marginally subversive

holistic enterprise-wide measurements and business performance

Measuring and improving employee retention is an increasingly vital challenge which is essential to the smooth function of “multi-location” operations that involve far flung managers and staff personnel. The power of key-driver analyses not only identifies what is important to improving employee performance; it provides a measurable basis for each business unit to target the specific areas that needed to improve. Not all management teams are equally good at communication, training, etc. The employee survey system that was developed lets managers know their real effectiveness on the important issues that impact employee performance, and how to improve the company-employee relationship.

via marketresearchbulletin.com

From www.marketresearchbulletin.com

The last couple of weeks, I have reading up on Enterprise Risk Management - ERM - in prep for my attempt at getting a certification in risk management from GARP and PRMIA next year. The goal of ERM is simple: to create a culture that acknowledges the fact that everyone in the company is a risk-manager.

This entry from MarketResearchBulettin.Com made me think: in addition to ERM - and perhaps, even prior to establishing an ERM - there must be an integrated, enterprise-wide measurement system that (well) integrates performance metrics, socialization metrics, "shared culture and values" metrics, financial metrics, project management and efficiency metrics, and others.

True: this will make life for CFOs and CROs harder.

But that may be the key to a sustainably profitable, positive-cashflow company.

of risks and rewards in marketing and advertising

The more you risk, the higher the reward:
Realistic or not?

We've heard that adage so many times.  I myself have used that in trying to convince clients to take on a new idea that I deem to be groundbreaking, creative, and would be a "first of its kind" execution.

But my viewpoint has changed.

After having learned more about risks and its management and mitigation (albeit from a financial perspective), I changed my mind.

It is not true that the more you risk, the higher the reward.

I am not sure who coined this - but I am guessing finance people. 

What is interesting is that it's also being used by creative executives (and media planners, like myself) to sell concepts that are rather risque and controversial - all under the guise that "you can't bore your consumers into buying your product - you can only excite them".  (I believe that's a paraphrase the great David Ogilvy.)

But the model - as depicted above - has some problems: 

1. It assumes that for every unit of risk that a client takes, it generates a commensurate amount of return to the client.

It may not be a one-to-one relationship - but it is linear nonetheless:  for every 1 unit of risk you take, you get some unit of reward.

I don't think that's realistic.

There must be a point beyond which taking on more risks won't generate as much returns or potentials for rewards.

2. It also assumes that the more risks you take, the expected the returns ought to keep on coming - so one should keep on taking risks. 

So if the amounnt of risks that a client takes approaches infinity, the rewards also should approach infinity.

Again, I don't think that's realistic. 

There's only so much "reward" that one can get - unless one believes in The Secret, which states that "there is an infinity of abundance out there".

A more realistic proposition:
Risk and Potential Rewards are 'hyperbolic'

OK.  Before you tune out, let me visually show you what I mean:

 

I believe that the above more accurately represents the relationship between taking risks and the possibility of a reward or returns on investments.

Let's break down the possibilities in this visual representation:

1. If you don't risk, you don't get anything.

The curve starts at zero - which means, if you don't take a risk, you won't get anything.  I think we can all agree with that one.

2. The relationship between risks and rewards/returns is not linear but is a curve that is similar to the "diminishing returns curve".

Focus on the top half of the figure: There must be a point beyond which taking on more risks won't generate any additional potential for return.  There is a 'decreasing efficiency' or 'decreasing risk-to-reward conversion'.

Let me illustrate:

If I took on some "b" risks ("b" being a number), the returns I get would be much higher than if I had taken some "a" risks.  However, if I took on "d" risks, the returns would not that different had I taken only "b" risks.

That's the law of diminishing returns - nothing lasts and goes on forever, basically

3. For every risk one takes - regardless of the amount - there is an equivalent possibility of failure.

The first, linear model assumes that if you take risks - there is no possibility of loss, no possibility of a backlash.  It's all good - and it lasts forever!

This model, however, acknowledges the real meaning of risk:  to take risks - any amount of risk - means being open to both possibilities of failure and of success.

If I took on "a" risks, the possibility of success is there - but so is the possibility of failure.  If I took on "d" risks, the possibility of success is also there - but so is the possibility of failure. 

The possibilities between success and failure may be imbalanced - but that is not the point:  The point is, for every risk, there is a possibility of success and the possibility of failure - simultaneously.  Otherwise, it is not risk.

(In this visual diagram, I have made the possibility of success a mirror image of the possibility of failure.  But it may not necessarily be so.)

So what do these have got to do
with marketing and advertising?

Let's stop the idea that "the more risks you take, the more rewards you get so let's get creative..."  I think it is irresponsible of ad and marketing professionals to recommend this approach: There are no guarantees that if you risked a lot, you'll get as much as what you risked.

Let's also start thinking in terms of risks in advertising and marketing:  If we are to elevate marketing discussions to be more than just "advertising and promotions", we need to accept, take on, and include in our thinking and philosophies the concepts of risks.

When we talk of "ROI" or "accountability" or "ROMI", we need to talk about not just "thresholds, creativity, optimal budgets" - but also risks.

So what's next?

The concept of risk may have originated from finance.  In fact, the charts above are from finance's portfolio management theories.

It's time that we treated marketing investments as investments.

It's time for clients to start asking their agencies and 'media brokers' to think like real brokers and financial analysts and consultants.  It's time that agencies to start thinking in terms of investments - in the real sense of the word invesment.

the mighty also falls

"How the Mighty Fall" the BusinessWeek

Collins outlines five stages of decline: Hubris Born of Success, Undisciplined Pursuit of More, Denial of Risk and Peril, Grasping for Salvation, Capitulation to Irrelevance or Death. He makes the point that great companies can fall "even if engaged in energetic and ambitious activity"...  (Emphasis mine)

This is from Jim Collins who wrote Good to Great and Built to Last (together with Jerry Porras).

It is quite interesting how it captures - in very simple terms and 'stages' - the history of some companies.

If I look at the financial industry, this could very well be the same trends that occurred.  The same is true of "idols".

This could very well be the same of brands.

From BusinessWeek.Com

When every little thing matters…

These are times when every little thing matters:

• When you remove all the drinks from what used to be an open pantry because you can save 200 dollars a  month, you are sending a signal that your people don’t matter.  So why should they consider you as if you mattered?
  
• When you lock the cabinets for office supplies to save on costs, you are sending a signal that you don’t trust your people.  Why would then your people trust you?
  
• When you question every single hour a person is late, you are sending a signal that your people are factory-workers who need a time-punch card – in spite of them having worked late last night till 11pm for no pay or for tapping into their electricity to finish a presentation to a client.
  
• When you question every single person’s leave application as if they were looking for ways to skive off work, you are sending them a signal that all you need are bodies of people and pairs of hands – but not necessarily their heart and their commitment.  Why should they trust you – when you don’t trust them?
  
• When you give signals of that your staff are nothing BUT mere bodies, mere pairs of hands, mere costs, mere overheads…
  

True.

The job market is bad.

You know that.  Your people know that.

The market is bad.

You know that.  And surprise: Your people know that too. 

Your people?  They are not just lines in your expense column.  They are not just drawers of salaries.

When you look hard enough, there is a gem inside them that you can nurture.

 

I have always believed that the best and the worst of times bring out the best and the worst of people.  And of companies.

These are not the best of times, obviously.

And I am beginning to see this truism rear its ugly head.

And those that believe – truly, f***ing believe – that their people is best way out of this mess, in spite of their inadequacies and their imperfections – will be the ones that will live on to be legends.

Thanks to Darwin Bell from Flickr for the photo

Remaking (and remarketing) marketing...

Seth Godin wrote a very strong blog-entry on marketeers, aptly titled "Poisoning the Well".  Here's what he has got to say about marketeers:

Marketers have spammed, lied, deceived, cluttered and ripped us off for so long, we're sick of it.

Which means that even if you have a really good reason, no, you can't call me on the phone. Which means that even if it's really important, no, I'm not going to read the instructions. Which means that god forbid you try to email me something I didn't ask for... you're trashed. It's so fashionable to be skeptical now that no one believes you if you attempt to do something for the right reasons.

Selfish short-sighted marketers ruined it for all of us. The only way out, I think, is for a few marketers to so overwhelm the market with long-term, generous marketing that we have no choice but to start paying attention again.

I would say amen to that.

This morning, I opened my mailbox - and sellers of condominium units and properties in Singapore have decided to rename me as "The Resident".  Sorry.  I didn't even bother opening those up.  If you really want me to consider your offering, at least address me properly.  I am not "The Resident" - I am not "Mr. Resident".

A couple of days ago, I had a phone call from a card company - asking me if I wanted to get a new card with them.  The problem was, I already had a card with them.  And in case they haven't noticed, I am quite OK with their services since I use their card several times in a month.  The funng thing? As soon as the telemarketer heard that I already had a card, she just went "Ah, OK.  Thanks.  Goodbye".

Hello?

And spam: The trend these days is "text/SMS spamming".  From my bank.  From my phone service provider.  From my cable TV provider.  From the bookstore.  From the skincare brand that I tried for the sake of trying.  From some company whose services I don't even know.

OK.

These are indeed tough times.

But these marketeers - and their brand managers - need to understand that in these tough times, it is also a lot easier to piss your current clients off.

Image From Feureau on Flickr.Com - Thanks!

Measuring ROI with Google – A Simple View

An interesting video from Google on YouTube on calculating ROI, using profit margins.

What thing that’s missing though is “So how do I move into the future?”

Profit margins (and cost of goods sold and revenues) are not static measurements for businesses.  There is seasonality involved – and there is randomness involved.  While measuring ROI from past campaigns is good, measuring and predicting ROIs for future campaigns is far much better and far more useful.

Just because one product does generate more profits now doesn’t necessarily mean it will continue to generate profits in the future.

Similarly: ROI from the past are not necessarily good predictors of ROI in the future.

Google Search as an Indicator of Brand Health?

I stumbled upon this Google video on using search results to understand the health of your brand versus other brands.  I thought it was interesting – but very dangerous. 

[Data and information in the wrong hands can become weapons of mass insight destruction!]

While it does answer some burning marketing questions – such as “how strong is my brand versus other brands”?, it could potentially be valid – since it is based on searches made by consumers, and therefore are ‘consumer-action-based’, and it is possible to monitor these across time – as per the video, it still leaves a lot of questions.

• Why are things going up or down?
  
• In the example, there was a surge in one of the brand’s “supposed brand strength”.  Can you trace that back to something relevant?
  
• The search terms are also revealing in the example video: the top search term is “digital camera batteries”.  Now, how do you explain that?  From my perspective, that actually indicates a potential problem/opportunity – that consumers have 'battery-related’ concerns and/or interests more than “digital camera” per se.
  

 

 

 

 

This is really interesting – but again, data and information [plus graphing, visualization techniques and statistical testing] can become weapons of insight destruction in the wrong hands.

The Future of the Communications

Cisco

 

For CISCO, the future of communications is on Mobile Internet – not just being able to access the internet through a mobile phone as a “by the way”, but as a real, basic part of our lives.

 

 

They call it 4G – and have even created a site for it.

 

Microsoft

For Microsoft, it is somewhat different – but still within the same category of “everywhere-everytime”.  This is an entry from Chris Brogan showing what Microsoft thinks the future of computing will be: it’s everywhere and anywhere – and every time and anytime.

 

<a href="http://video.msn.com/?mkt=en-GB&amp;playlist=videoByUuids:uuids:a517b260-bb6b-48b9-87ac-8e2743a28ec5&amp;showPlaylist=true&amp;from=shared" target="_new" title="Future Vision Montage">Video: Future Vision Montage</a>

 

 

Here’s the challenge to marketers and device-creators:  How can you leverage these to create the future – and be a part of the changing world of consumer-brand-entertainment landscape?

Making IKEA Catalogs Alive – and more engaging

This is something that I picked up from a colleague’s blog. 

I loved the idea of making a relatively boring medium (though IKEA’s is not boring at all, I should say – since I look forward to it!)  Other brands that do catalogs ought to think of the same way – bring the medium alive through another medium.  Or better yet: Bring the message to life and elevate it into the area of experience!

great = success?

Not always, I think.

And it all depends on how one defines great.

Mr. Godin asks which comes first - marketing or the product?

I believe marketing comes first - because marketing is all about doing undercover work amongst real people - and realizing that there is a need that can be filled.  And then getting under the skin of those who may need the product itself.  And then coming up with a solution - with the right price (and profit-making plans...).

And then offering it.

Through another step in the marketing process - promotions (which happens to include advertising...)

In my mind, I think marketing pervades the entire process - and that it is a neverending process.

Way after the purchase has happened and the need has been fulfilled, the process starts again. 

Marketing is about real people.

---

I never studied advertising nor marketing in university.  I was studying maths, stats, body parts of cats and sharks and fish and chicken, and human brains (real, preserved, formaldehyde-soaked human brain).

But I was told that marketing has four P's: Product - Place - Price - Promotion.

A former colleague told me that there's a fifth P - and it's the most important one of all: People.

Marketing starts with people.  Marketing ends with people.  And gets restarted again because of people.

Thanks to Quasimodo for the photo.