these days.

This week Cognition’s CEO Tim Witcherley in his rightly entitled Resources blog covers a subject that I encounter on a regular basis, and provides a useful guide to the basics of writing a business plan.

I mentioned in a post earlier this year that Ernst & Young had published a really useful guide to the IPO process in which they quoted research that showed that more than 40% of the factors that influence investors are non-financial. In fact, it transpires that after issues of compliance and finance the most important factors that influence investor decisions are marketing strategy and management team. No business should let the fact escape them that these days all organisations are marketing organisations and this means that marketing and business strategy are synonymous. Today’s business plan IS a marketing plan.

The problem with this is that there are still too many objections from executives on both sides of the operational/marketing divide. The nature of key executive positions is changing dramatically as the disciplines within an organisation converge and there are still a great many senior executives with incomplete or the inappropriate skill sets. Marketing people remain too creative and insufficiently business orientated and the finance usually think that marketing is all far too arty-farty. The solution to this lies in your processes. You need to create an environment and a way of working that enables you to bring together the skills you need without the culture of competition getting in the way. This is how successful organisations run and good business/marketing plan should reflect this.

Having just worked with an organisation to create a business plan for an IPO and being an advisor to a few start-ups, I’m acutely aware of what investors are looking for and my Brand Discovery programme and Full Effect Marketing approach have been designed to provide appropriate channels for the information that has to go into such a document. However, the perspective you need to take is logical. A business plan sets the scene, explains your objectives and how you identified them, then explains how you are going to achieve them and introduces the people who will be contributing. A real brand model is a critical part of this because we know without any doubt now that investors buy brands. A recent post on Investor Junkie gave six reasons why investors choose businesses with strong brands. They …

  1. have an established customer base
  2. enjoy a reputation
  3. have demonstrable staying power
  4. have positive cash-flow
  5. show strength beyond finances (It’s that 40% again!)
  6. prove they are marketing savvy.

So consider your integrated business plan from the point of view of the people who will read it and change your thinking and whatever else you need to, to enable you to deliver a plan that leaves investors in no doubt that you are a sound prospect. I’m sure you’ll find that as a by-product of this change your organisation will benefit anyway, so even if you aren’t looking to raise investment, it’s a good process to go through. Try it.


jackwelch

Posted: November 28, 2014
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Build a winning business on candor

Last week B&T published an article that asked “How can agencies create a culture for innovation“, a subject that those of you who have read my stuff before will know, is dear to my heart. The author of this post, Cassie Sacks, suggested that the key to creating an innovating environment is to remove the fear of ridicule that dissuades people from putting forward their ideas. I’ve said before “ideas” are more important than “the right ideas” and the sooner an organistion gets this the quicker they’ll achieve success, but there’s a deeper and more fundamental character trait involved here that influences far more than an organisation’s ability to innovate.

Back in 2005 Jack Welch dedicated a chapter in his book “Winning” to “candor”. An old fashioned concept perhaps and you may think an out-dated one. So out-dated, in fact that Microsoft’s spell-checker doesn’t recognise the word (or maybe that just says something about Microsoft?) However you’d be wrong because candor is as critical today to the efficiency that defines successful companies a it ever has been.

Jack’s point about candor was quite narrow. He was concerned with the honest expression of views and opinions, that determines the future of ideas and innovations. In this context, candor will reduce the waste of time and resources that accompany the pursuit of inappropriate ideas and enable businesses to focus time and attention on those that bring success. Obviously a business that is chasing product and process development that doesn’t lend anything to their brand model is wasting resources that could be more productively applied elsewhere.

However, this is only the tip of the iceberg of inefficiency that hampers the success of most organisations.  The key for any business is to eliminate this waste by identifying those projects and initiatives that don’t contribute to the delivery of the organisation’s brand promise as early as possible and bring them to a halt. Few businesses are good at this. I use my Brand Discovery programme to help businesses, not only define their brand, but introduce the structures, tools and processes they need to maintain its authenticity, and strengthen its appeal. The process starts with some soul-searching and a degree of self-honesty that few businesses achieve without help.

If candor is genuinely a component of your business culture its influence will and should spread way beyond your office walls. Candor and honesty go hand-in-hand. Businesses that are transparent and honest are generally those that enjoy long-term success. Don’t get me wrong, there are, unfortunately, many businesses out there that make short-term money on false promises and downright lies. However, you can be sure they are eventually found out. If you are planning on taking that route yourself you should also know that it’s also usually unrepeatable. Once you’ve screwed a bunch of people the reputation tends to stick and hamper any plans you may have to try a similar scam again. It’s harder to be a serial scammer than it is to build a sustainable business, so you may as well just take the honest route. Gain a reputation for being straight and even if you fail, you’ll more than likely get a second chance.

I know of many entrepreneurs who have failed a few times, but eventually achieved success by following this mantra and their success has been possible only because they enjoyed support from people who mattered. Just like your customers, suppliers, financiers, distributors and partners will all gravitate towards businesses they feel they know and can trust. They’ll also favour you with better deals, go the extra mile to keep you happy and stick with you when times are tough.

So, give some thought to what candor could do for your organisation and start making changes today. Get used to the idea that business isn’t about screwing people, but working with them. Organisations that understand this are always the eventual winners.


SmartWings Airbus 320 edit

Posted: November 26, 2014
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SmartWings and the balance between brand focus and commercial viability.

The most powerful brands are true to themselves. Their personalities are vivid, and honest. You can’t fake it, you don’t get anywhere by pretending to be what you are not, but it’s a fine balance and the quirkier you get the narrower your appeal.  When you are distinctive you will undoubtedly put some people off, but you’ll also tend to make the relationships you have deeper and more enduring (read valuable) and it works with brands in just the same way as it does in our personal lives. 

It’s up to you to establish whether your appeal is broad enough to be viable. If its not, you can fix this over time with a well defined and managed brand development programme, but, as I said, you can’t fake it and filling the gaps in your armoury is definitely not a quick fix.

Against this background I was intrigued by a new brand among long-haul airlines that despite their cosmopolitan destinations are remaining staunchly and unashamedly narrow. The 10.5million people in the Czech Republic are already well-served by airlines from around the world as well as a national carrier CSA that has been a dead man walking for years. However, the subject of my focus is the quirky Czech airline SmartWings and their foray into long haul to Dubai.

The experience I had flying with SmartWings recently was unmistakably Czech and with the British-managed and very polished FlyDubai due to launch their cosmopolitan brand on the same route next month SmartWings’ single-minded branding will be put to the toughest test.

From Ryan Air’s customer abuse to EasyJet’s uncouth passenger manifest, budget airlines are all lacking in some department. It’s all a matter of value choices. In fact when you consider that I spent more in the duty free shop at Dubai airport than my round trip from Dubai to Prague and back cost me on SmartWings, it seems a bit churlish to complain about anything. The carrier has clearly aimed squarely at the Czech traveller. Probably those with shallow pockets who are looking for a more exotic destination, but lack the sophistication to step outside their Czech cocoon. The give-away here is that the cabin crew were all Czech and the passengers applauded when the plane landed! They will also have to have very small wardrobes to comply with baggage restrictions – 15k plus 5k carry on. (I think my carry on usually weighs 15k!). There are absolutely no concessions made to travellers of nationalities other than Czechs.

I was actually relieved to find that, at the equivalent of £180 for a route I’d pay Emirates closer to £500 for, we had seats to sit on, but having not flown on an aircraft that didn’t offer proper in-flight entertainment since the seventies, I feared, when I discovered there was no customary back-of-seat entertainment centre on these aircraft, that, as Czechs are very much into amateur entertainment, the cabin crew might be planning to put on a little show. However, there was free (as well as charged-for) in-flight refreshments and I was delighted to find that my nose was not pressed against the back of the seat in front.

While SmartWings have taken the bold step of placing their little country’s culture front and centre it is a bit esoteric and will definitely not resonate with many of travellers on this route. I’m reasonably familiar with Czech culture, having had a base there for fifteen years and even I felt excluded, so I wonder if it makes good business sense to alienate so many passengers of other nationalities. Dubai is a place of many cultures where everyone (Including the Czechs) speaks English, yet, the only newspapers available on the six-hour flight were Czech. The in flight movie, shown on drop down screens the size of my smart-phone every three rows was also a very esoteric Czech production (There were subtitles, but they were so fast I couldn’t read them).

Budget airlines, of course, need to leverage any opportunity for revenue and in-flight magazine advertising is one revenue stream they can’t afford to ignore. I’m no stranger to magazine publishing having created a number of magazines for clients myself over the years and I was pleased to see a thick SmartWings magazine printed on paper which is thinner and poorer quality than would be required to attract Arab passengers, but was nonetheless a pretty good reflection of the carrier’s positioning.  However, it is definitely missing a trick or two. Pretty well all the ads were in Czech and the editorial (which was in English and Czech) was very Czech-centric. It didn’t seem to be designed to introduce Czechs to the customs, idiosyncrasies or other delights of the countries they were heading to and if it was intended to present the Czech Republic to an international audience it failed by talking too much like a Czech person. These inconsistencies will limit Arab advertisers and possibly international ones, but it also highlights the underlying question. Are SmartWings aiming at a Czech traveller to Dubai, or foreigners heading to Prague. And if its just Czechs, how sustainable is this exclusive strategy, particularly in the light of competition from FlyDubai.

The in-flight food, which I have admitted was a pleasant surprise, maintained the confusion by being typical of the Vietnamese faux-Chinese “bistros” that have taken over the Czech capital. This may possibly have been a naive attempt to appear cosmopolitan and it was OK, but they might have done better by maintaining the “Czech culture showcase” theme and serving up svickova or goulas even adding a story to the menu (possibly printed on the lid) to explain the origins and history of the dish.

Cabin crew were typically Czech, which means not as rude as their Ryan Air counterparts nor as in-you-face over-familiar as the crews on SouthWest Airlines and they were definitely pressed for time, routine-driven and not prone to tackle passenger needs that weren’t in the schedule. They were also conspicuously male, on my first leg, but maybe that was just a coincidence of the flight I was on. I’m still trying to get my head around the refreshment regime. Apart from the free meals and accompanying drinks, there’s a menu of refreshments listed in the in-flight magazine with prices, but I was told they weren’t available on the leg to Prague. Instead, if you wanted anything you just asked for it and it was served up for free! That one definitely goes on my “weird but welcome” list!

With no real in-flight entertainment for six hours there were times when I almost wished for the cabin-crew theatre. As I have said, there’s nothing wrong with the “cultural experience” but if you are going to take that approach on a long haul flight you really need to provide an opt-out option and in this case I think a wi-fi broadband provision would be welcome. I certainly didn’t expect to travel on a plane without the usual entertainment options, but I would have been happy to pay a nominal fee to stream video on my notebook. At the very least, I think an English language newspaper should be available, even if its Gulf News or Al Jazeira.

However, as I said, it’s a bit mean to find fault with an airline that is so obviously putting in some effort and, as my readers will know, I’m a big promoter of vivid brand personalities that appeal unequivocally to a clearly defined market. Given that Czechs are still tuning in to what international travellers consider right and proper, if the choice is between a limited offer delivered well and a failed attempt to compete with a major carrier on every level, I think I would probably choose SmartWings’ no frills simplicity again, although maybe next time with a fully-loaded i-Pad!

PS: In searching for an image to accompany this post, I discovered that SmartWings currently have four plane liveries. Surely that’s an indication of a business that’s not too sure of its own identity, but its also an opportunity for someone who knows what they are doing to tidy this up.


h

Posted: November 12, 2014
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Avoiding the usual pitfalls in your transformation programme

Last week Rob Llewellyn published an interesting article on Pulse about his specialist subject, transformation management. We all know that most transformation programmes fail to some extent, either by just not delivering the kind of benefit to the organisation that warrants the blood, sweat and tears, not to mention the cost, of implementation, or even by actually bringing a business to its needs.

To illustrate the issues Rob used a great piece by Chris Bradley, Martin Hurt and Sven Smit that appeared in McKinsey Quarterly and added a useful eleventh point of his own to that article’s ten tests that you put a transformation strategy through to give you an idea of whether it will succeed. Rob’s addition was the consideration of whether your organisation has the resources to execute your transformation strategy in the first place.

You need all kinds of resources to make a strategy work. It’s not just about numbers of people, but the skills (hard and soft) and experience they possess as well. That’s why when I get down to execution, I assemble a team comprising my client’s people supplemented by specialists brought in from outside, but there’s still more to it than that because you have to also have management model that enables this mix of personnel to work seamlessly as one team.

Some years ago I partnered with Experian Clarity Blue on a project for Sky TV. The project was headed by Clarity Blue’s Tony Mooney who has gone on to become the CEO of Sky IQ. Clarity Blue were developing strategy based on complex data analysis and Tony and I frequently discussed the principles of the transformation that these strategies usually represented for the companies concerned. Tony’s view at the time was that the large corporations they were working with, by definition, lacked the flexibility or imagination to change. This is the same principle that prevents large organisations from innovating (a subject that I’ve covered in this blog extensively in the past). The larger the organisation the more dependent it is on process and process is the enemy of change and innovation.

Tony’s idea was to take the responsibility away from the organisation by creating a parallel universe. Duplicating, in effect, the structure of a business and using the alternative resource to bring the strategy to life, before finally re-introducing the original team to the transformed organisation and allowing them to run it. This is a simplification, but in Prague the innovation consultancy Creative Dock adopts a similar approach with some of its projects. I guess you’ll get the idea.

It’s my personal belief though that you can’t expect a business team to adopt a strategy that they haven’t been involved in the creation of with the enthusiasm or deliver it with the speed you need to maintain seamless progression of the business. My approach of a combined team of experts from within and without the organisation is designed to overcome this problem and affect a seamless transformation in the shortest time possible.

I recommend everyone reads the McKinsey piece. The ten questions it poses are valid and largely reflect the elements of my Brand Discovery programme. Including …

Will your strategy beat the market? which explores the need to be different one of the subjects encompassed in my “You are only as good as your next big idea” philosophy as does the McKinsey question “Does your strategy put you ahead of trends?”.

“Does your strategy tap a true source of advantage?” is about avoiding making promises that you aren’t equipped to deliver, itself a cornerstone of Brand Discovery philosophy. Improve and fill in the gaps in the resources you need to be a leader in your market, but don’t promise until you know you can do it. The Brand Discovery programme will help you with this all the way.

The new marketing #101 is about being smart with data. Collecting the right information and analysing is thoroughly. Its also about interrogating your business and understanding why stuff happens. Once of the most common causes of new business failure is over optimism, so be brutally honest with yourself, you’ll thank yourself later! Remember every business is unique and there will be things that you know about your market that nobody else does. Leverage these insights to your advantage and you can check off question 5 on McKinsey’s list..

Their sixth question is a source of challenge to many businesses that rely on process to make things happen on a day-to-day basis. “Does your strategy embrace uncertainty” emphasises the need for strategy to be flexible, which, as I have already inferred, is tough to achieve when you are process driven. In today’s customer centric organisations processes have to be flexible to achieve tailored responses to customer needs. This means a totally different approach to HR and a radically different training agenda, but it also makes giving employees the elbow room to deliver what you have employed and trained them to do. Don’t over process and ensure that any processes you do develop are flexible and constantly monitored to facilitate adaptation as the need arises. This is also touched upon in question seven “Does your strategy balance commitment and flexibility” which in turn reinforces the importance of good timing.

I question eight the article introduces the issue of optimism. This is a subject I’ve been exploring lately in connection with my work with start-ups and incubators in Europe. One of the greatest threats to the success of a new business is over-optimism. Every entrepreneur believes they have a gold-plated product and much of my work and that of the incubators and investors I encounter is concerned with testing the viability of ideas. A while ago I mentioned in another post that one of the incubators in the Czech Republic that I was talking to in the summer assessed 800 applications from entrepreneurs, but only found eighteen viable ideas among them. This is where an outsider’s perspective is invaluable, but the weaknesses in so many ideas become obvious when you take off the rose-coloured specs.

I love question nine. To me this is often the reason for failure of a strategy. Far too many CEOs are happy to talk about transformation, but in my experience, most are not willing to commit to execution. I am very often asked what parts of a strategy are optional and the answer to this is either “all” or “none” depending on your perspective. Every element will play a part in the success of your business and in today’s competitive environment no business can afford to aim for anything but the number one slot in their sector. To get there you simply have to be the best. There is no pretending, no quick fixes or Sellotape solutions. To be the best you just have to do the graft. People throughout an organisation will look to cut corners as the process rolls out and it’s the responsibility of the CEO to ensure that they are kept in line. The CEO simply has to be prepared to get stuck in on the hard stuff.

Finally question ten asks whether you have an action plan. In fact, the simplest initiative requires some kind of action plan, so it shouldn’t be a surprise to anybody that a major initiative like a transformation programme needs one too. There are action plans and action plans and those that are most effective are realistic and have some kind of process attached to them. Some years ago a strategy that I created for a major organisation was brought to its knees when the guys from a top international consultancy firm came in to manage the transformation. They had a good enough management tool, but lacked both the ability to be realistic and the tenacity to keep the process rolling. Subsequently a good proportion of the potential benefit was lost.

If nothing else, I hope that together with Rob Llewellyn and the McKinsey guys I’ve managed to raise some awareness of what transformation involves. I especially hope that we haven’t put anybody off the idea of transformation. Most businesses I come across need it to some degree. In fact every business should be in a constant state of change if it is to keep up with the rate of change in the marketplace, but please don’t enter into such a process without understanding the implications of what you are doing and before you take your first step be certain that you have all your ducks in a row and make sure that you organise your transformation process around a detailed programme. It doesn’t have to be complicated, in fact the simplest processes are usually the best, just be sure that, like Brand Discovery, it covers all the bases.


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Posted: November 1, 2014
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Why brands can’t afford to behave like chamelleons

An interesting article in The Drum this week set out to explore the reasons why supermarkets like Morrison’s have a chameleon-like approach to their brand. In fact this was really all about Morrison’s rather than “supermarkets like them” and deservedly so. Morrison’s are desperate to find their customer and have been running around trying to be a friend to everyone for ages. However, even previous to this they didn’t exhibit the discipline required to build a strong brand. In fact, this may have been the root of their current problems.

Although the article focussed on Morrison’s, there was some truth in the headline. This isn’t just about them it’s a common weakness among businesses in all sectors and stems from a fundamental failure to understand how brands work.

The recent success of budget supermarket chains like Lidl and Aldi has been used by many to argue that brands have no value and if you want to be a retail star you just have to cut your prices. In fact this isn’t so. Sure, price is a factor, but there are others including the inalienable fact that we are and always will be emotional about purchases and that’s where brands score.

Let’s just start with the “trying to be a friend to everyone” issue. Forget it! You can’t. It doesn’t work like this in any context. Even the most well-liked people have enemies and certainly not everyone likes them. Brands work the same way. You are always going to have friends, enemies and a lot of people who fall somewhere in-between. What you have to do is decide who you want to be friends with and court them. By definition, many of the things you do to befriend your chosen group will alienate others. That’s the way it goes.

There’s another factor too. Look around you. Its undeniable that people with the most vivid personalities have the closest friends and strongest friendships. Shy retiring violets don’t get a fan club I’m afraid. That’s another fact of life. Apply this concept to brands and the relationships I called “brandships” and its obvious that the more extreme your brand personality the more likely you are to attract loyal friends, but also alienate people. The question then becomes “What is most important to you, the depth or number of relationships you have?”. The answer generally is that the depth of the relationship or customer loyalty has to be your priority, because your ROI will be higher and companies that invest in relationships are most successful long term.

The worst thing a brand can do is be “woolly”. Once you have defined your brand and created your brand model (which should be an thorough and well-defined process like Brand Discovery, that accommodates all the variables) stick to it. Not only maintain consistency, but constantly up the intensity of the things that you do that are representative of your promise.

Morrisons’ problem isn’t that they don’t have enough brandships (customers). It’s that their business model is based on volume that the market just can’t sustain. It seems that they devised this model during their brief moment of success, when they were moving from a regional operator to become a national player by acquiring the vacant Safeway stores (Which incidentally failed for Safeway largely because they didn’t have the floor space a modern supermarket requires, so this may not have been the wisest move).  It was a bit of a false dawn, but compounded by their inability to keep up with and adjust to events in the rapidly-changing marketplace.

Maybe there’s only one way that Morrison’s are going to escape ultimate oblivion and that’s firstly to define their brand once and for all, then build on it. They need to do this using a dynamic internal-marketing campaign, during which they will begin to address the real issues of structure and practices and possibly even down-size. It’s not what investors like to hear, I know, but a slice of a smaller cake is better than no cake at all.