Davis ThinkingEstée Lauder Cos. CEO Fabrizio Freda, only the second nonfamily member to lead the company since its founding in 1946, would like to change the way department stores sell cosmetics. Mr. Freda wants to woo customers who are still hesitant to splurge on upscale cosmetics. To make shopping less intimidating, some beauty counters now display prices, loosening a taboo. He is also designing counters to cater to varied shopping preferences.
Close your eyes and listen to the fight. One side says we have to change the way we do things now and the other warns grimly that if we do, the end result will be the Dark Ages. This isn't Washington, D.C., but the Madison Avenue echo chamber, with corporate America pushing for cost consciousness and efficiency from its ad agencies and those agencies railing against companies' bean counters being sicced on them. With each soul-crushing Ad Age item about the rising influence of procurement departments, creatives' agita rises.
Apple is famous for not engaging in the focus-grouping that defines most business product and marketing strategy. Which is partly why Apples products and advertising are so insanely great. They have the courage of their own convictions, instead of the opinions of everyone else's whims. On the subject, Steve Jobs loves to quote Henry Ford who once said that if he had asked people what they wanted they would have said "a faster horse."
Several years ago, my colleague Dave Ulrich and I looked at how leaders build value by building employee confidence in the future. Our findings bear revisiting as companies begin to emerge after the devastation of the last 18 months and work to create new value.
Innovation is undoubtedly the ‘secret sauce’ of business success. The good news is, the ability to innovate is a learnable skill — at least according to three researchers from INSEAD, Brigham Young and Harvard in their new study conducted over a six-year period. ‘Our research showed that at most companies, top executives do not feel personally responsible for coming up with strategic innovations,’ said Hal Gregersen of INSEAD. ‘True innovators rely on their courage to innovate and a willingness to take risks.’
"I have a dream" by Rev. Dr. Martin Luther King, Jr., is one of the most famous speeches of recent history. Aspiring leaders study it to see how memorable words that sketch a big, compelling vision can inspire significant change. But four words are not the measure of the man. There is much more to learn from his actions. King, whose birthday is commemorated by a U.S. federal holiday on the third Monday of each January, delivered that speech during a March on Washington in the summer of 1963. The rally attracted a record-breaking quarter of a million supporters for civil rights and against racial discrimination. It provided impetus for passage of equal rights legislation and the dismantling of formal trapping of segregation.
The next interview in the B2B Marketing thought leader interview series is with Christine Crandell, one of the most innovative thinkers I've met on the topics of sales and marketing alignment and marketing accountability. Christine sits on several advisory boards including Coupa and SDForum, and has held senior marketing positions at Egenera, Ariba, and many others. Her thoughts on organization and how marketing can earn credibility and "go toe-to-toe" with sales leadership are definitely worth reading.
This interview with Tony Hsieh, the chief executive of Zappos.com, was conducted and condensed by Adam Bryant. Q. What are some of the most important leadership lessons you’ve learned? A. After college, a roommate and I started a company called LinkExchange in 1996, and it grew to about 100 or so people, and then we ended up selling the company to Microsoft in 1998. From the outside, it looked like it was a great acquisition, $265 million, but most people don’t know the real reason why we ended up selling the company.
Coca-Cola today has a market capitalization in excess of $100 billion because the perceived value of its brand is significantly higher than the sum total of all the assets of the company. In my years with Procter & Gamble and Heinz, I have come to realize that no matter what the product or service, the key principles for building a great brand remain the same. By staying true to these seven principles, a marketer can weather economic highs and lows while building an iconic brand for target consumers.
A friend of mine attended a City University of New York reading recently from a new anthology of Central and Eastern European plays from the 1980s. Three of the playwrights in attendance that Monday night -- a Slovenian, a Hungarian, and a Romanian -- shared their views. All had written as dissidents and subversives until communism fell. They said that behind the Iron Curtain, one knew one's enemies and those commanding one's life. But, as my friend recounted, their opinion was that now, in the West, "Do you know any longer who's in charge?"
When it was announced in June 2009 that Robert McDonald would replace A.G. Lafley as chief executive officer of Procter & Gamble, investors and employees alike found themselves asking, Who is Bob McDonald? Putting that wonder aside, McDonald has already done well delivering a greater than 20% increase in P&G's stock price since becoming CEO in June. Now that he is slated to become chairman of the board on Jan. 1, 2010, what can his past actions tell us about what he values most and how he will continue to guide the 182-year-old consumer products company into the uncertain economic future?
"We do have a conscious say in selecting the narrative we will use to make sense of the world," writes New York Times columnist David Brooks. "Individual responsibility is contained in the act of selecting and constantly revising the master narrative we tell about ourselves." Brooks' explanation about choice of narrative can apply to leaders seeking ways to navigate our recession. The relentless tide of bad news may tempt those in charge to adopt a pessimistic view point, but leaders owe it to their followers to spread optimism. Without excluding reality, leaders need to inspire not simply hope, but also resilience. Storytelling can help in this effort. Here are some suggestions for crafting your own story to make sense of adversity.
Bad news isn't bad wine. It doesn't improve with age. According to Bain & Co, 80% of CEOs think their brands offer a superior experience, but only 8% of their consumers agreed. AOL seemed to have gleaned that fact. AOL's running man (logo) had already run off the cliff, revealing a brand that was desecrated, unoriginal, normalized and downtrodden. The business goal of any brand is to create more users, new users or new uses by continually innovating to add value to customer's lives. AOL CEO Tim Armstrong needs to ask himself: What is AOL's true brand ambition? What does he wish his AOL brand to be capable of achieving? With great brands come great benefits -- including higher customer loyalty, increased opportunities and elevated profits.
A broken brand is a business that has no idea where it’s going; has no way of communicating its purpose (since none exists); and therefore cannot align its activities nor inspire its people. It’s in disorder. And this disorder leads to people walking around concluding that no one cares and that no one is in charge. Employees may see problems or opportunities, but they stop complaining and suggesting ideas, since they’re convinced management can’t do anything, or won’t. I’ve read the results of recent surveys, which showed that fewer than 10 percent of employees believe their daily activities are actually related to corporate goals. That’s pitiful.
March Madness lasts only three weeks, but Metric Madness goes on all year long. What is Metric Madness? It's the notion you can run anything by the numbers, and it's become the hottest concept in business today.
According to David Aaker, today's CMO may wear up to five potential hats: facilitator, consultant, service provider, strategic partner, strategic captain. "The CMO and the central marketing group can assume a spectrum of roles," says Aaker, author of Spanning Silos: The New CMO Imperative. "The roles of the CMO can and often will vary with the activity and the silo, and additionally, will evolve over time."
Deciding whether to adopt a customer-centric orientation is a significant decision for organizations, not to be made casually. It results in debates defining customer centricity, often with the question, "How customer-centric do we need to be?" Inevitably, it means organizing around the customer and the further proliferation of the types of marketing needed to do so effectively. The many companies that have embraced a customer-centric orientation have experienced some real and often unexpected challenges. At the center of these challenges is the role of the chief marketing officer -- the person who needs to deliver thought leadership, lead the strategy debate and reorganization, and then integrate the various marketing types into a company-wide, customer-centric orientation.
North of the Arctic Circle, a top priority for fishermen is to catch and dry enough char to last the winter. Fishermen near the equator race to market before insects and bacteria spoil their catch. Climate is the driving factor shaping these vastly different fishing practices. In many corporations, the same is true for marketing and IT departments.
India's Tata Group has made innovation part of its DNA, setting up a way for handling new ideas and making creative thinking a performance criterion.
General Motors’ new advertising and marketing czar is Bob Lutz, who until April of this year headed global product development. According to CEO Fritz Henderson: “Bob’s responsibilities beyond creative design will include brands, marketing, advertising and communications.” (I can visualize Bob at his first meeting with one of GM’s agencies: “I’m not a marketing expert, but I did stay at a Holiday Inn Express last night.”)
The focus on the role of the leader in society has been at the heart of the development of much of modern political and social thought. Aristotle captured the essence of the proposition of the “altruistic” or “virtuous” leader: "But since we say that the virtue of the citizen and ruler is the same as that of the good man and that the same person must first be a subject and then a ruler, the legislator has to see that they become good men and by what means this may be accomplished." But for the want of a few good men (and women) at the top of the world’s financial services industry and its regulators, the world’s economic system was nearly destroyed. Now, business leaders are as ill-regarded as politicians. Indeed, there is a crisis of confidence in them that is global and worsening.
Amazon just announced that they're spending $800,000,000.00 (looks better that way) to buy Zappos.com. But wait. Amazon already has plenty of shoes. Amazon already has great technology. Amazon already has relationships with Fedex and UPS. What you buy when you spend that kind of money is what matters now.
People ask me all the time about the success of McDonalds, HP, Virgin America, and Walmart with new products and services, and their ongoing buzz. For me one key factor is the strength of their marketing leadership and the fact that their CMOs have an active seat at the C-Level table.
It would be profoundly reassuring to view the current economic crisis as simply another rough spell that we need to get through. Unfortunately, though, today’s mix of urgency, high stakes, and uncertainty will continue as the norm even after the recession ends. Economies cannot erect a firewall against intensifying global competition, energy constraints, climate change, and political instability. The immediate crisis—which we will get through, with the help of policy makers’ expert technical adjustments—merely sets the stage for a sustained or even permanent crisis of serious and unfamiliar challenges.
In no place has the seismic illumination of communication as an innovation been more punctuated than the Obama administration. Yes, while smart and astute policy adjustments and groundbreaking new lawmaking have been vital to our nation's healing, so, too, has been the manner in which these transformative changes have been communicated.
I’m sure you’ve heard the definition of madness: Doing the same things over and over and expecting different results. But have you heard of the "First Rule of Holes?” When you’re in one, stop digging! I see it all the time. Organizations are lost, but they’re making really good time. Ask yourself, and really think about it: Is my organization producing the growth in customers, members, revenues, donations, profits, etc. that it is designed to produce? Like it or not your answer has to be “yes,” because the design determines the results.
Times are tough. People are hurting. Your mission to help people is critically important. But please don't confuse "mission" with "strategy."
In my last post I identified three things that can turn leaders into laggards: the practical difficulties of sustaining above-average performance, the natural obsolescence of once-vital strategies, and the corrosive impact of discontinuous change. Now let me add a fourth: success corrupts.
Designers often wonder or whine about how their work is not recognized, accepted or even respected in their organization. What many designers don’t realize is how they or their designs are treated has to do with how the discipline of design is viewed within their organization. While most of the time I reference organizations that have in-house design teams, most of the topics of our discussion today can also apply to consultancies looking to service organizations that buy design services. There are many levels of how Design is viewed or integrated within an organization. This is what I like to call “The Design Functionality Axis” as illustrated above. The Axis stretches from a low level Supplier relationship at the base of the triangle to a Strategic Design Leadership relationship
David’s victory over Goliath, in the Biblical account, is held to be an anomaly. It was not. Davids win all the time.
The legendary advertising innovator David Ogilvy created an enduring organization using culture, integrity, and charm.
It's better to be first than it is to be better. Many people believe that the basic issue in marketing is convincing prospects that you have a better product or service. Not true. If you have a small market share and you have to do battle with larger, better-financed competitors, then your marketing strategy was probably faulty in the first place. You violated the first law of marketing. The basic issue in marketing is creating a category you can be first in. It's the law of leadership: It's better to be first than it is to be better. It's much easier to get into the mind first than to try to convince someone you have a better product than the one that did get there first.
The Guardian recently sat down with Rob Bondurant VP of Marketing at Patagonia and asked him to discuss their sustainable model and how they will continue to innovate for the future. Beyond simply furthering the reach of their own brand, we found Patagonia’s desire to provide leadership in the areas of ethical business practices to be particularly noteworthy.
The combination of a new administration headed to the White House, along with our country's established leadership in innovation, has us standing at the crest of a trail that could ensure we never enter this chasm again. Let's get back on our feet and remember what we are made of.
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