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Sunday, August 21, 2016

How Much REAL Strategic Planning Is Done?

Ideally, companies, institutions, and even people should engage in strategic planning. Put simply, it is concerned with identifying and then achieving long term objectives of your organization. This should not be confused with organizational planning which may be for the next 90 days (the quarterly report to Wall Street) or for the next year. Strategic planning is a long term forecast going out five years or more. In fact, a few companies, such as Exxon Mobil, AT&T, Microsoft, and Verizon likely look out 50 years in terms of planning.

Is 50 years absurd? Not really, in many cases. Take Exxon Mobil, for example. Fifty years from now they will likely be a significant player in energy production, transmission and sales. Several years back they made a multi-billion dollar acquisition of a large natural gas player. It has not paid off big time yet but the world appears to be moving to using more natural gas as it burns cleaner than oil or coal. Should alternative energy sources such as wind, solar, or hydrogen get more competitive with fossil fuels, you can bet that they will be there and they will have prepared for it decades before. Newer tech players in the business world such as Apple, Google and Facebook have surely begun to embrace long term planning. One key is that with the world changing so rapidly it is unlikely that your company as you know it will exist in 20 years or more. So, you have to hedge your bets and plan for the future. Such change is not a new thing. William Wrigley was selling baking powder well over a hundred years ago. To induce buyers, he ran a special where the purchaser received two free packs of chewing gum with each purchase of baking powder. The response was huge, he had the Eureka moment where he realized that he was in the wrong business, and created an empire with gum that was worth billions and recently went private.

I did find one long term plan some years back that was clearly in la-la land. Japan’s Matsushita Corporation (now Panasonic since 2008) said they had strategic plans going out 250 years in to the future. Initially, I thought it was a typo and they were saying 25 years. Nope. I had to laugh out loud. The changes that will occur over the next 250 will defy even a science fiction writer. Did their plan include selling space heaters on Jupiter? Give me a break!

Strategic plans incorporate objectives, strategies and tactics. All companies have objectives. They may include increasing sales, growing market share, or finding a niche where they can protect themselves from competition.

How do you achieve these objectives? That is through a strategy or grand plan. A surprising number of companies fall down here. They “fly by the seat of their pants” and react to competition but fail to lay out a coherent strategy. Part of the problem is that often their have unrealistic objectives.

Expressing your grand plan or strategy locally or on a micro level is the province of tactics. Here way too many people use terms strategies and tactics interchangeably. Also, I have sat in way too many painful meetings where managers spent hours mulling over whether a part of the plan was a strategy or a tactic. If they had a real plan, they would know.

If you spend time with small business operators or entrepreneurs, you rarely see  even a semiformal strategic plan. Many will point to their temple and say something like “it is all up here.” Not a good idea. Think about it. If someone dies suddenly, there is no plan for heirs to carry on. If you get a plan down on paper, even a simplistic one, you are forced to think about it. Show it to associates or a business savvy friend and you will get some healthy push-back and you will be forced to refine your plan. Also, a plan also implies commitment. I heard from a reader this week who wrote the following: “This may sound weird, but my plan is a contract with myself. I read it over once a week and force my CFO to review it monthly. Am I meeting my objectives? Do I have to shift gears? The written plan forces me to have discipline.”

With strategic planning, you need to follow-up. A “set it and forget it” mentality is deadly especially in a competitive environment. So, the best strategic plan needs to be followed up with strategic management, if you will.

There are key questions to ask when putting together a plan and they include:

--What is our share of the market and how strong is the market?

--Do our competitors pose a big threat and have we really identified all of them?

--Do our customers really like us? Where are we strong and where are we weak? Research can help a lot here and many CEO’s and top management are almost delusional about their image. A brutally honest consultant can help as well.

--What do we need to change to adapt to the future? Can we do it?

--What might happen if we continue with the status quo?

So, in answer to our title of this post, “How much real strategic planning is done?” My opinion is not nearly enough for companies of all sizes.

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com

Sunday, August 7, 2016

Schedule Time For Self Development

In our time pressured society, many if not most people seem harried. When I ask if they have read a specific new book or pass on an article, the response I often get is “thanks, but I am too busy and do not have time for that.” Oddly, the most successful people that I have ever met always seem to find the time for learning new things in their field and will respond in detail to anything that I send them.

My theory about these clear winners is that they seem to schedule time for self development almost instinctively. For years, self help gurus have encouraged people to take a sabbatical a few times in their careers. Well, that is fabulous if you are an academic where sabbaticals are common and often provide full pay or close to it during your time off or work for that rare company that provides them (For years, Time, Inc. gave staffers sabbaticals. It was not simply for writers. Sales executives would get them and come back refreshed and with a fresh eye on things). Others claim that several months of unemployment are a great time to reassess things. Maybe. Most people understandably use that time to be laser focused on becoming employed again. Some say being out of work told them that they needed to switch careers but that is usually only for a minority.

Sabbaticals are not practical in most areas especially small business where most of the job growth comes from these days. And, there are times in the middle of a work siege where all of us find the task directly front and center to be an all consuming passion. Yet, now during these exciting but turbulent times in marketing, you have to stay current and be able to embrace new ideas. Conventions, seminars, even TED talks can be valuable.  The value to me has always been that I never feel alone after such a session. Topics are brought up that were a non-starter at my place of employment or other issues were covered that no one else with whom I worked saw as important. Some valuable contacts could also be made.

Sometimes it is not easy. I have seen senior managers refuse to send people to conventions saying that they are a waste of money and Bob or Mary simply wants a few days off from work. True, in some cases. At the same time, I have witnessed a few highly motivated types pay the entry fee themselves and, in one case, even take vacation time to attend. None of these people stayed with their employer much longer but they were not going to pass up a chance to “go back to school.”

Also, I have met people who do it quietly. A sales rep that I have known for years would lunch with me three times a year. We did some business early on but then my accounts changed. He still met with me and asked a barrage of questions about various futuristic media and marketing topics and took copious notes. After a while, I had a book and a few articles ready for him. Today, I send him e-mails regularly and he never fails to respond despite his lofty title these days. Recently, I found out that he has been doing this with five other people for the last 20 years!
Entrepreneurs seem to know instinctively that they must reach out and ask for help and read a great deal about their field. They are often running scared which is a great way to stay on top of your game.

Finally, I have seen people from 58-65 year old do a complete makeover. Some retired, some were forced out, some worked for dying enterprises. When their unplanned sabbatical hit them they did not engage in self-pity. They used their first free time in decades to reinvent themselves. Their genius was not going to go untapped!

So whatever you age or situation, may I suggest you make the time for self-development. You will become more interesting and perhaps happier.

If you would like to contact Don Cole directly, you may reach at doncolemedia@gmail..com

Monday, August 1, 2016

Western World Demographic Outlook

Several years ago, I was about to put up a post entitled “Demographics are Destiny.” When I could not get most of my panel members to weigh in, I knew that the title must have been deadly. So, I renamed it “Jennifer Aniston is 40!” (Media Realism, April 23, 2009) and soon my e-mail box was loaded with comments and there were many hits on the actual post from across the world.

Well, a lot has happened in the last six years but, as you might expect, politicians around the world have “kicked the can down the road” instead of addressing a demographic iceberg that will hurt all and clobber many western democracies in the next two decades.

In terms of demographics, things have gone from rotten to worse over the last few years. There is not a single country in the European Economic Union (EEU) which boasts a fertility rate that guarantees an increase in population over the next three decades. In some countries, the population will decline drastically such as Italy and Spain. Others have serious issues for unknown or unresolved issues. Take Russia, for example. The World Health Organization (WHO) posits that the average Russian male has a life expectancy of under 60! They attribute this to big increases in heart disease, strokes, smoking and alcoholism. This gives them a life expectancy lower than males in Nigeria, Tanzania and Pakistan.

Japan is setting records for a peacetime decline in population. By 2050, 40% of the population will be over 65. Supporting the elderly will bankrupt them.

So, how will these countries survive or maintain an infrastructure? There is only one way--big increases in immigration.

In the United States, Treasury department estimates project that we will need 10 million immigrants per year to maintain our ratio of workers to retired citizens. Read this carefully. They are not calling for 10 million new immigrants. What they are saying that to keep the CURRENT RATIO intact, we will need that many new people. So, if we do not reform Social Security with some mix of higher S.S.taxes, older age for eligibility,  and net worth means tests, the system along with Medicare will collapse without a huge injection of immigrants to prop up the entitlements. And, many of us old folks will keep working longer as well.

Many rural places in America and throughout the western world are suffering acute labor shortages. Immigrants can help turn these areas around or provide vital services. Someone told me that young Brits, Germans, or Frenchmen would not wish to work in a small town Finnish old age home. I agree--wiping oatmeal off the faces of octogenarians does not have much appeal to them nor would it to most American youth.   Yet, if you were from Syria or a frontier market in Africa or Asia you would welcome the chance to live and work in a western nation with healthcare, free education, and a social safety net. People forget that unskilled immigrants often do the jobs that people in wealthier nations do not wish to do. I vividly remember being in Zurich, Switzerland in late 1973. Hundreds of then Yugoslavs hung out in the train station on Sunday afternoons. They had nine month or two year work permits. It had to be lonely but it was a step up from their life at home. British writer Randy Charles Epping put it well when he wrote, “a job, even a relatively low-paying one by Western standards, is the best hope for a worker to start building a better life.”

So, the impact on marketing will be profound. The old people have much of the money (sorry, kids). Many will live very long lives and will need caregivers who may well be immigrants. Marketers still have not adjusted to this emerging reality as many messages are still aimed a the under 35 group who are often struggling economically across the western world.

Politicians in Europe, Japan need to do something and quickly. In the U.S., we need to act but not as drastically. Will any have the political will to take the necessary measures to right the demographic shifts? History tends to damper my normal optimism about the future in this regard.

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com

Saturday, July 23, 2016

Luck vs. Hard Work?

About 35 years ago, the business press began publishing articles centered around the theme of “work smarter, not harder.” Some of them I found to be marginally useful and most seemed to be discussing time management techniques. The advice sounded great when you first read it but did not always work in the real world. For example, many said return all phone calls and e-mails at a set time each day usually after you get your personal “to-do” list done. Logical, right? Well, in a service oriented business such as advertising you do not keep a client waiting for six hours.

Also, I always took moderate offense at those whose claimed that all great managers and executives left promptly at five o’clock. Sometimes you had to work hard and simply put the time in on many projects. As a media executive, I knew that virtually no one was eager to hear what I had to say in most presentations. So, I worked hard to differentiate both me and my team in meetings. It might only be a factoid or two that was new to them or telling them about their company or spending that they did not know. It took time--sometimes a great deal of it. Yet, it almost always paid off handsomely.

So, I was and remain a fan of hard work or doing due diligence.

At the same time, you often hear how luck is just as important as working hard. To me, when people refer to someone as lucky it is often due to jealousy. How many times have you heard, “He gets all the breaks” or “She is just lucky.” Often, the complainers are the ones leaving at 5 pm and do not see how hard the “lucky” ones are putting in the long hours. Luck does play a factor in the broad sense. I remember my father telling how lucky I was “to be born in America and growing up in the 2nd half of the 20th century.” Malcolm Gladwell brought up the same point decades later in OUTLIERS. Just by being born here and then within a supporting family environment one had a leg up on 95+% of the rest of the world. Yet, there is also the old cliche of “shirtsleeves to shirtsleeves in three generations.”  As a youngster there were people who did seem to have a lot handed to them. They would inherit a modest retail operation, law practice, insurance office, or travel agency from their parents. Well, the internet and online marketing has devastated many of those operations and those who have survived were not simply members of what Warren Buffett dubbed the “lucky sperm club” but people who worked hard and have adapted to the changing landscape.

I asked some panel members and a few others about luck vs. hard work. Here are few of the better responses:

--Experienced and ageless marketer--“Don, I think luck plays a  part in getting to the right place at the right time.  After that I don’t think luck wins consistently. It’s all about preparation, persistence, and a reasonable dose of intelligence and common sense doesn’t hurt.”

--Self made mega-rich entrepreneur--“Luck is wildly overrated as a big factor. There are no shortcuts to success. It takes passion, dedication, and focus. People who talk about luck all the time are usually lazy bastards who never really tried.”

--Long time ad agency principal--Hah! Define Luck.
I love the axiom “The harder I work the luckier I become.” (originally from Thomas Jefferson although many including I used to attribute it to golfer Gary Player--editor)

Right place. Right time?  It happens but I prefer to think the odds are improved when you are working your butt off.

Obama did NOT get to be POTUS by luck.

If you work hard you might get lucky--or not. But, if you work hard and are smart you will be successful.”

To me, I find you can make your own luck. My entire life I have always been an omnivorous reader. Each week, I devoured each issue of AD AGE, BUSINESS WEEK, FORBES, FORTUNE and the Wall Street Journal and New York Times daily. Over time, I would be able to answer questions in meetings or presentations that surprised people. Dozens of times, colleagues would say, “I loved the way you pulled that answer out of your behind.” Well, I did not. I had and still have fairly good recall and I was able to answer questions based on my extensive reading. So, the more I read, the luckier I got! To this day, I still read economic theory (Smith, Keynes, Mises, Hayek, Friedman) for an hour a day to stay sharp. So, with rare exceptions, hard work takes heavy precedence over luck.

With every rule comes striking exceptions. In the late 1970’s, I was walking up a flight of stairs. A young lady was walking down. I smiled and said hello. She stopped, introduced herself and we talked for a minute. As we parted, she said, “I hope that I see you again.” In a few days, we will be married for 37 years. I was and am very, very lucky.

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com or leave a message on the blog.

Wednesday, July 13, 2016

Is Your Ad Agency Ambidextrous?

Most of us hope to lead a long and productive life. How about your company? The odds are that it is far less likely to live to a ripe old age. Less than .1% of U.S. companies make it to age 40. Even large companies, seemingly well established, may disappear or be sold within the next 10 years. General Electric is the last survivor of the original Dow Jones Industrial Average. And, it has reinvented itself several times in the last 130 years. To survive, authors Charles O’Reilly III and Michael Tushman say that a company has to be ambidextrous. They outline their thesis in a marvelous new book entitled, LEAD AND DISRUPT (Stanford University Press, 2016).

The authors state that company failure is “often due to the incumbent’s inability to play two distinctly different games at once.” Put simply, you need to use your current cash cow business to fund exploration in areas that are growing quickly or may significantly make your current business obsolete. Their advice to all is “innovate beyond your core.”

The book is full of statements that struck me as absolute gems. A favorite was “management is about preserving and improving the status quo. It is about avoiding the many “bad” ideas that surface in an organization. But leadership done well is about seeing around corners and running experiments that help destabilize the status quo.”

Another was “faced with changes in technology, competition, and regulations, incumbents need to compete in a mature business where the exploitation of existing capabilities is key and to simultaneously use existing assets to compete in more exploratory businesses.”

All of this, of course, is easier said than done. The book provides a fairly detailed case study of Havas in 2013, then the sixth largest ad agency holding company in the world. The CEO David Jones had the idea of transforming his assortment of agencies from a creative and media star to one that coupled crowd sourcing technologies in to the mix in a big way as well. Sadly, operators around the globe appeared to worry only about their “sandbox” and continued to sharpen their creative and traditional media strengths. So, the individual country managers did not try to implement the new focus and in some cases ignored the directive from the HQ. This kind of transformative goal could not be delegated. Senior management and the CEO needed to be more active and engaged in the process of change. After a year of frustration the talented Mr. Jones move on to, I hope, better things.

One thing I noticed reading the book was that it was easy or relatively easy for a major company to be ambidextrous--working equally well from either hand. Google, Apple, Microsoft and now Facebook and old stalwart Exxon Mobil are all loaded with cash. They can be ambidextrous as a failure in a new venture or even a disappointment will not hurt them much.

The harsh discipline of the market, however, is not so kind to smaller firms. Think of all the mid-sized and small ad shops that are struggling these days. As things change and sometimes very quickly, they will have to “bet the ranch” on a single experiment with a new speciality. A WPP, Omnicom, Interpublic or Publicis or even a large second tier player such as Havas can fail at a new venture and get bruised but not mortally wounded. And, if they do fail, the deep pocketed mega-shops can simply buy a leading player in an emerging discipline. So, like it or not, the big will likely only get bigger.

The book is provocative. Can you as a leader look around corners? Can you maintain the status quo but embrace change and a new way of doing business? If you can, then you are ambidextrous, too.

Also, do not be put off by O’Reilly being a professor at Stanford and Tushman at Harvard. They did not right a dense, scholarly tome. This book is easy to read and it has great clarity.

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com

Tuesday, July 5, 2016

Personnel Policy--Netflix Style

On Sunday, June 19, 2016, THE NEW YORK TIMES MAGAZINE had a cover story entitled, “Netflix Destroyed The Way We Watch TV.” Like many of us, I devoured the very well written piece by journalist Joe Nocera.

When people asked my opinion I generally referred them to my blog post of 1/28/16, Media Realism--”Netflix Concerns.” The post outlined some of the issues that critics, particularly securities analysts, said about Netflix in Nocera’s story.

What fascinated me about the Times piece was something else. It was with the remarkable candor that Netflix employees talked about their personnel policies. Nocera interviewed Patty McCord who served as something of a personnel director for Netflix for many years. Her advice to Reed Hastings, Netflix founder and CEO was “that he should ask himself a few times a year whether he would hire the same person in the same job if it opened that day.” If the answer were no, Hastings often wrote a large severance check. The article stressed how the company worked hard on letting people go humanely.

Eventually, Hastings approached Patty McCord and let her go as well after working with him for nearly 20 years including his pre-Netflix days. The article goes to a describe a slide show presented to all employees. A key line is, “We’re a team, not a family.” And “Netflix leaders hire, develop and cut smartly so we have stars in every position.” A number of companies talk about this kind of approach but few do it in practice. Apparently, Netflix does.

I approached some panel members who are active CEO’s, referred them to the Times article, and asked for comments. Here are a few of them:

--“This type of Darwinian approach might work well in tech where the average age of staffers is under 30 and no one expects to have a career with you. In more mainstream businesses, it does not work.”

--“I have a core group with me that has become an extended family. Some stayed with me through hard times and we all pulled together. Now, a few do not contribute much new. Some have retired but a few hang on. Should I cut them loose? Yes, but it is not simple.”

--“Years ago, someone told me to run my shop like a ball club. When they no longer were star performers, let them go. I have not always done it and it has come back to bite me. It makes the whole company weaker and the younger talent resent it and move on.”

--Someone whom I admire very much asked me, “Don, how does this approach build loyalty? Does each employee see themselves as a hired gun who will work anywhere?”

--“As staffers are less effective, I adjust compensation. We have a conventional media director and a digital media leader. Each year, the conventional person gets less to spend. I pay the person the same but cut the bonus. When I get push-back, I tell him the truth. You are not far from retirement so your salary will stay flat. You still have to perform. This does not play well but deep down, he knows the score.”

--“There are certain team members that I consider family. If we were about to go under, I would let them go. The odds are, though, that they will be here to help me turn off the lights. Am I too weak as a leader? Maybe. But this is not all about money.”

For years, virtually any company that I have known well has always said something to the effect that, when someone leaves or is terminated, you replace them with a better employee and the whole firm gets stronger. Yet, few have addressed the issue of employees who are not growing, or more frequently, not growing fast enough.

I once worked at a firm with a great deal of apparent deadwood in senior management. They were to me, the FOMOT group--Fat Old Men on Tenure. It seemed that they did not work hard, were not on top of industry changes, yet they pulled down serious money and even owned part of the firm. Later I learned that some had contacts that helped with new business and were joined at the hip with certain key clients.

Many people, however, were just there and simply hanging on.

How do you handle it? Could you honestly embrace the Netflix pure “grow or go” philosophy? I would love to hear from you.

If you would like to contact Don Cole directly, you may e-mail him at doncolemedia@gmail.com or post a message on the blog.

Wednesday, June 29, 2016

Chronicles of Wasted Time

Malcolm Muggeridge, the British journalist and wit among other talents, entitled his autobiography, CHRONICLES OF WASTED TIME. I read it at publication decades ago (he lived 1903-1990) and found it slow going with great writing and interesting insight. The title always amused me.

Recently, I sent the title out to a number of people on my panel who were retired or who announced they were about to be in the near future. I did not ask anyone to read Muggeridge only to react to the title of his autobiography. Here are some of the more interesting comments that I have received back:

--“Don, what a perfect way to describe my career! I spent more time in meetings both internal and with clients than I did actually working. The work itself was a joy; the meetings deadly.”

--“A few years back, I became a consultant. I am so much more productive than I ever was at an agency. No being bored by the long harangue of my CEO, no pompous creatives to ruin my day with their holier than though attitude. At the same time, if I have not spent 30 years at several shops and five client side, I could never do what I do now. So, the “wasted time” was the greens fee that I had to pay for the free and lucrative life that I have today. Sometimes, I miss the camaraderie, but most days I am very content.”

--“I have always been impatient. Meetings sapped my time and my emotional strength. I bet that I spent 20 years of my career in meetings. Now, I do a few conference calls and lots of e-mails and am very productive. Clients know that I charge by the day so they do not waste my time. They have expectations of me and have all their ducks in a row when I visit them. I have never worked more efficiently.”

-- “Meetings are just part of the process. The time was not really wasted. If you listened carefully and stayed attentive, you learned a lot about the players involved. The mavericks, the yes men, the lazy, the nut jobs, the ultra-talented all showed themselves eventually.”

--“Don’t get me started. There were times in my late 50’s when I felt that I had wasted my life by staying in this business. My husband helped me stay on an even keel. Yes, my career was a chronicle of wasted time. Wasn’t yours?”

--“Firemen, combat soldiers, political assassins, and day traders all have down time but on the job itself they do not waste time. The rest of us do regardless of profession. It is called life.”

Personally, I could deal with it fairly well except when it became repetitive. I had a client whom I visited twice a year for nine years. At each session, he asked precisely the same questions. After four or five times, I sent him a lengthy report thanking him for his interest and hoped to put the issues to bed. Nope. The next meeting he opened with the same inquiries. I never could figure him out nor could anyone around me. He was never rude and not unintelligent. Yet, he was a time waster on steroids.

How about you? Has your career been a Chronicle of Wasted Time?

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com