Recessions are tough. They test every part of every system. In business, a recession exposes weaknesses and drives change. It is not only the limits of admin systems and processes that get exposed but also the limits of the people working in the organizations that are affected by the recession.
Good recruiters appoint people with the right skills to do a particular job. Obviously they also hope that new hire will also have potential to grow and develop over time. Once they are onboard a good company will get them up to speed and get them working to somewhere near their maximum potential. Over time, training courses and exposure to new ideas and processes will help the individual develop but in general, most people in good companies are working somewhere near the top of their ability at any given point in time (otherwise, they are bored and the company is overpaying for talent it is not using).
When a recession comes along, it forces change at a rapidly increased rate, maybe more rapidly than new skills can be learned. Overnight, the trading environment can change in many ways (not always for the worse) and organizations need to change to keep up or maintain and grow their lead. This requires the individuals inside those organizations to drive that change and that is where the people who were already working at their limit can find themselves outside their comfort zone. People that have been with an organization for a long time and who are working hard every day to get their job done will find it hard to suddenly start innovating and coming up with new ways to approach their job.
When a recession bites, many organizations will trim any perceived excess and if there are people who are clearly not going to raise their game to cope with the new, more demanding environment, they will be let go. That doesn’t necessarily mean their role is redundant (although their job loss may be communicated like that) and new blood may well be brought in to drive the required change.
In additional to some potential legal traps, the challenge this gives to organizations is how do they bring on new, more highly skilled talent which probably costs more, at a time when they are likely to be reducing costs? It is a brave company that increases its wage bill during a recession, but sometimes that may be just what is needed to make the most of the opportunity.
The other side of this theory works for those people that find themselves out of a job in the middle of a recession. Although many firms are letting staff go, there will still be job opportunities out there with companies that are not just downsizing but who are also changing team members. Keep looking, they are out there, and they are probably with the most forward thinking and ambitious company you could hope to work for.
Friday, 27 March 2009
Thursday, 26 March 2009
I bought a new PC the other day...
I couldn’t put it off any longer, after 6 years of (almost) faithful service my Dell Inspiron was definitely about to expire. Whilst in Austin I took time out to visit Fry’s Electronics (the world’s best electronics store in my opinion) and look at the shiny new laptops. Being at the cutting edge of the internet revolution I had it in my head that I would buy one of those new fangled Netbook thingies.
A quick review of specs and a few questions to the sales associate quickly helped me decide that Netbooks are not for me. I love the portability and long battery life and low’ish price. But the poor spec and inability to beef it up beyond 2GB memory meant my 100GB iTunes music and video library was not going to work to my complete satisfaction. I was also worried that since it was almost too small for my needs today, how long would it last given the speed of change taking place in the IT world. As I am not ready to live my life with everything hosted for me up in the cloud, I guess I am not right for a NetBook.
So, I got on with reviewing laptops. Of course, Dell was notable by their absence (keep in mind this is their home town). Most of the other main players were all lined up side-by-side (except Apple who insist their kit is sold in a different part of the store) and guess what? They were all exactly the same.
I know I am stating the obvious here but they were all X86 based machines with similar specs and the same O/S and similar warranties and so nothing stood out. Except the price!
When you get right down to it, the PC is now a total commodity product. All the major manufacturers have allowed their brands to drift and soften. Do HP (Invent)still stand for innovation? Nope, not in the X86 PC world they don’t. Lenovo? Err... I am not sure what they ever stood for. Sony? Toshiba? None of them seemed to stand for anything different (although Sony was mind bogglingly expensive but I couldn’t see why).
A few years ago when I joined Dell, they were still seen as the value leader. IBM was the safe pair of hands and HP was viewed as the technical leaders. Sony used to be the style folks of the PC world. All that is gone now and none of them are differentiated in any way that I could tell. I find this somewhat disappointing given what I and most of my friends do for a living.
With Dell’s value leadership gone they are actually disadvantaged now because I couldn’t see their machine to compare it aesthetically, and had I wanted to buy a Dell (which I did due to a sense of loyalty to the many of my friends that still work there), I would have had to wait several days, if not weeks for it to be delivered.
I bought an Acer. It was at least 30% cheaper than any comparable machine (admittedly it was being promo’d by Fry’s) and it looked better than anything else. I walked out with it there and then and have spent the last couple of weeks evangelizing it to anyone that is interested enough to listen.
Any my point is? Well, the big boys need to get their brand messages back on track if they are going to raise their game and compete with the far eastern manufacturers. And Dell need to get their retail presence sorted out quickly otherwise it will be a rapid downhill descent.
Footnote. I looked up the equivalent Dell machine to my Acer on www.dell.com and it was almost twice the price!
A quick review of specs and a few questions to the sales associate quickly helped me decide that Netbooks are not for me. I love the portability and long battery life and low’ish price. But the poor spec and inability to beef it up beyond 2GB memory meant my 100GB iTunes music and video library was not going to work to my complete satisfaction. I was also worried that since it was almost too small for my needs today, how long would it last given the speed of change taking place in the IT world. As I am not ready to live my life with everything hosted for me up in the cloud, I guess I am not right for a NetBook.
So, I got on with reviewing laptops. Of course, Dell was notable by their absence (keep in mind this is their home town). Most of the other main players were all lined up side-by-side (except Apple who insist their kit is sold in a different part of the store) and guess what? They were all exactly the same.
I know I am stating the obvious here but they were all X86 based machines with similar specs and the same O/S and similar warranties and so nothing stood out. Except the price!
When you get right down to it, the PC is now a total commodity product. All the major manufacturers have allowed their brands to drift and soften. Do HP (Invent)still stand for innovation? Nope, not in the X86 PC world they don’t. Lenovo? Err... I am not sure what they ever stood for. Sony? Toshiba? None of them seemed to stand for anything different (although Sony was mind bogglingly expensive but I couldn’t see why).
A few years ago when I joined Dell, they were still seen as the value leader. IBM was the safe pair of hands and HP was viewed as the technical leaders. Sony used to be the style folks of the PC world. All that is gone now and none of them are differentiated in any way that I could tell. I find this somewhat disappointing given what I and most of my friends do for a living.
With Dell’s value leadership gone they are actually disadvantaged now because I couldn’t see their machine to compare it aesthetically, and had I wanted to buy a Dell (which I did due to a sense of loyalty to the many of my friends that still work there), I would have had to wait several days, if not weeks for it to be delivered.
I bought an Acer. It was at least 30% cheaper than any comparable machine (admittedly it was being promo’d by Fry’s) and it looked better than anything else. I walked out with it there and then and have spent the last couple of weeks evangelizing it to anyone that is interested enough to listen.
Any my point is? Well, the big boys need to get their brand messages back on track if they are going to raise their game and compete with the far eastern manufacturers. And Dell need to get their retail presence sorted out quickly otherwise it will be a rapid downhill descent.
Footnote. I looked up the equivalent Dell machine to my Acer on www.dell.com and it was almost twice the price!
It’s a funny old world...
There have been plenty of “unusual” stories in the news lately. A few that caught my eye included the AIG executive who resigned because he felt he was being betrayed (http://news.bbc.co.uk/2/hi/business/7964250.stm ) and Sir Fred Goodwin, the ex head of the Royal Bank of Scotland (RBS), who has been publicly slammed for receiving a huge pension when he was fired after RBS made the largest loss in UK corporate history.
What we weren’t told when Sir Fred was being publicly castigated was that he did not in fact receive the huge pension as part of his severance as has been widely publicised, it was something he had negotiated when he joined over 10 years previously and had been covered in the RBS annual report each year (http://news.bbc.co.uk/2/hi/business/7949929.stm ). It also turns out the AIG executive that resigned was on a base salary of $1 a year and his bonus was his only real income, not matter how big that bonus.
Now, I am not saying it is right to pay these huge salaries, bonuses and pensions but I do feel that a deal is a deal and if shareholders and politicians are OK with it during the good times, then it is somewhat unfair to renege on the deal when times (and public opinion) change down the line.
The other thing I think these stories highlight is that there are normally two sides to a story and it is important to try and understand both sides before making a decision. That may make it a good idea to read your favourite newspaper, the one that fits with your political ideology but also to read a second paper that doesn’t. Try to see things from both sides.
Having said that, I don’t think Sir Fred or the AIG executives received different coverage anywhere – they were uniformly crucified everywhere. I’m not defending them, but I do feel there is some justification in the claim they have been betrayed if they entered into a contract many years prior to all these problems and now other people are unhappy with those contracts. I know how I’d feel.
What we weren’t told when Sir Fred was being publicly castigated was that he did not in fact receive the huge pension as part of his severance as has been widely publicised, it was something he had negotiated when he joined over 10 years previously and had been covered in the RBS annual report each year (http://news.bbc.co.uk/2/hi/business/7949929.stm ). It also turns out the AIG executive that resigned was on a base salary of $1 a year and his bonus was his only real income, not matter how big that bonus.
Now, I am not saying it is right to pay these huge salaries, bonuses and pensions but I do feel that a deal is a deal and if shareholders and politicians are OK with it during the good times, then it is somewhat unfair to renege on the deal when times (and public opinion) change down the line.
The other thing I think these stories highlight is that there are normally two sides to a story and it is important to try and understand both sides before making a decision. That may make it a good idea to read your favourite newspaper, the one that fits with your political ideology but also to read a second paper that doesn’t. Try to see things from both sides.
Having said that, I don’t think Sir Fred or the AIG executives received different coverage anywhere – they were uniformly crucified everywhere. I’m not defending them, but I do feel there is some justification in the claim they have been betrayed if they entered into a contract many years prior to all these problems and now other people are unhappy with those contracts. I know how I’d feel.
Stop asking for more sales leads
OK, times are tough, sales are slowing, and management are worried. Just at that time when the marketing budget is being cut, sales are demanding more sales leads. Their theory is that if they have twice as many leads they will close (almost) twice as many sales. Good theory, but of course, completely wrong.
Firstly, unless you are a miniscule company, you cannot simply double the number of leads you produce. The law of diminishing returns comes into effect in the marcom department and your cost per lead is likely to increase unless your brand awareness can be grown at the same rate (tough for a small or mid-size company). Doubling the marcom spend will not double the number of leads you produce. Once those extra leads reach sales it will become clear that the extra leads are not always of the same quality as those produced before the budget was doubled overnight. Because you have worked hard to reach the outer limits of your target market and your brand awareness and credibility is now being stretched, sales will find themselves having to cherry pick those leads they feel are closable. Result; sales will not increase as forecast.
A much better way to grow sales (at anytime, not just during a downturn) is to look at the sales cycle from beginning to end and make sure marketing fully supports each step of the sale. Most complex sales (sales that go through multiple stages and involve multiple decision makers and influencers) require a very tight integration between the sales and marketing functions within an organization if close rates are to be optimised.
How many companies still let sales people produce their own presentation materials? How many companies still allow sales folks to write their own sales proposals? How many sales folks deliver their own demonstration to their own script? The answer is far too many. By getting sales and marketing more tightly interlocked, sales will be have access to higher quality materials that are on message and work to support each stage of the sale. The brand can be developed to deliver credibility at each part of the sale giving the customer the comfort they need to move onto the next stage.
Instead of asking for more leads, companies need to close more of those they already have. Improve sales performance by tightening the link between sales and marketing, not by asking for more sales leads.
Firstly, unless you are a miniscule company, you cannot simply double the number of leads you produce. The law of diminishing returns comes into effect in the marcom department and your cost per lead is likely to increase unless your brand awareness can be grown at the same rate (tough for a small or mid-size company). Doubling the marcom spend will not double the number of leads you produce. Once those extra leads reach sales it will become clear that the extra leads are not always of the same quality as those produced before the budget was doubled overnight. Because you have worked hard to reach the outer limits of your target market and your brand awareness and credibility is now being stretched, sales will find themselves having to cherry pick those leads they feel are closable. Result; sales will not increase as forecast.
A much better way to grow sales (at anytime, not just during a downturn) is to look at the sales cycle from beginning to end and make sure marketing fully supports each step of the sale. Most complex sales (sales that go through multiple stages and involve multiple decision makers and influencers) require a very tight integration between the sales and marketing functions within an organization if close rates are to be optimised.
How many companies still let sales people produce their own presentation materials? How many companies still allow sales folks to write their own sales proposals? How many sales folks deliver their own demonstration to their own script? The answer is far too many. By getting sales and marketing more tightly interlocked, sales will be have access to higher quality materials that are on message and work to support each stage of the sale. The brand can be developed to deliver credibility at each part of the sale giving the customer the comfort they need to move onto the next stage.
Instead of asking for more leads, companies need to close more of those they already have. Improve sales performance by tightening the link between sales and marketing, not by asking for more sales leads.
Wednesday, 25 March 2009
Raising your game in tough times...
Let’s think of an imaginary company during the good times...
Money is easy to obtain so in many areas, the business is just not as lean or mean as it is possible to be. Customers get away with longer payment terms than agreed. Customers may be given 30 days to pay but many companies have average debtor days of 55+ or even 65+ days. The credit control department put in a decent days work but it’s not a tough job. When the business needs extra money, the bank is falling over itself to make it available.
Then along come tougher times. Customers take longer to pay, some are even inconsiderate enough to go bust and not pay at all. Those customers that were paying in 50 days now take 60 days to pay. The bank no longer wants to lend money and so the company decides, in management speak, it has to “raise its game” and improve its performance. Management ask the credit control department to get tougher on the customers and get the money in faster. (This probably happens a few minutes prior to the same management telling their payments department to start paying their suppliers later).
At the same time customers start taking longer to pay, the credit control department get asked to reduce the average number days and get the money in quicker.
This is when things get difficult. The manager of the credit control department has been working at a good rate for a number of years and has always tried to look at ways of improving performance. To now be asked to simply improve performance overnight and deliver improved results exposes the limits of a company’s people and systems. Some people are able to rise to the challenge but many others will not because they cannot.
Companies recruit staff of a certain level to get a job done under certain conditions and pay them accordingly. When those conditions change, those same staff may not be able to deliver the changed performance the new conditions dictate.
So, what does this have to do with marketing? Well, credit control is a very easy example to give of tougher times affecting performance because it such an easy thing to measure and it requires relatively simple systems.
Marketing is far more subjective and so it is much more difficult for management to clearly see the ROI produced. When times get tough and companies need cash, they ask the bank for a loan and get turned down. They then “raise their game” and start looking at the performance of different departments in the company such as credit control. When credit control report back that getting the money in quicker is proving difficult, management then look at cost cutting opportunities and the marketing budget is always one of the first areas to be cut. In my experience, very few senior executives really understand strategic marketing and how it can be the most effective tool a company can deploy during a crisis. In tough times, maintaining the marketing budget but focusing it more on those often overlooked areas such as brand consideration rates and brand credibility can be the best investment a company can make.
For example, just as customer payment profiles will extend during a credit crisis, so the sales cycle may extend as customers look harder at their purchasing decisions and produce a more detailed business case to justify the investment. As potential suppliers come under greater scrutiny, their brand credibility becomes more important than ever before. By growing brand credibility, a company can close a greater percentage of the deals it is involved in (or lose a smaller percentage when their brand lets them down).
Making the most of every sales opportunity and maximising your chances of closing every sale is something very few companies are good at and cutting the marketing budget doesn’t help.
Money is easy to obtain so in many areas, the business is just not as lean or mean as it is possible to be. Customers get away with longer payment terms than agreed. Customers may be given 30 days to pay but many companies have average debtor days of 55+ or even 65+ days. The credit control department put in a decent days work but it’s not a tough job. When the business needs extra money, the bank is falling over itself to make it available.
Then along come tougher times. Customers take longer to pay, some are even inconsiderate enough to go bust and not pay at all. Those customers that were paying in 50 days now take 60 days to pay. The bank no longer wants to lend money and so the company decides, in management speak, it has to “raise its game” and improve its performance. Management ask the credit control department to get tougher on the customers and get the money in faster. (This probably happens a few minutes prior to the same management telling their payments department to start paying their suppliers later).
At the same time customers start taking longer to pay, the credit control department get asked to reduce the average number days and get the money in quicker.
This is when things get difficult. The manager of the credit control department has been working at a good rate for a number of years and has always tried to look at ways of improving performance. To now be asked to simply improve performance overnight and deliver improved results exposes the limits of a company’s people and systems. Some people are able to rise to the challenge but many others will not because they cannot.
Companies recruit staff of a certain level to get a job done under certain conditions and pay them accordingly. When those conditions change, those same staff may not be able to deliver the changed performance the new conditions dictate.
So, what does this have to do with marketing? Well, credit control is a very easy example to give of tougher times affecting performance because it such an easy thing to measure and it requires relatively simple systems.
Marketing is far more subjective and so it is much more difficult for management to clearly see the ROI produced. When times get tough and companies need cash, they ask the bank for a loan and get turned down. They then “raise their game” and start looking at the performance of different departments in the company such as credit control. When credit control report back that getting the money in quicker is proving difficult, management then look at cost cutting opportunities and the marketing budget is always one of the first areas to be cut. In my experience, very few senior executives really understand strategic marketing and how it can be the most effective tool a company can deploy during a crisis. In tough times, maintaining the marketing budget but focusing it more on those often overlooked areas such as brand consideration rates and brand credibility can be the best investment a company can make.
For example, just as customer payment profiles will extend during a credit crisis, so the sales cycle may extend as customers look harder at their purchasing decisions and produce a more detailed business case to justify the investment. As potential suppliers come under greater scrutiny, their brand credibility becomes more important than ever before. By growing brand credibility, a company can close a greater percentage of the deals it is involved in (or lose a smaller percentage when their brand lets them down).
Making the most of every sales opportunity and maximising your chances of closing every sale is something very few companies are good at and cutting the marketing budget doesn’t help.
What did we do before social networking?
I am very lucky to have many good friends with whom I regularly have heated debates on a wide range of topics. The last few days have been no different and it has set me off thinking about the social networking craze.
I Facebook. (Or "I FB" as one friend put it recently). I am on LinkedIn. I am learning to Twitter (or not). I think I need a blog. I used to have a MySpace page. I have a mobile phone that runs the Facebook and LinkedIn applications, and I then have Yahoo's "OneConnect" application installed so I can update multiple social networking sites with my status in one go and read what all my contacts are doing in a single "stream" or "pulse" of information without having to go to all the different web sites individually.
Why?
Well, I think I have a reasonably complicated life from a logistical point of view. I am Englishman that has lived in America and France and has a very extended set of friends. Just a few years ago I would probably have lost contact with these friends once I moved away but with the new social networking phenomenon that is Facebook I am now almost as connected to each of them as if I still lived among them.
I have had about 8 jobs over the last 25+ years and over the last couple of years I have gathered together almost all of my previous business contacts in my LinkedIn address book. I genuinely use this 300+ network of people to answer questions and find resources to help me when needed.
So what did we do before these new sites came along? Well, in one of my debates with friends, it was pointed out to me that we have always been engaged in social networking. Anyone who has pinned a notice to a notice board at work or in their local shop, or who has taken time to produce a Christmas update letter that they have photo copied and posted to friends and family with their Christmas card, or even the people who have spent a half day of their holiday sitting down to write out a small pile of post cards has been a social networker but using older technology. (Credit for this observation goes to Ian Farmer who you can follow here; http://twitter.com/ianfarmer )
Instead of a notice board in the staff cafeteria at work and instead of postcards or the annual Christmas update letter many of us now use MySpace and Facebook and a whole host of other sites to keep our friends, family and colleagues up to date on a day-to-day basis (or minute by minute in some cases).
From my own point of view, I find it interesting that I have never, ever, pinned a notice to a notice board anywhere. Soon after I moved to the USA I did take time to produce an update that I printed many times and sent to a range of friends but it only happened on that 1st year. I think I can safely say I have sent less than 5 postcards in my entire life and they were probably only purchased and posted because they were rude!
So why do I (we) spend time on these social networks?
What a simple card on a shelf can tell you.
I was attending a friend’s wedding recently in Austin, Texas and stayed at an up-market hotel just outside the City. As usual there was the ubiquitous note in the bathroom asking for my help in saving the planet. You know the one; “a towel on the floor means please replace and a towel on the rail means I will use it again.” As usual, this always prompts me to take a quick look at the hotel to see what efforts they are making themselves. In the case of the country club it was almost zero; incandescent bulbs were burning away in the light sockets, the air conditioning and lights all ran 24x7 even if I was out of the room and so on. Immediately, the request for help in saving the world was reduced to being nothing more than a profit maximising exercise in my eyes.
Normally I leave it there. All hotels make the same request and we all know that in 99% of cases it is a plea to reduce their laundry bill and has almost nothing to do with any desire to improve the health of the planet. However, in the country club in question, they really managed to offend my sensibilities in a new way. On the table in my room were two bottles of mineral water available for purchase (all I had to do was open them) that proudly bore the label “Fiji”. (The fact a small bottle was priced at $8.50 and wasn’t even in the fridge is worth its own blog entry.)
The debate about bringing water half way across the planet in a plastic bottle is not new. The almost cynical messaging by hotels that they are somehow “green” and their constant appeals to our environmental consciousness to do our bit in a way that just coincidently happens to lower their operating costs is annoying. However, the country club in question really took things to a new level.
The appeal card in question was printed in full colour and then laminated. The front had a short statement to the effect that “we did not inherit the earth from our ancestors, we have it on loan from our grandchildren”. On the back, below the appeal to save on their laundry costs were details of a series of awards they had won over the previous 2 decades for their environmental efforts. These included actions such as recycling water to use on the golf courses and so on.
As a marketer I was pained by their complete inability to understand that any claim you make on behalf of your brand has to be credible. They had worked their message up into a nice card, added some substantiating proof points to support their claims and then placed the card in the middle of the most environmentally unfriendly room I have stayed in for several years.
It was obvious; they have employed a reasonably skilled marketing person who knows how to do their marketing job but, that person is clearly quite low in rank within the organisation and is unable to really get the company aligned behind the brand values they want to push. The company doesn’t believe its own marketing hype.
All that from a simple card on the bathroom shelf!
Normally I leave it there. All hotels make the same request and we all know that in 99% of cases it is a plea to reduce their laundry bill and has almost nothing to do with any desire to improve the health of the planet. However, in the country club in question, they really managed to offend my sensibilities in a new way. On the table in my room were two bottles of mineral water available for purchase (all I had to do was open them) that proudly bore the label “Fiji”. (The fact a small bottle was priced at $8.50 and wasn’t even in the fridge is worth its own blog entry.)
The debate about bringing water half way across the planet in a plastic bottle is not new. The almost cynical messaging by hotels that they are somehow “green” and their constant appeals to our environmental consciousness to do our bit in a way that just coincidently happens to lower their operating costs is annoying. However, the country club in question really took things to a new level.
The appeal card in question was printed in full colour and then laminated. The front had a short statement to the effect that “we did not inherit the earth from our ancestors, we have it on loan from our grandchildren”. On the back, below the appeal to save on their laundry costs were details of a series of awards they had won over the previous 2 decades for their environmental efforts. These included actions such as recycling water to use on the golf courses and so on.
As a marketer I was pained by their complete inability to understand that any claim you make on behalf of your brand has to be credible. They had worked their message up into a nice card, added some substantiating proof points to support their claims and then placed the card in the middle of the most environmentally unfriendly room I have stayed in for several years.
It was obvious; they have employed a reasonably skilled marketing person who knows how to do their marketing job but, that person is clearly quite low in rank within the organisation and is unable to really get the company aligned behind the brand values they want to push. The company doesn’t believe its own marketing hype.
All that from a simple card on the bathroom shelf!
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