More Growth - consumer insight, brand positioning, growth strategy

What do philosophers and marketers have in common

We worry about things that seems not important to everyone else and can use language that is obscure and difficult to follow.

 I was reminded of this when I attended a philosophy lecture discussing how the philosopher Richard Rorty struggled to reconcile the fact that he was passionate about social justice and at the same time want to be selfish and spend time on transient personal pleasures such as the cultivation of rare orchids. It seemed that the philosopher’s intelligence led them to worry about things that seem quite straightforward to the rest of us.

 

Most of us have accepted that a part of our life may be devoted to causes whilst other parts of our lives are around personal stuff and other parts of our lives are economic. We know we have these different needs. We do not struggle with needing to explain a dilemma as Richard Rorty did.
 

As I left I found myself thinking that as marketers we can be seen to worry about things that the rest of the business are not so concerned about (e.g. brand essence, brand wheels, abstract ideas). This makes us seem a bit detached from the day to day realities.
 

The second tendency marketers share with philosophers is to use language that seems somewhat obscure to the rest of the business? This happened to me in this lecture where I felt like an outsider observing a rather strange parallel universe in which the language of discussion was unnecessarily complex and obscure.
 

Our own research has shown that marketing teams who do not communicate internally and have less frequent interactions with the rest of the business and are less well regarded. 

Whereas, the best market driven businesses have marketers who are well regarded and have invested time in interacting with the whole business so that their ideas are practical and useful and they communicate effectively so people understand the benefits.
 

There are two behaviours of these philosophers that we have observed in marketers and if you fall into this then you run a big risk of seeming detached from reality and reducing your impact on the business.
 

Firstly, like the philosophers, marketers can spend time exploring things that seem unconnected with the reality of getting more profitable growth.  I have sat through U&A presentations that provide interesting descriptions of consumer behaviour but offer little insight as to how the business could do things differently to satisfy customers.  Then on other occasions there are lengthy meetings to develop and discuss things like “brand essence” or the “brand pyramid”.  These discussions can seem to have little to do with the day to day business of getting more growth and hitting targets.   These discussions have little practical bearing on the decisions about products, services, prices, distribution and marketing communications that will drive growth.
 

Secondly, like the philosophers, marketers can use words and language that seems disconnected from the reality of getting more profitable growth. The use of this language can obscure the real value that marketer’s programmes and ideas might have. So whilst the business discusses customers, consumers, sales, products, services, reputation, distribution, logistics, prices, profit margins, promotions. Marketers talk about branding, brand image, strategy, awareness, design and identity. Many of these things may well be important but the links to profitable business growth and real practical decisions are less than clear to your colleagues in other functions.
 

So I left this lecture reflecting on how marketers can avoid behaviours that will restrict their influence and may mean the business is less market and customer driven.  Try this instead.
 

1.  Use shorter words.
2.  Use the language of the business, not the language of the text book or the advertising agency.
3. Make sure that the ideas and concepts you discuss will help you make practical decisions.  We call these concepts “really useful concepts”.

Why you should worry less about the future?

I was listening to this fascinating discussion on Start the Week on BBC Radio 4 on Monday

We are hard-wired not to truly estimate risk, too vulnerable to the impulse to simplify, narrate and categorize – and we don’t even realise it. What we should understand, argues the academic and city trader NASSIM NICHOLAS TALEB, is that our world is dominated by 'black swans', highly improbable events that have a massive impact and are nearly impossible to predict. Black swans, he says, mean we should ignore ‘experts’, stop reading newspapers and learn to take advantage of uncertainty. Nassim Nicholas Taleb will be delivering lectures on The Black Swan at the University of Oxford on Wednesday 5 March and at the London School of Economics on Thursday 6 March. The Black Swan: The Impact of the Highly Improbable is published by Penguin.

Here is the podcast link  Nassim is in the last 15 minutes

I got 5 points from the discussion

• What actually happens is often not possible to predict
• Measuring (empirical?) what is happening is more useful
• Projecting current trends is more reliable than expert predictions
• Our assessment of the risks we take will be wrong.
• Newspapers, colleagues and experts often try to convince us we can predict and manage risk.

It got me thinking, so what does this mean for businesses in pursuit of more growth? 

You should spend less time worrying less about the future.  So reduce the time you spend

• Worrying about things you cannot control
• Forecasting future events (since we will be wrong)
  
• Predicting competitor reaction
• Reacting to the latest hot topic in the marketing press

You should spend more time strengthening your ability to withstand unexpected shocks. To do this, measure what is actually happening to the business and assume it will continue until you create change by doing these things

• Discover your customers frustrations and unmet needs
• Know and measure what is important to customers
• Discover how to make this more available to customers
• Take action based on these insights and measure the results

You can do a simple audit to see where the balance of your time is spent.  Is it more on worrying about the future or could you do more to strengthen your competitive ability.

Corporate teams can easily get sucked into worrying about the future, whereas entrepreneurs tend to focus on things they can do now.

In the meantime.  I am off to the LSE on Thursday to gain some more insight into how we can strengthen our approach to helping you translate insights about customers into practical steps that will create more growth.

If you would like a free telephone audit to discover if you are worrying about the future too much or are doing enough to get on with the present, then email us or phone us on 020 8334 7202 to arrange it.

P. S.  This is exactly what Power Categories and Power Attributes and Power Channels will help you achieve this action orientation and address the business fundamentals.  The approach is about translating insights about customers into practical steps that will strengthen your competitive position in the market.

Is your growth constrained by a lack of resources or a lack of action?

Last post we discussed marketing influence across the whole business.  But according to some commentators, there might be a recession soon.  Does this mean marketers influence will decline even further.  You may have less money to spend and fewer resources.  It will put pressure on costs as growth gets more difficult.

So should you react in a different way as a result.  This week we show how "internal entrepreneurs" get growth.  This is the same whether the market is growing rapidly or stagnant.

The first thing is to focus on action; doing things rather than analysis, research and meetings.  I was reminded of this when reading Tom Peters blog and saw this quote.

Any project worth doing is worth doing because in some small or large way it challenges "the way we do things around here." Moreover, it is a given that bosses are primarily hired to be cops who make sure that we do things "the way we do things around here."

This dilemma is often resolved by a select band of individuals who drive for practical steps that will create growth.  These team members refuse to accept the processes, always find ways around the restrictions and "kick down doors" to make things happen.

This select band are the internal entrepreneurs.  They will work with limited resources.  Internal entrepreneurs push their ideas with conviction and energy.  They also recognize that they must win people over and cannot achieve their goals by just pushing their ideas.  However they are willing to push back and are not put off by objections and obstacles.  We have noticed they can exist at many levels of the organization.  This is not just a feature of senior management.  What are their behaviours?

We recently worked with someone in a 7m business who used this "internal entrepreneur" approach and it has worked, two years later this is now a 12m business.  They also operated with some of the constraints of a larger business since the business is owned by a multi billion global business.  But they did not have access to additional finance from this larger business.  The resources available to them were only those generated by the revenues of this 7m subsidiary. 

Here are our practical tips based on the behaviours we have observed in this case and others.

• Identify the five top drivers of growth on the business and ensuring the whole team understands them.   
• Translate the 5 drivers into practical actions and review them every month
• Refuse to accept that it is OK to miss objectives due to a need to adhere to process.  When obstacles arise, the question is how do you get around this?  What else could we do?
• Develop a great enthusiasm for celebrating successes.  Make the office area full of boards with updates on progress, pictures of successes, statements of intent and performance vs. targets.
• Evaluate all activities using three simple questions, what works, what does not work, what could we do better?  (Always start with the positive
• Always talk about the customer and understand the customer needs.  Underpin decisions by robust insight.  All ideas were tested with customers.  This can involve very low cost market research tools that the team created and managed themselves.
• Be clear about the working environment you want and the type of people this required.  Ensure all new recruits are interviewed and tested against this profile.

So if you are the boss, make sure you have some internal entrepreneurs in the team. If you are the team, try being an internal entrepreneur

If you want your team to understand how to do this look at  our programmes on  increasing marketing influence  (you can also read our papers on this.

Differentiate supports internal entrepreneurs with The Growth Game which is an approach that works to translate insights into practical steps for growth that have the support of the business team.   Our best clients are often "internal entrepreneurs; they know a lot of this stuff intuitively and use our approach to not only develop their ideas but to sell them to the business teams.

If any of you have experiences that relate to this, please let us know, either by private email or post comments under this article

Does your team ever struggle to win support for their plans?

The subject of marketing influence and effectiveness has hit the marketing press again.  Deloittes have done a global survey and Marketing published the findings last week.   It is a great survey based on authoritative opinions of 217 C level executives mainly CEOs, CMOs, and CFOs.

 

This reminded me that 10 years ago we published two papers in co-operation with The Marketing Forum.  These were based on survey findings from over 500 senior executives across all the business functions.  One paper was about marketing influence and the other about the future of marketing as a business function.

 

Get our papers click here

 

Some things have changed reading both 1998 and the 2008 papers I noticed that Marketing is now more central to strategy for the CEO.

Now 81% of CEO's see marketing as a key driver of growth  "the chief executive is much more open to talking about marketing these days"  CMO 2008

However what has not changed is that marketing teams remain detached from the rest of the business and often do not own the customer agenda within the business.

In 2008 - 77% of C-level respondents believe their employees do not fully appreciate the value of marketing  "I worry that I am seen as too specialised compared with my peers in other functions"  CMO 2008

In 1998 we found marketers do not communicate well with the rest of the business and are often seen as specialists who spend a lot of time talking to each other and their agencies but not enough time engaging with their own business.   Our report identified three characteristics of typical marketers that help to explain this

1. Marketers lack breadth and are conspicuously more loyal to their own professional development rather than broadening their career within the company
2. Marketers tend to be highly creative and analytical.  These strengths quite often go with weaker people and team player skills
3. Colleagues in other functions have much better people and influencing skills and this helps them exert more influence within the business.

Our conclusion in 1998 was 

The marketing profession was optimistic about its future.  The rest of the business wants it to succeed.  The role of marketing is to champion the cause of the customer throughout the business and ensure the business meets the needs of the customer in a profitable manner.  In many ways marketers are well equipped to do this.  The have the respect of the business for their creativity, intelligence, technical skills, energy and drive.

BUT

Marketing teams must develop new skills and operate in some different ways if they are to deliver this role in an effective manner.  It is essential that marketing earns the respect of the business so that the whole business becomes market led.  The key to this would seem to lie in new communication skills and having robust tools for identifying opportunities, analysis and measurement.  Without this the creative brilliance and smart analysis will lose its impact.

Since then, we have found that marketing teams who do spend more time working cross functionally and engage the whole business in their plans end up with much greater influence, are more highly regarded and create stronger top line growth.

This insight shaped the development of the Growth Game.  Our whole approach is  designed to overcome these issues 

 

Get the Marketing influence report click here

It is also instructive to examine Deloittes conclusions in 2008

• There is often a misalignment about the role of marketing amongst board members
• CEOs must help the CMO to align the organisation around growth
• The role of marketing is often misunderstood
• Marketers need to broaden their commercial skills to play an increasingly strategic role in organisations
• The focus on marketing measures is intensifying

Access to Deloittes report click here

If you recognise any of this, then take a look at our marketing influence programme.  This works with the marketing team and includes a 360 degree department feedback.  This programme encourages the team to think about why they should view the rest of the business as their customers, how this will help them achieve their goals, where they need to improve their communication skills and how to engage other colleagues to accomplish this.

 

Marketing influence programme - click here

 

 

Do you struggle with too much data or not enough insight?

Tabloid newspapers are powerful communicators and can exert influence on how people think.  One of the most effective tools they use (and abuse?) are concepts that simplify reality and allow people to see what is happening.  So a politician is "beleaguered", a celebrity is on the way "up" or "down",  a government is either "on a roll" or "stumbling".  Many people say that the papers influence opinion and they argue they just reflect it.  But whichever of these is true they cut through lots of data and create insight.

 

As marketers we need to create insight and become powerful communicators to win over the business to our ideas for growth.  There are often many ideas but this is accompanied by great uncertainty about which will produce the right results.  This uncertainty seems to derive from two sources.  Either there is too much data, so it is difficult to sift out what is important or there is a shortage of real customer driven insight because there is little market research available or affordable.

 

 

Have you found yourself sitting through analytical or descriptive presentations that provide some interesting content, but few actionable recommendations? 

 

Or sometimes have you found yourself struggling to come up with insights and unable to justify the investment in high price market research to create the customer understanding that will bring clarity to your decisions?

 

One of the breakthrough tools we have developed to cut through data and create insight is to develop "really useful concepts" that help you to see through the mist and bring clarity to decisions about what to do.  We have found it makes a huge difference and supports a cost effective approach.

• When there is too much data, the "really useful concept" slices through the data to bring out the compelling insights.
• When there is not enough money for new research, the "really useful concept" supports a structured approach to thinking through the issues and coming up with answers.  This approach may be done with customers or just your colleagues in the business.

You will probably have heard us talk about the concepts we use. What characterises all of them, is that they are built around an important business decision rather than just descriptive of an approach to analysis or discussion.

 

• Power Categories - where should we invest to get the most profitable growth?
• Power Attributes - what features and benefits most powerfully influence customers to choose our products?
• Power Propositions - products and services that deliver power attributes.
• Power Channels - where does the product or service need to be seen and be available so our customers will discover it and can buy it?

We also have two additional ideas that have provided valuable support.

• Rocketing - the tendency for customers to trade up and spend disproportionately on things that are really important to them
• Internal Entrepreneur - describes the skills and behaviours of the people who can make things happen and influence the organisation to change and actively create growth.

We were recently challenged about why our website and our conversation does not use the conventional language of the brand marketing world. So why we do not talk about market segmentation, brand positioning, marketing communications, brand pyramids, brand wheels and so forth? The question caused me to think about this and reflect on whether by being different, we are just confusing the issue.  In our experience this marketing speak can encourage debate, but often does not lead to decisions.  So we plan to stick to these "really useful concepts" because they are just that "really useful".
                                  
We know that internal entrepreneurs succeed when they become great communicators. Maybe we can learn from the Tabloid press and use simpler more powerful concepts.  When our clients adopt these "really useful concepts" they find it helps to create a common understanding about the decisions that the business must make.  This helps engage the business team and win support for the ideas. 
                                  

What is it that makes a concept "really useful". It must have the following characteristics

• It creates insight about an important business decision or action.
• It communicates.  It is easy to grasp and possible to have an idea of what it is about from the title.
• It is adaptable and can help you derive insight from robust data or management discussion.
• It has been proven to work through robust analysis or previous practical examples.

 

 

 

What "really useful concepts" do you use to make decisions?  If you want to share them, you can look at the blog version of this article and post a comment.

                                  

 

 

 

 

 

Our next due date for an ezine is 25th December, so we will skip that one and the next issue will be a New Year perspective on 2nd January.

                                  

In the meantime have a great holiday break.  The Differentiate team will be taking the chance to get some skiing in.  But we are back shortly after Christmas and will be fired up for the New Year.

Making decisions that will create growth

A few years ago our own research found that the most effective marketing teams spent more time interacting with other teams within the business rather than just with their agencies and colleagues.  This meant that they were much more highly regarded by the other business functions and as a result developed better ideas and proved to be more effective at implementing practical growth initiatives.

I was reminded that this insight is likely to remain a durable truth, when I was talking to a friend about a podcast interview with James Surowiecki. 

http://www.researchtalk.co.uk/rt/index.php?s=James+Surowiecki.   

Suowiecki is the author of The Wisdom of Crowds: Why the Many Are Smarter Than the Few and How Collective Wisdom Shapes Business, Economies, Societies and Nations.  I was intrigued by the simple idea contained in the title.  It made sense to me as I thought about my experience in observing and participating in business decision making.  It ties directly to our insight that marketing teams need to consult more widely throughout the business in order to improve their ideas and win support for their implementation.

 

The experts aren't always right is the message of the opening anecdote about a country fair where there was a prize for guessing the butchered weight of meat from a live ox.  The average of the guesses from the public was not only just about spot on; it was also more accurate than that of any of the cattle experts.

   

Not all crowds are wise however as anyone who heavily invested in the stock market during the dotcom boom will tell you.  So there are four key criteria that Suowiecki identified as separating wise crowds from those that make bad decisions.

• There needs to be diversity of opinion.  In a business context this means people need to come together with different experiences and different information. 
• People need to be thinking and acting independently.  Their opinions mustn't be determined by those around them like the boss or the attractive colleague they are hoping to invite out to dinner.
• There needs to be decentralisation with people relying on their own local knowledge rather than an aggregated average experience. 
• There needs to be a way to aggregate all the private opinions of the participants into a collective decision.

These criteria precisely correspond with we have found makes all the difference when working with clients over the past 10 years.   This edition of More Growth provides you with four practical tips on getting to the best decisions.

• Make the team cross functional and even international where relevant.  This will encourage a diversity of opinion.  In our experience better plans that result in more growth come when the whole business team is involved rather than just the marketing team.
• Hold debates when the boss is not in the room.  Thinking and acting independently can come from not always having the boss in the room.  Of course the boss has an important contribution to make but if they express a view on the solution too early then it results in too much time being spent on figuring out how to execute that idea, and not enough on exploring if there is a better idea.
• Create new ways to consult with people about what they think. We have found that internal online surveys or well run workshops will will ensure that people are able to say "this is what I think" rather than the much more speculative "this is what I think they think".
• Use workshops to share and understand aggregate opinions. These devices also increase peoples' commitment to the outcome.

The marketing team might be the customer expert but better business decisions, leading to more growth, usually come from involving all parts of the business

Are marketers truly Growth Champions

Recently I read an article about marketers as "Growth Champions".    This article was based on a survey conducted by Booz Allen during 2005-2006 and covering 2000 senior marketing executives.  See http://www.strategy-business.com/press/article/06206?pg=all

The article identified 6 approaches to marketing leadership and marketing structure in the different companies (the % figures below refer to the number of businesses of that type found in the sample).

   

Marketing Masters (40%) have a solid grasp of traditional marketing fundamentals and are clearly competent at the kinds of activities that marketing has always conducted.  However, they are not so involved in establishing the strategic growth agenda, and they are not as likely to provide high-level strategy recommendations to the CEO and other business leaders. They are also less likely to rely on standardized processes and tools to provide efficient service. Marketing Masters deliver superior revenue growth and profitability.

 

Senior Counselors (17%) guide the CEO on marketing strategy. They rarely lead product innovation or new business development, and have severely limited decision rights over new markets, new products, or even promotion campaigns. They deliver average revenue growth and profitability.

 

Service Providers (15%) merely provide advertising, promotion, and public relations service at the request of the company's brand and product teams. Service Providers serve companies that are foundering behind their industry peers.

 

Brand Builders (12%) are efficient providers of such marketing services as communications strategy, creative output, and campaign execution in support of the company's key brands. But their role and decision rights on strategy and investment are all but negligible. This category seems to deliver average revenue growth and profitability.

 

Best Practices Advisors (9%) work with individual business units to maximize marketing effectiveness and efficiency by bringing best practices to advertising, promotion, public relations, and other activities. This profile has a low correlation with above-average growth, but they are profitable.

 

Growth Champions (9%) see themselves as "owners" of their company's key growth-support functions, whether or not these fit into conventional definitions of marketing practice. They lead general management activities as product innovation and new business development; they approve large investment decisions to enter new markets or launch new products.

 

Only Growth Champions correlated clearly with better performance; teams in this category are 20 percent more likely to exhibit superior revenue growth and profitability for their industry than marketing departments in the other five categories.

 

Growth Champions share several significant characteristics: 

• They can identify their contributions to revenue growth, and they gain added authority from their ability to define return on investment (ROI).
• Their members have a broader range of capabilities than their counterparts in other companies.
• They use standardized tools and processes for efficiency.
• They are proactive, not reactive, in providing both guidance and services that they believe add value to the senior leadership team.

We have observed that the clients who have been most successful at using the Growth Game principles have used it to assert their authority and to ensure they deliver each of these 5 points.

 

There are some strong similarities between this Booz Allen survey and some work we have done with 6 client companies about increasing the influence of marketing on the businesses growth agenda.  We will share our conclusions in the next ezine.

 

Ezine sign up If you want to get this kind of content delivered to your inbox, then go to www.differentiate-it.co.uk to sign up.  You can see examples of previous ezines in the links on the right hand side of this blog.

Are you an "internal entrepreneur"

Managers often worry about doing too much and the need to prioritise initiatives.  This concern can become one of the big barriers to making practical steps for growth,  when resources are limited. 

 

This is because there is a real dilemma here.You know the only way to grow is to do stuff.  If you carry on doing the same things as you did last year your business performance will remain the same  as last year (at best!).  But your bosses and shareholders want you to do the right things, the things that will work.  How do you find out what is the right stuff , how do you pick the winners   Powerful insights are helpful , but in the end you must translate these into practical steps for growth, you have to try things.

 

What distinguishes successful entrepreneurs is they will try stuff and take risks (albeit measured and calculated in some way.  This leads to rapid growth and some failures.

 

What distinguishes large companies is they can leverage their assets to create cash to invest in future growth, their ability to organize large teams of people and a studied approach to managing the inherent risks.  Their very size and organisation structures and processes often inhibit the entrepreneurial instinct to just try stuff out.

 

There is much debate in businesses about how to create the entrepreneurial spirit within a large company organization.  Senior management recognize that the internal processes and management incentives and company politics can suppress this spirit.  Over many years of witnessing different company teams and the process of taking steps to grow the business, we have consistently observed that practical steps for growth come from a small number of individuals who refuse the accept the processes, find ways around them and spend their time kicking doors down to make things happen.

 

This works because the business also has a large number of managers who are well able to contain and manage the risks that could be created by the “internal entrepreneur”.  These “drivers for growth” can exist at many different levels within the organization, from the CEO to the brand manager or sales manager.

 

To be successful these “internal entrepreneurs” recognize that they must win people over and cannot achieve their goals by just pushing their ideas.  However they are willing to push back and are not put off by objections and obstacles.

 

The business only needs a few "internal entrepreneurs" to kick down doors.  Maybe the whole business team does not need to become "more entrepreneurial".   Look around and see if your teams have a number of these "internal entrepreneurs".  If you are the team leader, make sure you have some in the team.  (suitably offset by some more restrained managers).  If they are not there, work out how to find them or become one yourself.

 

You can watch, listen and learn from the successful internal entrepreneur as they invest a disproportionate amount of time selling their ideas and engaging the business teams in their mission.

 

At Differentiate we place great emphasis on not just powerful insights but ensuring these are translated into practical steps for growth and steps that have the support of the business team.