Kelly's Think Tank

Dump the CEO/President rhetoric

2012-01-30T14:13:00.004+01:00

It’s time to raise a finger of warning regarding the prolific use of the "CEO President" analogy in the current primary rhetoric. The role of President of the United States may have some things in common with the role of CEO of a large corporation but then again the office of President has things in common with many different roles. The USA is not a corporation and the President is not the CEO.

There is nothing fundamentally wrong with making comparisons between different roles in society to learn from similarities as well as the differences. The problem is that we often take these kinds of analogies much too far. Listening to the political rhetoric around the presidential primaries I get the uneasy feeling that many people, including some presidential candidates, actually think running the country is the same as running a company. Again, although there are clearly some similarities, the differences are so significant and so many that we should be wary of even using this analogy.

Corporations are generally not democracies. CEOs, even the best ones, are accustomed to having orders executed. As long as the CEO enjoys the support of the board he/she expects action. Good CEOs may tolerate a great deal of open hearted and even heated discussion until a decision is made but after the decision is made the CEO expects loyalty to the decision and action towards executing the decision. Opposition and competition for a corporation are by definition confined to the competition, i.e. to other companies providing similar goods and services not people within the organization.

The President of the USA does not have the consolidated power of a CEO and cannot expect to have his/her orders followed after a decision is made. The decision making process is long and complicated and usually involves so much bargaining with opposition that the final result hardly resembles the original idea. When some sort of decision is finally pushed through Congress it is still free for any and all opposition to work actively against the decision. What CEO would tolerate that kind of behavior within their own organization?

Shareholders, employees, customers and suppliers are distinctly different roles and for the most part completely different people. In government there are no investors who expect a certain return on investment. The closest role to a citizen that can be found in a corporation would be that of customer. The concept of customer may be useful in terms of government providing various services to citizens which the citizens pay for through taxes. But again, there is not a direct correlation between the recipient of the service and the payer for the service. Typically real customers have a choice but in most areas government has a monopoly on the services provided. Certainly citizens have choice in terms of voicing opinions and electing politicians to make wanted changes but this is a long slow process.

If we insist on using corporate language to describe government the best we could do is to call government a kind of "Shared Service" organization. We as taxpayers decide that certain services would be better if we share. We pool resources in order to provide those services to us. In developed democracies like the USA most political debate is focused on "how much" service should be provided not on what services. There is no real debate about wether we should provide education, healthcare, a legal system, military or welfare. The debate is more focused on how far reaching these services should be and how they should be financed.

There are employees and clearly much of the leadership skills required for leading a large company will be useful in leading these employees but corporations do not have a monopoly on good leadership. Good leaders may have honed their skills in NGOs, military, medicine, education or any number of other places.

There are opportunities to learn from corporations about efficiency in processes and good customer service but then again corporations may well have opportunities to learn from other areas in society as well.

Our founding fathers intentionally created a system of checks and balances to guarantee that too much power didn’t end up in the hands of one person or one group. CEOs are dictators. Companies are dictatorships. We have seen examples of leaders of some countries trying to implement a CEO-like leadership (ie Italy, Hungary, etc) and the end results are devastating to the democratic process.

When in doubt, good for you!

2012-01-19T10:53:00.001+01:00

If you don't doubt your ability now and then you probably don't have any.

Deadlock or not?

2011-12-21T21:05:00.000+01:00

It can be a daunting task to understand the implications of political decisions. What does healthcare reform really mean for me or should we invade Iraq or should we now leave Iraq once we have gotten there? Most people elect politicians they believe will represent their interests but unless you are voting for a county commissioner who has promised to fix a pothole in front of your house it can be extremely difficult to know just what is in my best interest. This self-interest is at the heart of democracy but it is also one of democracy's great faults. A professor once told me that democracy works great until people discover that they can vote themselves rich. This is basically what happened in several European countries like Greece where a majority of the people elected the politicians that promised the most benefits.

In order to simplify things we get on various bandwagons and buy into entire ideologies so that we don't have to think about individual questions that are very complicated. How could it be that highly educated people on both sides of important political decisions have such different opinions? The easy answer, if you are a member of one bandwagon or the other, is simply to draw the conclusion that the other guys are either idiots, fundamentally evil or in cahoots with someone somewhere (like big business). While any or all of these may be true and certainly are true to some extent the primary driver of dissention on important issues is the sheer complexity of the issues. It just isn’t easy!

The problem isn’t an easy one nor is the solution. A peek into the world of psychology might help us understand some of the phenomena at play in politics that cause the most damage.

There are many studies in the world of psychology that demonstrate that most people will take a benefit for themselves most of the time and not give it to another person. This is especially true if the other person is not known by the test subject or does not know who the other person is. Suppose that a generation of people in a country decide to give themselves retirement benefits that exceed the funding that they actually put into the retirement system. The rationale behind such a system might be that things will always get better and economies will always grow. In essence, no matter how you look at it one generation of voters gives themselves a benefit at the expense of coming generations. Those who will foot the bill are either too young to vote or not even born at the time the decision is made. These kinds of decisions occur all the time.

Let’s take another example. At any given time most voters do not have children in a public school system. If we say that in the USA public school is 12 years and the average life span is around 80 years and voting age is 18 then an average voter might have children in school about one fifth of their voting life. By the time the individual is old enough to vote their public schooling is over. Also consider that changes and improvements in school systems tend to take a long time so the closer a voters children get to the end of their schooling the less likely they are to be interested in investments in the public school system. It may already be clear to you what I am getting at here. Most people are going to opt for political candidates whose policies will give them the most benefit in the shortest time. Investing in school systems will tend to get a lower priority from voters than say retirement programs. And the closer you get to retirement age the more likely you are to vote for candidates who offer good retirement benefits. Voters in the middle of their lives will be more interested in policies that help them immediately. People with reasonably stable jobs with decent pay and good benefits will be more interested in tax reductions since they view taxes as a necessary evil. Something they pay for but don’t get much benefit from. Even people who don’t have stable jobs with decent pay and good benefits but who believe that they will in the near future will tend to opt for lower taxes and less benefits for other people.

Now here is the catch, most of us, will not and probably cannot, admit to being so selfish. We wrap all this seeming selfishness up in rhetoric about the American dream or that using tax money to help needy people incapacitates the needy. As it turns out it is not tax dollars that incapacitate the poor it is how they are applied.

The American dream while decidedly American in its expression is not unique to the USA. In most, if not all countries of the world things tend to go better for those who pull themselves up by their bootstraps. Those who can and do take control of their fates, educate themselves and struggle up the ladder tend to do better in life, at least materially, no matter where they live. It should not go without saying that if you invade a fertile continent, rich with natural resources and run off or kill the people who were already living there your chances of building wealth are much better than if you had stayed back in Europe working as a farm hand for a wealthy land owner. That said although most have heard about the American dream many Americans have never actually gotten a glimpse of it.

Once we have decided where we stand on various political issues based primarily on our own short-term interests the cognitive dissonance kicks in and we start seeking out information, arguments and analogies to confirm our beliefs. Once we have found enough “evidence” to confirm what we already had decided was true we then enter the phase of overestimating our own abilities and judgment and underestimating the views of people with divergent ideas. Since those other people are also entrenched in their own narcissistic trance of cognitive dissonance they also believe their views to be best. In the end any attempts at communication between the groups ends up in a verbal fistfight (which is about what American politics has become).

In order to navigate in a complex world we learn to generalize. At one level generalization is extremely important helping us to quickly draw conclusions about whether or not a situation is dangerous or safe, whether a berry is edible or not, or if a particular animal is food for us or if we are food for them. The problem occurs when we let these generalizations become facts and let them guide our judgment and behavior too much. Most snakes are not poisonous and most of the poisonous ones don’t want to bite us. Far fewer people are killed or injured by sharks every year than by bicycles. We have irrational judgments that cause us to fear things that are relatively safe and not to fear other things that are actually quite dangerous.

The same thing happens in politics. We tend to make broad generalizations based on our firmly held beliefs and come to conclusions that while they may sound logical are really only fantasies in our own heads. I hear republicans express genuine fear of President Obama and his policies. The same fears I heard expressed by democrats while George W was in office. It may be true that one of them was or is more dangerous than the other but the problem is that most people who have decided that Obama is dangerous for our country are not really open for discussion on the topic.

So what’s the solution? I will be the first to say I don’t know but I do have some general suggestions. As with any problem we need to begin by acknowledging that the problem exists. The problem is not “other people”. T he problem, or problems are significant and complicated and will not be resolved by platitudes and political rhetoric. Our only chance is to put our brightest minds to work across party lines. Will this happen? Short-term I doubt it. If history is any kind of teacher we will probably have to see things get much worse before the party politicians will bury their battle axes and focus on the issues facing our nation. It is not all the politicians fault. They do what they think they need to do to stay in office. They do what they think we want them to do. We need to give them a mandate to do what needs to be done and that probably won’t happen till things go to hell a bit more.

Change is about behaviour not machines

2011-10-02T10:53:00.001+02:00

Companies spend millions to build systems and nothing to implement them. Then they wonder why nobody uses the new system. Its like buying an exercise machine hoping to get in shape. Its not the buying but the using that counts.

Change is easy, sort of....

2011-10-02T10:26:00.001+02:00

In most cases implementing change in organisations is easy and that is probably why it is so hard. We under estimate the effort required.

Intolerance breeds insanity!

2011-07-24T17:46:00.004+02:00

As I read about the brutal massacre in Norway I cannot help but feel a sense of guilt. I believe that this guilt is shared by many of us. My sin is that of ignoring intolerance.

I have seen intolerance in many forms but often not reacted to it. When I have met intolerant people I generally think to myself what pitiful closed minded people they are and go on. I often recite the old saying “Never wrestle with a pig. You get dirty, and the pig likes it” while comforting myself that most people are not pigs and we can simply ignore the ones who are.

Many times throughout my life I have met people who believed that their way was the best and/or only way. Sometimes they held religious views that regarded everyone not sharing their views as lost and were often scared of atheists or people of other faiths. Other times I have met people who believed that their cultural or racial background was better than others and again often feared people they perceived to be different. I also frequently meet people who are so convinced that their own political ideas and ideologies are so right that they have no little or no tolerance for people who see things differently.

In Sweden most of us ignored the Swedish Democrat party who despite their name are anything but democratic with roots and clear ties to neo-Nazi groups. One day those of us who had been ignoring these nuts woke up to find that they had gained enough support to get themselves into the Swedish parliament.

Surprisingly, the greatest threat to our own peace and safety does not come from terrorist groups from far away countries or people with different religions. Our biggest threats are homegrown! According to the European Union’s police organization Europol between 2006 and 2009, 1,770 terror actions where committed in Europe. Only six (0.34%) of these had Muslim connections while 1,596 or 90.2% were carried out by people with extreme right-wing orientation. I can't help but reflect on the bible verse (Matthew 7:5) about removing "the log out of your own eye, and then you will see clearly to take the speck out of your brother’s eye".

For my part I realize that I should not have avoided “wrestling with pigs” as much as I have. We need to get in the mud and make it clear to everyone that most of us are not intolerant “pigs”. We need to clearly demonstrate that most of us not only tolerate diversity but truly appreciate it because we know that it makes our lives richer and makes the world a better place.

Bad luck got us into this mess and I guess good luck will have to get us out of it!

2011-04-26T20:47:00.000+02:00

If you pay attention to what business leaders say when they speak to the media you will notice that bad things are always the result of external factors like recessions, weaker demand, or just plain bad luck. When good things happen they are always the result of good leadership and wise decisions by leaders of the company. Wouldn't it be refreshing to hear the corporate leader who said "we screwed up"! We all know they screw up all the time, just like all the rest of us do. Why is it so hard to admit it and get on with things? There are a few who do but not many.

As a shareholder or customer I am interested how a company manages its failures. Do they cover them up and hope no one will notice? Do they accept them and try to learn from them? A company with a cover-up mentality is like to make the same mistakes over and over again.

Focus on the right stuff!

2011-03-04T12:16:00.000+01:00

Of all the possible outcomes in any situation only a few are probable and only one will actually happen.

Sometimes the outcome cannot be controlled like when a meteor falls on your head.

Sometimes the outcome can only be partially controlled like when two great teams meet in a championship.

Sometimes the outcome can be controlled by us to a very great exent like just about everything else that doesn't fall into one of the previous categories.

So don't spend time and energy on things you can't do anything about and don't let anything stop you from taking care of the things you can.

Smile or Die

2011-02-15T12:33:00.001+01:00

I can also suggest “Smile or Die: How Positive Thinking Fooled America and the World” by Barbara Ehrenreich. This book takes a scientific look at “positive thinking” showing what is true and what is total nonsense. This book is a must for anyone who ever suspected that just maybe everything isn’t possible.

The Happiness Hypothesis

2011-02-15T12:26:00.001+01:00

If you haven't read "The Happiness Hypothesis" by Jonathan Haidt then do it! It is one of the most profound and interesting books I have read in years. Haidt gives real insight into the psychology of happiness and the ancient wisdom of the world’s great religions and philosophies.

2011-02-06T18:29:00.002+01:00

Recognize this? I found this quote by Charlton Ogburn in his book "Merril's Marauders", Harpers Magazine, January 1957. "Merril's Marauders" is a first hand account of the Burma Campaign during WWII. In fact I have found similar quotations going back to acient Greece and I wouldn't be suprised to find even older references.

"We trained hard, but it seemed that every time we were beginning to form up into teams we would be reorganized. Presumably the plans for our employment were being changed. I was to learn later in life that, perhaps because we are so good at organizing, we tend as a nation to meet any new situation by reorganizing; and a wonderful method it can be for creating the illusion of progress while producing confusion, inefficiency, and demoralization. "

2010-11-27T15:44:00.000+01:00

No doubt, a management position can teach you a great deal about yourself, but I wouldn't recommend it as an alternative to therapy.

Job interviews can be nightmares

2010-11-12T09:06:00.000+01:00

Years ago I was applying for a job I really wanted. I had gone through all the tests and interviews with consultants, had several different interviews with HR people and various line managers and had at last been informed that I was "the" candidate they would recommend to the VP who would be my boss. After about three months of interviews and test I was finally sitting in the VPs office and he sat quietly reading my CV. When he had finished reading he arrogantly dropped my CV on the floor, looked at me and asked "Why should I hire you? I can find hundreds of people with a CV like yours!" Needless to say I was amazed at his attitude. The only thing I could think of in answer to his question was “I thought you were only looking for one person for this position”.

When I got home from the interview I told my wife that I didn’t think I was going to be offered the position and even if I were offered the job I wasn’t going to take it because the guy who was going to be my boss was a jerk. The next day the head of HR called and said that they would like to offer me the position and could I please meet him so we could discuss the terms. I explained to him how I had been treated during the interview and how disappointed I was to have to turn down there offer. I really wanted the job but I didn’t want to work with such a horrible boss. The HR director explained that he knew that the VP could be a bit eccentric from time to time and often gave a bit of a “hard ass” first impression but most people who got to know him really liked him and he consistently scored high on employee surveys.

I finally agreed to take the position and got to know my new boss and really liked him. One day I asked him why he had behaved so badly in my job interview. He told me that he had already known from all the tests and interviews that I was qualified for the job. What he wanted to find out was how I could handle myself in tough situations. He said he had been delighted that I was quick on my feet, kept my integrity and used humor to manage the situation.

I do not recommend his methods. Even if his motives were good his behavior was bad and nearly cost them their favorite candidate. In fact, I have stopped using this kind of questions when I interview people. It is fair to discuss with a job candidate about their qualities related to the position. I do not think it is fair to ask people how they measure up against other candidates when they don’t even know who they are competing with. It is my job to judge which candidate is best.

Motivation without compassion is destructive. Motivation with compassion can change the world.

2010-11-02T09:27:00.001+01:00

Ultimately we are all responsible for our own destiny. That doesn’t mean that we aren’t allowed to give or accept help. We are allowed to cooperate and try to make things easier for each other. I can take complete responsibility for my life and still accept a helping hand from time to time.

Life isn’t about every man for himself and to hell with everyone else. If you and I want to share our good fortune by using tax money to help give unfortunate children a better start in life we can vote for the right politicians and get it done. If we want to pool our resources to make sure that if any of us fall on hard times our children won’t go hungry we can. These common decisions are not abdicating responsibility, they are in fact taking responsibility.

From the mouths of babes...

2010-10-31T18:20:00.001+01:00

My seven year old daughter asked me at the dinner table tonight, "Is the United States a rich country?" I said "yes it is". She said "aren't there lots of people the the USA who are poor?" I said "yes there are". She said "Why are there many poor people in the USA if it is so rich?" I didn't know what to say.

I wrote this text on my Facebook page and one of my American friends who is a died in the wool republican answered “Tell her not everyone in the USA works smart or hard, and some are just unfortunate. . . just like in every other country.” My friend reply is unfortunately all too typical of the kind of poorly thought through and heartless rhetoric prevalent in the USA today. These arguments although effective miss the point. We Americans think we are the brightest, the strongest and the best at everything and find it extremely difficult to learn from other nations.

But not every other wealthy country has the kind of poverty we see in our country, the USA. Some countries address the issue of poverty differently. My American friend gave three explanations for poverty. People are either lazy, dumb or unfortunate (and I assume he would allow for some combinations of these three). These explanations, although common, at best only describe why some succeed better than others. They do not explain why a nation chooses to let some of its people live a dream life while others live in dire poverty. In a functioning democracy it comes down to the choices we as voters make. If we want to provide food, housing, equality in education and quality healthcare to fellow citizens who are less fortunate, we can. Many other western capitalist democratic countries have succeeded. We Americans can succeed as well! It is not about lowering the standard of the wealthy, it is about raising the standard of those who are worse off in society.

Penny wise and dollar foolish...

2010-09-27T09:40:00.004+02:00

SAS has taken giant steps in cutting costs. They have replaced real people with "do-it-yourself" machines. You would think that they could at least have engough machines. Everytime I have flown with SAS the last year I have had to stand in long lines at the automatic machines. Then I have to stand in a long line again to "drop" my bagage.

2010-09-24T13:44:00.002+02:00

For my Swedish speaking friends you can now have a look at lots of video clips from one of my lectures which I have called "The Ten Commandments for Leaders". You can either what an entire lecture of 50 minutes, a 9 minute trailer or see each commandment seperately as a 1-2 minute mini-clip. I hope you enjoy this. My friends at Astrakan Strategisk Utbildning AB have but it all together very nicely so you can either go to their page and have a look or click on the links below.

Budord nummer 1 http://www.youtube.com/watch?v=7xwpO6WyR68

Budord nummer 2 http://www.youtube.com/watch?v=z08vkZ5_foc

Budord nummer 3 http://www.youtube.com/watch?v=wkdOMTGpmGM

Budord nummer 4 http://www.youtube.com/watch?v=uZvJuhl_oh8

Budord nummer 5 http://www.youtube.com/watch?v=qZHZ8Q6PzsE

Budord nummer 6 http://www.youtube.com/watch?v=2E6UApACUWA

Budord nummer 7 http://www.youtube.com/watch?v=GoKk5CQtfIc

Budord nummer 8 http://www.youtube.com/watch?v=RcYTbDFWUWA

Budord nummer 9 http://www.youtube.com/watch?v=0AC1NBEIl40

Budord nummer 10 http://www.youtube.com/watch?v=du89FIVov5U

9 minuters trailer från föreläsningen ”Tio Budord för Ledare” http://www.youtube.com/watch?v=MaCPjhr0Zw8

50 minuters film av hela föreläsningen finns på http://www.tvhuset.se/shows/odell/

For those who are curious and english speaking I hope to have something similar out in English soon.

Burning Korans and other craziness...

2010-09-11T21:42:00.007+02:00

The sad thing about a wacko pastor in a tiny church in Florida burning Korans is that his views are shared by many other so called Christians. I find it hard to believe that anyone that really bought-in to the fundamental message of Christianity could carry so much hatred inside them (love your neighbor, turn the other cheek, blessed are the peace makers, forgiveness etc etc). I spent 4 years in college studying religion and theology and I can't remember anywhere in the New Testament where it says blessed are the ass-kickers or god loves intolerance, or revenge is sweet.

If Jesus really did come back from the dead and is sitting there in heaven with god right now I bet this kind of foolishness really pisses him off. If he didn’t come back from the dead I bet he is rolling over in his grave now.

Democracy is a terrible system. The only thing worse than people trying to lead themselves is letting somebody else do it!

2010-07-17T13:04:00.003+02:00

I am sitting in the shade under one of the apple trees in my garden reading one of Sweden’s daily newspapers. The world championship in football is now over so the papers can’t seem to find much to write about, except of course the upcoming parliamentary elections this fall. Fortunately for the general public there has popped up a juicy sex scandal with one of the ministers who has been forced to jump ship right before the election. Otherwise I think this election and its total lack of issues would be the biggest sleeping pill of the decade.

The TV debate between the leaders of the two main parties was comical. Debate in this case is probably not the right expression since they agree on all the key issues. The height of their “debate” was about who came up with an idea first before the other party stole it. It was sad and funny seeing them try to say the same thing in different ways so that the viewers would think that they actually had different points of view and that the other party would lead the country to a catastrophe. When all was said and done not even the expert commentators could explain how the parties differed significantly on the issues. ( I have always been amazed that “expert commentators” can spend an hour telling you what a politician just said in 30 minutes.)

In the end the Swedish people will have to go to the polls and decide who will lead the country for the next mandate period based on who they think can best execute the plans that all the parties agree upon not who has the best ideas. Maybe that isn’t so bad but I can’t help worrying that with everyone in such agreement we might be missing something. Leading a country in times like these requires diversity of thought and real debate. Many of the challenges facing not only Sweden but the world are so complicated that they should tax the facilities of our brightest and best.

Where is the opposition when politicians agree on all the important issues? Who is representing alternative thoughts and ideas? What professional politician wants to represent marginalized ideas and issues that go against the mainstream?

Politicians want power and power comes from winning elections. From the very beginning of the great experiment known as democracy, politicians have understood that they must be closely aligned with the sentiments of the majority of the people if they want to stay in power. Hordes of PR agencies and research organizations using modern methods for measuring public opinion keep politicians and political parties on track. Politicians are continuously updated on what can be said and done that will appeal to as many as possible? This inevitably leads to a harmonization of the parties towards the center of the mainstream of public thought. Any party that ventures too far from the mainstream will be punished at the polls! In the end, democracy is a terrible system. The only thing worse than people trying to lead themselves is letting somebody else do it!

The Challenge of Or!

2010-07-12T19:31:00.004+02:00

I am riding on the train on the way home from a very interesting speaking engagement at a management conference for a 50 year old company with patented industrial solutions. I can’t help but think about the similarities this company has with so many others.

The company is a powerful global player in their industry. Like many successful companies their success has been built on solid technological foundation based on high quality and innovation.

Today they face new challenges which require them to re-think virtually every aspect of their business. Continued focus on developing better products is an important success factor but it must be based on deeper analysis of “real” customer needs. The winners in industries like this will join strong products with innovative new approaches to sales and distribution. Great products once separated leaders from losers.

Today, great products only open the door to the playing field. Winners combine great products or services with innovative new approaches to sales, service, distribution and marketing. Turning products into services and services into products is something of a mantra across countless industries. As James C. Collins, Jerry I. Porras put in in there book Built to Last, great companies must take on the challenge of the “or”. Should we focus on margin or volume? The winners do both! Should we focus on developing great products or be great at sales and marketing? The winners know that success will require both!

The company I met has understood that their outstanding products are a key element of a successful mix but that they must be stronger on all the other elements as well.

Many companies are facing numerous questions like:

How do we redefine sales processes to better support our customers’ buying processes our products are used in such a broad range of industries?

What steps need to be taken to go from selling products to solutions?

How do we develop new and flexible business models that maximize cash flow throughout the value chain?

How can we best use IT systems and telecom services to support our own and our customers’ processes?

Do we need to redefine the scope of our business to consolidate our past success and build a stronger platform for future growth?

2010-05-24T09:01:00.003+02:00

Efficiency and productivity in business has always been about getting the most bang for the buck from the resources we pay for directly. The environmental crisis has made us aware that we also have to include resources we don’t pay for directly in our efficiency and productivity models.

Leaders are not born they are developed!

2010-05-04T09:20:00.001+02:00

Leadership is not something one is born with. Leadership is a skill set that more than anything is learned. Some very few of us may have been born with a natural talent that makes it easier for us to develop as leaders. Just like some very few are born with good musical talent. These few may be able to intuitively walk into a room and "take charge". Others may sit down at a piano and the music simply flows from their fingers. The problem with these natural born talents is that there just aren't enough of them to go around and many of them never actually bloom into leaders (or musicians).

If you want to man your management with good leaders or fill your orchestra with good musicians you will have to go for the hard working people who have devoted a great deal of time and effort to learning their trade. The majority of us "normally" gifted people have to work hard to develop our leadership skills. If we want to excel we need to study with others, practice and have a high tolerance for failure.

Most of us end up in leadership positions in our companies with no real preparation at all. After spending years at school preparing for a professional discipline, years more practicing that discipline and then one day we become leaders. We go from salesman to sales manager, from engineer to department head, and so on with little or no training. If the average managers formal training for their professional discipline can be measured in years their leadership training can be measured in days or weeks. And yet most managers feel that their leadership role is more demanding than their professional discipline.

Kelly Odell - Ur föreläsning: Tio Budord för en Ledare

2010-04-26T09:35:00.000+02:00

The bucket is running dry...

2010-04-21T22:28:00.005+02:00

A few weeks ago the weather was bad so I went to the gym and was running on the treadmill. In order to pass the time I was watching a debate program on a Swedish television station. The program dealt with two issues. One was a debate about the fact that apparently Swedes eat more candy than any other people in the world. According to the program a whopping 17 kgs per person are consumed annually by Swedes. This part of the program didn't amount to much since it is hard for anyone to argue that eating that much candy is good for you.

The other debate was much more interesting. It was about how long oil is going to last. In this debate were people who argued that the oil supply would peak within 3 to 5 years and others representing the oil industry that said oil wouldn't peak until 40 years. What struck me in the debate is the realization that sometime between now and 40 years will be the peak! 40 years isn't a long time away! With a wee bit of luck I may still be kicking then and my children will be in the middle of their lives.

We have to crack this nut now because tomorrow we may have to work in the dark...

Teaching vs. Learning

2010-04-14T16:48:00.002+02:00

No one can really teach another person anything, they can only inspire them to learn.

Harmony is the balance of tension not the absence of tension.

2010-04-02T19:20:00.001+02:00

Have you noticed how more and more often job ads specify personality traits together with competencies required for the job. In fact it wouldn't be to harsh to say that it looks like many companies are trying to recruit the very same person or at least people with very similar personality traits. The truth is that many highly competent people just don't fit the perky, gung-ho image we often look for when recruiting new employees. This stereotyping can limit creativity and lower performance in your organization. A competent sour-puss or a difficult introvert might be just what the doctor ordered to lift us to a higher level of performance. When we say “he fits in”, “he’s a team player” or “we speak the same language” what we are really saying is we get along and there is no real tension. If you ever find yourself thinking like this when recruiting let it be a warning for you. The nice guy who fits in, the guy you would love to play a round of golf with is likely to be the wrong guy for the job.

Most of us have seen the research on how to create high performing teams and if we take a look at this research again we will be reminded that while we may not want to be throwing furniture at each other in management meetings we do want a high level of diversity and even tension. Harmony is the balance of tension not the absence of it.

Getting to the heart of change!

2009-12-17T22:27:00.003+01:00

I recently made a joint presentation with Elisabeth Kamél at the annual conference for The Swedish Project Management Association (Svenskt Projektforum). Elisabeth is one of Sweden’s leading educators for project leaders and I work with Change Management and Leadership. Together we were going to give insight into how to successfully manage change management projects. During the our preparation we decided to make an attempt at offering a tool to help project leaders and change agents with what we have seen to be one of the most common reasons most change initiatives fail.

In our experience most change initiatives fail because organizations and their leaders fail to understand and manage the “human” element of change. Change in an organization means change in behavior and yet most organizations run change with standard project management methodology. Although there has been a great deal written about the human or soft side of change most project management methods offer little or no help in understanding and addressing the real human issues of change that will in the end determine the outcome of change initiatives.

We decided to present the meeting with a practical tool that would compliment a broad range of project management methodologies. The result was the following template which we hope will help to guide insight, actions and communication.

Following the matrix there are some further explanations to guide your thinking.

Change Matrix (Getting to the heart of change!)

by Elisabeth Kamél and Kelly Odell

Stake-holders	Effect direct/ Indirect/ Pos/Neg	New demands/ expectations	New knowledge/ competence	Resources for securing new knowledge	Need for inspiration/motivation	Communication needs	Investment in time, money, consultants, training, etc
Employeee in unit X
Employee in unit Y
Mgmt Team
Business unit leaders
Dept managers
Team-leaders
Customer
Employees

1. Stakeholders: Identify who will be impacted during and after the process (direct/indirect/later?) For example employees, customers, suppliers, etc

-Who will be impacted by this change?

-How will this change affect these individuals/groups?

-What can be done to minimize the negative effects of the change for the different stakeholders?

-How will the desired result of the change be affected if we do not get support from individuals/groups?

2. Make an honest assessment of how the change will affect the various stakeholders.

3. Describe what new demands and expectations on the stakeholders during and after the change.

4. Define which new knowledge or competences are necessary so that stakeholders can execute the new behaviors required by the change.

5. Describe what resources are available to help affected stakeholders in gaining necessary new knowledge and competence.

6. Redogör för hur de berörda kan inspireras och motiveras att bidra för att förverkliga förändringen.

7. Create a communication plan. Describe how the communication with the stakeholders will be executed. Give honest information about the change is necessary, how it will be implemented and what is expected of them as stakeholders. Remember the power of a Vision! How will the world be a better place when we have completed this change!

-Frequency – How often should we communicate? The general rule is that you cannot communicate too often! Even when you don’t have anything new to say you can gather the stakeholders and say that!

-Media – Which communication channels are available to you and which will we use when?

-Focus on target groups – Communication should be adapted to each group of stakeholders or even sub-groups of stakeholders since they can be impacted differently and will perceive the change differently.

8. Create a budget

Define what resources are necessary. (Time, Money, Consultants, Training, etc)

Include this budget in the decision material before you execute the change. If you can’t afford to the soft side of change you can’t afford the hard side either!

Does god choose sides when his children fight?

2009-12-17T09:14:00.003+01:00

Truth is often not black or white, but shades of gray. Not because there aren't real truths but because life, politics, love and business can be very complicated. It is so easy, and so dangerous, to decide what to do on an issue or a problem and then look for facts to substantiate our points of view. This behavior seems to come naturally to us and might very well have been an asset when we were cavemen. If you heard a strange noise you might have been safer to assume that it is a hungry tiger than to open-mindedly collect and analyze the facts. Unfortunately, these primitive behaviors make it harder for us to live in a complex society.

Should we have gone to Afghanistan? Hard question.

Should we leave Afghanistan now that we are there? Another hard question.

Should we have gone into Iraq? Not as hard a question but still difficult?

Should we pull out now that we are there regardless if the reason we went was justifiable or not? Very hard question!

Many of us decide who we will listen to, (our political party, our religion or a business gurus) based on a combination of intellectual and emotional affinity as well as some variation of “peer pressure”. Then it is and easy step to assume that what my party and its leaders do is more “right” than what the others do. We then subconsciously look for confirmation for our beliefs.

-SAP is a great system but does anyone really think that all the companies that have installed SAP really needed SAP? Or is it the a function of “Social Proof” as Cialdini described it. Everyone else is getting SAP maybe we should too!

-Was everything Bush did wrong and everything Obama does is right, or vice versa depending on your political preference?

-Are Christians always right and Muslims always wrong or vice versa depending on your religious preference?

-Does god choose sides when his children fight?

Once again I long for the death of ideologies. Ideologies dictate for us not only how we should think but what we should think. Values are good to have but often get confused with ideological dictates and doctrines. When we find ourselves feeling right and wondering why so many other people could be so wrong it could be a warning that we have fallen prey to or ideologies. In order to really understand your own position on an issue whether it be political, religous or business we must strive to truly understand different and even opposing points of view. It is first when we understand why someone else thinks and acts so completely differently that we can begin to understand ourselves.

The Gospel of Change Management

2009-12-07T22:26:00.001+01:00

Getting to the Heart of Change

Early in life I spent four years at college studying theology and religion because I thought I wanted to enter the ministry. I changed my mind and didn't attend seminary and have never worked in the ministry. When I moved to Sweden I did an MBA at the Stockholm School of Economics. I have now spent more than 25 years in various management positions and the last 12 years as a public speaker, workshop leader and teacher in the subjects of leadership and change management. Since some of my speaking agents have played up the "preacher" angle when selling me I thought it would be fun to play with some of the "religious" lingo to package my message. The following are not really meant to be comprehensive and may not be quite clear without all the stories and examples I usually give to explain them. But if you find any value in them feel free!

The Golden Rule of Organizational Change:

If you feel the need to make major changes in your organization, don’t do it!

Ten Commandments of Change

If you feel compelled to make major changes in your organization despite the Golden Rule, then make sure to follow the Ten Commandments of Organizational Change.

1. Remember that change is inevitable. In any given situation we have only three alternatives:

i. Accept the situation

ii. Change the situation

iii. Change situations

2. Be open-minded! Change is in itself neither good nor bad! Some changes affect us positively, some negatively and some not at all.

3. Remember, that there are primarily three types of change: Influence what you can and adapt to the rest!

-Those changes we initiate ourselves

-Those changes we did not initiate but over which we have great influence

-Those changes we did not initiate and over which we have little or no control

4. Focus on the human side of change!

Change requires “real” new behavior not just new actions. “It is easier not to smoke a cigarette than it is not to want to smoke a cigarette.”

5. Control your destiny!

Although we cannot always directly influence change we can influence on how the change affects our lives through our attitudes and actions.

6. Never initiate change simply for the sake of change!

Change should only be initiated when absolutely necessary with a real desire to make things better!

7. Be inquisitive! The three fundamental questions driving change:

Where am I now? It is ok to be happy where you are!

Where do I want to be? You don’t necessarily have to change anything!

How do I get there? Go back and re-think the first two points before developing your plan of action!

8. Base you decisions on facts. Intuition is better than no information at all but facts are always better.

9. Be courageous! Don’t worry if you don’t succeed the first time. Change is difficult but it is never too late to try again!

10. Be persistent! Those who succeed are not those who never fail, they are the ones who never give up!

The Paradox of Change

The outcome of change is difficult to foresee. Sometimes those changes that appear to be most negative in the short-term bring the most long-term benefit and those changes that seem most desirable in the short-term are not necessarily best for us in the long-term.

The Ten Commandements of Cross Group Collaboration

2009-11-20T16:56:00.003+01:00

Today I held a workshop with a group from Microsoft Sweden on the topic Cross Group Collaboration. It was a very good group of people and I was impressed with their involvement and inight into issues of cross group collaboration as well as diversity. In preparation for this workshop I created Ten Commandments for Cross Group Collaboration that might be of interest to others. Some of these may need some explaination and I will try to get around to developing them more later.

The Ten Commandments of Cross Group Collaboration

1. Remember that rules are made to help us. When they don’t help us we are allowed to break them.

2. Break down the communication hierarchy.

3. Remember that good ideas can come from anywhere, and often do!

4. Show respect but don’t avoid conflict.

5. Adapt your processes to your customers needs, not the other way around.

6. Adapt you decisions to each new situation

7. Avoid compromise

8. Celebrate Failure

9. Be resillient

10. Keep an open mind!

Substance vs. Structure

2009-11-11T20:34:00.002+01:00

Someone asked me an interesting question. "How do our cognitive abilities get any structure without adhering to some sort of ideology?" My answer: Structure and substance are too different things. A book can give you a structure, we read from left to right, from top to bottom etc. What I am concerned with is what we write on the pages not how we read. The common structure of a book can hold the ideologies Marx, Christianity, Islam or Communism and Capitalism. Anyone can write anything on a page, the reader must read with discernment.

Beware of Ideologies!

2009-11-11T17:37:00.000+01:00

Ideologies scare me. Good people can kill or be killed for ideologies. Ideologies put power in the hands of the few to steer the minds of the many. Life can be complicated and confusing at times and ideologies make things easier. Too easy!

It is better to struggle with life’s choices and fail occasionally than to swallow easy answers and comfortable truths served up by political parties, religions or Dr. Phil. We have to learn to adapt our decisions and actions to each new situation. If you find yourself trusting rules of thumb on important issues think again! If people around you state opinions as if they were universal truths be wary.

Experiments

2009-11-03T10:05:00.002+01:00

When the democrats try to create a healthcare system that provides quality even for the poor it is deemed (at best) as a liberal experiment by republicans. I guess an example of a conservative experiment would be when our previous president took us to war to prevent the use of nuclear weapons by a nation that had no nuclear weapons. Risk is implicit when experimenting. I think I would rather stick with liberal experimentation that conservative.

Airports

2009-10-06T12:55:00.000+02:00

Airports are interesting, so full of expectations and potential. Everyone here is on their way. I don't know where but somewhere. By the looks of it some of them don't want to go where ever they are going and others can't wait to get there.

There may be no other place where we are so closely reminded of the frailty of our society. We tolerantly stand in line as our belongings and our bodies are electronically searched to prevent someone we don't know from killing us. It is sobering to think that that there may be people out there who are so angry at somebody about something that they are willing to kill anybody to make their point.

Management's Universal Problem

2009-09-09T18:33:00.003+02:00

We don't know where we are, we can't agree on where we ought to be going, so we don't know if the actions we are taking will get us there.

Turn your brain back on! Good Advice for you, me and Jan Guillou!

2009-09-08T18:14:00.002+02:00

Jan Guillou, a famous Swedish journalist and author, said the other day in an interview that he starts each day by reading several newspapers including a leading business newspaper (Dagens Industri = Daily Industry). Being a staunch socialist Jan felt compelled to explain that he wants to keep an eye on the opposition.

I like to read and I read lots of books, but I am generally selective about what I read. There is just not enough time to read everything so you have to choose. My selection process is not very sophisticated. There is a big risk that I choose to read things that just strengthen what I already believe. If I ever do read something that opposes my firmly held beliefs it is more likely than not that I won’t read it with an open mind. I will probably just look for weaknesses and counter-arguments. Sometimes I wonder what value people like Jan Guillou and I add to society when we stop thinking critically and just propagate the same old ideologies, religions or pet peeves we always have.

DN Debatt translation "Many corporate leaders just aren't good enough in the crisis"

2009-07-25T15:39:00.005+02:00

There were quite a few of you that wrote to me and ask me to translate my debate article in Dagens Nyheter (Daily News) one of Swedens largest daily newspapers. Obviously, the article is written of a Swedish public but I am afraid the problems I highlight are equally challenging in many other countries. The article came out today and has already generated quite a bit of attention. If you would like to view the original Swedish article go to: http://www.dn.se/opinion/debatt/manga-som-leder-foretag-haller-inte-mattet-i-krisen-1.917974

Following is my own fast and more or less direct translation of the article:

”Many corporate leaders just aren't good enough in the crisis”

Experienced businessman criticizes corporate leaders: The crises cannot be solved by reducing head-count. Desperate cost-cutting does not improve a company’s long-term profitability. Head-count reductions almost always lead to reduced customer benefit and therefore to weaker competitive advantage. Far too many companies spend money on firing employees and then in a couple years they spend even more money recruiting new ones. Those companies that invest in developing their employee’s competence now will be much stronger when the current economic cycle turns up again, writes Kelly Odell who recently resigned as sales director for Volvo Cars.

I can keep quite any longer. After many years in leading positions in Swedish companies, I can only come to the conclusion that many of the leaders of our important companies just aren’t good enough. I recently read in ”Dagens Industri” (Sweden’s leading daily business newspaper) that ”Swedish companies are the most pessimistic in Europe” and ”Over half of Swedish managers expect more head-count reductions in their own organizations this year”. In my opinion many corporate leaders lack vision and in often even backbone.

The answer to weaker profitability is not necessarily head-count reductions. The answer may not even be saving money. These actions are typically only necessary if you have to maximize your results in the nearest quarter. If, on the other hand, you goal is to maximize profitability over a longer time frame the best thing to do may be to spend more money and invest in developing the competence of those employees who may not be needed in the operations at the moment.

No matter how dark things look at the moment, the long-term trend is that there will be a shortage of employees (not jobs). Many companies spend money on firing employees and then in a couple years they spend even more money recruiting new ones.

Those of us that have been around for a while know that at the end of each economic down-turn there are companies that emerge stronger and better prepared for the future because they invested themselves out of the crises. The same thing will happen after this economic crisis.
Some companies will disappear, some will survive and a few will bloom. The ones that manage best will be those that have a clear vision of what they want to achieve that will create real value for their customers. They are companies who stand by their core values even in times of crisis.
Some companies seem willing to do whatever it takes to survive, but the best companies and the best leaders would rather let their businesses go bankrupt than be forced to give up their core values. Take a look at many companies’ homepages and you will read high-flying visions and value statements declaring that our employees are our most important resource and expressions of customer centricity. But what happens when things get tough? The most important resource (the employees) at many companies is divested at the lowest possible cost and the ones who remain get no training or education. This leads, almost without exception to reduced value for the customer. For example, there are few large Swedish companies that don’t have longer waiting times for phone calls to their customer service as a result of the current economic crisis.

Some will think my views are naïve. Some will say that companies are bleeding and radical actions must be taken for the best of the company and for society. This may be true for some of our companies, but maybe we should ask ourselves how these companies ended up in a crisis in the first place. Where are their reserves? Were corporate leaders not aware that strong economic cycles are followed by weak cycles?

Even if I don’t expect anyone to know exactly when an economic cycle will change or how deep they will be, everyone knows these cycles exist. Some of our companies were in difficult situations even before the current financial crisis arose. For these companies the events of last fall were just an additional burden to carry. Many other companies on the other hand have made a great deal of money during many years for their owners during a long and strong economic high. Where is that money now? Didn’t anyone put away something for the winter?

Firemen, the polis and the military all know that you should plan and train for crisis when there isn’t a crisis. Have our companies done their scenario planning? What will we do if/when the economy declines? Do we have the resources to get buy? How will we manage our employees? I know from my own experience that many have not prepared at all.

Now more than ever we should focus on becoming more effective in our businesses not just on lowering costs. Reduced profitability is a normal symptom of economic downturns.
Possibly the most common reaction is cost-cutting. Cost-cutting is relatively simple to do and can solve short-term cash- flow needs, but in itself, cost-cutting does not improve the company’s situation for the future. The question we need to focus on is how to improve return on investment.

There is a direct correlation between the perceived customer benefit you create and the customer’s willingness to pay for it. Therefore we should think about how to create the greatest possible customer benefit with the least possible resources. What is really important for the customer? How well do we meet and exceed our customers’ expectations? How can we change our offer, processes or behavior to increase customer value with fewer resources? Hunting costs is easy but creating extremely cost-effective companies is difficult, very difficult. That is why far too many companies focus on saving money in a crisis without reflecting on what impact the cost savings will have on the organization. I have seen at close range repeated examples where we send 10% of the workforce home but we don’t send 10% of the work home. We have also not defined new ways of working that make it possible to get everything done with fewer resources. The truth is that you often don’t have time or competence to address those challenges.
It is also interesting to note that HR-managers in the USA are almost as pessimistic as their Swedish colleagues. My homeland, the USA, is also the home of (what Swedes call) “quarterly capitalism” and Sweden is often quick to jump on the latest management trends from the USA. Is it possible that we have adopted this American practice even stronger than they have? I have worked all over Europe and seen that central and southern European companies have a more long-term perspective especially with regard to financial planning in contrast to the Anglo-Saxon countries and Sweden.

Sweden’s corporate leaders have not created the current global economic crises on their own, but together we have unconsciously, and in cooperation with other business leaders and owners around the world, contributed to making the crisis worse.

Kelly Odell

Many of our corporate leaders just aren't good enough!

2009-07-25T01:48:00.002+02:00

The following link goes to a debate article I had in DN Debatt. The debate page in one of Sweden's largest daily papers. Unfortunately, for those who don't speak Swedish you wont understand it. Maybe I will get around to translating it for you.
http://www.dn.se/opinion/debatt/manga-som-leder-foretag-haller-inte-mattet-i-krisen-1.917974

Looking for a Good Benchmark? Try QlikTech

2009-07-08T23:14:00.003+02:00

I just spent an afternoon leading a workshop with one of the most interesting companies I have been involved with in a very long time. The company is called QlikTech (http://www.qlikview.com/) and if you haven´t heard of them yet , you will and the sooner the better for your own sake. QlikTech impressed me for two main reasons: The Product and The People.

The Product
QlikTech has a software product called QlikView that is as powerful as it is simple. As far as I am concerned QlikView is the premier business intelligence software on the market today. Those of you who have followed me or my blog know that I have been around and I have seen some good BI software solutions and lots of bad ones. Oddly, most of the good ones I have seen have been “homemade” . Whether or not these BI applications are “homemade” or purchased from a software supplier most of them are either not flexible or very expensive or often both.

QlikView puts information (and analysis tools) in the hands of the people in a way that is easy to comprehend so that your employees brain cells can work on analyzing data and solving problems instead of trying to compile and understand the data. In a time when most of us are used to application roll-outs that take weeks, months or even years QlikView takes days. Many companies still spend more man-hours creating reports than actually using them but not with QlikView. In fact, it will probably take less time for a manager to create their own report with QlikView than it would take them to ask someone else to do it.

The People
The second thing that impressed me about QlikTech was the quality of the organization. In my working life I have had the opportunity to peek behind the curtains of many different companies and organizations. It is not often I run into a company that is truly and consistently striving to walk the talk in the way that QlikTech is doing. Don’t get me wrong, with the kind of radical growth they have had, going from a start-up to a major player in the global Business Intelligence software arena they have had their growing pains. The difference is that they are seriously addressing the difficult cultural issues and not just paying them lip-service.

The group I met was what QlikTech call their Veterans. In their terminology that means they have been employed about 5 years or more. Veterans they may be but hardly old-timers by most company standards. Nonetheless, these Veterans were part of the company at a time when the whole company could sit around a table and drink coffee together. Today they have employees spread all around the world and you would need a coffee table the size of a football field to get everyone around it. QlikTech is working consciously (and successfully) with managing their corporate culture instead of just letting the culture happen. They are listening closely to and acting on employee concerns and ideas. They are striving to keep in touch with their entrepreneurial roots while embracing the benefits of growth and profitability.

In short, keep your eye on QlikTech and if and when they get listed on a stock-market somewhere I am going to be first in line to buy some shares. This is a company that is going places.

Ten Commandments of Change

2009-07-06T14:08:00.003+02:00

I. Remember that change is inevitable.

II. Change is in itself neither good nor bad! Some changes affect us positively, some negatively and some not at all.

III. There are primarily three types of change:
a. Those changes we initiate ourselves
b. Those changes we did not initiate but over which we have great influence
c. Those changes we did not initiate and over which we have little or no control

IV. You control your destiny! Although we cannot always directly influence change we can influence on how the change affects our lives through our attitudes and actions.

V. The Paradox of Change: The outcome of change is difficult to foresee. Sometimes those changes that appear to be most negative in the short-term bring the most long-term benefit and those changes that seem most desirable in the short-term are not necessarily best for us in the long-term.

VI. Therefore, never initiate change simply for the sake of change! Change should only be initiated when absolutely necessary with a real desire to make things better!

VII. The three fundamental questions driving change:
a. Where am I now? (It is ok to be happy where you are!)
b. Where do I want to be? (You don’t necessarily have to change anything!)
c. How do I get there? (Go back and re-think the first two points before developing your plan of action!)

VIII. Base you decisions on facts. Intuition is better than no information at all but facts are always better.

IX. Don’t worry if you don’t succeed the first time. Change is difficult but it is never too late to try again!

X. Be persistent! Those who succeed are not those who never fail, they are the ones who never give up!

The Means is the End of Machiavelli

2009-06-15T21:07:00.003+02:00

Machiavelli argued that the end justifies the means, but what if there is no end and in the end the means is all there is? Then the means would have to justify the means and that would put an end to Machiavelli.

Be wary of truth-sayers

2009-05-29T22:02:00.003+02:00

Be wary of truth-sayers (even the one writing this). Although we are constantly in search of truth, the truth is that any real deep meaningful truth that may exist is likely beyond our capacity of comprehension. Anything we may believe to be true is highly subjective. Therefore we must be vigilant. We should never fall prey to comfortable “truths”. Truth is not revealed by the majority. Truth is not revealed through the beliefs of our ancestors or the values of the society around us. We must constantly question and re-evaluate that which we believe to be true and be humble enough to admit that although we may hold a truth to be true that truth is at best a victim of our perceptions.

Rules are made to help us, when they don't help us we can ignore them!

2009-05-28T11:30:00.004+02:00

Behaviour in all organisations is steered by a system of formal and/or informal rules and values. In the event that a conflict arises between a rule and a value we should always opt in favor of the value. Rules are made to help us, when they don't help us we can ignore them!

Ignorance: The Root of All Evil

2009-05-26T08:04:00.001+02:00

Far more evil is caused by ignorance than by meaness.

Fantasies, Dreams and Reality

2009-05-22T08:08:00.001+02:00

The differnce between fantasies and dreams is desire. the difference between dreams and reality is effort!

Make the Most of This Crisis, They don't come along too often

2009-02-03T23:54:00.005+01:00

I am not going to add to the mass of amature analysis about the current financial crisis facing the worlds economy. There are journalists, bloggers, politicians and gurus to cause enough confusion without my help. I would like to comment on a side effect of the current situation. It is really interesting to see how different people react under pressure (including myself). It seems that extreme circumstances tend to bring out the best and the worst in us. I have witnessed some people excerise great creativity in solving the challenges posed by the current financial situation but I have also seen extreme cases of tunnel vision, lack of focus and even apathy. Why is it that some people can meet these challenges with energy and resolve while others seem to fall apart?

I wouldn't be surprised if DNA plays a certain role in this. Some are born with better genes to handle a crisis. It is not unlikely that our socialization has a significant effect. Still I can't help thinking that there must be things we can learn, things we can practice that will make us better prepared for tough situations. Police and firemen train themselves to be able to handle situations that would be difficult for the untrained to handle. They learn how to handle their fear, how to protect themselves and how close to a fire you can stand without getting hurt. When it comes to the business world we are not talking about life-threatening risks. No one gets physically injured because profits are down. Surely if we can train ourselves to face raging fires and armed criminals while remaining calm and thinking rationally, we ought to be able to face a global financial crises.

Analyze your ghosts!

The ghosts you see and understand are not nearly as scary as the ones you don't. Often we are frightened of things without really understanding what it is we are really scared of. Potential risks become much easier to deal with if we identify them and analyze the impact these risks pose for us (as well as the probability that they will happen). May dad always says that 90% of the things we worry about never happen. Suppose you are worried about losing your job. The first question is how likely is it that it might happen? What would be the impact on you if it did happen? How hard would it be to get a new job? Would you have to take a pay cut or move to another town? What sacrifices would you have to make if you had to take a lower paying job or move to another town? By working through all the consequences you can develope an understanding of how you would handle the problem if it happened.

What's the worst that could happen?

Another trick is to ask yourself what is the worst that could happen? What is the worst that could happen at work? What would you do if the worst happened? Could you live with that? Could you handle the situation? If so, then you can get back to living your life and stop worrying! No one wants to lose their job or lose money on the stockmarket. When it happens it can be extremely challenging. Our emotions can swing from apathy to rage and back again. But being mentally prepared for the challenge, understanding the consequences and having at least a vague strategy for handling the situation can be a big help in meeting a crises. If you are feeling very brave you might even ask yourself what's the best that could happen? (A new, more interesting job with a better salary?) A crisis can be the catalyst you need to create positive change. Change in your life or in your organization!

Solutions or Confusion?

2008-01-27T17:02:00.001+01:00

Remember when everything caused cancer? Every other day there was a new story about some new research that showed some new substance in our daily lives that was killing us. It finally got to the point where cynics and comedians came to the conclusion that life is deadly and living is lethal. The end result being that many people just gave up with the excuse that if everything you eat is going to get you then it doesn't matter what you eat!

Now I am afraid the same thing is happening with the environment. Today I was sitting drinking a bottle of mineral water in a cafe when a man came up and told me that mineral water was bad for the climate. I fully expected to hear a lecture about the stupidity of carting bottled water around the world in boats, trucks, planes and trains when we have fantastic drinking water coming right out of the tap (I basically agree with this!).

To my surprise he just laughed and said that scientists have discovered that the CO2 in bubble water destroys the ozone. Then he said "the scientists are all wrong! The problem isn't bubbles in the water; there are just too damn many people on the planet!" As our conversation went on he informed me that when we die our bodies give off gases that have a negative effect on the ozone. I cleverly suggested cremation but he said that was even worse!

So according to my new friend, the "cafe environmentalist", we virtually everything we do while we are alive is bad for the planet and even when we die it is bad for the planet so it really doesn't matter what we do! Being no expert in these issues I tried to suggest that if some things we can't control (like death) are bad for the environment then it is even more important that we do everything we can to minimize the negative impact of those things we can control!

Unfortunately I think my buddy has already joined the cynics! If everything we do is bad for the environment then it really doesn't matter what we do! I hope he is wrong!

Ten Commandments for a Successful Career

2007-09-30T18:25:00.000+02:00

Those of you who have read my Ten Commandments for Leaders will notice that some of these commandments are the same. I hope that makes sense to you, it does to me!

•1. Listen: No one knows everything! You don’t have to be an expert on every issue!
•2. Always say your mind! You are paid for what’s in your head.
•3. Never get yourself into an economic situation where you can’t afford to tell the company to go to hell!
•4. You have to risk your job in order to do your job!
•5. Don’t worry about politics! In the long-term it is the results that count.
•6. If you’re not passionate about what you are doing then go do something you are passionate about!
•7. Make your decisions on facts! An educated guess is better than no information at all, but facts are always best.
•8. Take responsibility for your own motivation!
•9. Be resilient! Careers are not linear, they go up and down and you always get a second chance!
•10. Have fun!

7. Make your decisions on facts! Intuition is better than no information at all, but facts are always best.

2007-07-10T18:05:00.000+02:00

In recent years there has been a great deal of hype for intuition. Hopefully, most of the hype is the result of misunderstandings. I don’t want to believe that intelligent people would encourage us to make decisions in a “Blink” instead of analyzing the facts. In fact, while some people promote the value of common sense I can’t help but think that even if we may all have common sense, there sure isn’t much about common sense that we have in common! I don’t know how many times I have heard people arguing vastly different points of view and all base their arguments on common sense! Give me a good old fashioned analysis of the data any old day!

It is amazing that so many companies can be so successful despite the fact that many important decisions are based on the nice warm feeling some executive has in their tummy. This in itself must be evidence that the practice of intuition based management is much more widespread than anyone wants to admit. In a world where everyone is guessing, the one who guesses a little better is the winner!

I am not opposed to making an educated guess as a last resort to fill in the gaps of good analysis. I am against basing analysis primarily on intuition and acting as though these guesses and assumptions are facts! Substituting facts with intuition should always be an exception and these exceptions should be documented and frequently re-evaluated since they are likely to represent major risks in the analysis. Over time, the “intuited” facts can either be confirmed by trail and error or replaced by facts. All too often these intuited facts become “truths” and no one remembers the origin of the information.

Jeffery Pfeffer and Robert Sutton’s book “Hard Facts, Dangerous Half-Truths & Total Nonsense” is the best thing I have read on the subject of “evidence-based” management. If this book doesn’t appeal to your common sense then you might want to take your common sense in for an overhaul!

6. If you’re not passionate about what you are doing then go do something you are passionate about!

2007-06-05T22:31:00.000+02:00

It is really rather simple! Competition will demand that you are good at what you do. In order to be good you have to enjoy it. You may be thinking that it is unrealistic to expect that everyone in the company is passionate about their work. You may be right, but we aren’t talking about everyone, we are talking about you! We are talking about the leaders of these organizations. If the leaders aren’t passionate about the business then who the hell is?

The choices you make not only affect you. They will also have a significant impact on your employer and your colleagues.

Lose/Lose/Lose or Win/Win/Win

You lose
The world is getting more and more competitive. In most industries customers have greater choice and require better products and services at lower cost. In order to meet these competitive pressures organizations are struggling to drive down costs through achieving greater efficiencies. In short, companies are expecting fewer people to produce more! In essence each of us has to get better and better at what we do. The only way to meet this challenge is to work with something you truly enjoy. If it is not enjoyable you just won’t be able to put in the effort that is required to succeed. It will just be too much like work! If on the other hand you enjoy what you are doing you will perceive the effort you put into it as self-development or even as play.

If are bogged down in a job you are not passionate about you aren’t getting the satisfaction out of you work you deserve. Since we spend so much time at work it is fair to say that you are not getting the satisfaction from you life that you ought to grant yourself.

Your employer loses
If you are on a job you are not passionate about you will not be able to perform at the level of productivity your employer has the right to expect from you. This could ultimately undermine your employer’s ability to succeed in highly competitive markets.

The other guy loses
By filling a position that you are not passionate about you are blocking that position from someone else who may be dreaming of doing your job. They will not get the opportunity to get their dream position as long as you are sitting there (at least not at your company). There may be circumstances in which there just aren’t enough dream jobs to go around, but what a terrible shame if some of these scarce positions are filled by people who don’t appreciate them and who may be secretly dream of doing something else!

5. Don’t worry about politics! In the long-term it is the results that count.

2007-05-07T20:51:00.000+02:00

All organizations have politics if we mean the kind of politics that occur from the natural group dynamics when people try to cooperate to achieve their goals (hopefully common goals). In this sense, politics is about how we work together as a group, how decisions are made and how power is distributed in the group. Everyone participates in this kind of politics, therefore, office politics or the politics of any group are in themselves natural.

What happens, when politics become the end itself and not the means in an organization? Sometimes, the goal of a group or an individual is to gain and hold power not to achieve any tangible goals for the organization? Any goals that happen to be achieved become tools to hold or gain more power.

This is common in the governmental politics of a country. From the beginning, at least some political parties start with good intentions: A group of people with a shared world view or common values join together to try and make their town, country or the world better. They soon realize that in order to create the changes in society which they believe are necessary they need power and in order to gain power they need support from voters. The temptation becomes very great to say and do things that are popular with voters in order to get the power to drive change. In the end political parties can find themselves so compromised that it is difficult to align their “real” actions with the values and world view they espouse.

Unfortunately, these “negative politics” are not restricted to the realm political parties. They are just as common in non-profit organizations as they are in large corporations. Anyone who has ever devoted time to their local home-owners association or their children’s athletic club has probably experienced the nasty backside of politics.

We all know someone who is well liked by some managers, (maybe not as popular with their peers or subordinates) who seem to be well connected and always in the limelight but who never really seems to achieve anything. I have seen people like this, on stage, taking all the credit for an award that everyone knows is the result of the inspiration and hard work of others (typically their subordinates). I have seen people argue adamantly against an initiative and all of a sudden try to take credit for the idea when it has gained popular support or become a big success.

Despite all this, I am convinced that in the long-term there are two elements that outweigh all the power of politics. Results and integrity!

Any organization that does not reward good results is doomed! In order to succeed organizations must deliver value to their stakeholders. Whether it be shareholders, taxpayers, patients or students the organization that doesn’t deliver will die! Therefore, organizations need people who are focused on delivering results. These results oriented people will, over time, be encouraged and rewarded by their organization for the sake of the organization. This does not mean that a “politician” cannot win short-term victories from time to time but they cannot win long-term or the organization will erode and fail.

Integrity and results go hand in hand! They are really all about who you are, or who you want to be. No person is greater than the combination of her thoughts, words and deeds. And the greatest of these is deeds! Good intentions are fine and well but if never converted into actions they become cobblestones on the path to hell! Intentions translated into words can be powerful and lead to positive change. Words that grow from great thoughts become art, a deed in itself, which may inspire others to great deeds. Great words, combined with bad deeds are hypocrisy. Good intentions transformed into words and reflected by good deeds are the hallmark of a life well lived.

I sometimes think of a time in the future when I am old and looking back on my life. There will undoubtedly be things in my life which I regret (anyone who would not lacks insight) and hopefully there will be things of which I am proud. The question is what has been the overwhelming tone of my life. Has it been a life of ass-kissing, ass-kicking and manipulation or a life of reflection, integrity and achievement? Have I lived the life I wanted to live or a life that looked good in the eyes of others? Will I leave the world better than I found it or taken as much as I could with no consideration price my life will cost the ones I leave behind?

4. You have to risk your job in order to do your job! Losing your job is not the worst thing that can happen! (It can often be the best!)

2007-04-28T11:50:00.000+02:00

Far too many people seem to think that the worst thing that can happen to them in working life is losing their job, especially, losing their job as a direct result of their own actions. The embarrassment of failure and/or the eventual threat of economic insecurity resulting from unemployment tend to limit our willingness, indeed maybe even our capacity to be creative and take risks. But risk taking is exactly what we have been hired to do.

The higher the risk, the higher the return! This premise is one of the fundamentals of economics. Despite this I have often heard people say things like “we need to minimize risk” or “we need to eliminate risk”. From the perspective of economic theory minimizing or eliminating risk is the same as minimizing or eliminating profitability. In any healthy company the direct opposite of this should be true; we should encourage our people to take risks.

I don’t know how many times I have seen looks of panic on the faces of various managers when I say things like this. I can almost hear them saying “What if an employee takes a risk that bankrupts the company?” When I talk about risk I am not talking about jumping out of an airplane without a parachute or playing Russian roulette with a loaded gun. These activities are not risky they are stupid. Risk taking should be the result of intelligent fact-based decisions making full use of our skills and knowledge while pushing the frontier of our competence. Risk taking is not foolish squandering of resources or wild guesses!

Companies in highly competitive industries will fail in the long-term if they cannot develop a culture that encourages risk-taking. The same is true of the individual careers of all employees in these companies! My own theory is that the greater your responsibility in the company, the greater risks you must be willing to take to succeed. Unfortunately, there often seems to be a reverse correlation between seniority in the organization and willingness to take risks.

There are many more jobs in the world for people who make $50,000 a year than there are for people who make $2,000,000 a year. It would not be strange if someone who has a $2,000,000 job were inclined to do whatever possible to keep it. They might also be inclined to avoid anything that might jeopardize their positions!

Risk avoidance will lead to failure in achieving results and ultimately to losing your job. Risk-taking over the long-term will lead to growth and profitability, however, on the short-term a risk that doesn’t work out well could also lead to losing that cosy high-paying job. If you do the math at an individual level you could come to the conclusion that you are likely to end up getting fired no matter what you do. If you play it safe and maybe offset declining profitability and lose of market share with cost-cutting initiatives you might just be able to prolong your employment longer than if you take risks. I am not saying that there are never scenarios where you should play it safe or that cost-cutting for that matter is always wrong. I am saying that these initiatives can and sometimes are misused by managers for there own benefit to the detriment of the company!

3. Never get yourself into an economic situation where you can’t afford to tell the company to go to hell!

2007-04-21T14:16:00.000+02:00

Many years ago I worked together with a man who I respected very much. I was around 30 years old and he was closer to 60. Back then nobody used words like mentor to describe those kinds of relationships but looking back now he was clearly my mentor at the time. One night when we had been working late and sat talking he said to me “Never get yourself into an economic situation where you can’t afford to tell the company to go to hell!”

He continued by explaining that if you get yourself into the “Golden Cage”* two things are likely to happen. First of all you risk losing your job satisfaction and secondly your value to the company will decrease. When you sacrifice your economic independence you may stop taking risks and saying what you think (especially when what you think might be uncomfortable for your superiors). Paradoxically, the freer you are to walk out the door the greater the value you are likely to create for your company.

I remember a boss I had at my first job after graduating from college. He was always trying to get me to buy a house or at least an expensive car. One day I asked him why it mattered to him if I bought a house or a car. He said very bluntly that if I got into debt I would be more likely to stay with the company. This might very well have been true but the question is if this was really the best thing for my boss or the company? By increasing my dependence on the company I might very well have decreased my productivity (as well as my job satisfaction). There is no doubt that motivation increases productivity. As long as I work where I work because I want to, my motivation will be high. When I start feeling that I work where I work because I have to, my motivation and productivity will decrease. Add this to the “fear factor” (or prostitution factor as one of my friends calls it) ,that is the fear of doing or saying something that might jeopardize my job, and you might well have taken all the entrepreneurial spirit out of me.

*Some call it the Golden Cage! Maybe you have a job that doesn’t stimulate you intellectually. Maybe you even hate your job! The problem is that it pays the rent. It might even pay a great deal more than the rent. That job you hate may be providing you with a lifestyle that is hard to give up. Nice cars, nice house (or houses), fancy food, great vacations and a nice boat.

I was only following orders!

2007-03-29T11:11:00.001+02:00

“I was only following orders!” This classic statement has been used by people throughout history to justify immoral and unethical behaviour. The question is whether or not this is a viable excuse in our daily work environment.

Clearly a senior executive has the right to make decisions and to expect those decisions to be followed. I would even say that a senior executive has the right to have wrong decisions followed. Occasionally, I find myself in discussions with colleagues who are frustrated because of a poor decision made by a senior manager. Sometimes my advice to them is simply to implement the decision (after first having done your best to point out the why the decision is a poor one). The fastest way to get some managers to realize that a decision was wrong is to actually do what they say. You might never get that person to see their mistake by arguing, but it will be very clear once the decision is implemented. (Who knows, it might even turn out that the decision was the right one.)

What happens if a senior executive insists that you do something that is either ethically wrong or possibly even illegal? The simple answer is that if you agree to do as this superior says, you are accountable. Morally you are complicit in the action which has been done. You are equally guilty if you see unethical behaviour and do not act to correct it.

2. Listen: No one knows everything! Your job is to lead, not to be an expert on every issue!

2007-03-13T08:08:00.001+01:00

Make sure you have the best people in your organization and then listen to them. You cannot win on your own!

In the best of all worlds people get promoted to management positions because they were perceived as being good at their old job. If they perform well in that management position they could get promoted to a higher one. It might not be unreasonable for someone who has been promoted many times and finds themselves in higher management positions to start believing that they are gifted! They might start thinking that the reason they are the boss is because they are better or brighter than the “normal” employees. Nothing is further from the truth. If I where to come to the conclusion that I really was smarter or better than all of my employees I would leave the company! A company where I am the smartest guy is bound to get beaten by its competitors!

I recently spoke at a conference for sales managers and I asked them to raise their hands if they were the best salesman in their company prior to being promoted to sales manager. About 2/3 of the people raised their hands! I would not argue that the best salesman couldn’t be a good sales manager, nor would I argue that a mediocre salesman couldn’t also be a great sales manager. The skill set needed to lead salespeople is not the same skill set that is required to be a great salesman!

Some years ago I got promoted from a marketing manager position to be the president of Whirlpool Corporation’s Swedish sales organization. In the beginning it was very hard for me to keep my nose out of the marketing manager’s job. I really thought I could do his job better than he could and was never really satisfied with his performance. It took some time before I realized that he just did things differently, not worse, than I would have! Even if I acknowledge that sometimes “my way” might have been better than his it was not significantly better. Finally, one day my marketing manager came to me and said that he thought I was a great marketing manager but he wondered who was running the company while I was doing his job?

Ten Commandments for Managers: A Closer Look

2007-03-06T23:21:00.000+01:00

I have received a number of emails from people who appreciated “The Ten Commandments for Managers” that I published here some weeks ago. Some of them have asked me to elaborate on these commandments, so here comes commandment number one!

1. Be humble: No one is as good as they think they are! (Or as bad either for that matter)

One of the cardinal sins of managers is over confidence. It may very well be the case that you have made it where you are today because of your talent, but you do not know everything. No matter how talented you are, you are going to make mistakes. No matter how wise you are your judgment will fail you. Don’t worry about it, accept it!

Another cardinal sin of managers is lack of confidence. Even if some try to hide their lack of confidence with bold displays of overpowering arrogance, from time to time, every manager feels the burden of inadequacy. In those quiet moments of self-reflection every good manager in every organization realizes that they have failed to meet their own expectations regardless of how much praise they receive from the world around them. The best leaders acknowledge their fears and failures, learn from them and move on.

Keep It Simple: Wise Words from a Wise Man on Organizatonal Change

2007-01-10T23:38:00.000+01:00

One night, many years ago while I was doing my MBA at the Stockholm School of Economics I was sitting beside the late Prof. Gunnar Hedlund in a pub. We were having a pub night and Gunnar had lectured for us during the day and tagged along to the pub that evening.

Gunnar had spent a large part of his life researching how international organizations organize themselves. Sitting there beside him I couldn’t help but ask him some questions that had been on my mind during his lecture. One of the questions I put to Gunnar was “have you seen in your research that some organizational form is better in some way than other organisations?” Looking back I suppose my question was a bit naïve but I couldn’t help but wonder if companies that use matrix organisations might be more profitable over time that strict hierarchical ones or vice versa. Gunnar smiled at me, probably thinking that here is just one more eager young man looking for simple answers to complicated problems. His answer to me was this: “There is no empirical evidence to indicate that any organizational structure is better or best” he continued “I can imagine that there may be certain organizational structures that are not suitable in certain situations but there are probably may that are equally suitable.”

Gunnar said: “Choose a simple organizational structure and keep it that way. Companies often re-organize in order to adapt to changes in the world around them but the market place changes much faster than organizations can re-organize. If you choose a simple organization you can then spend your effort on teaching the people in the organization to be flexible and adapt to changes in the market place.”

During my working life I have lived through many large and small organizational changes. I have even initiated some of them. More and more I begin to wonder if Gunnar wasn’t right. Organizational changes are time consuming and costly. In most cases the benefits of the re-organization are marginal if they exist at all!

At one point in my life the head of HR for a company I was working for asked me what I thought about the ongoing re-organization and I said “You can’t ruin a good company by re-organizing”! This VP of HR broke out in laughter.

The Ten Commandments for Managers

2007-01-08T10:34:00.000+01:00

1. Be humble: No one is as good as they think they are! (Or as bad either for that matter)
2. Listen: No one knows everything! Your job is to lead, not to be an expert on every issue!
3. Never get yourself into an economic situation where you can’t afford to tell the company to go to hell!
4. You have to risk your job in order to do your job! Losing your job is not the worst thing that can happen! (It can often be the best!)
5. Don’t worry about politics! In the long-term it is the results that count.
6. If you’re not passionate about what you are doing then go do something you are passionate about!
7. Make your decisions on facts! Intuition is better than no information at all, but facts are always best.
8. Always say your mind! You are paid for what’s in your head. If you think it but don’t say it, you are defrauding your employer.
9. Your employees work for you of their own free will!
10. Remember: The Company chose you as a manager, but your employees choose their own leaders!

Template for Success or Why Change Initiatives are Doomed!

2006-12-17T21:35:00.000+01:00

Some time ago I was asked to speak to a group of people who work full-time as change agents in a large Swedish company. One of these change agents had attended a one day course on change management that I teach for a Swedish education company (Astrakan Strategic Education AB, http://www.astrakan.se/ ). This change agent’s boss said to me that they would like me to focus on how to create lasting change.

Lasting Change

Is there any other kind of change than lasting change? Change initiatives that do not lead to lasting change are just a waste of time. If organizations initiate change processes they are surely intended to last, at least until the next change process. I have heard people say that as long as one of our change agents is involved in the project things move along well but when we pull out the change initiative falters or even stops. This is a common problem when people with special competence like consultants or internal change agents are involved in change.

Fundamentally, change in organizations is about changing behaviour. We want individual human beings to do things differently than they have done in the past. No change will ever be long-lasting without changing the behaviour of people doing the work of the organization. If this assertion is true then to create lasting change we must focus on the drivers of human behaviour.

Template for Success!

Most change initiatives fail because they do not successfully address the underlying behaviours that are to be changed. Below is a simple template that might be helpful in addressing the real elements of organizational change. In the first column I have listed a breakdown of the elements of Competence. Across the top I have listed elements of change processes as described by Mats Lundeberg in his book “Handling Change”. (Mats is a professor at the Stockholm School of Economics)

Fill in each field as needed with a few of both the group and the individual. Remember, it is individuals within the group that need to change. Individuals have different competencies and desires, therefore you may need to answer many of these questions at an individual level to insure the success of you change process.

Remember that behavioural change takes time. A rule of thumb is that significant changes in individual behaviours take 21 days of consistent effort. How often do each individual in our organizations get 21 consecutive days with training, coaching and follow-up to secure the new behaviours. In many cases they get a training course, a kick-off and a t-shirt and are expected to “just do it”!

I have filled in the columns “Current State” and “Future State” with some questions to help you get started. Good luck!

Click here to view the template! (Its not pretty but it works!)

The Mobile Revolution Meets the Advertising Legacy!

2006-11-14T21:37:00.000+01:00

Although I was born and raised in the USA, I have been living and working in Sweden of most of the last twenty years. During that time I have seen many changes occur in the world of entertainment and media. I remember when I first got to Sweden there where only two TV channels that usually didn’t show programs more than a few a day. One Friday night, during prime time, I watched a documentary on the mating behaviours of horses. It wasn’t bad but not what you would expect to watch with your friends while drinking beer on a Friday night.

When commercial television was finally allowed in Sweden nobody in the advertising industry knew what to do with it. Swedish advertising and media agencies where all about print! This opened a niche for small specialized consulting companies who could advise customers and their agencies on how to use TV. A buddy of mine was very successful in this business and his main qualifications where that he was very smart and he grew up watching commercial TV in the states. With time the advertising community became savvy to TV but it was amazing how long it took for many agencies to seriously include TV as a real part of the media mix.

Some years later commercial radio started up in Sweden and the same process was repeated. Traditional ad and media agencies had no expertise in radio. Specialized “radio” consultancies thrived for years until the advertising environment had adapted to this new media. (I still think radio is highly misunderstood, poorly used and undervalued in Sweden.)

As the internet entered our lives we have seen the same type of conservative approach from the advertising environment. Most agencies still don’t understand the real value of the internet and have little or no in-house competence. If they do have internet competence they typically treat it as a special channel and it is an exception to see campaigns in which the internet is fully integrated.

Now the mobile telephone is lurking on the horizon as the next great new media environment. The question is how long it will take advertising agencies to embrace the opportunities created by the mobile telephone. The mobile phone makes it possible to present the right message, adapted to the customer's situation (place, time, interests, etc) combined with the perfect payment solution. The mobile phone interacts easily with all other media and can turn static two dimensional media like print and billboards into interactive media. Imagine getting customers to run all over town taking photos of billboards in various locations in order to win a backstage pass or a trip to the Bahamas.

The end result will be more cost effective campaigns that target the right customers with the right info at the right time and place which will both increase customer’s satisfaction with the advertiser (and advertising in general) and increase sales.

All in a Day's Work!

2006-11-14T21:04:00.000+01:00

The only thing that is worse than throwing your pearls before swine is when the swine reject your pearls!

Unleashing the Power of Mobility!

2006-11-06T21:45:00.000+01:00

Everyone knows it is going to happen! Just like at some point everyone knew that the internet was going to fundamentally change the way we work and play! Even during the deepest crash of the internet economy the life of the internet itself was never really in question. The only thing that really crashed about the internet was the business models. Most of us just surfed right through the crash of the internet economy. Some people lost lots of money but most of us just surfed on oblivious to the financial struggles behind the scenes of many internet companies. Many internet sites disappeared but others popped up to replace them and many survived and even thrived.

Now it is happening again! This year the mobile phone celebrates its 50th anniversary. (I am proud to say that my employer played a key role in the creation of the mobile phone). During the past 50 years the mobile phone has revolutionized voice communication as well as the telecom industry. It is fitting then that this youthful 50 year-old stands poised once again to radically change our lifestyle and our industry.

This time the change is taking place in the world of data communication and like before this revolution will have its losers and its heroes. In order to understand the magnitude of this new change you could start by imagining that everything we do on the internet today will be moved into the mobile telephone. That in itself may not seem like such a big deal and in some ways may even be perceived as a weaker version of the internet. After all, who wants to surf the internet on such a little screen and with lower speed than most people have at home or at work. But anyone voicing opinions like this needs to think again!

First of all far from everyone has easy affordable access to the internet. Large parts of the world have little or no access to the internet. The mobile internet will make a powerful contribution to the welfare and quality of life for many people in the world.

In the parts of the world where a large part of the population has easy, affordable access to the internet there are still enormous opportunities that a mobile internet will create. Imagine all the strengths of the internet enhanced by a few key benefits of the mobile phone: Mobility, Positioning, Interactivity and Payment!

Even if the mobile phone can give you internet access where ever you are it is still highly reactive. Users need to go in and search for the pertinent information they are looking for. One advantage of the mobile phone is that it can provide key information to content providers that will help them give users information they want or need before they actually seek it. Drivers can be provided with information about road conditions as they travel down a highway. Spectators can sit in the stadium watching their home team playing football while at the same time viewing highlights on their phones of other matches going on at other places. The alternatives are endless.

Mobile phones can easily turn all kinds of inanimate objects like billboards, beer cans, or newspaper ads into interactive media. Imagine getting customers to run all over town taking pictures with their telephones of the same posters on billboards at various locations in order to win back stage passes or a trip to the Bahamas. Or customers sending in pictures taken with their telephones of a coke can. With today’s picture recognition technology advertisers can cost-effectively identify pictures of one individual poster or coke can without bar codes making it possible to activate brands in exciting new ways.

The mobile phone has the potential to replace the credit card as we know it. The mobile phone could become the primary payment tool in a large part of the world. But if you connect mobile payment together with all the other benefits of mobility, interactivity and positioning, you begin to understand the real power of the mobile phone. The mobile phone makes it easier to target the right customer segments with the right message, to involve the customer in an interactive dialog and finally to execute the transaction.

Imagine the following transaction process:

You receive a video message from your favourite music artist asking if you would like to win tickets to his/her next concert!

Then receiving a free track from the artist’s next album.

Then being offered to purchase the entire album at a special price.

Then being offered free music from similar up and coming artists within the same genre as your favourite artist.

The process can go on for a long time!

Here is another scenario:

Imagine sitting at home watching a James Bond movie on a DVD or via Cable TV. We all know that at some point in time James is going to give the camera a great view of his Omega watch or his SonyEricsson mobile phone. You push a button on your mobile phone and James turns towards you and says “I see you are interested in my watch. This is the new Omega etc, etc, etc! For those of you watching this movie you can get a 10% discount on the watch and it will be delivered to your door tomorrow.” You push another button on your phone and the watch is charged to your telephone bill and you continue watching the movie. The next day you get your watch!

To paraphrase Kotler: Customers who get the right product for the right price, when and where they want it are satisfied! The mobile phone makes this easier than it has ever been!

Smarter than an ant and dumber than a pike!

2006-10-24T23:23:00.000+02:00

I suppose everyone has heard about the research that was done in which minnows where put into a glass cylinder in an aquarium with a pike and after the pike had bumped his head on the glass cylinder about 7 times he quit trying to eat the minnows. Then when the glass cylinder was removed the pike still would not eat the minnows even if the minnow swam right in front of his face. The pike had learned once and for all that there was no point in trying to eat the minnow. Been there, done that!

There is another story told by a professor (I don’t remember who, sorry!) who said that ant’s have a very low intelligence as individuals but very high intelligence as a group. People on the other hand have high intelligence as individuals and low intelligence as a group. I think anyone who has worked in very large organizations recognizes this problem. I am frequently amazed at what sound views many people in large organizations have about the problems facing their companies and what actions need to be taken to improve the situation. When all of these clever individuals get together the end result often turns out much worse than it would have if just one person had done the thinking.

Considering these two stories I have come to the conclusion that our ambition should be to be at least as smart as ants are when working in groups never losing sight of the groups overriding mission. We should at the same time be relentless in our strivings to excel in fulfilling our mission, continuously re-evaluating the situation and never letting the long shadow of history block our vision of the future.

Hard Facts, Dangerous Half-Truths & Total Nonsense by Jeffrey Pfeffer and Robert I. Sutton

2006-09-20T06:43:00.000+02:00

Some critics have suggested that "Hard Facts" borders on common sense but it is the apparent lack of common sense in business that often amazes and shocks me. In fact, the idea of common sense is exactly the type of the strongly held belief that "Hard Facts" puts into question. As far as I can tell, all people have sense but not much of it is common! There is so much about business management that appears to be obvious to so many when reading business literature or attending conferences and yet when we get back to the office we fall back on old behaviours and entreched belief systems. "Hard Facts" truly gives the hard facts on what is one of the most significant underlying problems with business life today. Business initiatives fail because they are initiated to solve problems that aren’t fully understood and achieve goals that aren’t clearly defined with methodology that at best is ineffective and at worse destructive!

THE MARKETING PLAN: THE GOOD THE BAD AND THE UGLY

2006-09-02T07:52:00.000+02:00

Following is another simple marketing plan template that I have used from time to time in my work. Line my earlier entry "The World's Shortest Marketing Plan" this plan template is very short and should be kept that way!

The Good

Virtually all companies conduct some sort of planning, whether it be it the form of budgets, strategic plans, business plans or marketing plans. Despite the various problems, some of which are described below, many companies have discovered the hidden benefits of planning activities. Here I would like to emphasize the planning activity as opposed to a planning document, tool or method. It is in the activity, the action of planning that the real value is achieved. As Dwight Eisenhower said "Plans are nothing, planning is everything".

Of course the planning activity must be documented in some way, however, a planning document should be living organism, continuously adapting to new situations and new environmental requirements. Like an organism it should be continuously developing and learning. As time goes, the document should reflect the accumulated knowledge and experience of the actors in the business which it represents. Many managers have discovered the value of planning and whether one intends to reveal the "truth" in an official document or not, many valuable "truths" can be discovered during the act of planning. These "truths", in the form of facts, ideas or discoveries of correlations and relationships between variables, are beneficial in the running of the business.

The Bad

Unfortunately, in many companies these planning tools are primarily seen as tedious routines which must be executed in order to satisfy requirements from top management. As soon as these plans are made and presented they are far too often filed away and never to be seen again. They may be brought out again next year to be used as a guide for the new plan.

One of the most common planning tools is the budget. Budgets are manipulated by everyone. Those responsible for creating the budgets build in buffers in order to insure that the budget can be achieved. Those who review and/or approve the budgets of others, fully aware of the manipulations which take place, regard most budgets with suspicion. This results in responses from senior management with arbitrary demands for higher sales, more margin or lower costs by amounts or percentages which, in objective terms, could only be interpreted as incompetence, either on the part of the budget maker or the evaluator. However, since everyone knows the rules, no such conclusions are drawn. In fact, a manager or director who attempts to budget "honestly" may be deemed incompetent since he will undoubtedly be judged according to the same measures as all others who are playing the budget manipulation game.
This manipulation is not limited to budgets. It is prevalent in all kinds of planning activities in many companies and organizations. For this reason one might question the validity of this type of planning tool as some companies have done and eliminated the use of budgets for example.

The Ugly

If these planning methods are not lost deep in a file cabinet and even if they are done with honest assumptions and good analysis they still run a risk of becoming "holy gospel". Many planning tools are mystically transformed from paper documents to stone tablets. These tablets are then followed blindly as a surrogate "Ten Commandments" and no deviations or alterations to the plan are allowed. Alternatively, these tablets are used to bash the heads of managers who have not achieved the goals set forth.

MARKETING PLAN

Depending on ones definition of marketing, the marketing plan could focus on everything from specific sales related activities, to virtually every aspect of the business that affects a company's competitive position in the market. This broader definition could involve relationships with suppliers for components or sub-assembly, financial institutions, production technology or anything else that could affect the strength of the company in the market place.
The following elements should be included in a marketing plan:

I. Facts and Analysis

A. Market size, in volume and value by product group
B. Average price by product and/or product group
C. Distribution channel analysis

1. Key distributors or channels

a. Description of their business or of the channel
b. Sales, and share of market
c. Sales of our products
d. Description of terms of business, (margins, logistics, etc)

D. Competition analysis

1. Brand positioning
2. Market share
3. Relationship to trade
4. Consumer image
5. Strengths and weaknesses
6. Expected reaction to our company or product

E. Our own strengths and weaknesses

1. Brand positioning
2. Market share
3. Relationship to trade
4. Consumer image
5. Strengths and weaknesses
6. Short-term product or market needs
7. Long-term product or market needs

F. Consumer Analysis

1. Buying Behavior
2. Purchase Criteria
3. Lifestyle Analysis (if possible)

II. Plan of Action

A. Define adjustments to strategy (product focus, brand positioning etc)
B. Define tactical actions

1. Attacks to competitors weaknesses
2. Target key competitors
3. Promotional Plan

a. Internal actions ( to promote products within own sales
organization)
b. Trade actions ( to promote products to distribution channels)
c. Consumer actions ( to promote products to Consumers)
d. Estimated costs

III. Financial Plan (targets/expectations for relevant period 1-5 years)
A. Market share
B. Sales targets
C. Selling Expenses
D. Returns (Net Operating Profit)
E. Market Investments
F. Cash Flow Analysis (Net Present Value)

THE PERLMUTTER/RONSTADT MATRIX

2006-08-23T23:32:00.000+02:00

A Tool for Analysis of Global R&D Organizations

BACKGROUND

Creating the right organization and control system for R&D is always a difficult task even when confined to only one geographical location. Managing numerous R&D units spread all over the world increases the complexity dramatically. How well corporations coordinate their global R&D is one of the key factors for success in many industries.

Two crucial parameters must be defined in order to understand the methods for managing global R&D:

1) The various functions filled by R&D units
2) The different types of organizations that can be applied to these units

Types of global R&D laboratories

In order to understand the functions that can be filled by R&D units the descriptions used by Ronstadt (1977) as seen in de Meyer's and Mizushima's article Global R&D management (1989) will be referred to. Ronstadt's model is based on four types of R&D activities.

1) Transfer Technology Units or units established to help certain foreign subsidiaries transfer manufacturing technology from the parent while also providing related technical services for foreign customers.

2) Indigenous Technology Units or units established to develop new and improved products expressly for the foreign market. These products were not the direct result of new technology supplied by the parent organization.

3) Global Technology Units or units established to develop new products and processes for simultaneous application in major world markets of the company.

4) Corporate Technology Units or units established to generate new technology of a long term or exploratory nature expressly for the parent.

Types of organizations

To discuss the various organizations which can be used for global R&D, the model developed by Perlmutter (1965) as described in the book Managing the Global Firm by Bartlett, Doz and Hedlund (1990) will be applied. Although Perlmutter's model was developed to describe different types of organizations for multi-national corporations, it is not unreasonable to apply the same models to the organization of global R&D units.

Perlmutter's 3 organizational structures are:

1) Ethnocentric - overseas operations are managed primarily to protect the company's competitiveness in the home market. Communication and information is top down and all strategic decisions are steered from corporate headquarters. Subsidiaries sell products designed and manufactured by parent with little or no local control.

2) Polycentric - overseas subsidiaries take more responsibility adapting designs and manufacturing product to meet local needs. Subsidiaries are managed as independent units with minimum interference from headquarters.

3) Geocentric - all units of the organization are in close communication. Global market segments are defined and technology is transferred rapidly to sell more or less the same product worldwide maximizing economies of scale both in production and R&D.

EVALUATION

The Perlmutter/Ronstadt Matrix

The following matrix illustrates one way in which global R&D can be discussed. It is of course possible that a corporation can manage its R&D activities differently depending on the type of technology unit. For example, a transfer technology unit might be treated polycentrically while a corporate technology unit may be managed geocentrically. However for the sake of this paper the various types of technology units will be discussed individually with no significant attention paid to the communication flows between the different types of technology units.

Ethnocentric Transfer Technology Units (ETTU)

ETTU's assume that the subsidiary does some manufacturing for the local market. In an ethnocentric company the transfer of technology from the parent to subsidiary is based on the transfer of a finished design to be implemented in local production. This design was originally created to meet the needs of the parent company's home market and is transferred to the subsidiary in an opportunistic fashion. A positive reaction to this product from the market might be considered "good luck" because no real consideration was taken to local market need by the parent company. These R&D units could be located anywhere in the world, however, their responsibility is limited to adaption of the design from headquarters to the local manufacturing facility.

Ethnocentric Indigenous Technology Units (EITU)

The indigenous technology unit cannot exist by definition in an ethnocentric corporation since the local subsidiary would not be allowed the freedom to develop and manufacture product specifically for the local market. This type of operation could represent a transitory position from ethnocentric to polycentric.

Ethnocentric Global Technology Units (EGTU)

In the strictest sense EGTU's cannot exist since in an ethnocentric organization a global technology unit is based at the headquarters and although simultaneous introduction of new technology may occur to capitalize on global scale, the product is primarily designed to meet the needs of the home market.

Ethnocentric Corporate Technology Units (ECTU)

Corporate Technology units are quite compatible with ethnocentric organizations. The ECTU is located in the headquarters and is focused on securing the long-term development of new technology or evaluating applicability of alternative technologies and processes for the parent corporation.

Polycentric Transfer Technology Units (PTTU)

If the polycentric corporation maintains transfer technology units, they will be located in the headquarters and used to transfer product designs or manufacturing technology to the subsidiary to then be adapted by the local organization. If a subsidiary were to develop a technology or design that is applicable to another market, the transfer would take place via the PTTU at the headquarters since there is no mechanism for communication between subsidiaries.

Polycentric Indigenous Technology Units (PITU)

The indigenous technology unit fits best in a polycentric organization. The freedom that the polycentric organization allows is an excellent environment for the development and manufacturing of products specifically for the local market.

Polycentric Global Technology Units (PGTU)

To operate global technology units in a polycentric organization would be very difficult since the various local organizations are accustomed to making adaptations to fit their local markets. If, for example, a PGTU, were to develop a product to be applied simultaneously around the world, the design would need to be so flexible as to allow for local adaption and additional time must be allocated, not only for product adaptation, but also for internally selling the concept to the relatively independent polycentric subsidiaries.

Polycentric Corporate Technology Units (PCTU)

Corporate technology units in polycentric companies operate as suppliers to the local subsidiaries. Probably located at the headquarters, the PCTU would "sell" to or take assignments from the local R&D units to evaluate new technologies or materials. The PCTU functions as an advanced research laboratory for a number of more application oriented units in the subsidiaries.

Geocentric Transfer Technology Units (GTTU)

The transfer technology unit is extremely important if the geocentric organization is going to function successfully. Transfer technology units can be located anywhere and have the responsibility for surveying best practices or new innovations throughout the company and implementing them or cross fertilizing wherever applicable. The GTTU can be either a formal organization or an informal function of all R&D units.

Geocentric Indigenous Technology Units (GITU)

Although indigenous technology units could exist in a geocentric corporation, it is contra the fundamental goal of that type of organization. In a properly functioning geocentric R&D unit, no new product would be developed in a subsidiary without striving to incorporate the needs of the global market. It could occur that a market segment were defined in a local market that was not evident in any other market and that this segment was deemed important enough to justify a specific product being developed. In this case the development might be executed in the local development organization or in some other subsidiary where a special competence was maintained, thus the concept represented by the GITU is not truly applicable.

Geocentric Global Technology Units (GGTU)

Global technology units capitalize on the open communication between subsidiaries around the world to maximize global scales in R&D, manufacturing, and marketing. Although global technology units can function well even in ethnocentric organizations the geocentric corporation's ability to leverage a global base of technical know-how and human resources gives a clear competitive advantage.

Geocentric Corporate Technology Units (GCTU)

In a geocentric organization, corporate technology can be located in a single unit anywhere in the world or it may be comprised of several different units carrying the responsibility for different areas of technology. The corporate technology function may also be divided between a number of R&D units with specific product responsibility (i.e. global technology units) which manage a segment of the corporate technology function based on their unique competencies. For example a global technology unit that is primarily focused on developing a product that requires special heat resistant plastics may also be responsible for the corporate technology unit for all heat resistant plastics for the entire company.

CONCLUSIONS

It should be noted that this Perlmutter/Ronstadt matrix would require more in depth analysis in order to confirm its viability as an evaluation tool. In this brief analysis some general conclusions can be drawn.

Ethnocentric

The first and maybe most obvious conclusion is that ethnocentric R&D organisations are not functional on a global scale. This does not mean that a company with ethnocentric R&D is not a global competitor. A company may be a global leader in their industry, however this would imply an industry in which the product is a relatively unimportant element of the marketing mix. This could be true of such products as Coca Cola or Chanel perfume. Another alternative is that the company has created a temporary monopoly for example with patents as in the case Astra and Losec.

Polycentric

As regards polycentric and geocentric organisations it could be concluded that both are equally functional for global R&D but the choice of organisation styles depends greatly on the nature of the industry.

Polycentric organisations are particularly applicable to industries in which there are large variations in the needs of the market. The food industry is a good example where companies like Unilever and Nestlé must develop products that meet the local tastes of consumers around the world.

The key to the polycentric R&D organisation is the indigenous technology unit which carries the responsibility for creating products that secure the company's success in the local market. The transfer technology units work to avoid simultaneous development of products in different markets and to cross-fertilize best practices or to transfer new knowledge from the corporate technology units.

The corporate technology units fill a secondary, but important role to the indigenous technology units. The corporate technology unit is not under the pressures of supplying the market with new products and can therfore fill the role of technology consultants looking ahead, evaluating and developing fundamental technology that will be fed to the more operative R&D units locally.
Geocentric

A geocentric organization is advantageous for industries in which market needs can be defined or segmented globally with little or no variations from country to country. In fast pace industries with short product lifecycles, a geocentric organisation for R&D gives the benefit of developing a large number of competitive products for immediate global introduction. The geocentric R&D organisation is a child of modern times, completely dependent on high speed telecommunication, jet travel and computers.

The driver in this type of organisation is the global technology unit. These units must be well coordinated to avoid overlapping, however, properly managed the geocentric global technology units operate as one R&D department with a number of complimentary projects being executed simultaneously. Although inconvenienced by geographical distance, the project teams are in constant communication. The corporate technology units in a geocentric organisation are crucial and although they can be located anywhere in the world they should be clearly separated from the global technology units. This will ensure that the corporate technology units are focused on long term technology development which will secure the future of the corporation.

Lie Number Three: "Our product is at the end of its lifecycle!"

2006-07-22T00:56:00.000+02:00

Every product will eventually reach the end of its lifecycle. Some marketers use end of lifecycle as an excuse for there own lack of ability to address challenges of a competitive environment. Most products are not at the end of their life but need repeated rejuvenation. These rejuvenations are not really new lifecycles just product updates. A product like a Ford has been developed, recreated and improved many times over the years but I would argue that the fundamental product lifecycle of the Ford is still alive and kicking.

When your product has reached the end of its lifecycle you will know it! No one will want to buy your product or the products of your competitors. It won’t be a question of how to upgrade the product but how to replace it. In Sweden there is a classic example of a product that reached the end of its lifecycle the classic case of FACIT. FACIT manufactured the “adding machines” and realized far too late that electronic calculators would turn adding machines into one of the dinosaurs of the office. The adding machine truly reached the end of its product lifecycle. Most of us work with products and services that are not at the end of their lifecycles. If you begin to think your product is, it is probably just time for the next version.

Lie Number Two: “We are a commodity industry”

2006-06-28T10:21:00.000+02:00

You might argue that some industries really are commodity industries if they sell sand, iron ore or oil. I would argue that any business that succeeds for any period of time is surely differentiating itself in ways that are valued by its customers and therefore even if their products are highly commoditized their product offer is not.

I have heard people in many different industries say “we are a commodity industry”. Very early in my career I worked as an export sales manager for a small Swedish company that manufactured welding wire (basically just steel wire for those who don’t know). In that job I could argue for hours about why our product was better that the competitors and worth a small but very important premium. A great many customers paid that premium in order to improve the quality of their own products and manufacturing processes.

Some years later I spent 10 years with Whirlpool, the American whitegoods company, in various marketing and sales positions and let me tell you that people in that industry work very hard to differentiate their products. I don’t know how many times I’ve heard people say that a refrigerator is a refrigerator but the reality is that there is a great variety of appliances on the market and it is not the case that it is only the cheapest ones that sell. Even within what might be called a low-price segment competitors strive to differentiate their products.

Today, it is not uncommon to hear people talking about the commoditization of the telecom industry. On the surface it may appear that everyone is offering more or less the same thing: “A phone call is a phone call!” but nothing could be farther from the truth!

The other day I was talking to someone on the telephone. I was at my office but he was driving through the Swedish countryside in his car. He had a very bad connection and several times the call got cut off and he had to call me again. Finally, I asked him if he was a customer of my company (TeliaSonera). He admitted that he was not. He had recently switched from us to another operator because they offered him a slightly cheaper price-plan. My reply to him was that their price plan still seemed to be very expensive since their phone service was so poor. He laughed and we continued our conversation. A few days later he called and told me that he had changed back to my company. He had been thinking about what I had said and come to the realization that for a small difference in price he received much better quality of service from us. He said “I want to have a cell-phone so that I can make calls wherever I am and if it doesn’t work when I need it to I might as well not have one.” (In reality he probably paid more to the other operator with a poorer network since many price plans are more expensive to open a new call than to continue and old one.)

My point is that although many people talk about their business as if it were a commodity there are very few industries that truly are commodity industries. If you think you are working in a true “commodity industry” ask yourself why your company stays in business? What is your company’s competitive advantage? I think you will discover that although there may be great similarity between the products and services you and your competitors sell the actual offering you make to your customers may vary greatly. Your company may be perceived as being more reliable, giving better service or maybe just more likeable than your competitors. Whatever the differentiators are they are valuable and must be developed and managed. Customers don’t buy products they buy an offer that satisfies their needs. Even if your product truly is a commodity your offer to the customer which includes the commodity may very well be unique.

Lie Number One: Price Erosion

2006-06-25T09:28:00.000+02:00

Inspired by Guy Kawasaki’s talent for identifying the “untruths” of the business world I thought I would try my hand at a few. The first on is the illusion of price erosion.

Prices do not erode! What erodes is a company’s ability to be more successful than their competitors at satisfying customers. So called price erosion doesn’t happen to individual companies, it happens to entire industries. When an industry experiences price erosion it is really an expression of the fact the players in the industry are achieving less and less diversification between themselves. When everyone offers what appear to be more or less the same products and services prices fall. Price erosion is only a symptom or evidence of the lack of innovation within an industry. Managers will sometimes justify lower revenue and weaker margins by proclaiming that they are victims of price erosion. You never hear them say prices are down to due their lack of ability to outpace their competitors!

Continuous improvement in value creation is hard. Lowering prices is easy! Most companies find themselves in situations where they are compelled to lower prices in order to maintain their customer base from time to time. Short-term profit margins can be maintained by reducing costs but long-term, the only way to earn more money is by creating more value for your customers. At some point in time you will reach a level of efficiency where cost reductions erode the value of the customer offer and only lead to further price reductions without additional margin. Many companies discover that although their margins are the same as a percentage they have declined drastically in real money.

If you feel compelled to talk about price erosion, make sure you keep in mind that it is only a symptom. If putting a label on the symptom helps you better understand the illness then power to you but don’t neglect the reality that your prices are eroding because your business is losing its competitive edge.

Born to Lead or Bats in the Belfry

2006-06-12T21:44:00.000+02:00

Some years ago I joined the management team of a new division that had been created in the company I worked in at that time. The head of that division gathered his new management team for our first off-site meeting so that we could "team build". Our new boss opened this meeting by saying that he had hand picked each one of us because during our working lives we had developed into good leaders. He then continued by saying that he had be born to be a leader. He explained how it had been apparent to everyone as a child on the school playground that he was a born leader. We listened to a number of stories from throughout his life that exemplified his exceptional leadership. We were to understand that although we were all good leaders, he was a "born" leader (apparently in his mind equal to "great" leader").

I won't comment on whether or not my old boss was born with, or ever developed any leadership qualities. One thing he did, however, seem to have been born without was good common sense. This weakness seems to afflict many top managers and politicians. I am never really surprised that people get crazy thoughts in their heads. I know I often have absolutely ridiculous nonsense gallivanting around the corridors of my mind. What surprises me is that many people lack the judgment to keep these absurd notions for themselves! If my boss really believed he was the greatest thing to happen to leadership since Napoleon you would have thought he would also have realized that this revelation would sound a bit farfetched for his employees who were only moderately gifted.

This blog entry skirts the issue of whether or not leaders are born or created. It is highly likely that some people may be born with more of certain qualities that give them a head start at becoming a good leader but there seems to be very little agreement in management literature about what these qualities are. In fact about the only thing that everyone seems to agree on is that there are many different successful leadership styles. Another factor that seems to be common in all successful leadership styles is empathy. The ability to understand the wants and desires of others seems to be a success factor for all types of leaders including those who use their leadership solely for their own benefit and the oppression of others. Machiavellistic leaders as well as altruistic leaders have great advantage of a highly developed empathy.

The short of it is that no one really knows how great leaders are made. We know only slightly more about what traits are characteristic of great leaders. My suggestion is that if little voices in your head are telling you that you were born to lead, ignore them!

I Believe

2006-06-07T20:09:00.000+02:00

Many years ago in College one of the assignments we were asked to do was to prepare a "Kleine Credo" or little belief system. The assignment was to write a short essay of no more than 1-2 pages describing our personal religious beliefs. It wasn’t a strange assignment since I was in a class on New Testament theology while working on a degree in Religion. ( I won’t bore you with the contents of that Kleine Credo.)

Many years later I was asked to speak to a group of employees who were going to be representing our company at a large trade show. The organizers asked me to talk about how to meet customers and give them good service. It occurred to me that it might help to remind these colleagues of just how important the work we do at our company really is and I decided to write a new Kleine Credo expressing my own opinions about the Telecom industry. Since then I have shown this for groups of people in all industries. If you cannot see how your industry is contributing to making the world a better place my recommendation is to change industry! What do you believe?

I Believe...

I believe that global competition promotes world peace.

I believe the telecom industry contributes significantly to world trade creating better opportunities to improve the quality of life for people around the world.

I believe the telecom industry facilitates better communication and greater understanding between people around the world.

I believe that we are all important members of a large group of people from around the world who have decided to cooperate in order to create these values, to create better world!

Personify your product!

2006-06-02T11:19:00.000+02:00

I was asked to speak to a group of marketing graduate students about how I used market research in my work as a product manager. As I recall I spent most of the lecture showing examples of various research we had done and how that research had helped us make necessary decisions. During this presentation two things popped out of my mouth which I had previously not thought about very much consciously prior to that day but which I have come to believe more and more strongly throughout my working life.

"A marketer should live the life of their product" or "embody their product", "personify their product"…something like that…

In highly competitive industries marketing decisions must often be made very quickly. There will not be time to do in depth analysis on every issue but a marketer who is immersed in their product and who understands the industry dynamics of their business will make the right intuitive decisions when the time comes.

There is No Escape from Marketing!

2006-05-29T21:08:00.000+02:00

I ran across Stan DeVaughn's blog entry from February 27, 2006 with the title "Marketing and Branding are high-tech wrecks" and can simply say that I couldn't have put it better myself. So many high-tech companies once founded upon their discovery of a "real" need over time seem to lose the ability to think outside in.

If you are a dyed in the wool marketeer working in a truly marketing driven organization you will have nothing to learn from this blog entry. If you are a marketing novice or a true marketeer working in a technology driven company you might want to keep reading.

Marketing has nothing to do with organization. Companies choose to organize the work of marketing in many different ways. Some companies gather all of Kotler's Ps (Product, Price, Place, Promotion) in the same organization while other companies have a marketing department managing advertising and the rest of the Ps are distributed throughout the organization. (Some companies don't even have a marketing department.)

Marketing describes how companies understand customer needs and satisfy them for a profit. To paraphrase Kotler marketing is all about what product to sell …to which customer…at what price….how will the customer find out about the product, buy it and get it delivered? (And what will the competitors do about it?) All companies do marketing. Whether it be done poorly or well, consciously or unconsciously marketing cannot be escaped. No matter how your particular organization organizes the work of marketing success depends on your ability to manage the balance and/or trade offs between the 4 Ps (the marketing mix).

Imagine a company where a market research department works with customer insight to identify customer needs, a product development department creates new products, a pricing manager sets the prices for the products, a market communications department does the advertising and the sales department defines a distribution strategy. So far so good?

Now imagine that none of these groups coordinate their activities with each other and in the event that they ever do meet it is not clear who really makes the decisions. These companies do exist and most often the people running the show in companies like this are the product development people. In the end they are making products with little or no input from the people with the customer insight and the rest of the organization has to do their best to try and sell them or the company will go bust. These types of companies are doing marketing (albeit poorly) whether they realize it or not. Because product development has created products that were not optimized to customer needs the company will compensate by increasing advertising expenditures and paying higher commissions to its dealers and/or with lower prices to the end users. This is managing the marketing mix.

Imagine, on the other hand, a company where the people with the customer insight (not the salespeople) are defining the requirements on new products including retail pricing, commisions and gross margin. Product development creates the defined product with the right performance and price. Promotion of this product will be very cost effective since the product so clearly meets the customers real needs at a reasonable price making the sales departments job much easier. Companies like this do exist and they are usually the leaders in their industries or they are hungry small companies de-throning the old industry leaders.

The "Behave-Atudes"

2006-05-26T08:42:00.000+02:00

A strong understanding of your customer’s behaviours and attitudes as they relate to the products and services you sell is one of the keys to successful segmentation and the success of your business. Many large companies (with large resources) develop sophisticated processes for segmenting customers based on behaviours including quantitative and qualitative research, data mining and complex analysis models. Many refer to these segmentation models as “Needs Based” segmentation, however, the needs are normally never really identified but rather extrapolated (guessed at) from demonstrated behaviours and or attitudes.

When trying to understand the fundamentals of your customer’s behaviours and attitudes regarding your products and services two key parameters should be evaluated. How interested or how engaged are they and how frequently do they use the product or service.

The diagram demonstrates the four generic behavioural/attitude (Behav-Atudes) categories that can be found in most industries. Depending on your specific product or service the size of each group will vary but you will likely be surprised to find that there is almost always a sizeable group in each category. The offerings you make to each group as well as the way you communicate to each of these groups should be adapted to their specific behaviour/attitudinal position. Identifying your customers Behav-Atudes can give you a real competitive advantage or even lead to discovering new ways to solve the customers underlying needs by substitution making your products obsolete and redefining your industries.

The Four Generic “Behave-Atudes”
( You will likely find names for the Behave-Atudes that describe your customers from your industry perspective that are much better. Feel free!)

Professional

Individuals who are actively interested and frequent users of products and services like yours could be called Professionals. Not because they necessarily use your products in their professions but because they are typical very knowledgeable and have strong opinions based on a great deal of real experience of the products or services. Insight gained from these users can contribute significantly to further product development. Branding is very important.

Enthusiast

Enthusiasts are people who are very interested but not frequent users. Among these you will find people who have expensive kitchens but who eat most of their meals in restaurants or people that have a fully equipped carpentry workshop in their garage for hobby use. These users can be very talented and sophisticated despite having less “real” experience than the professional. Branding is important in this group.

Funtionalist

These people will use your products and services occasionally but are really not interested in the products. As long as the product works they really don’t care very much about design, branding or extra accessories. Simplicity is key with these customers since these users will not spend time learning to use your products or services.

Rebel

Rebels use your products and services often but are not at all interested in them. They may drive their car much more than the average car owner or use their cell-phone much more than other people but they view the product only as an means to an end. These users view products in the same category as commodities and are very price conscious. They seek basic functionality and ease of use. It is not uncommon to find users with negative attitudes about your products despite being frequent users. These people often feel forced into using the product or service.

Corporate Spirituality

2006-05-19T19:26:00.000+02:00

At first glance it is tempting to conclude that people in large parts of the developed world have become less religious. The question is, however, if we haven't simply changed religions. Could it be that we are just as religious as ever but the focus of our worship is different, our ceremonies and rituals are clothed in other symbols and our clergymen are found in other institutions? In William James book "The Varieties of Religious Experience" he states that religion is "the feellings, acts, and experiences of individual men in their solitude, so far as they apprehend themselves to stand in relation to whatever they may consider the divine". He goes on to define "divine" as whatever the individual "felt to be the primal truth". With these definitions of religion it becomes much easier to begin to identify our new gods and religious practices. In fact, I suspect that there are a great many new religions which are fullfilling mans need for religious experience. However, I will keep my focus on the modern business environment. There is a strong argument that the business world of today is built upon a largely spiritual foundation and that there exists a corporate religion which is the glue holding these organisations and even entire market systems in order.

It is not my ambition to condescend those activities and institutions of business life that will be discussed here. Nor is it my goal to ridicule the "traditional religions" or religious people. My goal here is to attempt to understand business life, management, and organisation from a different point of view. One that might give us better insight into the workings of the organization as well as the individuals that comprise them. Management theorie has been primarily scientific in its approach. This has led to a great number of theoretical models of organizations from more or less scientific orgins. In "Images of Organization" by Gareth Morgan the point is made that the metaphors we use in decribing an organization imply " a way of thinking and a way of seeing that prevade how we understand our world generally". Any metaphor we choose will open possibilities but also create limitations. A metaphor is by definition "like" or similar to the object of comparison. It is not the same as that object and therefore even if it may given insight as to how the organization works it will also mislead. The problem is then to ascertain which of the "insights" are correct and which are faulty. By trying to understand organizations and business life as religious expression we may find ourselves in the same perdicament, however, there is a good chance that this will not fall into the same trap as other metaphors because it may not be a metaphor. I could be that our business life is in fact a part of mans search for meaning and his attempt to fill his spiritual needs.

In an earlier blog entry i introduced the “Holy Trinity of Sustainable Growth” (Customer, Employee and Shareholder) in which I argue that over the long-term it is impossible to create value for one of these stakeholder groups without creating value for all of them. As with the “Holy Trinity of Christianity” most of us cannot credibly describe the relationship between the three entities even though we believe there is a relationship. Everyday we hear references to “the market”. There are events that happen in the market or we are told that the market has behaved in one way or the other. Has this market become our new god? A vague entity that effects all of our lifes. An entity that is omnipresent (everywhere at once) and as close to omniscient (all knowing) as anything else we know.

Business gurus are the priests of our time and weild as much power over society as the priests did hundreds or thousands of years ago. Our holy scripture might be described as a limited number of books by a few holy apostles like Maslow, Pavlov, Kotler, Porter, Kotter and Drucker. Everything else written in management literature could be seen as exergesis on these apostles fundamental themes.

In my own management experience I find that it is much easier to gain acceptance for my theories or “beliefs” than it is to get critical, analytical views. It seems to be easier to believe than to think and analyze.

We need to be alert to the fact that we humans find ourselves so easily believing. We must learn to exercise our free wills and our intellects to continuously question and analyze reality as best we can perceive it and make the best possible decisions from time to time. Companies that strive to create a common belief system risk eliminating critical thought and will surely loose their competitive edge.

Drugs, Sex and Rock n Roll (continued)

2006-05-11T07:20:00.000+02:00

I received a comment from Kfir Pravda asking me to clarify my view on how fundamental human needs drive decision making in a B2B environment. (To see the original blog entry click here)

Following is my response:

All businesses are either providing a product or service which directly satisfies a “real” customer need or they are part of a value chain that in the end will satisfy that need. Nobody really wants to buy a complex managed service solution or a rock crusher. The only “rational” reason for buying either of these is that they in some way make it easier for you to satisfy your customer and your customer should never buy your product if it doesn’t in some way improve their offer to their customer and so on!. In highly competitive industries (virtually all industries) understanding the full value chain from beginning to end can give you the insight to gain a competitive advantage over others who are simply focused on their part of the value chain.

All decision makers are human and base decisions on what satisfies their needs. Decision makers in B2B environments understand what requirements need to be fulfilled in purchasing a managed service or a rock crusher. Even if the requirements are expressed in technical and economic terms the underlying motivations of the decision makers are Maslowian. They want to be perceived as talented, successful, get bigger bonuses, promotions, etc. Sellers in B2B should always be thinking about how they can make the decision makers life better!

The Paradigm Erupts (The disruption of the Telecom industry)

2006-05-09T11:43:00.000+02:00

The great philosopher Leibniz (born 1670) said “Reality cannot be found except in One single source, because of the interconnection of all things with one another.” Although certainly not his intention this statement rings true for the Telecom or IT industries today. In the very near future everything from our breakfast cereal to our heartbeats will be connected.

What if telephones of the future will be no larger than a dime and cost less than a dollar?

If telephones could be very small and very inexpensive would we still have only one telephone each or would we have hundreds? Would they just be laying around everywhere or would they be built in as an extra feature or component of all sorts of other products?

What if our customer identity moves out of the SIM-card and into our driver’s license or maybe in a “chip” implanted under the skin on our neck. (My cat has one and horses often have them.) If someone would borrow your telephone, the telephone will automatically identify them and charge whatever calls they make to their bill. While they use your phone they have access to all of there own telephone numbers, calendar and anything thing else they want to access (files, entertainment, photos, music, whatever). When you take the phone back it switches back to your identity and your content. In short, what if you have access to all of your personal content with whatever device you have access to wherever you happen to be without the limitations of the memory capacity of the device?

When I connect my customer identity to a device the size of a dime and lay that little phone on top of a TV or a PC or a screen in my car or a Palm in my pocket I can see my content. None of this is technologically farfetched, however, there is still a great deal to do on the commercial side of things to understand what products and services with which business models will generate revenue for what companies.

There is a convergence of everything to everything.

Telephones have become computers and computers have become telephones. We can watch TV on phones or over the internet! Any decent telephone contains a camera and a Mp3 player. Cameras are getting SIM-cards so they can automatically send your photos to your computer or your server supplier. Some gurus claim that this is not really convergence but divergence. To avoid getting caught up in semantics, maybe the best thing is to say that from a technology perspective things are changing rapidly.

New disruptive technologies will impact the way we work and play as individuals! They will create great opportunities for some companies and spell out doom for others. Although it is relatively easy to see these changes happening at a macro level it is enormously difficult (impossible) to say which companies will win. It is equally difficult to know exactly what technologies to bank on or which new business models will succeed.

What are the keys to success in this brand new world or maybe I should say in this new brand world? Customers and brands have always been important and I will not fall for the temptation of saying they will be more important in the future. However, the role of brands is changing as are the tools we use to build brands. TV advertising has been the most powerful tool for building strong consumer brands for 50 years. Viewers are opting out of traditional TV for other forms of entertainment or they are fast forwarding or simply hoping over commercials on digital channels. New media consumption behaviors require new marketing know-how. Consumers are becoming immune to traditional brand promises. Volvo’s promise of safety has gone from a powerful driver of the brand to being a prerequisite for any carmaker competing in that customer segment. Whatever else a BMW, Mercedes or Volvo may aspire to be in the hearts and minds of their customers they must also me safe.

This is not a paradigm shift, it is a paradigm eruption!

The expression “paradigm shift” at best creates a mental picture of one state of things that will shift to another state. What we are witnessing is more like an eruption in which there are so many parameters and so much change happening simultaneously that it can hardly be called a shift. When the dust settles many of the winners (not all) will simply have been lucky. They will have gambled on the right technologies and services. Organizations need a certain amount of stability to operate. The agenda cannot be changed completely everyday! Paradoxically, despite the fact that technology is radically changing the way we live and work, our fundamental human needs remain the same. Here we find the underlying stability we need to run our businesses. Fundamental human needs change very slowly, if at all. I am sure that a traveling business man in Roman times would have wanted to call home to his wife and his office if he could have. The need was there but the technical solution was not. As technology advances we find better ways to satisfy our needs. Our behaviors change but the needs that drive these behaviors do not.

Maslow will move from the marketing department to the boardroom

Companies who build their visions and strategies around satisfying these fundamental needs by means of whatever technologies best happen to suit them at the time will succeed. Companies who entrench themselves in technologies and then look for commercially viable applications will falter. Maslow will reign supreme and move from the marketing department to the boardroom.

Tips for success in this “New Brand World”!

Focus on fundamental human needs
-Shift from acquisition to retention (Anyone can win a customer, winners keep them)

Be open minded
-Don’t defend old technical solutions or business models (Kill your darlings)
-Accept that you don’t know what tomorrow holds

Experiment
-Failures are inevitable! Expect, Accept, Celebrate and Learn from them!
-Move on!

Have Fun!
Be fearless in the face of change. It’s a great business!

The World's Shortest Marketing Plan Version 2.1

2006-05-04T23:14:00.000+02:00

I am learning everyday about the power of the digital universe. A couple weeks ago I published my "World's Shortest Marketing Plan" where I gave myself the challenge of making a marketing plan template that was reasonably comprehensive and could fit on a single powerpoint page. This was my reaction to many of the marketing plan templates I have seen and worked with that are just to long and complicated to get your arms around even as a seasoned marketer and damn near impossible for a novice.

My short template got some attention on my blog and then I got an email from Guy Kawasaki, one of the true business blog gurus. Guy suggested that we adapt my template with a new version of the 4Ps created by another blogger named John Sviokla. John’s 5Ps do a great job bringing Kotler into the digital universe. His blog is well worth the read!

In short Guy improved the content of Kelly’s blog by adapting it with content from John’s blog.

Following is the new hybrid! Let me know what you think and do take a look at Guy and John’s blogs!

To view a word document version click here.

If you ever get anything right it was probably a mistake

2006-05-04T21:21:00.000+02:00

“Stand still, I'm trying to shoot you!”

Some years ago I took a course to get a hunting license. One of the things we had to do to qualify for the license was to shoot a paper target shaped like a moose moving back and forth on a track at a distance of 80 meters. The target area on the moose was about the size of a basketball. Having had very little prior experience with weapons it came as a great surprise to me that in order to hit the target area I had to aim at a place where the moose wasn’t. It didn’t take very long to learn how to aim just far enough ahead of the target so that the paper moose would run into the bullet. On a shooting range there are very few parameters to keep in mind when shooting the paper moose. The moose travels in a straight line in one direction at a constant speed. (I have since learned that moose do not do this in real life.)

The problems we face in business are normally much more complex with many different parameters to consider and each of these parameters is itself mutating, developing and changing over time.

“You can’t step into the same river once”

About 2500 years ago Heraclytus wrote that ”You cannot step into the same river twice!”and Cratylus, one of his disciples, went a bit further by saying “You can’t even step into the same river once!”. This pretty well sums up my day to day working life.

As managers we continually confront various problems (or issues and opportunities to be politically correct). We define the current situation, identify the ideal future state, evaluate various alternatives and finally develop and implement an action plan. This model more or less describes the common steps in all change and/or development models. Everyone who has worked with change initiatives knows how challenging they can be. Unfortunately, many changes initiatives are doomed from the very beginning for at least a couple of key reasons.

Lots of small errors can make on hell of a mess!

Much of our analysis is based on assumptions, educated guesses and sometimes wild fantasies. Don’t get me wrong, I would rather have a best guess from a competent colleague than no information at all but none the less many of the problems we face in business are so complex that even small errors in a number of basic assumptions multiply into significant deviations in the final analysis.

If you ever get anything right it was probably a mistake.

We forget that we are shooting at moving targets. We define the problem based on our knowledge (or perceptions) in current state but by the time we have completed our analysis and defined our actions the problem has already evolved into a new state. Most change initiatives take time to implement and by the time the actions are in place the problem the changes were designed to resolve is so different that our changes may at best have no effect at all and at worse might have put us into an even worse position than if we had done nothing at all. In extremely dynamic environments you might say that if you ever actually get anything right it was probably a mistake.

Drugs, Sex and Rock n Roll

2006-04-30T09:41:00.000+02:00

Nobody wants what your selling! This is a reality for every industry in the world no matter what you are selling! I often joke and say if you are not working in one of the three primary industries (Drugs, Sex and Rock n Roll) then you are working in a support industry. This is closer to the truth that many might think. Whether you sell Ferraris or dialysis equipment, whiskey or washing machines your customers are only interested in the improvements your product or service can make in their lives.

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!

Leaders not living up to expectations!

2006-04-25T07:20:00.000+02:00

I am often asked to speak to groups of middle and senior managers about leadership. When I meet these groups I usually start out by asking them to think about all the bosses they have ever had and raise their hands if they think their bosses have been satisfactory or if they have been less than satisfactory. This is certainly not a scientific study but after having done this a few hundred times I have drawn some conclusions.

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!

The World's Shortest Marketing Plan

2006-04-15T10:29:00.003+02:00

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.

Management at its worst!

2006-04-13T19:25:00.000+02:00

Following is an email that was sent to me some time ago by someone who attended one of my speaking engagements.

From: .........
Sent: ..........
To: kelly@thinktank.se
Copy: .........
Subject: What should I do?

Dear Kelly,

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?

Yours truly,
…………..

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!

Stop Kicking in Open Doors! Go Through Them!

2006-04-11T19:27:00.000+02:00

When I am out at various speaking engagements I am frequently surprised at how easy it is to get managers and employees to accept and agree to various management concepts and yet how hard it is to get them to apply these concepts when they get back home in their work

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.

Civil courage!

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!

Discipline

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.

Passion

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!

The Path to profitable growth goes through the heart not through the balance sheet! (Part 3)

2006-04-10T23:29:00.000+02:00

Long-term sustainable growth is the result of creating value for the Holy Trinity of Customer, Employee and Shareholder. Growth is the reward companies reap when they succeed in satisfying the needs of these three groups.

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.

The Path to profitable growth goes through the heart not through the balance sheet! (Part 2)

2006-03-29T21:32:00.000+02:00

Another fundamental building block of growth is to create what many call an innovation culture within the company. Creating an environment where everyone takes risks and where failures are seen as learning opportunities. Many companies strive to minimize risk or even eliminate risk but as anyone who ever took a basic course in economics knows "the higher the risk the higher the return". If our focus is risk elimination we are in essence simultaneously dooming our business to profit elimination. Creating growth involves taking risks and making mistakes. Growth doesn’t come easy and it is inevitable that growth companies will take the wrong path from time to time, learn from their mistakes and move on. Businesses that understand this encourage risk taking and even celebrate failure.

Many years ago I was asked by a Vice-President of the company I was working for to lead a difficult and important project in addition to my normal line manager job. After about 9 months we concluded that the project would not succeed and the project was closed down.

The Vice President then asked me to give an internal presentation with my reflections about why the project had failed and what we as a company should learn from the experience. I was both surprised and nervous when I found out that he had booked an auditorium and about 100 people were to attend the presentation of my failure. Before I started my presentation the VP went up on the stage and thanked me and my project team for accepting such a difficult and risky project and for working so diligently. He then presented me with a gift certificate worth $1000 from our travel agency as a token of appreciation for my effort. This is a great example of celebrating failure. In a very simple way he demonstrated to me and everyone else that not reaching difficult goals could be deemed a success if lessons where learned.

Several months later the project was restarted and within a year was successfully completed. Everyone involved agreed that the learning gained from our previous "failures" played a significant role in the successful outcome.

The Path to profitable growth goes through the heart not through the balance sheet! (Part 1)

2006-03-28T19:42:00.000+02:00

Most business leaders agree that growth is a prequisite for success and yet few actually succeed in creating sustainable long-term growth. One key problem is that companies attempt to create growth by focusing on results instead of working to create the right behaviors in their organizations that will lead to results.

In order to create growth we must view organizations as groups of people who cooperate with one another of their own free will to achieve common goals. People use resources in processes to achieve results. although we often speak of employees as resources they are not infact resourses they are the value creators who use and manage resources. If we accept this description of organizations then it follows naturally that we should focus our management attention on the behavior of the people in the processes much more than on the end results.

Companies have always focused on growth even if the factors that drive growth have changed over time. Long-term growth has always been about being in phase with the world around you and a step ahead of your competitors.

There was a time when owning production resources was the key to success. If you owned a factory producing almost anything the supply was greater than the demand. Growth was driven to a great extent by your ability to develop and manage your production resources. In that environment, competition was often local and the end-users alternatives were limited.

Today growth comes to those companies who win in competition with the best companies in the world and there is an overcapacity in production for almost all products and services. . As a result of the easy access of information created by the internet, even industries that are not yet confronted with a well developed global competition find themselves forced to meet expectations of end-users as if the best companies in the world existed in their home market.

Consumers that enter a home electronics store are often more knowledgeable about the product they seek that the people working in the store. A patient can have a deeper understanding of the details of their particular illness than a general practitioner (or at least believe they do). In this environment victory comes to those companies that best understand and manage the customer relationship. Owning the customer relationship becomes much more important than owning the factory.

Companies that successfully win and keep customers will find solutions to manufacture their products and services but companies who excel at production but lack the skills required to retain their customers will inevitably fail.

This message is difficult to accept for companies that have built their success over many years based on manufacturing or technical superiority and this message is equally true for both product and service oriented companies. Many companies have placed their faith in their technical capabilities and believe that if your product is good enough then the customers will come to you. Unfortunately, this is only true for a select few companies. Most companies compete against competitors with similar products and services where operational excellence and customer intimacy are the deciding factors not product quality and features.

Business Leaders Majoring in the Minors

2006-03-17T19:10:00.000+01:00

Many business leaders run their business on a combination of financial targets and ratios that at best give a view of where the company has been but say nothing about where the company is going. Despite the common use of Vision statements and balanced scorecards with targets for customer satisfaction and employee satisfaction, business leaders frequently find themselves stuck in the hectic race for short-term financial targets.

Managers find that they are perceived as successful by their superiors even if they miss so called "soft" targets as long as they reach or exceed their financial targets. The opposite, however is frequently not the case! Line managers who achieve good results on non-financial targets like processes, or employee and customer satisfaction but miss short-term financial targets are typically not as well thought of.

Profit is the result of successful business. But these profits are the result of people managing processes to create goods or services which satisfy customer needs. It is logical then that to increase profits managers must focus on the behaviours, processes and customer needs that create outstanding financial returns not the returns in themselves. One major problem with this way of thinking is that managers have very little knowledge in the behavioural sciences and therefore find it very difficult if not impossible to define which key customer needs to focus on and what employee behaviours will satisfy those needs.

Many companies spend large sums of money researching customer and employee satisfaction but many researchers admit that the real value of the research seldom reaches line management. Managers may have targets in their balanced scorecards to improve customer and employee satisfaction but they get little or no help in defining the changes necessary for reaching these goals. Instead managers do what they know best; cut costs, eliminate risk, focus on technology and lower prices to gain new customers or retain old ones.

Cost cutting is justifiable when changes in the environment make it possible to satisfy customers as well, or better than before with less cost. Managers have difficulty knowing how cost-cutting will impact customer satisfaction and often find out the hard way after the fact.

Trade is a prerequisite for lasting peace

2006-03-16T18:55:00.000+01:00

International trade is a prerequisite for lasting peace in the world. Our soldiers and police are doing everything they can to protect us from the immediate threat of terrorism. They may be our peace-keepers but it is our international corporations and the people working in them that are our peace-creators. International business, like local business, is all about building long-term and mutually beneficial relations. It is therefore crucial that we develop the skills necessary to develop and maintain relationships with people all over the world in vastly different cultures.

The greater the economic interdependencies become between nations or regions in the world the less likely we are to find ourselves in violent conflicts. Simply stated, if I am dependent on my neighbour for my own survival I am not nearly as likely to pick a fight with him!

When large groups of people are excluded from the global economy, their poverty leads them right into the hands of men like bin Laden, Hitler or Stalin. These men all offer or offered poor oppressed people a chance to fight back against a world that had not set a place for them at the banquet of international economic development. Dire poverty created the inertia for the growth of communism. Following the First World War, a beaten and disillusioned Germany could not regain its footing to a high extent as the result of the isolationist spirit of the times. Foreign investment following that war was at all time lows and it was virtually impossible to rebuild industry. This created the opportunity for an insane man who promised a return to greatness for the German people. Today, terrorist like bin Laden gain support from people who truly have nothing to lose. Hunger is indeed a powerful motivator! The riots in India following the demolition of a mosque used religion as a front for economically impoverished communities to claim land and property for their own.

Terrorism is about economics not religion! It is a classic case of the haves and the have nots. If we want to solve the problem of terrorism it is not enough to protect ourselves. We must become much more active in developing the global economy! We must demonstrate for the next generations of potential terrorists that there are real alternatives by involving them in our prosperity. This is by no means a call for charity! It is instead a call for common sense and self interest! There are enormous amounts of people longing to buy our products and services and to sell us theirs. We will not only decrease the violence in the world, we will increase the prosperity for everyone!

The Only Thing That is Constant is Change Management

2006-03-15T07:20:00.000+01:00

There is likely no subject that has been more written about or misused in management literature than topic of Change Management. Despite the virtual ocean of literature, internet sites, methodologies, and theories proffered by management gurus, university professors and management consultants around the world all serious change management thinking is based on the theory of Cognitive Dissonance developed by the social psychologist Leon Festinger in 1957.A google search gives over 46 000 000 hits and a search on Amazon.com carried over 4,500 different titles referring to "Change Management".

Is it just one of life's little paradoxes that the only thing in the world that doesn't change is "Change Management"?

According to Festinger’s Theory of Cognitive dissonance a tension arise in people when they are confronted with information that contradicts their current view of reality. Festinger stated that people choose between 5 methods for dealing with cognitive dissonance: they avoid situations they believe will produce dissonance (selective exposure); they seek out consonant information; they redefine dissonant cognitions as less important or change their dissonant cognitions; or they change their behaviour to fit their cognitions."

Change Management is all about trying to get people to choose the last of these 5 alternatives. Change management is about changing behaviour by presenting people with alternative behaviours and helping them understand the benefits of adopting these new behaviours. Typically, change management methodologies attempt to describe "current state" in organizations and develop an "ideal future state" for the group.

The discrepancy between the current state and the ideal future creates cognitive dissonance in the individuals in the group. At this point Change Management methodologies propose a variety of ideas on how best to close the gap between these two states and move the organization towards the ideal future. Typically, these "theories" propose; identifying benefits for various stakeholders (including those whose behaviours must change) of having reached the ideal state as well as risks if the ideal is not achieved, methods for developing strategies and action plans for reaching the desired position, activities for creating "buy-in" and commitment to the proposed changes, and methods for measuring and following up the progress of the change initiative.http://www.thinktank.se