The biology of Strategy

The biology of Strategy

Mar 11, 2021 | Change, Leadership, Marketing

Every successful strategy I have seen, heard of, read about, or imagined, has three common factors. The first is obvious, the second and third less so.

      1. The strategy is implemented.
      2. The strategy is communicated widely as a story, that draws stakeholders in, giving them an emotional stake in the outcome. It is backed by research facts and figures, speculation, and opinion, but at its core, it tells a story.
      3. The strategy is modular, evolved from the bottom up, not delivered intact in final form by the hand of some commercial demi-god. One section builds on, and in turn relies on other parts of the strategy, for the wider impact. Each part is interdependent of all other parts, to some extent.

This organic structure enables strategic evolution in response to the changing external environment and internal learning as the strategy implementation evolves, without losing sight of the objective. The path to the end has many possible sub paths, but the end is clear.

A successful story has a beat, a rhythm to it that responds to some sort of incident, observation, or crisis, and a resolution, all built up in a series of ‘beats’ each of which has each of these elements escalating into sequences and a climax of some sort.

The emergent strategy, like an organic structure, has a range of base materials organised as self-contained units that combine to form an ever increasingly complex and interdependent system.

Developing a strategic model that has the potential and opportunity to evolve is not something that comes easily from a template, or ‘packaged’ advice.  It is extremely context sensitive, fragile in early stages, requiring constant expert attention and nurturing.

Call me when you need some of this ‘strategic gardening’ to enhance your performance.

Header cartoon is once again courtesy of Scott Adams and Dilbert

Proof: You must own your digital home base.

Proof: You must own your digital home base.

Feb 26, 2021 | Marketing, Strategy

 

If we ever needed more evidence that you need to have a piece of the digital landscape that is yours, where you make the rules, the response of Facebook to the then proposed ‘News Media and Digital Platforms mandatory Bargaining Code’ is it.

This piece of nonsensical legislation, now passed into law, sought to even the bargaining power of legacy media with the two giants in the space, Google and Facebook.

On the surface, a useful idea, but legislating behaviour has never worked in the past, and this attempt will be a dog.

The central claim that Google and Facebook steal content for which they have not paid, while an easy lie to tell, is nonsense. Media chooses to put their content onto Facebook, their choice. The platforms then determine where the posting goes, and who sees it via their constantly evolving algorithms.

No stealing going on there.

On the other hand, legacy media post their stuff because of the reach on offer from the platforms. Hundreds of millions, if not billions of potential views is a tasty lure.

The role played by the platforms is as middleman, a wholesaler of eyeballs, playing both sides of the equation for their own benefit.

On one side, they attract viewers by using the algorithms to deliver content that users like to see, based on their viewing history. That data is a humongous pile of personal information, freely given by us to the eyeball wholesalers to sell to advertisers who want their messages to reach those most likely to transact.

Back ‘in the day’ there was a ‘code’ of editorial independence, and factual reporting, funded by the advertising that flowed to the media owners. That source of revenue dried up as the platforms gained power, and as a result, so did the independence and fact checking dry up, replaced by ‘bait’ tailored for the individual, to chase for news, information, and entertainment. Any pretence of fact went out the window. The more extreme, salacious, and outrageous the better to attract the wandering eyeball.

The ‘bait’ was spread around by the platforms, leading back to the media that choose to ‘publish’ it using primarily Facebook to do so. The media benefited from that trail of crumbs, they got the reach, but still did not have the ability to attract the advertising dollars, that all went to the collectors of the crumbs. As a result, the media, which in this country means the Murdoch and Nine empires, stuck out their hand for help from those to whom they have given lots and lots of support. A quid quo pro for that support, the cost of which will be more junk, salacious nonsense, and sheer fabrication passing as news. Real news, the stuff that effects our lives, is unlikely to get much of a look-in: not enough views.

What of those who have availed themselves of the platforms to engage in some sort of community benefit activity, from local interest groups to really useful things like emergency warnings, information and local news. Do they get any financial assistance? No. Nada. They will now however be able to contribute their data to the algorithms that enables the ad targeting that will exclude them.

Google announced they had set up ‘News Showcase’ that would be curated out of Singapore, and for which they would charge a fee for inclusion. It is unlikely Facebook will not follow such a worthy way to skim a few more advertising dollars. So much for ‘news’. It is perhaps just coincidental that the corporate tax rate in Singapore is considerably less than this country, although that consideration has not been an obstacle in the past, as Australian tax has evolved as almost voluntary to these characters.

I could go on, but risk bursting a valve somewhere.

Suffice to observe that the Government has demonstrated again how firmly they are attached to the teat of Murdoch et al, and buggar common sense, integrity, principle, factual analysis, and the rest of us.

To state the obvious again, you must own your own piece of digital real estate.

Header credit: Huffpost Australia. A confused and surprised treasurer being eyed off by a humanoid

 

The vital secret of a great brand

The vital secret of a great brand

Feb 24, 2021 | Branding, Marketing

Building a brand that has longevity, one that engages and serves consumers over time, while delivering returns to the owner of the brand is a really, really difficult exercise, one that very few get right. Sadly, when it is done right, over time, the essential elements of the brand become forgotten as new people move in, and too often fail to respect or even understand the foundations, and ego takes over.

They do something different, as that is what they think they must do to make their name, and they completely stuff the brand up.

The secret of a great brand is that there is no secret.

No silver bullet, no checklist for greatness, just time, experimentation, investment, and a mental picture of the perfect outcome, for the customer.

By delivering the customer a perfect experience, the one they were promised, and doing it over and over again, at competitive levels of price and service, and with humility, the owner of the brand benefits.

However, there is a very consistent attribute of those brands that are successful.

Stories.

We humans evolved with stories.

We remember, understand, and relate to them.

The power of the story resides in the emotional engagement it generates, by making it personal.

Many years ago, I was lucky to be around as the Meadow Lea brand evolved. The brand went from an also ran in a highly contested and rapidly growing market, to dominating market leader over the course of several years. Unfortunately, I can claim little part in that evolution greater than an engaged observer, a messenger boy with an occasionally audible opinion.

The Meadow Lea story started in the late 1970’s, yes, some of us were alive then. The regulations that ensured margarine was nasty grey stuff that tasted as nasty as it looked, courtesy of the dairy industry lobby, had been removed. Women were entering the workforce in droves, they were educated, ambitious, and driven, but crippled by the accepted mindset that their role was to stay at home, cook, clean, look after the kids, while hubby earnt the money and was basically absent. Meanwhile they were working as hard as men, or often harder at whatever job they had. The juggling was enormous, as was the strain, and as a result they were sleep deprived and ignored.

Sounds positively medieval, but it was only 45 years ago.

This strong desire to be recognised and valued was recognised in the research we were doing, incremental pieces of the brand jigsaw were being fitted together, the result being the simple recognition that women, who did 99% of the shopping, cleaning, and child rearing, needed to be recognised for the backbreaking effort. They wanted to be congratulated for simply surviving, let alone thriving. So, we said it in the advertising.

‘You ought to be congratulated’.

This simple phrase captured the competing driving forces in women’s lives at the time in a few simple words and jingle, backed up by memorable executions that evolved over the following 5 years.

It was the story women were telling themselves.

Later, the idiots that bought the business for its profitability and market position, killed the golden goose by failing to understand the mosaic which made up the brand. They took the easy way out, redirecting the money that should have been spent on maintaining the brand, ensuring it continued to evolve with those who were making the purchase choice, into the pockets of supermarkets.

Meadow Lea is now nothing more than a few tubs on a supermarket shelf. It has gone full circle, but I cannot help wondering if a revival was possible. We still all need to feel valued, to be congratulated for something, even if it is just surviving the crap that was 2020.

Having a story for your brand is a key part of offering the hook with which a consumer can engage.

Take the ‘about us’ page on almost every website I see. Nobody really cares that your grandfather started the business in 1934, and that your father and uncle followed him, and you are now the boss. This sort of story, which everyone uses on their website, is all about you.

Nobody really cares, except your mother.

You must make the story about them, the customer.

Not easy.

Understanding the ‘stories’ of your key customer and potential customer audiences, means you can shape the way you communicate, the words, tone, and the way you seek to shape their behaviour.

To do all that, you need a detailed understanding of who they are. You need to understand their ‘persona’.

When you seek to alter someone’s behaviour, the easiest way is to ‘piggyback’ the altered behaviour onto the existing beliefs and practises, just altering them slightly, which avoids the perception of risk that comes with any change we humans seek to implement.

When you know them well, when they say ‘this is for me’ to themselves, then your task of getting them to deviate slightly in your favour is easier.

Header cartoon credit: Gapingvoid.com with thanks for another visual representation of the words used in this post.

What does a brand mean to us?

What does a brand mean to us?

Feb 19, 2021 | Branding, Marketing

 

We human beings are hard wired to be social, to belong to a group that reflects in one way or another, the view we have of ourselves.

We belong to a family group, for better or worse, then many ‘satellite’ groups of varying importance to us.

A brand is the flag of a group to which we may belong, aspire to join, have no interest in at all, or indeed, may hold in contempt.

Buying a product with a brand is a signal that we are a part of that group. If it is a brand of yoghurt, it is probably a pretty loose group, the alternatives are almost as good, price and availability on shelf play a significant role in the choice. By contrast, buying an expensive branded handbag, a tailored and branded suit, or an expensive car means a whole lot more.  We are saying overtly to others, we are a part of that group, holding the perceived values of the group as being personally important.

For those marketing a brand, the challenge is to find those who may be interested, and then to remove all the friction that may stop them becoming a part of the brand group, assuming they meet the ‘brand qualification’ standards. For example, unless you have a lot of money, you will not be admitted to the Louis Vuitton handbag owners group, or the Rolls Royce owners club.

There are some tried and true ways of engaging ‘brand members’.

For example, describe the members using a noun, rather than a verb. Describing a ‘brand member’ as a ‘user’ is more effective than saying they use the brand. Simple, more personal, and it makes the invitation more compelling.

Encouraging someone to take an action they may not have otherwise taken is also simple. Suggesting that ‘75% of people like you do this,’ dramatically increases the chances that your target will also do the action you require. Being told that number by someone they know, and trust is a powerful catalyst, even when they know that person is just a paid celebrity of some sort.

For the owner of the brand, it enables more specific communication that is likely to resonate with current and potential owners, attracting those who are not currently ‘users’ and cementing the value of being a user to those already in the club. This enables more productive use of marketing funds, and greater margins.

Usually there is a trade-off between volume and margin, very few brands can pull off the double of high volume and high margins. The only one I can think of is Apple with their iPhone, that still has 85% of the profitability of the mobile phone market on the back of their astonishing ability to get people to pay a significant premium for the device.

Building a brand is a tough, long term task, at which few succeed.

What is the second most powerful word in Marketing?

What is the second most powerful word in Marketing?

Feb 11, 2021 | Change, Communication

Pretty obviously, ‘Free’ is the most powerful word in marketing. It is the best way to get people to trial a product, make the trial free, no risk, no commitment, no money. However, it is hard to make ‘free’ commercially sustainable.

The second most powerful word is ‘because’

‘Because’ gives people permission to do something they would not normally do, it provides the reason to change behaviour, it removes the discomfort of the change, we can always revert, we just did it this once ‘because…’

Next time you want to go to the front of the line in a supermarket, try asking politely, and using ‘because’ when you ask. The addition of some emotive reason after the because will increase the likelihood of an ‘OK’ even more.

E.g. ‘would you mind if I go in front of you‘ success rate about 20%

‘Would you mind if I go in front of you because I only have a few things” success rate about 40%

‘Would you mind if I went in front of you, because I only have a few things and my sick mother is waiting in the car‘ success rate about 80%.

Try it the next time you want someone to do something for you.

 

Header cartoon courtesy of Scott Adams, and Dilbert.

What is the first principle of marketing?

What is the first principle of marketing?

Feb 1, 2021 | Customers, Marketing

 

 

I regularly see and hear people suggest that ‘thinking from first principles’ is a great thing, a foundation of success. Often when these people are flogging a product or service of some sort, their offering somehow becomes a function of a first principle.

 

‘This marketing automation stack is built from first principles‘ is a claim made by a vendor to an acquaintance who runs a modest but long-lived SME. The business is constrained by IT limitations of various types. A combination of lack of cash, underdeveloped understanding of the tools available and how they work both individually and together, and general wariness about florid claims about the returns that will arrive, magically, on installation,

What should we mean by ‘first principles’?

Aristotle defined it as ‘The first basis from which a thing is known’. Philosophers since have added their own wrinkles, but it comes down to the few single facts that provide the foundation of whatever idea you are considering. When you break a problem down to this level, it enables you to, sometimes, reassemble from a different set of possibilities, ideas from different fields, and end up with something new.

Thinking from first principles is challenging.

Our brains have evolved to reduce the cognitive load as a survival mechanism. Fight or flight must kick in quickly, automatically, just in case the rustle in the weeds is a sabre-toothed tiger. We therefore have mental models, or patterns we use unconsciously to classify things we see and set out to think about. Even when we set about thinking carefully, we are still subject to the mental models we have built up, the analogies and experiences we have that enable us to respond with the minimum of cognitive energy.

John Boyd used the evolution of the snowmobile as a demonstration of ‘First principles’. A snowmobile combines the body of a boat, the tracks of a tank, motor and controls of a motor bike, and skis, to deliver a machine that gives mobility on the snow. Similarly, Elon Musk used first principles to build his own rockets for SpaceX. He broke up a rocket into its component parts, then built his own rockets with parts sourced independently.  Musk’s whole business empire is based on reimagining something and rebuilding from first principles. Arthur Conan Doyle via his character Sherlock Holmes, advocated the same approach.  ‘When you have eliminated the impossible, whatever remains, however improbable, must be the truth‘. William of Ockham in the 14th century wrote similar words that have been passed down as the wisdom of Occam’s razor.

When you apply this thinking to marketing, and consideration of what it is that makes a successful business, you come down to one simple first principal.

Happy customers, who willingly and spontaneously refer you to others.

When you have happy customers, little else matters beyond a competitive capability to supply the product or service at a competitive price that returns an industry average gross margin.

What are the first principles of your business model?

 

 

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