Marketing’s lean future

Marketing’s lean future

Mar 23, 2016 | Governance, Leadership, Lean, Marketing

The best marketers I employed in days past as a honcho in a corporate environment were pretty much always from a professional background of some type. Those with engineering, science, architecture training, and with a bit of sales thrown in were almost always better marketers than those with marketing degrees.

Having just a 40 year old (had anybody heard of marketing 40 years ago) marketing degree, this both intrigued and disturbed me, and it took a while to understand “why” it was so. It became clear that those trained in the professions had an instinctive approach to problem solving, commonly called the ‘scientific method’. By contrast, those with just marketing degrees tended to jump from problem definition straight to a final solution, missing all the nuances and understanding to be gained from the interim steps, and often getting it horribly wrong as a result.

“Lean thinking” 35 years ago was just a babe, an approach to operational improvement that has transformed the way manufacturing operations around the world are run, and delivered huge benefits to our way of life. It is absolutely based on the scientific method.

More recently however, it has been realised that lean thinking has applications far wider than just operations, and office work flows are rapidly transforming as a result. The next obvious cab off the rank is marketing, traditionally a qualitative, smoke and mirrors part of a business, and marketers have been their own worst enemy.

It often seems marketers sit around, drink coffee, and go to lunch a lot, and as a result of allowing that perception to survive, (and it has been true in an unfortunate number of cases) , we get what we deserve.

If people do not understand the role of marketing, particularly those who allocate resources and measure performance, no wonder there are problems, but there are some pretty simple solutions taken from lean thinking.

Have an objective

Map the processes

Form hypothesis

Test and measure

Rinse and repeat.

From the perspective of managing this process, it is essential that two criteria be met:

  1. There is great transparency of the whole process across functions, everyone these days is “in marketing”. Leveraging the resources available by the collaboration enabled by technology will evolve as standard practice, for which transparency is essential.
  2. It is OK to be wrong, you can learn more for your mistakes than from what works well, but to learn  there must be understanding of the flaws in the tested hypothesis coming from the failure. In addition, there needs to be a robust process of due diligence both before and after the experiments are done. Saying it is OK to be wrong is not a license to be sloppy, as I have seen from time to time.

Marketing has been very late to the technology table, and as a result the size of the gap between the ‘leading edge’ and what most small and medium businesses are doing is huge, and getting progressively ‘huger’. There is a real danger of just leaving it in the too hard basket, but that would be a mistake.

Marketing technology offers the opportunity to leverage resources and widen the impact, the core principals of marketing remain unchanged, indeed become more important as we increase the leverage that can be applied. For small and medium businesses these technologies are the competitive tool-box they have been seeking.

It is my prediction that inside a decade technology decisions will be driven by marketing. If you cannot locate, understand, engage, and deliver value to your customers in a digital world, you will not survive. This post from the ‘Martech’ guru Scott Brinker detailing the 2016 marketing technology landscape says it all.

Lets see how that goes as the technology landscape continues to evolve.

What makes some leaders, and others just managers?

What makes some leaders, and others just managers?

Feb 2, 2016 | Leadership

In my 40 years of commercial life I have seen a few true leaders, and many, many more managers.

Unfortunately.

The leaders are not always those at the top of organisations, more often that not, those are just the successful managers. The leaders can be scattered through an organisation, from the top to the bottom, they are the ones to whom others turn when a decision has to be made, a difficult choice articulated, and when someone is required to step forward and be the one to take a risk.

When you  meet one, you usually just “know it”.

Just because you are the boss, does not make you a leader.

Sometimes in fact, I think that being the boss is a counter leadership factor, simply because being the boss means others will do your bidding, the institutional power invested in the position dictates that you have the call.

On many, this conferred power has the effect that they confuse the notions of leadership and management. Their egos are boosted, they feel good so the self confidence that feeling good brings impacts those around them, and they receive the deference of the group, and feed on it.

They listen to their own voice and fail to recognise that it is their voice, and not necessarily the voice of the group.

Leaders by contrast make those around them feel good, they inspire  action by demonstration, they acknowledge that they are a part of a group, not  the embodiment of that group, they give before the receive, of their time, energy, experience, and expertise.

Leaders would never sacrifice those around them for  the numbers, but they would be prepared to sacrifice the numbers for  the people, and others recognise that, and respond by acknowledging their leadership.

The leaders among us are often unsung outside their immediate circles, sometimes we find ourselves participating willingly in something without knowing who started it.

Most of us are aware of “Movember” probably know somebody who has grown a  moustache for charity, but do we know who started it? Probably not, but he was a leader.

He is an unsung hero, unknown apart from his immediate circle, nevertheless, a leader.

A mate of mine, Julian Day  is one such unsung hero. I know he is a leader because he always gives before he receives, that makes him a leader, and I am proud to call him a mate.

This time however, there are some accolades coming from outside his immediate circle. This is based partly on his success as a provider of professional services to the IT industry, and creation of the highly regarded Consensus  awards acknowledging the success of others in that industry.  However, his mission in life is to do something bigger than just have commercial success, so he has created the Waterline Challenge.

I have watched over the past few years as Julian has wrestled with the complex challenges of creating a national charity event, one that will direct the money raised to the need, and not to the charity administration. The commitment of his time and energy has been enormous, but more importantly, he has been able to assemble a stellar group around him ,also prepared to commit their time and energy to the event. He has led the charge, put himself out there with nothing to gain personally.

The catalyst for this post is the publication of a book, “50 unsung business heroes”  in which Julian is  worthy inclusion.

Well done old mate!

 

 

The (almost) impossible task of brand building momentum. A personal story.

The (almost) impossible task of brand building momentum. A personal story.

Jan 29, 2016 | Branding, Customers, Innovation, Leadership, Marketing

What is  a brand?

When you think about it, a brand is a just a promise embodied in a product.

A promise of performance, and delivery of value.

It survives and grows, retains and builds relevance and attraction only when the promise is delivered.

Finding the promise that can be delivered in a way that is sufficiently different to make an impact is really difficult.  Making a promise that is the same as everyone else’s promise, and the brand becomes indistinguishable, just another label on the shelf.

30 years ago I was heading a marketing group that amongst other successes, relaunched ‘Ski’ yoghurt in Australia. The relaunch was a huge success, and over the following 3 years, our national market share went from single figures to well over 35% in a market growing at double digit rates.

There is a lot of patronising bullshit around about the way to build a brand, advice that sounds nice but is usually just a template that promises an outcome, a bit like the paint by numbers paintings an old aunt had adorning her walls. Not very good, and certainly not original.

So, I thought that the hindsight afforded by the almost 25 years since that  Ski relaunch might be valuable as you consider your own brand building exercise.

Following are the lessons I took away, often with the enlightenment that comes with hindsight, as the appearance of organisation and planning is a bit of a fiction, the real situation was considerably more chaotic as we juggled competing priorities, competitive and financial pressure, and all the jostling and risk mitigation that goes on inside big businesses.

 

Be different.

At the time conventional wisdom was that the fruit in yoghurt had to be mashed, the product homogeneous, that lumps of fruit were not good. All the research told us that consumers wanted their fruit yoghurt to be consistent with the fruit mashed and evenly distributed, and the launch of Yoplait a few years earlier had kick started a genuinely competitive race and significant market growth.

We relaunched Ski on the proposition  of taste. The best tasting yogurt, the only one with pieces of fruit. It completely distinguished us from the then market leader, Yoplait, and all other brands, and gave consumers who liked or did not mind whole fruit in their yogurt a real reason to buy Ski. Of course, some rejected it, but many did realise after trying that they did prefer it, and whilst there was a lot of supporting activity and pack changes, the market share of Ski zoomed. A few of the small producers copied us, but the market leader could not, as their whole manufacturing process was designed to deliver a homogeneous product.

The value of true differentiation backed by a brand promise that was carried out and of value to at least some consumers was clear.

Across the range Ski was so different that  it created new segments within  the yoghurt category, segments we owned because we created and named them, and which made competition hard and expensive for our opposition.

 

Get onto a roll.

When you have a line-up of innovations that do add value, you can roll them out progressively and the competitive impact is cumulative, you leave the competition struggling to catch up with your first one, and spending valuable marketing resources to stay in the game while you roll out the second, and third iteration. I would not claim that Steve Jobs knew anything about Ski, but that is the exact strategy that Apple used from the launch of the original iPod on.

In our case, we relaunched Ski with the different product as noted, but we also changed the naming conventions that had prevailed. For example, the low fat version changed from Ski Low Fat to Ski DeLite. Worked a treat, and went some way to redefining the low fat category. The next ‘roll’ of the dice was to relaunch the 1kg size into the now common rectangular packs. To that time all 1kg Packs had been round, as they were operationally easier and the packs were much cheaper. However, we noted that most female buyers, and they made up 90+%  of purchasers, could not easily handle the product in one hand, they did not fit on most refrigerator door racks, and were less than optimal on the retail shelves.

When we changed all this, sales of 1kg exploded, and gave us new retail distribution. We then followed up with Ski Double-Up, a product that had a range of ‘toppings’ in a separate compartment  of the pack, and a completely different yoghurt that emerged from the combination of new strains of culture and operational process innovation,  that revolutionised the market again, creating an entirely new category.

Your customers may not be who you think they are.

Innovation is a powerful way to attract fringe, lapsed or just reluctant buyers into a market. When we launched Ski Double-up the typical consumer was young, educated, and female.  Consumption by men of yoghurt was only about 20% of female. Ski Double-Up changed all that. Not only did it attract more men, they were significantly older in profile, those who would not touch ‘yoghurt’ as it has been with a barge-pole. They tried Double-Up, liked it, tried other versions, and became regular and loyal consumers, adding significantly to the scope and scale of the Ski brand.

 

Start with ‘Why’.

Defining the ‘Why’ of your brand is a foundation of all branding activity. The best articulation of “Why’ is the now famous TED talk by Simon Sinek.  A brand without a clear and distinctive ‘Why’ is just a label. Sinek uses Apple as an example several times, because as he says, ‘everyone gets it’ and they do. Apple is a branding icon, but not the only one. Recently I stumbled across a new brand from a start-up, one that is breaking new ground on a number of fronts, competing against some of the biggest and best marketers in the world, but will (I suspect) succeed on the strength of their “Why’. It is whogivesacrap toilet paper, purchased by consumers  direct rather than via retailers, with a very clear ‘Why’. Many, almost certainly most will not buy into the why, but enough will to make the brand and business a success, and they will do some good in the process.

The corporate benefit of ‘Why’ is that everyone in the business can buy into it, and the resulting culture can become a very powerful motivator and driver of performance. In our case, the ‘why’ was that we were producing a natural, healthy product, our workforce has all been taken into our confidence, and they were our market research as we ran taste group after taste group in the factory during the development process to get the variables right. When the products became very successful, those people  saw what their contribution had resulted in, and took great pride in it, making a huge contribution to improving the production efficiencies .

 

Sweat the small stuff.

Details matter, a lot. Steve Job’s obsession with the experience of opening a shipper containing an Apple product contributed  a core part to the brand identity of Apple. With Ski we pioneered amongst other things a  process that used a new and expensive printing process that both accommodated the square shape of the 1kg tub, and delivered crystal clear graphics. It was expensive and difficult, but  the attention to the detail that could have been dismissed for cheaper more utilitarian solutions paid huge dividends in volume, and profitability albeit at skinnier margins.

 

Be brave & committed.

Nothing really useful will evolve from just doing the same thing as others, but just a bit better. Being different means taking risks, being brave, pushing the envelope, all those clichés that mean someone has to be brave enough to open the door to the unchartered. That takes guts, rare in todays corporate world,  but around aplenty in small and medium sized businesses.

When we changed Ski 1kg to the rectangular tub, there was no way back. Over a week long factory shutdown, the old machinery for  filling the round tubs was removed, and the new rectangular filling machines installed. Had the change failed, there was no way back.

The steps we took with Ski were all brave at the time. We changed the dynamics and shape of the market, a seemingly obvious step,  but at the time it was sweaty palms all around.

 

You have to be smart.

The marketing group had some very smart people, but more than that, it was a collectively smart group. There was great collaboration and support, and the longevity of the group was substantial, which had offered the opportunity to make a few mistakes and learn from them. At a time when the average tenure of marketing personnel was about 18 months, we averaged 6 years, giving us a significant depth of market understanding and intelligence. Just as important, or perhaps more so, we had the support of the CEO of the division who was prepared to support and encourage the things we did, and I am sure his palms were sweatier than any others, although at the time it never showed. His confidence in us, and support in keeping the corporate drones at bay never wavered. Innovation is impossible without that sort of support from the top.

 

It is really hard to continue to succeed.

This is a warning.

If you succeed, when the applause is over and the credit appropriated, the corporate gnomes come out to play, those who do not understand the dynamics of a brand. If you go into a supermarket today, Ski is an also ran, it looks like it is back to single figure market share, a shadow of its former self we had built. The brand we developed was raped by the accountants and sycophants who killed the golden goose by greed, short ‘termism’ and stupidity, rather than continuing to nurture and invest. The temptation to do so will be strong, and it takes a CEO with brass ones to resist the siren call of the throngs and maintain the investment required.

That rot had started a year or so before I was toddled off. By that time the corporate structure had changed a couple of times, and I was unable to keep the support that had enabled the success in the first place in the face of the changed structure and personnel. Unable to stay quiet in the face of the short term lure of the margins instead of continuing the investment for the long haul, I insisted on being the resident ‘Cassandra’  and ended up paying the price.

As I wrote this post I had to shake myself that it was 25 years ago.

Seems like yesterday.

A lot has changed in the marketing landscape, but the essentials remain the same.

Can the government’s innovation initiative innovate us out of the funk?

Can the government’s innovation initiative innovate us out of the funk?

Dec 18, 2015 | Collaboration, Governance, Leadership, Strategy

Peter Drucker said something like “innovation is the only truly sustainable competitive advantage”.

Having just re-read his 1985 musings on Innovation and Entrepreneurship, after 20 or so years, the degree of his foresight is truly astonishing. It is great to finally have a Prime Minister who actually understands how to make a buck, and the strategic, commercial and competitive challenges of bringing new products to market. He may be one of the few in Canberra who do, but at least it is a fair start.

With much fanfare the Government on December 3 tabled in parliament a Senate  report on ‘Australia’s innovation System‘  However, with the exception of Professor  Roy Greens valuable contribution as an appendix, I see little of real  value in the report beyond a few worthwhile observations and some useful changes to the tax treatment of entrepreneurial endeavours.

Our venerable Senators have had summarized for them documents (I wonder how much consideration these busy important people actually gave to the detail of the submissions) that may have started with some valuable ideas but which have been sanitised into a document long on rhetoric and disturbingly short on anything of value, which can only be delivered when someone asks the question “What now”?

As someone who has run an agency outsourced from the Federal bureaucracy charged with identifying and delivering innovation to a specific sector, I can attest from first hand just how powerful the cultural forces are against anything with even a hint of risk, change, or long term thinking in the now politicised public sector.

Successful innovation takes all three, plus a clear definition of the problems to be addressed.

There is little evidence of anything in the report that encourages me to think that the status quo will be truly challenged.

It is useful to look to successful models, and there are none more successful than the US since the second war. Most will now assume I am jumping to Google, Apple et al, but no. if you look deep enough you will see the hand of government at a deep level making very long term investments in basic science, building knowledge that the private sector then leverages with innovation into commercial products delivering new value.

A scientist named Vannevar Bush (no relation to the Bush pollies) was commissioned by President Roosevelt just before he died to report on what needed to be done to promote research and development and the commercial innovation it drives, just as this senate inquiry has done. Bush reported to president Truman in 1945, delivering his report, “Science, the Endless Frontier” which laid out the proposition:

“Basic research leads to new technology. It provides scientific capital. It creates a fund from which the practical application of knowledge must be drawn”.

Directly resulting from this report was the National Science Foundation. Defence Advanced Research Projects Agency DARPA  and several other institutes charged with the charter to do basic science, of discovering new knowledge.

When you look at all the products disrupting industries up to today, and changing our lives, many if not most of them have their roots in the various agencies spawned by Bush’s farsighted ideas, and the ability of the scientific agencies concerned to outlive the political cycle.

Now compare that to Australia’s situation.

CSIRO used to be a great agency, capable of developing technology like the wireless technology in the 90’s now in every mobile phone after years on the shelf until a commercial use with smartphones was found. Scientific Capital at work.

Now CSIRO is a politicised dysfunctional rump of its former self, with a little of the funding ripped out over the last 20 years of hubris restored via this latest in a long line of Innovation “initiatives” to the sounds of grateful clapping. I see few practical remedies for the past 20 years of innovation vandalism being actually addressed, although at least a real start may have been made.

As I always say in workshops, “the best time to start an innovation initiative was 10 years ago, the second best time is now”.

Lets hope it is not too late for Australian manufacturing.

The lesson from Nurofen’s leadership folly

The lesson from Nurofen’s leadership folly

Dec 15, 2015 | Branding, Leadership, Sales

Reckitt Benckiser did everything right, and they did everything wrong with their Nurofen brand.

How can that be?

The ACCC has now successfully prosecuted Reckitt Benckiser in the federal court for misleading consumers with their Nurofen brand of painkillers, requiring them to pull product off the market within three months.

There will also be a fine, potentially a significant one to drive home the message.

In the process, years of investment in the brand will be trashed.

Who will ever trust Nurofen again?

On one hand, I have absolutely no sympathy for a corporation of any type that knowingly and deliberately perpetrated this sort of misleading communication. The writing has been on the wall some time after Nurofen won Choice magazine’s coveted “Shonky Award”  which garnered a fair bit of publicity at the time, including a star appearance on the ABC’s ‘Checkout” program. That Reckitts chose to ignore the ‘social warnings’  and voluntarily adjust their communication is a huge failure in leadership.

The marketing however has been very good over a long time.

Having run large corporate marketing departments, I can understand exactly how it all evolved.

An experiment with a brand extension generated added market share, consumer preference and retail shelf space at premium prices and margins. The marketing people responsible were recognised and rewarded by their employer and peers. Who would not take the next step, and seek new segments?

Back pain, period pain, migraine relief, et al, commercially seductive stuff.

Nobody would tinker with that sort of success. Anyone who dared to suggest that it was wrong, and they should walk away from the measurable short term success in favour of being a brand worthy of long term trust, a truly difficult notion to measure, would find themselves seeking other opportunities very quickly.

The failure is in the leadership of Reckitt Benckiser.

Reckitt Benckiser management simply  failed to reconcile the short term financial benefits of successful brand marketing with the long term benefits of having a brand and business that demonstrated leadership by building trust. They failed the basic test of personal leadership which is to do what is right, even when it is  not necessarily expedient.

Clearly the ‘leaders’ of Reckitt’s were there not as leaders, but as managers. They are undoubtedly good at managing the numbers, negotiating the deal, maneuvering amongst the corporate politics, but would you want them beside you when the going got really tough? Instinctively you know it would be all about them, they would  not ‘ have your back’

It is easy to forget that business is about people, not corporations.

People buy products from people, not businesses.

While we all talk about ‘relationships’ endlessly, particularly in the digital and social spheres that now so dominate our lives,  we tend to forget just how hard it is to maintain a real relationship.

One night stands are pretty easy, there is  no real personal investment, marriage is hard just because there is that investment required.

We should never forget the difference.

The 4 strategies to scale a small business.

Jun 18, 2015 | Customers, Leadership, Operations, Small business

scaleable

courtesy www.myob.com.au

 

Most businesses want to grow, even just a bit, it is not only in the DNA,  but some scale makes life in most areas easier. So how do small businesses go about it?

4 basic strategies.

1. Empower the team.

Make every front line person as well as the office realise that their input and customer service is essential. It can be done, and it works. Bunnings is king of the hardware space, delivering great outcomes for Coles, whereas Masters has been a disaster for Woolworths, yesterday claiming the scalp of the MD Grant O’Brien. I shop at Bunnings a lot, drives me nuts, but at least their  people their have product knowledge useful to a casual renovator, share it with you and smile. My two attempts at Masters have been different, and there won’t be a third. Whilst these are both large businesses, it is no different for a small one. Make everyone aware of the 8 moments of truth, and committed to improving them on each interaction that occurs.

2. Critical processes need to be documented.

This is not just to pass the various audits haunting us, but so that employees and everyone else knows what is important and what to do. Documentation makes for robust repeatable processes. The challenge becomes one of continuous improvement, as once a process is documented, it sometimes takes on a persona as being “done”. Within continuous improvement lurks the obvious but often overlooked fact that to improve you first need a stable, measured processes as the starting point for improvement. Documentation provides that starting point.

3. Automate repetitive tasks.

If the same thing is done regularly, in the same way, automate it. Then  you get accuracy, reliability and cost reductions, and who does  not want those. Often there is a cost up front, but taken in the context of the potential savings and productivity improvements they are usually small. The most common automation target is customer service. It can be very successful at stripping out costs, but go too far and customers go somewhere else.  A “learning” FAQ function makes great sense for many, and make sure you do not lose the opportunity for the personal touch.

4. Make everything searchable.

Documents, emails, social media posts, everything that gets done should be in a central repository searchable by anyone when it is needed. The waste of having documents in silos is enormous, unnecessary and just plain stupid in this day and age.

The technology is now such that it is possible for small businesses  to be significant global players in a narrow and deep niche should that be their objective, but even for the local businesses without those grand aspirations, scaling operations is a key consideration in the quest to maximise that other most important resource, your time.