Tag Archives: culture

A brand without culture is like Milo without milk

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When was the last time you drank Milo? (I just did… immediately after writing the title of this article. I couldn’t help myself.) Now, think about the last time you ate a Milo Bar. These powdery chocolate nuggets, famous for leaving you with ‘camel’s mouth’ (a teenage expression for dry mouth) were discontinued in Australia in 2005 after a solid decade… of declining sales. The Milo Bar was a line extension of one of Australia’s favourite drinks (a glass of which sits in front of me now); however, despite its popularity as a kids’ (and 40-year-old’s) beverage, it failed to sustain market share as a chocolate bar.

Why, you ask? Well, it’s simple really. The Milo brand was (and is) strong; the brand strategy remains rock solid in the face of ever-increasing health-related scrutiny, but the experience of eating a Milo Bar ‘felt’ far from healthy – which is of course the platform of Milo’s brand strategy. If you would like to know more about the life and times of the Milo Bar, jump onto the Nestlé site and go wild.

While you do that, I will continue with this article.

Strategy rich, culture poor

Brand strategy is something that marketers and business leaders love to talk about. It’s visible on paper, it’s usually conceptually engaging (if it’s any good) and always speaks to competitive advantage. Brand strategy has the capacity to motivate people about a ‘new horizon’, ‘untapped possibilities’ and an ‘abundant future’. Apologies if you found that last sentence sickening, I did also, but that is the sort of drivel I hear all day long from brand strategists (takes one to know one). Brand strategy is not applied astrophysics; it’s basic competitive creativity. Regardless, unlike brand strategy itself, finding a brand strategy that in practice actually works is another matter altogether, and I will come to that later.

OK, so if brand strategy was a car it would be an Alfa Romeo – looks good, should work, but can be an expensive fix if (read: when) it breaks down. Let’s now look at our old mate ‘culture’ through the same automotive lens. Culture in the world of cars is premium unleaded fuel. It is basically invisible to the conscious mind, more boring to think about than air, yet is the very thing that enables the Prada- sunglasses-clad, gold-chain-wearing, Bruno-Mars-blaring Alfa drivers to make it down Chapel or Oxford Street.

The very last thing any marketer wants to talk about is culture. ‘Surely that’s something that lives in the bowels of an HR boffin’s cave, sitting beautifully next to the corporate diversity policy.’ Yep, organisational culture gets a very bad rap. Seen by most as something outside of marketing or business control, perhaps even something specialised belonging to HR, and almost always seen as completely irrelevant to the Alfa Romeo of the business world: brand strategy. And while that seems to be the case, it couldn’t be further from the truth.

Dud culture = dud strategy. No buts.

In almost all cases (excepting some low- touch FMCG products), culture is the vital ingredient required to carry a brand’s strategic intent across the plethora of multi-channel marketing touch points. A brand strategy built on ‘innovation’, for instance, requires a learning-driven culture where people can explore new and challenging ways to deliver customer experiences.

Increasingly, I see organisations investing in finding a thought-provoking, creatively-intelligent strategy that they expect to work within existing workplaces without considering the state of both culture and climate (general mood). If we look at the generalised workplace of 2012, we find the hallmarks of anxiety. Global economic uncertainty coupled with general conservative business practices has encouraged business leaders to ‘tighten the reins’, validate and risk mitigate the corporate workplace.

When this happens, the sense of freedom, possibility and opportunity required to step confidently forward and in line with the strategy is not possible, because ‘that’s not how we do things around here’. And if you look up the definition of culture, you will find ‘the way we do things around here’ is a very popular corporate definition. In basic terms, if even the very best brand strategy comes up against a conservative, safety-seeking culture, you can be sure that this strategy will first slow, then bounce restlessly against the walls and ceiling before deflating over time. It is also usually around this time that some bright spark comes up with the new innovative strategy… which in time will suffer the same fate at the hands of culture.

Let me leave you with a line to remember. Author and leadership/change expert John Kotter once said, “Culture eats strategy for breakfast.” I prefer to think, ‘Without culture, brand strategy is like Milo without milk.’

 

Dan Gregory: Think bigger… like Dan

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Last month Marketing discussed all things agency business model with Dan Gregory, creative chairman of New Republique, The Gruen Transfer regular and CEO at The Impossible Institute. In the second part of our chat, we discuss the impact of changing marketers’ ambition through leadership and culture, as well as the new marketing.

 

“It’s all competing on price, which is a downward spiral, so your margin has to come from something, other than, ‘Well, it does what it says on the tin,’ and I think that’s a real opportunity, but it takes marketers who have a capacity to think like leaders rather than as employees, because if all you’re doing is protecting your job or protecting your next sideways move to your next employer, you’re never going to do anything that’s extraordinary. You’re never going to do anything that revolutionises a business.” Dan Gregory isn’t overwhelmed by what he’s seeing in Australian marketing personalities, its strategic and long-term thought or its talent promotion:

Marketing: Speaking to domestic and international marketing thought leaders, a common lament is the devaluing of brand building with a greater focus on quarter-to-quarter tactics. Now, you posit that a marketer is going to need to be able to create content that could potentially be a saleable asset, but plays to the identity of their customer. Surely they need to know what the identity of that brand is, and what we’ve seen is the loss of a lot of that equity across the board.

Dan Gregory: I think that’s absolutely true. The iTunes store is exactly the kind of thing that I’m talking about. It’s content, it’s communications, but it’s also got utility and it drives sales, and it helps people make those purchases. But I think, in some ways, it works the opposite way. The iPod is actually a really good ad for iTunes: it’s a functional piece, and I think that what you’ll see is innovation coming from a position of utility, rather than what utility that also provides, that intangible value of identity.

I mean Nike shoes – forget the whole third world industry thing. It probably costs what? I don’t know, 10 or 15 bucks to make a pair of trainers; they sell for $200. So, all of the value is intangible; there’s nothing intrinsic in it, depending on who you believe, that means that they’re particularly better than Brooks or Asics for instance. That ability to create value beyond just the functional is incredibly important, and you see it all the time. The first iPhone couldn’t send MMSs. Right?

Take Kodak [former Eastman Kodak chief marketing officer, Jeffrey Hayzlett was speaking with Dan Gregory at Schmart Marketing, where Marketing caught up with him]: my issue with a lot of clients is they get so wrapped up in what they do, that they forget who they are. If you think back to who Kodak was in the 1970s… Kodak was all about preserving memories: “They maybe just be snapshots to you Mr Swanson, but to me they’re irreplaceable memories.” Now that need still exists, but they focused on what they did rather than who they were, [which] was people that preserve memories. What they did was, they made film, and they made film, they made film, they made film, and then all of a sudden there was a new format that replaced film, and all of a sudden because they were so focused on what they did, they were like, ‘I don’t know what to do now’, and the need to preserve memories, whether it be through data drives, whether it be through national archives, whether it be through protecting and encrypting information in financial services, or preserving the photography and the art of the nation for posterity, that need is still there and there’s heaps of money in it.

Kodak should be the name that means, you know, ‘when you keep something in a Kodak digital vault, it’s safe forever’. That’s what it should have meant, but because they were more focused on what they did, the utility, it actually cost them the opportunity to evolve into what they should have been in the future… When you say that people have lost focus on brands, that’s what’s missing, it’s that they’ve lost who they are, and they focus so much on what they do, but what they do is changing every day. We’ve got retail… media. Book stores disappeared overnight, and they had record stores to [predict that]; they had to know it was coming, but they weren’t quick enough to change. Barnes and Noble online, Amazon, a few of them moved along quite quickly, but we’re kind of left with the fallout of that, rather than it being really thought through. What else could they have evolved into that would have changed their business? I think every retailer should be thinking about that.

I had a really interesting conversation [at an optometry conference]… Working as a speaker now, I speak to lots of the industry groups – my perception is that most people don’t know the real business they’re in, and I’ll link that back to identity. They don’t know who they are, [they know] what they do.

So, I had this really interesting conversation with a group of optometrists. And I said to them, “What business are you in?” and they all go, “Well, we’re a medical profession,” and I go, “Really?” And I said, “Where’s your margin? Where do you make your money? Do you make it on the consultancies?” and they go, “Well no, that covers costs.” And I said, “Well, where do you make the margin?” and they said, “Well, actually we make mark-up when we sell glasses.” And I said, “Interesting. And how many pairs of glasses can you sell to one person?” and they said, “Well, usually one, but we could sell two or three.” I said, “Yeah, you’re right.” I said, “How much money did you invest training yourselves to do the examination part?” They go, “Well lots,” and I said, “How much time and money do you spend investing in training your front of office sales staff, so that they can up-sell clients while you’re in with the next patient?” and of course the answer’s, “Well, nothing.” Right? And they’re set up like pharmacies.

I said to them, “Guys, you’re in retail fashion. All your money is in the stuff that you sell, and you don’t even arrange your store in a way that makes it easier for me. [With] all of your communications, you could collect a digital database that goes, ‘Here’s the new look for spring.’ You could actually get consumers used to the idea of cycling through, getting new glasses on a more regular basis, on having more than one pair. ‘Here’s your work pair, here’s your casual pair, here’s your night pair,’ you know. I mean it sounds like a big expense, but women spend it on handbags, on shoes. Men spend it on wallets, on watches. I’m wearing a $6000 watch today and I’ve got more than one. Now again, it’s not something I need, it’s something I want, and if you think about it, if you’re someone who wears glasses, ‘what’s the most notable fashion accessory you wear?’ – that’s where people’s eyes go, to meet other people’s eyes. So, I think that there are a lot of organisations who don’t really know what business they’re in, and I think it’s partly because we’re so locked in to process, and so disconnected from the people we actually are serving.

The number of times I sit in meetings and play the role of consumer, they say, “We’ve got this product with this feature and it’s got this and it’s got this,” and I say, “I don’t give a shit. What’s in it for me?” I think if every marketing brief just started with – ‘What’s in it for me?’ ‘What’s in it for the consumer?’ ‘How can we phrase that in the simplest possible language?’ – you would actually get your marketing materials and advertising materials, and engagement systems designed in a much more effective way.

Dan gregory speaking

Who are the leaders in marketing in Australia?

I think New Zealand probably does a better job, because there’s also this sense that ‘we’re five million people and no one’s looking’. I think Australia is actually a really conservative culture. I actually think it’s a cultural thing. Australians think of themselves as laidback and gregarious; they’re not, they’re really not. It’s actually really conservative in a lot of ways.

I’ve lived in Italy, I’ve lived in the UK, I’ve lived in the United States; we tend to think of the US as puritans with guns, and there’s certainly this horrible religious film that sits over the American culture.

They’re actually not that conservative, they’re actually bold in what they do, and they’re prepared to go back and forth, and the British have a bit of that too… One of the interesting things is, and I hate to say this, but some of the most extraordinary marketers that I’ve worked with, the bravest people, the people who’ve done the most successful work – forget the most creative work, but the most successful – the ones that made the biggest difference to an organisation, they’ve either been foreigners or they’ve been someone who’s come from a different category, or they’ve been both. And what that means is, they haven’t got a sense of ‘well, this is the way we do things around here’.

They don’t know how to toe the line, so they don’t. What they do is, they actually approach the problem from the position of a consumer, which I think is really, really valuable. Having said that, I have worked with some great marketers. At the time we launched Aussie Home Loans, John Symond was a CEO making decisions, and a different level of decision.

John knew he was picking a fight with the most powerful financial organisations in the country, but he had the position and the stones to back himself and, again, he was someone with a bigger mission than just making a few bucks… People like Lucie Austin at Coke… And, before Lucie, there was Karen Wong, who was an amazing leader, an inspiring marketer. Karen was rare in that she created a marketing department that was able to stamp its authority on what it did. And look at things like the Coke Zero launch, which was unbelievably successful, and it’s a result of the leadership. I think it does start at the top and if not the CEO then the marketing directors. Both Lucie and Karen were marketing directors, who for the most part created a culture that didn’t have brand managers going, “I don’t want to present anything that I’ll get into trouble for.” It allowed their people to have an honest conversation and go, “Listen, I think this is really good. I mean it’s challenging, and there will be political issues, but I think it will transform the business.” You’ve got to remember, for brands like Coke, New Zealand and Australia are the first markets in the world to wake up. Which means if we screw up here when the US stock exchange wakes up in a few hours’ time, they take a hit, so we can actually do something amazing that makes money in this market, and it costs them in points, if [the US market] doesn’t like it.

It’s an interesting point that marketers are leaders. It seems obvious, but if you spoke to the majority of marketing graduates or even professionals, I don’t think that they would use the word leadership too quickly in a description of what they do.

No, and I agree, and I think it’s a real mistake. If you think about – what is a leader supposed to do? A leader isn’t supposed to balance the books; that’s what you’ve got a financial department for. A leader isn’t supposed to set the process in terms of production; you’ve got a production manager for that. What they are supposed to be is determining ‘what does the organisation mean?’ They’re supposed to be the voice in the marketplace, they’re supposed to be the face in the marketplace, and they’re supposed to set the course for the organisation to follow and, basically, create something that employees buy into, and the consumers buy and, if you think about that, that’s pretty much a description of what marketing is supposed to do.

Obviously, there are checks and balances that sit on top of that, but alignment is a marketing function as well. Making sure people are on the same page, people are all buying in to the same objective. We’re all selling, and I think that’s what’s been missing, is marketers really seeing what they do as a responsibility of leadership.

So, how do you inspire that, or how do you incentivise that?

Good question. I think part of the problem in Australia is that it’s such a small industry, which means that if you screw up, you have to leave the country to get a job. So I think we’ve incentivised people to not think that way, and I think that’s a bit of an issue. Often times, you actually find better marketing decisions coming from a CEO, when you’re dealing with them directly. It’s not that the marketing people don’t know their jobs or wouldn’t have made the same decision; I just don’t think they feel confident enough or secure enough to make that kind of decision. I think that’s a bit of an issue. But, to answer your question, how do we encourage it? I think that’s a really good question, actually. I don’t necessarily believe that leaders are born. I think certain skills, you have a natural predilection for it.

At some point it does have to come from the individual though. I’ve changed my mind! It’s not necessarily a talent, but it does have to come from you, and I think it’s the present leadership’s responsibility to encourage that. I surround myself with as many dissenting voices as I can, and I encourage those people around me to argue ferociously with me. Often, you’ll see me having heated debates with people I work with, and it’s not about me being right and them being wrong. It’s… the better able they are to challenge me, the better my thinking is, so that if it goes public it’s actually been tested and tempered. I think it’s up to leaders to employ people who’ll challenge them, people who they think can be better than them, which requires a level of courage in itself, because some people don’t like hiring better than them for fear that they’ll get shafted, but I actually think that’s what a leader has to do. It’s the role of a leader to inspire their people, to create a vision that actually their organisation buys in to.

The best leaders do that, they buy in to a sense of something bigger than themselves. People don’t work late without a sense of begrudging it, unless they’re inspired by the work that they do. Marketing people [have to] see themselves as leaders, and I think that will happen, because it’s easy to outsource or offshore your financial functions, your legal functions and to some extent your customer service functions and even some of your productivity, but the inspiration depicting the, ‘What do we stand for? What’s our voice in the marketplace?’ that’s got to be local. You can’t buy that off a rack, you can’t get a really intelligent grad from India to do that. I think that’s the opportunity, and I see really smart people in marketing who should be in leadership positions, and half the time I just think, ‘Step up a little bit.’ Look, I think at the moment, it’s seen as a job rather than an entrepreneurial leadership opportunity, and so I think that attracts a certain kind of person to marketing as well – not that there aren’t really entrepreneurial people in marketing, but I think overwhelmingly your career path, in your head, is probably aiming at being a marketing director not CEO, and I think that filter changes the way you approach what you do. If you think about the most famous leaders in the world, they’re actually really good at marketing. They’re charismatic, they can speak in a way that engages people, attracts people to them, and that’s what we’re really doing, we’re actually attracting people to us voluntarily. The push model’s dead.

Care to weigh in on an idea that’s been kicked around for a while: that the consumer owns the brand now?

Look, I think that’s partly true in terms of they share in the brand, and they can help shape it. I don’t think they own it any more than brands own them. I don’t think Steve Jobs gave a damn about what consumers thought. I think he did what he believed was right, and I think people responded to that.

People are attracted to people who clearly believe what they say, and are committed to it. I mean you may not even agree with them necessarily… So, in terms of consumers, I think rather than owning the brand, they buy into the brand. I think rather than your organisation’s identity being brand defined, if it’s clear enough, consumers use that identity to help them find their own, or aspects of their own. Clearly I don’t jog, but I wear Nikes because I buy into their vision of the world, they sell the heroism and participation; I buy that.

 

Culture and where the wild things live

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I am rearing two long-necked turtles. Our vet said the most important thing to remember when keeping turtles is water quality. If the water pH and temperature becomes unfavourable, the turtles will quickly become ill, contract diseases and eventually die a long, slow and painful death. Culture in the workplace can be compared to the water habitat of my reptilian dependants. In fact, it is a very good analogy. The healthier the culture, the more the employees that make up the business thrive.

What does ‘good’ look like?

One of the easiest ways to identify a healthy culture is by examining organisational performance. After all, organisational culture primarily exists to help organisations perform. So, aside from a company’s share price, much can be gleaned about culture- influenced performance by reviewing an organisation’s reputation. For the sake of ease and the purposes of this article, let’s use the AMR 2012 Corporate Reputation Index. While many have questioned the validity of the AMR index, likening it more to a brand recall instrument, some of the observations appear intuitively accurate.

I have selected a few brands that have witnessed dramatic shifts, based primarily on changes to their culture.

First, Telstra moved from 60th position in 2011 to 45th. This was one of the largest shifts across the index and to my mind reflects the new energy and direction resulting from the brand refresh. Leadership is a key contributor to culture, and the cultural impact of the appointment of brand guru Mark Buckman (Telstra’s chief marketing officer) should not be underestimated.

Next, Virgin moved from 13th position in 2011 to sixth. When you talk to the people at Virgin, they don’t use corporate jargon to explain the shift, they simply say, “It is our people who put the magic back into flying.” In this country no brand demonstrates branded, culturally-aligned customer experience better than Virgin. All service brands should take a good hard look at the cultural structure and practices of Virgin.

What does ‘not so good’ look like?

Finally, let’s take a quick look at a brand that slipped 18 positions from seventh to 25th… yep, Virgin’s competition in the air, Qantas. Formally Australia’s most iconic brand, Qantas, as we know, has struggled of late and, culturally, the story couldn’t be worse. Leadership decision-making is the most obvious symbol of culture, and leading a brand to be ‘at war’ with its pilots, engineers, baggage handlers and ground staff over work conditions is cultural suicide. Enough said.

What’s this got to do with turtles?

Just as all animals in the animal kingdom are sensitive to their environment (so much so that they suffer and, in many cases, die if their habitat is compromised), so too are employees. Without meaning to state the obvious, humans are also members of the animal kingdom and, like it or not, are governed by many of the same environmental influences as turtles, monkeys and birds. By taking this broader, more holistic view of organisational culture, organisations can begin to more quickly understand what needs to be done to support employees and bring a sense of tribal security and belonging to a culture.

Here are a few ways to help reframe your thinking around internal branding and culture, likening what most of us consider to be a corporate practice more to the way of the wild:

1. Leadership. In the corporate world, ‘leadership’ is seen as a management progression with financial responsibilities. In the animal kingdom, leadership has a very simple translation: to protect and grow a community through various natural challenges. Corporate leadership is no different. One of the ways that alpha animals lead packs most effectively is by establishing rituals that demand accountability and individual growth from within. Demonstrative growth. In the business world, this means ‘delivery’.

2. Systems. The systems that govern the ‘way’ organisations work (IT, human resources practices, unspoken protocol etc) can easily be trivialised as administrative support, when really these systems have an enormous say in whether a business strategy works or doesn’t. In the wild, the systems that exist within a community of animals determine whether they live or die. Pack leaders quickly appoint roles that serve the greater purpose, very much like organisations resourcing to deliver on a business goal or strategy. There is a clear understanding of how each role relates to another, along with the relevant support required for each role to succeed.

3. Learning and development. When we think of L&D, most of us envisage a workshop, a facilitator and individually wrapped Mentos mints. Sometimes we feel that L&D is a chore, other times a privilege, largely depending on the topic (and facilitator). This is due to a lack of perspective around the reason behind the genre: learning initiatives.

In the wild, animals either learn or they become dependent and vulnerable. Not too long after that, they are a set of ribs being picked at by vultures.

4. Communication. The emphasis of internal communication has also lost its importance, often giving way to a campaign of entertainment. While humour is a very effective information transfer mechanism, there is much to be learned from the very pointed, focused communication methods that exist within groups of animals. What they lack in creativity they make up for in consistency.

There is never any doubt around the intent or meaning behind internal messaging within a community of animals.

The wrap

Culture exists to enhance performance. No business goal or marketing strategy will ever realise its potential without the careful alignment of the culture behind it. The brands that understand and demonstrate this are enhancing their reputation and performance, while those that continue to miss the fact that ‘ culture determines their fate’ slide off into a Qantas-like corporate horror story.

 

Culture: organisational performance in foster care

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The rightful parent of culture is the CEO and executive board. However, a general knowledge deficiency, along with an incorrect order of priorities means that organisational culture more often than not lives in foster care: Human Resources (HR). The obvious issue here is the well-documented image problem that HR has across the globe, along with the inability for most HR departments to be empowered to manage broad and sustained cultural change. So, instead of culture being an A-list organisational celebrity, it can unfortunately show up on a long and not very impressive D-list along with the likes of corporate social responsibility and the social club fun run.

What is culture?

Wake up! Organisational culture is a term that describes the way things are done within an organisation. This means how the people that make up every organisation are productive and the way the business operates in every aspect. Yes, every aspect. Things like the way leaders lead, system design, compliance, workplace and team structure, process management, brand, marketing, pricing, customer experience: every aspect!

Organisational culture is determined by a company’s behaviours, symbols and systems – which come from a deliberate or, more often than not, an unintentional set of values.

Dysfunction

There is an old and also proven saying that 80 percent of culture change programs fail. I would be surprised if this percentage wasn’t actually much higher. Basically until culture becomes a standing C-Suite agenda item, it can’t succeed. The decisions made by an organisation’s executives are key cultural symbols and guide ‘how things get done’. This by definition means culture.

While culture remains a ‘program’, living with HR – or anywhere other than the key decision-making body – it can’t be sustained. In the early 2000s, one of Australia’s largest banks launched a very successful culture program across something like 30,000 people. It was heralded as the exemplar culture case study for five or so years. The reason it worked was simple: it came from the top down. Culture was considered to be the key element of the organisation (which it is for every organisation) and it was integrated and inclusive – being driven by the employee population. And when you look at why it eventually dissolved after a few years and now is simply a series of branded folders in a basement, we need to look at culture leaving the paternal home (executive suite) and being relegated to a line item on an HR ‘program’ of work.

There are many other reasons organisational culture is suboptimal (or in many cases toxic):

  • ‘It’s too hard to understand… so let’s not try. What we can do is talk about organisational strategy and brand values.’ The fact that they both depend 100 percent on culture to perform is something that often gets overlooked,
  • ‘Let’s launch a quirky internal communications program that proclaims our values.’ Every organisation has an ‘espoused culture’ but that doesn’t determine how things actually get done, or
  • ‘Apple has a great culture. Let’s do what they do!’ Every brand has unique brand values that need to be mapped to cultural values, which then drive specific, culturally aligned behaviours, symbols and systems.

The wrap

There are many, many more reasons why organisational culture across the globe is undervalued, and why companies suffer in many ways because of this. Is your brand/ organisation sending the one thing that determines your success off to live with weird Uncle Willie? As a marketer, part of your role is ‘brand experience’ – how customers experience your brand. Yep, you guessed it – culture again. If you aren’t sure how your organisation’s culture drives your brand/customer experience, then I suspect your organisational culture is making model trains in the back shed with Willie.

 

Kiely: Delivering value through convenience

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Next time you are standing in a queue, waiting to enjoy the service experience, perhaps you can contemplate the Paradox of Convenience. This principle states: Consumer offerings based on convenience inevitably produce their own inconveniences which can cancel out the original benefit. This principle is being launched in draft form here today and I welcome your input (Michael@michaelkielymarketing.com.au).

Take the supermarket, or the ‘super’ market. Obviously its inventors thought of it as the highest level of evolution for the distribution of consumer household goods. But consider the customer service experience: Scrabble around in the crevices of the car to find a gold coin to insert in the trolley security system to ‘rent’ a trolley. (The convenience is the company’s.) The customer must search for the goods unassisted, because there are few staff when you need them. They disappear through the mysterious rubber doors whenever you need them. Periodically the management shifts the location of the stock, based on analysis of profit planograms. So just when you start to know the lie of the land, it all changes. Then you discover – after fruitlessly searching for your favourite variant of tinned tuna – that is has been delisted.

Now to the checkout where there are often too few open and queues are long. What happened to that technology developed a decade ago that scanned the products as you put them in your trolley? Your total shows up on the terminal, you pay and you go. But no. We suffer stone age ‘super’ markets. How you wish you had 12 items or less. (The supermarket companies prefer it if you visit several times for smaller amounts of goods. Their data tracking system based on their loyalty card program tells them this.) Your turn finally arrives, then you stumble out into the carpark with your booty, driving home to stagger in with wrist-strangling plastic bags pulling your arms out of their sockets… and so it goes.

What inferior system did it replace? When I was a boy, the housewife would take her shopping list to the grocer’s shop. The counter separated the customer from the goods. The grocer took the shopping list and ‘filled’ the order himself. Mother could leave the list and return to collect the goods. I remember there was a home delivery service as well. Bread and milk were home delivered, so there was no need to lug that home. And not only that, but Mother was at home so during the week, various traders would drive past the home and come in to get her order: green grocers for vegetables, soft drinks, even meat and fish. This paradise was destroyed by low prices and the new ideology of ‘convenience’.

Now think of flying. Is there any customer experience more discomforting than boarding an airliner, that futile stop-start procession up the aisle to find there are no spaces left in the overhead locker so you stuff your bag under the seat in from of you and suffer cramp for the entire journey. The seats are comfy if you’re a midget. A perfect example of the Paradox is the new check-in system: you swipe your card and get your boarding pass. But to ‘drop off’ your luggage, you return to the traditional check-in queue.

And what did this system replace? A sleeper carriage with a cup of tea brought to you by an attendant. It took longer to get there, and time is money. But the Paradox is based on the Principle of Convenience: making life easier for consumers. Since the Second World War, mankind has seen the emergence of the labour-saving device as the dominant cultural icon. Food processors with a thousand pieces make washing up after preparing meals a major job – so you need another labour-saving device: the dishwasher. And so it goes. Convenience has a momentum of its own.

The mobile phone is a Paradox Principle device. It makes life easier while it makes life harder. The inconvenience embedded in the mobile phone is subtle: the widespread expectation that you will be available to a caller round the clock. The Blackberry creates an email fixation in people, a compulsive disorder that makes people anxious if they don’t get an email for more than a few minutes. A Blackberry blackout in New York last year caused chaos and hysteria among the Big Apple’s big time operators.

Paradox everywhere: would we need the gym and the weight loss program – both modern developments – if we did not have labour-saving devices? “Take the stairs, not the lift”. “Walk to the shops. Leave the car at home.” Instead we pay to avoid physical activity and pay to engage in physical activity.

How does this help you? An ‘inconvenience’ is an itch. An opportunity to provide a ‘scratch’. But once a system has been devised to address an inconvenience, it’s inevitable that this ‘convenience’ system will create its own inconveniences. Be vigilant in identifying these emergent itches and address them and you will win favour with modern consumers.

Second, learn to tell the difference between a ‘convenience’ for customers and a ‘convenience’ for the company.

Finally, the customer’s choice is a matrix of benefits and dis-incentives. Customer ‘levers’ are convenience, possession and functionality and two ‘currencies’ – time and money. One or more of these elements can outweigh dis-incentives. For instance, many people will endure inconvenience for low price. Or high price for functionality or possession.

Guerrilla Guide: Pitching to a board

by ON
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I’m at The Hyatt, all glitz and glamour and ordinary food. It’s a lunch organised by the Australian Institute of Company Directors and there are some 400 of them crammed in. The subject is ‘Marketing and the Role of the Board’ and Sir Rod Carnegie is speaking. He’s about 80, has three or four degrees, has worked all over the world and been on stacks of boards. He’s raving about a book on marketing that some old mate of his wrote. Questions are allowed from the floor.

A bloke who’s very high up in a certain marketing industry association waddles to his feet and asks Sir Rod what sort of education board members should undertake to get a better grip on marketing? Sir Rod says, and I quote word for word, “A two- or three-week course ought to give you what you need”. This is from an ‘expert’ promoting marketing.

This neatly puts the marketing function at the same level of importance to a board as a sailing trip around the Whitsundays or a short course on modern art. If I’m not mistaken, in reality marketing is as important to a board as breathing. There are no companies in the country who don’t depend on effective marketing for their very survival. No marketing, no sales, no money, no board.

But they don’t see it that way. They see it as one more (granted, usually entertaining) function on the way between the morning coffee and lunch at the club. Why is this? Boards in Australia are invariably stacked with eight accountants, one lawyer and one engineer, who probably founded the company. They are invariably over 50, most over 60. They are mostly white, middle class men. There is one woman on every five or six of them – you have to get lucky. There is a ‘professional’ marketer on fewer than one in 20. And I’m not saying he’s (sorry, but there are so few women, adding the ‘s’ is a waste of ink) a member of AMI or ASMI or ASMRS or even ADMA; he’s probably done a couple of weeks as a salesman while studying law, but he’s the only one in the gang who’s done any selling at all, so is considered the marketing expert.

Boards don’t care if you think this is silly or unfair; that it does not reflect the core dependence companies have on our profession. They are in the power position and you are not. Bad luck for you.

But here you are, month after month, needing to get the board’s approval for anything you want to do to further the company’s interests. Fail, and you end up doing sweet F all. Succeed in getting the budgets and you become a hero in marketing land and go on to have a shining career. It all comes down to your ability to convince a bunch of middle-aged men to allow you to do what you want.

Hold that negative thought – boards are not made up of stupid people. The main thrust of this article is about dealing with senior boards – men in the main who take home between a few hundred thousand to many millions a year, for only a few days of work a month, controlling the most complex machines in this country. They have fought their way up corporate ladders, or built their own ships, and now run everybody’s lives. You must get boards to want to work with – and for – you, or you will fail in your job and no doubt your entire career.

So how do you sell ideas to a board?

Remember, you’re selling to your father.

He’s an old accountant and often a grumpy one. He needs marketing to work, but doesn’t think much of it and basically thinks about money all day long. That’s why he’s an accountant in the first place.

He’s certainly not thinking much about things like dramatically building markets, changing the way people do things, inspiring workforces or ethics. On the positive side, the board (your dad) actually wants you to succeed, will give you the money if you can convince him it’s a good idea and, because he’s hideously conservative, he will occasionally save you from making a big boo-boo, which you were overexcited about. Will he be able to make that fine judgement call when it’s touch or go? Nup. Most boards have little street smarts and no real experience with sensitive markets. They will go with the tried and true (regardless of how boring it is for the market/customer), rather than the new and more exciting, almost every time.

In fact, the boards that do allow great work, stand out like the proverbial dog’s balls. That we can name only a few decent creative-based campaigns in Australia at any one time is not a reflection of the quality of creative people in this country. We have many great people in creative fields – our international success in movies, music, etc. is testament to that. Australia’s low standard of advertising creative is more about the lack of people who are able to truly convince boards to take a leap of faith. And I guess it’s also because most of the boards in Australia are more conservative than they should be. They are heavily over-supplied with accountants compared to their equivalents overseas. A ‘balanced’ board, with multidisciplined people, representing key groups like, say women, is something insisted upon in the US, the UK, Germany, etc., but not here.

Because they have very little understanding of marketing issues and often no one around at their level who does (except the few who have really relevant people on them), they will often fall for what sounds like a nice idea sold to them by someone who’s slick at selling, but is not a good long-term brand building marketer.

Boards are the ones who buy the tacky promotional idea, pick the ad that seems like a nice change (but usually stuffs up your carefully built brand personality) and cut advertising budgets during a time of downturn (because they can be cut), when history says it’s the worst time to do so. What do they know? They don’t know anything about marketing case studies – they have never studied the disciplines. And they’ll always blame you when it fails and heap praise on some other department when it works.

Why do they not give credit to the marketing department when credit is due? Invariably because they hated the kids studying marketing at uni who were better looking, drove snappier cars, bedded more exciting partners and, worst of all, made fun of the accounting students. They have never forgiven the marketers for choosing a career that was fulfilling and interesting instead of just built on balancing the books. So they spend their later years making marketing decisions arrogantly, without bothering to study the laws of marketing, just because they find they can. Better yet, because it allows them to humiliate marketers.

Your father is sexist

Most of the people reading this rag are in a marketing role, more often than not, a senior one. Years ago this meant most of the readers were men with a degree in marketing, who had done some selling/brand management and were now heading up the department. Nowadays this is not the case. Increasingly the marketing management role is taken by a woman. This works for boards. It reflects the fact that boards don’t believe marketing is a man’s job. They think that ‘PR chicks’ should make the marketing decisions. They often have a much softer spot for a daughter figure than a male, who may try to come across as an equal. They don’t like males who are from different tribes. They despise men who dress differently to them. Drab suit during the week, polo shirt, jeans and riding boots on the weekend, or else. They like younger women who seem nice and pliable like a good daughter. Given exactly the same situation and plan being sold through, a female marketing manager will invariably get the nod over a male because boards don’t find them as threatening.

This is tricky if you’re a bloke. Which is why most male marketing managers dress like accountants to lessen the threat factor – out of a sheer need to survive they end up at least looking like they belong to the same tribe. It also means that if you’re a bloke and you want your ideas to sell it’s often good to take to the meeting a younger female member of your team to keep the board happy that a woman is involved. Note I didn’t say, God forbid, actually making decisions.

Sell to the power brokers

Boards are extremely political. Like a footy team with half-backs, centres and full-forwards, everyone has their place. One accountant will be more engineering-oriented, one more tax-minded. You must work out who’s the most powerful and make sure they are onside. You must also work out the best method of getting to them. You may find you need to convince person C who is always listened to by person A, before actually fronting person A.

Sell to them as individuals

Boards are made up of individuals. If you get a chance to discuss the issues, sell to them one-on-one before the main presentation; you’ll be able to get more of them onside. If you can sell to more than half beforehand, and especially if you can get the main players onside, then you have a hope. Forget the fact that you think it seems political – they revel in it. Forget the idea of ‘impact’ – they hate being taken unawares. Everyone on a board likes to think they have the jump on everyone else.

Repeat

One of my favourite clients repeats his monthly mantra every time he sees you on the basis that there’s always someone in the room who doesn’t know the game plan. It works a treat to keep everyone focused on the right issues. When you see your board, it’s probably been a month or so since the last time. In that period they’ve had 30 breakfasts, been to 150 meetings, driven around town 75 times. They’ve forgotten most of what you said last time. So run through the messages you gave them last time first. “As you’ll recall” is a good way to start.

We

Use the term ‘we’, never ‘you’. The board sees a marketing person as you see a Martian. You dress differently, are much younger, you studied things they don’t know about and they know you know more about the subject than they do. You must make them feel they are on your team and you on theirs. To get them onside, you must find ways to make them feel they are part of this whole thing and they have a real say. Get them to ‘build the baby’ with you. Smart marketers get the board to debate marketing issues, giving them the right information and allowing them to make the same conclusions. A good plan, set up the right way, will get through, but it has to come from someone you trust. And that means someone on their team. Be on their team.

Give them the background info

Boards are not stupid. They didn’t get where they are now by being dumb. They got where they are by not making mistakes. So if you give them all the information as appendices behind the summary argument, they will respond to it.

Put it on one page

Sir Winston Churchill (who is as much a hero to boards as Sun Tzu, Dale Carnegie, Henry VIII, John Howard and John Wayne) once said if you can’t get it on one page, it’s not worth saying. So put the main argument on one page. Just back it up with a folder three inches thick.

Use PowerPoint

I hate PowerPoint. I’d rather have my teeth ripped out with rusty pliers than use PowerPoint again; however, as PowerPoint focuses them on issues and makes them read the points, taking the emphasis off you the marketer and onto the issues themselves, PowerPoint works. Just keep the points to only three to four per slide, the presentation short (and I mean 10 slides max) and the pictures/graphs big.

Practise

I know it’s boring to talk to yourself in the toilet. And you look mad if you walk down the street talking to the trees, but nowadays when you’re driving everyone thinks you have someone on loud speaker, so you can practise to your heart’s content in your car. Everyone good practises.

Start with money

Most marketers start with the need and idea and by the time they get to the budget issues, the board has invariably decided it’s going to be too expensive. A very wise, very successful marketer once told me to start with the money first, and it works. They get involved with how much you are going to make and how little it will cost, and are often hanging to see how.

Discuss risk

Assessing risk is noting the probabilities of various things going wrong and looking at the possible consequences. Most marketers shy away from raising issues related to risk due to a belief that if they don’t mention one or two aspects, the board won’t think of them either. You are far better off putting things on the table and beating them to the opportunity to say no. If you have given issues the right amount of thought you’ll have a reason why you’re still prepared to go forward. Say the bad thing and then say why it must be discounted and how you’ll get around the risk. This is always where a decent budget can be justified so much easier than in the creative bit.

Handle all the objections

Think up all the possible negative arguments and have a response prepared. Know your stuff, or you look like a fool. People have no confidence in fools. They will never trust them with money. No matter how silly you think an objection is, it is valid if it is raised. That the CEO’s wife doesn’t like the TV program is important in his eyes, regardless of what you think about its relevance.

Get agreement if you can

If possible, ask for a vote of confidence or approval of budget. But know your process – if your board agrees things on the next meeting, don’t try to rock the boat. Your relationship with your board needs to last for years. Better to present the facts and expect them to agree, than to be too pushy.

Stick to times and follow up

Boards have no time. People who respect their time allocations get huge brownie points. Precise meeting notes, as carefully worded emails, work too.

Learn from your experience

You’ll always get a few goes with any board, once you’re where you are. It’s a good idea to map out what worked and what failed for future reference. Make notes – especially work out whom you need to work on and how.

Summarise

Always summarise the argument at the end.

Managing corporate reputation

by ON
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Everything your company does is observed through the filter of corporate reputation. And a company’s corporate social responsibility activity – and inactivity – has an enormous impact on reputation. In a study TNS conducted in the US in 2005, we saw changes in investors’ evaluations of the 30 companies comprising the Dow Jones Industrial Average (DJIA), proving that corporate reputation influenced the value of those companies and the share price of their stocks even as far back as 2001. So how do you get your company ready to measure and manage corporate reputation?

1. Recognise that your corporate reputation is already impacting your business

Corporate reputation is either a halo or a shadow, depending on how strong or weak it is. Many companies do not recognise how the issues they deal with are often symptoms of weakness in corporate reputation, such as employee turnover, the need to discount market share despite good customer satisfaction scores, and difficulty in creating strategic alliances. A strong corporate reputation protects the value of a company even when that reputation is under assault.

2. Measure your overall corporate reputation

Corporate reputation should be measured using a composite index that incorporates the dimensions constituting corporate reputation. Dimensions should cover both the competency of an organisation (measured through product and service quality factors) and emotional appeal (such as favourability and trust). The index must also be demonstrably reliable (trackable) and valid (i.e. able to be linked to business outcomes). Simply measuring and reporting numbers is not enough.

3. Include company-specific diagnostic items

To manage reputation, corporate reputation surveys need to include items that can be analysed to identify key drivers. These must be meaningful to both the respondent and the company using the results. This is essential if the findings are to be actionable.

4. Identify the stakeholders that need to be included in your corporate reputation measurement program

Stakeholders often include investors/owners, employees, customers, suppliers, government representatives and community leaders. Although their relationship with the company may be internal or external, and their business influence direct or indirect, all can impact upon the success of the enterprise.

5. Plan for subsequent tracking waves

Be sure to plan for ongoing measurement before conducting the first baseline measure. A company’s reputation is subject to change, so periodic scheduled measurement sustains momentum and helps companies realise program potential.

6. Establish action plans

Corporate communications (or equivalent) and agency partners will need to work with senior management to prioritise reputation issues based on study results and develop action plans. These should include goals, objectives/performance targets, activities, timelines and responsibilities.