What about the future?

November 20, 2013

Many businesses reach the height of their success just before they expire. Why?

Under the operational umbrella, they they have learned rights and wrongs, developed an understanding for their strengths and weaknesses, developed quality networks, and streamlined efficiencies.

Under the strategic umbrella, leadership and management are starved of skills.

Ignorance, being blissful – until things go wrong – remains in tact. Management blames the economy, their workforce, their trade channels, their advertising agencies, even their customers, for their demise.

The truth is they do NOT know what strategy is. They do not have strategic skills. They have not managed, or planned, strategically.

A decent strategic marketing plan protects against an adverse future, in fact it creates a utopian one.

A decent strategic marketing plan understands industry dynamics, capitalises upon competitive circumstances, caters for and creates opportunity in economic change, and prepares an organisation for evolutionary adaption to new market forces.

Life cycle stage analysis is a crucial element of strategic marketing. So is product portfolio management. So is brand portfolio management. So is trend analysis. Tracking change in market and segments alike is mandatory for strategic planning.

I was once told by the CEO of Australia’s biggest software and hardware distributor at the time (with 75% market share), “We write a marketing plan in 3 weeks”. They went broke within 2 years.

I once expressed concern to Australia’s biggest Office Equipment supplier that they needed to think about Strategic Marketing. The Sales Director replied, “Don’t talk to me about ‘marketing’, we just need to get out there and sell!” They collapsed into liquidation 18 months later.

I counselled a company for three years in photographic services and forewarned them of changes to consumer behaviour. Their CEO said, “This company has been going 44 years, and you think you can predict its demise.” Four years later he, and his business, were dead.

National Account managers in FMCG, senior consultants in global consultancies, CEO’s of multi-nationals… all can fall into the trap of mistaking tactics for strategies: Perceiving operational skills as strategic ones, with impressive success camouflaging the absence of outstanding success.

When a business becomes bullet proof, immortal, and self-perpetuating; even then there can be no rest. This is (traditionally) when the smooth talkers, diplomats and bureaucrats – overshadowing the gifted strategic thinker – win Board level roles.

Insightfullness, the ability to see the future with clarity, the skills to determine what factors are relevant, crucial or significant, is not necessarily accompanied by charisma, diplomacy, or graciousness.

It takes a brilliant mind, wisdom of the ages, entrepreneurial spirit and great basic training to lead a company to a dominant future.

This is the aspiration great leaders must envisage and pursue. This is how CEO’s should be assessed and evaluated, and rewarded. For my money, it’s ALL about the future.

[Anyone wanting to know more about strategic planning should go to: http://j.mp/markstrat ]

During my Feb 2012 presentation at the FMCG summit at MGSM in Sydney, I asked the group of about 60, “When did you do your last segmentation study?”.

I was appalled to find only 1 company had undertaken a segmentation study in the past seven years… SEVEN YEARS!!!!!!!! (Less frequent than 3 years is considered intolerable!)

There was once a time when FMCG marketers were recognised as leaders, gurus even, in the execution of marketing science: An FMCG marketer was the herald of super-normal profits, profit maximising decision making, and management leadership.

When segmentation is the most powerful tool in the arsenal of a marketer’s weaponry, and the professional standard slips to such a low, no wonder FMCG companies are crying poor!

But, are their marketing executives to blame? I wonder….

Could it be the declining quality of market research services in Australia has so declined as to undermine the anticipated value, insight or trend identification?

Could it be that senior management is so diluted in marketing training that those who control the purse strings – ignorant of how much they don’t know – simply are not allowing marketing departments sufficient budget for segmentation studies – denying resultant sustainable competitive advantage and brand equity investment?

Could it be that the pure-academic standards in the tertiary education of marketers has simply eroded the passing down of commercially important training and skills to the point where marketing graduates simply are not empowered with proper education in marketing anymore?

I sit, jaw agog, sometimes at the wasteful and poor marketing communications efforts in TV advertising spend and creative, at outdoor ads, online ads and other marketing communications execution that just denies justification, and I wonder… but with the revelation of such poor strategic marketing management helps me understand the woes of the industry and from where they come.