I have always been fascinated with statistical models that try to project the future. Regression-based modeling, econometrics, scenario-planning, and simulations (including techniques from the finance field) are some of the techniques that I found to be helpful in coming up with projections.
In my previous life, we even came up with a "vision-statement" that encapsulated this view: "Empowering Foresight".
However, at the back of my mind is "foresight is never 20/20" and that "past events are never a guarantee of future events".
A constant reminder that in spite of all the due diligence, the rigor, the studies, the equations, and the scenarios that have been done, there is no guarantee that things are going to be as predicted.
Foresight is never 20/20 - hindsight is.
Seth Godin writes about this in his entry, It's (Always) Too Soon To Know For Sure. He notes:
If you're racing, you better figure out what to do about the times that you don't know for sure...because more and more of your inputs are going to be tenuous, speculative and possibly wrong. Day traders have always understood this--all they do is trade on uncertainty. But you, too, if you're racing, are going to have to make decisions on less than perfect information.
Indeed, perfect information is hard to come by in spite of the deluge of data and the now-very-cheap methods of gathering information.
But these days, one has to make decisions on the fly.
So what does one do?
My view is simple:
That sounds like a cliche because it is.
But it is not always practiced.
It is true the doing everything that you can is not going to be a guarantee that things are going to be right. But it certainly doesn't mean you shouldn't even bother doing what you can to control the things that you can.
It will not be perfect - it can NEVER be perfect.
But that should never be a reason to skip the due diligence and the rigor: one has to uncover as many potential opportunities and threats as possible, and come up with scenarios to respond to them.
One will never encapsulate everything whilst planning, say, a campaign or a marketing program - that's why it's called the future.
The only recourse that we have is to plan to adapt and to learn and to respond.
I will not deny that I believe in the power of research - and specifically, in the power of measurements. I believe that goals should be clearly defined - and in the case of marketing and sales (which I think should always be aligned), they should be quantified.
I also believe that there are a lot of factors that affect - facilitate, catalyze, result to - sales.
I also believe that whenever something emerges as a risk to achieving sales goals, one should sit down and respond.
However, I think that marketeers can become trapped in what I can only call as "metrics myopia".
Metrics myopia leads to a knee-jerk reaction to a slight change - usually a dip - in certain metrics deemed to be determinants of success.
The knee-jerk reaction from marketeers and sales executives trigger a chain of panic that affects the entire marketing organization, with the potential of triggering the entire organization to respond with "urgency".What causes metrics-myopia-induced panic disorder?
Immediate data access - made accessible by cheaper costs of doing research and by technology.
And since costs and technology are making data access even far cheaper, a pandemic is a real, possible phenomenon.
My recommended response:
If things don't improve, then repeat from (3).
Sure. It is a competitive world out there.
Time and speed are always critical considerations.
But use them wisely. And respond rationally.
the most innovative things that have happened in the past decade in marketing were all made possible by innovations in the digital world.
the rise of Google and Google Search changed the economics of media buying. though they may have failed (?) in their attempts to replicate the same business model beyond search into TV and print spaces, their innovations in search have shifted the way we look at media economics, auctions, and bids radically.
the emergence of mobile apps and ads has started. and with the onslaught of iPhones in Asia Pacific and the avalanche of responses it has generated from Google, Nokia, Microsoft and Blackberry in the OS front, from Samsung, Motorola, Nokia, Blackberry, HTC and LG in the design/handset front, we can expect 2010 to be the start of an even bigger shift in delivering messages to audiences.
the developments in digital outdoor and the continued expansion of "TV on the streets" in major Asian economies will also change the landscape dramatically - and increase efficiencies in delivering time- and geo-targeted messages, and hopefully, effectiveness and measurability of the outdoor medium.
the battle of the consoles - XBOX360, Nintendo Wii, and PS3 - is not just about selling games in disc-formats anymore. it has begun to evolve into the "battle for domination of the living/game room". the integration of traditional on-PC services (e.g., twitter, facebook, emails, instant messaging, radio streaming) is just the beginning.
and expect that ads will also follow as the technologies that allow on-demand delivery of games are applied to ad-serving.
(aside: whilst i was playing Topspin3 on my XBOX against Roddick, I saw ads of McD's local delivery service - 67773777 - in Singapore.)
with all these developments in the world of digital marketing, one can be tempted to say that "wow, digital media can solve all our problems!"
and that's where i take a stand:
i acknowledge that digital media - and digital marketing - do have a role in the communications mix. and it could very well be a role that is important and one that could lead to revenues and profits for the clients.
but not all marketing problems can be solved by digital "marketing".
in the same way that advertising cannot solve all marketing problems, digital "marketing" cannot solve all marketing problems or communication problems.
to say that digital marketing can solve everything is to fall into the trap of equating digital "marketing" planning with the search for marketing solutions.
marketing is far too complex than just a mere mix of search keywords, digital ads, social networks, fanpages and number of followers/fans...
marketing - in spite of what most marketing managers and juniors (and even seniors) would want to believe - is complex.
marketing involves making multi-dimension decisions that span pricing, product development and creation/extensions, branding and brand extensions, geographic prioritization and go-to-market strategies, competitive response anticipation, risk assessment and mitigation, said/unsaid consumer need satiation, opportunity-scoping, -assessment, and -realization...
i don't think digital marketing and the technologies that support digital marketing - and our understanding of these technologies - have reached that level just yet.
Back then, we looked at the web as "merely another channel - like TV, presses, magazines, and direct mailers - only that it accelerates the purchase cycle being much closer to the purchase occasion".
But we now know of course (I hope that all of us now know that!) that the internet and the web turned out to be more than that.
From my viewpoint, the web has dramatically changed not just the marketing and information landscape: it has changed the way we look at the world, the way we participate in it, the way we feel towards concepts such as privacy, hierarchies, and 'social order'.
And the Cluetrain Manifesto captured the new realities in marketing and in conducting business way before we knew where we were headed.
Here is a video from YouTube on where we are at.
One of the most beautiful things that was written in the Cluetrain Manifesto is this last paragraph in the introduction:
Seth Godin writes in his latest blog post -
If there was ever a moment to follow your passion and do work that matters, this is it. You can't say, "but I need to make a fortune instead," because that's not happening right now. So you might as well join the people who can say, "I love doing this."
In an earlier entry, Godin also wrote about "taking what you can get".
I have had this notion that in order to survive in these tough economic times, one has to somehow ride the wave - and the wave has been defined by calculated mediocrity, founded on fear and risk-aversion, and on misdirection.
Calculated mediocrity - the search for the path of least resistance, the shortcut, the most efficient - but not necessarily the most effective - way, the "good-enough" phenomenon, the "numbers-don't-lie" and "my-gut-doesn't-lie" - has been all around in almost all industries since the GFC (global financial crisis) reared its ugly head.
The funny thing about this time around is that this calculated mediocrity that is pervading most companies right now is that, well, it is founded on fear.
Sure, we can rationalize the fears - things are slowing down, credit market's tight, we are in a recession, profits are probably going down, revenues are down, stocks are down, shareholders are jittery...
And they are probably logical justifications of the fears on which the current air of calculated mediocrity is built upon - but then, they are just that: mere justifications.
When confronted with fear, we return to what our 'gut' tells us - the heuristics that have been embedded in our heads.
Hence, companies cut costs. They start with marketing and research budgets. Then talent. Then research and development. Then manufacturing centers.
All in the interest of keeping costs down and well, survival.
From my vantage point, if a company had to go back to 'calculated mediocrity' - or take recourse in shortcuts - in order to survive, then will not survive a more chaotic world that this GFC will usher in.
If a company had been "hard-pressed" to be mediocre because it had to survive, then it will not survive the future.
Because this crisis - whether we like it or not - is just the start.
Recovery may be around the corner - but we are going to emerge very different.
And as Warren Buffett said, it is only when the tide goes out that you learn who's been swimming naked.
Those who willingly gave up their shorts to survive - who reverted to mediocrity because "we had no choice" - they are the ones who have been swimming naked.
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.
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.
Often, the biggest challenge in mobilizing the talent inside your organization is learning to live with different solutions to the same customer problem. You need to ask yourself whether your current approach is designed to deliver what customers really want from you, or designed to keep employees comfortable. There's a lot of improvement to be had — if you can get over the fear of ruffling feathers.
... requires that one be open to different solutions - conventional and unconventional - to seemingly mundane, ordinary customer problems.
This blog entry from John Sviokla at http://blogs.harvardbusiness.org/sviokla/2009/09/can_you_design_an_internal_net.html is essentially what it's all about. He writes about the Netflix prize that urged 41'000 teams in 186 countries to submit solutions to a problem posed by the Netflix management.
There is beauty in harnessing the power of the crowd - after all, it is the power of the crowd (and their sentiments) that seems to be creating the volatility and profit-opportunities in the world's biggest betting game, the stock market.
But there is a need for management teams to be open to potential - and surprising - solutions.
Some old problems require old solutions - but some, because things have changed dramatically, require new solutions.
A couple of months ago, I presented to the leaders of the organization I am connected with. The topic was simple: accountability in the marketing world and how we can be prepared for the emergence of payment-by-results.
Seth Godin now writes about "everyone gets paid on commission" - which at first glance, made me wince because the "C" word was sort of like anathema to me.
But after reading what he had to say about commissions, it was not entirely about "commissions" as we know it in the ad and marketing world: it's about delivering results - and getting paid for it.
Ad agencies started out as "media space brokers" - and that's the reason, I believe, why they were called "agencies". In the same manner that travel agents get a commission from the vendor (the airline, the hotel, the vacation packager) for every trip they book, ad agencies were also paid based on the amount of media space they book - it used to be 15% of the gross amount or 17.65% of the additional amount.
The name got stuck - in spite of the fact that ad agencies started to move towards "hour-/time-based" fees - which supposedly would allow agencies to recommend to "not advertise when the time is not right", something that would have been unheard of in the world of commissions.
It is supposed to be something that should benefit both clients and their agency partners.
Now, we are moving towards payment by results: Agencies get paid based on the results that they generate for the clients' business.
This - I believe - is what Mr. Godin is writing about: being paid for the results that you generate.
However, implementing this in the world of marketing and communications is that easy. Here are some of the barriers that I can think of (and feel free to add more):
1. Agencies think that they have no control over other factors that affect sales (or profits or any other business metric/KPI). A valid reasoning - if agencies are supposed to be measure on sales or profits, it follows that they should have influence over how the business' marketing communications and marketing operations programs should be created. And not all clients are ready to give agencies that seat on the decision-making table.
Clients have yet to truly realize the value (yes, in spite of the history of advertising) that agencies can bring to their business - and most clients still see agencies as "go-for-it/do-it" companies.
The onus is on both agencies and clients: Agencies have to demonstrate that they are willing to be measured against sales and real business metrics (and circumvent this thinking and #2 below) - and clients will have to give agencies far more than just a "go-for" status and be real business partners with them, in the same way that they treat consultants from McKinsey, Booz, and Accenture.
2. Agencies think that their business is not about driving sales - but influencing people to buy by reminding, encouraging, and inspiring consumers to buy. Which I think is not entirely valid.
Sure, some campaign briefs talk about creating awareness and driving engagement. But no marketeer in her right mind - and definitely no CEO in her right mind - would want to spend money just to create awareness for her brand and drive 'differentiating brand experiences' that do not get translated to sales and profits.
Agencies need to rewire their brains - and accept the fact that all the things that we do from 9 to 5 (or beyond) point to one thing: driving sales, revenues, and profits for our clients' businesses.
Sure. Getting there entails creating awareness and driving engagement and loyalty to a brand. But what use is awareness and engagement and loyalty if it does not translate to sales and/or profits?
Marketing investments are (1) expense lines on the clients' balance sheet - that is a fact that we have to accept, and (2) investments - and therefore ought to deliver returns that would allow the client to further her business.
[There is some truth - of course - to this objection. "If a client wants to decide on whether to pursue a geographic expansion or not, can an agency help?" "If a client wants to do pricing promotions with key retail accounts, does the agency have the expertise to advise?" "If a client wants to create a new product with R&D, can agencies advise?".
My response: Agencies should be able to do so. If the expertise doesn't exist, then agencies ought to resign the business - after all, agencies ought to know the business they are managing inside and out.]
3. Clients are not sure what metrics they should be measuring. Should clients be measuring revenues? Number of transactions? Value per transaction? Profits?
I think part of the reason why we never got to really implementing payment by results is because clients themselves are not sure what to measure in order to judge their agencies.
My response: It depends on your business model and the short- and long-term goals of the business.
Dell - I would reckon - would be very much interested in immediate response per campaign in the form of number of transactions and value per transaction, because their business model is built on JIT deliveries to consumer and efficient corp-to-consumer relationships. Microsoft's could be very different.
P&G, Unilever, Coke and PepsiCo brands could very well be focused on immediate short-term sales - whilst at the same time ensuring long-term business goals are reached.
Immediate response to and sales relationships with promotions (price-offs, new packaging, new innovations, brand extensions) amongst consumers AND amongst key retail accounts are probably the best metrics for short-term effects.
For some, it's about profitability - ensuring that they are profitable, since sometimes, revenues and profits are not entirely linear.
Whatever it is, clients - and their marketing and finance teams - ought to start thinking what metric they should be monitoring - and judging their agencies on.
I believe marketing needs to change - and the current economic scenario has hastened that need for change. The area of marketing accountability needs to be fully entrenched in each and every agency and client organization.
That means embracing what Seth Godin is suggesting: Everyone gets paid on commission - on results.
And now something related about work...
Whilst on holidays, I have been trying to read up on two work-related themes (in between my Paulo Coelho, Dan Brown [not a fan], and a few other 'esoteric' readings): Network Analysis and Complexity Science.
1. Network analysis/science is not easy. It requires deep thought - and very unconventional approaches and algorithms. Most of the articles I have read have emphasized that their work is only the beginning - and that there is more to learn.
... Which leads me to the current belief in advertising that "so long as you have 'word-of-mouth' in your communications campaign, you'd be fine..." and "oh by the way, let's create a page on (insert your favorite social-networking site) and an app for iPhone".
I think this is simplifying the beauty of social networks and their impact on communications, marketing and ad effectiveness, and consumer behavior and emotions significantly.
Approaching social networks as if they were another medium that can be controlled is - in my belief - simply the wrong way. Not just because we don't have control over the social medium as we do on other media - but because social media affect people differently because they work differently.
2. Complexity is the nature of things - and whilst we may want to simplify our communications through visuals and bullet points, our message will remain to be complex.
We can create PowerPoint slides filled only with pictures and single-words or lines - because it is simple - and simple is beautiful, and is effective. We can create simple ads - filled with white space or capped with a catchy tagline or a jingly.
At least that's what we are taught - cognitive science says "schemas work - so leave them with schemas that they can bring along with them and process".
But it does become really complex because of the last two words: "... and process".
No matter how complex or simple our message is, it will cross over to complexity as soon as human processing starts.
A 10slide presentation - that is simple - could have as much complexity as a 100slide presentation. And the length, or style, or manner doesn't really matter: it's how the audience processes them that matters - and that adds that significant layer of complexity.
The same is true with social media and social networks: A seemingly simple 5-friend group (5node network) is very complex - and its complexities could well be similar with a 10-friend, 20-friend, or 100-friend network.
The human element is there.
We are born social - we are innately social.
And some are more social than others with a selective group - regardless of whether they already belong within the same group or not.