Listening: A Strategy and Marketing Blog | Hosfeld & Associates

By Kathleen M. Hosfeld

Creating improvement in performance, marketing or otherwise, usually involves change. Many of us are keenly interested in any thing that creates positive change faster and with lasting results. So, I was intrigued when I  read that the science of neuroplasticity has some implications for how individuals and organizations can change. The headline: Focus on Solutions Instead of Problems.

This is something I thought I already knew. In the spring of 2007, we worked with a non-profit board focused on generating earned income from events. In researching what would increase attendance at their events, we tapped market research that explored how similar organizations and similar events elsewhere managed to do well. But one board member was flummoxed. “Why didn’t you research why people don’t come?” he asked.

We had, in fact, studied the surveys that talked about reasons people don’t attend events like his. In fact, the Executive Director of the organization had ordered and studied three white papers on why organizations like theirs had failed. I read those, as well as national studies on the challenges of similar organizations.

In order to turn things around, we had chosen instead to look at best practices of what others had done to solve their problem. What solutions were out there? What was already working? Having practiced “appreciative” approaches like this to marketing for quite some time, I was pleased to learn this fall that the implications of neuroplasticity for creating change in organizations supports this approach. The study of neuroplasticity concerns how the brain can and can’t be “rerouted” to support new ways of thinking and behaving.

According to an article in the Autumn 2007 Special Edition of Strategy + Business, focusing on a problem (”why does this keep happening?”) builds stronger neural pathways associated with the problem. An appropriate metaphor might be that it wears the ruts deeper in the existing road. Making new ideas possible (and new behavior) starts with focusing on solutions instead (”what will create a different outcome?”). Focusing attention on solutions helps build the short-cut between the road we’ve been on and the road we want to be on. So, focusing on solutions that are working is a faster way to create change.
While the non-profit I worked with did not ultimately adopt all the best practices we identified, the result of the assessment was hope. They had previously convinced themselves that their prospects were small. Now they had compelling evidence that others similar to them were making similar transitions and accomplishing their goals.  Compelled by this hope and a vision of greater possibility than they had imagined, they were able to chart a new course, recruit a new Executive Director and embark on a more successful program.
Focusing what you want to achieve, and new solutions to get there, are the keys to faster change and faster marketing results. The full article on Neuroplasticity is here at the Strategy + Business website:  You must register to read it but registration is free.

A financial consulting organization, working with business owners who had commingled business and personal assets, was frustrated by clients’ inability to move ahead with estate or investment strategies.  Their situations were so complex it was difficult to intuitively understand all the implications of the recommendations their advisors would make. Clients would get stuck. Time would pass. Often, nothing was done.

What their clients needed to see was a year-by-year picture of what would happen if they adopted a certain strategy. Without over analyzing the situation, the consulting organization started putting together spreadsheets that showed the relationship of the personal and business assets. They compared scenarios and showed the year by year comparison stretching out in time to retirement and beyond.

The consulting organization was so focused on the solutions they were proposing, they didn’t at first recognize the value of their spreadsheet tool.  It took some customer research during a strategic planning process for them to realize how much clients valued the financial models they created.

The financial models were what we call a “pearl” that had formed in the organization. The frustration they felt over clients’ inaction was like the irritating grain of sand that enters the oyster and eventually becomes the pearl.  The organization responded to the irritation by creating a new tool.

Upon discovering this pearl they had created over 15 years ago, the company was able to use it as the basis of a national expansion into new markets.  This pearl has been a consistent source of strategic advantage as their business has evolved through many market changes and economic cycles.

This is what we call a “stumble upon” strategy. It’s something already present in the organization that is working well. However, in many organizations the lenses through which members see their own organization are different than the lenses through which their customers see them.

What is the pearl that’s hiding in plain sight in your organization?

Organizations Can Experience the Stress of Change When Implementing New Branding or Marketing Strategies

The dynamics of change are challenging for any organization.  Whether reacting to change or initiating change, the ambiguity and fear of the unknown that go with change create anxiety.  It’s made worse when leaders don’t acknowledge that the experience of change is as important to manage as the actual mechanics of doing business differently. The change doesn’t have to be a merger, down-sizing or process engineering to have significant impact. It can be as simple as creating a new marketing program.

In my work helping clients to explore, identify and implement new marketing strategies I’ve seen the effects of change in a variety of circumstances:

• Addressing declining revenue in a down market
• Implementing a new marketing plan during the transition of senior leadership
• Adopting a new brand strategy as the CEO made unannounced plans to leave
• Developing a new strategic direction when an artistic director and an executive director were fighting for control of an arts non-profit

The lessons that are emerging from these and other experiences reinforce a number of best practices of change management. Emotionally-intelligent and systems-oriented practices help carry organizations more successfully through change.

See the Whole System – A systems perspective is one that recognizes that our current situation is the result of the interaction of multiple elements. There are many lenses through which to see and define the elements of a system. One, the integral model, suggests that there are subjective and objective aspects of human systems. Objective elements are those that can be demonstrated and observed. Subjective elements are thoughts, beliefs and feelings.  Many organizations seek to drive change by attending only to the objective elements. Increasingly however, they are finding that success comes from attending to the subjective ideas, beliefs, passions and perspectives taken by individuals and shared culturally. Attending to those subjective areas – the “soft” stuff – means taking care of the emotional side of change.

William Bridges is known for his simple but useful model that highlights the emotional challenges of change. Organizations beginning a change start with an Ending. From there they move into a Neutral Zone where there is an intentional effort to move to a new end goal. Arrival at that end goal constitutes a New Beginning.

For organizations or individuals who have had change forced upon them, the first phase, Endings, is a phase of grief and loss. Time must be spent at this stage of change to recognize what is ending, and notice what is not ending.  For those who are initiating the change, there may be less unwanted loss, but something must be given up in order to move forward. As painful as this time can be, the next phase, the Neutral Zone, can be even more challenging. In the Neutral Zone, we enter the unknown, a time of new learning, where risks must be taken to find solutions that take the organization toward its goal.

Acknowledge and Mitigate Anxiety — Organizations facing the unknown experience anxiety. The members in these organizations act out their anxiety in a variety of ways. Finger-pointing, blame-shifting, detachment, passive aggression, aggression, and scapegoating are among the behaviors that show up in the Neutral Zone. Trust, or lack of trust, can be a significant factor in change. Many are suspicious of who is behind the change and who will benefit the most. A lack of clear leadership will bring out aggression as individuals seek to impose a sense of order. Perhaps most important to notice is a tendency to personalize the anxiety of change and make friction or problems experienced in the change process a particular individual’s fault.

A variety of techniques can be used to address these behaviors if they arise during the implementation of a new marketing strategy or program. Perhaps the most important step to mitigate anxiety is openly acknowledging it and providing safe places for that anxiety to be expressed.

Leadership Sets the Tone – How is the top leader (or leaders) in the change reacting? Are they anxious? Are they risk-averse? Do they love learning new things and taking on new challenges? If the leader is anxious, the organization will be anxious. If the leader is not clear, his or her direct reports will be unclear. They will believe he or she has a plan and just isn’t telling them what it is. If the leader feels comfortable taking risks and making mistakes, he or she will make that okay for everyone else. That’s important because transformational and adaptive change means stepping into the unknown. Mistakes will be made. That’s how we learn the new way.

So, leaders in change must be aware of their own receptivity to change. Those that are anxious should find outside resources for support and not expect emotional reassurance from their employees. Those leaders who thrive in change need to be sensitive to those who are less comfortable and not label them as “the resistance.”   Frequent communication about the change, clarifying where the organization is in the change process, and providing hope for a positive outcome are some of the greatest gifts leaders can give in a transition.

A more detailed unpacking of the Bridges model will provide additional insights for organizations going through change. John Kotter’s model for leading change in organizations also provides a series of action steps leaders can use to address the points above as they plan and manage the change.

At some point in the lives of many of America’s newspapers, their purpose shifted. Many went from seeking to “empower a democratic society with a free press” to “delivering an audience to advertisers.”

We in the Seattle area watched this month as nearly three decades of changes in the newspaper industry brought down the Seattle Post-Intelligencer. It would be simplistic to say that loss of the original purpose was the turning point in the newspaper industry’s demise. Many complex factors including the rise of the Internet have contributed to their current dire circumstances.

While many reporters and editors remained motivated by the ideal of a free press, their management was focused on a specific form of revenue creation (selling advertising) which did not allow newspapers to adapt as the market has changed.

Ted Levitt made this point years ago in his famous “Marketing Myopia” article: adapting over time means focusing on the evolving needs of customers, not selling a particular business model. Holding fast to the importance of a free press as an agent of enlightened democracy might have helped newspapers cling less tightly to the advertising paradigm and evolve their revenue models in service of the greater purpose.

A focus on how we seek to make the world a better place helps companies stay clear and resilient in troubled times.  When economic conditions are volatile, business models focused on purpose provide clarity about what needs to change and what should never change in the business. This focus on purpose does four things for an organization:

• Provides a strategic focal point for aligning all aspects of the organization
• Creates the basis for powerful, trust-based marketing
• Establishes a foundation for positive corporate culture, and
• Taps the motivation and passion of employees and other stakeholders.

According to an article in the February 12 Gallup Management Journal, it’s more critical than ever that businesses and customers know what companies stand for.

The article describes the work of GSD&M Idea City in Austin Texas, a branding agency, as it helped Southwest Airlines describe their purpose. While many see Southwest as simply the low-cost provider, for founder Herb Kelleher, the point is making air travel accessible. The agency gave him the language to describe his purpose: “democratizing the skies.”

A friend of Hosfeld & Associates, Kip Gregory, author of Winning Clients in a Wired World, also runs a purpose-driven business. He works with clients to help them tap the enormous potential of the Internet and everyday technology to make their businesses more profitable. For Kip, the Internet is a banquet and many businesses can’t find the door in.

In talking with Kip about his purpose, I paraphrased: “You’re not in the technology business, Kip, you’re in the abundance business. Hundreds of the resources you share with clients are free, and yet they offer the opportunity for breakthroughs in productivity and profits.”

Kip is successful because people recognize he’s not a geek who loves technology (not that there’s anything wrong with being a technology-loving geek); but a client champion who uses technology to make them more successful.

Studies suggest that purpose-driven businesses outperform companies without a purpose. Southwest Airlines is one of several firms cited in the book Firms of Endearment, which describes the characteristics and performance of companies committed to a purpose. Firms of Endearment (or FoEs) that they studied returned a 1,026 percent for investors over the 10 years ending June 30, 2006, compared to a 122 percent return for the S&P 500.

Companies with purpose are not immune to economic downturns. Some of the firms described in the book, including Harley Davidson, have taken significant hits in the last several months. Yes, further studies suggest that companies committed to purpose recover more quickly after economic challenges.

Companies with purpose, those that take a stand and build their business on making the world a better place, stand out with consumers. They foster trust and loyalty. Companies with loyal customers succeed in good markets, and have more going for them in difficult times.

If you’d like to find out how to align your organization’s operations and brand around a compelling purpose, please contact us.

In the world of information technology, many companies offer services directed towards “infrastructure optimization.”  They establish a strong understanding of how the client’s business works. Then they examine how well the technology assets serve the business model. This assessment typically covers people, processes and technology and their interrelationships.  The optimization assessment yields suggestions for how to make the client more profitable through adjustments and additions to people, processes and physical technology assets. In some cases, when the business has evolved beyond its current infrastructure, the outcome means significant strategic change.

Optimizing organizational strategy follows the same general outline.  It starts with understanding of how a business works, and what is working well.  It must look at marketing practice (similar to processes), the people/human elements that make strategy successful (individual and cultural), and technology (systems, IT and otherwise) that support the strategy.  A strategy optimization process leverages the best assets, the best of what’s working, and identifies the potential for growth.

Strategy optimization starts from the perspective that the management of strategy is equally important to the creation of strategy. Many companies craft wonderful strategies that are poorly implemented.  Successful strategy optimization looks at both the structural integrity of the strategy as well as the management environment in which it thrives.

Periods of economic uncertainty and transition place greater demands on organizations to engage in adaptive change processes. As a result, the idea of “what really works” in strategic planning has changed dramatically in the last 15 years.

Added to this are increased employee expectations for engagement, collaboration, and the opportunity to create positive social and environmental outcomes through their work.

• What really works in strategic planning?
• What must clients do to ensure a high quality process and outcome?
• How do we build progressive values for success and meaning into both the strategic planning process itself and the resulting strategic plan?

What Really Works In Strategic Planning?

Following we provide insights about what works in strategic planning, followed by some of the reasons traditional planning may have failed in that regard.

When the strategy is clear to everyone. Strategy needs to be simple enough for anyone in the company to understand.

• Avoid top-down approaches. Many organizations suffer from planning that goes on at the most senior level of the organization and doesn’t integrate wisdom from “the front lines.” Top-down planning also suffers as a result of a lack of understanding and buy-in. The most effective approach is one that combines top-down and bottom up approaches.

• Numbers aren’t the whole story. Strategies that are about hitting particular financial targets alone aren’t really strategies. Financial targets are goals that we want the strategies to deliver.  A strategy is the mobilization of company-wide efforts needed to create the desired outcomes. Financial targets are the “what.” Strategies are the “how.”

• Create shared language. The language of the executive office is often financial, but that doesn’t “translate” very well in other parts of the organization. Using planning tools that create shared language in all departments and levels of the organization helps make the strategy clear.

The strategy is resilient. One common critique of strategic plans is that they are obsolete as soon as they are written. Resilient strategies are based on organizational strengths and assets that have long-term strategic potential.

• Avoid strategies that are “borrowed” from other companies. Some companies try to copy what they see working for their competitors or peers in their industry.  While great ideas can often be picked up from others, successful strategy is based on the unique assets and strengths of each organization.

• Base strategic plans on long-term opportunities, not short-term trends. A very common practice in organizations is to mistake tactical strategies for strategic planning. A short-term market opportunity then replaces organizational mission and strategy. Without balancing short-term and long-term, the organization short-changes itself on profitability and risks creating a culture driven from one crisis to another.

The strategy is fully implemented. Many organizations create reasonable strategies that are not fully implemented. When this happens, one of the following may be occurring.

• Invite people into agreement with the strategy. If the strategy process has not sufficiently included key perspectives in its development, the outcome will likely have opponents. Strategy processes that integrate differing views ultimately create stronger outcomes.

• Translate the strategy to day to day work. For many, the intuitive process of figuring out what strategy means for their work is fun and challenging. For others, it’s asking them to do the impossible.  Creating measurable action steps, and in some cases, metrics and financial targets, is a critical step in strategy implementation.

• Role model at the executive level and follow through. In order to give the strategy a chance, there has to be managerial commitment and follow-through. If the strategy was developed without their buy-in or if the strategy is not robust enough, managers will become fearful that it doesn’t address the reality of today’s challenges. If they face resistance because key perspectives weren’t addressed in planning, they may lose the will to enforce it. If no one seems to get the strategy, they may become frustrated and conclude the strategy “doesn’t work.”

The Client’s Role in Getting a Good Outcome?

Robust strategies that help organizations become more successful and profitable require quality input from the client.  Clients need to consider carefully if they can make these commitments in order to get a better outcome from a planning effort:

• Will you commit a reasonable amount of time? Although many processes take too much time and cost too much, it is also true that you can’t craft a robust, fully articulated organizational strategy and action plan in a weekend retreat with a SWAT analysis and a brainstorming session.  A reasonable amount of time for strategy development is 6 to 9 months. This time frame allows for comprehensive organizational and competitive analysis, as well as client research. During that time, the strategy process should not bring day to day activity to a halt. Rather, the process should feed new information into daily operations on an ongoing basis.

• Will you create opportunities for participation at all levels of the organization? Finding appropriate ways to tap the genius of the entire organization are essential to crafting practical, doable strategies and engaging the entire organization it their implementation.  Strategy design isn’t necessarily a consensus process, but there must be broad input and dialogue. Some of the best strategies and innovations are “stumbled upon” in the initial stages of planning. They sometimes are small, unnoticed or under-valued aspects of the organization that only emerge with broad participation.

• Will you ask clients or customers what they really want? Committing the time and money to conduct client research is essential to strategy design. The primary sources of break-through innovations and thinking are efforts that solve clients’ problems in new and unique ways.  WE all have our own standards of what quality or good work means. It’s important that we not mistake that for what customers or clients truly value. One of the key elements to sound strategy is focusing on what creates perceived value for clients. The only way to find out what creates perceived value for clients is by asking them. Without research, strategy making devolves into guesswork.

Creating Both Success and Meaning Through Strategy

“A path without heart is never enjoyable. You have to work hard even to take it. On the other hand, a path with heart is easy; it does not make you work at liking it.”
-    Carlos Castaneda, The Teachings of Don Juan

Employee loyalty and enthusiasm are two of the greatest strategic assets of any organization. We tap the potential of these assets when organizations serve a purpose that creates meaning for their work.

Organizations can create meaningful engagement in the ways they conduct strategic planning exercises, as well as in how they incorporate values and mission in the resulting plans.

Strategic planning processes can create anxiety and uncertainty, over and above that generated by the changing dynamics that make the planning process necessary. The following elements can help organizations bring out the best in their people as they go about strategic planning processes.

• Collaborative Engagement – Creating opportunities for engagement, dialogue and input from all levels of the organization is essential to creating understanding of and support for strategic plans. It is also the primary way to tap the genius within the organization to find its own solutions.  While we do not conduct planning from a consensus model, we do design ways to get engagement and information efficiently and in ways that make participants feel heard and valued.

• Build On What’s Already Working – Focusing the organization on what’s working creates hope and a foundation upon which to build new strengths. What do clients or customers already really appreciate and want from the organization? What’s the opportunity to leverage existing strengths and capacities for further growth? What are the “stumble upon” initiatives that are working that can be amplified?

Additionally, strategic planning offers an opportunity for organizations to step back and integrate social and environmental values and opportunities into the core business. In 2008, almost 60% of companies surveyed by McKinsey and Company reported that they were integrating environmental and social missions into their core strategy to a greater degree than they were five years prior. Although cost savings and new marketing opportunities motivate some of these initiatives, such practices also attract top talent. “Recruitment and retention consultancies like Kenexa, Hewitt Associates, Robert Half, and Towers Perrin have published figures demonstrating a link between environmentally friendly workplaces and engaged employees,” writes Andree Iffrig, author of Find Your Voice at Work: The Power of Storytelling in the Workplace (Limegrass 2007). Environmental and social values pave the path with heart that employees want to walk.

“After” Approaches Emphasize Stakeholders, Systems Perspective and “Third Way” Thinking

By Kathleen M. Hosfeld (with Jenny Mish)

Thousands of sustainability oriented startups are creating game-changing innovations in products, services, industry partnerships, supply chain management and more as they seek to integrate values of social justice and environmental stewardship into their business practices.

As startups, they represent one part of the new sustainability economy. The other side is existing “traditional” businesses seeking to integrate sustainability into both the culture and business processes at the same time. For the former group, the challenge is making it work without a roadmap. For the latter, it’s creating change in systems that seem to have worked “just fine” before sustainability came along.

Until recently, there hasn’t been much recognition of the role that marketing can play in furthering sustainability. Superficial promotional claims of green characteristics of products and services in the 1980s — what’s now known as “green washing” — actually created something of setback for the sustainability movement. Today, marketing functions – such as product design or supply chain transparency– that are critical to success may not – in some organizations – have been seen as part of marketing.

As more organizations have succeeded in integrating sustainability, marketing researchers and people in the field are noticing an emerging picture of what sustainability oriented marketing looks like.

Jenny Mish, a doctoral candidate in marketing at the University of Utah, and I saw the outlines of this emerging picture in data she gathered as a part of her doctoral work. She completed a study of “Exemplary Triple Bottom Line Companies,” in the summer of 2007. She identified several themes emerging as characteristic of marketing in sustainability oriented companies:

• They view their situations through a complex, systems perspective – highlighting interrelationships of components and stakeholders
• They take a long-term triple bottom line approach – finding third-way solutions instead of creating trade-offs between goals
• They engage a broad array of stakeholders
• They integrate full-cycle product (or service) costs into their understanding of what creates value and relevance for customers
• They emphasize relational, trust-based communications and sales approaches

Many of these organizations express these characteristics as “authenticity” – saying they reflect their values (“This is who we are”). Comparing Jenny’s interview data with my consulting experience in the field, we have created a series of polarity diagrams that demonstrate the contrast between marketing that is not at all sustainability oriented and marketing that fully embraces sustainability. This comparison begins to create some guidelines for those companies who want to practice sustainability oriented marketing. This offers a picture of what they might or should be striving for.

Marketing “Before” And “After” Sustainability

This series of three diagrams contrasts a simplistic, single-bottom line oriented approach to marketing with a complex, triple-bottom-line approach to sustainability marketing:

• It’s important to stress that the two ends of the spectrum do not exist in pure forms. The right side of each diagram actually represents a collage of sustainability oriented marketing“best practices.”
• We suspect that lower profitability on the left side is the result of a more limited marketing skill set that coincides with a simplistic approach.

Figure 1. Managerial Orientation

To make a transition to sustainability oriented marketing, the values and perspectives of sustainability must be reflected at the top. Although some studies show that sustainability efforts can “start from the middle,” – marketers need agreement and support from other managers to make sustainability a
priority. Without this, the pressure on marketers to drive only short-term sales targets will create either/or situations where marketers are forced to choose between profit and sustainability goals. Figure 1 contrasts the managerial orientation of the two ends of the spectrum.

Figure 2. Relationships with Stakeholders

What we see in organizations that make this transition is that at some point the expectation of the marketing function flips. The extreme polarity on the left represents marketing as strictly the job of “selling.” (Again it’s important to stress that the two ends of the spectrum are not descriptions of actual businesses, but rather extreme points of view.) At some point, exemplary organizations pursuing a triple bottom line demonstrate a perspective that marketing is the stewardship of relationships in the context of assumed reciprocity. They certainly don’t remove the sales imperative from the table. However,marketing is charged with accomplishing the goals of the organization for sales, profit and mission by providing superior benefit and relevance to not just customers alone but also to other stakeholders.

Figure 2 depicts the key relationships of which marketers become stewards in a sustainability oriented setting.

Figure 3. How Stakeholder Relationships are Stewarded

The final figure demonstrates how various aspects of marketing practice – from budgeting to research to pricing to promotion – change in character when the purpose of marketing shifts from “selling stuff” to “stewarding relationships.”

What we notice in this chart is that a much higher degree of marketing sophistication is required to practice marketing from a stewardship perspective. For example, whereas many organizations do not have a defined approach to pricing – for example, they price intuitively based on what the market will
bear – sustainability oriented organizations must develop the capacity to measure the full cycle cost of a product or service and base their pricing accordingly.

The approach to market intelligence or customer research also changes. On the left, consumers are studied so that their needs can be addressed in sales and promotion. Sustainability oriented marketers, on the other hand, seek to foster ongoing dialogue with customers and other stakeholders. It’s considered a continuous conversation, where even “co-creation” may take place when that is valuable on both sides.

Another characteristic that was noted from Jenny’s study is that in sustainability oriented marketing, marketing functions and expertise are dispersed throughout the organization. Marketing – or rather stewardship of stakeholder relationships – is “everyone’s job.” It’s important to note that many companies who haven’t consciously adopted sustainability principles yet practice a high degree of ethics and have high standards for authenticity and trust in customer and other stakeholder relationships. We sense that these companies are well placed on the continuum toward the right hand side of the polarity diagrams even if the ideas of social justice and environmental stewardship are not yet part of their corporate consciousness.

What Does All This Mean?

For those companies who are already embracing sustainability, this comparison of “before” and “after” may identify new areas to deepen their practice. For those who are just getting started, leaders in organizations may want to take note of the following:

• Marketers need to be supported in integrating sustainability and its values into their practices. They may need to be challenged to hold financial, social and environmental goals simultaneously. Or they may need assurance from the top that the company is serious about measuring success by all three.
• Marketers may also need to be challenged to think and act from a systems perspective. They need to be supported and trained to look for “third way” solutions rather than seeing multiple bottom lines as areas for trade-offs. In the end this may pay off in innovation. The ability to hold multiple objectives simultaneously and search for the “third way” has led, in the past, to new products and services, as well as more efficient manufacturing and delivery systems.
• The overall marketing skill of the organization must be enhanced. Marketers should receive professional development in areas where they may lack experience. A sense of “stewardship of relationships” should be fostered in the company as a whole so that sustainability oriented marketing becomes “everyone’s job.”

A “printer friendly” version of this article, with larger graphics, is available here.

By Kathleen M. Hosfeld, President

Recently, as I was browsing the “management” books aisle at a favorite bookstore, I pulled down a book on marketing and opened it to the first chapter. “Marketing is war,” the author wrote. Furthermore, he said, if the reader didn’t have the stomach for war, then “get out.”

We live in an interesting time in which the structures of one era exist side by side with those of a new one that is emerging. On the one hand we have the “business as machine” and “marketing as war” metaphors. In the early days of the corporation when people were trying to get their heads around how to direct large workforces – which were new to their experience – the only reasonable comparison was the mobilization of troops and resources for war. At about the same time, people were trying to make management and the enhancement of human work performance into a science.That meant breaking down work roles into components, isolating variables and trying to measure them for potential improvement.

But a metaphor is just a lens. Sometimes it doesn’t help us to see all that we should in a situation. Sometimes it colors our perceptions in ways we don’t want. In the last several decades many have been looking for metaphors that reflect the more dynamic aspects of organizations, markets and economies – the parts that seem to elude our attempts to control them. They are looking for metaphors that are more comprehensive than war.

One metaphor to explore is that of “marketing as a garden.” Many have suggested that economies are living systems and bear resemblance to dynamic ecosystems. Let’s make a distinction between a wild ecosystem and a living system that has been shaped by human intention. A garden is a living system that exists because a human being or human beings created it. While we don’t have control over all the dynamics in the garden, human influence determines a great deal of what occurs. Our organizations, markets, industries or economies might be considered gardens shaped by human actions, but still influenced by forces outside human control.

Two interesting ideas emerge when we consider the idea of marketing as a form of tending a garden:

There Are No Departments in a Garden

First, when we look at the dynamics of a living system, we discover that it’s difficult to completely separate all the processes at work into discrete boxes. Managers today tend to make artificial distinctions between marketing and management, finance, manufacturing, research and more. The distinctions will depend on how one defines marketing itself. Let’s assume that our definition of marketing, for the moment, is the actions of an organization to attract and keep customers. We could say that price-setting is a marketing function. But frequently a marketing decision is also a management decision. Price-setting is determined in part by knowledge of what the customer can and will pay. But it is also a management decision that has to reflect the costs to produce and the company’s goals for profit. Product development is another example. The design of a product impacts the customers who will be interested in it; it’s a marketing issue. It’s also a management and manufacturing issue.

The choosing of which customer segments/markets to enter is often reserved for senior management and strategists. This can also be a marketing decision; marketers have experience in the field that helps determine which segments are the best fit for the company’s strengths. Marketing is actually a set of complex, interrelated actions/decisions taking place within a dynamic system. This is mirrored in the nature of living systems, where various natural “sub-processes” serve multiple functions – those that can be compared with marketing and those that are more “management” functions.

One conclusion that can be drawn, and has been drawn already by theorists, is that a system view of business means that marketing can’t be separated from management. The silos we have created between marketing and other organizational sub-systems are artificial distinctions that actually impede interaction needed for the optimal health of our garden/our business.

“Too Much Alike” Increases Intensity of Competition

A second interesting idea comes when we consider the nature of competition in a living system. As some have sought new metaphors of organization, they’ve thrown out the idea of competition completely and replaced it with the ideal that all companies should just “get along” and collaborate. If we look at living systems, however, we have to accept that competition is a fact of life. Only just so many organisms can be supported by the resources found within the boundaries of a specific ecosystem. Only just so many companies can serve the same set of customers with a similar product.

What we find in living systems, however, is that the more similar two competing organisms are, the more intense their competition. Conversely, the more differentiated two competing organisms are, the more likely it is they will achieve an equilibrium that allows both to prosper. In business, we see this when two companies operate too similarly and offer the same essential product or service – they  compete more intensely. Companies that do not compete head-to-head are more likely to peacefully co-exist, or even partner, with others in their marketplace. This second lesson from living systems underscores the need for organizations to develop and sustain strategies that set them apart in ways that are meaningful to customer.

These two implications are likely just a starting place for cultivating the metaphor of the garden. What can you see through this lens? Plant the idea in the back of your mind and see what sprouts.

Note: Some of the ideas within the following journal articles contributed to this essay: The Anatomy of Competition, by Bruce Henderson, Journal of Marketing; and General Living Systems Theory and Marketing: A Framework for Analysis, by R. Eric Reidenbach & Terence A.Oliva, Journal of Marketing.

By Kathleen M. Hosfeld, President

A McKinsey Company study, commissioned by The Marketing Society, recently found most CEOs believe that although marketing has a vital role to play in addressing business challenges, they question marketing’s overall contribution to financial results. The potential of marketing’s possible contribution is not fulfilled.

In some situations, the perception is caused by a lack of measurement. The organization hasn’t measured the “before” and “after” pictures of an otherwise good program, and just can’t tell what part of the mix is working or not. But in many instances this perception points to an underlying weakness in either strategy formulation or execution. “Marketers are the heart of the business but not the head,” said one CEO interviewed. Head and heart must work together.

What this involves is building clear definition of the business model, collaboration between marketing and finance, widespread understanding and support for the business model, and alignment of individuals’ goals and objectives with the key components of the business model relevant to their jobs. Here are three questions that help determine where each organization can start:

Do you have a strategy? A plan is not necessarily a strategy. A strategy would be an actual business model that shows how activity will overcome challenges and lead to financial return. Too often the concept of “marketing” is interpreted only as marketing communications – which can be thought to include advertising, public relations and brand-logo development. A business model includes product or service design, distribution strategy, sales strategy, customer and account management, pricing and more. This careens dangerously into the area of “finance” which is considered a weakness of marketers, according to the McKinsey study. One way to bring head and heart together is to forge a collaborative relationship between marketing and finance that reflects a holistic sense of the organization.

Do people understand and support the strategy? “Understand” would mean they get the rationale of it, how the strategy “works”, what it will accomplish. “Support” means they agree with the strategy and reflect that with their actions. Everyone knows what it’s like when our own head and heart are not in agreement. It’s painful when the head doesn’t support what the heart wants to do and vice versa. While it’s often impossible to get 100% understanding and support of a strategy, each organization needs to do the work to engage the right people. Many employees will say they don’t want to be involved in strategy education or engagement. “Just tell us what you want.” This is often a mask for cynicism about whether the organization is really committed. “Why buy in when the wind is going to blow in a different direction six weeks or six months from now?” they ask. Employees measure management support for a strategy by the extent to which they “stay the course.” For full return on investment (ROI), then, the marketing strategy must manage and renew the engagement and support of the company for a sustained period of time.

Does everyone know what it means for their job? The head and heart are willing, but the flesh is…well..confused. Strategies are often crafted by highly intuitive people who think the implications of the strategy are clear and obvious. Many people however need help to determine what a strategy means for their job or their department. Organizations that fail to do this translation create a disconnect between the strategy and how members of the organization interact with the world. Often, some type of training or staff development is necessary to make sure all employees are living the strategy, including how they demonstrate brand values and promises in their day-to-day activities.

One of my colleagues, Hans Carstensen III, created broad participation in his company?s business model through creation of a companywide budgeting/planning system that tied goals and objectives in a clear way to the desired performance of a part of their business model. Each goal or objective for the $7.0 billion-in-assets insurance company had a “key performance indicator” (KPI) selected by the unit manager and the position-holder; these were monitored throughout the year. Bonus compensation was tied to performance. “The result,? says Carstensen, “was that everyone had a stake in and a sense of how their position was contributing to the business model’s overall success.”

Strategic management tools the “balanced scorecard,” systems thinking, integral theory, learning organizations — reflected in the three points above are all great ways to see the organization the way your customers see it, to tear down the barriers between head and heart to create a more aligned, successful organization.

Another important step in bringing head and heart together is aligning the business model with values and purpose, and our design to make the world a better place. We?ll save that enormous subject for another article.

By Kathleen M. Hosfeld, President

Three questions can help organizations connect their strategies and brands to The Great Story, the important work of our time. I first realized the value of the “great story” more than a decade ago, in listening to my retired father and a colleague reminisce about their days in the aluminum industry. At a dinner together I heard the two former executives wax nostalgic.

“It’s not the same as when we were there, Bob,” his friend Clay said. “All these young guys care about is their careers. You and I, what we cared about was aluminum.”

The reverence with which he said the word aluminum went beyond the value of excellence, beyond the pride of creating quality. Mass production of aluminum changed everything – from airplanes (once made of wood and fabric), to rail cars, to building construction materials, to medical tools, to food storage. Aluminum was the metal that would carry us to the moon.

The power of aluminum to create a better world was the kind of purpose that called for service beyond self-interest. It was clear in the way Clay said the word aluminum that to him it meant a brighter future for his children and grandchildren. That future was worth his dedication and creativity.

Whether we work in a for-profit or a non-profit, for government or private enterprise, the larger story of our work makes it worth the best we have to give.

The Three Questions

In strategy work with clients, I’ve found that defining the organization’s purpose around something compelling to people both inside and outside the organization depends on answering three questions:

• What is the change we want to see in the world because of our work (shared vision)?
• What are the means we will use to create this change (shared means)?
• How do we want to be together as we do this work (shared values)?

Seeing the Change

When we ask the question, “What is the change we want to see in the world because of our work?” we assume that we have a degree (if small) of influence over a vast system. The question implies we’re looking for a point of leverage in the system. Another way to ask the question is “Why make a change at all? What is the need?” Sometimes, we already know the change we want to create in the world – more home ownership, greater fuel efficiency, healthier kids, engaged citizens. We can look around us and see that others care about this same change because they too are working in their own way to address this need. This gives us a sense of who our partners, collaborators or competitors might be. Most of us are unaccustomed to thinking about our work in terms of our impact on the world. Some entrepreneurs respond to this question by realizing they’ve lost track of their original goals for their business.

Creating the Change

The next question, “What are the means we will use to create this change” defines the day-to-day tasks and methods you use to achieve your goal. A technology support division of a local city government might have a goal to become an essential resource to the entire city system. But there might be many roads to get to this shared destination. Is it through superior help-desk solutions? Is it through catalyzing technology upgrades? Defining shared means is an agreement about strategy.  Clarifying “shared means” results in focus, and thus creates greater return on investment of learning and capital. It often requires sifting through what others (competitors or collaborators) are already doing, what your organization does best or most successfully. It also means listening to what customers or other constituents validate as meaningful. This validation can be purchases and customer loyalty in a for-profit venture. In a non-profit it can be expressed through grants and donations that support the work.

Being The Change

How we create the change is very often influenced by asking “How do we want to be together as we do this work?” This speaks to something very different than the values statements senior managers post on bulletin boards for everyone’s compliance.  This question gets at the underlying values that reflect how we want to be treated or how we (the people) agree to treat each other in the workplace even when there’s no external reward. Creating alignment between the goals and organizational culture creates integrity; it says “we walk our talk.”  For many employees, agreements about how we want to be together can be as important as the change we want to see in the world. Positive social networks, being a valued member of a productive team, and the ability to take pride in their work create meaning for many employees that brings out their best contribution. These agreements can create stability at times when the larger strategic vision is shifting.

Answering these three questions benefits an organization in several ways. It:

• Creates efficiency through clear focus and alignment resulting in faster progress and fewer wasted resources;
• Articulates a compelling foundation for brands and other marketing messages;
• Fosters productive social connections among employees who then share the same goals; and
• Establishes a positive purpose for the organization in the context of a larger, dynamic system.

These questions and their answers lead us back to that place of the great story of our work. We’re not just telling a good story about our company and work as many corporate storytellers do. Rather we are seeing the Great Story of our time, finding our place in a story that is bigger than us, bigger than the place we work, and committing ourselves to work that is worthy of our passion and service. This is living a great story.

(This article was originally published in March of 2005.  My father, Bob Hosfeld, an Alcoa executive, contributed significantly to the original version. Its continued publication is dedicated to his memory and his legacy as a “spiritual advisor” to his colleagues.)