The simple, and real reason Bill blew it

The simple, and real reason Bill blew it

May 21, 2019 | Marketing, Personal Rant

In the tsunami of analysis seeking to understand the loss of the election by Labor, I have yet to hear anyone put their finger on what I consider to be the real reason.

Psychology.

Specifically Prospect Theory.

Prospect Theory was articulated by Nobel laureate Danial Kahneman in his great book (required reading) ‘Thinking Fast & Slow’. It is the psychological relationship between the pain of a prospective loss, compared to the pleasure of a prospective gain. In the published theory Kahneman and his collaborator Amos Tversky put the effect as twice the expected pleasure from the gain necessary to overcome the prospective pain of loss. However, in interviews, he has said that the relationship is more like 5-7 times, but when writing the papers, they thought nobody would believe them, so they settled on twice.

Think about this relationship as it applied to the offers of the two major parties on Saturday.

Labor promised some pain for a few, but failed to articulate who the few were, and justify the pain, so all voters saw was ‘Pain’. By contrast, the Liberals promised no pain, and lots of gain, albeit almost totally bereft of detail beyond election rhetoric.

It was not so obvious to me beforehand, but with the benefit of that magnificent justifying mechanism, hindsight, it is as obvious as the  nose on your face. Labor did  not just need a better salesman, which they certainly did, they also needed someone who understood the psychology underpinning successful marketing.

Header cartoon is from www.tomgauld.com with my thanks.

Where is the demarcation between Accountability, Responsibility and Authority?

Where is the demarcation between Accountability, Responsibility and Authority?

May 20, 2019 | Governance, Leadership, Management

The words ‘Accountability’ ‘Responsibility’ and ‘Authority’ are often mixed up, used inconsistently, and often as synonyms.

How often have I heard someone say they have accountability, but not the responsibility, as well as the opposite?.

In any organisation, the ‘language’ used has to be crystal clear. Without clarity, ambiguity and finger pointing creeps in.

Let’s put this one to bed.

In my world, the demarcation between these words is very clear.

Accountability.

The clue is in the word: ‘count’. The person with accountability is the one keeping track of progress, counting it. They may not have the power to make all  the decisions, their role is to be the one who gives voice to issues as they arise, and should be independent of the role the person plays in the organisational hierarchy.  In former marketing management roles I held product managers accountable for margins of the products for which they held responsibility. They did not set final prices, nor did they control the promotional spend or COGS, but they were accountable for margins, and it was their role to monitor, communicate, and persuade, to deliver both the percentage and dollar outcomes.

Responsibility.

Anyone who is in a position to ‘respond’ carries responsibility. An individual does not have to carry either accountability for outcomes, or the authority to make decisions to be responsible for actions taken, most particularly their own. It is in this area of responsibility that the cultural aspects of an enterprise are felt most keenly. When those without any institutional power feel attachment to an outcome, and act accordingly, they are exhibiting a level of responsibility, and it is a powerful marker to a positive, productive culture. 

Authority.

This belongs to the person who has the final say, the power of veto. Authority can be delegated, even to the lower levels in an enterprise. On a production line where there is an ‘Andon’ line in place, workers carry the authority to stop the line when they see a quality fault, rather than allowing it to proceed further down the line.

The larger an organisation becomes, the more nuanced and ambiguous these definitions can  become as people interpret their position and role, and that of others, slightly differently.

A regular and blatant misuse of the word authority occurs when it is used to point at someone who is expected to be an expert. The word sometimes carries the preposition, ‘an’, in front of it, becoming ‘an authority’, as in the header illustration. The doctor was used in the header ad because he was seen as ‘an authority’, and therefore had an opinion that should count, but had no authority over the actions of an individual.  

As a further example, In most organisations, the CFO is accountable for the cash. They literally count it, report on it, and recommend actions that impact on it. The CEO retains authority over the cash, as they have the final say in how it is managed and allocated, and everyone in the organisation has a responsibility to ensure that cash is spent wisely, with appropriate governance and reporting.

Having clarity around these definitions, and a culture that respects and responds to them, is crucial to any improvement process.

 

Where is Occum when you really need him?

Where is Occum when you really need him?

May 17, 2019 | Change, Leadership, Personal Rant

We need Occum’s Razor to be applied to our deliberations on all sorts of things, from our personal and professional lives, to the  way politics is being practised around the western world.

The term comes from the writings of William of Ockham, a 14th century philosopher monk, and calls for simplicity of logic, the removal of superfluous ingredients when you have a simpler idea that accommodates the facts just as well.

In effect,  strip an argument back to its essential elements, and work with the facts. Conjecture, personality, and status quo of all kinds should play no part in the development of an idea.

Tomorrow is federal election day 2019, the culmination of a campaign that really started back in August last year when Malcolm Turnbull was rolled by his own party.

The ‘campaign’ has been little more than a display of clichés, vague and inconsistent promises,  and pork barrelling to both fragile electorates and interest groups. I guess to be fair, it must be said that the Labor party has at least set out to articulate an agenda of change that does make an offer to voters, but the chief salesman is a dud.  

What appears to be happening more and more is the phenomena of ‘Occum’s Broom’, which suggests that inconvenient facts and unwanted insights are swept under the carpet. Utilising Occums broom is both intellectually dishonest, and way too easy to deploy as a shortcut to some sort of outcome preferred by one group or another, who seek power.  

By Sunday, we will know who wielded the broom to the best effect, at least in the house of Representatives. In the Senate, I suspect there will be a bit of a wait as the dust from the broom settles its way through the myriad of minor ‘parties’ whose primary vote is limited to their families, and a few zealots.

Bob Hawke passed last night, and I cannot help but wonder if his passing will deliver a telling fillip to the Labor vote, as we are confronted by personalities from both sides observing his great contribution to the nation, and to the practice of politics as a means to make positive and lasting change.

The header cartoon is again by Hugh McLeod at www.Gapingvoid.com and represents the question we will all be asking ourselves come Monday.

 

The new competitive advantage in a digital world

The new competitive advantage in a digital world

May 15, 2019 | Communication, Marketing

Data collection has become an obsession of marketers in particular, but all sorts of other assorted boffins as well.  We have data up to the wahzoo, and do not know what to do with it all. So, we throw it against the wall and come up with all sorts of nonsensical stuff designed to sell digital ads to marketers too silly to think clearly about what they are doing, and why they should be doing it with digital.

Data is now a huge, though largely unmapped  industry, infested with data snips designed to track consumers so they can be targeted by advertisers, or perhaps more accurately, promised by the sellers of digital space to silly advertisers with too much of someone else’s money to spend.

The only industry that has actually done well in this mess are the scammers, and those who produce ad blockers, which in itself is a measure of how poorly  served we are.

Advertising used to be the means by which we were delivered information important to making purchase decisions. Now digital advertising is used as a means to follow up, make money for the scammers and fraudsters, and  occasionally, set about delivering information to someone who wants it.

The new competitive advantage is not to get more data, but to be able to turn the data you have into actionable market intelligence. 

This brings us back to the foundation of advertising and marketing,  understanding your customer better than your opposition. Given they usually have the same data set as you, your competitive advantage is in the use you make of it.

Header cartoon courtesy Tom Fishburne at www.marketoonist.com

 

 

 

11 things you have to get right to successfully rebrand.

11 things you have to get right to successfully rebrand.

May 13, 2019 | Branding, Marketing

Rebranding an enterprise is fraught with risk.

You risk losing the brand identity you have, along with current customers, distribution channels, recognition, and so on, banking on building a larger brand in the future.

It will not happen without significant risk and cost.

Let’s get the definition of ‘rebrand’ right.

We are  not talking about a simple pack change here, but a ‘clean sheet of paper’ rebrand.

A seemingly simple pack change is hard enough, but pales into insignificance against a total rebrand, which goes to the core of the value delivered by the brand to its customers.

Years ago I was tasked to rebrand a well known albeit small FMCG brand, ‘Tandaco’. It had in its portfolio several ingredient products used by serious and traditional cooks,  suet,  yeast,  stuffing mix and breadcrumbs. The task was to rebrand into a new brand ‘Supercook,’ which had a wider range of products that were intended to be licenced from the UK.

Having previously been badly bitten by what appeared to be a simple repackaging exercise on Tandaco Stuffing Mix, told in this post,  I was very wary of the larger exercise. While I opposed the whole exercise, as I failed to see any additional value for consumers, and considerable risk, I was convinced I had done everything humanly possible to make it work.

I set out to do this ‘by the numbers,’ to ensure as far as possible that mistakes previously made were not repeated. It was the early eighties, so market research was ‘clunky’ at best, and by comparison to today, positively prehistoric. Nevertheless, there was a lot of research done aimed at addressing what I saw as the stumbling blocks;

  • How did we translate the positive feelings of that small group of current buyers of Tandaco to the new brand Supercook?
  • How did we ensure that the new brand was not left on the shelf due to non recognition, repeating the mistake made previously with the redesign of the stuffing mix, noted above.
  • What brand takeaway did we want to attach to the new Supercook brand?
  • Which additional products could be fitted under the umbrella, that would add to the total volumes of that particular sub category in supermarkets? There were some expectations here based on the British experience, but it seemed to me that potential range extensions were going to have to take share from an existing product, as category expansion seemed unlikely.
  • What was the profile of the key group of purchasers who made up the bulk of the volume currently, and would they ‘stick’ when the new brand was introduced? Indeed, would they buy some of the range  extensions in preference to the existing competition, and why?
  • How would the brand change impact on consumers, how did it add any value to them. My view, expressed probably too loudly for the relatively junior person I was at the time, was that the whole exercise was driven by someone in an office who had a good idea one morning, and no engagement in the marketplace.

There were also marketing management challenges that had to be addressed.

  • Designers and advertising creative personnel needed to be thoroughly briefed and on board with the strategies, reasons for the change, and what we sought to achieve
  • Internal management record keeping from the accounting, through the production management and procurement processes needed to be keyed into the changeover timetables, and accommodating of record changes and allowances made for the inevitable one off changeover costs that would emerge.
  • Sales personnel and importantly customer , supermarket buyers needed similar timetables.
  • Most importantly, consumers had to be informed and engaged in the new brand as it was rolled out.
  • Was there enough budget to do all of the above?

While I believed at the time I had crossed every ‘t’ and dotted every ‘I,’ the change turned out to be a silly idea, and was reversed a couple of years later, after my departure.

At the time of the change, Cerebos was owned by British Multinational RHM, which had slowly bought up the Australian owned businesses over a period of years, and had global aspirations. It has since been passed around like a parcel at a 5 year olds birthday party. The current owner being Kraft Heinz, who acquired it at the beginning of 2018 from Japanese brewer Suntory.  Given the recent disastrous performance by Kraft Heinz, Cerebos is most likely back on the market as Kraft Heinz scrambles to improve their  balance sheet.

A final word of caution. I have seen a ‘rebrand’ become the excuse for all sorts of other changes, not associated with adding value to customers. These are to be avoided at any cost.