Wednesday, February 22, 2012

Not if, but how government should regulate business

I was inspired by and article by George Jarkesy the other day. In the article George quoted Calvin Coolidge who said “The business of America is Business”. That quote along with Georges comments got me thinking. If business is the business of America then what is the business of business? Or, to put it in the words of one of my old bosses when I was presenting a meandering powerpoint presentation about something he shouted out “What’s the bloody point?”. This in fact is the crucial question. What is the point or purpose of business for if in deed America is all about business the purpose of business must be the essence of America.
According to some, the business of business is to create wealth but that is at best a radical over-simplification. If you mean by wealth, money and/or things, then I would be inclined to disagree that business is about creating wealth. The fact is that nobody, at least no healthy people, strive in life only to gather money or things. What we really want is health, status, love, security and self-actualization to quote Maslov. Money and things are only of value as long as they contribute to one of our underlying and fundamental human needs. The key word in that last sentence is “value”. What the business of business “should” be about is creating value.

Then the question arises, “value for whom?” The only reasonable answer to this question is that businesses should be in the business of creating value for everyone, certainly for shareholders, customers and employees but also for society as a whole. Business shares the responsibility of creating value for society with all other institutions both public and private. All institutions exist “or should exist” for the purpose of making the world a better place. If making the world a better place is not the primary long-term objective of an institution then that institution has no place in society. It may well be that someone starts a business with the sole ambition of making money but if that business doesn’t create value for other people it will not survive. If that business is detrimental for society it should not exist.

We may all have different opinions about what a better world would look like and even if we agreed on what a better world would be we may not agree on how to get there. But we all share a common ambition of making things better. This is probably nowhere as evident as it is in the political arena. Politicians and political parties may have strongly opposing opinions and may often have hidden agendas but they all have the same fundamental message to voters. Vote for me or my party and things will be better.

But what happens if a business does not contribute to the general good of society and actually acts in ways that are detrimental to society? We regulate them! I have never met anyone who didn’t believe in government regulation of business at some level. It just makes good sense to legislate to block the creation of monopolies. It is equally prudent to control that companies don’t pollute the environment and that they provide a safe working environment for their employees. The question is not whether or not we as a society should regulate business nor is the question how much we should regulate business. Some businesses are highly regulated and there are few if any among conservatives or liberals who argue for legalization of heroin or prostitution.

The real issues are complicated and the answers must be more nuanced than the slogans being thrown around by politicians on both sides of the issues. Government, as an extension of the people, should have the right and the responsibility to protect the people from unscrupulous people and harmful business practices for the good of society.

Saturday, February 18, 2012

The World's Shortest Marketing Plan (revisited)

I finally woke up to the fact that the link to my World's Shortest Marketing Plan Template had gone bad so I am taking the liberty to repost it. I hope you don't mind.

Since first blogging this marketing plan template it has been reblogged countless times and been published in many different magazines and books. The first person to reblog my template was Guy Kawasaki. Guy was also made some very interesting adaptations to it which he called The World's Shortest Marketing Plan 2.0 which was especially interesting for the digital marketing environment. Guy was also generous enough to be very clear about the source of the original template for The World's Shortest Marketing Plan.
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!

Good luck! 
Click here to view or download the template.