I came across a couple of companies in the last few weeks (they will remain anonymous to protect the innocent) that had a great product and great ideas, but neither were going anywhere. Worse than that in fact, while one of them is highly successful (I’m talking world top five here) the future for both of them looks decidedly threatening.
Its not the first time that I have come across this situation, there have been many. In fact, the nature of my work means that I probably encounter far more businesses like this than most people.
The reason that these and other companies with great ideas and good products struggle is often (maybe even usually) because the vision, ideas and the means of developing the business is locked in the minds of the most senior managers. Its a phenomenon not exclusive to SMEs and entrepreneurships, the sharing of insights and ideas is something that businesses of all types and sizes can be bad at.
This failure manifests itself in a number of different ways. Typically it creates a monarchical culture – one where the bosses give instructions and the workers carry them out without question. This model is common in Central Europe where Communism, bred people whose approach to work and eventually life was “don’t ask why, just do it, however stupid it sounds” and organisations of every type, right up to government, involved intense micro-management as people relinquished their right to think, let alone protest, on every level.
If there is an up-side to this approach, as the Commie leaders discovered, its for the guy or guys in charge – only they know what’s going on so there’s far less chance of being threatened and though the root of this is commonly managers who just don’t know what “facilitatory management” is, its equally likely to be a sign of personal insecurity among those people at the top. The BIG weakness of this system is that it does involve a high degree of management time and effort and it under-utilises the organisations greatest asset – its employees. This means that managers are required to be far more hands on than they should be, so once the volume of work gets to a certain level, bandwidth dictates that the business stops developing and, thus, will ultimately crash.
A monarchical business, once it reaches a certain point, will typically be slow to develop ideas, will make a lot of mistakes and waste a lot of time. As I said, its not a phenomena reserved for SMEs, a classic case was ABB Brown-Boveri, one of the world’s largest conglomerates who were rescued from disaster by an enlightened Chairman who introduced a high degree of autonomy to cut product development time and costs and so increased profit dramatically.
What we are talking about here is “efficiency” or the lack of it – the single difference between a successful organisation and an unsuccessful one. So what has branding to do with this? Well, everything!
A strong brand will increase the efficiency of an organisation by increasing your chances of delivering customer expectations every time and minimising cost-per-sale. The first point is covered because a strong brand will give investors confidence, suppliers understand the game they are in and employees understand and commit to their role in the delivery of the promise. On the other hand, costs are minimised because customers will (literally and figuratively) walk past a competitor to reach a brand they know, they will readily buy new products from brands that they know and trust, they will pay more for their favourite brand and the level of marketing communication required to drive sales is minimised. A strong brand relinquishes the need for monarchical management freeing managers to get on with … well, management stuff like creating and developing opportunities for growth, confident in the knowledge that they can leave the day-to-day to their employees, suppliers, distributors and partners.
I’m not the only person to have recognised this of course, in fact most people get it, the problem comes in turning that understanding into action. Unless you are building an organisation from scratch (and even then its tricky) the change in perspective, structure and management practises that are necessary to create and leverage a strong brand require a far bigger step than most organisations care to contemplate. That’s why most organisations struggle along in the twilight zone of Sellotape solutions and so-so branding.
For the past few years I have been wrestling with this issue and evolving an approach that helps organisations of all types and sizes make the necessary changes in a way that’s more metamorphosis than instant transformation. That’s Full Effect Marketing!
Full Effect Marketing places the brand at the centre of the organisation and marketing firmly in the driving seat. It integrates business and marketing (including marcoms and sales)elements in an holistic strategy that waves goodbye to situations where customers are disappointed. This is good because while it may take ten times as much to sell to a new customer as it does an existing one (hence the vast sums organisations are investing in CRM) it would probably cost you a hundred times as much to entice a disappointed customer back to your brand.
Now doesn’t that sound efficient?
December 11, 2007