Aug 31, 2022 | Innovation, Marketing
Processes are the means by which things get done. From the simplest thing like cleaning the coffee machine in the lunchroom, to launching a major new product, it happens by way of a series of activities culminating in the objective being achieved.
It makes sense to do the same thing the same way every time, assuming you get the desired outcome. Doing so delivers stability, reduced errors, and makes the processes transferrable between people.
Process stability is a fundamental foundation of being able to scale a business.
However, processes do not innovate. They can replicate the past with great productivity benefits, they do not take risks. They squeeze out creativity, as it is variation to the process, and therefore not allowed.
Let’s look more closely at innovation, which can be broken down into a series of repeatable steps, and thus becomes a process.
There are two types.
Incremental. This is where there is continual improvement, the adjustment of processes to deliver benefit. The preconditions of incremental innovation are twofold:
- First, you need stability to be able to execute on CI, and
- Second, you need the culture of experimentation, continuous A/B testing to prevail.
Break-through. This second category is, to me, real innovation. It can create new markets and demand, of the type Apple deployed with iPod, iTunes then the iPhone, and Henry Ford did with the Model T. You need to be able to see where there is new potential, new markets, new demand, and be prepared to throw the baby out.
The culture and processes that support these two types of innovation are very different, effectively mutually exclusive, so you must make a choice. Trying to do both inside the same corporate ‘shell’ rarely works.
The former requires alignment, stability, continuous improvement, and several other popular management cliches.
The latter will die under these constraining circumstances, it requires insulation, a ‘skunk-works’ of some sort to succeed, a culture that enables experimentation and the attendant risk, giving the efforts immunity from corporate ‘sameness’.
Scott Adams reflects this pardox beautifully in this 2012 cartoon used for the header.
Aug 22, 2022 | Marketing
‘Marketing’ means many different things to different people. Therefore, a conversation that seeks to allocate marketing resources in the optimal manner is bound to be flawed.
To a plant manager, ‘marketing’ means the money spent to generate orders to keep his plant running, to an accountant, it is an expense code in the profit and loss, to a scientist it is an occasionally needed extravagance so people can see their brilliance, and to many marketing people it is going to lunch a lot.
It is none of these things, and all of them.
That is the problem.
So called marketers have for so long shovelled so much jargon, hyperbole, misunderstanding, fortune-telling, and flatulent bullshit onto the pile that they have forgotten, if they ever understood, the purpose is to find and serve customers.
We can only find our way back by taking advice from Aristotle, by identifying the foundational proposition and assumptions shape the investment. In other words, to define it from first principles, or, to quote Aristotle: ‘The first basis from which a thing is known’
In this case, the first principle stems from Peter Drucker’s immortal pronouncement ‘The purpose of a business is to create and keep a customer’
Marketing is, or should be, the leader in that task, and everyone has a responsibility for a part of the equation.
Header: Once again, I thank Dilbert and his mentor Scott Adams for the insight
Aug 17, 2022 | Customers, Marketing
In many major companies, there has been a number of new positions created in the last decade to try and accommodate the changes in the strategic and competitive environment.
Among them has been the ‘Chief Revenue Officer’ (CRO)
In some cases, this reflects the need for increased collaboration and sometimes convergence of marketing and sales. In others, it is just the fashion, the latest management fad.
This seems to be particularly the case in businesses where another of those-acronym driven fads has evolved, ABM, (Account Based Marketing)
The barriers to the integration of Marketing and Sales are high, deeply set into the functional status quo of most organisations, and resistant to change. However, the emergence of digital tools has accelerated the trend, and the recent Covid challenges have been a catalyst for further and quicker evolution than would otherwise have been the case.
For years I have been advocating ‘Alignment’ of marketing and sales to the needs of specific customers, and ways to achieve that outcome.
Removing the Marketing and Sales labels has proved to be useful to the integration. The emerging combined function recognises that the responsibility of each is simply Revenue Generation, or ‘RevGen’
The first substantial consulting assignment I had, well over 20 years ago introduced my client, a domestically owned multinational supplier of ingredients to the food industry, to Strategic Key Account Management. (Try the acronym, always got a chuckle)
We went through a process of identifying the specific needs of key customers, and tailored our marketing and sales effort, to the expressed and often jointly uncovered needs of customers, with whom we engaged in the process.
Those workshops and subsequent implementation efforts are as relevant now as they were 20 years ago, probably more so. It has just been renamed Revenue Generation.
SKAM required that the marketing and sales personnel collaborated and engaged customers at decision making levels to identify how my client could add value to their customers businesses. The core assumption was that only by doing one or more of the following, could we be successful.
- Assisting our customers to increase their sales,
- Actively reducing their costs or
- Increasing their productivity.
We set ourselves the task of identifying how we could achieve at least one of those three things, preferably two, and focussed our efforts on delivering those outcomes.
Predictably, it was a successful initiative. Customers loved the collaboration. Inventory levels reduced, as customer service levels and responsiveness increased, generating increased trading profits.
I had a coffee with one of the managers from that business, now a very senior bloke in a multinational organisation a couple of weeks ago, during which he told me that he still uses the three-part test, and insists his team use it. The longevity of the idea, and the impact it has had is gratifying!
Header comes from the extensive StrategyAudit slide bank.
Aug 8, 2022 | Innovation, Marketing, Strategy
Black and white thinking is easy, there is right and wrong, you decide which side of the fence you are on, and stick to it.
Luckily, life is not like that. Life is a mass collision of colours, ambiguity built on ambiguity, built on uncertainty. That is what makes it interesting, and worth living.
Following the previous post that offered 9 strategies for more impactful decisions, it seemed appropriate to observe that the great advice in that post is useless in the absence of being able to see a problem from a number of perspectives.
In other words, see all the colours.
Most problems we face in strategy development are wicked ones, where there is no obvious right and wrong answer, where there are nuances on top of nuances, second order impacts, and where definitive data is hard, if not impossible to find.
Thinking in a binary manner means that you dismiss all these opportunities for creativity because it is somehow inconsistent with your existing views.
This also means you lose sight of most of the stuff from the alternative choices, which is where the richness usually hides.
Differences of opinion cause tension, discomfort, and room for conversation which become challenging for a binary thinker.
Thinking and then communicating in a nuanced way is an enormously valuable skill.
Relationships that last can accommodate the differences caused by the grey areas. It requires that you can hold seemingly inconsistent ideas in your mind at the same time.
Binary thinking means you cannot hold those conflicting ideas.
The question every time in a disagreement, is the extent to which the tension created by differences in opinion are healthy.
We are used to seeing things in a binary manner, it is the automatic response, but we need to find a way to manage the inconsistency and ambiguity. We need to be flexible, as well as being driven by the rules.
The biggest challenges we face have the need to be able to dance with the facts, what works today, may not work tomorrow.
Overdoing structure removes the flexibility, and the opportunity to see things that may become important.
We think most problems can be solved, that is the base assumption we always have, but the conventional wisdom does not always work.
As a kid I lived on the beach, surfed a lot. The water pushed into the beach by the waves needs to get back out somehow, so you have ‘rips’. The area that allows the water to return from the beach. When surfing, you go with the rip, it will take you out, try and swim against it, you will just get tired and make little or no progress. You need to be able to swim at an angle, use the rip to take you out, then move across towards where the waves are.
This skill works in problem solving, finding bits of a problem that are resolvable, like getting a single wave in a session in the surf, you get the thrill of that great wave, use the rip to take you back to catch the next one. It is a process
Tension between people who hold differing views is healthy when managed well. This is when there is a recognition that there is no right or wrong answer to a wicked problem, just the better choice at this point. Then the differences in opinion can better hold the outcomes of the decision to account, it will increase the opportunity to pick up the problem molehills before they become mountains.
Ambiguity and bias can be used constructively.
Embrace your opposites. It indicates you recognise there are differences, give permission to voice the unfamiliar perspective. This is the opposite to just having people with you that agree, then there is no tension, no opportunity to see the differing perspectives.
One side of any question is rarely completely right, and the other completely wrong, we must be curious to see the reasons that the others see it differently.
This is how we produce creative new options that reflect life.
Header cartoon credit: Tom Gauld in ‘New Scientist’ magazine.
Jul 25, 2022 | Analytics, Marketing
Almost every marketing so called guru, yours truly included, will bang on about calculating an ROI from your investment in marketing.
Marketing like any other investment should seek a return, and there should be accountability for those numbers.
Almost nobody will disagree.
The challenge is how you do it.
How do you attribute an outcome to any specific activity or individually weighted group of activities?
The amount spent divided by the sales, or margin returned from that activity.
Pretty easy in the case of a piece of machinery, another matter entirely for anything beyond a specific tactical action, such as an ad in Facebook or Google where the response can be counted.
In the case of marketing investment, how do you allocate the sales outcome to that activity?
When a sale is generated, was it because of the activity we are calculating for, or was it the phone call from the sales rep, attractive copy on the website, clean delivery truck, or the referral from some other satisfied customer?
How can we tell?
When some analytics nerd cracks the code on attribution, he will become histories fastest billionaire.
So, when some fast talker promising world market domination will result from investing in their new ‘thing’, run as fast as you can, unless they can prove they are the one who cracked the attribution code, which I do not expect any time soon.
Jul 8, 2022 | Innovation, Marketing, Strategy
A former client has been providing engineering services to the fossil fuel industry for decades. Having breakfast with him a while ago, he expressed the view that the prospects for the industry in which his business competes, and thus his business are dismal.
He is right, so long as he continues to see his current capability set through the perspective of how the business has operated in the past.
The challenge is to position yourself to take advantage of opportunities as they arise. Emerging technologies of various types are opening substantial opportunities for which his business has deep capabilities, but which are hiding in an alternative perspective of how those capabilities can be leveraged. Changing the strategic frame through which they are seen provides a path forward.
The challenge of the future is to reposition yourself quickly towards the point at which there is real, monetised value to be added.
You must be prepared to make early bets on those opportunities with the best odds of success in the medium term with a minimum of information by which to make those decisions. Equally, you must be prepared to walk away from the sunk cost when new information emerges which reduces the odds of the expected success.
Stripped back to basics, you must set yourself up so that as clarity emerges you are in a position to accelerate into it.
In my younger days I spent half my life on a surfboard. In a big swell, the position on the wave you took after the take-off was critical. Done right, you were able to accelerate out of the bottom turn into the fastest part of the wave, and, hopefully, make it through the break above you. Get the timing of the bottom turn just a bit wrong, and ‘Wipeout!
It is the same in business, positioning yourself going into uncertainty in the manner that puts you in the best position to accelerate out as it becomes clearer will be the difference between those who make it, and those who do not.
Photo credit: John Morris via flikr
