Tag Archives: tactics

Create a Stronger Brand Through Research and Leadership

As an adviser to SMBs, we frequently are in the role of addressing branding issues in an organization either looking to jump start growth or figure out how to combine forces with a merger partner. In any such scenario, the effort to rebrand is a challenge. To take a known corporate identity and recast it in the minds of a target audience requires research data, creativity, and commitment.

Overture NetworksOverture Networks in the Research Triangle area of North Carolina merged with another competitor, who happened to be located in the same town. Both Overture and Hatteras Networks competed in the telecommunications equipment sector. After the merger, the new company had a broader product line, bigger sales distribution channel, and deeper expertise. Mark Durrett, Overture’s marketing director, and Alicia Smith, the communications director, shared seven lessons from their rebranding experience via the Marketing Profs website this morning:

1. Executive buy-in is critical

Our executive team recognized that our rebranding project had the power to help grow the business and change buying behavior. With the CEO’s support, every executive leader, a member of our board of directors, and other company leaders became involved. Vested in the project’s success and expecting measurable results, they all cleared their calendars to participate.

2. Set internal and external goals

The merger brought together two companies with complementary products, but different operating cultures. By marrying the objectives of our rebranding work with the company’s strategic business and growth goals, we helped ensure that everything we did drove business value and focused on growing the bottom line. We learned to be realistic with our timing, knowing that ships don’t turn on a dime, and gave ourselves time to define and then “live” our new brand.

3. Research can inform and guide

There’s tremendous power in asking questions—and in listening. Diving deep, we asked everyone—customers, analysts, internal stakeholders—what they thought we did, how we did it, how we could do it better (or different or easier or with more impact), what they wish we did, how they prefer to work with… you get the idea. After we created a safe forum to receive candid, useful responses, the input poured in. In any such exercise, you must be prepared to get quality feedback; you must listen carefully, evaluate honestly, and decide what really matters.

4. Collaboration (and outside experts) can bring you together

A valued and trusted partner will use your research, extract ideas from the entire team, and empower key leadership to make quality decisions. And just because you’ve expanded the circle of collaboration doesn’t mean you make decisions by committee. With everyone invested (and involved) in the process, our leadership made decisions that the other collaborators readily accepted.

5. Establish a foundation, then build on it

Before beginning any creative exercise—from your new logo to a datasheet—your team needs to have agreed on all the elements that define you as a company. Armed with those foundational brand elements, you can effectively build out the language, design elements, stories, and guidelines that allow your brand to grow in the direction you desire.

6. Convert collaborators to evangelists

Executives and other leaders have a unique role in sharing your brand story with customers, analysts, employees, and key stakeholders. Ideally, they will transition from collaborators to evangelists. 

7. Keep walking the walk: You have to live the brand

Once the launch party fades, the hard work begins. Hopefully, by now, your entire company agrees that your brand consists of everything that has anything to do with your company, and that your brand goes everywhere. Your stated values must become reality. Anyone who interacts with your people or your products, receives an invoice, or sees your logo—really anyone in any circumstance—expects an experience that aligns with your brand attributes. 

 

Even if you have not undertaken a rebranding project, you and your company can benefit from the advice offered above.  Think through how you can solicit and implement feedback from customers. Incorporate their input into your messaging, involve executive management in the process, and seek to build collaboration into brand evangelism.

Changes in Marketing You Need to Know For 2013

In advising my clients on marketing and related business development issues, it is often difficult to get them focused on integrated marketing approaches. Many have been sold marketing services by an agency that is not necessarily coordinated with either the overall business strategy or other marketing strategies and tactics. With the advent of a new year come a series of questions regarding the future and direction of marketing given the increased importance of the internet. Recently, Uri Bar-Joseph, director of marketing at Optify, in a blog post on the Marketing Profs website, addressed what his firm sees as trends in marketing for 2013. His opinions are offered below:

Digital-Marketing-Picture

1. Digital marketing will continue to grow

It’s pretty obvious to just about everyone that digital marketing is becoming the main channel for demand generation. But despite the adoption levels of digital marketing, there’s still a lot more upside. In 2013, digital marketing will continue to see huge adoption rates as businesses of all sizes implement all manner of digital marketing tactics.

2. Digital marketing services will surge

Subsequent to digital marketing’s mass adoption, adoptions, digital marketing services will spike. Consultants, agencies, and new services will surge to support new users and meet their demand for assistance.

3. Content creation services and software will proliferate

Content marketing is becoming the core of just about every marketing initiative for B2B marketing as well as B2C. In 2013, we will see a host of software and services solutions for content creation and syndication emerge as companies try to use content for more demand- and lead-generation results.

4. Integrated marketing will gain popularity

After new channels stabilize as standalone, consistent lead-gen options (social media, content marketing) and new channels and tactics emerge with enormous promise (mobile, re-targeting), 2013 will become the year of integrated marketing campaigns. Marketers will try to combine tactics to make use of the compounded effect of multiple channels’ working in unison. The market will react as more solutions will come to offer the ability to manage and measure integrated campaigns in one place, marking a decline in the adoption of one-dimensional solutions.

5. Direct mail will make a return

While digital marketing rises, sophisticated marketers will recognize the potential of direct mail coupled with an online connection to break through the noise. Solutions and services that offer integrated—offline and online—approaches will emerge and gain traction as a result of being affordable and highly measurable.

6. Big Data applications will emerge

Big Data has been the hot topic in the media for the last 18 months, and big companies such as HP, IBM, Microsoft, and other software conglomerates have been developing solutions to tackle Big Data. In 2013, we will see solutions emerge and adopted that offer big data applications for day-to-day marketing campaigns.

7. The immeasurable will become measurable

In 2012, we noticed a lot of talk about measurement and the ability to justify marketing efforts. As ROI becomes essential to the broad adoption of any marketing tactic, in 2013 solutions and services will find ways to measure previously immeasurable tactics and evaluate their contribution to the bottom line.

8. PPC will decline as budgets move to other paid solutions

In 2012 we’ve seen the first signs of decline in PPC usage for B2B companies. In the next year, more budgets will move away from PPC to new and more affordable channels and tactics.

9. Marketing spend on software will increase

As more software and infrastructure for marketing is required, Marketing’s budget will match IT’s.

10. Sales responsibilities will move to Marketing

The expansion of lead generation responsibilities in B2B marketing is resulting in the moving of more sales-related tasks to Marketing. In 2013 we will see marketing teams take over more sales tasks, such as lead qualification, inside sales team management, and sales operations.

How about you and your company? As you think about your strategy for business growth for 2013, which of these trends have you thought about? For me, the top 3 things I want my clients to focus on are integrated marketing, metrics, and a digital marketing (including content) strategy.

 

Artisan Opportunists Make Great Entrepreneurs

Having served entrepreneurs for years, I tell my consulting clients that I have worked in almost every industry niche possible. Until my recent involvement with an incubator in Raleigh, North Carolina that is serving artisan entrepreneurs, however, I had not worked with many artistic types in a business setting. A group of Baylor University scholars wrote Small Business Management: An Entrepreneurial Emphasis a few years ago in an effort to define what small businesses need in terms of critical success factors. The authors borrowed some thoughts from a forerunner of management thought, Norman R. Smith. Smith held that there are 2 styles of the entrepreneur; the craftsman (artisan) entrepreneur and the opportunistic entrepreneur. He developed a 14 characteristic scoring system to classify entrepreneurs into one of the two categories, including qualities such ranging from breadth of education to employee relations.

Artisans were observed to possess a skill or talent that drives their initiative to open a business (vs. the tendency of an opportunistic entrepreneur to amass resources needed to respond to a market need.) Many grew up in an environment that values tasks and hard work, often as a result of exposure to the work world very early in life. With a preference for mastering the mechanics of machinery, they tend to become production-oriented early in their work lives. Many have become frustrated with management or unions and take the start-up route only after some critical event occurs.

Other key distinctions include a reluctance to delegate authority and a preference to develop customers by personal contacts only. Often, growth plans are hard to identify in the way they conduct business. This entrepreneur has a paternalistic attitude and tends to think of employees as part of the family. Accordingly, operations are focused inwardly with little engagement of the community around the artisan. With concerns about losing control over a “good” situation, artisan entrepreneurs have been known to resist involving others in key management decisions and shun interaction with outsiders. Traditional forms of financing and marketing are the rule here.

As I think about the artisans whom we serve at Kindred Boutique (the incubator in Raleigh), I see many of these factors at work. While many characterizations are stereotypical, there are enough patterns to validate the mindset of artisan entrepreneurs whom we encounter as being very similar to what is described. We work with the artisans to establish better cooperation–the boutique itself is intended to show the benefits of collective marketing and “product” testing. Often, an artisan entrepreneur has chosen this new career because of frustration with his prior one. Non-traditional forms of marketing and funding their ideas are not well received.Opportunist

What is desirable is to help the artisan think more opportunistically. (This line of thought is not meant to denigrate artisans in favor of non-artisans, who often need to think more creatively and divergently.) Smith found  that opportunistic entrepreneurs come from a background of predominately middle- to upper-economic status; their fathers are typically skilled and professional workers and own small or family businesses. As a result of the household income, these entrepreneurs have been groomed for success through formal education and exposure to other cultures through travel and attending fine arts events. This type of entrepreneur is observed to have significantly more marketing, selling, general administration, and merchandising skills.

Having watched their fathers in the business world run organizations, this group understands and appreciates management practices like delegation, advanced segment marketing techniques, and the value of strategic planning. As a rule, this group enjoys competitive situations, and may be more likely to burn their bridges. There is no critical event that decides when they should go into business. instead of competing on price and personal reputation, the opportunist relies on product development and strategy. 

Artisans can benefit from the experiences of opportunists and vice versa. Take a moment to think about which group represents your basic worldview. Modify the way you start and run your business to incorporate an approach that your counterpart from the other group may employ. You will be more successful in life and business as a result.

Your Perspective May Undermine Innovation and Value Creation

Every company, whether privately owned or with public stockholders, is concerned about its valuation. The value of an enterprise is enhanced when its future growth opportunities are well understood, documented, and pursued. Why is it, then, that so many small to medium size enterprises fail to articulate a compelling innovation strategy that will fuel the needed growth? Kevin McFarthing, who operates the Innovation Fixer consulting firm, argues that it can be a lack of perspective. He has seen too many companies obsessed with current period performance of the exclusion of the long term “big rocks” that must be put in place to build a foundation for sustainable success.

McFarthing evokes the Three Horizons model of the late 20th century in many consulting projects as a means to draw corporate executives’ focus into more far-reaching and significant perspective. Baghai, Coley and White first outlined the model in “The Alchemy of Growth” in 1999. Markets and technology are seen as drivers in the model and are depicted in the diagram below (from Tim Kastelle’s blog).

Three Horizons Model

 

McFarthing’s interpretation of the Three Horizons model is as follows:

The Three Horizons process forces an assessment of technology strengths and market dynamics. It then forces a view of how much resource is allocated to each of the Three Horizons. The example above shows Google’s allocation of 70/20/10, which will differ for different companies in each category. It also forces a portfolio approach to innovation.

It also helps to retain the concept of emergent strategy in your approach to the innovation portfolio, as the days of fixed long term planning are diminishing…You can’t just write a five-year plan, lock it down and expect it to deliver. Large companies must continually revise their perspective of the role radical innovation will play in their growth.

The balance of the projects and resource applied to each element of the portfolio should be decided by the top team in the company, and be dictated by corporate strategy. Incidentally, it’s not just the resource that should follow a strategic allocation; the use of management time should also follow the Horizon split. Too often resource is applied to the opportunities on the edge, but thinking time is taken up by the short term. It should be followed through, and the temptation to reallocate Horizon Three resources to fight Horizon One fires should be resisted.

Where the application of these principles falls apart in many organizations is in the allocation of strategic (often scarce and/or over-committed) resources to pursue what has been stated as a priority. You know the saying, “You gotta walk the talk.” Breakthrough innovation, then, must move from strategy and communications (though it needs to be thoughtfully developed therein) to execution via competent actions. The right combination of talent, unique skills, and initiative, when coupled with appropriate resources, produces an environment ripe for innovation to occur.  While some organizations are able to spur internal innovation, most rely on open innovation (external sources) to re-energize their enterprises. Even large companies like Kraft Foods estimated that 98% of IP in the food industry existed outside Kraft. Knowing that an industry leader like Kraft saw value in eliciting the help of others should embolden your team to admit the need for outside help.

Three Horizons, while instructional, is not the only model used to enhance one’s perspective on the opportunity for innovation. What these models have in common, according to McFarthing, are the following principles:

  • Make space in your portfolio for bets on radical innovation;
  • Balance your portfolio over different time frames;
  • Balance your portfolio over different technology needs;
  • Exploit the potential offered by Open Innovation;
  • Balance your portfolio over different market opportunities;
  • In all cases, stretch your view and take a broader perspective.

Sounds like good risk management, creative strategy, and a plan for sustainability rolled into one approach!

Find Ways to Improve Manufacturing Company Profits

In trying to understand business issues, case studies can serve as a useful tool to show us what we may not see at first glance in our own businesses. When I was doing the research that led to the founding of the Turnaround Management Association a number of years ago, I had the “opportunity” to compile, read, and review over 900 case studies on attempted turnarounds. As I read about companies from a variety of industries, geographies, and backgrounds, I was able to decipher certain trends and best practices. While I obviously don’t have the space (or your attention span) to delve into that level of detail in a blog post, I wanted to recount a case study and point out some lessons to be learned.

better resultsA $100+ million company lost 25% of its revenue during the period 2005 – 2010. Simultaneously, EBIT declined by 91%, dropping to 0.9% of  2010 sales numbers. A turnaround firm was retained to restore revenues and achieve at least 10% EBIT by the end of 2012. The results of the project were that 2011 revenue improved by 20.20% over 2010 and 2011 EBIT was 5.5% of 2011 revenue, an increase of 470% over that of 2010.

How the Results Were Achieved

Strategic Alignment

By analyzing the markets served, rates of growth, and trends, the turnaround firm was able to highlight the very best opportunities for high growth. Historical analysis yielded insights into top customers and products, with breakout information by plant location. As insights were gleaned from the data, brainstorming sessions were held with the executive team to modify strategic and tactical plans.

Product Pricing

As with many companies who suffered a decline in fortunes, this company had begun to compete on price rather than more strategic competitive advantages. As their products and services became commoditized, considerable price variability had snuck into the company based on local market conditions. With considerable (40%+) market share in its primary markets, the company in crisis had very few price comparables available from competitive intelligence by which new pricing could be developed. The consultants helped the company do the following:

  1. Make product groups by cost and technical specs,
  2. (For each product group) establish minimum, mean, and max prices,
  3. Determine products that were priced outside of guideline rages, and
  4. Identify customers who were not profitable to serve.

Margins were terrible, so the company implemented the following procedures recommended by the turnaround firm: 

  • Pricing for non-strategic customers was immediately increased,
  • Held meetings with strategic customers to explain the fair price increases, and
  • Future price increases were planned in unison with strategic customers.

Product Costing & Standardization

The old product costing model was jettisoned in favor of a more accurate, easier to maintain one. Product Standardization was accomplished by analyzing SKUs across key product groupings. A small list of products were designated as standard offerings. Everything else was labeled “custom,” with appropriate cost and pricing decisions.

Operations Improvement

Process improvements were instituted after plant visits. Highlighted items included:

  • Supply chain improvements through TQM and JIT were achieved
  • Minimum order quantity guidelines streamlined production runs and enhanced scheduling efficiency
  • Setup and preventive maintenance routines were sharpened
  • Paperwork and scrap reduction and recycling were instituted

The culmination of 2011 efforts was that higher contribution margin at the plant level. Production scheduling and materials requirement procedures were highlighted as areas for additional improvement. 

When an outside team is brought in to focus on profitability and the executive team cooperates fully, great things can happen in a turnaround. Clear communications, improved decision-making, unified focus all lead to enhanced morale and the profitability becomes an outgrowth of good management.