Sunday, April 30, 2006
If you work in a Business to Business industry your customers are only interested in what you sell if it helps them satisfy underlying needs with their customers. Basically, it all boils down to Maslow! In order to be successful you have to understand how your product or service contributes to individual people’s lives at least at some level of Maslow.
This is in no way news for good marketers but to judge from many companies advertising messages what really excites their customers is the number of number of gigabytes in the memory.
The classic “rule of thumb” was never mention the product feature without also stating the benefit for the customer. Therefore, you find laundry detergents with a special ingredient “X” (feature) that makes your socks whiter (benefit). Then you get new improved detergent with extra-powerful ingredient “X” to get your socks even whiter. The result of this type of marketing is that customers first become sceptical end up cynical! What customers really want is to be healthy and safe, loved and admired and terribly successful. No doubt a good laundry detergent can contribute to several of these “psychological” benefits and the better marketers understand the connection the more successful they become.
When an industry focuses on product features instead of the underlying “psychological” benefits commoditization and price erosion is just around the corner!
Tuesday, April 25, 2006
Most groups have about 2/3 who feel that their bosses have on the whole not lived up to expectations. Occasionally, I will meet a group where about 2/3 feel their bosses have been satisfactory but this is an exception. Nonetheless at least 1/3 (and maybe as much as 2/3) of all managers do not meet their employee’s expectations (this is corraborated in a number of more reliable surveys that mine). This alone represents a significant problem for organizations. You won’t find many CEO’s or HR VPs saying that 30% or 50% of their managers are not good leaders and yet the truth seems to be just that!
But what if the problem wasn’t with our managers but rather with our employees? What if we as employees have the wrong expectations of our leaders? Could that at least be a partial explanation for our dissatisfaction with our superiors? We often have higher expectations of our leaders than we do of ourselves or our colleagues and some of these expectations might be justifiable. The reality is, however, that managers are just normal people whose job it is to manage and like everyone else they have strengths and weaknesses. Managers exhibit the same moral behaviour as everyone else. They have the same intellectual, physical and emotional competence as the rest of the human race. They get divorced, fall ill and make mistakes in judgement like the rest of us.
In a many cultures there is an underlying expectation that the boss is smarter, works harder and has higher ethical standards than her employees. Intellectually we all know this is not true but emotionally we still expect our superiors to be superhuman.
If one of my neighbours had an affair with a younger woman I might feel sorry for his wife and family but I probably wouldn’t spend a great deal of time thinking about it. But if someone with a high position of leadership did the same thing I might be very concerned. When Bill Clinton was unfaithful it was one of the hottest news items in the world. I live in Sweden and I remember people sitting around with coffee cups in hand involved in dynamic discussions about this. Why would Swedes even care about the sexual habits of a leader of another country? Whatever the reason the reality is that they do care and a big part of the explanation is that we expect our leaders to be better at walking the talk than we are!
Saturday, April 15, 2006
There seems to be a never ending supply of new marketing plan templates. A google search gave 215,000,000 hits on “marketing plan”. The problem most marketing plan templates is that they are just to long. Marketing plan templates often look like a table of contents which you then fill up with substance about your own company and business environment. I have worked with templates that were in themselves over 30 pages long and before you actually start filling them with content. If you followed such a template and answered all the questions you would have a marketing plan of several hundred pages. I was recently visited by a large consulting company who suggested that we should use their template which was a mere 70 pages. Needless to say, I decided not to use their template. Don’t get me wrong, the content of most of these “long” templates is very good and if used as a shopping list over what might be done and not a list of what should be done they can be very useful.
The marketing plan is a communication tool used to give direction to the company. It is not a checklist actions or a demonstration of the marketers analytical prowess. You might think of the marketing plan as a menu describing the food that will be served at a fancy party. This description tells you what will be served and in what order. It does not give you a recipe for every dish, a description of all the various dishes that were considered but not chosen or a deep analysis of why the items on the menu where selected. Naturally someone has to create the menu and a great deal of analysis might be behind every selection but this does not need to be reflected in the menu.
Similarly, strong marketing plans are the result lots of analysis. It may well be that you want to keep all of this analysis together in one place for future reference but the marketing plan is not the right place. The marketing plan should describe target/goals and how they will be achieved during a given planning horizon (typically 1 year) in order to reach the company’s vision. Although marketers can be deeply involved in creating the vision it is typically the CEO’s responsibility. The marketer comes in to describe what underlying customer needs will be addressed with which products or services and to which customers , how will they be packaged, communicated, priced, bundled and distributed.
Some time ago I was asked to speak to a group of MBA students at the Stockholm school of economics about marketing plans. I realized that I was not at all satisfied with the templates we used or any template I had ever used for that matter for the simple reason that they were too long to be used for effective communication.
Below is a template that I created for that presentation and it has been adapted in used in several companies since then with good success. Try to answer each square in the template with no more that one page including diagrams and pictures. This will result in a marketing plan of no more than 24 pages!
Click here to view or download the template.
Thursday, April 13, 2006
Subject: What should I do?
Thank you for a great speech at the ……… conference. I went away inspired and stayed that way for several days but then reality caught up with me. I wanted to ask you what you thought about the following situation at my office.
I was selected together with several other people in our company to be evaluated for a place in our “High potential” group. We were sent through rigorous testing that lasted several days and included IQ tests, 360 degree evaluations, personality tests, group work and much more. To make a long story short, I received top scores on everything and was told by the consultants doing the testing that I would be at the top of their recommendation list. Shortly thereafter I overheard one of my colleagues openly complaining about the terrible evaluation she had gotten from the consultants. Imagine my surprise when the following day it was announced that she was the only one from our department selected for the Hypo group!
I immediately called the consultant that had evaluated me and asked what had happened. I told the consultant what I had overheard and wondered why I hadn’t been recommended. The consultant assured me that I had been their strongest recommendation and also confided that my colleague had not been recommended by them.
What do you think I should do?
Unfortunately, the situation described in this email is not unusual! Companies spend lots of time and money using sophisticated analysis tools and then ignore the results if they don’t like them. Logically, you might think that managers who are going to follow their intuitions at all cost could save the money they spend on the analysis. The problem with the story in this email is that the individuals involved get such mixed messages become de-motivated or simply leave the company.
Typically, the people who are selected for these types of deep evaluations are already identified as top performers. If management initiates such an evaluation process they must also commit to following the final recommendations. If they don’t, as in the example above, people who are clearly some of your very best will become disillusioned and will probably end up leaving the company. In fact my advice to this individual was to discuss it with their boss and if they weren’t satisfied with the answer they should send the evaluation document they had been given to some recruiting firms along with their C/V. I can only imagine all the politics that must have gone on behind the scenes in this company but the end result will be a company with the wrong people in leadership positions and all the good people working for their competitors!
Tuesday, April 11, 2006
Everyone agrees with Gallups study showing the connection between employee satisfaction and business unit performance or Pfeffers "Seven Practices of Successful Organizations". Even more provacative concepts like Tom Peter's statement "(1)the two most important factors in business today are inconsistency and unpredictability; and (2)we desperately need more traitors inside the corporate moat!" are widely accepted. I have spoken to many other public speakers and authors and they all express feelings of humility about actually getting paid for delivering messages that are largely common sense.
Why is it then that we seem to be intellectually prepared to accept these concepts as reasonable and valid and yet have such difficulty in implementation? Following are at least some of my reflections and certainly not a complete list.
Doing things right in an environment that has lulled itself into mediocrity takes guts. Treating employees with respect in an environment that views people as interchangeable resources requires an understanding of your own values and the conviction to follow them. Really putting the customer in the center of your business (not just the center of your powerpoint presentations) can lead to breaking rules, tradition and culture.
We are paid to create value not follow orders!
It is a common misconception that employees are paid to execute fixed behaviours which have been defined by management. Simply stated, employees are paid to do what their bosses tell them to do.
The reality is that, at best, a manager can point in a general direction and usually has no better understanding than any other employee about how to reach the target. All employees are paid to use their minds to understand what steps and behaviours will best contribute to creating value.
Getting fired is not the worst that can happen!
If employees and managers are courageous about their convictions and accept the responsibility for creating value not following orders, there is always a chance that they might get fired. This is one of the most frequent comments I get from my audiences. I have to agree that some organizations or some managers might not tolerate people who actually walk the talk! Another way of getting fired is not delivering results.
Many years ago I was involved in a project in which in order to succeed we realized we would have to break many rules (not laws) and take a great deal of personal risk. My working group came to the conclusion that we would rather get fired for breaking rules than be run off for not delivering the results. (In the end we delivered excellent results and no one ever complained about the rest.) In short, I just can't imagine seeing it as anything but a merit if you got fired for doing the right thing! Spending a lifetime sucking up and kissing ass seems a lot worse!
Doing things right is difficult and does not always come naturally. Like anything else in life excellence comes to those who strive for it. World records don't get broken without dedication, committment and sweat! Mediocre companies can only become great companies by the same means.
The only way to dig up the kind of motivation required to succeed is to have a true passion for what you are doing. The only way to have that kind of passion is through starvation or fascination. Most of us are not desperate people in desperate situations! Our daily survival is not at risk. Therefore, the vast majority of us will find our passion for success by focusing on something we truly love.
The next time you are in the audience listening to a speaker and you find yourself thinking that this guy is just kicking in open doors. Why not stop watching all these open doors and start walking through them!
Monday, April 10, 2006
The Holy Trinity of Sustainable Growth
Among these three groups the shareholders needs are usually the easiest to understand since they want the best possible return on investment. It is much more difficult to identify the real underlying needs of the customer or the drivers of employee behaviour. It is even harder to align the various needs and desires of the employees and customers. In most of western society it is fair to say that from a Maslovian perspective both the customer and the employee have climbed so high on Maslov’s hierarchy that to succeed in satisfying or stimulating their needs we must focus on the purely existential needs. From this perspective almost all products and services are necessary evils. Since most of us are very secure with regard to our fundamental needs for survival such as a roof over our heads and food in our stomachs we spend most of our time striving to reach further up the path of self-actualization.
It is not unusual that companies create high-flying visions of the future for the company only to forget to address the real hopes and desires of the customer and the employee. "What’s in it for me" is a realistic and honest question of each employee to ask (as well as the customer). Expecting that the employees will strive to achieve the vision because it is their job is delusional and unrealistic. Equally, it is growth cannot be attained until the company truly understands that customers do not want what we sell, they want the benefit that our products and services create for them.
Successful companies strive to understand their customers psyscho-existential needs. How do our products and services contribute to our customers individual identity and values. Questions like "Who am I?", "Why am I here?" and "Where do I fit in?" must be addressed almost at an individual level. The answers to these questions impact product developement, packaging, branding, market communication and much more.