24 February 2006

Leadership and disappointment

It is not hard to imagine that leaders can be disappointed by the reactions they get from their direct colleagues. Everything you do is directed at helping and leading them and they do not recognize your efforts.
A simple reason could be, that your employees are used to your way of working and do not react to it like they used too. Another reason could be, that your employees do not know how they could react. Or do not understand, that a leader also likes to receive positive feedback. A forth reason could be, that employees never learned to see by what kind of positive actions they are surrounded. Yet another reason could be, that your actions as a leader are so indirectly connected to outcomes, that employees have trouble recognizing your impact as a leader on their experiences.

It becomes a strange situation, when a leader starts to complain about the behavior of people from outside his organization. If he is disappointed by his customers, who do not seem to understand that quality is costly. If he is disappointed about the fact that investments do not deliver within five years the expected market share and profit. When you are disappointed about the fact that your turnover grows less in one country compared to another, although neither are comparable.
The disappointment is even stranger, when the leader has a great succes under his belt. You decided to invest in a company, that others thought to be a bad investment. And after a year your decision turns out right. Your company’s profit grew 75% over the last year and you can pay your shareholders their dividend, for the first time in four years.
But maybe the disappointment is understandable. We often want to hear from the ones we see as close to ourselves to recognize our succes and the financial profits do not seem enough.
Or all our efforts are directed at making it possible to stay in a certain place, that seems to be difficult to maintain. We often see this happening when people try to keep a company or its headquarters connected to the county in which it was founded.

Coping with disappointment
How could a leader address his disappointment, to keep yourself from showing it in public? Because people do not understand that a successful organization complains about a small problem.
A first method could be to see that you are disappointed and why. Getting a clear understanding of your disappointment could be achieved by talking to an external party. Be careful who you choose, because journalist have their own goals when listening to you. Best is to find someone who has no stake in listening to you.
A second approach is stop looking at negative things and things that go wrong. You might want to look at only your successes. However there is a danger in only looking at positive things. If the failures are a signal for fundamental problems, then ignoring them may result in complete failure of all systems.
A third method is to sit down with your colleagues and make a list of all positive and negative elements and see if being disappointed is justified. Often you will find out, that there is no reason to be disappointed.
An advantage of this last approach is that you get a clear view of your situation and that you can be content. Your satisfaction can give you the energy to find out what caused some of the fiascos.

A few suggestions for a leader who is feeling disappointed:
  1. talk internally about your disappointment, because in the outside world you will not be understood;
  2. have a positive feeling, before you start looking at fiascos, because else you will feel disappointed afterwards;
  3. do not look at disappointments on your own. Do it with someone else, who can give the advantages of the fiascos (not the devils advocate, but his fool);
  4. research your disappointment, is it caused by:
  • internal reactions, or
  • are they from outside, or
  • is your personal situation a reason for disappointment?

Advise for Numico’s chairman
My advise to Jan Bennink of Numico is: stop being disappointed about the Dutch when everywhere else you are a succes. My compliments for the succes of Numico.

16 February 2006

Leadership and management

Superior leaders get things done with very little motion.
They impart instruction not through many words, but through a few deeds.
They keep informed about everything but interfere hardly at all.
They are catalysts, and though things would not get done as well if they were not there, when they succeed they take no credit.
And, because they take no credit, credit never leaves them.

-- Lao-Tzu

Most of what we call management consists of making it difficult for people to get their work done.

-- Peter F. Drucker

08 February 2006

Leadership and marketing

Organizations are more than their product

Marketing is one of those disciplines of which many leaders probably think: thank goodness that it is a department. This of course is the wrong thought. Because marketing in essence is the product an organization sells.
Most small to average size organizations however, think that they are selling a specific product to their clients, for example a machine or a hamburger.
Most clients think they are buying a machine or a donut they crave for. But in reality an organization sells a combination of elements, of which the product is only a part.

A leader should look at the total organization as a product that is to be sold. That would give the insight why it is necessary to address the 5 P’s of the marketing mix as well as the 4 C’s of the consumer mix.

The 5 P’s were short for:

  • What are you selling? The next cash cow or do you have a dog in the house?

  • As real estate agents will say: Location, location, location

  • Are you offering the lowest price? Or are you being exclusive? Or is the relation between price and performance more important?

  • Is the products existence known to the public and does it look good?

  • Is everybody motivated to sell the product or are they selling because they get paid to do so?

A variation on the 5 P’s is the 4 C’s put forward by R. Lauterborn (ref. 1, ref. 2, ref. 3, ref. 4), which I first encountered in an article by John Koster and Ed Peelen on managementsite.nl “Komt het nog wel goed met marketing?” (Will marketing be alright?):

  • Which effort must the customer make: personally, financial or physical?
Customer needs:

  • What is it the customer wants to buy: a product or its use?

  • What can be done to live up to the expectations of the customer in price, place, promotion, product and personnel?

  • How does the customer want to be addressed?

When we use the 5 P marketing mix to answer the questions of the consumer mix, you get the following questions:
  • Product

How much trouble is it to us a product (almost everyone has something at home, that after onetime use disappeared into a closet or drawer, because of the difficulty to use it or get help from the manufacturer.)

  • Place

How far and how long should a customer travel to get his product. And what should he be paying once he has arrived at his destination? (An example of how this is solved, is the free parking ticket for the car park.)

  • Price

What should a customer pay for the product? And does this price seem reasonable compared to what he is getting and needs to do?

  • Promotion

Is the PR directed at the customer or was it made for the PR department? Is the packaging and the user manuel clear and understandable? Is there a help desk and is personnel available?

  • Personnel

Is it the customer who is excerting himself to reach a member of the organization or is the personnel that tries to reach the customer with a friendly attitude? You might say is the customer there to keep the employees busy or are the employees there to help the customer?

Customer needs:
  • Product

What is the intended use by the customer and is that the only thing it can be used for? Is the customer interested in this product or would he rather have a product that is less sophisticated but easier to use?

  • Place

Does the customer want a shop around the corner with everything for sale or does he want a range of shops. that all sell their own unique products? Does he want to spend a lot to get at the desired place or does she want it at walking distance? Does he want exclusivity or does she want what everybody is having?

  • Price

Is the price unimportant as long as the product works the way advertised or should it give more for a low price?

  • Promotion

Is the customer interested in thinking for himself or should you make him laugh? Should your PR be understandable or should it challenge the customer to understand what was meant?

  • Personnel

Should the customer be searching and waiting for help or should the customer be treated like a king?

  • Product

How much effort should it take the customer to use the product? How can the customer be helped to start using the product as soon as possible?

  • Place

How easy can you get to the location where the product is sold? What has to be done to get to the location? Could the product be brought to the customer?

  • Price

Does the price fit the expectations of the client? Or should the client be helped understanding what the price signifies?

  • Promotion

Is the customer getting the information he needs, or should the customer adjust to the information?

  • Personnel

Is the customer expected to search and wait for personnel or is he being pampered like a baby?

  • Product

Is the product telling the customer that it is easy to use and understand or is a product for professionally trained users.

  • Place

Does it say: “come on in” or more something like ”get out and stay out.”

  • Price

Is it a price of exclusiveness or inclusiveness? Does the adjust to the customer or should the customer adjust to the price?

  • Promotion

Is it about the customer or is the product and the organization central to the information given? Do we think and tell the customer we think his mental capacity is hindered or do we think he needs to be informed to become knowledgeable?

  • Personnel

Is it clear that the employees think that the customer is important and do they show it or is the customer a buggy side effect of working for this company? Is the customer right or the employee?

Examples of how organizations and their leaders have trouble connecting their product and customers, are easily found. Take for example the automotive industry. With the exception of a few brands most are doing worse every year. Toyota has almost overtaken GM as biggest car maker of the world. Where GM is closing factories and cutting salaries.

What is causing this difference?
Because Toyota puts the customer and his wishes central and also communicates this with its vehicles and service. GM however still thinks that all its customers want is a car with the GM logo somewhere on the car.
But not only the automotive industry is an example. The educational system also thinks its knows better than its customers. The biggest part of the educational system still focuses on content delivery. Instead it should be looking at what is needed to help their customers learn what is being taught and what the customer is going to do with that knowledge.
It would be good if leaders understood that their product is not what the customer takes with him when stepping out of the door, but that its the whole package from the first glimpse of an idea for a product up to the moment the product will be recycled.