23 Reasons Not to Talk to Strangers? Or...

...Little Red Riding Hood?

My friend and former colleague Eric Pelletier blogs in a wonderful post, Croissants and fairy tales. How storytelling makes strategy happen that

...when people in a similar context, are exposed to the same facts, they tend to arrive at the same conclusions. And so, when they're in the same organization then, they're also likely to arrive at the same conclusion about the right strategy to take the organization forward.

While he focuses on the power of getting people on board via storytelling to implement strategies, I have little doubt he'd agree about the power of creating shared conclusions on formulating a winning strategy in the first place.

In The Biggest Problem in Strategy? Mindset, I noted how the railroads in post war America missed out on growth opportunities because they saw themselves in the railroad business, not the transportation business, and how Blockbuster missed out on digital distribution, ignoring intelligence on the looming threat. While railroad efficiency made enormous strides post deregulation in 1980, it basically kept the surviving companies in the game. Rail's share of freight traffic in the US (measured in ton-miles) declined from about 75% in 1930 (A Short History of US Freight Railroads, pp3) to 28% in 2000 (Freight-Rail Bottom Line Report, pp 14). Worse, its share of freight revenues dropped to a mere 6%. Blockbuster went bankrupt in 2011, shuttering the last of its outlets in 2013. Other examples of failed strategies aren't hard to find: cell phone manufacturers Nokia and Motorola; bookstores Borders and Barnes and Noble; computer manufacturer Sun; the plethora of desktop application software firms - remember VisiCalc, Lotus 1-2-3 and Freelance Graphics and WordPerfect, all of which dominated at one time?

Storytelling works because of the evolution of the prefrontal cortex of the human brain, which helps us recognize and act on patterns. It also works, as Eric notes, because it creates a shared context, or "experience" (even if vicarious) in the tribe. 

But this pattern-recognizing ability is both a help and a hindrance, for individuals and groups. It helps tremendously when the situation is reasonably stable, but often fails us in times of significant environmental change, when we are unable to recognize new patterns. And the worst failures occur when the "tribe," and especially the decision-making leadership, is unable to jettison outdated mindsets.

The most powerful stories are the ones collectively arrived at, through shared experiences. And the most powerful of these are crises. IBM (where I worked for the better part of a decade), was able to reinvent itself in the early 1990s because the tribe members (the employees) knew there was no other choice, enabling Lou Gerstner to drive a change in the collective mindset. But it was painful, to the tune of 200,000 layoffs.

So I return to a theme readers of my blog will recognize: why not create simulated "crises" to enable decision-makers to "experience" the consequences of potential actions. Militaries, governments and airline pilots (see Chance Only Favors Prepared Minds) do this regularly. And some companies regularly incorporate scenario planning or business wargaming (among other experiential planning techniques), designed and facilitated by experts for maximum effectiveness, into strategy development.

Companies that invest in these now, incorporating the latest available intelligence on potential opportunities or threats, reap huge future returns and often avoid debilitating disasters.

Creating Winning Strategies by Changing the Dialogue

In far too many companies, "strategy" has become a euphemism for planning or budgeting. The underlying - and unstated - assumption is that marketplace conditions are largely static: the future will be largely an extension of the past and, thus, all we need to do is optimize our current operations.

This assumption, unfortunately, has proved fatal in industry after industry. Just a few years ago, Motorola and Nokia were major cell phone players, Sun was a significant server manufacturer, Blockbuster was the source for many of us for at-home movie viewing, and Borders and Barnes and Noble were where we shopped for books...

To drive serious strategic discussions, you first need to accurately assess your source of competitive advantage. Here's a framework we've found useful:

Source of Competitive Advantage (worst to first):

1. Commodity with cost disadvantage

2. Commodity with cost parity

3. Commodity with 10% to 20% cost advantage

4. One-year offering development lead

5. Two-year offering development lead

6. Brand, patent, copyright

7. Owning the customer relationship

8. A string of dominant positions (for example, cost advantage + development lead + patent protection

9. Managing the value net or ecosystem

10. Owning the industry standard

Importance of Marketplace Insight

The first two, of course, confer no competitive advantage; unfortunately, a realistic assessment of their true competitive position would surprise many companies... Hence the importance of helping decision makers develop relevant marketplace insight. Answers to these critical questions will help:

• What are customers really buying? How are their preferences changing?
• What new initiatives are current competitors undertaking: operations, innovation, marketing, sales, customer service?
• What economic or regulatory trends will impact the industry?
• Which emerging competitors have the potential to change the nature of competitive dynamics?

Assessing the Consequences

Once the decision makers have grappled with these issues, they'll need to assess the impact on the organization, including:

• Systems and processes: Do we need to change our offerings development or production processes? Which need to be re-engineered? Which can we outsource? What support do we need from IT?
• People and skills: Do we need to retrain our existing workforce? Change our hiring requirements? Restructure the organization?
• Culture: Do we need to change the behaviors? If so, where? Only in specific functions? Or everywhere in the organization?
• Incentives: Do we have the right incentives in place? And how will we align these across the organization?
• Profits: How will we make money in the future? How can we protect our profit streams?

Creating Winning Strategies

With all of the above in hand, decision makers can proceed to the important work of re-allocating resources to create:

• Differentiated value propositions
• Innovation, operational and go-to market initiatives
• Organizational alignment

Challenging work, all this, since it means the nature of the strategic discussion must change, from planning / budgeting to strategy, from past to future and from business-as-usual to new business models. Importantly, it means changing mental models - how decision makers interpret information about the marketplace. And this, in turn, means creating opportunities for dialogue and debate, v. reading reports.

But it could mean the difference between organizational life and death.

Opportunity or Afterthought?

Support

How many great customer service calls can you recall? If you’re like me, you’re more likely to remember the endless prompts, being put on hold, or dealing with someone who can’t or won’t solve your problem.

How many trade shows or conferences have you returned from with a slew of unremarkable collateral? Admission: I don’t really collect a lot and mostly throw out what I do.

How many vendor capability presentations have caused you to take action? Or, as a consumer, how many unsolicited calls or emails have actually caused you to buy something? In my case, close to zero.

I once inherited an under-performing business development (cold calling) function. The sales team had hired a bright, engaging and outgoing young professional with the intent of qualifying leads and setting up sales meetings. But after six months and zero meetings, something had to change.

The reason soon became abundantly clear. This erstwhile and eager individual had received no training: not in the offering, not in the sales process and not in how to identify needs and nurture leads.

Six months completely wasted.

Support, or lack thereof, can make or break a customer relationship. Done well, and accounted for properly, it can pay for itself many times over. I willingly pay extra for a premium credit card because of the support I get – the company handles our inquiries with personnel whose sole purpose appears to make me a satisfied customer. And because of that, I almost invariably use that credit card for my purchases. Same with my bank: I maintain a high balance, initially to eliminate monthly fees, but more recently because it enables me to get through quickly to knowledgeable personnel who address my concerns promptly.

The subtitle of George Day’s must read book, The Market Driven Organization** says it all: your job is “Understanding, Attracting and Keeping Valuable Customers.”

This requires great support which, in turn, requires training.

Training is an opportunity, not an afterthought.

*Cartoon posted by Joel Leonard in a LinkedIn update
**Day, George, The Market-Driven Organization: Understanding, Attracting and Keeping Valuable Customers, Free Press, 2007

Understand the Competitor's Strategic Intent

What do you need to know about the competition?

The most important thing you need to know is their strategic intent – what is it they are trying to accomplish. Once you understand this, you’ll have a framework for understanding virtually every decision they make, from hiring key personnel, to product strategy, benefits, features and functionality and pricing. Take, for example, a competitor whose CEO has made aggressive revenue growth commitments. You might deduce s/he will aggressively pursue every opportunity in the marketplace, regardless of profitability. Or, if the technical staff dominates development, offerings may include features and functionality customers don't care about.

You don’t need 100-page documents, chock full of data but poor on insights. If your CI team is producing these, fire them. What you need is a one-page report that shows the competitor’s approach and what their likely next actions will be. You need to understand their key people – what they do and how they think, because people and organizations repeat their successes. You need to understand the likely impact of new initiatives, and their financial and technical capabilities. And, most importantly, you need to understand the competitor’s culture

Lou Gerstner was maniacally focused on customers and competition from the first day he joined he joined IBM. At his first executive retreat, he forced his senior executives into red-team exercises and asked them to attack their own businesses as if they were the primary competitors. He got immediate results, and extended the concept by naming each senior executive to be in charge of a major competitor as part of their responsibilities.

Make your executive peers part of your CI team. You’ll be delighted with the results.

Next: Differentiation: What Really Matters

Where Do You Start?

The first 90 days.

“The first thing you should do is read, or re-read, the book The First 90 Days*,” says Nigel Dessau, CMO of Stratus Technology and ex-CMO of both AMD and StorageTek.  “In the first 30 days of any new job I've taken, I gather data, qualitative and quantitative. I’m not choosy, at first. I meet with as many people as I can, and then review every night for what I've learned. From that I come up with six focus areas, two of which are most likely going to be people and budget. Then I sit with the leadership team and discuss. And then I discuss with my marketing team, to get alignment. What ensues becomes my plan for the next several years, which is the average tenure of a CMO."

Let’s go to the source: “The actions you take during your first three months in a new job will largely determine whether you succeed or fail, ” writes Harvard’s Michael Watkins, author of The First 90 Days. “The stakes are obviously high. Failure in a new assignment can spell the end of a promising career.”

Sobering.

Luckily for us, Watkins has researched the success and failure of new executives and offers a checklist of things you need to do :

1. Promote yourself. No, don’t hire a publicist. Mentally accept that you've been promoted into a new position that will require different skills than what’s made you successful in the past.
2. Accelerate your learning. Go into learning overdrive – spend as much time as you can reading about markets, product, technologies, systems and structures, and especially the company culture and politics.
3. Match your strategy to the situation. Start-ups are quite different than product line turnarounds which are quite different from new market entry situations
4. Secure early wins. This may be the most important thing you can do: nothing succeeds like success. It builds personal credibility.
5. Negotiate success. Your new boss thinks you’re the right person for the job, but isn't totally sure yet. Schedule time, weekly, to go over your assessment of the situation, his or her expectations, reporting style and the resources you will have available.
6. Achieve alignment. With each promotion, you’ll find that you “do” less and have to “get more done.” The only way to achieve this is to align, or re-align, the structure with the strategy
7. Build your team. Evaluate the team early and, if necessary, make tough calls. You can’t afford to depend on non-performers.
8. Create coalitions. More important jobs increasingly depend on your ability to influence people who don’t report to you. Make them your allies, and you succeed. Make them your enemies, and you fail.
9. Keep your balance. You’ll be drinking from a fire hose – you’ll find that the demands on your time are more than there are hours in the day. Find ways to keep your perspective and don’t be rushed into making risky decisions.
10. Expedite everyone. Bosses, peers and especially direct reports – the quicker you can get everyone up to speed, the better your performance will be.

Even - or maybe especially - if you've been in your job for some time, this is sound advice. Take some time to mentally promote yourself into that next position and contemplate what it would take to succeed. Then, follow these steps as if you were already in the position.

You may get that promotion faster than you think.

Next: Day 91

*Watkins, Michael, The First 90 Days, Harvard Business School Press, 2003

You're Not an Island

Cultivating the best talent.

To accomplish your objectives, you’ll need to rely on your team, which requires a combination of recruiting, training and leadership. “Your team is what makes matters most,” says Kristin Hambleton, VP Marketing, Neolane Communications, now part of Adobe. "You’re not an island – you need collaboration and leadership.”

Successful marketing executives recruit the best people they can. 

Kimberly Clark CMO Tony Palmer says, “the smartest thing I did when I started was to go out and hire four or five of the best people I could find in the disciplines. They were people who had a lot of weight in terms of skill set and experience, and that helped enormously. I think that very early on, the organization saw them as a skill set that they didn't recognize, and they tended to therefore be invited in more.”*  Adds Tony Wells, CMO of ADT Security Services, “surround yourself with good people – hire people better than you.”

Then, they build their team’s capabilities. 

Most importantly, says Ted Rubin, Chief Social Marketing Officer of Collective Bias, “teach mid-level marketing execs to speak to the c-suite in a way they understand – learn to speak their language – talk to me about sales / conversion.” Says Wells, “always look to develop people – make it possible for them do the best work of their career.” And Bloomberg CMO Maureen McGuire says “development of people is a daily task…It’s about coaching people through the process, helping them to understand the business and what’s good or bad about the work that they've done at the moment.”**

Finally, leadership is critical. 

“Know yourself, your job, your people, their strengths and weaknesses, says Tony Wells, CMO ADT Security Services. There should always be something exciting going on. Create energy.” Unfortunately, says Karen Masullo, EVP Social Media of Firestorm, “many marketers who move into executive positions tell their teams what to do without soliciting their input – allow your team to help you. Avoid being dictatorial.”

The management consulting firm Hay Group suggests using a variety of leadership styles,*** noting that a poor leader uses a single style, effective leaders use at least four and superb leaders can use six, and know when to use them:

Surviving in the Marketing Jungle

Marketing is about survival in a jungle that has no mercy, particularly for members of one of the least understood clans in the corporate world.

If you play the game well, you’ll get additional opportunities. Many companies now have Chief Revenue Officers, which formally combine sales and marketing. You could eventually get IT: Gartner research VP Laura McLellan* predicts that by 2017 CMOs will spend more on IT than CIOs. And you might even have a shot at the top position, as did James White who become the CEO Jamba Juice.

Based on interviews and research, those who just focus on "marketing" are less likely to succeed. The successful CMO needs to think act like the CEO of a business – your business is the business of "understanding, attracting, and keeping valuable customers."** You need to become the CEO of Marketing™.

Amazon's "Surprise" Attack on the Grocery Business

The news that Amazon is readying a major roll out of its online grocery business will catch many grocers unprepared.

This despite the fact that Peapod has been perfecting its model since 1989, reaching sales $500 million last year, there are an estimated 1600 online competitors, and Wal Mart decided the category was large enough to enter in 2011. And Amazon's initiative has been five years in the making.

Many will justify their lack of action because, at $6 billion, the category is just over 1% of the $550 billion food market in the US. It's just not big enough, yet, they'll say.

And one morning, they'll wake up, "surprised" at how big the category has become and try to mount an effective response.

It will be too late.

What did they do wrong?

Surprise rarely occurs because of lack of signals; it's due to either misreading indicators or when an organization's view of the environment, conditioned by past perceptions, prevents it from correctly seeking or interpreting indicators or emerging trends.

Take Pearl Harbor - why did the US navy fail to detect anytime in advance the movement of the most powerful fleet in history? It was not as if Japan's blue water fleet was a surprise - in 1905 it destroyed the Russian Pacific fleet; nor were Japan's expansionist intentions a secret - it invaded Manchuria in 1931. Given this, "intelligence officers could perhaps have foreseen the attack if the US, years before, had...flown regular aerial reconnaissance of the the Japanese navy, put intercept units aboard ships sailing close to Japan...or recruited a network of marine observers to report on ship movements." [Kahn, "The Intelligence Failure of Pearl Harbor," Foreign affairs, 70, no. 5 (Winter 1991/1992)]

In other words, you can't find what you're not looking for. Said another way, we create our own surprises.

What "surprises" await your organization?

Growth Challenges

Companies seeking a growth agenda face a number of challenges:

• How do we identify big business ideas?
• Do we stay in current markets, creating new portfolios? Do we enter new therapeutic areas?
• How do we launch a growth agenda without losing ground on efficiency gains?
• How do we structure the accountabilities and the incentives to make this a successful initiative?
• How do we change long established mindsets that keep the organization from seeing and acting on new opportunities in the market place?
• How do we launch a growth initiative that has the full ownership of the management team?
• How do we ensure that this exercise goes beyond brainstorming ideas for growth to executing them?
• How do we effectively engage the business developers / sales force in a new initiative?

Which ones do you face?

And what are you doing about them?

Questions

Do you ask questions?

Or give answers?

Which do you think is more likely to be successful?

Experience matters.

Get out of the building

I've read about Lean Startup Marketing, so when the local entrepreneurs Meetup group offered a chance to learn from those who had undergone the three day process, I took it.

The concept is straightforward:

Failing at strategy

How many new strategies have you actually seen succeed?

If your organization is typical, you undergo an annual 'strategy' process which almost invariably confirms the current strategy. Nothing changes. Not because of the data. Or the hard thinking. Or the valid strategic options.

Picked especially for you...

Increasingly, I get eblasts that start "Picked especially for you..."

Amazon made this popular, and I still enjoy its missives, because it actually has made picks for me, based on sophisticated algorithms. I don't always buy, but I am always interested in learning about new books that may be an enjoyable read.

Great sales personnel (and lousy ones)

I love great sales personnel.

As much as I loathe lousy ones.

We were looking for track lighting at the local lighting store, from whom we had bought in the past. Those who've shopped for lighting know this takes some time and, often, in home consultations. After all, it is neither a small purchase, nor one you can easily replace.

Listening

We'd heard about a nice local deli, and stopped in to see the offerings.

Greeted with a smile, we asked about their prepared dishes, particularly vegetarian ones which, unfortunately, were on the sparse side. Because the store came with high recommendations, we persisted in our questioning.

Until the clerk offered us a sampling of the store's meatballs, something they were well known for.

Huh?

What's a smile worth? Redux

In the local supermarket today, two young women offered wine tasting samples. Good location, right at the front of the store.

I walked right by.

Not because of the wine.

What's a smile worth?

I stopped at the local Fresh Market for a piece of fish for dinner.

While the prices are a little higher than the competing local supermarket, I go there often, for a variety of reasons, including the quality of the fresh produce, meats and seafood, the selection and the deli.

Landing that job

In light of Friday's anemic jobs report, it's clear that competition for open jobs is not going to get any easier.

So how do you get an edge?

Everyone lives by selling something...

...said Robert Louis Stevenson, author of Treasure Island and the Strange Case of Dr. Jekyll and Mr. Hyde.

Sales reps, of course, sell products and services to customers.

CEOs sell their vision to their boards and employees.

CIOs sell their plans and budgets to the management team.

CFOs sell the company's investment plans to Wall Street.

CHROs sell the benefits of working in an organization to prospective employees.

Inventors sell their ideas to investors.

And CMOs must help sell all of these.

All require an in-depth understanding of both the offering and the buyer.

What are you selling?

And have you done the hard work to develop the insight required?

Experience matters.

Know your limits

Late last Saturday afternoon, my wife decided to try the new organic juice (imagine apple, cucumber, romaine, celery, kale and chard...all mixed together!) place that just opened.

No go. Closed.

Sunday afternoon, closed again.