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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 write 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.