Where are your OSZ boundaries?

Where are your OSZ boundaries?

Nov 25, 2016 | Change, Management, Strategy

We are all familiar with the term ‘Comfort zone’ as in ‘that is outside my comfort zone’.

When most people speak publicly to a large audience for the first time, it is way outside their comfort zone. That discomfort manifests as fear, they sweat, the knees are rubbery, voice goes up a few octaves, and sometimes nausea takes over, but for most, they become increasingly comfortable with being on stage with practice.

In effect the limits of their comfort zone have been expanded. What was previously in their discomfort zone has become comfortable.  The ‘fear’ of being on stage has lessened, you learn to work with it, manage it, and often turn it to your advantage.  For some it becomes an exciting and stimulating experience.

I would propose then that we go one  step further.

To our own comfort and discomfort zones, which are well populated in our minds, we add a third option.

Our ‘Oh Shit’ zone, or OSZ.

This is not just an increased level of discomfort, the jelly-knee, voice cracking experience of that first gig on a big stage, where you are able to add rational thought and know that whatever happens, you will go home that night at about the same time.

The Oh Shit Zone implies a level beyond  psychological discomfort to one of physical or psychological danger. Manageable but nevertheless, danger, with the attendant fear that has to be managed if you are to get through to the ‘other side’ of the event.

For me, it would be jumping out of a perfectly good aeroplane with a little sack on my back that promised to float me to earth safely.

However, once done, having conquered the fear the first time, the second time would be easier, and the third, easier again.

The uncomfortable things we all need to do, but often do not are the things that hold us back. I am as guilty as anybody, that fear of failure, of public censure or even pity is strong. Those that push through, conquer their fear and get the job done despite the obstacles, are the ones who will be successful.

Considering you OSZ puts a different perspective on  bit of discomfort.

 

How to set a marketing budget that works

How to set a marketing budget that works

Nov 21, 2016 | Governance, Management, Marketing

Pretty obvious question, particularly at this time of the year when organisations are starting to think about the preparation of the 2017 budget.

In many  enterprises, the marketing budget is set by the boss and the finance people.

They see marketing as a cost, so typically it becomes a percentage of revenue. They agree a targeted revenue, then apply a percentage.

What absolute bollocks

If marketing is a driver of revenue, then the more you spend, the more productive you should be, and when well done with metrics and sensible discipline, the more money you get at the top line as a result.

Therefore the challenge is for marketers to come up with sensible marketing plans, that promise to deliver on the strategic objectives agreed by the enterprise.

Marketing then becomes  an investment, not a cost.

Zero based marketing will have its day, when the marketing planning  is done reflecting the strategic drivers and priorities of the enterprise, and answers the question ‘what are the best ways to deliver on the objectives?’.

Do that and you generate the revenue, and marketing becomes an investment, the effectiveness of which can be measured.

Thinking about marketing as an expense is about the most common stupid assumption in the corner office, but is well ingrained because marketing people have lacked the balls and organisational grunt to back their convictions that it is otherwise. When confronted by reasonable, but difficult questions marketers without the necessary experience, knowledge, or intellect,  break into generalisations, weasel words and fluff.

Use cascading S.M.A.R.T. goals to forecast and measure the impact of the tactics employed to achieve an outcome, any outcome, not just marketing.

Pretty sensible acronym.

Specific. Measureable. Agreed. Realistic. Time bound.

I know the BEHAG (Big Hairy Audacious Goal) crowd will trot out JFK’s BEHAG to reach the moon by 1969, that galvanised the space effort, but most of us do not have the resources of the US at our disposal, so lets just take a powder and be realistic.

Set realistic enterprise goals, then have them drive the allocation of resources to marketing, and indeed elsewhere, hold people accountable, and have continuous learning loops in place. Only a fool makes the same mistake twice.

I once had a very confronting shouting match with the MD of a business I worked for who drove the whole budgeting process from the bottom right hand corner of the P&L. Somehow, magically, a number appeared, and he drove budgets backwards through the business. It was a reverse auction between functions, who could promise to deliver the most for the least?

Problem was that the promises were extracted in a strategic vacuum, and meant little.

The shouting happened as the finance guy offered up a chunk of his budget that had been earmarked to integrate the reporting systems of several businesses we had taken over the previous year to deliver reliable and timely sales and margin numbers. At the time (it was over 20 years ago) I stated it was not worth spending marketing budgets if I could not track the outcomes, and the priority was therefore the sales information, not the promised revenue resulting from the marketing expenditure because it could not be reliably measured.

I smile now, but at the time, it was not fun, and was just another nail in my corporate coffin.

The essential 70/20/10 rule for business optimisation.

The essential 70/20/10 rule for business optimisation.

Nov 10, 2016 | Governance, Leadership, Management

Most of my time is devoted to improving SME manufacturing businesses. I do it for a living, mine and theirs, and I have an ulterior motive.

I want my grandchildren to have a better life than me, and while I have had a great life, the pace of  improvement has faltered noticeably over the last 25 years as the productivity of our economy has floundered, and the flow through benefit to living standards has reduced to a trickle.

I put it down to the decline of manufacturing.

We have taken the easy way out, as an economy and society, and taken the benefits before they were able to be sustained.

Short term gain, long term pain.

The evidence is everywhere, from the short termism of the stock market to the supposed microscopic attention span of millennials, self indulgence of baby boomers,  and the politics of who gets what of the tax take ripped out by the three levels of government and their acolytes.

I believe that without manufacturing, the process by which we gain leverage, the decline will continue. There are only so many baristas and hairdressers we need, and they offer no leverage, as you can only make one coffee at a time.

To the rule in the header.

Almost all small and medium sized manufacturers I work with, from those resilient few remaining who supply into FMCG markets, to those in engineering and service manufacturing (like printing) the formula for optimisation is reasonably consistent.

70/20/10.

70% of the time, effort and investment needs to be devoted to the foundations of the business. The numbers, financial and otherwise that deliver meaningful measurable and actionable planning and feedback loops on the allocation of their resources to their core business. In effect it is improving on the things that made you successful in the first place, but which have not evolved as quickly as the competitive  environment around them, so they are being squeezed.

20% of the effort and investment into adjacent areas. These are the places that will in all probability spawn the new product category, class of competitor,  demanding but value driven customer, and the emerging niche market that technology has enabled. This adjacency leverages some of the capability developed in your core market in a different way, stimulates capability development, and delivers you asset productivity.

10% of the effort is playtime. This is the messy, risky, scary, and significantly disconnected from your core, innovation and change initiatives. it is from this effort that the product and business model disruption that will change everything can emerge. Way better to be on top of the changes, anticipating and planning for them, rather than being taken by surprise and belted by them.

The numbers vary, and the nature of the resources allocated varies, but in rough form, 70/20/10 seems to hold across business sizes, models and market types.

 

What is Intellectual Osmosis?

What is Intellectual Osmosis?

Oct 27, 2016 | Management, Marketing

Definition: ‘The process by which a great product is conceived and  ‘launched’ to the market, with the developer believing that its greatness will be so obvious that the world will beat a path to his door’.

Never happens.

That bloke with the better mousetrap is still waiting.

 Nobody will become aware, understand, and be motivated to take some action if they know nothing about your great idea, and the solution to their specific problem that it can deliver, by some form of Intellectual Osmosis.

At some point you have to undertake the hard graft of developing a strategy, and translating it into the necessary marketing, sales, operational and commercial processes in order to turn the great idea into a business.

Most stop at the idea stage, as that is the easy bit. They then sit back and get disappointed and even angry when they see ‘their’ idea turned into a successful venture by someone else.

Intellectual Osmosis simply does not work, but does feel seductively good, as it is totally risk free.

6 Questions that keep business owners awake at night

6 Questions that keep business owners awake at night

Oct 24, 2016 | Customers, Management

Every business is different, but the foundations of every business are very similar. Answering these 6 seemingly simple questions should expose any weaknesses in the foundations of your business.

  • Why should customers buy from me rather than my competitors? If you cannot answer this question from the perspective of your customers, is it any wonder you are awake? When your product is the same as everyone else’s, price is the only discriminator. So you need to find a combination of a market niche of some kind and a value proposition that your product delivers. The combination is sales fuel. Be different distinctive, remarkable.
  • How do potential customers find me? Most marketers ask themselves, how do I find new customers, but the question is better asked as how do new customers find me, reverse engineer the journey a potential new customer goes through in their journey to find a product then insert yourself into the process. Again, another false assumption made by marketers is that the poor customer, when they see the ad, or read the social feed,  will rush out to buy the product. Nonsense. Even the hottest of prospect has a process they go through that ends up at a point in time when they are ready to buy, and usually the marketer has little ability to influence them at that time, consumers make up their own minds, particularly now as they have access to all the information they need. Customers do not need marketers to give them the necessary information in the way they used to in the past. To be successful, you must have  a process that brings in a consistent flow of good leads that can be converted into sales in a predictable manner.
  • How am I spending my time? Time is the one non- renewable resource we all have, and it is limited. Every person on earth has the same  1,440 minutes available to them every day, it is how we use them that counts. Reviewing the expenditure of this time against your personal, professional  and commercial objectives is a precondition to success in any of the three areas. Remember the old urgent but not important, important buy not urgent equation.
  • How is what I am doing adding value? Adding value to someone, even if it is yourself when reading a book is what life is about.  Are you expending enough effort during the time you spend on various activities, or are you just coasting. My daughter was an elite gymnast, one of the best few in the country, in an unforgiving sport. Part of what became her modus operandi is the capacity to concentrate with absolute intensity for periods, then relax, stretch and go again. I watched her while studying for her several degrees, her concentration would be absolute for 15 minutes, followed by 30 seconds of a lift of her head, stretch, then another 15 minutes, and this would go for 2 or three hours at a stretch then she would walk around, read a book, and really relax for a while before moving into the next thing.
  • Are my stakeholders aligned? This question is usually limited to employees, but these days, you also have to consider contractors, financiers and suppliers. These latter stakeholders are as important as employees, and harder to align simply because you do not hold the power of ”employment’ over them, you usually need them more than they need you.
  • How is my cash?  Cash is business lifeblood, run out and you are dead. Make sure you do not run out, by forecasting the flow of your cash and managing operations appropriately.

When you can answer all these questions easily, you should be able to sleep well at night.

Classic marketing strategy: Before & After

Classic marketing strategy: Before & After

Sep 16, 2016 | Management, Strategy

The classic ad for weight loss products is to show a before and after. It also works for make-up, home decoration and renovation, and a myriad of other products,

What about yourself, your personal branding?

Works there too, and it is a pretty important product.

Digital media suddenly requires that we become ‘public’ in a way that was unthinkable just a generation ago. We have become our own products, and yet so many of us are reluctant to spend a few bucks to get the best out of what we have.

I have been no different.

For the past decade or so I have been active on various digital platforms and have used the same photo, taken with a good camera, but nevertheless an amateur photo. While it conveyed (at least I thought it did) the sort of ‘gravitas’ that my long career and deep domain knowledge has developed, it was less than optimum.

So, I took my own advice to my clients, and lashed out and had Sam Affridi  take some shots. Sam spent a considerable time with me in conversation, so that when he broke out his gear, he had a clear idea in his mind what would deliver the best result. Of the many shots he took, he selected a small number, all different, that all convey a subtly different message underpinned with the foundation conveying the wisdom that comes from long experience.

You judge for yourself if it was worth a couple of hours and a few dollars.

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