Google Website Translator Gadget

Thursday, September 2, 2010

Connecting the Dots

I'm surprised it took so long for the mainstream media to connect the dots on recent acquisition activity here in Silicon Valley. For those of us steeped in both cloud computing and mobile telecommunications, the pattern has been clear for a long time. Nonetheless, I found it encouraging that the Valley's newspaper of record, the San Jose Mercury News, finally reported on the trend in a front page story today.
If you haven't been following the M&A action here in tech's heartland, let me do a quick recap.
  • HP just today acquired 3Par for $2.4B after a fierce bidding war with Dell. 3Par's products combine virtualization software and hardware to increase storage capacity and lower operating costs, making them ideal for cloud computing applications. Also this year, HP acquired 3Com, Palm and Fortify Software.
  • Intel acquired McAfee on August 19 and then 10 days later acquired Infineon. McAfee makes security software which is a critical element for both cloud computing and mobile telecom. Infineon makes wireless chip sets for three primary markets, security, communications and energy efficiency.
  • Google has made a number of smaller acquisitions this year including Aardvark, a social media search engine for $50M, AdMob, a mobile advertising platform that's particularly popular with iPhone app developers, ITA Software, a flight information software company, and just last month, Slide, a social application company.
  • In addition, Cisco Systems acquired Tandberg for $3.3B and Oracle acquired Sun Microsystems for $7.4B
The recent Silicon Valley acquisition frenzy, which has already seen five billion-dollar plus acquisitions this year, illustrates two irreversable trends in technology -- cloud computing and mobile telecommunications.
According to the IEEE, by 2014 smartphones and other mobile devices, such as Apple's iPad, will send and receive more data each month than they did in all of 2009. More than 75% of that information will come from Internet traffic and nearly all of the balance will come from audio and video streaming.
A big part of the increase in mobile data will come from cloud computing applications. Utility software (such as maps) will lead the way, followed closely by productivity tools (especially for sales, data sharing and collaboration), then social networking and search.
A senior analyst at ABI Research, a telecom analyst firm in Oyster Bay, NY, predicts that the number of people subscribing to mobile cloud computing applications will rise from 71 million today to more than a billion by 2014.
Asia will lead the way with the largest number of mobile cloud computing app subscribers, but North America will bring in nearly as much revenue because high-paying enterprises will have a larger slice of the pie here.
So it's no wonder that Silicon Valley tech companies are scrambling to acquire companies and technology that will give them an edge in either cloud computing or mobile telecommunications, or both. And if the month of August was any indication, there will likely be several more billion-dollar acquisitions before the end of 2010.

Wednesday, September 1, 2010

Six Key Categories for Gauging the Client/Agency Relationship

With Labor Day only five days away here in the U.S., it's almost that magical time of year again:  immersing yourself in the 2011 strategic planning process.

Yesterday, colleague Bill Bellows blogged about an easy-to-follow process (called OST, for Objectives, Strategies, Tactics) for creating business objectives:

  • Set objectives first
  • Follow objectives with strategies
  • Begin doing the actual work with tactics that drive strategies
OST simplifies the process of creating business objectives for organizations who may be starting from scratch.  And it's also useful for organizations who are revisiting their business objectives.  It's something companies who aren't satisfied with the status quo do regularly as a response to the twists and turns of the market they sell into.

While CEOs, CMOs and business development executives are preoccupying themselves with the business objective-building phase of the 2011 strategic planning process, their corporate communications teams are likely engaged in a parallel process:  evaluating the 2010 communications effort and their desired results for next year.

For the corporate communications pro, the 2011 strategic planning process will likely include a formal, or at least informal evaluation of their external communications resources, such as public relations agencies.  

Reviewing the annual performance of a public relations agency, or other marketing services provider, is a big deal.  Doing it right is time consuming and may take you away from your "day job" for a stretch.  And the results of the review could wind up creating even more work for the corporate communications team, i.e., a full scale agency review including the issuance of an RFP, the painstaking review of the RFP responses, the live presentations of the finalists agencies, the selection and buy-in from executives, etc.

Phew, I'm spent just writing about it.

Nonetheless, an annual review (again, at least informally) of your outsourced communications resources is absolutely necessary.  

But like Bill said in his post about OST, "this is not rocket science."

Reviewing your PR agency doesn't have to be rocket science either.  It just has to get done.  

To help you get started, I put together this list of six key categories for evaluating your agency:  
  • Does your agency team know your market at least as well as your internal team does?
  • Have the account team leaders taken the time to understand the pressures you face as an internal communications pro?  Or do they see the world only through their eyes?
  • Is your agency team visible?  If not, why not?  Are they too busy working on other accounts or pitching new business when they should be in your face?  Is your business important enough to them?
  • When do you see or hear from the senior-most agency executives?  Only when there's a problem or only when there's good news to share?  Or are they truly engaged with your business, in the trenches with the account team creating ideas and insights to propel your business?  
  • Is your agency listening to you?  Or are they hell bent on doing things only their way and pout when you insist on an alternative approach?  So, is your agency part of your team or are they their own team?
  • Does your agency do what they say are going to do? Is their follow through as strong as it was during the first three months of the account or has it tapered off over time?  Does this mean your agency team has become too comfortable?  
In the best agency/client relationships, any issue that comes up during a review shouldn't be a surprise to either party.  In the better relationships, communications are open and frequent enough so that major issues are dealt with as they erupt.  

But in too many agency/client relationships, issues are put on the back burner by one or both parties hoping they will disappear on their own. They rarely do.

What's the relationship with your agency like?

It's almost Labor Day and a good time to ask.

Tuesday, August 31, 2010

Three Steps to Creating Business Objectives that Work

We often read comments urging consultants to align marketing programs with business objectives.  It sounds great. Unless, of course, your client or company hasn't specified their business objectives or, more commonly, has confused strategies with objectives. When you encounter a company like this (and you'd be surprised how many billion-dollar companies do not use objectives effectively), you have two choices: run like hell because this is a clear sign of organizational dysfunction or strap on the responsibility of helping your client define their objectives.  In most cases, we choose the second option -- better to be part of the solution than adding to the problem.  

If you choose to lead or guide your clients through this process, you immediately need to sort through the fundamental distinction between objectives, strategies and tactics. Crazy as it may seem in this era of endless analytics, companies and consulting firms often languish and struggle to get on the same page when these terms are unclear. Worse, metrics may be misaligned, misinterpreted or misunderstood when one person thinks they are talking about strategy and the other considers it an objective.

You can navigate through these situations with a simple three-step process that we call OST.  This is simply a hierarchal reminder that Objectives, Strategies and Tactics have to be developed in that hierarchal order to build actionable, successful programs. This is not rocket science, but it bears explanation for those who may know marketing, media and customers, but not business. 

1. Set objectives first:  Objectives communicate what the client organization plans to achieve. They need to be realistic, specific and measurable. A fine objective would be: To increase sales by 10% in the first quarter of 2011.

2. Follow objectives with strategies:  This may sound contrary to the way you think of strategy. Many of us are conditioned to talk about the client "strategy" or the strategy for the program as though strategy itself is what guides business.  It does not. Look back on your experience. How many great strategies have you heard that never came to fruition?  How many times have you heard frustrated or disillusioned employees talk derisively about the "strategy du jour?" There is a reason for this. Frankly, strategies without accountability are easy to articulate. They motivate, excite and even inspire people -- until they fail. We need to understand that strategies are general in nature. Untethered, they are likely to remain little more than words. Placed in the right hierarchy -- attached to specific, quantifiable objectives -- they become dynamic and charged with the energy required to make them actionable.  An acceptable strategy tied to the objective cited above would be: Cross sell the division's new WonderProduct II to existing clients.

3. Tactics drive strategies: After you have established quantifiable objectives with supporting strategies, you need to begin doing the actual work. Tactics are what you do to make strategies work. They are the building blocks of programs and they make or break the success of programs and business.  They are the phone calls, the conferences, the articles and community building that has to happen day in and day out.  While Nike's famous call to "Just Do It" rings in our ears, tactics can be disastrous in isolation of objectives and strategies -- especially as you communicate with customers, media and channel partners. Audiences will take your words at face value, and will assume you already have set objectives and strategies before going public with a program. As you have probably experienced, this is not always the case. Nothing can freeze a customer faster (and make your company or your client look ridiculous) than to suddenly stop pursuing a tactic you've been driving publicly, because somebody in the organization realized it was out of synch with an objective or strategy. In business, companies can thrive when the left hand knows what the right hand is doing. An example of a tactic is: Introduce the new Wonder Product 2 solution to all current customers in the CEO's keynote speech during Company World 2010 in October.

One final note is in order. When setting up objectives, be sure you and your clients do not tackle more than you can handle. Establishing too many objectives may make you look great to your client or boss in the beginning but it sets an unrealistic expectation that may color your performance review in the end if you are unable to achieve what you promise. If you specify more objectives than the budget enables you to accomplish, you will find your program log-jammed and bleeding dollars trying to tackle too much and ultimately achieving too little. We suggest you follow the urging of a client Marketing Vice President to simply "Do Fewer Things Better!"  Based on our experience, here are some targets to consider:
  • set a maximum of four to six measurable objectives for the year 
  • establish no more than three strategies for each objective, and
  • create a fresh set of 5-10 tactics each quarter that align with your strategies.
It may not always be as easy as this, but it doesn't have to be much harder. Breaking down the process into the right hierarchy creates clarity and leads to specific achievable metrics for you and your client to agree upon. You do yourself and your client a great service by simply putting Objectives, Strategies and Tactics in the right hierarchy to understand how they depend on each other for success.