Corporate Transformation

Learn to speak the language of success

Are you projecting a "Lack"? Or an Opportunity?

The way you think and speak will dictate the probability of your success, or not.  

Watch Roger Hamilton here: 

http://bit.ly/P4Gro 

Marketingspeak ...

Read Seth Godin's new blog post at --> http://sethgodin.typepad.com/seths_blog/2009/08/not-so-good-at-math.html 

Here it is again for those of you who don't like surfing:

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Not so good at math

A simple quiz for smart marketers:

Let's say your goal is to reduce gasoline consumption.

And let's say there are only two kinds of cars in the world. Half of them are Suburbans that get 10 miles to the gallon and half are Priuses that get 50.

If we assume that all the cars drive the same number of miles, which would be a better investment:

• Get new tires for all the Suburbans and increase their mileage a bit to 13 miles per gallon.
• Replace all the Priuses and rewire them to get 100 miles per gallon (doubling their average!)

Trick question aside, the answer is the first one. (In fact, it's more than twice as good a move).

We're not wired for arithmetic. It confuses us, stresses us out and more often than not, is used to deceive. 

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Ever see those M.C. Escher drawings where the space in between shapes morph into shapes themselves and where dimensions and levels all merge into a different perspective?

This is exactly what Seth is proving in his brilliant post.  However, I'd rather focus on the marketingspeak vs. the math.

When marketing spins, it weaves a story into the fabric of the spin.  When you read the words in Seth's blog post, the words spin a tale.  The tale doesn't hold up to the mathematical reality, however. As Seth points out, we would rather believe the spin than go through the trouble of doing the math to arrive at a empirical scientific conclusion.

So, this is a double-edged sword.  In the hands of the Marketeer (or Politician, Statistician, etc.), they know full well that their spin weaves the story to the point consumers buy their products and constituents believe their messages - counting on the fact that fewer will "do the math" than not.  

The same sword in the hands of an educated Gen-XY Consumer (the generation that did not grow up on Big Brand Messages, IBM Mainframes or slide rules) will cut through the spin and they are more likely to do the math. 

Ergo, It's a generational thing if you follow the spin or follow the math.  I'd argue that Gen-XY and beyond will not accept the message without slicing and dicing the math - and they're much better at doing that in their heads at new-math speed than earlier (mine) generations were.  

VPs of Marketing & Branding people take note - the spin is losing its cycle without the math and Consumers / Constituents now are more in control than before.  The lesson here is to weave the math into the story as you spin, target the neural patterns of your different constituents, be credible to the math and above all else, don't be wishy-washy in your spin-cycle!

What's Your Core?

Most times we think we can do it all.

I'm not talking about packing 1,000 activities into one day and only really completing 3 or 4.  I'm talking about Core Competencies.

In Law School, Medical School, B-School, and the School of Hard Knocks, we learned all about time management, practice development, economics, etc., just enough so we can understand the "issues".  

Well, sorta, kinda.  As the saying goes, "A little knowledge is dangerous".  That holds true for many C-Level execs, entrepreneurs, homemakers and would-be day-traders who believe they are one-person business machines.

We forget our strengths, our core values, our Core Competencies and what business we are in to begin with.

It takes guts to look in the mirror and say, "I don't know enough about personnel benefits to do it myself".  Or how about, "I never wrote a Policies & Procedures manual before".  Or try, "I have no clue how to develop a strategic Sales plan".  Even "I can't waste time mailing/shipping the marketing literature". Or "there are jobbers out there who can source raw materials for me at a lower cost than I can do it for".

One CEO of a major multi-Billion dollar corporation I performed a Strategic Acquisition Plan for, told me one day that "I make all my decisions by myself and I hire people in my image to execute my vision". This was someone who never delegated authority and responsibility and was always under constant pressure to carry the corporation on his shoulders because he felt he knew it all. And all his people also did it all themselves.  Everyone in this company worked 90-hour weeks and his average employee turnover was 12 months!

We are not talking here about delegation - that's a skill one can learn with time and effort.  I'm talking about focusing on the Company's (and your) Core Competencies.

A Bakery bakes, an advertising company advertises, an energy company makes it, a web design company designs and a bank lends money.  The founders, the visionaries and the people managing the company day-to-day don't do Policies & Procedures manual, they don't assemble Business Plans and they don't have the legal background to be the company's attorneys.  They also should not be troubleshooting the company IP network, nor should they attempt to write the company's Sales methodology.  

Let's take this one step further!

Is an Insurance Adjustment company also a claims processor? Is a manufacturing company also a Logistics/Transportation company? Is a fashion retailer also a web publisher? Is a Nurse Care company also a Medicare billing company? Is a car service company also a mechanic?  The list goes on.  

One of the arguments you will hear is that "we are a lean, mean entrepreneurial machine and we do everything ourselves - we don't have the money to outsource". True. However, once you get the Core Competency mindset, you'll recognize these as a part of the cost of doing business.  Run your own show and do it in-house for the time being.  But when the either the company gets big enough, or the process get too time consuming, when possible, offload non-Core Competencies.

OK - how do I do this?

A Core Competency is defined as "That which is the essence of the company and that defines what you do and is unique and unparalleled and constitutes a singular capability of the founding members, your Team and the company's brand". Or use the Wiktionary definition - "An important special capability or expertise; especially that of a business affording it sustainable competitive advantage".

You need to create a bubble chart with the main, center bubble as your Core Business Premise, with layers of bubbles around it that represent "activities' your company performs today in order to operate. Once you have all the departments and activities your company performs in bubbles, then begin to color in ONLY what is a Core Competency.  Before you start playing with crayons, though, make a bunch of copies!

But CHALLENGE every time you use color!  Bring in your team and have them start with a non-colored copy and do the same exercise.  Have your accountant come in one day and do it with them.  Your lawyer too, and the secretary who answers the phone (they will have some real thoughts, contrary to public opinion!).  And folks, sometimes a spouse has ideas you'd never have thought of (happened to me - thanks dear!).

Once you have these colored in, the remaining bubbles are activities that can be outsourced, offloaded, sold off and that should be performed by an outside firm that DOES THIS ACTIVITY AS THEIR CORE COMPETENCY.  Find them, propose to them your requirements and select the best one for your business model so it becomes a seamless part of your supply chain.

You will (hopefully now, if not, in the near future) through this exercise, have shed numerous cost centers and potentially sinkholes within your company and you will find someone who can perform the same activity at a lower cost than you can do it for today.

Don't let your or the corporate ego get in the way, or "we've always done that ourselves, because we don't trust anyone else with it", or "Hey, this is part of our Core Competency!".  Challenge EVERY activity you execute to see if it is really Core.

I have an old saying that I always use, "Don't' do anything that you can get someone else to do, better!". Get someone else who can do it for you better than you can.

The result will be lowering your unit cost and operating expenses, potentially providing better service levels and this will give you much more time to be creative and identify new (Core Competency) revenue streams!

Good Luck, and come back here with Comments!

Where to Get the Help?!

Contrary to the general consensus in corporations and some start-ups today that Interns and Free Work cannot ever be sufficient to deliver quality / quantity results to a company, all you creative leaders - yes, not just managers - would be well-advised to tap in to a bottomless well of talent that surrounds us. 

I'm talking from experience here, folks, and let me tell you a story.

In one of my Start-ups we were strapped for cash during the inception year.  We had to conduct research on a global basis with deep analysis on the numbers acquired, extrapolation of the Data into Knowledge and then synthesis of knowledge into Intelligence (that's a topic for another Post - stay tuned).

I did not have the budget to hire researchers (at $50K/year) nor could we charter Consultants (at $100/hour) nor could we farm it out to a research organization (at $25K/project).  Management was busy managing and visioning and we had no one to do the research (e.g. grunt work).

For $25 (in then dollars) I posted a request for researchers and Interns on the NYU Job Board and got the NYU Placement Office to help.  I received over 20 resumes.  I picked 5 Interns who were completing their BS/BA and had time on their hands during the summer months.

Please note all you "managers" - you will run into Federal Labor Law problems if you have Interns work for you more than 20 hours per week and pay them nothing.  In order to make this work, you have to pay them something on a 1099 basis in order to steer clear of Labor laws. Please do check if you do this now with someone in the know - an HR person - so that you know the current laws and keep within the guidelines.

I paid each of the 5 Interns $500 per month.  Yes, you read it right, a month!  It was enough to steer clear of the Labor laws, to keep the Interns in some pocket money, they felt they delivered value for value (you know that no one appreciates what they get for free!) and we got results.

Oh Boy, did we get results!

For those of you over the age of 30 (I am, but I won't tell you by how much, yeah, OK, look at my picture on the Blog, top left, there you go, ....), you will be absolutely shocked, amazed, incredulous and professionally shattered by the kids coming out of Universities today.  These guys and gals could run rings around the best Consulting Firms I know.  Not only were they workhorses, but tasks that I (and I'm good ..) could do in 2 or 3 hours - they whipped up in 20 minutes.  With color, spreadsheets, PowerPoint and a complete bibliography included - and with a smile.

I was amazed!  And they got it the first time I explained it - didn't need clarification and didn't need a re-look over their shoulder.  And they loved what they were doing!!!  Kids today grow up building neural patterns in their brains that are completely sync'ed with technology, Internet search, data, virtual realities and creative manipulation of Intelligence.

Now, I did have a strategy here.  I offered them $500 per month in addition to a nice office (air-conditioned, way cool !), a great location (Union Square, hello ...) and I wrote them a flowery letter from my Company that would give them Credits in school.  That last one was the key here.

Win Win situation!

Next time you need employees, help, assistance or just person-power, go to the local Universities - to the Job Board and go to the Placement offices - and get yourself Interns! And folks, be nice to them now, because they'll be running things in a few years!

See Seth Godin on this very same topic - http://sethgodin.typepad.com/seths_blog/2009/08/free-work-vs-internships.html  

The "B" ( Brand ) Word

This "Branding" concept needs some serious clarification.

On page 56 of Aug 3 2009 Business Week:

 "A company's worth is rarely equal to the sum of its assets. Most corporations hold intangible value. An important case in point: brand image. At the 2004 World Economic Forum,59% of top executives said brand represents more than 40% of a company's market capitalization. The past year has made all too clear that a company's image is no guarantee of future performance. But data show top names tend to outperform over the long run. In the short term, spin-offs are a likely winner: once separated from its parent company, the new entity's management can focus better, improve efficiencies and realize untapped brand potential"

 ...The Top Companies on the Business Week/Internbrand 2008 Best Global Brands list have beaten the Standard and Poor 500 by seven percentage points on average so far this year....

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OK, so much for Brands (notice the capital 'B').  However, 99.9 percent of companies out there are not established brands and do not have years of market penetration, loyal customers and resources to build a Brand.

However, every company (and for that matter, every individual - yes, YOU are a brand!) has a brand (note the little 'b'). The brand has value.  That value is predominantly in the mind of the owner/management and not in the public's eye. However, there is a brand there.

This value is not the same in the eyes of a financial adviser, M&A specialist or the public markets.  But having said that, it may acquire a goodwill value value or a subjective value when selling your company, however, it is intangible and subject to a creative accounting and financial engineering exercise.  It has no proven public value. Not yet.

Your task as owner/executive or as adviser to the company is to enhance, accelerate and extend the brand into a Brand.  Think of yourself as a Sculptor.  Your job is to take that great big rock and unlock/unleash the form you see hidden in the rock.  That is the Brand you are trying to extract from the company.  And yes, while a science, the 'art' part of it requires an artist to help you out with it.

The biggest mistake owners/executives make today, is to assume that enhancing a brand (or Brand) is to create a new logo and letterhead.  

That is not branding.  Branding is a strategy, a mindset, a way of life, a methodology and the "great clarifier".  To effectively extend and enhance a brand, one needs a methodology that includes customer segmentation and building a matrix of brand identity across all customer segments and brand penetration that matches.  Brand management, brand maintenance, brand crossover, and constant brand acceleration.  The process will release you.  The process will force you to fine-tune the value hidden in the company.

Historically, a re-Branding activity in many case has resulted in an increase in valuation of anywhere from a few % points in value to a 20% increase in value.  It's like painting your house before you sell it - you get a better price for the house after it's painted and renovated!

Funds managers, M&A firms and company acquirers would do well to ensure that the brand is rightly created and maintained prior to any major activity.  Owners/executives need to watch Brand Value constantly and tweak it as necessary, as it will allow you to soar to heights not imagined before. 

And find a good "Brand Artist" to help you with the art part!

Culture will dictate your company's success

Culture - it means so much to so many people.  Yet it usually means one thing to a company's Founder - it means "His/Her Way or the Highway".  All too often a Chairman of the Board, a CEO or a Founder form their company or shape the enterprise they lead in their image.  They hire in their image, they manage in their distinct management style and they inculcate the same modalities into their management levels and the rank and file.

Cultures change at the same speed as business models change.  Companies that neglect "Culture Shift" miss the boat.  Their Customers notice it first, their suppliers second and then the Web notices.  By the time the C-level Exec does, it's too late and the market share lost is significant.

Your Customer dictates the culture of the company - NOT the Company's leaders or Founders. Companies that succeed and have high Customer ratings and extensive Customer Loyalty are the ones that get their Customers' Culture right, they support and serve/service it and are flexible enough to shift it when necessary.

Culture management is a task that needs revisiting periodically - almost as frequently as financial statements.

RECOMMENDATION: 

Create a designated title and assign it to the most Customer-centric person in the organization.  NOT a Manager and NOT an Executive.  Someone who has a pulse on the company's Customers and someone with a multi-cultural background.  Task them to review Customer Service records, Customer feedback, the Corporate Blog and Complaints.  Have them write a cultural post on the company's blog periodically. Have them present "Culture Shift Recommendations" once a month.  Have them present to the Board or to the senior leadership team. 

When able to, bring in a Change Management / Culture Management Consultant to help build a Culture map that defines cultural impact and recommendations that address 1) Customers, 2) Employees and 3) the Company's Market Segments.