Feb 4, 2010 | Branding, Change, Leadership, Marketing
The corporate left brain/right brain conflict is alive and well in Jetstar.
Currently Jetstar is spending on TV advertising their Asian destinations, pushing that they are not just a cut price airline, at the same time they are facing a PR debacle, having left passengers in Penang airport for several days due to mechanical problems with an aircraft. (perhaps they should change their advertising; “an extra 4 days at your expense” not a great idea?)
Gail Kelly at Westpac got it horribly wrong a few weeks before Christmas, raising the banks home mortgage rate beyond the increase in the prime rate, how many advertising dollars did that send down the crapper? Anyone who actually thought about the pricing challenge from a customer perspective would have predicted such an outcome, that the mistake was made by the former CEO of St George whose culture was all about customer care is inexplicable. Even the vaunted Toyota is struggling with a recall in the US of 9 million cars with sticking accelerators, not a good addition to their market positioning.
The list of companies that sacrifice their long term position to get out of a hole in a crises goes on, and on. The corporate “numbers groupthink” takes over, no-one states the obvious, but uncomfortable truth that the P&L needs to take a short term hit for the benefit of the long term.
Very occasionally, someone does it right. The classic is J&J’s recall of Tylenol in 1982, and subsequent leadership in introducing tamper evident packaging. Short term cost was huge, but the long term position was enhanced enormously. Arnotts in Australia had a similar experience in 1993, and came out of it smelling like roses.
Why do most businesses continue to make the same mistake when faced with a crisis, a short term focused response?
My conclusion is that the power of the short term performance metrics overwhelms common sense, and the only antidote to this long term poison is to build a culture that genuinely sees customers as central to the reason for the business existing, and only by serving customers can commercial sustainability be achieved. This commitment to long term customer value needs to be a part of the culture, as fundamental to an organisations shape and actions as DNA.
Feb 2, 2010 | Leadership, Management
Engaged in a recent discussion about the nature of leadership, I fell back on the old chestnut that managers manage things, but leaders decide what to manage, which got me through until a “smartie” asked “what about entrepreneurs”?
Took a while, and a bit of filling, but it came to me that entrepreneurs recognise, leverage and manage opportunity.
Apart from being an acceptable answer on the day, when I thought about it later, I still liked it.
Feb 1, 2010 | Leadership, Personal Rant, Strategy
The emerging reality of the emerging “carbon economy” irrespective of the regulatory regime that emerges is not only an operational and regulatory management issue, but a strategic one because of its potential to create and destroy asset value.
Over time, emissions intensive assets will be replaced by those that create the same outcome without the emissions, and new businesses will emerge that provide the technical tools.
This is not an ideological view, it is based on 250 years of commercial history. The same way the internal combustion engine replaced the hay driven horse transport, the telephone finished off the telegraph, the silicon chip finished off vacuum tubes, and the net is in the process of finishing off the CD, renewable/low emissions energy source will finish off coal fired power stations.
As Australia’s politicians, today, start again the wrangling, point scoring, verbal gymnastics, hubris, personal views paraded as facts, dissembling, and plain untruths in the debate about the regulatory framework to be built in this country to supposedly “manage” climate change, they would do well to leaven the mix with some commercial and strategic reality.
Jan 24, 2010 | Change, Innovation, Leadership
Good art is never boring, it always “says” something new, irrespective of weather it is a drawing, a poem, a piece of music, a hairstyle, or anything else, it is never safe, predictable, and attractive to everyone.
Defenders of the status quo always try and put numbers on risk, but how do you put numbers on things that are new and different, and encouraging of change?
Art creates a platform, a means for people to engage, people who have nothing in common other than an appreciation of the piece of art in front of them will find a way to engage with each other, facilitated by the piece.
What an opportunity for product designers to appeal to markets that are vastly different in demographics, but in some behavioral way, very similar!
Take a risk, and engage with designers who see things differently to ypu, and most of the market, but first you need to get the defenders of the status quo to accept that what makes them uncomfortable is good.
Jan 18, 2010 | Leadership, Management, Marketing
Customers remember the best and the worst.
When you absolutely “nail” it, they remember, and when you absolutely “stuff” it, they also remember, but guess which one they remember when you do both.
The parable of the bungled baggage, and variations of it is a story often used to illustrate the point, a small or seemingly unrelated factor can undo all the good work that goes into a customer interaction, so watch for the small things, and focus manically on what Jan Carlzon calls on the “Moments of Truth” those times when there is a direct contact between your front line of customer service, and your customer, after all, without customers, there is not much else.
Jan 14, 2010 | Innovation, Leadership, Strategy
Like it or not, “Green” is now mainstream, and the market, not the motley bunch of politicians, bureaucrats, activists, and assorted hangers-on who showed up to the failed Copenhagen party, will determine what happens.
Make no mistake, this is a seismic change in nature of economic activity that is evolving far more rapidly than those who seek to extract “rent” from it can change the rules to effectively charge the rent.
Al Gore fronted “An Inconvenient Truth” the documentary which won two Oscars in 2007 (best documentary, best original song) simultaneously with credible economic and political muscle being put behind the notion of global warming, and the stick was pushed into the ants-nest. Concurrently, Prius was a runaway sales success, Slow food & food miles suddenly emerged, Carbon foot-print became a board issue, and Wal-Mart decreed all products on its shelves would have a carbon score displayed, and the ants were running everywhere.
Smart investment is being funneled into development of sustainable/renewable energy technologies from solar, wind, “clean” coal, and those that use energy are seeking ways to minimise use without compromising productivity.
Under these circumstances, the best thing for the rent-seekers to do is stand back, and try to garner some of the credit when it emerges, as they can have little impact on the technical revolution that is happening around them.
