Cash flow as the lifeblood is only half a metaphor.

Cash flow as the lifeblood is only half a metaphor.

 

 

Cash flow is often described as the lifeblood of a business.

While it is correct, it leaves a lot on the table.

If cash flow is the lifeblood, you also need a heart to pump it around the body. The leaner and more efficient the body in which the heart resides, the easier it is to pump, reducing the stress on the mechanism, reducing risk.

Similarly, to be effective blood requires oxygen to be attracted and distributed through the system.

Oxygen is what keeps everything working, it is the source of the power required to run the system, without which the system rapidly grinds to a halt.

In a business context, the oxygen is the input of information, the lungs and heart are the analysis and leveraging of that information, and the culture of the organisation is the body that holds it all together.

You go to the doctor to get a physical, where do you go to get a ‘commercial’?

An accountant will give you part of the picture, based on the books.

A ‘lean’ expert might offer many insights into the operational processes, particularly in a factory, and at the same time offer cultural insights.

A ‘6 sigma’ expert will deliver an arithmetic analysis of the efficiency of each part of a process.

A marketing expert (if you can find a bullshit-free one) will give you opinions based often on questionable and partial information, and usually biased towards their particular view of the role of marketing.

A sales expert will opine that everything else will be OK if you just get more leads for them to convert, and here is how!!

The point is that each will give you a picture of your business as they see it based on their experience, training, predisposition, domain knowledge, and their own assessment of WIFM.

Finding someone who ties all that together, and offers a complete, unbiased, and expert picture is a challenge.

 

 

 

 

How much has marketing really changed?

How much has marketing really changed?

 

 

If you asked a room full of marketers if marketing had changed in the last decade, you would get most of them telling you it had changed radically.

On the surface it has, the digital revolution has taken marketing by the neck and given it a great big shake.

There has been an explosion of sales, media, connection, and payment channels, customers are more wary, and do their own research before a marketer knows they are in the market. So called ‘content’ has almost infinite reach, but the frequency is rubbish, as there is so much digital noise, and so much competition for attention, that most of it is the digital equivalent of yesterday’s fish wrapper from the newspaper obituary section. The investment in marketing technology to manage all this has also exploded.

There is a welter of research and opinion that confirms the notion marketing has changed, some by very credible organisations.

I asked myself the question again, after stumbling across this report by Adobe, one of those credible organisations that supports the ‘yes’ vote, and came to a partly different conclusion.

Marketing has changed, absolutely, at the tactical level. The means by which marketers create and deliver a value proposition, then turn it into a transaction is unrecognisable from just 5 years ago. However, tactical implementation is just a small part of the pie.

Organisationally, marketing has changed a bit. Generally, it is still a function in a group of functional silos that reports to a CEO. A range of new titles have emerged, Chief Marketing Officer, Chief Engagement Officer, and so on, but that does not change the essential reporting and accountability of those in senior marketing roles. The marketing organisation in large enterprises has also siloed, now there is digital, customer service, technology, and a range of other functional roles within marketing not present 5 years ago.

Strategically, marketing has changed little if at all. The role of marketing is to tell the future and adjust the value proposition to customers ahead of the changing preferences and behaviour. That has always been the case, and remains so.

The only strategic change I can see is one of leadership.

In the past, marketing has generally been a passive corporate player, relegated to the role of managing one of the largest expenses in the P&L. Now the value of enterprises is so much more in the hands of intangibles, that marketing is increasingly demanding a seat at the big table. This requires that marketers are able to lead their peers and boss. Unless they can achieve this position of leadership, they will remain the simple gatekeepers to one line in the P&L, rather than being responsible for the future health of the enterprise.

Look at it from the top down.
Marketing has changed little strategically, but strategy is by far the most important component.

It has changed organisationally, and while it is important, in most areas, it is not a game changer.

Tactically, marketing is unrecognisable, but who really cares. Tactics are short term, able to be changed in real time as the situation evolves. Marketers need the organisational capability to be able to change in real time, but the impact of failing to do so is limited.

The marketing groups that will be successful into the future are the ones that are successful leaders of their organisation. To achieve this role of leadership, they must be able to identify the priority areas for investment and activity, as well as being able to remove the organisational constraints that operate in every enterprise, that are not directly accountable to marketing.

Well, they are not accountable until marketers are in the corner office, which should be happening more and more as they are the future tellers. Those who currently occupy that office are usually the engineers, lawyers, and accountants who are good at reading the past in the data, and hoping the future looks similar.

Who is next in your corner office?

 

 

4 hurdles to successful ‘digitisation’

4 hurdles to successful ‘digitisation’

Often, I hear the term ‘Digital Strategy’ used as if it were an end result, some discrete set of activities to be completed.

To my mind, this is a misuse of the term.

As it is usually used, ‘Digital’ is all about the devices, the technology, whereas the value in digital is elsewhere. It is in the ability to get things done, differently, more quickly, efficiently, and in a distributed manner by those best able to complete the activity with the minimum of organisational friction.

It is about the business models enabled, the understanding of customers, ability to visualise the unseen, and communicate it clearly. It is not about the RFID tags, VR, and all the other enablers of digital, it is the outcomes that count.

Your strategy may be enabled by digital, but you do not need a digital strategy any more than you need a telephone strategy. They are both just tools to be leveraged.

Management of these changes is confronting, there is not a lot of precedent to go by. This is particularly the case now following the explosion of AI onto the scene. There is a lot of advice around, often delivered by those with a stake in selling you another product or service. However, it seems to me that there are a few simple parameters worth considering.

Functional Silo thinking is poison. The communication enabled by digital is inherently cross functional, better reflecting the way customers and suppliers see us and want to interact. Functional silos have little to do with optimised outcomes anymore. They have outlived their purpose and value.

One step at a time. While the pace of change is getting faster, and the pressure to keep up increasing, we all know what happens when we try and run down a hill really fast, we end up arse over tit. Matching the speed of change to the pace that your enterprise can absorb the change is pretty sensible. Of course, if you are the slowest in the competing pack, it may be better to get out while you can.

Digital is a team game. Hand balling digital responsibility to the IT people is a mistake. You will end up getting what they think you need, which is rarely what you really need. The real challenge is engagement of people not really focussed on digital. The primary example is in the space of marketing automation. Suddenly it exploded, way beyond the capabilities and experience of most marketing people, who are nevertheless now investing more in tech than the IT people. It is essential that the right capabilities are built in the right places. Finally, everyone affected, which is everyone, needs to be in on the secret, with all the options, challenges, and opportunities transparent. The unknown is the father of all sorts of ugly children.

Think long term. Digital transformations are not just about which software you will install to automate a process. Is more about what the business may look like in 5, 10 years, and what steps do you need to take over that time to reman relevant. Technology, much of which may not yet be available, will play a vital role in that evolution, but they remain tools of the evolution, rather than the main game.

Header credit: My thanks to Tom Gauld in New Scientist.

Is Taylor Swift the greatest marketer of the last 20 years?

Is Taylor Swift the greatest marketer of the last 20 years?

 

 

There are many contenders from around the globe for the mantle of ‘GOAT”, or at least of the last 20 years.

The obvious choice might be Steve Jobs, whose single-minded pursuit of all the factors that coalesce into great, long lasting, and commercially effective marketing culture is unparalleled.

You might nominate Elon Musk. He reshaped the auto industry worldwide, made batteries sexy, and figured out how to create a reuseable rocket, before imploding by renaming Twitter ‘X’.

How about Jeff Bezos who figured we would buy books online and turned that idea into a retail behemoth that has reshaped markets.

Some might add the foul mothed Gary Vaynerchuck to the list, whose ability to promote himself while talking about himself is unmatched.

Then there is a small number of genuinely original marketing thinkers and academics: Seth Godin, Mark Ritson, Byron Sharp, Roger Martin, and Scott Galloway.

Add in a few hands-on practitioners like Angela Ahrendts, Richard Branson, Marc Pritchard, and a trio of Aussies who changed the world, Melanie Perkins, and the Atlassian duo of Farquhar and Cannon-Brookes (whose core values include ‘don’t F%@k the customer’) and you have a good list.

However, my nomination would be from outside the usual ‘who is the GOAT’ box. It is a 34-year-old musician, songwriter, entrepreneur, and publicity machine, who has added tens of billions to the GNP of the US.

Taylor Swift.

I could not identify one Taylor Swift song, and I do not know if she even has any musical talent, but she certainly is a truly great marketer!!

To have the world talking about you, (even a 72-year-old bloke in a blog post) to have massive fan clubs of ‘Swifties’ salivating over every new piece of iconography, hordes fighting to pay eyewatering amounts to get nosebleed seats in a 100,000 seat stadium, takes some talent.

What makes her so great? Indeed, what are the common characteristics of all those in the list?

  • Understands who her customers are, and applies relentless focus. Swifts core market is young women and girls. She has demonstrated mastery in engaging with that audience with the music, visual extravaganza, and personal storytelling that resonates. She is also a powerful role model, encouraging independence, ambition, creativity and determination, emotions to which those in her market all aspire.
  • Consistently creates value for customers, individually. It seems the ‘Swifties’ out there all see Taylor as someone they easily relate to personally, across a wide range of channels and media. She is consistently delivering experiences, based on the music and extravaganza shows, but supported by all sorts of adjacent activities, such as having Kobe Bryant, a superstar in his field, come on stage at a concert and wax lyrical about her kindness, generosity, and ‘grounded’ personal values. She tells Swifties what they want to hear, and even their parents have trouble arguing!
  • Is ‘the only one’. Marketing success is an outcome of meticulous attention to detail, and the communication of all those details in a package. It requires two types of activity that is an extremely difficult mix to get right. On one hand, you need to ensure ‘activation’. The calls to action that today generate the motivation to spend money to be a part of the party. On the other, it requires that long term investment be made that build a brand, an identity that engages and creates a long-term platform from which the activation and short-term revenue generators are launched. When done well, as in this case, there will be ‘only one’. Where else can a teenage girl find the excitement, engagement, communal vibe she gets from being part of a ‘Swiftie’ fan community?
  • Swift applies compounding leverage. Taylor has executed a masterful commercial strategy. Unlike almost all other entertainers, she has retained control of everything, and runs the whole shebang as the CEO of a large, volatile and very complex business entity. Her uncanny ability to generate ‘Buzz’ around everything she does, which is spread by wildfire word of mouth and unpaid media enables a continuous stream of ‘Swift-news’ which has fans hanging out for more. She provides the creativity, leadership, and alignment most CEO’s can only dream of across the diverse range of activity her business embraces.

Swift is touring Australia, starting later this month, with multiple sold out shows in Sydney and Melbourne. The hype is becoming all consuming: you even have to reserve a spot in the line to pick up your merch and get to the cash register at the exit of the ‘pop-up’ merchandise stores.

Header illustration is via DALL-E, everything else is ‘organic’

 

Revolution by digital: A survival necessity.

Revolution by digital: A survival necessity.

 

‘Going digital’ sounds easy.

Sadly, it is not.

Almost every company I visit or work with needs, to one degree or another to be aggressively moving down the path towards ‘digitisation’.

Just what does ‘digitisation’ mean?

For most of my clients it means automating some or all of the existing processes driven by bits of unconnected software and spreadsheets, liberally connected by people handing things over.

It is a mess, and there is not one, or even a suite of digital measures that will address the whole challenge, despite what the software vendors sprout.

The world is digitising at an accelerating rate, so keeping up is not only a competitive imperative, it is a strategic necessity. Never more than now as ChatGPT burst onto the scene, compressing everything, and making the ‘digitisation’ drive one of life and death.

On of my former clients is a printing business, an SME with deep capabilities in all things ‘printing’ that enabled the company to be very successful, in the past. Their capabilities are terrific, cutting edge, if we were still in 1999.

If I use them as a metaphor for most I work with, there is a consistent pattern.

  • They did not see Digitisation as an investment in the future, rather it is seen as an expense.
  • There was no consideration of the application of digital to their product offerings, beyond the digital printing machines, and services beyond those that made them successful 20 years ago.
  • Their business model, beyond what is demanded by the two biggest customers, who between them deliver 34% of revenue, has not changed.
  • They have not considered digitisation of operational processes, beyond a 25-year-old ERP system. The system has not been adequately updated, and they only use a portion of the existing capability.
  • They have not modified their organisational and operational culture to meet the changed expectations of their customers, and the market.

No digitisation effort can succeed without the support of an operating culture that encourages ongoing change. Organisational processes can be modified by decree, but they will not stick. It takes everyone in the boat to be pulling in the same direction, in unison to make progress. This takes leadership, and a willingness to be both vulnerable internally, and a strong ability to absorb the stuff from outside. The leadership group must ‘get out of the building’. Not to smell the roses, but to see the lie of the land, and understand where the opportunities and challenges are hiding.

Coming to this point, where there is a recognition that change is no longer a choice, is where you are given one point out of a possible 10. Now you need to do something about it all to have a shot at the following 9 points. A daunting prospect for most.

The process has 5 easy in principle steps:

  • Map the existing operational processes so you know what to change, and where the gaps/opportunities are hiding..
  • Map and change the mindset of the people, so you understand the extent of the challenge.
  • Take small and incremental steps along a path that all understand leads to a digital future, which means that a lot of collaborative planning has been done.
  • Ensure that there are the necessary opportunities for all stakeholders, but particularly employees to grow and change with you. Those that choose not to, also choose to work elsewhere. There are no free rides.
  • Ensure the resources of time and money are allocated uncompromisingly to the long-term outcomes. It is just too easy to put aside something that is important but not urgent, for something that may seem to be urgent, but is not important to the transformational effort.

As noted, since the public release of ChatGPT in November 2022, the time before the liquidator comes around for those who choose not to change has compressed radically.

Most, if not all SME’s beyond the digital start-ups now cropping up like mushrooms after rain, will need outside expertise.

Consider that help to be an investment in survival, not a cost.

 

Header cartoon credit: Tom Fishburne at Marketoonist.com