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Back in March 2005, I was sitting in my office one nice morning grinding out a letter to a difficult client. I stopped to take a phone call ...

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 ask 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

Tuesday, June 21, 2016

The 80:20 Rule

Unless you are a newcomer to the business world, you have experienced, thought about, or been part of the 80:20 principle.

It first surfaced way back in 1896 when Vilfredo Pareto, an Italian economist, published a paper at the University of Lausanne. Pareto’s research illustrated that 80% of Italy’s land was owned by 20% of the population (and you thought income inequality was a new issue! Nope, remember Karl Marx). Pareto kept digging and found that across countries similar patterns existed. As late as 1989, looking at global GDP by quintile, the top 20% (quintile) produced 82.1% of the economic handle.

After World War II, a few others led by philologist George K. Aipf, picked up the Pareto mantle and the 80:20 principle was found to be widespread and some soon called it the “principle of least effort.”

The following items were often observed across the world:

--20% of employees were responsible for 80% of corporate output.

--80% of sales came from 20% of clients

--80% of profits came from 20% of customers

--In bookstores, 80% of sales came from 20% of titles

As more people examined it, the 80:20 principle started to creep in to management science or quasi-science. Some entrepreneurs failed as they did not leave tasks to others that they did not do well. They should have focused on the 20% at which they excelled.  The mantra was to work harder on elements that work harder for you and ultimately focus energy on what you enjoy.

Big companies often shed brands or divisions that were not profitable. Conglomerates often did not work out well so chieftains sold off the least profitable or most difficult areas and became stronger organizations.

Asking a few ad agency chiefs about 80:20 was interesting. Here are the two best comments:

--“No one wants to resign business unless the clients are complete bastards. Over the last few years, I saw 80:20 clearly in our P&L’s. So we have asked for big increases in compensation from a few clients. If they refused, we resigned them. We are a bit smaller but more profitable during a challenging time for shops our size. I wish that I had done this 10 years earlier but it takes guts.”

--“When you contacted me, I was afraid to answer but my partners urged me to tell the truth. Candidly, if we could start over tomorrow, we might only keep the 20% of our staff that is still growing and contributing a great deal. I think that if I were totally honest, I just might fire myself. It stuns me how 80:20 applies in so many areas.”

Recently, I had an experience with 80:20 that shook me to the core. I looked at my stock trading since 1973. Even a persnickety statistician would consider that to be a longitudinal study. And, my findings? You guessed it. Some 79.4% of my gains came from 20% of my holdings. Eerie, but true.

The 80:20 principle is alive and well!

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

Sunday, June 12, 2016

Is Your Firm A Learning Organization?

In the last 15 years all of us have clearly learned one thing--the world is speeding up and, as even frontier markets get wired, people are getting more demanding or spoiled. They want precisely what THEY want and they want it now, not in the future. As the pace of change continues to accelerate, all companies, but especially those in communication, have to adapt and change or perish. A firm has to continually improve across all departments and you need to rethink your goals. Yet, what is a company? It is essentially its people and people only change when they are learning new things and shifting behaviors. As one person wrote to me, “Learning is the capital of the future” (More about that later).

About 25 years ago, Peter Senge of MIT wrote a book called THE FIFTH DISCIPLINE: THE ART AND PRACTICE OF THE LEARNING ORGANIZATION. His thesis was that it was not merely individuals but the organization itself which has to learn and keep learning to stay current. He described learning organizations as “organizations where people continually expand their capacity to create the results they truly desire, where new and expansive patterns of thinking are nurtured, where collective aspiration is set free, and where people are continually learning to see the whole together.” Sounds fabulous, huh?

Does anyone truly do it? Well, as is often the case, theorists such as Senge were more than a bit ahead of their time. Today, in 2016, I would argue that being a learning organization is crucial for the growth and even survival of many media entities and small to medium sized advertising agencies.

Did you ever ask anyone or observe what it is to be part of a great business team? Maybe even a well run department within a larger firm? To me, it always seem to hinge around an open environment for ideas and that people feel that they are doing something meaningful.

Senge identified things with a bit more precision that that. Disciplines needed in a learning organization include:

1) Systems Thinking--this is simply saying that what you do is interrelated and what you do can effect others and have long term effects. All too often I observed people 100% concerned with their own job, job security or department. No one looked at the big picture--people focused on their own “silo” or “sandbox.” Long term it hurt growth and the overall environment of the company.

2) Personal Mastery--here Senge says one lives life from a creative rather than reactive standpoint. These people are still learning and hungry for it. There are no “fat old men on tenure” who are coasting. Curiosity reigns. This is much easier said than done especially in a service organization.

3) Building A Shared Vision--teams learn to think insightfully and there is an “operational trust” among executives. There is dialog that is far more open than most organizations.

4) Leadership--autocrats need not apply. These men and women need to be teachers but not owners of the corporate vision.

About 10 years ago, I began to see the term learning organization pop up in the chairman’s letter in annual reports and corporate mission statements. I sometimes laughed out loud if I knew the group was run by a narrow minded tyrant. To me, Senge’s idea is one whose time has come. If not, many organizations we know will be swept away or much weaker over the next decade.

Finally, I mentioned that someone had written to me when I canvassed some panel members about this topic that “learning is the capital of the future.” Impressed, I asked if it were his original phrase. He said no and challenged me to find it. After some Inspector  Clouseau style research, I believe it was coined by British business writer Edward Russell-Walling. His articles on Senge are well worth your time if you do not want to plow through the original “Learning Organization” text.

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

Saturday, June 4, 2016

Tell Them What They Want To Hear?

It has often been said in the American business world that the way to survive is to tell management “what it wants to hear.” The late Chris Argyris (1923-2013) questioned that view often in his long career. Of all his books on organizational science, my favorite was ORGANIZATION AND INNOVATION.

In brief, Argyris said that there were two types of companies which he labeled Model I and Model II.  He stated that in Model I firms people only said things aloud in meetings that were felt to be appropriate to company culture. Confrontation was avoided at all costs. If an employee felt that he or she would be penalized in some way for candor, or might embarrass someone or announce bad news in a session, they usually would keep quiet, soft-pedal the issue or even lie. By doing so, top management gets knowledge that he categorized as invalid and many errors could not be corrected. Argyris felt strongly that if an organization was to learn, then finding and correcting errors was what it was all about.

Everywhere that I have worked in my career, superiors always said, “Tell me anything. My door is always open.” Think about it yourself and I am certain that most of you have heard the same thing. Did you act on it literally?

It is very hard to find an executive in almost any industry who is not at least minimally defensive about criticisms from an employee. After a period of years goes by and a relationship develops, most of us have learned where they can go and where they avoid comment. I made it a point never to call someone out in a meeting in front of peers. Stronger comments were always better one on one and even then, it was difficult at times. This week I just finished THE MURDER OF LEHMAN BROTHERS (Brick Tower Press, 2009) in which Joseph Tibman (a pen name for a former investor banker at Lehman) talked about how Lehman Brothers CEO Dick Fuld was always insulated from bad news right until the end of the company’s existence. Clearly, they were a Model I firm.

Model II companies, according to Argyris, have somehow found a way to express issues. People are not afraid to raise conflicting views and their is actual encouragement of challenging publicly even what the CEO has to say. Problems can be dealt with even when you are pretty far down the road on a project. Argyris says there are only a handful of Model II companies out there. He wrote that in 1965 and I bet it is still largely true today.

Where do Model II companies exist? Startups, particularly in tech, would likely head the list. I have seen and heard of it in small professional practices in law, medicine and financial planning and analysis. Everyone is experienced and fairly secure. Family businesses sometimes operate on Model II. As one person said to me, “Yes, we argue, disagree and fight. But, at the end of the day we still love each other and we are all owners.”

Does it work in the media world? A sales staff may have it if it is not too large. Everyone is under pressure to perform so the sales chief is not the villain--the bean counters at headquarters are. So, people are often apt to speak up about sales tactics or who to pursue for new business. Ad agencies? Maybe a few start-up digital shops are Model II but generally candor is found in private conversations at long standing agencies among senior management who are financially secure.

The late Andy Grove of Intel once famously said, “Only the paranoid survive.” It always gets a laugh when it is brought up but today in many firms, particularly advertising agencies there is a crying need to move toward a Model II culture.

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