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.

Real Men Have CAD

“Real men have fabs.” That famous quote from the early 1990s, is usually attributed to Jerry Sanders, Chairman of Advanced Micro Devices, and was used to underscore the belief that owning a semiconductor manufacturing facility, or fab, was the only way a semiconductor company could be successful.

Many innovative chip companies saw things differently, however, and by the mid-1990s there were many successful “fabless” semiconductor companies. These pioneers realized that the $1-2B it cost for the construction of a new fab every couple of years was not only prohibitive from a cost perspective, but also not necessary at all.

These chip makers turned to TSMC, UMC, Seiko-Epson and even IBM for the manufacturing of the wafers and chips, while focusing their efforts on design innovation, testing and marketing.

By the mid-1990s, many of these fabless chip makers were among the most profitable companies in the semiconductor industry.

Fast forward to today.

The continuing economic downturn has forced all companies to take a hard look at cutting, or at least managing, costs. The semiconductor industry is no different from other markets, and every chip maker is looking for a way to turn fixed costs into variable costs.

In his post on Xuropa last year James Colgan said that one way semiconductor companies plan to turn fixed costs into variable costs is by moving parts of the EDA (electronic design automation) flow to a SaaS model, where components of the semiconductor design software reside in the cloud.

Clearly there is a trend in the semiconductor industry to take advantage of cloud computing as a way to reduce costs. The chart below shows the adoption curve for many of the EDA modules migrating to the cloud.

This will have ramifications for how EDA companies such as Cadence, Synopsys and Mentor Graphics market their products to customers. No longer will customers want to purchase costly software design tools, or even licenses to those tools, if they can use them via the cloud on a pay-per-use model. This trend is just now in its infancy, as is the way EDA companies talk about their relationship to cloud computing.

But as rapid as other software applications have moved the cloud, we're probably not too far away from hearing some stubborn semiconductor executive stand up and proclaim that "real men have CAD."

P&G Visits The Valley

The convergence of technology, media and marketing has been happening for some time with many brands experimenting with all manner of digital mechanisms to reach audiences and illuminate their brands. It is not often that we are privy to the inner thoughts of the industry marketing leaders.

This week, however, word came that Procter & Gamble, the venerable leader in all things consumer marketing has established a presence in Silicon Valley to get closer to the rapid innovation and emerging technologies. VentureBlog and others attended a P&G briefing at which P&G had some interesting impressions of Twitter (“it is best for one to many communications that are short bursts of timely information” but “it is not particularly relevant to what they are doing on the brand building and advertising side”) and Facebook (“a must-have for digital advertising and brand building”).

P&G’s revelation that it is taking social media so seriously is all the more striking in the context that only a year ago a senior P&G executive was quoted at a conference deriding social media’s impact as a marketing tool, saying among other things "What in heaven's name made you think you could monetize the real estate in which somebody is breaking up with their girlfriend?"

Of course, many questions persist including whether all P&G brands are right for social media, an essential question for a successful social media strategy. P&G didn’t comment on its specific brand plans but a quick look at Facebook reveals P&G brand Pringles has nearly 2.5 million more fans than Old Spice.

While P&G has declined to quantify its investment in Facebook activities it is clear that even the world’s leading global brands have noticed and are taking the potential social media seriously. Hopefully P&G’s investment in its digital adventure will pay off with more innovation in the Valley and among marketers. The enhanced visibility of the benefits and of measurable results will create further acceptance of these emerging technologies within the marketing mix and a new appreciation for the merits of an integrated approach to marketing.

Social media is here to stay (at least until the next big thing comes our way), so brands of all sizes might as well join the conversation.

You Can't Manage What You Don't Measure

With so much of the social media focus on metrics, it’s startling that few marketing organizations and their PR agencies have the internal resources at hand to measure their social media success. The inability of companies engaged in interactive social media marketing to measure in-house the business impact of their campaigns is putting the cart before the horse.

You can’t manage what you don’t measure.

“..how can a company claim to judge social media on a particular success metric like brand awareness or customer engagement with no ability to actually measure that metric? Do companies think they should measure the impact of social media on brand and engagement metrics but never get around to doing so?” These questions and others like it were raised by Business.com in its recent report, “Business Social Media Benchmarking Study”. Sixty-five per cent of the survey participants, many of them senior executives, said they have the ability to see the impact of their social media programs using web site traffic as a metric. And 55% said they have a view into the success of their social media programs using “prospect lead volume” and “useful product feedback” as metrics. But at the bottom of the scale, less than 35 percent of respondents using “awareness” and “reputation” as brand metrics say they can measure the impact of their social media campaigns.

Certainly, there’s no shortage of social media measurement resources – from home-grown to “one size fits all” to elaborate customized solutions. Among the challenges associated with social media metrics is identifying the appropriate resources to take on the task. Large organizations have only recently begun adding the staffing power necessary to measure their social media efforts, while smaller organizations either don’t do it – or don’t do it well – or delegate the responsibility to their PR agency who in turn often delegate the task to an outside “specialist” firm.

Marshall Sponder, founder of Webmetricsguru.com, an industry blog about web analytics, social media and search marketing, says that clients are beginning to insist that their PR firms bring the social media measurement capabilities in house; that partner-based measurement models don’t work well enough.

At 3Point Communications, measurement is a cornerstone of the communications process. Metrics help clients to better understand their customers’ goals and enable more effective interactive communications results – offline and online. While we may use proven third-party tools when appropriate, such as biz360, 3Point’s measurement capabilities are in house. That’s where we think they belong. How else are we different? We provide all the backup data and charts of a standard analytics report but we also analyze the information to present concrete action-oriented recommendations. We can do this because of 3Point’s unique combination of digital experience, analytics skills and business focus.

How are your social media programs being measured? Are you happy with the results? We'd love to hear from you.