What Can Go Wrong Will Go Wrong. Transformation Mistakes to Avoid

Across the Pond- Marketing Transformed

24. What Can Go Wrong Will Go Wrong. Transformation Mistakes to Avoid

 

CHRIS LAWSON: 

This show is about what can go wrong and will go wrong. It’s about looking at failure and how to avoid it or how to learn from it. When we’ve been viewing some of the comments about the shows, there’s a lot about well, how do I actually put that into practice? Or I tried that, and it didn’t work. It’s a fair challenge as it’s not easy. It’s difficult looking at digital transformation and marketing transformation.

 

SAMUEL MONNIE: 

I think, for a lot of us who have worked in different organisations, different companies, different places, transformation varies depending on what type of company you’re in and the type of leadership you have and the type of team and the culture of the organisation. I think all of those factors do influence how people see it and how they respond to it.

 

CHRIS LAWSON: 

Yeah, and there’s a stat, quite widely quoted around the fact that seventy percent of transformation projects fail, which is staggering when you think of how much money is invested in that.

 

SAMUEL MONNIE: 

Well, higher than that if you think about it really. Seventy percent, if maybe thirty percent succeed that’s quite impressive.

 

CHRIS LAWSON: 

Yeah, and let’s face it, there’s probably a lot of failures that people don’t like to talk about or put in surveys as much as anything else. There’s a huge body of work, some academic, some practitioner led, some consultancy led about digital transformation and how to do it well and we’ll come and touch on that but, one of the key pieces of work was by Mckinsey and a senior partner there, Harry Robinson said that one of the biggest reasons a transformation isn’t successful is down to the CEO not setting sufficient high aspirations and there needs to be an audacious goal there that everyone can get behind. And I think that’s really fascinating Sam. I always remember Paul Keenan who was the CEO of Bauer and Emap before that and he talked a lot about having an audacious goal. And what was fascinating about it was the mindset. It was a stretch upon a stretch, upon a stretch. Good was never good enough. There was a certain amount of good to great in there but, actually, it was just relentless. There was a pressure to perform and outperform and over perform each time. But it did help improve the speed and the help and the momentum we were offering. So, in a way it had the desired effect although, pretty much everyone was exhausted most of the time.  

 

SAMUEL MONNIE: 

Yeah, I think that’s a good comment there, to have the EQ side and the human side there because, as you talk about this constant raising the bar and striving for more, there are some cultures that just won’t work in - and fear starts to kick in. People reject the change or start to not be on board.

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 I know I’m one of those people who tends to see the new, the opportunity, the innovation, the possibility and be rallying around that and having to focus on that long-term goal and being open to new ways of getting there and, changes to plan, changes to strategy, competitor moves. All of that keeps me excited and engaged in how to solve it and how to grow but for many people, fear might kick in, they might reject it and just back off. 

 

The Right Environment for Failure

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CHRIS LAWSON: 

Yeah, and that’s the second point: you need to stress to everyone in the organisation how important this change is going to be and how important they all are to make it happen. But, you can’t really carry passengers within that as well, you have to make sure that you have everyone on board and wrap your arms around them but, there is a challenge there, I think. 

 

SAMUEL MONNIE: 

Yeah, and I think one of the points we can talk about is what are the negative consequences of a negative voice and the damage that they can do. Yes, absolutely let’s have a debate, voice some honest discussions but some people's perspective is you get on board or you jump off.

 

CHRIS LAWSON: 

Yeah, simple as that. And one of the things that we looked at in earlier episodes was that you can’t have a team full of pioneers, visionaries or optimists, you need that splattering of realists and even the naysayers as well, just to bring you back down to ground, but, at some point you have to go “we have to get behind this, we have to focus on this and we have to drive it”. 

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Another point, a negative voice and what it can do. Employees not buying into the change and therefore not investing extra energy that the shift requires to make it happen is another contributing factor that he mentions. I think that's where honesty and transparency and being authentic really comes into play here. Where, we’ve all been in a project or an organisation where someone’s nodding and then you get outside and they say, ‘we’re never going to be able to achieve that.’ And that bottom line is you’ve got to be in a situation where you can have that honest debate, but if it’s not right for you - you’ve got to be able to walk away as well. I think it’s a test of character but, some of that character has to be installed from the leadership team, as well. 

 

SAMUEL MONNIE: 

Yeah, and I think the key thing is that leadership must create an environment where people can actually give that perspective and share that perspective. Not outside or in the hallways but in a more public place in a more public way because, often, leadership doesn't set the tone for people to give dissenting voices or provide alternative perspectives. They say, ‘my door is always open.’ But actually, the door is probably closed and they’re not wanting to hear it. So, there’s an ownness we’re not just pointing at the people to ship up or shape out, it's also the leaders and how they role model and how they actually create the environment for this to work. 

 

CHRIS LAWSON: 

We won’t go into it because we covered it in another episode, but regular performance tracking, making sure that you’ve got milestones in place and you’re reviewing, feeding back into it.

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I think the difficult part is around managing those twin-speed businesses. How do you manage the day to day activities, the business as usual, making sure the wheels don’t fall off, as well as focusing on the long-term as well? That, I think, is the challenge. There’s another report by Mckinsey where they say that most transformations are focused on today’s problems and how you ultimately fix them is you ensure that your solutions are future proof, meaning that you need new thinking, you have to be focusing on a horizon two and a horizon three and not just the short-term horizon. And, if you don’t, you will lead to a new organisation structure that isn’t agile and doesn’t thrive in change and disruption and that’s actually what you do need to survive. 

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Those points where you look at an organisation and you go, how much of that rings true? And I think we’ve all been there where a manager or a leader stood up and said right, we need to move from A to B, and you’re looking at it point which doesn’t feel like it’s been heard. So, a good starting point for how things can go wrong, I think.  

 

SAMUEL MONNIE: 

Yeah, I think as you are so eloquently sharing, the power of transformation and how leaders need to identify opportunists to do that, there’s some brands that have done that well that come to mind. So, as you are in such a great flow, is there a brand that comes to mind that has done that well, that you can share with the audience?  

 

Real Life Stories

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CHRIS LAWSON: 

Thanks Sam, that’s nice to hear. One that springs to mind is Lego. And I like it because it just feels like a position to all these digital brands that we keep talking about. They were close to going bankrupt, really, really close. They lost their way, they were creating a huge amount of product lines, they were straying away from what their audience wanted. They brought in a new CEO who was from Mckinsey, and he reduced the number of products, drastically reduced the number of products and looked at where they could provide more relevance. Where the market was going, where toy manufacturing was going. They looked at film and video and how they could keep themselves relevant within that. And, I think it’s fascinating actually. He, himself said, we need to constantly become better otherwise, there will be someone out there who will catch us up. And look, you look at how successful Lego is and how powerful it is, and actually what they did was that they kept asking themselves where they could go? How could they transform? Clearly a success story now, but, was something that you would almost imagine was going to be on a scrap heap. 

 

SAMUEL MONNIE: 

Well, you can almost imagine that Chris. Because, essentially, what’s remarkable about this story and remarkable about this product is the core thing they make are plastic bricks. And anyone can make plastic bricks. You can mass produce them from factories galore. And so, turning a commodity into a brand that stands, resonates and has meaning in today’s world is a great example of transformation and I think, you can see the fruits of the labour and the fortunes that have grown. Really, really easy to copy plastic bricks and you could say the same about the coffee industry. Nespresso’s another brand that I love, and they’ve done an immensely awesome job because coffee is essentially the world’s number two commodity behind oil. Again, they’ve been able to transform a proposition into something that has meaning and relevance and create a product and experience that lives on. And, an industry or a sector that was doomed a few years ago, now they actually show consistent growth. So, if you’re in a sector or a business and you’re thinking ‘there’s no hope for us, we’re being transformed around us, we can’t win.’ Well, look, those are two proof points of companies that have turned it around and managed to win. 

 

CHRIS LAWSON: 

Good one Sam. I think also, you look at sectors that were doomed, look at media and music. I mean, both, clearly both having a bit of a resurgence now, with different business boles, but it’s taken like ten or fifteen years to get there. These were two industries in the early two thousands, when I was working on them that were careering down paths that were just going to lead to rationalisation really. Clear knowledge that technology was going to revolutionise how people consume their services and that the business models weren’t going to work in the new world but, very, very difficult to do something about that when you’re the incumbent. And many left it too late I think, to actually react to it. And some definitely had the opportunity to do something about it, but didn’t. I remember being in one company, that I won’t mention, and were looking at acquisitions with two young upstarts coming in, Love Film - now sold to Amazon of course, Net A Porter, an incredibly successful unicorn business, a fashion business who were looking for either investment, to be bought or partnership. And sometimes, when you’re in a position of strength, you don’t necessarily realise where a market is going, and you need to be aware of it. 

 

SAMUEL MONNIE: 

Absolutely Chris. My first Saturday job was working in a camera shop and then my first full-time job was working in a record store and do either of those exist anymore? Both of those industries saw the digital stuff happening and kind of stuck to what they traditionally did, the retailers I worked for, and a company like Virgin Megastores was another one which has a global presence that I worked at and they've gone away. So, the jobs that I grew up with don’t exist anymore. I’m not sure how I feel about that but it’s a critical reason why we can’t afford to put our head in the sand because the work that we do will change over time and we need to be fit for that future, to be successful going forward.

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I’d love to shout out a guy called Michael Gale, who’s a fellow Brit, and fellow Manchester United fan but, anyway, he’s written a brilliant book called The Digital Helix, and when I read it, it just rang so true on the core issues that lead to success or failure that just go beyond the digital remix. So, yes, digital remix was important, but it’s not the only thing. There's transparency and a reality on executive action and involvement, and that’s so pivotable in terms of how leaders lead. Not from their ivory tower, but actually rolling up their sleeves and leading the people, role-modelling it, modelling the mindset, really breaking down their silos and asking the right questions and operating in the right way. It’s about communication, Chris, and he mentioned some of that, some of the leadership from the Lego CEO of communicating what’s really realistic and what’s achievable and making sure everyone’s clear about that. 

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Then, of course, it’s about measuring what matters. You know what Chris? I’ve been at companies where there are twenty-five-point score cards on multiple metrics but the elements relating to the people and resources are absent. And so, if you don’t have those right metrics in place and the right resources in place, you’re not going to succeed. It’s often a top-down plan with no realism and no resources. So, one of the things he says in his book is to create a stop and a start and a do-differently framework. 

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And what I like about this is that you can ask a bunch of questions to get started, so you can ask yourself which relationships matter? How do we change them? Which ones matter? Thinking about resources and allocations, which ones do we use? How do we handle the allocations? What should we do internally, what should we do externally? These are all really important strategic questions. The outcomes. Ok, so what outcomes actually matter? Versus outcomes we do today or outcomes we think we want. Which are the right ones? So, that framework of relationships, resources, allocations, outcomes and focus, it sounds really, really simple but it’s actually a great tool and great framework to think about this. The magic is to force yourself to think about these differently. So, this is not just big multi-billion companies, it could be you as a small entrepreneur or a midsize company. Ask yourself these questions and it will set you up at least facing where the transformation is that you need to focus and what you’re going to do to go forward.  

 

CHRIS LAWSON:

Yeah, I really like that. And I think that’s a good point, this isn’t just transformation of large-scale enterprises or brands. Transformation happens everywhere and also is getting faster in a way, due to tech advancement. So, you need to look at how you future proof your role. I think a lot of those points are really, really clear in terms of how you can go about it at whatever level you are. 

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So, Sam. What’s the biggest transformation mistake that you’ve been involved in would you say? 

 

Who’s Doing it Wrong- and Right?

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SAMUEL MONNIE: 

Chris, I’m going to sound very familiar, I was going to use the analogy of a broken record, but perhaps there’s not so many of those around. I come back to the organisational piece of what’s in it for me, from the individual perspective, and perhaps the leaders not being truly committed themselves to change. I, like you, have probably been in situations, one hundred percent of the listeners have been there where companies have emerged or reorganised or have been acquired or acquired other companies and the aim is to drive growth. It’s to drive innovation, to better serve customers or to respond to market threats because the numbers are down, and the business is declining and there’s downsizing going on- you get the picture.

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The issue I’ve seen Chris, is often there’s just painfully, blindly investing, buying stuff, investing in technology, investing in infrastructure in a vacuum, and everyone not working in the same mindset, not working on the right outcome, so,  you have new departments and new people doing work that doesn’t duck into the core business and so, the new department, the new organisation, the new digital team or the e-com are trying to sell their work to the business. They’re trying to convince the organisation that this stuff has value and it’s needed, and imagine the folks on the other side they’ve already got one hundred percent of their time for- they don’t necessarily look for new solutions or look for these resources and it’s kind of a fruitless effort, trying to persuade people to use your stuff. 

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In the modern marketing world, digital world, first party data is really important but imagine an organisation which is invested in perhaps shipment data and you’re not being able to crack the dashboards and the reporting. You’re probably seen as a troublemaker trying to show this new information which is more consumer centric. So, for me it’s a failure to assess where your organisation needs to invest and then ensuring those resources work well together because there’s often multiple budgets, multiple agendas and often marketing and IT aren’t collaborating. But Chris, who do you see getting it right?

 

CHRIS LAWSON: 

Now, that is a good question, and it is difficult if you’re an accumbent or in the leadership position. I worked with a lot of private equity organisations on turn around plans and helping provide a marketing audit for them, so helping come in and say well, how do we help them transform. But the ones who get it right aren’t sector specific I don’t think. They’re the ones that adopt the behaviours we discussed. Skill set, mindset and behaviours. However, they’re also the ones that anticipate the wave of trend and go for it. I read a lot of stuff from VCs and private equity houses and it’s interesting what they have to say. 

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There’s an organisation called Home Brew which isn’t a craft beer company, but they provide investment on that pre-series A stage and it’s quite interesting their philosophy, where it’s a mission driven founder, they’re looking for people where they’re mission driven founders and have a firm belief on how the world should operate and a strong set of hypothesis on how to get there. They’re looking for people who want to disrupt, have empathy and are passionate about what they think they can do. So, they’re looking for very, very specifics there in terms of what they think is going to work. A lot of VCs operate in areas where they’ve got a hypothesis or thesis they call them, a VC thesis of what they think the real sort of opportunities are going to be in the future, which is why you almost get a glut at one time of looking at social media companies or self-driving cars or AI driven organisations. But I think that’s absolutely fascinating when you think about that, and there’s a lot that can be learnt from it. But again, no one’s really got the answer here. There was an analyst who asked Eric Schmidt around YouTube, when they bought that in 2006 and said, you paid a lot of money, how do you know that was the right amount? And Eric, he looked at the analyst, paused and said, it’s definitely not the right amount - it’s either way too high or way too low and we will know in ten years’ time. And clearly, they called it right. But, there is no magic around this, but I think aiming in the right areas, having a philosophy that you aim towards and work.

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The Perks of Doing it Differently

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SAMUEL MONNIE:  

It’s often about disrupting the market to make it go wrong for your competitors. So, it’s less about worrying about other people, it’s about you taking action, you being the catalyst so, rather than wait for it to happen you’re trying to learn from the mistakes and it’s all about having a growth mindset. But, it’s about embracing that risk and that failure so, the realist experience for a lot of us is working in roles and departments but, are they going to be around in ten years?

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I remember when social media was up and coming and it was really an uphill battle to get the resources, to get the support and to get people to take it seriously. It was trying to shift to content creation and letting go of the brand story and all of that was being resisted by the leadership throughout marketing. Social was not valued for the PR and influencers, it was seen as people with opinions and not experts, and of course, but fast-forward to today! 

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It was almost as if social was a joke that was tolerated because they were measuring success in a completely different way and that’s the thing I’m taking away. There’s completely different terms of reference which are just alien to a lot of people, and the D2C brands, the director to consumer brands, have started to win in so many segments because the way they did things, the way they measure, the way they target, the way they act- it wasn’t the proper way of doing it and look at where we are now. 

 

CHRIS LAWSON:

Yeah, that’s fascinating, and I think the real formula is to keep moving forward. That skills, mindsets and behaviours, and we talk about a growth mindset and brands need growth mindsets as well. you look at how The Guardian is funded now, changing dramatically, you look at how Facebook makes its money, again, they’re anticipating their audience is getting older, lock in WhatsApp, lock in Instagram into those revenue streams as well. obviously, Instagram is a vast part of their revenue stream now. So, you have to carry on moving forward, you can’t ever sit on your laurels.

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Three Key Takeouts and Reflections

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SAMUEL MONNIE: 

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1. Chris, there was some really juicy context there but I think, you started off with the right tone in terms of the CEO setting high expectations, and you told the wonderful story of Lego and how, he was able to come in, work with a lot of leaders and turn around, essentially, a company selling plastic bricks. 

2. Secondly, there’s clearly a lot about the mindset, philosophy and the culture of the organisation. You’ve really got to have the right values that bring people along and get everyone to support it. 

3. And then, thirdly, I’d say it’s about, well, everyone gets it wrong. Everyone fails Chris, the number out there is seventy percent, probably higher. So, we need to embrace that we’re going to stumble, we’re going to get things wrong and it’s how we handle that, how we learn from that and how we move forward that is critical if you believe in the idea of what can go wrong will go wrong. 

 

CHRIS LAWSON: 

Three great takeouts there. Thanks for all your insight this show, I think it’s been a really good one. So, next week’s show we’re going to talk about ten lessons we can learn from start up’s and scale up’s, and how we can apply that to our everyday work at whatever type of organisation that we’re in. some great stuff out there, I’m really looking forward to it. 

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