Apr 17, 2024 | Change, Leadership
The following is a post that I drafted at the beginning of the Corona epidemic but did not post.
It is a personal reflection on ageism, that becomes increasingly relevant as older, retired workers I see around me now going bonkers from boredom. Few want the pressures they had as youngsters climbing the slippery corporate pole, or struggling to manage and grow an SME, but they do wish to remain useful, relevant, and earning a bit of pocket money.
By ignoring this growing cohort, we are also ignoring the wisdom of hard-won experience, and 4 years later, thought it worth the question.
At 34 I landed my first job as Marketing Manager of a stand-alone business, a significant FMCG manufacturer.
The business was an absolute basket case, and in the middle of a major investment in new facilities in Western Sydney that was financially and operationally irrational. However, the move of location encouraged a number of the marketing personnel I inherited to leave. This gave me the opportunity to recruit people who I thought had the skills and mindset to contribute to the massive task of rebuilding.
The process was a standard one for the 1980’s, via a head-hunter who provided a big list of potential people against the brief I had provided. Amongst the guidelines was a requirement that he find people who had a different background and skill set to my classic FMCG marketing history. On that list was an older bloke, late forties, who fitted pretty well the profile of what I was looking for, and who in addition, was desperate for the job. His previous employer had ‘re-engineered,’ which was one of the management fads at the time, and he had been a victim of that ‘re-engineering’.
I had several conversations with him over a couple of weeks, and eventually decided against hiring him. At the time, I rationalised this decision as being sensible, as he was late forties, seeking a job for which he was overqualified in a number of ways, working for someone who was significantly his chronological junior. I assumed he would move on as quickly as he could, leaving me with a problem I simply did not need.
Even at the time, in the back of my brain, I also knew I was intimidated by someone so much older, with far more experience across a range of areas where mine was lacking. How would it look, risking being shown up by someone who formally reported to me?
Over the subsequent 10 years as we dragged the business kicking and screaming into the 20th century, as Marketing Manager, but also controlling several other functional areas for 8 years, then GM for 2 years, I reflected on my decision about this man. How much would his experience have contributed, even if just for a short time, as we transformed the business from the basket case it had been, to the much larger and very successful business it had become.
Almost exactly a decade later, I found myself ‘re-engineered’ after ongoing differences of opinion with the Managing Director of the corporate of which we were a division, reporting at the bottom line.
It was then that the frustration and desperation he must have felt really hit home. I discovered I was too experienced to be a Marketing/Sales manager, but too inexperienced to be a General Manager/MD. It is also possible that the reality is that I am not as ‘pretty’ as some, and believe strongly in expressing views in as frank and open manner as possible. This is a toxic combination in an interview process for a corporate role.
It also seemed that at 46, and dispirited, which I had become after 18 months of relentless looking, I was too old.
Ageism had a face, and it looked back at me every morning as I shaved. In no way was that ageism deliberate, or even more than partially recognised at the time, but it was there, lurking in the background.
As a result I started to take seriously some of the conversations, advice, and a few paid ‘quick fixes’ I had delivered over the 18 months of ‘gardening leave’. The paid ones utilised not only my skills and experience, but attitude. None evolved into a long-term job. However, they paid some of the bills piling up with a young family, which was at the time gnawingly stressful.
I look on now and consider the manner in which the carnage being wrought by the Corona Virus will impact on a huge number of peoples lives. I shudder at the number who are experienced, qualified, and who will not be able to regain employment that leverages those skills.
At 68, I think I am in a better place to make a contribution than I was at 45, 55, or even 65. (I am now 72, and the observation holds)
I wonder how many Millennial, or Gen Y managers will want to risk being shown up by someone who has seen and survived a bunch of booms and their subsequent busts over a long commercial life? Just as I feared I would be shown up back in 1985.
Despite the progress made over the last 25 years in recognising the value to be contributed by genuine diversity, I fear that as we start the long road to recovery, ageism will again rear its ugly head. It will leave huge amounts of experience, resilience and capability withering in the lines of unemployed, or at best, underemployed.
Apr 8, 2024 | Change, Leadership
The only way to solve a problem, particularly a significant one is to understand the cause of the problem and eliminate that cause.
Rip the band-aid off.
Taking a short-term action to address a symptom of a problem is just kicking the can down the road. The problem will return unless the root cause is addressed.
In a previous life working in a regulated industry, I observed many problems that were never addressed. Simply, they were papered over with a short-term fix that looked good as action had been taken. However, they only served to compromise performance and leave the problem to someone else. The industry ended up with a huge pile of band-aids obscuring and complicating the identification of the root causes of the problems that continued to emerge.
Deja vu is upon us.
The current housing crisis is an outcome of decisions made progressively over the last 40 years. Some were made with the best of intentions, others for purely political reasons. However, the chickens are now crapping all over the hen house in the form of a housing crisis that will not be solved by sticking another band aid, or even a couple of boxes of them, over the symptoms of the problem.
The solution hides in addressing the cause.
Progressive governments have given investment in real estate significant tax advantages. This diverts that investment from alternative more productive uses, leaving us with the current shortage of housing, and stratospheric rents.
Ripping the band aid off now will be extremely painful for tax advantaged investors, but is essential.
There is a budget due in a few weeks, I expect more band-aids.
The current government when in opposition lost an election by proposing some sensible but relatively painless, to most, measures that started to address the root cause. The then government, now the opposition, was relentless in painting the sensible moves as robbery by the government.
It was as stupid and false as to claim that electric vehicles would kill the weekend.
Most of us would be better off with changes being made, our children and grandchildren most certainly would be.
Unfortunately, the battle for political power outweighs consideration of real debate, long term perspective, and benefit to the majority.
The longer we leave it, the greater will be the pain when the time comes that we have no option but to rip down the mountainous pile of band-aids.
Apr 2, 2024 | Branding, Change, retail
The retail landscape is changing, even as the two retail gorillas hunker down and set about extracting more from the current model.
Following are a few of the macro trends I see that will continue to erode the current model that has been so successful.
Declining customer loyalty.
I have no numbers, but anecdotally, where in the past you shopped at Coles or Woollies, now you have Aldi, Farmers markets, Costco, Harris Farm, and a range of specialty retailers all competing successfully for the consumers dollar. I no longer know why anyone sees any of the major retailers as ‘their’ store. Loyalty is something that is given in acknowledgement of great service, and the gorillas have failed in that space.
Changing customer habits.
Associated with loyalty, customers are looking for things other than just the lowest price. Increasingly they want product provenance, domestically produced product, they are increasingly sensitive to the ingredient lists, and spurious health claims. This is all happening as the gorillas remove the options from their shelves in the game of short-term margins.
The continued growth of home delivery by the gorillas since Covid gave it a turbo-boost seems here to stay. Interestingly, home delivery also seems to be a useful brand building tool for the gorillas. Anecdotally, consumers tend to stick with one or the other of Coles or Woolies for delivery in greater numbers than they exhibit loyalty when shopping for themselves.
Investment attraction.
Aldi has invested successfully, Costco while going more slowly than expected, appear here to stay, farmers markets have become ‘corporatized’ to some extent, Harris Farm continues to invest, and specialty stores continue to ‘pop up’ although few survive for the long term. It seems that the market is sufficiently big, that with only two major players there is risk capital going in at the fringes, and in the long term, the fringes tend to become mainstream. Looming over all this is the shadow of Amazon, and more generally the move away from the bricks and mortar business model. I was betting a few years ago that the Harris family would cash in and sell to Amazon, a transaction consistent with their strategy in the US. So far, I have been wrong.
More recently, the public and political attention focussed on the gorillas can only have a negative impact on the investment attraction of FMCG retail.
Business model proliferation at the fringes.
While the supermarket model absolutely dominates the current landscape, technology and changing consumer attitudes are enabling evolving business models to compete for the consumers dollar. Two of my neighbours combine to buy meat in bulk direct from a farmer in the Southern highlands. It started as all the meat from a single animal, which meant lots of mince. Recently much of that mince is being made into sausages, and they are experimenting with differing sausage flavours for variety. This proliferation seems to me to be another signpost that change is coming, like it or not.
Margin pressure.
While all this is going on, margins through the supply chain are under increasing competitive pressure. This pressure impacts enormously on the decision making of incumbents, offering niche opportunities to newcomers and new business models to make a case with consumers.
It seems to me that the incumbent retailers are waiting to see what happens. History tells us that this is not an effective strategy. The better course is to shape your future in some way that suits your aspirations. It would be naive to say this was easy, it is excruciatingly hard, which is why so few are able to make the transformations necessary.
I keep on harping about the failure of Woolworths to leverage the start they made with Thomas Dux. To my mind it was a classic strategic mistake to back away.
My conclusion is that the current management culture at both the retail gorillas lacks the courage to explore, be curious, make investments that are separate from the main business, and stick to them in the face of short-term challenges. Instead, they have chosen to hunker down and optimise the current model.
Mar 4, 2024 | AI, Change
Covid was a Darwinian catalyst, at least in my view.
A decade of slow change was supercharged into 6 months as businesses, institutions, and individuals, struggled with the need to change rapidly, and radically. It also unleashed an unprecedented innovation cycle in medical science that will have long term impacts on drug discovery.
In November 2022, another Darwinian catalyst struck. Open AI launched ChatGPT into the wild, setting off a chain reaction that surpassed the impact of Covid, which has since become endemic, and we have largely stopped worrying.
We have yet to understand the longer-term impacts of AI on social dislocation, personal security, and the ways in which the largess can be fairly spread across the community.
The trends in both cases were all there for those who looked closely enough with an open mind to see.
Pre-Covid it was clear that there were too many cafes, and we were generally over-shopped. Home delivery was increasing, as was remote work. The installation of ‘smart’ devices in factories and homes was normal, and product differentiation based on digital features was everywhere. Yet, it was slow going.
We had a binary mindset, the cake was a given size, and any change to the way it was sliced up meant there were winners and losers. Nobody wanted to be the latter.
Suddenly, in two whacks behind the ear, the cake has changed size and shape radically. The pre-Covid/AI status quo that included many points of friction and often unseen waste, previously sacrosanct, have been swept away.
All this costs money, so the cake has changed ingredients as well as shape and size. The suppliers of those ingredients have morphed into a few monster corporations that will continue to change the shape of our cake with little or no public oversight. Governance has become whatever it takes to make more money, as the power of regulators is substantially diminished.
This level of uncertainty has made us very jumpy, unwilling to trust, and wary of the future impact on our finances, security and familial connections. It has also made possible development of products and services inconceivable previously.
If you are a glass half full type, the opportunities are endless. If you are the other sort, find a comfortable place to hide, if there are any left.
How would Darwin see human evolution post covid & AI?
Header: Is a photo of Ghandi leading the ‘Salt march’ in 1930 which was the catalyst to the recognition that British rule over India needed to end.
Feb 29, 2024 | Change, Leadership, Marketing
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?
Feb 21, 2024 | AI, Change, Governance, Strategy
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.
