Mar 21, 2014 | Governance, Leadership, Strategy
Simon Sinek
For 35 years as a corporate manager and consultant I have been an advocate of, amongst other things, personal accountability, marketing ROI, extensive use of data in decision-making but without eliminating the wisdom of individuals who have “been there, done that”, socialising businesses with various digital platforms, turning your supply chains around so they become demand chains, and much more.
Many of the 1,100 odd StrategyAudit posts to date have as the core idea the notion of “doing” something rather than just accepting the status quo.
It is only in the last few years that I have come to realise that while the advocacy was based on good solid reasoning coming from domain experience, technical expertise, and common sense, it is not enough by itself.
I have spent lots of time articulating various cases for change considering the “WIFM” (What’s in it for me) question explaining why the proposal was in not only the best interests of the individual, but of the organisation, but fell short of connecting into the reasons the organisation exists, why it deserves the commitment of the individual. Lots about commercial survival, innovation being the only sustainable competitive advantage, the commercial and personal value of simplicity and transparency, but little, as I said, about the big “Why” question.
Now, in a homogenised, connected, and integrating world, little is more important than articulating the ‘Why” . Spend the time to watch Simon Sinek’s seminal presentation, your competitors almost certainly have.
Mar 20, 2014 | Governance, Management, Small business
Cash flow is the lifeblood of every business, from the one person micro business working out of their garage, to the largest multinational. To call it “Lifeblood” sounds like a cliché, but the thing about clichés is that generally they are true.
Working as I do with small businesses, cash is a priority, and whilst I concentrate on the strategies and marketing planning and implementation, there is no point going there unless the cash flow is robust, or in the case of start-ups, has been sufficiently considered to offer confidence.
Unfortunately, the owner/managers of most SME’s are lousy at cash flow management.
Amongst the first questions I ask after engagement, and quite often before , are:
- How do you manage your cash flow? and,
- Can I see your debtors reports?
In response to the first, I am looking for:
- The management routines, preferably daily, but at least weekly review of cash and its management, with forecasts, action points and outcomes recorded.
- A calendar that identifies the timing of expenses and expected revenue. I also want to be assured that the calendar is a part of the review process, not something wheeled out once a year during the budgeting process.
- A rigorous process of following up debtors. You do not have to be aggressive, rude, or inconsiderate of the debtors position, but it needs to be regular, informed, and be a key part of the CEO’s management agenda. It should include escalation points that reflect trading terms, after which increased pressure is applied to debtors. This may vary with the customer, for example chain supermarkets routinely do not pay inside 60 days, but generally, once a debt goes beyond about 75 days, experience tells me that they become very hard to collect without cost and significant effort.
- Clear, simple, and up to date Trading Terms that are articulated and applied consistently.
- Immediate and clear follow up processes to manage customer discounts and claims, particularly where cooperative promotional activity is present or where there is an imbalance of relationship power, as there is with chain supermarkets.
In response to the second, I like to see the debtors report, clearly broken into appropriate categories, logically, 30, 60, and 90 days, pulled off the top of the desk, or out of the “favourites” list indicating that they are a document in constant use, updated and maintained.
Cash is too important to the left to the accountants to manage alone, it needs to be a key priority for the boss, that way, everyone else knows it is important.
Mar 17, 2014 | Communication, Governance, Management
Trust is a word that keeps on coming up, everywhere.
Increasingly in a complicated world we are looking for those we can trust, to do business with, to have as friends, or just to share a cup of coffee.
I have just completed a project of chain re-engineering that did not deliver all the hoped for outcomes, but during the debrief process, the word “trust” and its foundations that in this case proved to be a bit fragile, loomed large. Similarly, a friend of mine is selling her house, retiring to the south coast, and she appointed an agent from a small number in her local area, and as it happens, one of the unsuccessful bidders was also a friend of mine, someone who I would get to sell my house, when the time is right, because I trust her.
Got me thinking about the components of trust.
It seems there are four headline components, which is good for me as a consultant, as I can conjure up a quadrant and deliver it as a deep intellectual exercise. However, the reality is that it is common sense, just like most consultants quadrants, but common sense that paints a picture, that delivers a perspective, and makes you think.
- Engagement. You do not trust those with whom you have no experience, who have not earned that trust. You may think they are trustworthy, but would you confide your pin number to them?, there is a difference. Engagement of the type that generates trust happens over time, is a two way process shared equally by both parties, and is devoid of ambiguity and hidden agendas.
- Integrity. It becomes clear over time that the positive behaviour that builds trust is not just for the benefit of the chosen few, but is based on a “personal code” of some sort that extends to those not closely engaged. The individual or enterprise concerned consistently puts the interests of those with whom it interacts above its own short term interests, and it acts the same way to everybody, irrespective of their status. They “walk the talk,” always.
- Operational excellence. This sounds business-like, but is just as applicable to individuals. Summed up it simply means that they never over-promise and under-deliver, what you get is what you saw and at least what you expected, but usually is more than you could have reasonably hoped for.
- Fit for purpose. The product or service is the right one for the purpose for which it has been delivered, and there has been an effort to ensure that the purpose has been defined sufficiently by both parties to ensure that the product was the right one for the circumstances.
Back to my chain exercise. When I look at it dispassionately, the parties had insufficient opportunity and incentive to build the trust in each other that was necessary. Individually, they trusted me, as I knew them all, spent considerable time articulating the process, and have a history with several, but they did not know each other well enough to offer the real trust we were looking for.
And to my two friends who did not do business. The house seller went with an alternative that offered an up front incentive, it seemed to reduce the cost of selling. When the process is over, her house of 30 years which is the only substantial asset she owns has been sold, I suspect she will wonder if the agent delivered her a buyer that just made his life easy, a cut price, quick and easy sale that delivered him an easy commission, in return for the added costs he incurred up front, all wrapped up in the clichés of the real estate agent. Had she trusted my agent friend, it is quite possible that she would have delivered them a buyer, just the right buyer who wanted the house because of what it was, not because the price was great, the cash benefit of which would have been to dwarf the up front saving that was made.
During the research for this post I put “trust” into several dictionaries, and the options for a definition are many and varied, according to the context. No wonder we have difficulty.
Mar 11, 2014 | Change, Governance, Innovation, Personal Rant
Comment on possible changes to the cross media ownership laws is emerging, again. Communications Minister Malcolm Turnbull reopened the conversation in an interview with Sky, reflecting that the media landscape had changed dramatically, so it makes sense to change the rules that govern the ownership that were set up before the changes occurred. It seems pretty sensible to me.
However, here is the paradox.
The traditional media is commercially stuffed, as the advertising has been drained away by the “new media” of the internet, but never have they been so powerful. Just look at the role the Murdoch press, and the so called “news” programs on commercial TV at prime time in the evening, played in the recent federal election.
“New media” outlets are popping up all over the place, previously unpublishable individuals (like yours truly) can have their say, amongst comment and analysis by serious groups like the Guardian , and new collaborations like that represented by the Conversation . However, the agenda is still being shaped by the newspapers and evening TV “news” programs.
Occupying a core place in the system is the ABC, seemingly reviled by both political persuasions when in Government, so they must be doing something right. However, the future of the ABC is consistently under question, and the economic argument is a solid one. The demographics of the ABC are heavily skewed towards the top half of the population, 70% of the population never engage with the ABC over the course of a year, and yet we all pay equally, effectively a regressive tax. As the argument goes, those who want the ABC can generally afford to pay for it, or have their viewing/listening interrupted by ads which pay for it, and those who do not ever listen/view it should not be expected to pay.
The media landscape has changed beyond recognition in the last decade, and the rules that govern that landscape should evolve as well to better ensure a competitively and commercially healthy system, as we are all best served by diversity, competition and innovation. Just what that evolved regulatory framework means is under debate, and some pretty smart people are putting their views, amongst them Marc Andreesen, an investor who gets it right more often than he gets it wrong, with this terrific post on the future of news.
Any change will impact all of us. How we obtain information, analysis, and opinion, wrapped up as “news” in my humble view, is crucial to the way we interact with the world, and we should all be engaged in the debate about the changes.
Mar 7, 2014 | Governance, Leadership
Everyone knows the optimist sees the glass half full, and the pessimist sees it as half empty, but few see the other options.
The technologist sees the shape as sub-optimal
The engineer sees the variation of material in the glass as an affront to his efficiency
The designer sees the glass as twice the size it needs to be
The production manager wants more glasses
The marketer thinks the glass just needs to be bigger, with a better name
The innovator is keen to find another way to introduce liquid into the glass
The accountant just bitches about the costs.
The entrepreneur sees a great opportunity in glasses
The salesman points out that people buy less glasses when it rains, which is why his sales are down
Leaders find ways to bridge the gaps between these perspectives, and have everyone working to a common goal.
Feb 24, 2014 | Branding, Governance, Marketing, Strategy
There is a lot to learn from the SPC imbroglio, the feds must be delighted to have got away with their IR/”no more handouts” agenda intact as the Victorian government bailed out not only SPC, but their federal colleagues, albeit not a good look for the state version and federal version of the same party to take a different position on a matter that both are saying is fundamental to their philosophy.
But what can we marketers take away?
- Every conversation has many sides. Jan Carlzons great “Moments of Truth” idea from the 80’s hold true in the C21, but the moments have been multiplied by the proliferation of connected devices. Not only do we need to have to have those we used to call “front line” troops on the hymn-sheet, but we have to have everyone on the sheet, as the conversation is now much wider, and almost totally uncontrollable, unlike the past. Best you can do now is have a credible seat at the table. I wonder would Sharman Stone have had the same impact 25 years ago as she has had over the last few weeks? I suspect not. Her message would have been the same, but her ability to access consumers, interest and advocate groups, and the public would not. She may have got a sound bite on the evening news, perhaps a radio interview, and the local paper would have run it indefinitely, but would the rest of us have been aware of the Gaffs the PM made about the workers entitlement, the connections made with the car industry, the Cadburys decision and Tassal decisions? No.
- We do care about local industry. SPC sales soared after the publicity, Australians do care that local industry is being decimated, but not enough to buy more cars. Is the cause of agriculture is closer to our national psyche than cars? Perhaps the cost of a car Vs the cost of a can of peaches had something to do with it. It will be interesting to observe how a renowned marketer like Coke extends the effect. I doubt they will be able to, as they will just revert to the tried and true, the plan, and what has gone before, when the context has changed completely. Having the cultural agility to completely change the message is usually beyond hierarchical organisations. I would radically alter and expand SPC consumer communications to keep the mood alive, and the retailers on side.
- Marketing needs to be agile, and connected. Following the above point, the production of annual marketing plans that feed into strategic plans, with budgets, accountabilities, media plans, and all the rest remains a vital task, with the huge caveat that things move so fast these days, that marketers need to be prepared to respond instantly to stuff that emerges. That single twitter post highlighting a product failure cannot be left alone, you may choose to do nothing, but ignoring it is not an option, you risk the classic “United breaks guitars” response.
- Marketing is the driver of everything. Marketing used to be just another functional responsibility, usually seen as a poor cousin to operations and finance. No more. Those enterprises that continue to see Marketing as the producer of the ads and promotional material, diviner of new products, and artistes of the long lunch rather than an idea that is the responsibility of everyone to be a part of, the driver of perceptions, and the voice of the market inside the enterprise will not be long in the business.
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