Possibility, are you asking how or what?

Polarity, the idea of opposites, turns thoughts and possibilities around like  a pendulum  always moving from one extreme to the other. That is until the thought runs out of energy or momentum and stops. It rests until some force displaces it.

Recently, a client asked for help explaining the difference between planning for a transition and planning a transformation. Since Transformation seems to be one of the buzz words of the moment, I began to wonder what made the two thinking processes different, and what did they really mean. My polarity thinking friend suggested that transitions plan for certainty, or near certainty and transformation plan for uncertainty.  I disagreed.

I think of a transition as the pause between takes, what happens between two clearly defined states.  It’s when we assess, evaluate or figure out our position, how close or far. Transformation, that’s the feeling we have on arrival, we made it so now what.

In other words, if the client has a clear objective as in to take a specific distant hill, then transition plans incorporate the certainty that elevations will be changing on route and insures the team’s prepared for the journey. When it knows  what changes to expect along the way, then it’s transition ready. Transformation focuses on arrival, different conditions and challenges it doesn’t know, but can imagine arrival makes possible.  After all, isn’t that why the objective was to take the hill?  Wasn’t it about the advantage that being on top offers?

Put another way, imagine what you want to do is known, like traveling to another location.  Transitions focus on the journey, how long will it take, buying tickets or planning the route. Transformation planning asks how the change in location affects your current activities.  Transitions are more whole body time shifts, where as transformation puts your head in the future while the rest of your physical body remains grounded in the present.

November’s topic for the monthly strategy discussion focused on Transformation Readiness. Before I managed to summarize the conversation and post notes,news about the sale of Mariano’s to Kroger caught my eye. and then I also spotted  an interview with CEO, Bob Mariano on the Chicago Booth website.

If you are not familiar with Chicago, then let me explain that Mariano’s was a new entry into the grocery store business. By coincident, just as they had opened a few stores one of Chicago’s main competitors –Safeway decided to close all of its Dominick’s stores. This meant Mariano’s acquired 10 of the closed stores and their debt fueled expansion took off.  That’s when Kroger came calling.

Since I had already been thinking about  transformation questions , as in how do you get transformation ready, I thought it worth sharing these responses.  Take a peek, and let me know what you think, are the example transitions or evidence of transformation readiness?

Scenario A: I think that Mariano’s namesake, CEO and founder, Bob nailed it when he said:

“At Mariano’s, we tried to push further. We continue to push.  What I mean by push is to expose the customer to different and unique things and allow them the opportunity to tell you, ‘No, I don’t like that,’ or ‘Yes, I like that.’”

Scenario B: Or maybe you prefer the spin by CEO of Shazam when asked about the increasing gap between growth in the amount of information and its utilization. ” …How do you improve data intelligence?”

“That’s definitely the case [that there is a data knowledge gap] and for years we have been talking about data warehousing, or capturing that data, but turning information into data intelligence is a new journey for many companies…”

Or, how about the Gambling industry insiders view who characterizes difference between digitizing or converting your industry to the reality post conversion this way:

Advancements in technology has brought about a rapid digitization of gambling and almost every other industry. Some have managed to exploit these developments more than others and I think that the gambling industry is at the forefront of how well technology can be applied to a domain.

As an industry we must be open to change and pro-actively look at how we can exploit such technologies to provide a better and more entertaining experience to our customers. For example, the progress in Touch ID has enabled us to allow LeoVegas iPhone app customers to log in to the casino using only their fingerprint.

Are you wondering why distinguishing between transitions and transformations matter? Or, even better, how your business can take greater advantage of the widespread availability, access and flexibility that a fully digitized world creates?

Great, now you are thinking strategically.

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Management 2.0–can you shift? Top 50 Overall Rank Company Innovation

In 2011, among 673 companies from 32 countries, Apple topped the list as most admired and respected by both industry peers and overall.  CNN’s Money magazine  survey used several criteria to compute an overall ranking and then shared on a single criterion those companies who made the top ten spots.  A composite summary appears below.  Surprisingly, no company ranked consistently across all criteria –not even Apple who ranked #1 only on innovation.

Top 50 Overall Rank Company Innovation Global Competi-tiveness People management Mangement Quality Long Term Invest-ment Quality of Products/Services Financial Soundness Social Res-ponsibility

25

Goldman Sachs Group

1

1

Apple

2

7

10

4

2

14

Walt Disney

6

3

3

7

10

3

2

Google

9

2

4

1

2

1

24

Nike

2

4

5

9

9

6

31

Nestle

3

3

7

8

9

7

8

7

Amazon. com

4

8

6

4

1

3

10

McDonald’s

1

1

2

12

IBM

8

49

Accenture

9

9

9

5

Procter & Gamble

9

15

3M

6

3

Berkshire Hathaway

4

Southwest Airlines

6

Coca-Cola

8

FedEx

9

Microsoft
N.A. Royal Dutch Shell

6

Nike, Google,Walt Disney and Amazon have similar rock star status.  But the failure of many of  the remaining companies to even make the top ten on other categories, or the inconsistency of the company rankings  is a bit confusing.

If analysts and directors evaluate companies using different criteria , which criteria should management prioritize?

The best case for management 2.0.

Imperfect an instrument as surveys of  directors, industry peers and analyst rankings of companies may be, the disconnects between perception and management is unsettling.

Perhaps, the problem is complexity itself. Siloed, hierarchical , central, command-control decision-making  styled organizations struggle to keep up.  As the world moves faster, successful business outcomes require simultaneous attention to multiple interdependent factors. Consistency in your approach across your markets may prove disastrous.

In compiling the chart above, I initially focused on three indicators:  people management aka Talent; overall management quality; and innovation.  The diversity of companies across these criteria rankings lend credence to the rallying cry to change existing talent and management approaches.  Traditional, internal organizational frameworks or operating design warrant alignment on more than these three factors.   Gary Hamel, long down this path, wrote The Future of management in 2007; and often describes traditional management practices as obsolete, calling for revolution within the ranks. More pertinent, values alignment do not seem to be a priority.  After all why would any organization undergo a major cultural transformation for the sake of upping this score?

Remember Total Quality Management, or the movement to adopt Six sigma cultures?   Though well-intentioned, both turned out to be somewhat of a passing fad, the impetus for effective and efficient operations did  lower bottom line costs, but the residual streamline approach undercut the very capability for resilience necessary to succeed in the current global, rapidly competitive environment.

More contemporary buzzwords rippling through the management literature continuously call for new adjustments, and a shift in style to accompany if not better accommodate technology changes. Simplifying access and transmission of multiple media, aka  web2.0. may indeed require a different management approach.  What  exactly are we describing?  Apart from branding , a series of  common threads unite the work of three thought leaders.

Ron Heifetz describes The Practice of Adaptive Leadership (2009), its associated risks, and why our attachment to authoritative leadership needs rebooting. Gary Hamel’s book, Leading the Revolution (2002) explored ways to reinvent business models in light of the dot-com technology bubble; his more recent title is The Future of Management (2007).  The monthly strategy discussion readings (links at the bottom of this post) also included the insights of Bob Thomas, author of Crucibles of Leadership (2008), from  Accenture’s Institute of High Performing Leadership.

All of these thought leaders describe  embracing unconventional thinking, full transparency, initiative, experimentation, learning from experience or basically creating adaptive cultures. Sounds a little like innovation doesn’t it?

What about the social media factor?

Coincident on the day the monthly strategy discussion met to review these authors theses on management,  the Chicago Booth Annual Management Conference keynote panel focused on the most visible evidence of these shifts– “The economics of Social Media.”  In 2011, it’s impossible to be in business and not be inundated with headlines about Linked In’s public offering,  Facebook’s 600 million and counting users, or Twitter’s 200 million strong.  Of course these are just a few of the applications business must evaluate, not so much to buy, but to watch, listen and learn to respond to many stakeholders associated with their enterprise.

The shift  of control over your brand and business between stakeholders and business leaders and managers is close to parity.  If web2.0, or social media is the people’s network where they can transact, share, express and discover–Business has to be present, flexible and responsive 24/7.  if you had doubts, now you know why Management 2.0 is critical to an organization’s survival.

Social media’s ubiquity challenges the most traditional organizations and their decision-making hierarchy.  Customer facing roles increase risk, especially if  individuals are scripted or their flexibility to act and access to information is  limited by the system.  The parameters around interaction, once  engineered to reduce costs and maximize returns, need adjusting and consider  indirect factors. Typically, an organization expects customer service to buffer or clean up  “messy” or “problem” concerns from the public.  The focus measure is efficiency–avg handle time and the number of calls/hour.  Management did not track the quality or effectiveness of the interaction in the unit performance report. The push for further labor savings resulted in outsourcing and offshoring these units, adoption of automated voice response systems or encouraging online users to check out the FAQ section of a website before contacting support.  Sure, customer satisfaction and customer relationship systems are  important, but the breadth of possible outbound responses remain tightly controlled.  In the same manner that marketing and PR  manage the company message and often write the release printed by limited media outlets.

Integrating Web2.0 and the interaction tracking within the operation exemplify internal innovations or managerial adaptation, right? Management learned to take advantage of technology to lower its delivery costs and use CRM systems to learn about the customer and track transaction behavior.  All signs of adaptation. But do they go far enough?

Back to the Future

Facebook launched in 2004 and quickly spread to all university campuses and entered some corporations, opening to any user in 2006 and quickly became the 7th most trafficked website.

In 2007, social media is not even mentioned in what   Businessweek described as attributes of the worlds most innovative companies:

The leaders of companies on this year’s BusinessWeek-BCG list of the World’s Most Innovative Companies recognize that developing breakthrough products, revamping operational processes, and coming up with new business models doesn’t happen overnight. Instead of relying on gimmicks or incremental line extensions, they’re working to build organizations that are capable of sustained innovation. They understand that requires taking risks and investing for the long-term. And they focus on the things that really matter, such as hiring the most talented employees and providing them with the environment they need to thrive.

…Getting people to step out of their comfort zones can do a lot to spark new ideas. But if they’re not paired with more fundamental changes, all those efforts will go nowhere. Fortunately, some companies have been waking up to that fact…. the proper care and feeding of employees in creative cultures takes much more than training. …best companies seem to be managing a balance of a few high-profile programs aimed at getting employees to think differently and more fundamental processes that make sure the work actually gets done.

Of the top 10 companies (Apple, Google, Toyota, GE, Microsoft, P&G, 3M, Walt Disney Co., IBM and Sony) 3M had dropped to 7 from 3rd in 2006, while Walt Disney had catapulted from 43 in 2006 to #8.  Surprised?

We compared these messages and found them to  echo some of the authors’ admonishment of the management 2.0 revolution.

Marching orders for Management 2.0 Advocates

Note: The original article citations are found below.

Gary  Hamel talks about inspiring and changing the environment, aggregating human capabilities toward the collective and mentions three big organizational challenges:

  1. Adaptability–how to build self-transforming organizations
  2. Innovation–mobilizing imagination
  3. Engagement–on both the emotional and intellectual so people bring all of their capabilities to their work.

Ron Heifetz talks about adaptive leadership means changing the way people do business in many places in the organization.  In other words, innovation isn’t just for marketing.  Leadership has to orchestrate the connections between the possible, or the abstract strategic imperative and the tactical or working level.  The question is not merely whether to  establish accountability; but how to  help all levels of the organization challenge and push the frontier of their current constructed environment and create room for experimentation, where people are free to make mistakes and learn.

Finally, Bob Thomas suggests that experience has to be turned into leadership capabilities and focus on the ability to learn lessons.  Provide the  imperative around durable processes in three facets of learning:

  1. Prepare — how do/could we frame the problem, understand how we learn and focus on accelerating the possibility to learn
  2. Deploy–activate our sense-making skills, emotional IQ, story telling, practice with  multiple decision-making and leadership styles to close the gap between theory and practice.  (Heifetz expresses the gap as the difference between knowing and abstraction).
  3. Renew–Points of view are teachable as well as adaptive.  Managers should build and exercise their own advice networks.

Sounds easy right? The 2007 article profiled GE, Disney, IBM and Boeing.  By 2011,  the companies rated by their industry peers and then overall only identified Google, Apple and only the Walt Disney company made the top 10 list.

Articles featured in the monthly Discussion

Ron Heifetz

1. Adaptive Leadership

 2. The Interview Adaptive Leadership

Gary Hamel

Can’t Innovate? It’s Management’s Fault (Really!)

Inventing Management 2.0

Bob Thomas

Turning Experience into Leadership

Is it Too Late for a Web Strategy?

Old spice man

If you don't know this man, then you're missing out on one of the more popular twists in popular culture and marketing of 2010. 

This is the Old Spice campaign's man of mystery.  Intentionally I did not insert the web video, nor am I interested in chasing down the viewer stats, though sales report isn't great.  It's here because the ad reference exemplifes multi-channel linked marketing strategy and came up  in last Friday's monthly Chicago Booth Alumni Club's Discussion around  Strategic Management Practices.

Wearing my research hat, and doubling as a typical consumer, the first place I turned to find the reference was to type the key word phrase "old spice man" into my google search bar located at the top of my web browser. My search was not to purchase, engage in conversation or to gain proximity to someone with product experience –that would need  some different key words.  The campaign as well as my search process shows the evolution of the internet and the effect of its influence in our lives.  The shifting trends exhibited below in this wonderful chart  was the focus by Chris Anderson and Michael Wolff in the provocatively titled September 2010 article in Wired The Web is Dead, long live the Internet

Internet traffic trends 2010

CISCO compiled data using the Cooperative Association for Internet Data Analysis (CAIDA). The chart suggests that Video and Peer to Peer traffic is increasing while the use of the world wide web is declining.  This data is somewhat misleading and the chart's suggestions that mobile apps, and other specialized channel options, will displace the web browser  is not so clear-cut.

Is this graph a credible and reliable translation of the geek speak from  CAIDA?  A more recent  analysis than what appeared in Wired, expresses the following:

" Continuing its growth in traffic, connectivity, and complexity, the current Internet is full of applications with rapidly changing characteristics."

Overall, CAIDA has found that traffic on the internet continues to grow,  which is not adequately represented by the two- dimensional graph CISCO and WIRED depicted. Growth does accurately reflect the transition and growing emergence of traffic off the world wide web and into  alternative internet based transmission paths (e.g. mobile based and other applications that allow real time streaming).  

This same transition mimics strategies used by effective  marketers who link the brand messages and campaigns across  multiple media platforms.  Key words provide the bridge. The more consistent their use across the growing number of media platforms,  the more certain an organization's promotion efforts will  intersect key consumer touch points on or offline.   Ideally, consumers pick up these same key words  and carry them across other natural communication channels, further enhancing the brand's reputation and in theory  increasing sales.

If your business is selling Search Engine Optimization (SEO) this emphasis on key words appears  great for business. It's not however where a capable marketing strategy should invest the majority of its budget.  Not merely because there is some danger to pursuing this strategy (see the The dirty little secrets of search in last week's New York Times); but the greater, more complex objective is reputation management and not key word optimization.  

 Historically, brand owners/creators controlled media messaging and placement.  To successfully sell, you "paid" for the privilege of being placed in front of consumers walking through the yellow pages or by a billboard, listening over radio/TV  or their eyeballs scanning newspaper or specialty publications. Product packaging, placement and promotion  are often  budgeted separately and only occasionally linked for a "special" promotion (e.g. cause marketing or a contest).  The rise of the world wide web, added the category of "owned" media to the marketing mix and budgets had to cover the cost of website development, content writers and traffic analysis, including SEO.  With Social Media, a third area– "earned" warrants increasing budget and management attention to monitor the customer-created channels and chatter of your brand enthusiasts  as well as brand detractors. (see complete description in Branding in the Digital Age by David Edelman). 

 The Edelman article's case study of a TV manufacturer across one touch point within the wider consumer decision journey proves far more  instructive than my earlier reference to the Old Spice ad and its multi-channel focus. 

"A costly disruption of the journey across the category made clear that the company’s new marketing strategy had to deliver an integrated experience from consider to buy and beyond . In fact, because the problem was common to the entire category, addressing it might create competitive advantage."    

Unlike Old Spice, the manufacturer opted to shift the marketing emphasis away from paid media.  Focusing on owned and earned media seems to enhance the effectiveness of their key words and multi-channel linkages, and engage traffic where it mattered most at the buy, and enjoy, advocacy, bond  touch points. This is not a prescription for all brands, but the case is instructive in identifying the disconnects and deficiencies in common web based strategies, or even of marketing extravaganzas disconnected from the ongoing conversations that are circling your business, product and/or brand.

Whether or not you belief in Chris Anderson's prognosis about the death  of the Web or buy into David Edelman's Consumer Decision Journey research, few organizations appear to have fully leveraged these changes.  Increasingly, an ability to execute and efficiently allocate resources to address the demands presented by the growing number of communication channels  will  distinguish successful companies from their competitors.  The changes create more opportunities for strategy to take a more commanding role in managing and driving the combined efforts, either internally or with the help of outside specialty firms.

Additonal Discussion Take Aways

  • Social networks are informative, free sources of intelligence that naturally build out and generate mutual trust and benefits to buyers and sellers. 
  • The role of the marketer is merely to influence and no longer the producer/director of the brand experience.
  • The responsibility for marketing  is changing and increasingly is upending internal role limitations  and requiring participation from unlikely sources e.g. corporate governance, communication standards and guidelines.  Employees share roles with customers and the more acquainted with internal policies, strategies and planning the more they can aide and assist in  wider message consistency. 
  • Authenticity has become ever more important.
  • Fluidity and increasing knowledge of terminology around the digital communications space is a valuable skills set…not just for marketers and IT folks. 
  • As reputation management rises and people do business more and more with the people that they know,  is there anything really being created of value, and are other marketing and sales efforts as necessary?
  • How do these lessons translate or enhance B2B sales? 
  • It's not the web vs. the internet differentiation that matters, as much as recognizing how one innovation(social media)  has brought into focus an array of  deficiencies and gaps within an organization (marketing departments) as well as an industry (e.g. advertising) The challenge is how to best integrate the old with the new. 
  • In the end, the prescription to know your customer before creating your strategy remains the first and foremost lesson. Knowing what your customer wants will always be helpful but successful business requires more.
  • True differentiation in products being marketed remain beneficial but the emphasis should be toward innovation in developing products. 
  • Important to remember the shape of the adoption curves with new technology and Chris Anderson's point that new doesn't replace old. New merely creates more table space to accommodate more preferences.  The challenge is the frequency we change, resort and revisit our marketing activities and resource priorities. 
  • Both  articles confirm the importance of social media and keeping up with changing technologies.  They also call attention to the  the challenges organizations  face in trying to bring them together  to create successful communities around their products and/or brands.

 

Any added thoughts, perspectives or cases are welcome.

Added citations

Edelman makes some of the same points in this article:

Four ways to get more value from digital marketing

By David C. Edelman, McKinsey Quarterly, March 2010

https://www.mckinseyquarterly.com/Four_ways_to_get_more_value_from_digital_marketing_2556

 

Trust Agents, Using the web to build Influence    by Chris Brogan and Julien Smith

NOW Revolution, 7 shifts to make your business faster   by Jay Baer and Amber Naslund