Why we should bring the customer back into the boardroom

It’s been more than 10 years since McGovern,Court,Quelch & Crawford wrote an article called Bringing Customers into the Boardroom https://hbr.org/2004/11/bringing-customers-into-the-boardroom. As a founder of the Fondation des Administrateurs, a Belgian association advocating the professionalization of Board of Directors, and as the holder of the marketing Chair at the University of Brussels, Solvay School of Economics and Management, I was doubly interested by the topic.

If we look at the situation today, i’m afraid that board discussions continue to focus more on investments, corporate control, company performance and the like… Strategic decisions are the prerogative of Board of Directors and yet, marketing is still believed by some board members to be some kind of operational function, guided by the outdated 4p’s model. For those directors, strategic marketing decisions (choosing markets to be in, positioning adequate value propositions, creating value through the portfolio of businesses,…) are away from their immediate worries. It’s pitiful and dangerous in a VUCA type of business environment.

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I advocate an equitable distribution of the subjects to be treated in Boards. Strategic marketing issues are as important as financial, social or nominations ones. Don’t misunderstand me, I’m not talking about a Board discussing on a new corporate logo or giving intuitive advice on an advertising campaign ! I’ve seen so many of these meetings turning out to be a « discussion de café du commerce ».  I’m talking about (1) being informed on key market trends, (2) reviewing the company positions on strategic market segments, (3) understanding competitive dynamics, etc. The key is to avoid the so called Kodak syndrome and keep alert and agile on the strategic fields. http://oser-performer.com/2015/08/22/oser-performer-50-how-could-your-company-avoid-the-kodak-syndrome/

To be practical, I recommend here after a number of measures that a Board Chairman could take to bring the customer back into the boardroom. After all, marketing is all about delivering value to customers to generate so much satisfaction that they want to be oyal to you.

  1. Invite real customers at a board meeting at least once a year

As Hans Hickler put it in a 2015 excellent article in the Huftington Post,«  Adding customer discussions to the Board agenda is an important part of a broader customer engagement strategy with the board, including the regular review of customer survey results, engagement metrics, segmentation reviews. But nothing beats engaging directly with the customer ! » http://www.huffingtonpost.com/hans-hickler/invite-your-customer-into_b_6693278.html

  1. Create a strategic marketing committee

Besides the usual audit, strategy and nominations committees, etc. we should have one caring for the follow up of the marketing function. Linked with the strategy committee (I recommend 2 members attending both the strategy and the strategic marketing committees), it should watch and monitor closely marketing plans and KPI’s and, as importantly, signal changing market trends quickly enough to the board. Remember that  IBM took nearly two years to realize that Apple was more than some kids playing in a garage !

  1. Include marketing performance KPI’s in the Board dashboard

Financial reporting is about past and present. Marketing reporting is about the future. KPI’s like customer satisfaction index, customer churn rates (https://www.ngdata.com/what-is-customer-churn/) and other relevant metrics may be signals of future performance. But, more than that « boards need a thorough understanding of how their companies are meeting customers’ needs and how their marketing strategies support those efforts https://hbr.org/2004/11/bringing-customers-into-the-boardroom. Board members should be critical and demanding as to the why’s and how’s and challege non specific answers.

  1. Be sure to have marketing specialists on the board

Marketing is as technical as IT, supply chain or accounting. Yet a number of people, even professional managers, still believe it’s intuitive and within the reach of all. Actually, it’s not ! Especially today ! With the emergence of new analytical tools and new metrics, with the development of 360° multimedia marcom and with the advent of sophisticated marketing intelligence systems, marketing is now technically tough to understand. So boards should not be the hostage of a management team informing them about things they don’t understand with a new obscure jargon. Boards should have seats for marketing professionals.

  1. Have a regular evaluation of the marketing talents

Marketing today includes classical and progressive methods. The war for talents is real today and especially for marketing functions. The CMO role is way different from what it was 10 years ago. We need teams who ally analytical hard skills with softer creative skills. We need passion and ethics. We need a deep understanding of emerging trends and proactivity to take opportunity of them in the most agile way. It’s hard to find marketing executives who can manage teams like that ! Not only should we find them but we also need to keep them long enough so they can really influence the business.  Boards should consider this issue as being of the highest priority.

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Marketing and customer matters have been considered by Boards as secundary isues for too long. Today, in a volatile, uncertain, complex and ambiguous business environment, no company can consider the future with « sleepy confidence ».

Marketing is the engine of innovation. Its strategic role is to ensure the long term sustainabilty of revenues and corporate reputation. That’s why Boards need to get involved !

Be inspired !


 

10 reasons why business needs creative minds

I have been working a lot on creativity teaching over these last years. As the founder of the Advanced Master in Creativity and Marketing at Solvay Brussels School, I happened to exchange a lot of ideas with my colleagues and friends among which Mark Raison, on the the most famous creativity trainer in this world http://fr.slideshare.net/mark.raison. Here what I got out of all this and mainly the rasons why business more than ever needs creative minds.

Reason 1: All recent marketing hits (Apple, Nespresso, Tesla,….) come from superior creativity, whether it’s market creation or radically new ways to do business

Reason 2: Confronted with technology, new media, globalization and an incredible diversification of supply sources, consumers and business customers don’t want to be just satisified, they want to be excited

Reason 3: Lawyers, accountants, software engineers: that’s what Mom & Dad encouraged us to become. They were wrong. Gone is the age of “left-brain” dominance. The future belongs to a different kind of person with a different kind of mind: designers, inventors, teachers, storytellers...”, Daniel H Pink https://www.amazon.com/Whole-New-Mind-Right-Brainers-Future/dp/1594481717

Reason 4: You can be creative in math, science, music, dance, cuisine, teaching, running a family, or engineering. Any business today should be about generating original ideas that create value.

Reason 5: Nobody has a clue what the world’s going to look like in five or ten years, or even next year actually. If you can’t predict the future, invent it.

Reason 6: The challenges we currently face, from overpopulation to a shortage of natural resources, are without precedent. New problems call for new solutions. New opportunities call for new approaches.

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Reason 7: “There is little to no time allotted for real thinking, brainstorming or experimentation without judgment. With so much pressure to produce quick results in the current economic environment, it may seem like a luxury to walk away from the mountain of tasks to be accomplished but, actually, it should be at the top of the management agenda”, Sandi Edwards, senior vice president at AMA Enterprise https://www.linkedin.com/in/sandi-edwards-21192b5

Reason 8: Today, developing a competitive adavantage, the base for business success and survival, requires innovation and creativity at the strategic level, not only at operational level.

Reason 9: If we still leave businesses and economies in the hand of purely rational people, it will lead to more disasters.

Reason 10: After all, what is life without pep, fun and excitement ?

Be inspired !Unknown.jpeg

What’s a “good board” ? The Chairperson role.

A few days ago, I wrote an article about the need for startup companies to have a good Board of Directors (BoD) from day one. I had a few lines about the notion of “good Board” but too few to my own and my readers’s satisfaction. So i will go a bit further here.

What I pointed last time as a first step was to choose a good Chairperson i.e. someone who will care for the success of the business, someone senior who can manage meetings adequately and someone who has “a strong voice”. Actually the perfect Chairperson is more than that. In any board, in any company or non profit organization, big or small, the Chair (in this article I will use the word “Chair” to designate “Chairperson” for the sake of simplicity) is key as a balancing agent and a catalyst. That’s why the rules of conduct of corporate governance strongly recommend to separate the function of CEO from the one of Chair. This is going against the idea of “PDG – Président Directeur Général” still quite common in France for example.

I recommend that any Chairperson consider this:

Making sure that the Board’s composition is optimal

This is a key point to consider . As I already pointed out in my previous article, a good balance is needed between executive and non executive directors. Balance of skills, competencies and experiences is as important. But it’s not only about cv’s ! Personalites should also be examined. It’s good to have some devil’s advocate in the group, it’s recommended to mix entepreneurial, risk taking, minds with more conservative and careful heads. It’s also great to have people able to see the big picture while others are caring for details. Finally, all should have a strong sense of the ethics linked to their function, especially a clear sense of the company’s interest first. It means that the Chair should have thorough discussions with shareholders about the board “casting”. Promoting a regular turnover of Board members helps keeping a good balance. The Chair should care for it.

Interacting with other Board members outside of the boardroom

It’s a pity to see Boards limited to boardroom interactions. Opinions on future decisions should better be examined in separate one-to-one meetings at the Chair’s initiative. Board members can voice their concerns in a confidential setting. They will also be better prepared for the coming meetings. The Chair should be neutral here as his or her role commands. (S)he should ask relevant questions, listen carefully and probe the Director’s opinion, not impose his or her one. This may seem sometimes hard for some strong personality Chairpeople but it’s indispensable !

Setting the numbers of meetings and the agenda of each meeting with care and thoughtfulness

This may seem a trivial point but in my opinion it’s a major concern. Especially when the CEO is a strong leader, which is what we expect from her or him, (s)he wouls have a tendency to control the Board. A number of Chairpeople let the agenda decided by the CEO letting him or her control the discussion flow. Meetings are always too short to cover all points of an agenda. And long, endless board meetings are ineffective. I’ve seen a lot of agendas in my life and most of time they are overcrowded. Sometimes eight to ten issues to discuss on the same half day or evening ! Or it can be the opposite: two or three general points with no focus. Neither is good. The Board should focus on real Board issues, period ! A Board meeting is not a place to inform about issues, it’s a place to decide about issues. It’s not the same. The Chair should care for that. Decide on the agenda, decide on priorities and make sure that no important point that management wants an agreement on is put at the end when no time is left to discuss it freely and profoundly (this is by the way a well known tactic used by CEO’s to get a point easily approved…)

Managing meetings in the most efficicent way

Again this seemingly trivial consideration shows the difference between a strong and a weak Chair ! The agenda having been set, it must be respected with an equal distibution of time. I’ve attended numerous Board meeetings where timing is non respected leading to some prominent Board members leaving the room before the end of discussions. This is generally due to a lack of focus and never ending talks lost into details. In these situations it seems that no one dare to remind the Chairperson that (s)he is the guardian of time. (S)he is also the guardian of the debate’s quality. The Chair should care for reminding board members that they should be clear and focused. (S)he should split time evenly, inviting silent individuals to express themselves while reminding talkative ones to refrain from talking too much. The Chair should then summarize points of views and lead to decision making preferably through consensus.

Following up on decisions after Board meetings

A good Board meeting always ends with a document called “minutes of meeting” written by he Board’s secretary. Besides notable comments of Board members, it should include a list of decisions and a “to do list” until next meeting. It’s not unusual to see some “homework” given by the Chair to Board members in preparation for next meeting (an issue to investigate, a report to pre-read, some figures to reflect on,…). Actually, i recommend it firmly. This is keeping Directors under pressure and is always reminding them of their responsibilities. Time is scarce and procatrination is frequent. We should always avoid Directors coming to the boardroom poorly prepared or unprepared at all. The Chair should order the Board’s secretary to have a regular recall procedure a few weeks or days before next meeting. But this is not the most important. The Chair should hold regular meetings and talks with the CEO to insure follow up on key strategic decisions (strategy moves, investments, management hiring…). In bigger companies, (s)he should do the same with board’s sub-commitees (audit, compensation,…).

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I could write a book on this subject ! There are a number of roles and tasks dedicated to the Chair I didn’t even touch here (inside and outside representation and PR, chairing in times of crisis, realtionship with CEO and executive committee, etc.). Most of the Boards I attended in my life were poorly managed due to lack of adequate chairing. Even with prominent, competent and highly experienced members, a Board without a great Chairperson cannot work greatly !

Be inspired !

 

Why start ups should have a good Board from the start

The role of a “Board of Directors” (BoD) as a key component of a good corporate governance system is often misunderstood and a number of entrepreneurs think it’s a gimmick for big companies. Corporate governance itself is a vague concept for those who launched a business and are dealing day and night with operational issues. However, entrepreneurs should be more than concerned with the quality of their Board.

The BoD’s responsibilities are numerous. It includes: (1) defining business strategy, (2) naming the management team, (3) controlling execution, (4) deciding on major investments, (5) choosing the best financing structure, (6) checking on strategic KPI’s including financial inidcators. But what is misunderstood is the role that directors play outside board meetings. They can bring a specific expertise, a unique network, a wisdom forged by experience and a sense of responsibility linked to the function itself.

On the other side, entrepreneurs, business launchers are obsessed by a number of very down to earth issues: raising capital money, finding the first customers, getting a team on board, etc. Once the project is on rail, they go from one operational problem to the next, they face stress and tight schedules, they don’t have enough time to care about strategy. If success is coming early, they need to cope with growth. If it’s slow to happen, they need to adapt and reconfigure quite fast. For most of them, thinking of holding boards meetings with people asking strange questions is out of scope ! Well, they’re wrong !

It is when they are overwhelmed by operational problems that entrepreneurs need a good BoD ! The board will oblige them to raise the head above the daily shit. The board will oblige them to think about key elements of a successful strategy. Why did the performance overscored or underscored the business plan ? Why is this “wonderful manager” performing under expectations ? Why is the cash running so fast ? Why, why, why ? A good board will raise issues that entrepreneurs like to hide to themselves. In a determined but benevolent manner.3db68d5.jpg

Now the question is: what is a “good board” ? It’s never easy to find the right answer but I can at least give some advice.

First, choose a good chairperson: someone who will care for your success, someone senior who can manage meetings adequately (not too long, nor to short, with a effective agenda), someone who has “a strong voice”.

Then, enlarge the board to outsiders. We call them “independent directors” because they have no (or negligeable) financial stake in the company and they’re not part of families of the company’s shareholders. So you’re sure they have no conflict of interest and can have a free judgement.

Finally, look at competencies and personalities. Finding board members who can bring an expertise that nobody has in the business yet is great. Having someone with a cool and wise judgement is always good. A personality liking to play devil’s advocate is also bringing value.

One of my Harvard fellow classmate who was quite successful in business creation told me once: “I hate to prepare these boards meetings. I’m pissed off by reports and paper work. But each time I leave the board table, I feel better to have met these great professionals. Without them, i would never have so much success”.

So, my dear readers, if you’re an entrepreneur and you think of making your business a big business, go for a great board from the start. You’re great, right ? So, remember: “First class people hire first class people. Second class people hire third class people” .

Be top class ! Be inspired !

Marketing à la Trump: no thank you !

Marketing the Trump way: no thank you !

With Donald Trump elected President of the United States, I’ve seen a number of posts and articles claiming that one of the reason for Trump’s successful election was that he run a better marketing campaign than Clinton. Even my eminent colleague John A. Quelch from Harvard Business School wrote a quick article which I do not consider to be his most excellent http://hbswk.hbs.edu/item/donald-trump-s-winning-marketing-manual

I must say that I don’t agree at all with these views for the following reasons.

  1. Marketing is not about sales, it’s about customer satisfaction. At this point, the most we can say is that Trump convinced a number of citizens to cast a vote for him. This is most similar with a buying process. Not at all a “consumption” process. We will judge President Trump marketing performance when he will run for a second term. At that time, we will see if his current supporters are happy and satisfied with his policy or not.
  1. Trump did not win the highest market share. Let’s point out that Trump was not the best seller. He didn’t win the majority of voters. Hillary Clinton won the popular vote by more than 2,000,000 votes. Actually, she got more market share than her competitor but she lost the election due to the Electoral College system so specific to the USA.
  1. Marketing is not about any kind of false promises to get people to buy your stuff. This sounds more like the hard selling techniques used by door to door salesmen of the past. They would confuse naïve people with beautiful speeches in order to load them with useless products and then disappear forever from the neighborhood. Look at Donald Trump speech style and attitude: it’s exactly that !
  1. Ethical marketing communication practice forbids to denigrate competitors. In most countries of the world, it is specified in the law or at least in the codes of ethics of the marketing and communication profession. Nowhere now can responsible marketing people lie about competitors, about product integrity or about brand promises. In the case of Trump, that’s exactly what he did all along his campaign. In the most disgusting ways.

These facts are leading me to reject the simple fact that Trump so called marketing is any good marketing.

In any case, I don’t want that kind of attitude, the Trump attitude, to even be assimilated with the marketing discipline, a discipline that some of us, professors and practicioners, want to rehabilitate in the eyes of the public. Claiming that candidate Trump and his clique were good marketers just makes me vomit. Period !

Be inspired ! trmp_skywriting-800x430.jpg

 

 

Why you should care about corporate governance

Last Friday, I was reading with interest a quite surprizing Financial Times article about John Stumpf, Wells Fargo CEO, hearings by the US senate banking committee. Wells Fargo (https://www.wellsfargo.com) is a US bank that built its recent reputation on a consumer friendly, no nonsense strategy of nationwide presence in every corner of the United States. “Main street” vs “Wall street”. They’re just doing normal retail banking. Nevertheless, they were caught in a scandal a few weeks ago. Their branch officers, under huge pressure of their Chief Operating Officer, did anything to reach their daily sales quotas and get their regular sales bonuses.

Selling, selling, selling ! So much pressure that they started opening millions of fake accounts for clients who were not even aware of it because they were not even informed. Crooks ! Conservative bankers became crooks ! Terrible ! Again ! More than that, the CEO, now under scrutiny, doesn’t even think of resigning. And he’s not ready to give up is personal bonus !

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This reminded me how important corporate governance is in our world. Corporate governance: a much discussed concept. Now a little forgotten. But so important. If you don’t remember, corporate governance is a system made of internal or external regulations or commonly agreed practices aimed at guaranteeing companies and institutions to be managed in a normal way. Normal means in a coherent and honest way, avoiding excessive power of top managers as well as incoherent decisions. The system also aims at protecting minority interests to be spoiled in any way.

Corporate governance is insisting on the role of the Board of Directors (BoD) as governing body. The BoD should not be confused with the Board of Management. Directors’ roles are to decide on the strategy, choose members of top management, give them a clear responsibility and control the execution. They are stimulators, decision makers and watchdogs. The BoD is elected by the shareholders assembly and typically regroups representatives of majority shareholders, minority shareholders and so called “independent directors” (means they are independent of shareholders and management). BoD work is now a professional work, at least in big corporations. I was personally involved in corporate governance thinking as an active founder of the Foundation of Board Directors some years ago.

I will write some other posts about corporate governance in the next future, especially in the case of entrepreneurial companies, but I’d like to draw your attention on the influence of a governance system on your own future. In the case of above mentioned Wells Fargo where management was not controlled adequately, the final victims were middle managers who were fired on ground of mismanagement and mishonesty. Top management was not ! It’s almost always the same. Guys at the top always go at worst with golden parachutes and enough money to pay for good lawyers. Middle managers are collateral victims.

It’s time for you to check the governance system of your company. It’s about strategy and execution. It’s about integrity and values. After all, common sense should guide us in management practice but the fact is that, most people care for their own interest, money and power. Don’t be the victim of some crooks who could be leading tour corporation !

Be inspired !

5 “MUST DO” if you want to empower your team

Leading a team today has nothing to do with the old ways. Old-type leadership was about giving orders, controlling subordinates and rewarding / punishing people like kids.

Today, this doesn’t work anymore. At best it’s ineffective and at worst it’s devastating ! The key to success is making your team members great players in the game of business. Look at great sport coaches ? Well, you can be a great coach too. This is how to do:

  • Set the direction: people need to know the purpose of their work. It’s key ! If their only goal is to make a bit of money for life, they will not develop their talent. A good boss is showing the way, making clear what the  trip is about and make people ambitious about it. Restate your vision to your team every month !
  •  Listen with empathy: we spend time on our phones and tablets always waiting for the next notification ! We should listen to our team members more: take time out with each of them, go lunch one to one, have a relaxed small talk at the end of the day. Whatever the time, let them talk ! Use Carl Rogers reflective practice http://www.bapca.org.uk/about/what-is-it.html
  • Sometimes “kick the ass”: being always nice is comfortable. People like you, they’re happy and feel good about working in your team. It’s great ! But comfort leads to sleepiness. We can not be good business athletes if we don’t surpass ourselves. Give a shot of energy to your team regularly. Give your opinion on what is not good enough, invite your team to an unexpected meeting and tell them you expect a better performance. Move them !
  • Keep a distance: a boss is not a friend, authority comes out of some mystery you’re keeping about you. I know a lot of my young mentorees who feel uncomfortable about being in a leadership position for the first time. They try to become friends with their team members. Especially with older ones. It’s not a good solution. You can be nice, have a night out with your team, or whatever team building activities, but you should always be in your team leaders shoes…
  • And above all believe in their ability to succeed… People feel when you trust them. Trusting their capabilities, their dedication, their true person. A number of experiences were made showing that when people feel trusted, they perform better. Look at your team members as people, not as objects. Try to find what is best in them. Tell them when they’re doing something good and show them how they can be better. Use Ken Blanchard one-minute manager method, it’s simple and effective http://www.kenblanchard.com

All in all, leading is a fantastic experience ! It’s great to feel others following you, becoming better and performing as a team under your guidance and with your support.

Be inspired !images.jpeg