Management attention is an investment.
However, I have never seen a calculation of that investment made without the benefit of hindsight. Considering the return on management attention (ROMA) seems to be a sensible element of investment due diligence.
As a consultant I’m always urging clients to focus their resources, time, money, expertise, operational capacity against a narrow field. This focus of resource is always superior to a generalised approach in winning in the short term.
Nowhere are military metaphors more appropriate then in a competitive commercial environment. Every general knows that to win the battle, he needs overwhelming force in a specific space.
However, every general also knows that a war is not won in a single battle. To win the war, you also must be able to adjust to changes in the context in which the war is being waged and respond accordingly.
Years ago, while working for Cerebos, I was responsible for Cerola muesli, now departed from supermarket shelves. In those days there were only a few major SKUs in the breakfast cereal aisle. Wheat Bix, Kellogg’s Corn Flakes, Rice bubbles, and a few other relatively minor SKUs. Muesli was out on the fringes, widely seen as ‘tree hugger food’.
As an extension to Cerola, we created a strategy that straddled the gap between those major cereals and muesli and named it ‘Light & Crunchy’.
We launched it into a test in South Australia. We believed we could build the Cerola brand to be more than just ‘hippie-food’ by creating a new category in the Cereal market. There was an unmet need, a potential gap in the market. That gap could be leveraged (we believed) with a good product and effective marketing programs to generate trial, which would lead to repeat purchase.
The early stages of the test were an enormous success. We easily got retail distribution, consumer trial and repurchase rates that were well above our benchmarks for a successful test.
The significant miscalculation made was not anticipating the weight of the response from Kellogg’s.
It came very quickly with a competitive product called ‘Just Right’, a direct copy of Light and Crunchy. Just Right still exists, which validates our identification of the unmet need. Kellogg’s competitive launch was supported by overwhelming advertising, consumer promotions, and instore promotional support. That massive, focused response by Kellogg’s simply blew us away, and killed any thoughts of continuing.
Kellogg’s saw our test launch of Light & Crunchy as a significant incursion into their territory. They had previously left us alone in Muesli. Research indicated that muesli, as it had been, was not competing for the same consumers who were purchasing Corn Flakes, Rice Bubbles, and Sanitarium’s Wheat Bix.
With Cerola Light and Crunchy, we changed that, and Kellogg’s reacted with extreme aggression. I had failed to anticipate the reaction, which was with the benefit of hindsight, absolutely predictable.
The real lesson was that we did not have what it took to be competent in the breakfast cereal market. While competence is a term that most would see as a measure of skill, in this instance it was more than that. It was a measure also of our depth of knowledge of the market, the competitive drivers that existed, and sufficiently deep pockets to wage a competitive war on Kellogg’s home turf.
Our attention was too focussed on the opportunity we saw in the market, but substantially lacking in attention to the wider competitive context. We had a skewed focus of attention, and the return on that lack of attention taught us a painful lesson.
‘ROMA’. Return on Management Attention, is always a strategic driver, rarely adequately considered.
