The two most common threats to big corporates can be ORGANISATIONAL and/or ENVIRONMENTAL.

 

As I’ve often said, “Companies don’t fail. Businesses don’t fail. Products don’t fail. Brands don’t fail… It is Leadership and Management that causes these to fail.”

 

In Woolworths case, their internal issues are their sheer refusal to believe that anyone outside their company knows anything worthwhile. It reminds me of the saying, “Only a fool knows everything” and Woollies, for all their admirable knowledge, expertise, and ability, are sailing 5º off course, right into the proverbial Titanic’s iceberg!

 

They stubbornly have refused the recent counsel of a previous CEO who has told the Board, that WOOLWORTHS has chronic “ABC Corporate Cancer” (a term coined by Warren Buffet that identifies the destructive combination of arrogance, complacency and bureaucracy). This is clearly observable when you consider their absence of strategic leadership in overcoming the long-running Coles Price war, their botched and re-botched Every-Day Reward loyalty programs, their high staff turnover in Marketing & Strategy personnel, and turnover of Chairman and CEO.

 

So THREAT No 1, the Denial in recognising the ORGANISATIONAL aspects of ABC, is sending WOOLWORTHS cascading towards disaster. They need to embrace a humility and adopt attitudinal shift to listening to and accepting external advice.

 

The often spruiked Einstein-quote of “Doing what you have always done, and expecting a different result is insanity”, might apply in the face of their diminishing success over the past 10 years.

 

Threat No 2 is an External One. WOOLWORTHS see Coles as their major competitor. While Coles struggles against WOOLWORTHS, Aldi is left to grow consistently at 7%+… Why can’t WOOLWORTHS see the writing on the wall, or at least the significance of this trend???

 

WOOLWORTHS (and Coles) have adopted the short-term, and brand corrosive pursuit of private label and house brands, at the expense of branded products. They have made enemies of FMCG companies that they should be partnering with to undo the generic attack on brand value. They should be encouraging brand equity development and new product development, and supporting brands in ways they never have than before.

 

Instead, they connive to squeeze what little is left in profits for their FMCG partners, forcing budgets dry, eliminating insights for NPD by research, or revenue for brand equity development.

 

So THREAT No 2, the Denial in recognising the ENVIRONMENTAL aspects of ABC, is undermining their own competitive advantage and market positioning, creating an industry and a market place that is becoming more willing to reject WOOLWORTHS as a preferred solution to its needs.

 

Inevitably, of course, the WOOLWORTHS Board will retire, fat on its Directors’ Fees. WOOLWORTHS senior executives will ‘migrate’ to other retail organisations, employed due to their position and political savvy, rather than their failure to save WOOLWORTHS, and WOOLWORTHS will become a company that older people “might remember”.

 

It the poor shareholders of WOOLWORTHS , the faithful investors who trusted the Board and senior executives, for whom I feel sorry; particularly when WOOLWORTHS could return to favour dominance and mega profits, by simply jumping form their self-imposed pedestal and holding cap in hand.

 

NB: WOOLWORTHS were offered a means of generating $400M is EBIT p.a. in 2007… and two senior executives individually approved the concept… but shuffles in management and politics… combined with insurmountable corporate arrogance quashed that concept regardless. Now they’re in trouble – go figure!

The Objective of the following is to empower business leaders to achieve breakthrough, profitable sale growth: Here goes…

Understand What “Marketing” is

The first thing a CEO MUST do is recognize the definition of the word, “Marketing”… Believing that “Marketing” is simply the “1 ‘P’”, Marketing Communications, or “P=Promotions” … maintaining a perception that “Marketing “ is simply advertising, promotion, publicity and tricks , fluff and ‘smoke and mirrors’ or ‘sales support’, just locks CEO’s into a world of pain.

A CEO MUST understand that “Marketing” is actually the complete function of “managing exchange”… combining disciplines that include:

  • Quantitative methods
  • Market analysis
  • Consumer and buyer behaviour
  • Motivation leaning & either psychological skills
  • Pricing optimization and strategic management
  • Distribution and supply chain control & Management
  • Sales Process
  • People
  • Segmentation, Targeting & Positioning, AND
  • Internal Politics

Understand the Hierarchies of Marketing

It is sheer suicide to allow a person who has been in one industry, working there way “up” over the years, to rise to a Marketing Leadership role, without having secured tertiary or specialised STRATEGIC management education.

Why this has happened in Marketing, is abhorrent. But imagine, promoting a nurse to brain surgeon, because he or she worked in a hospital for 25 years?

Imagine, promoting a receptionist to Senior Tax Counsel because he or she worked for a tax account for 20 years?

Imagine, promoting the stewardess of a Qantas jet to head pilot, because she’s been flying for 30 years?

Its is MORE stupid to hand over strategic decisions for a business to someone who’s expertise has been buying print, organising photos, copy editing brochures, or drafting advertising schedules… sheer madness!!!

Understand Segmentation

A “market’ is nothing more that a corral of heterogeneous segments.

As soon as I hear naïve commentary that starts off with “All people want” or “Everyone wants…” I shudder!

As soon as you start treating your customers as cookie-cutter copies of each other, you have definitely, absolutely undermined your sales and profit opportunities.

As soon as you confuse your corporate identity from your branding, you are sunk!

McDonalds has limited itself by lacking strategic competence at this level. So has Telstra – big time! Woolworths (operational giants, strategic dwarfs) have no idea what they are missing. Even Apple, debatably excellent marketers, are cruising for a bruising… watch THEM decline if they don’t ‘get it’ soon!

Mars owns the global canned pet food market because is recognizes and rends to the existence of segments – you don’t maintain 85% market share for 30 years without a GOOD reason! But even the mighty can fall.

The Hurdle for Business

The issue is REAL Marketing has been defamed into an ancient art form by the self-interested opportunists of the operational strain… people without qualifications, who lack understanding and knowledge, always push people away who threaten their power.

Snake-oil sales people, with fast tongues and greedy motives will put down common sense to play on emotion and fear. Comedy and doubt, to feather their own nests and ANY cost.

The solution lays within the grasp of so any open minded CEO, COO of CMO

Leaders of organizations MUST be operational. They must know their businesses.

The opportunity costs is they cant have the strategic competence of those with different skill sets.

One of the best CMO’s I have met in years recently told ne he enters a meeting hoping he’ll be the least expert of all participants and that he’ll learn the most… but many business leaders perceive they know it all or should appear to know it all… with outcomes synonymous with the fable of the Emperor’s New Clothes.

There are a significant number of strategically skilled consultants and experts across the globe who do understand strategic marketing in its complete sense, and who can contribute to decision making strategically.

GREAT CEO’s recognise their own weaknesses as well as their strengths. Greater one’s act decisively and do something about it.

Want some more insight? Download my free e-book, THE FOUR FACES OF MARKETING, here… http://j.mp/ALLmktg

Are you betting everything, your future, your financial security, your professional reputation, your life savings… on your upcoming product launch?

You’re not the first to be going through this nerve-wracking experience.

Are you fearful of the disappointing, gut-wrenching possibility, no matter HOW unlikely, that having spent months (even years) creating and refining a product you believe will truly help people, finally offering it for sale, that it might gather dust when no one buys it?

Wouldn’t you feel better with some sort of safety check, or protection against making an error of judgement, to remove any possibility of a single but crucial, launch-ruining omission, that could turn your product launch from a triumphant success into the mistake of your life?

Its great that every thing looks hunky dory. I bet you’re sure you’ve considered all the issues… but, even if you are100% confident you couldn’t possibly have forgotten, overlooked, or failed to consider anything… Isn’t it worth just double-checking the plan that might change the very course of your life?

Then why not take five smart minutes and do a Pre-Launch assessment? It is a proven, valid tool that measures the factors known to have significant effect on the outcome of product launches. It exposes oversights. It reveals hidden issues. It identifies any shortcomings and it suggests possible improvements to your product launch plans so you nail success.

The executives of Launch Engineering, a marketing consultancy dedicated to the scientific application of marketing knowledge to product development & launch, have been developing, planning, marketing and launching new products and business concepts for over 35 years.

Now, they have digitised key findings into a simple online, do-it-yourself pre-launch analytical tool.., prelaunchchecker.com

Whether you’re trying to launch a new product for a big corporation, or a new business or even start from scratch, the unique pre-launch assessment gives you a disciplined, objective, academically sound, and commercially proven means of predicting your certainty of product launch success.

What makes the Pre launch evaluation so special is the sophisticated basis in which it was built… on the back of a huge University study that determined the key factors in successful product launch proven by then 40 years of commercial application. It is an unique method of making sure your product launch will be as successful as it possibly can, and a safety net that warns you before you launch a product that cannot succeed.

Let’s take a look at how the Pre-Launch Evaluation helps you identify and measure the variables so you make sure you have a winner, and launch it in the most optimal way…

The analysis addresses the key factors that are known to have a significant effect on the outcome of a product launch.

The scores that you give for each factor are than assessed according to the known significance, or value, of each and every key factor, so a mathematically generated performance indicator is produced to give an objective and non-emotional assessment of the likelihood of product launch success.

This final score definitively indicates probable product launch outcomes… AND has the bonus benefit of identifying the areas that need to be improved to improve the score and optimise the likely launch result.

Over the past 17 years Launch Engineering executives have used this method over and over again… and its NEVER failed!

To put it into perspective, its created breakthrough profits and income, and saved millions in avoidable losses.

Here, in more specific detail, is what this Pre-Launch Evaluation is all about:

* Works with any product category and industry type

* Identifies the significant factors while undistracted by issues of no or small relevance

* Presents a strong business case for investors or bean counters, cynics or worry-warts

* Assist effective marketing planning, particularly contingency planning as well as feedback and control.

* Fires off a warning cannon if the launch concept is faulty

* Based on the synergistic power of academic modelling AND commercial experience

Ready to get started? If you’re thinking it costs a fortune.. and that this is some sort of direct-marketing itch to squeeze you for money… its not!

In the contrary, it is a philanthropic attempt to save people from making boo-boos. Its our attempt the destroy the appalling failure rate of new products. We genuinely want to protect people’s lives, jobs, future, reputations, relationships and careers.

It ridiculous that the knowledge it there, and NOT offered to protect those many people who have lost their homes, their jobs, friends and family ties without the information that is available from a Pre-Launch Evaluation.

The reason we’ve digitised the Pre-Launch Evaluation is so people who are about to launch a new product and who desperately need it to work, people who cannot afford a failed launch, have a valid and useful safety fence.

Yes, its true our firm offers an advanced Pre-Launch Evaluation, where we send a crack team or senior consultants into a corporation to rake and study every facet and then develop a knockout marketing plan… but even the decision makers there can now see whether they NEED this, by first using the online DIY service.

If you want to dodge the product failure bullet, if you’re looking for peace of mind to confidently launch your big idea, if you want to glide through your launch with confidence, knowing that your dreams will soon be reality, then just check out prelaunchchecker.com.

If you’re serious about making your product launch a success, launching successfully and generating a real achievement that your peers and even your competitors will respect, you need to take action and get the odds on your side… If the fear of a failed product launch needs to be buried, or you just want to feel secure… you can resolve all concerns quickly, easily and efficiently.

At worst, you’ll sleep easier knowing your plans, hopes and aspirations will be a reality.

When you ‘nail’ a product launch, you’re everyone’s hero: Your suppliers revere you, your boss admires you, your bank manager congratulates you, and your staff worship you as you collect accolades for your marketing and entrepreneurial prowess…

(… Unfortunately, if you do fail, it the reverse.)

We want the success outcome for everyone, so spread the news and get everyone using the prelaunch checker evaluation from now on?

The direct link is prelaunchchecker.com… but you can also get to it from the launchengineering.com web site

According to Wikipedia, the free encyclopaedia

Milton Friedman takes a shareholder approach to social responsibility. This approach views shareholders as the economic engine of the organization and the only group to which the firm must be socially responsible. As such, the goal of the firm is to maximize profits and return a portion of those profits to shareholders as a reward for the risk they took in investing in the firm. He advocates that the shareholders can then decide for themselves what social initiatives to take part in rather than having their appointed executive, whom they appointed for business reasons, decide for them.

Friedman argued that a company should have no “social responsibility” to the public or society because its only concern is to increase profits for itself and for its shareholders and that the shareholders in their private capacity are the ones with the social responsibility. He wrote about this concept in his book Capitalism and Freedom. In it he states that when companies concern themselves with the community rather than focusing on profits, it leads to totalitarianism.

In the book, Friedman writes: “There is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.”

The truth is that CSR-free businesses strive towards highest possible ROSF (return of shareholders’ funds). To do this they MUST focus on operational issues, ignore the implications and incidental costs of short-term returns over long terms position, and IF EMPOWERED, create win/lose relationships with trade partners (and even customers).

Friedman ignores two keys factors of the 8 P’s of Marketing – PEOPLE & POLITICS – the People who possess operational skills, don’t ‘get’ (or even understand) strategy. The politics of a Board of Management team that exercises OPERATIONAL strengths cannot embrace (or even grasp) STRATEGIC concepts, ideas, and approaches.

So Coles & WW have now commenced on their paths to self-destruction… two giants that DESERVE immortality, undermining their future. One is like a care with great power delivery to the rear wheels; just missing one of its front wheels… steering isn’t very good. The other is missing a rear wheel, it can only stay stable turning in a circular fashion on itself, in every widening and less efficient circles.

(If you doubt this at all, talk to Geoff Kennet, try and find a mission statement for Westfarmers or Coles, ask WW why they rejected a promotion to generate $400M p.a. in EBIT 8 years ago, because they were focused on ‘making’ Everyday rewards work, but now hang their hopes on squeezing more from suppliers, while taking more shelf space for private labels – the polices used by their abnormally high English executive team, who are applying the OPERATIONAL methods that have now damaged Sainsbury & Tesco.)

Both are building businesses for Aldi, and now Lidi… in the false race to short term ROSF while damning long term ROSF permanently. (See “Are WW & Coles sly Agents of Aldi”).

Mind you FMCG companies fell into the Corporate Arrogance trap decades ago (some are still there) and, had THEY had strategic insight and nous, they’d have control of the situation now, but alas… short term “Friedman” thinking undermined THEIR future, as well!

But CSR (Corporate Social Responsibility), or the lack of it, is NOT the issue, but only a symptom.

The REAL issue is strategic thinking vs operational thinking…. Strategic Management as opposed to operational Management… Panning for winning the war, not raining to win a single fight in a stand-alone battle.

Adopting the Hierarchies of Marketing, and embracing the need to create and maintain balance of power between OPERATIONAL and STRATEGIC thinking – mindful of the shareholder vs, stakeholder debate – is the reality that escaped Milton Friedman.

[Readers are invited to download my free e-book – “The Four Faces of Marketing – The Missing Link Between Marketing & Management” at http://j.mp/ALLmktg ]

Too many marketing strategists believe their own BS! Pricing Strategy, Communications strategy, Online Strategy, branding strategy etc. isn’t genius… it is obvious, common sense that evolves out of the fact that perfect knowledge leads to perfect decisions.

I’ve had an extraordinary number of commercial successes in my career, record-breaking ones… NOT because I am one bit smarter, more intuitive, have more street cunning or am unusually lucky, but because I persevered long enough in learning my trade to be able to recognise the one, inalienable truth of business: If you genuinely know what the customer wants and can give it to them, they WILL buy!

The absolute secret, of all extraordinary business success, is knowing the customer.

Is it REALLY that simple?

Whether it is the individual or the segment – yes!

There are so many examples of this across the internet, in each of our careers, recorded, diagnosed, studied and reported by academics around the world, and demonstrable in every case study and high return annual report… so why do we complicate and confuse, cloud and cover this fact?

Think about it…

Pricing Strategy: In particular Value-Based pricing? Know the customer!

Communications strategy: In particular advertising & positioning? Know the customer!

Retailing: In particular store layout, ranging, staffing, location? Know the customer!

Manufacturing: Everything from branding, sizing, packaging, new product development, distribution strategy? Know the customer!

Why is the business community in denial?

When FMCG hummed a merry tune, the industry habitually committed to segmentation studies annually… but as operational executives with corporate political skills rose in a culture of corporate arrogance, costs were cut to carve out larger profits, ignorant to the fact they were really blunting competitive advantage and digesting brand equity.

In adequately training marketing personnel, briefing and sustaining market research of questionable quality, undermined the payback from segmentation studies and other market research.

Over the years, the team at my firm has written strategy for transport, banks, FMCG, commodities, utilities, government that has generated record-breaking results, unimagined sales growth, and extraordinary profits… why? Simply better understanding of the customer – EVERY time!

An example of how ignorance of the Hierarchies of Marketing can corrode success.

There is a large company – one of the world’s top 500 companies – headed for hard times due to an absence of strategic acumen.

It is a business that owns, operates or manages thousands of holiday resorts across the world.

One of its divisions is an arm that distributes a derivative of of the timeshare concept. Instead of selling the same venue, at the same time, to a consumer, they offer “Vacation Credits”… effectively pooling timeshare ownership across a network of venues that accept a homogenised booking system trading in ownership leverage measured by “credits or points” that a “member or owner” possess.

A great deal, poorly marketed.

Lack of strategic marketing acumen

Management have high operational expertise: They seek out and pursue operationally driven means to squeeze productivity and sales performance. Its killing their business! Operational compliance. Professional conduct. Processes and procedures are impeccable. While overtly obedient to compliance, behind the scenes Sales Management push the envelope:  Personnel are at the forefront of covert ethics… carnal. mercenary, desperate, stressed.

“Don’t talk to me about ‘marketing’… Just get out there and sell!” is the middle management response to those that dare voice their intuitive frustration at an approach that screams out inefficiency.

This company doesn’t invest in adequate market research. It doesn’t understand its prime target audience. It doesn’t understand market segmentation. It doesn’t monitor changes in the market place. It doesn’t respond to new, evolving segments.

“Marketing”, to them, is promotions: They even call their lead generating hawkers, “The Marketing Team”.

This company still uses methods developed in the 1970’s. They run a shotgun appeal sweepstake for lead generation, supported by gifts offered to prospects to attend a sales presentation. Imagine using the same (often weaker) marketing communications strategy for over 30 years!!!!

Their sales teams end up with very low conversion rates, are frustrated and suffer high turnover.

Their operational promotional team produce week, ineffective sales promotions collateral.

They spend huge amounts in HR training, but waste it paying immigrant labour minimal wages at the coalface.

They still grow – at 1,000 ‘members’ a year. If they were empowered with strategic marketing leadership, they’d grow at no less than 25,000 members a year.

Like so many companies, the bigger they are, the harder they fall….

“We’ve been doing this for 40 years… what do you know!”

“We’re a top 500 global company, how dare you suggest you know how to run our business better than we do!”

“Even if you were right, we couldn’t service growth of 25,000 members per year.”

I am reminded of the quote, “There is no reason anyone would want a computer in their home” by Ken Olson, president, chairman & founder-Digital Equipment Corp. in 1977. The point being that larger corporations suffer resistance to change with greater inertia than smaller ones. Part of this comes from what is cynically described as “Corporate Arrogance” but often simply a factor that results is Operationally-extraordinary executives being promoted into roles that need Strategically educated and oriented approaches to strategic decision making.

I’d be interested in response from any company that sees itself in a similar situation, and from executives who have experienced and overcome the transition from operational focus to strategic focus… and their results.

 

People wanting clarity on the Hierarchies of Marketing can go to…

http://www.launchengineering.com/marketing.htm

… or pre-order my upcoming book on the Hierarchies of Marketing from BookBoon.com.