Monthly Archives: March 2007

The Living Green Expo

The Living Green Expo comes to the Twin Cities area on May 5th and 6th at the State Fair Grounds. 

I am a big fan of green living and support companies that are green in their business efforts.  Admission is free so really what do you have to lose to go check out what products are available and hey, you just might learn how to save money by going green.  I have switched almost all my light bulbs to the low watt bulbs over the past year.  Not only am I saving money on replacement costs, but energy bills are lower as well.  Going green means saving green in more ways than one.

 Check it out:  http://www.livinggreen.org/index.cfm

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Blog Bump, Light

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Edward’s Employer Handbook Rules

Rule #1  Reward life skills and personal growth.

 

 

Doesn’t matter what field you are in, too few companies do this.  It’s all about the technical skills.  You know what, here’s a little hint, technical skills don’t mean a whole lot if the person is not a developed person all around.  Bad people do bad work, and good people do good work, regardless of degrees or career pedigree.

 

 

Life skills and personal growth are very under rated skills in the world of business.  Few people put any value on the skills someone learns through personal growth.  Frankly those are the skills that really matter at the end of the day.  Personal growth means facing oneself, warts and all and really learning what it means to be who they are and develop their unique abilities.  Those are skills you just can’t teach in school or in a company management program.  They are learned by getting kicked, or thrown to the wall a few times by life.  The kind of soul searching a person is forced to do in such situations is priceless and if they come out a better person, you would be very wise to snatch them up.

 

 

There is a value to this kind of personal growth and the lessons found in them that you just can’t get from books, courses or work experience.  The value you can gain from those life skills will pay off.  I remember a guy I hired, didn’t have the degrees or work experience but he had some really tough life lessons and he used to develop really well as a person and I saw that in him.  He ended up being the top sales guy.  He didn’t have any industry experience or sales experience, but he knew himself better than any degree or experience in a career could have taught him.  That’s real value that produced real results.

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Going Global?

I wanted to update my blog roll and was doing some research for a new service I am researching for my website.  It all focused on international business, that is, the actually process of doing business cross borders, not to be confused with globalization or political, economic or social issues of internationalization.  I was very surprised, I did a 10 page deep search on Google with various phrases and hardly found any blogs.  The ones I did find were either too basic in information or they just updated so infrequently that it they were not timely. 

This actually does surprise me, all the time there are plenty of articles about the importance of international business yet there is no one actually talking about it on a real day to day level on any blog that I could find.  Does that mean people really don’t care or is it that there are really so few experts out there? 

If anyone has any good blogs that deal with international business, let me know, I’m on the look out for them.  In the meantime, I guess I’ll try and switch a few topics of conversation on here to the area of international business to help.

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Poor Returns Means Poor Marketing

Forrester came out with a study earlier this month saying that 76% of marketers had no way to determine their ROI on advertising, yet spend 60% of their budget on it and gives agencies a failing grade when it comes to returns. 

 

During a recent marketing presentation, an information poll was taken and 79% of the marketers had no clue how to measure marketing’s impact on sale’s ability to close a deal.

 

These two situations demonstrate the real need for some solid metrics in the world of marketing.  It really strikes at the core as to why marketing doesn’t get much respect and why CMOs have the shortest tenure of any top officer in most companies. 

 

When is marketing as a community going to wake up and admit they need to rethink their approach?  My alarm clock went off years ago, has yours?  There is no reason why those numbers should be has high as they are.  Any marketer who is in the camp that can’t explain how marketing impacts the bottom line in direct ways, better be worried.

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Dancing With the Devil – Marketing Metrics

The devil is in the details, as the saying often goes.  Today I was lucky enough to be in on a presentation with two professors from Darden School of Business, Prof. Farris and Pfeifer, co authors of a book on marketing metrics.  The presentation was mainly on the marriage of financial and marketing metrics and of course on their book.  It was a very interesting presentation and far too short, I would have enjoyed going another two hours on top of the one hour provided.

 

 

However there was one small comment they made that stuck the most with me.  They mentioned that the drive to a metrics based culture in business often can and does go too far.  The devil is in the details and you don’t want to dance with the devil because in the end, that extra work will cost you more than the returns to know that extra information. 

 

 

The idea behind pushing it too far, really is at the heart of the debate behind marketing metrics.  Many of us know we need better metrics.  If you leave it up to finance or operations to define those metrics, they will want to quantify everything, dance with the devil.  In strategy and marketing, you come to realize and just accept that there is a certain level of immeasurable aspects to what you do.  You can not define with precise knowing, what real estate you own the minds of every customer you have, we don’t understand the human mind enough to say that.  We know that ROI of marketing is so diverse that it is near impossible to really forecast over a long period, what those returns will be in say 10 years or 20 years, you just can’t say it as a return on asset like is often assumed.  There are so many unknowns out there that you are just wasting your time, effort and resources in trying to get answers to those questions.

 

 

As adults, we want answers, we don’t like to deal with ambiguity, in marketing, you just have to learn to accept it.  It’s not finance where you can crunch a number and have an answer, there is still some art left in the science of marketing and you just can’t crunch it with the knowledge available to us today.  When we try, we dance with the devil, the devil in the details and he plays a rather mean game.  You may get an answer but it will never happen, it’s just too susceptible to changes in the market.  So you spend a lot of money and time for nothing.  Then most just do that again and throw more money and people and time at the problem when in fact the answer is a more simplistic approach.

 

 

Another area is that some people want to quantify all their actions and go over board on the metrics.  They end up with far more numbers than they actually need.  A lot of metrics actually say they same thing, they just say it in different ways.  It really comes down to your style and how your company uses metrics.  You don’t need to do an NPV and CLV on the same account because they pretty much say the same thing, just in different ways.  Having quality metrics is far better than having quantity of metrics.  If you can’t act on the metrics answers, then you don’t need it. 

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Deficit and Asset Based Thinking

Opportunities or problems?  Strengths or weakness?  Can or cant?  Polar opposites of what can make a huge difference in the performance of a team.  Deficit thinking vs. Asset thinking, comes down to how you view what you think about and how that influences how you see the world and your ability to work with in it.  The two are very similar, the words used in both are very similar and very small changes from one to the other can make a world of difference in team performance. 

 

 

Deficit thinking is all about can’t, problems, weakness, obstacles.  In a SWOT analysis, this kind of thinking leads to rather large weakness and threat sections.  Or it leads to a company culture where change is very hard to create because there is a general feeling of, nothing can be done.  Deficit thinking is more wide spread in the corporate world than most would like to admit.  It is everywhere.  You can’t trust candidates they may steal or be serial killers, so we have these fun background checks (deficit thinking).  Corporate politics resisting change agents is another example; the old guard fears change and only see problems (deficit thinking).  Employees steal search their bags before they can leave the building (deficit thinking). You can’t trust the entrepreneur, ring them dry of all control and reward, this is how a lot of venture capitalist operate today (deficit thinking). 

 

 

At the end of the day, deficit thinking creates more problems.  It creates a mentality of fear, of failure of never being able to rise above the situation.  Have you ever experienced a corporate culture as such?  I’ve seen many and it makes most sane people want to run in fear.  I’ll never forget this one guy I had dinner with from a large telecom who was in such a department of deficit thinking.  His only goal in life was to have his side business make enough money so he could get out of his full time job.  He hated his job so much; he saw no reason to go to work other than to get the pay check.  The real curse of the deficit thinking is that it creates a culture where change, even life saving change, takes an enormous amount of effort and energy that it leaves the organization exhausted.  Moral is constantly low and management spends a fortune on the latest behavioral test and motivational consulting package.  It’s like stuffing yourself with junk food and never working out; eventually you get sluggish, tired and lacking motivation.

 

 

Asset thinking is focusing on what works, on opportunities and building strength through positive efforts that move a business forward.  Having worked in an environment with asset based thinking; I know the positive benefits that drive companies to the next level.  It is not the rose tinted glasses view of the world or wishing away the bad.  Case in point:

 

 

Once we had a really bad program experience with a client.  Everything that could go wrong did go wrong.  Some of the team was rather gloom and doom; they knew heads could really roll for that one.  I didn’t see it that way, I saw it as the opportunity we needed to really get management to let us fix some of the areas they had been dragging their feet on.  We analyzed every aspect we could and presented our findings and showed how we can improve.  This energized the team because we were focusing on solutions and creating new opportunities.  And we were able to really break through some areas where approval had been bogged down in committee, with the urgency produced by that bad project, we were able to get things done.  That’s asset thinking.

 

 

This ties in with the theme of the year here, beliefs.  How you see the world (beliefs) makes all the difference in how you interact with the world and approach situations.  Do you believe you have problems or do you seek the opportunity?  It’s not positive thinking, it’s not pretending bad things don’t happen; it’s searching for the route to better use of your assets. 

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Using the PESTEL Analysis Tool

Sometimes known as the STEP analysis, PESTEL stands for Political, Economic, Social, Technical, Environment and Legislative. It is a great tool for any size organization who would like to have a simple to use tool for understanding the external forces influencing their market and performance.  If you would like a good tool for external forces, I would recommend using this one.   

 PESTEL is a strategic planning tool; it helps you see the landscape beyond your own market.  This is important because as we are seeing in the stock markets, what happens in China, does impact what happens on Main Street.  The PESTEL is great for ensuring you don’t thinking yourself into a vacuum.  There are times when an organization thinks itself too internally and forgets to understand the power of the outside forces.  PESTEL helps to remind people, there are forces out there, directly and indirectly, impacting how your business performs. 

 A PESTEL can be used with other tools such as a SWOT analysis, helping you understand in some cases, why a particular service or product is performing the way it is.  For example, say you have a product that has seen significant decline in the past few years in terms of sales volume in your traditional markets.  A SWOT analysis may reveal that the market has matured and their tastes have changed to the point they are out growing your product.  A PESTEL may indicate that external forces that created the change in your traditional market have created opportunities in new markets outside your traditional market.  Economic growth and legislative changes may have created an opening in new geographic areas that now give you access to new markets that do want your product.  There are thousands of variables that can help you see this. 

 A PESTEL can be used in Scenario based forecasting.  These are your “what if” situations.  You can take the PESTEL data and forecast future trends and develop a more global and typically better forecasting model for your Scenario based forecasts. 

The down side to a PESTEL is that it will generally give you general data, this is a lot of economic and trend data you can find in the Wall Street Journal.  For a small business, that’s just fine, that level of information is generally all you need.   If you want a more detailed and robust tool, you need to move up to the Market Review Tool which does create a more detailed picture.

  PESTEL is simpler to use than the Market Review tool which is a rather advanced tool that does the same and then some. It provides more detailed analysis, but also you really need to know what you are doing in order to perform the Market Review.  For those of you who are a small business owner or a start up, a Market Review is probably more work than you want or need.  In a larger organization, you need someone who is a marketing analysis expert in order to do a Market Review, otherwise you are going to end up with a lot of misleading information.  If you don’t have such a person, go with a PESTEL instead.  I ONLY recommend the Market Review if you have someone who really understands market forces and marketing principles.  I’ve done many Market Review analysis and am quite good at it, but I also know the pitfalls and what to look for in terms of the data getting warped by biases.  If you don’t have someone who knows this tool well, they just might snap in frustration.  So stick with the PESTEL or hire someone like me who knows the Market Review. 

    Either way, get someone to do the external analysis for you and tie it in to your marketing efforts, it is very simple to do and saves a lot of money when used properly.

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Storm of the Century Part II

For the second time in a week, the weather people foretold of a big storm coming.  They said we would end up with 12-14 inches of snow and this time they were actually right!  I ended up getting about 12 and half inches of snow and other place got a little more but most were in the 12-14 inches range.  This entire experience of the two storms provides a great example of the brand promise.

 

 

During the first storm, it was a bust, we didn’t get anywhere near what they claimed we would.  People had stocked up on food and supplies, cancelled weekend plans and prepared to sit at home by the fireplace all weekend long.  Only to find out, it was a respectable storm, but nothing an hour of shoveling couldn’t handle.  People were disappointed and a bit mad, even calling the weather people, the weather terrorists who tried to scare everyone.

 

 

The weather people built up the trust that you can trust them for telling you when the big ones are coming and the promise was broken in the eyes of a lot of people.  They believed in the commercials and ads about being able to trust the weather forecasters in the event of a big one, that they would give us accurate forecasts.  And for the first storm they didn’t.  So we were stuck with all these supplies, enough bottled water to last the rest of the year and soup to last a few years.  My friend who manages a grocery store said they made a killing on that first storm, it was like Thanksgiving for them in terms of sales.

 

 

With in less than a week, again, we were told to brace ourselves for another big one.  Most people went on with their lives not preparing or believing the forecasters.  They were immune to the daily warnings.  Many proclaiming that you can’t trust the forecasters, that it was all hype to get us to stay home or buy more stuff.  Some did the opposite of what we were asked to do in preparation.

 

 

Finally the day came, the day the storm was to hit.  They said noon to 2pm it would hit us.  It was clear skies and windy.  I knew the wind could be trouble that’s usually how it starts around here, it gets really windy.  By evening, the snow had started.  The next morning, there was a sea of snow and it kept on coming.  Snow plows came by but just ended up trapping everyone in their homes as the snow walls were 4 feet high when they drove buy.  So now we were stuck for some time trying to clear all that snow.

 

 

Lucky for me the snow plow guy decided not to place a 4 foot wall of snow in front of my driveway so I could get out and move around.  Which was a good thing because the power went out.  So I went to the mall, which almost never loses power.  Many places were closed, everyone was understaffed.  The supermarket had people scrambling for supplies, again the pallet of Pop-Tarts had been rolled out, although my friend told me sales were not really coming in, certainly nothing like the last storm.  A look of concern and “we need to take this serious” had returned to everyone’s face and snow emergency mentality was back in force.

 

 

The forecasters had created a brand promise to tell people that they will provide accurate reports at least for the big storms.  That promise was broken in the eyes of many and they did not believe the forecasters.  This happens with company brands all the time.  Often the company provides a brand promise “low prices”, “high quality”. “reliable service.”  And then some where along the line that promise gets broken, often due to budget issues and corners are cut.  This is mainly due to the fact that the idea of keeping your brand promise is not fully understood.

As the forecasters found out, when they break their brand promise, people don’t buy what they sell.  It took a big storm of up to 25 inches in some places, to get that promise back.  If that was money, we are talking having spending thousands per customer to get their trust back.  That’s a lot of money!  The up front cutting of corners, actually costs more money in the end when the company must spend money to gain the trust back.  And companies can’t rely on nature to provide the opportunity; they have to pay for it. 

So the two storms provide a great lesson in brand promise.  Ensure you can deliver on your promise or find yourself struggling to win back customers.  What ever short term profits you may make by cutting corners, will be off set by the price you pay down the road, trying to win those customers back.

 

Winter

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