Have you ever been a lost opportunity? This story is about a vendor that was approached with a request for quote. Truly a good sales opportunity is where the customer finds you. No prospecting, just find out the pain point, position and convey a value-based price. Be responsive and the sale is made.

This Story

A sales person had recently left a firm. A senior executive had the former employee’s email forwarded to him. A current customer wanted to purchase services from the vendor firm. The VP did not have the time to be responsive. That was the first error. Former sales employee’s email should be forwarded to a responsive sales manager. Perhaps it was beneath the VP’s pay grade.

Selling products and services – and selling brand – is everyone’s job.

In this story days went by. Then the VP emailed to set a sales phone call the following week. The VP missed the call. That was the second error. No email, no request to reschedule, no follow-up apology for missing the outlook calendar event – nothing. Two more weeks went by.

Another contact was called to ask, “what’s up?”  He shared an apology from their delivery team, and let on that there was a developing service gap. The other contact inadvertently revealed that the unresponsive VP had contributed to the exodus of several people at the company, as well as customers. Everyone recognized the collateral damage this VP was doing. Frustrated, they shared the truth with customers. Is that wrong? Yes.

The other contact said she would try to motivate the VP to call. An email was received another week later saying, “let’s schedule a time.” By then another vendor is actively engaged. The customer has goals and deadlines to meet. The customer’s response to the VP’s late email says that another vendor is now submitting a quote.

Opportunity Lost or Found

The senior executive now has two options. A better senior executive takes action. He would pick up the phone immediately, apologize with out excuse for his error and solve the problem immediately. A lesser senior executive hides. He sends a rationalizing email with excuses, and even suggests it was the customer who  missed the appointment.

The lesser VP does not work to win-back the business. He dismisses it saying, “good luck with the other vendor.” There’s only one way for a customer to take this lesser response. That the VP is not interested in meeting their needs in a brand driving customer experience.

I like to call the better executive’s approach to solving the problem: “the Nordstrom approach.” Call now, put immediate action in gear to ensure that the situation is resolved and that the vendor’s brand is protected.

How many times does it happen that a Senior VP thinks that participating and engaging with customers is below their pay grade? What will happen to the referral business this client had been sending the vendor?  what will happen if they are asked to complete a survey, or Google review?

For opportunity, it’s never below anyone’s pay grade. As the old Chinese proverb goes, “There are three things that cannot be recalled; a spent arrow, a spoken (broken) word, a lost opportunity.”

From: SteinVox, SteinVox - Voice for Pervasive Strategy

Let me say that again standard budget parameters don’t exist for marketing, and they should not exist, any more than they do for any other function in the organization. No one repeats the past in developing strategies and marketing plans for the future. Is it ever the case that the strategy and goals for the coming year are identical to the prior year? If they are, your company is not growing.

I belong to several strategy and marketing-as-strategy professional organizations. They have members that hold roles like Chief Strategy Officer, Chief Customer Officer, and yes, even Chief Marketing officer, as well as their Vice President variants.  Like every year, this year is no different.

About this time, October, someone in a senior executive role asks the question: “…my CEO has asked me”: ‘What are the standard parameters and/or formula used to determine a marketing budget?’” My colleague shared that this question always makes her “shiver.”

The initial responses for industries X, Y, and Z, come from dozens of C-level and VP-level strategic leaders from different roles in the executive suite. CFO’s pipe in, as do Sales VP’s and others with standard percentages for developing the budget from a total dollar standard down.

If you know me, you know this is frustrating to see. Any MBA should know this is not the right way to prepare for success.

Three things converge to define your marketing-as-strategy budget. first is your marketing plan to achieve corporate objectives. Second is the spend from last year, and third is the economic conditions of spend that the CFO is going to share at budgeting time. Now, the game is on. The most important item, is the first one – precisely, what is it going to take to achieve the CEO’s corporate objectives for the coming year – in budget dollars.

Using standard budget parameters for your industry is like putting a year-long project in gear, backwards. I know, as do other leaders that know that marketing-as-strategy is the CEO’s secret weapon and right hand to achieving success in attaining every strategic goal for the company (not only revenue, but true competitive advantage across all functions). As such, this question is backwards because it is not focused on the expected result, but on building a set of activities first, to meet a budget number based on x% of operating budget, or who knows what.

I replied with this note to my colleague – see if it makes sense to you, too.

Hi Melanie,

In every senior marketing role I’ve held, I have loved this question. It is the opportunity for Marketing Leaders to step up, and defend their marketing plan, base it on strategy, costs, and results.  And, show that it is aligned, and is leading towards results on equal footing, or perhaps better than, any other executive’s plan for the coming year.

How many times have marketers been in the executive suite, and watched the other CxO’s present their annual plans for operations, sales, r&d, and so on…, and then see all the money go to those functions because they say they need 4%, the industry norm of operating budget like every other company in their category? If I’m the CEO, I’m saying: “4% for what?”

This is instead, marketing-as-strategy’s time to shine.

To be clear, it is not the time to say “industry standards spend… so we should too.” That’s sure suicide for your detached marketing plan. Every other leader around the table is going to say “our company is different, and I need that $ for my functional plan. Sure, have some benchmarks in the back of your mind, if asked, but never lead with this logic – it shows you don’t really know.

Instead, build your marketing plan based on the corporate goals the CEO has set out for you to visibly lead the company. Take the time to really put the MBA-rigor you know is right to build a strategy, that drives results, that support the CEO’s objectives, and will ultimately achieve them. Like positioning and differentiating any other product or service, position your strategy in your presentation to the CEO and executive suite during budget meetings.

Give them “options” for level one investment gets level one returns. Level two gets level two returns, and so on. Then, make your optimal recommendation (it might/should not, be the biggest budget level scenario) for spending across all domains of marketing (corporate, product, strategic, and field -marketing). And, don’t forget to budget for your people and team to ensure success (Human Resources).

…then defend it!  If you don’t get the money you need to spend and deliver on the CEO’s objectives, position your results and set expectations in these meetings among the other executives and their budgets.

I have seen it, and experienced it, and can guarantee that a rational like: “I need 4% because that’s the industry norm” will fail nearly every time, and marketing overall, as well as your company, will suffer.

Build a plan, price it by getting several agencies and vendors to provide competitive quotes for your editorial, social, media, events, product and field (etc.) efforts across the next-year calendar. Be sure you have included input from others on the executive team so you can show and share how your marketing strategy and plan is based on their input . When they say no to something, take the proposed results off the table, and ensure that expectations are set in October so you are not the blame point for failure dependent on the marketing budget that was cut later during the budget year.  Document what is in, and what is out, and memorialize it.

If you have a good CEO, she/he will see you as a partner to their success as a leader of the organization if you apply MBA-level strategic thinking to budget-setting. If you do the “everyone in like companies spends x%, so we should too,” you have abdicated your strategic leadership responsibility. The CFO and the CEO will discuss your lack of vision in private, and give you a set amount for the coming year – they may start a search for your replacement as a subsequent outcome – if they are good at their roles. As a result of abdicating leadership, you will be forced to make do while expectations will be set by everyone else telling you what you will do without consideration and understanding of what effort it will really take (human resources) and what budget it will really cost. This is a recipe for failure and career disaster for marketing, and the company.

Yes, this is real and challenging work, and it can take significant investment of time and effort. There are consultants that can help you get it done, if you need help.  Delegate the specific effort to write pieces of the plan and get quotes to your marketing team to develop the details, of course, then spend time rolling it up.

It is possible, and far better, to build your budget this way, and defend it as the catalyst to growth. And, to do it, you must lead just as any other equal player in the board room.

Cheers, Andrew

Bottom line here is that any marketer that is worth it knows that standard budget parameters for marketing do not exist. The budget is based on what plan is needed to achieve reasonably set corporate goals under it’s present and next-year economic conditions.

They know to use their knowledge, skills and experience to develop a real plan that drives toward the CEO’s strategic objectives – not the marketing spend and tactics of an industry benchmark. Defend it and confidently own the seat in the executive suite as a key contributor to the company’s success and a right hand of the CEO to achieve her/his objectives.

Set those expectations so marketing is not the weak link for the coming year. The CFO and CEO will see and understand it. If not, that company is not long for this world, competitors will crush it, and if you are the marketing leader, you need to polish up your job search skills and think about working somewhere else.

Got it? Leave your comment if you do.

Image Credit: kenteegardin via photopin cc

From: SteinVox, SteinVox - Voice for Pervasive Strategy

The Fall semester starts the MBA Class of 2015 at business schools across the nation. Candidates seek that special path to the top.  The question came to me: Is an MBA really the path to the top? And, if marginally not the case, why does academia educate students in this social era toward achieving an “MBA Degree” defined by its industrial era namesake curriculum? Specifically, is it time for academic disruptive innovation for the MBA degree itself. What about an MBI, or an MBL? Curious what these are? read on.

Stop for a moment, and recall your b-school days. You learned the tools to administer a business. Subjects like finance, accounting, operations management dominated the curriculum. Recently, the push in many schools is around innovation. Many study how Netflix, dominated Blockbuster, and how the product development labs at P&G work.  Other schools compare Google’s innovation environment of 2 hours a day (seems to have dwindled to less than 1 hour) with the democratization-driven innovation approach of Microsoft.  And, others take students through case studies to learn about the unique leadership at ServiceMaster or Virgin Airways.

The academic focus in many MBA programs today has evolved toward Leadership and Innovation. Why hasn’t the degree itself, in name, changed to reflect this evolution?

Recollection

The challenge of administration, in the context of the title “MBA” is that administration, by definition, is doing the same thing, over and over, to levels of continually increasing efficiency. That’s my definition which I like, as it has parity with the colloquial definition of insanity. Dictionary.com has a number of definitions, like “the duty or duties of an administrator in exercising the executive functions of a position.” All the definitions I read lack any suggestion beyond the performance of duties; as in duties in a predefined job description.

Academic Disruptive Innovation Challenge

Academic disruptive innovation required breaking decades of institutionalized academic structures and is a monumental challenge. But, as Coursera has shown, once it gains momentum, there’s no stopping it.

How do we change the focus of MBA schools away from primarily producing operational, financial, and accounting experts that can manage a business to zero growth and competitive disadvantage? We know this to be true (the MBA case studies show it, if viewed from the right perspective) when innovation in all aspects of the business is sacrificed by well-meaning MBA-degreed leaders and consultants.

Instead, we are watching economic decay occur from over-focusing on efficiency improvements to make and count the revenue from yester-year’s products that today’s consumers don’t’ need or want anymore?  That’s a broad statement, but if you read my “Strategic Innovation Trumps Efficiency Measures,” it’s extraordinarily clear why this is the case.

MBI and MBL

OK, if you read this far, now consider if business schools really practiced what they taught in the case studies on “disruptive innovation.” I challenge them to do what it takes to create these degrees and perhaps even deemphasize or drop the MBA degree defined back in the industrial age, last century.

Consider a degree called Master of Business Innovation (MBI). The focus of this degree would be primarily marketing, new business model development, and commercialization of invention. To make this radical change, the number of and focus on finance, accounting and operations courses will need to be reduced. Not eliminated, but reduced. But the product that business schools would produce with this degree would be what corporate business, and innovative firms just starting out, really need – over traditional MBAs.

Consider a degree called Master of Business Leadership (MBL). The focus of this degree would primarily be servant leadership, not the historical industrial-age command and control leadership that is often taught today. What if we could add the really profound stuff coming out of the modern Military into the MBL degree curriculum? It’s not hard to find articles describing how it has used embedded troop techniques to use servant leadership in the middle east to show them the way to peace. Anyone that has met and spoke with these leaders, knows how far forward our military has forged this path. Servant leadership research is ongoing at institutions like University of Illinois, at Chicago (UIC), and others – and the data is compelling. Let’s teach it!  Let’s produce graduates with a degree in it!

Stands to reason, if business can innovate and grow through leadership that focuses on being agile and market driving, they will win over reactive market driven companies that only know how to wait until market research tells them what the market already wanted, yesterday.

Kudos to the Business School that recognizes that trying to position the MBA is futile when the customer (global corporate enterprise) has moved on. It won’t be enough to just redevelop the curriculum. The positioning (marketing term) of MBAs continues to slide, as noted in the Harvard article, below. Kudos to the Business School that leads with both a new degree and new curriculum.

Insightful Innovation or Academic Blasphemy

Call me a heretic. Most new ideas label the thinker or messenger. With the social popularity of bashing MBA degrees, the time is ripe for heresy. We need the kind of heresy that a big name school like the University of Illinois, or Harvard, or Stanford, could lead with in this disruptive change.

Just last week, the article in Harvard Business Review (online) titled “An Old-Boy’s MBA Is Not High-Value Management Education” shows that even a leader like Harvard is aware of the dilemma, and the failure of business schools to be forward thinking to innovate the future instead of backward-looking to train business school graduates how to over-optimize obsolete operations of the past.

Somewhere, a Dean, provost or Trustee of the Board at some institution is reading this, and calling this blasphemy. Understand that I have an MBA, and don’t like the bashing. It’s the wrong approach. But I argue, using the marketing, positioning and business techniques we should be (and some are) teaching as a primary focus in MBA programs today, teaches us that this is precisely the disruptive innovation that is needed. Business School needs to show it understands what it teaches, and disruptively innovate – itself – make it as profound as the shift from the industrial age to the social era we experiencing right now.

Something to Ponder

Today, I help many companies deploy modern operating models for new initiatives. We look for and hire MBAs that have the innate aptitude and talent to be MBI’s and MBL’s. It will be a profound disruptive change when business schools produce the kind of Masters of Business Innovation or Masters of Business Leadership degrees by default. This requires visibly lowering the contextual focus on “administration.”  To be sure, and clear – administration is a necessary activity, as is efficient finance, operations and accounting functions in a business – and so is labor in the factory – but that’s not where you are going to find the next executives for the C-suite in a decade or two.

We see Business Schools trying to re-position their MBA programs as “innovative,”  “focused on innovation,” and even “leadership” MBAs. But the business enterprise, and new firm creation customer is not buying it. And the negative publicity for MBAs and the MBA academic program in general, continues. Understand I do have an MBA, and value it, but it’s the opinion of the customer is the only one that matters.  I learned that in my marketing classes in my MBA program.

If we have learned anything in the past two decades of economic ups and downs, it is not that better “administrators” are needed. We have learned instead that Business Schools must produce degreed individuals with a talent and skill for modern “innovation” and “leadership” – that is what makes the next Netflix, ServiceMaster or Virgin on this planet.

Image credit: kevin dooley via photopin cc

From: SteinVox, SteinVox - Voice for Pervasive Strategy

Why an operating model? You have a vision of how your leadership views the future through the delivery of value your company creates. You have a mission that frames how your organization will satisfy customers to realize that vision through long-term capture of value. What’s next? Often, companies jump to product and marketing and sales strategies. Often, a comprehensive organization chart is created to give people a place to anchor their role and receive direction from management in a top-down hierarchy. And, your company begins the task of selling.

How will these people operate? How will functions engage efficiently? What about an operating model? Whether your firm is a start-up or a fortune 500 company, thinking through the concept of an operating model can be of great benefit to your firm.

Wikipedia defines an operating model as: “the abstract representation of how an organization operates across process, organization, and technology domains in order to accomplish its function.”

Think of an operating model in terms of a hospital’s surgery center. A patient wants to know that when the anesthesia kicks in, that room has everything in it necessary for a successful operation. And that the right people are in the room doing their essential roles at the right time in the right place, to efficiently achieve the outcome you expected when you were admitted. In a business context:

Operating models clarify organizational functions such that each can optimally carry out their role. Operating models enable organizational functions to support, amplify and accelerate the results and expected outcomes of other functions they interact with internally. Operating models clarify who, what, where, when, and why functions operate along a timeline of corporate development. In that sense, they are fairly rigid models for operating today but fluid and capable of reforming as economic events, marketing trends and industry pressures demand change over time.

Operating models are internally focused. In contrast, business models are externally focused.  By definition, business models define how a firm will create, capture and sustain value for its customers through coordinated product and service offerings marketed and sold to deliver on a firm’s value claims for customers. There are business school courses and many books on operating models, as well as many current resources on the web. I bring up operating models for two reasons, first for new businesses and start-ups, and second for any company that is going through a stage-change (start-up to expansion stage, or private equity turn-around, as two examples).

Points of Failure

In working with start-ups and firms, I commonly see four points of potential failure:

1. Vision and Mission Statements. All too often, a start-up will go on and on, never crafting these. If they are not present, what are people in the organization working toward achieving? These two fundamentals drive organizational alignment along one direction.
2. An Operating Model. It’s very easy to see. Everyone is invited to every meeting. No one can make a decision, and everyone can weigh in on an issue. Without an operating model, delays allow competitive advantage to slip and firm paralysis to take hold.
3. Organization Structure. The word “re-org” is often used to describe the re-arrangement of people in boxes on an organization chart. All too often, this is done without revisiting the operational model to determine precisely what roles (boxes) are essential, what roles can be eliminated, and what new roles are needed. Especially in small companies where the will to make difficult decisions to let people is lacking. Building and sustaining the right organization is not an emotionally driven task.
4. Business Model. This is where the corporate strategy, product strategy, go-to-market strategy and marketing and sales strategy converge to engage long-term relationships with customers. It is ultimately the model for the fair exchange of fees paid for value received.

Many leaders spend time on vision and mission. Many take great care to have the organization chart that models existing process in hopefully permanent way, while at the same time ensuring that everyone before the reorg has a place after the reorg. And, in order to collect revenue, at the most rudimentary level a business model is present. It is often generated hastily, but it exists.

Reasons to Define an Operating Model

Clear and deliberate thinking around a firm’s operating model is required. All four of these points complement each other and increase potential for business success. A wise leader early in my career used to say: “If everyone is involved in doing everything, no one does anything.” Here are a few reasons why an operating model prevents paralysis:

• A solid operating model drives organization decisions (structure and roles –changing over time).
• It is the framework to achieve the vision and mission, and identify areas of accountability, competency and weakness thereby supporting improvement?
• It is leadership framework for execution of strategy that without it organizations become paralyzed.
• An operating model prevents human indecisiveness that results in over-pivoting of strategy.
• It structures people’s role and responsibility in terms of declarative, consensus, consultative and autonomous decision making at the right time and place.
• It optimizes productivity and time management defining who and what functions needs to attend what (type of) meeting, why and when.
• Creates an organizational roadmap to ensure you prepare to have the right people at the right time over the long-term.

Warning Signs:

The warning signs to look for if you sense a need for operating model or overhaul of an existing one are:

1. Does everyone attend every meeting, or can meetings be faster and effective with fewer people attending?
2. Does everyone in the organization know the vision statement and how their contribution drives the company forward to achieve it?
3. Can everyone name the customer persona (market) and describe how value is created and captured?
4. Is everyone achieving their work autonomously, on time, and under budget?
5. Do you hear the words “we need to do more research” as a long-term excuse pattern for not getting things done?
6. Are people doing their primary function well, and first, aligned with their competency, before doing other’s functions?
7. Can anyone stop a decision from moving forward with an objection? Or does every decision go to the CEO or Board for final say?
8. Does everyone know who to go to when, to achieve what they need to achieve in their role, or is management over-directing tasks?

You see the patter of questions to ask – in the end, the operating model has powerful potential to enable great things.

An Operating Model Is Essential

Many will say that start-ups and expansion stage companies don’t need this level of leadership and structure. I disagree. If a stakeholder has invested $10 million in a start-up, the demand for the right level of focus on these four components is essential, if not higher than the fortune 500 company. Without an operating model, people in an organization will appear very busy, but achieve fewer goals. For example, sales people may spend time re-doing marketing, and less time closing business. This has a compounding effect as one function doesn’t get done, while another also doesn’t get done well by the people assigned to it in the (missing) operating model.

Operating models may have different levels of malleability when considering how they work in small to very large companies, or in different industries – but in context, they are necessary.  Formalized operating models – even if flexible, makes them part of the culture and powerful leadership leverage to maximize competitive advantage over firms that do not have an operating model. Larger companies generally have more room for flux in the system and ability to absorb inefficiencies. The smaller a company is, the more naturally lean and efficient its stakeholders demand, and should rightly demand.

How is the operating model at your firm? Share with others how you created it, nurture it, and ensure the entire organization can gain traction from it. Like in a surgery center, the operating room has clear structure and purpose, with every essential person knows their role. Your firm needs this level of surgical precision around who, what where and when activities and decisions must happen to ensure success, and prevent grave consequences. In future posts,

I’ll dig deeper into the process of creating an operating model, and some additional examples. For now, this should get you thinking.

Image credits: Just Us 3 via photopin cc

From: SteinVox, SteinVox - Voice for Pervasive Strategy

Time passes and generations must collaborate now to create the future. Another summer of passage for youth into adulthood with commencement speeches and graduation parties have driven an observation.

I question the often heard phrase that the future belongs to the younger generation.

I’m drawn to a new conclusion. It is all people that will save the world, not just young people. As each year passes, we all should be thinking about reaching across generational lines, not passing the proverbial baton of the future in abdication. Youth should also reject being handed such responsibility alone and unaccompanied.

More likely to be the truth: young people will collaborate and work with older generations. Building the future is to accelerate innovation on the strong shoulders of the wisdom amassed by all generations. If the future is to have meaning and be a place that young people (who will inevitably become old people) want to continue to live and thrive!

New Perspective

This perspective that young people inevitably are destined to become an older generation is something worth making a core tenet of future commencement speeches. It should drive a deeper interest in a broader context for what the future really is about.

It’s a perspective that can engage a broader cross section to do more, in less time. Sure, people get old, and leave this earth, but while we’re all here, let’s not inadvertently breed divisiveness and ignorance at the launch of youth into the world after commencement.

Note to speech writers and the media. Don’t generalize that the future belongs solely to young people. It shows lack of thought on your part. It implies that older generations don’t care, can’t influence, or are not interested in the future. Statements, blogs, and speeches with titles and themes “The Future Belongs to the Younger Generation” just don’t make sense.

8 Reasons to Change Perspective

1. All younger generations become older generations. One thing about the future that is true and cannot be stopped is time passes. Youth inevitably gets old.
2. Older generations know what has worked and failed in the past. Creating a future that all people want to live involves asking questions so as not to repeat the past. Often, the reason “why” something became that way is valuable in building the solution.
3. Depth of perspective comes from experience, which is a function of time here on earth. Youth cannot know what they will be feeling and thinking in the future, but a window of perspective exists by collaborating with wiser, more experienced, and yes, older generations.
4. The cross section of the population includes generations. Economies are driven by these many generations. Building the next iPhone app, for example, should consider an economy of opportunity across this cross section of potential users with differing age-based interests.
5. Older generations care as much as younger generations about the future. And, in one sense, they have experienced the loss of things that were as they are replaced by things that are.  Big things, like values, consumerism and service. Restoring these things will take collaborative effort across all generations.
6. Older generations are a powerful resource for the youth to achieve their ideas and innovation faster. They have many resources from money to wisdom and experience.
7. To say that the future belongs to youth, may even give complacency in our human nature. It can propagate a continuum of allowing younger generations to solve the issues, problems, failures of the past, or that we create today. We all own them, let’s collaborate to all address and fix them.
8. Humans now live longer, and younger generations will live even longer. The future can be richer for young generations that will be the next old generations, if young and old alike, collaboratively craft it.

To Ponder

Does it make sense to keep saying that “the world will be saved by the younger generation?” The function of time will inevitably pass control of the world on to others, but owning the future seems too broad. Those generalized statements abdicate responsibility of the speaker. Action is owned by everyone of all ages to participate in creating that future.

The current focus on youthful innovation at incubators and innovation hubs leaves out the obvious participation of multiple generations. (Go visit sometime, you’ll see the ratio.) The desperately needed profound innovation, in areas like disruptive improvement of healthcare, transportation, and government operations, can be improved and accelerated even more through collaboration with the wisdom of wiser generations.

As I am in my mid-life, with 25+ years of experience behind me, and looking forward to my next 25+ years of contribution to this planet we share, I see greatness. Greatness that will come through more focus on inter-generational collaboration.

Image credit: Wikimedia commons: Abhikdhar2009, “Artistic representation of human age. From childhood to old age and ultimately death.”

From: SteinVox, SteinVox - Voice for Pervasive Strategy