Value or organising ideas and the new leadership

February 5th, 2010

One of the most potent aspects of Stellar is the way that uses value or organising ideas as a new leadership tool. Considerable support for this is provided in Margaret J. Wheatley’s influential book Leadership and the New Science. Amongst other statements, she quotes Robert Haas, former CEO of Levi Strauss & Co, who calls these “conceptual controls” and goes on to say: “It’s the ideas of the business that are controlling… not some manager with authority”. That is precisely the principle that we adopted in the development of Stellar.

As Wheatley confirms, this has the effect of both channelling or guiding the organisation and liberating its creative ability.

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Wheatley says: Companies organized around a strong identity provide a good example of how self reference works

February 2nd, 2010

According to Margaret J. Wheatley, “Companies organized around a strong identity provide a good example of how self reference works to create greater stability and autonomy (see Collins and Porras 1993; Blanchard and O’Connor 1997). When an organization knows who it is, what its strengths are, and what it is trying to accomplish, it can respond intelligently to changes from its environment. Whatever it decides to do is determined by this clear sense of self, not just because a new trend or market has appeared. The organisation does not get locked into supporting certain products or business units just because they exist, or following after every fad just because it shows up. The presence of a clear identity makes the organisation less vulnerable to its environment; it develops greater freedom to decide how it will respond.”

Source: Wheatley, Margaret J. (2006) Leadership and the New Science — Discovering Order in a Chaotic World. Berret-Koehler Publishers, Inc, San Francisco. ISBN 978-1-57675-344-6

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There is no feature of the integrated marketing model that is not dependant on the service principle.

February 2nd, 2010

Service in Integrated Marketing/Integrated Service Marketing

Premise: there is no feature of the integrated marketing model that is not dependant on the service principle.

The core principle in Integrated Marketing is service:-

  • Service is what creates value for customers and value for customers is what creates brand equity/customer equity.
  • Service differentiates the brand  – service may be equated with value when used in its broadest sense and is the common differentiator in an age of ‘product parity’ in its narrower sense.
  • The reason why IMC works – harmonised messages across media – is because it represents a service to customers/consumers.  They are looking for information, insight, choice-support, life-support, and harmonised communication provides this more coherently, effectively, meaningfully.  Hence it is implicitly a better service.
  • Organisational operations in Integrated Marketing are largely focused on service elements.  For example call centres, service personnel, even sales people. Aligning and enhancing these service people and their processes represents/generates added value
  • CRM technology input and its outputs are service focussed.
  • Leadership has a responsibility to serve company people – by providing/maintaining resources, strategy, direction, culture, policies, values etc. that empower.
  • Organisational associates – including external partners – serve the brand mission, and support /serve each other through the value stream (internal customer – supplier chain).  Service is a key cultural value through the organisational process and also a fundamental process design principle (creating value/reducing mudah).
  • Etc!

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Ads that research said would not work

January 20th, 2010

We all know that we need research to give us insight. We also know we can’t always trust the research.

Both the Stella Reassuringly Expensive ads based on the Jean de Fleurette movie and the Heineken policeman’s feet ad (“refreshes the parts…”) had research that said they would not work. Of course, both worked stunningly well.

Stella_Artois_ad

How do you judge research?

A common answer might be that you have to go with your gut instinct or experience. I think that dodges the issue. What informs gut instinct and experience?

I think you could have brought in some very experienced people from the four corners of the marketing and advertising world (including perhaps the researchers themselves) to look at these research results and asked them what their gut instinct said. Probably, you would have got a variety of answers and you would be no further forward. They might even have agreed with the research.

It’s not just a question of feel. I believe that the answer is that you have to understand the brand.

This is what informs feel, gut instinct, judgment.

True, the purpose of research like this is to help you to understand the brand and if you start out naive and knowing nothing you might have to use the best research you have and the best experience you have and proceed by trial and error.

But in more mature brands and with more experience of working with them, brand knowledge, brand feel becomes a reference point, a north star against which you can calibrate new research. All understanding, all concepts arise from the interconnection of different ideas and knowledge, just as a Roman arch holds itself up by its own structure.

That’s one of the reasons why I deprecate the rapid turnover of senior marketers in brands.

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McKinsey’s ‘innovation performance score’ rated low!

September 10th, 2009

Mckinsey have recently added a new consultancy appraoch based on a research model called IPS. I think it’s flawed.

It is reported by Jens-Olaf Berwig, Nathan Marston, Lauri Pukkinen, and Lothar Stein who explain how it works: “we compare the revenue growth of the company to the overall market and attribute any out-performance (sic) to the company’s ability to innovate”. That is pretty much it.

That seems a little flimsy to me. In my work with clients I have seen many other aspects of great business management, like clarity of ideas and persistent focus and avoiding managing tampering and quality improvements that easily lead to faster than than market performance. That is what they are designed to do. You can call it all innovation if you want – it would be to some CEOs – but I don’t think it fits the general idea of innovation.

The authors also say they “…look for revenues generated by new reporting segments within a company—either from new initiatives or from acquisitions that go beyond mere geographic expansion. This is what we call market creation (if the segment is new to the world) or market entry (if it is only new to the company). We also take into account revenues from acquisitions that lead to new products and activities, even if they are not broken out as a new reporting segment.”

Again, that seems optimistic to me. Too many acquistions represent an absence of creativity inside the company so top management and their bankers turn to acquistion to provide temporary relief. You can buy innovation but that does not make you innovative.

I think this falls short of McKinsey’s normal standards – maybe it’s in the reporting, maybe the model.

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In innovation: Don’t rush! Focus on the essential!

September 9th, 2009

Rajesh Chandy, Brigitte Hopstaken, Om Narasimhan and Jaideep Prabhu report from an outstanding study* of pharma innovation that focus in your core competence area on…

1.     a moderate number of important ideas

2.     with a moderate level of development speed

…is optimum. High speed can kill and too many ideas can yield less.

They found that the optimal speed is about nine years from idea patenting to drug approval and targets too far below or above this level can be detrimental. Also, firms that focus in technical fields where they have experience and expertise do better at converting ideas into successful drugs. Finally, firms that focus on important ideas have higher conversion ability than firms that don’t.

Two wise sayings straight from Buddha seem to apply:

  • Separate the essential from the non-essential.
  • Tune your speed to the perfect pitch

* Rajesh K. Chandy, Brigitte Hopstaken, Om Narasimhan, and Jaideep C. Prabhu (2006) From Invention to Innovation: Conversion Ability in Product Development, Journal of Marketing Research (August 2006).  Winner, 2006 American Marketing Association TechSig Best Paper Award

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Maestro needs packaging

September 7th, 2009

Joshua Bell, the violin maestro, played incognito for 45 minutes in a Washington, DC Metro Station on a cold January morning in 2007 as part of a social experiment (organised by the Washington Post) about perception, taste and consumer priorities.

He played some of the most complex and beautiful pieces in the classical canon, with a violin worth $3.5 million dollars. Two days previously, he had sold out a theatre in Boston with seats averaging $100 each.

While he played in the metro, only six people stopped to listen, all briefly.  However, a number of children tried to stop, but parents, without exception, moved their children along quickly. About 20 people donated, but most continued to walk at their normal pace.  Bell collected just $32.

The Post’s subsequent article won them a Pulitzer.

So what does this mean? Could it be any of the following…

  • When people are busy and distracted, they don’t notice, end of story. Mindfulness is needed for a good life.
  • A theatre provides a service consisting of the conditions for concentration and appreciation, and this service is worth more than the artist?
  • People don’t appreciate music (and other high arts), they admire themselves for appreciating what they know to be admirable?
  • Commentators get more attention than artists.
  • To all things there is a season, a time for hurrying on and a time for sitting and listening.
  • Unless you be as little children you will not enter the kingdom of heaven.
  • The integrated marketing contention that dissonance (the gap between the setting and the music) is a destructor of value is true.

Thoughts please.

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Challenges to achieving competitiveness in influencing the attitudes and behaviours of consumers and other stakeholders

September 7th, 2009

Research at the Centre for Integrated Marketing shows that:

1.    The world is changing: it’s more complex, the opportunities are more extensive, and the competition is smarter

2.    Customers and other stakeholders receive more marketing communication than at any time in human history

3.    There is an increasing pressure to demonstrate ROI

4.    Success requires maximum efficiency and effectiveness

5.    Current methods mean that efficiency is often not maximised

6.    Even working with considerable efficiency and effectiveness, much marketing communications remains ineffective due to the competition’s negating efforts

7.    Even working at considerable creative effectiveness, excessive costs limit impact versus the competition’s negating efforts and communication proliferation

8.    Lack of precise, accurate and shared insight into both the brand identity and its stakeholder communities diminishes performance, and this appears surprisingly common

9.    Lack of a governing idea for the communications spectrum diminishes performance, again surprisingly common

10. Failure to include all corporate functions and communication channels in planning sub-optimises performance

11. Fragmented, competitive practice, habit and payment methods in the marketing communications industry sub-optimise efficiency and effectiveness of performance

12. Narrow, discipline-specific and prejudiced communication objectives determine creative technique and goals adversely

13. Organisational structures based on excessive discipline polarisation sub-optimise performance, leading to skills, creative approach, objectives and research being channelled through silos on both client and agency side.

14. Planning and evaluation tools based on individualised communication disciplines do not reflect present planning and evaluation needs and bar inter-discipline planning and learning

15. Many communication perspectives, discourses and assumptions are inconsistent and sub-optimal.

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Touchpoint evaluation methods – analysis and research methods

August 30th, 2009

Some ways of evaluating touchpoints (including media experiences) arising from marketing communications, services etc.

  1. Pre-/post sales analysis lets you evaluate performance and see the opportunities for improved interaction with customers you do and do not have.
  2. Critical incidents analysis typically consists of in-depth qualitative research to understand how customers have experienced specific incidents as well as which are the most important.
  3. Cloverleaf mapping is a way of identifying the fundamental characteristics of a touchpoint in terms of the five elements: tangibles/performance, process, knowledge/know-how, relationship and brand personality/experience. How do customers experience these and what do they really like? Both qualitative and quantitative research can be used
  4. CODAR planning defines the communication objectives for each touchpoint. You should now evaluate success in achieving these objectives. A variety of different techniques can be employed including satisfaction research, quantitative research, brand attitude tracking and CODAR specific quantitative research. You can also collect data from sales and CRM tools and from the front line. Did customers taken out of our communication will be planned to put in? Where these the right objectives? Did they achieve the business results that you expected?
  5. Ad awareness: did consumers notice communications? Did they like them? Did they understand them and take out the message that you intended?
  6. Satisfaction research can be used to identify how happy customers are with their experience, how close it is to what they expect and how it compares with what is provided by competitors or alternatives.
  7. Channel analysis: which channels were most successful in getting customers to interact with and buy from the brand? How do customers experience the relationship between channels? What is their journey between channels?
  8. Kano analysis gives a more textured approach to understanding customer experience. Kano analysis always involves evaluation of the historic situation.
  9. Touchpoint data analysis aims to identify what information customers expect you to have and you would like to have at each touchpoint, as well as the opportunities to collect information that would be relevant at another point. As an evaluation tool it can be used to audit the effectiveness of your data collection.
  10. Event trigger analysis/planning aims to identify response rules as a result of that event. Evaluation aims to understand the relative effectiveness of different event triggers, as well as fine-grained detail. For example, if you are sending a renewal mailing, how long before contract termination should you send this, how many communications should you send (first reminder, second reminder…) and what creative works best?
  11. Usage occasion analysis: what are the situations or moods in which customers are most likely to use the product or service? As an evaluation tool you can assess how well you are exploiting these occasions, whether there is any customer change or trend, whether preliminary research insights stand up?
  12. Mood analysis: what mood are customers typically in at this particular media or touchpoint event. The same techniques as for usage occasion analysis apply.
  13. Behaviour analysis: what do people actually do at this touchpoint? How do different segments behave differently? How well did your treatment of them generate the changes that you wanted?
  14. Media analysis: what is the penetration of different media to the target audience? (Which media do target segments interact with?) How much does it cost to reach them? What type of communication works most effectively in each medium? How effective are you at exploiting this?
  15. Media receptiveness: for example, understanding the relative importance and receptivity to different media in different categories. Are you using the best mix and how well are you using it?
  16. Was your value proposition appreciated?
  17. Did you have the best offer? How did it work in terms of the overall relationship cycle and not just immediate return (brand and customer equity generation)?
  18. What did you learn from applying the U-process (which you learned about in the last module)?
  19. ROI analysis: did you make money from your communication to this touchpoint/to the mix? What is the return on investment? What is the payback period?
  20. What is the relationship between the communication effect and the business result? How do changes in consumer attitudes affect their behaviour and profitability?

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18-steps to Integrated Marketing

August 24th, 2009

18-steps1

  1. Leadership Commitment: to make a beginning and to sustain the process of change
  2. Build Core C-Level Team: the senior team need to contract to take responsibility for one or more elements within an interlocking set of objectives and organisation change projects.
  3. Organising Idea: championing the key organising idea/ideas that shape the business is the key role of leadership.
  4. Align Organisation Purpose/Brand: ensure that the organisation is designed and motivated to reflect its mission, purpose and brand promise.
  5. Customer Community Orientation: design the organisation so that it is tailored to deliver value to its different customer communities.
  6. Organise marketing by customer communities: This fuels the process of change and is a seed act that can produce a thousand blooms.
  7. Agency Partnership Process: rationalise the agency relationships into a single team partnership.
  8. Brand-Customer Community Research: the core attributes of the brand signature, the primary customer communities and their archetypal members.
  9. Customer Experience Audits and Research: by community across all key Touchpoints.
  10. Learning Company Processes: a pre-requisite for a sharing and therefore integrated business.
  11. Financial Planning, Lifetime Relationship and Lifetime Value: Integrated Marketing is a hard-headed discipline, that recognises both a necessity to make profits and the opportunity of maximising lifetime value
  12. Value Package Design: develop distinctive, high value propositions for the different financial segments within each community
  13. R&D Innovation: Integrated Marketing does not accept that it is necessary to provide me-too solutions. Genuine differentiation and added value is the only certain way to survive in a competitive world.
  14. Technology, Culture and Process Redesign: the means to deliver
  15. Integrated Communications Planning: media neutral planning and creative ideas.
  16. Integrated Communication Evaluation and Learning: a common currency for all Touchpoint/media communication and an evaluation method that accumulates data and knowledge for econometric modelling and learning.
  17. Mobilising Everyone: involving, inspiring and directing everyone.
  18. Living the Brand Mission: a goal, but also an ongoing process to nurture and manage.

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