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Friday, July 30, 2010


This summer has seen its share of communication blunders and, as we head into August, we are starting to see the consequences. Tony Hayward has been removed as CEO in light of his poor handling of the oil spill. Maybe that yacht race at the height of the crisis wasn't such a good idea? Apple said it would provide iPhone 4 customers with free cases to improve reception issues that happen when the phone is held in a certain way. General Stanley McChrystal is retiring from the US Army after he was relieved of command of NATO forces in Afghanistan by President Obama, following blatantly disrespectful comments made to Rolling Stone magazine. Laurent Blanc, the new coach of the French national soccer team, announced that none of the players who went on strike at the World Cup in South Africa would play in the next match and that future selections would be based not only on talent but on a strong sense of teamwork, as well. The lesson in all of this is that what you say and do and how it is portrayed in the media and online has a tremendous impact on companies and careers. Tony Hayward didn't cause the oil spill but the problem was his to solve. Instead of showing leadership and providing clear, regular and honest communication, he was portrayed as not wanting to deal with the problem by saying he wanted his life back, minimizing the problem by not providing accurate information on the size of the disaster and not caring by going to yacht race at the height of the crisis. Likewise, Steve Jobs probably didn't design the finicky antenna for the iPhone 4 but he did tout its engineering at the launch press conference. Instead of blaming customers for holding the iPhone the wrong way he should have said right off the bat that the iPhone 4 didn't live up to Apple's high quality standards and that they would find a solution. Instead of a story that persisted for a period of time and tarnished Apple's otherwise sterling reputation, it would have been a one day story that might have actually strengthened their image as a company that can do no wrong. General McChystal should have had media training and a thorough briefing prior to letting a Rolling Stone reporter follow his entourage for a month. If he had done so, he would not have made such rookie mistakes. The problem is that most CEOs or, for that matter, Generals and professional athletes, don't understand the importance of communication and, as a result, don't solicit much input from their communications department or agency. If they had, they would have probably reacted differently.

Thursday, July 29, 2010

Robert Dudley's Mission of a Lifetime

Robert W. Dudley has accepted the mission of a lifetime. 

As the new leader of embattled BP, Mr. Dudley has a full plate.

Dudley is charged with picking up the twisted pieces of a massive train wreck and putting it all back together.  Quickly.

He'll need to stand in the fire and not get burned.  He'll need to be decisive and fearless.  But also calm and thoughtful.  Never let anyone see him sweat.

He can't afford, nor can BP, to say the wrong thing -- as his predecessor did on too many occasions.

Dudley needs to move without delay to restore trust among regulators and investors.  But also among BP employees at every management level around the world.  I don't know anyone who works for BP, but I can imagine the conversations they have been part of during summer cocktail hours.  And I suspect many of these discussions were unpleasant for BP employees.

BP has been accused by a number of watchdog groups for taking the easy way out -- cutting corners.  One such watchdog group charges BP with a "culture of recklessness." 

How will Dudley move his troops toward a culture that values safety above all else?

Dudley and BP can't afford to do anything less but to deeply engage everyone of its 80,000 employees to rebuild the company's culture and reputation.  The days of pretty boy Tony Hayward and lip-service treatment to important issues are gone forever. 

Here are a few additional suggestions for Mr. Dudley and BP as the company goes through the most important CEO transition in its 100 year history.
  • Pay attention to all stakeholders.  Employees, investors, regulators, media, business partners, customers, etc.  Some of the underlying anxieties of a particular stakeholder group may not be obvious at first but could burst on the scene at inopportune times.
  • Develop key transitional messages and err on the side of over communicating to key stakeholders.
  • Communicate globally.  U.K. CEO succeeded by a U.S. CEO to run a U.K. company.  This is the perfect time for BP to embrace its global workforce and anoint them as true ambassadors of the global brand.  BP needs every employee believing that BP, over time, will overcome its present situation.
  • Make any senior management team changes in the proverbial "first 100 days."  Unlike many CEOs, Dudley isn't going to get a honeymoon period and acting quickly could become his biggest ally.  If he has any doubts about any member of his management team, he should take the appropriate action now.
  • If Hayward is truly out of the way, insists he stay out of the way.   

Tuesday, July 27, 2010

How Has Marketing Lost its Relevance?

In 2004, Nirmalya Kumar of the London Business School, published an incredibly insightful book called "Marketing as Strategy."  Professor Kumar argued that CEO's have lost faith in marketing -- that somewhere marketing became marginalized by tactical implementation of communications programs rather than owning a strategic "seat at the table."  Yet, as Kumar states, the importance of marketing as a two-way mirror between organizations and their customers has never been more important.

So we have this odd situation where the importance of the function is growing while the faith of management in those who lead the function is diminished. How did we get to this place where the marketing function is in crisis? How has marketing lost its relevance?

The answer lies, in part, with the subtitle of Professor Kumar's book: "understanding the CEO's agenda for driving growth and innovation." 

Over the years, many marketing organizations and the marketers who run them and serve them have become disconnected from the strategy of the company. My experience is that they often are communications experts not marketing experts.

Like any function under constant pressure, marketing developed its own measures to justify its existence.  Today, that takes place in the form of reliance on communications tactics and a train wreck of metrics, strewn like jackknifed cars along the track. 

We, as marketers get caught up in the latest pretty packaging whether it is social media, SEO or web traffic, and we look for metrics to justify how well they work.  (How many followers do you have?)

I find it interesting how many times I've read leading social media experts stress the importance of understanding the company's business objectives.  I want to stand up, shaking with incredulity, like the comedian Lewis Black.   "THAT IS THE PROBLEM!"  What are the business objectives?  Who in marketing helps set them?  Who in marketing understands them?  

Don't misunderstand me. Metrics are helpful. They are wonderful tools. But they are usually the cart before the proverbial horse. They often are not lead indicators of where the CEO is trying to move the company. CEOs are under increasing pressure to deliver profits. Board members worry about the complexities of financial reporting requirements. And, so, the C-suite agenda is less likely to focus on marketing issues. But marketing still has to find and deliver answers to questions that ultimately drive the growth of the company -- who are our customers?  what do they need from us?  how do we deliver what they need better than our competition delivers it? 

What has to change for marketing to become relevant to CEOs -- and for CMOs to keep their "seat in the suite"? 

Let's start by throwing stuff out. The 4Ps -- product, promotion, price and place?  In the dumpster!  Let's start to think and act like strategic business executives not kids playing with the latest toy and trying to show mom and dad how well it works.

Here's an easy place to start.  Answer the following three questions for your company or organization:

1. Where are we?  
2. Where have we agreed to go in five years?  
3. How do we get there profitably and increase shareholder value?

In one form or another that is what every CEO is trying to determine.  Twitter, Facebook, Digg, Reddit, Radian 6, only matter if they help answer the last bullet, and I believe they can -- when applied correctly to the right problem.

So if that is is the CEO's short list, what should marketing's be?  Let's go back to Professor Kumar.  Here is the set of questions he poses that every marketer needs to become relevant to the CEO and his or her agenda.  You need to answer these. If you don't know the answers, ask somebody. If nobody knows, figure out how to use the tools of marketing to get answers. That is how you become relevant. 

Seven Steps to Making Marketing Relevant Again
1. From Market Segments to Strategic Segments: 
  • Who are our valued customers?
  • Which customers are unhappy with current offerings in the industry?
  • Is the target large enough to meet our sales objectives?
  • What is our value proposition?
  • Does it fit the needs of customers we are trying to serve?
  • What benefits are we delivering?
  • Can we deliver and earn a profit?
2. From Selling Products to Providing Solutions: 
  • Do we guarantee customers outcomes and benefits instead of product performance?
  • Have our sales people developed consulting skills and deep industry knowledge?
  • Have we developed effective processes to allocate resources to solution projects?
3. From Declining to Growing Distribution Channels: 
  • What service outputs will the new channel provide?
  • How will the relative importance and power of existing channels change?
  • Which competitors will enter the new channel?
  • What changes in channel incentives to existing members will competitors try? 
  • What new competences do we need to enter the new channel?
4. From Branded Bulldozers to Global Distribution Partners: 
  • Have we identified our most valuable clients on a worldwide basis?
  • Are there single points of contact for global customers?
  • Have we optimized our supply chain for global efficiency
  • Have we harmonized pricing structures?
5. From Brand Acquisitions to Brand Rationalization: 
  • Which brands are contributing to our profits?
  • What needs-based segments exist in each category?
  • How much sales revenue would we risk by deleting non-core brands?
  • What is the role of the corporate brand?
  • How will we articulate our program to stakeholders?
6. From Market-Driven to Market-Driving: 
  • Are new ideas routinely imported from the outside?
  • Do we tolerate failures and have processes in place to learn from failures?
  • Do we ensure that radical ideas do not lose resources to incremental ideas?
7. From Strategic Business Unit Marketing to Corporate Marketing: 
  • How does the organization rate on customer focus in processes, including new product development, order fulfillment, customer relationship management?
  • Is the organization organized around customers?
  • Are metrics and rewards related to impact on customers?
  • Does the organization systematically learn about customers?
Clearly this is as much a shift in thinking as it is in the tools and programs marketing deploys. Social media and digital marketing tied to analytics can move the needle forward only a fraction if marketers don't understand the three most difficult questions any company faces. As marketers, isn't it time we stepped back and started thinking about the metrics we use as vehicles to identify the growth needs of the company rather than metrics that justify the existence of tactics that are often not well aligned with the strategic direction of the company?  Isn't it time we started to help set the strategic agenda of our companies and clients rather than serve as marginalized order takers worried about followers and colorful charts?