BoostStrapping

eBoost Consulting's Guide to Becoming a Complete Marketing Strategist | Part 3: Business Acumen

Miss part 1 and 2?  Don't skip steps.  In Part 1, we discussed the Fundamentals.  In Part 2, we discussed The Big Picture. 

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Determining the connection between the external and the internal.  This is the art of business acumen: link an insightful assessment of the external business landscape with the keen awareness of how money can be made – and then executing the strategy to deliver the desired results.  The building blocks are simple but mastering how they intertwine in each setting demands intense mental activity and skill.

20/20 Foresight – External Context

Identifying the external context requires a quick, decisive mental modeling of the big picture.  This skill takes plenty of practice.  The essence of this skill is to find patterns, rhythms, from among a wide variety of factors and posit the assumptions that would converge them.  A simple way is to begin with a list of six questions:

1. What is happening in the world today?
2. What does it mean for others?
3. What does it mean for us?
4. What would have to happen first (for the results we want to occur)?
5. What do we have to do to play a role?
6. What do we do next?

The answer doesn’t exist in these answers.  The questions merely help executives assess the validity of the company’s moneymaking approach.  This is a fluid process, and almost entirely qualitative.  Assuming this iterative routine encourages executives to transcend old rules of thumb deeply etched in their DNA – i.e. quantitative data, deliverables – and means giving up on the habitual reliance on precedent historical data.  Historical data reflects linear change, rather than continuous movement which is the essence of business maneuvers.  One big trend is achieved through a million small ones. 

Learning to see the business landscape with 20/20 observation depends on the rigor and discipline applied to the entire process of a) envisioning the changes b) deducing the actions and c) implementing the plan.

20/20 Insight – Internal Context

The ability to simplify complexity is vital to the success and sanity of business leaders.  We live in a world with unlimited data, unlimited thoughts, and constricted time.  The line between the successful and sane strategists vs unsuccessful and stressed out strategists comes in the ability to focus on the basics of moneymaking of a company.  Successful marketing strategists know how to break the most complex business situations down to the fundamentals. 

Here are the basics:  

• Cash – this is a no brainer.  Understanding how much cash the business generates and how much cash it consumes is critical.
• Margin -  margin is tricky.  Typically, when a client mentions margin or bottom line, what they are referring to is the net profit margin – the money the company earns after paying all expenses, interest and taxes.  Gross margin is a different story if not more insightful of shifts in the business.  Gross margin is the different between a product’s selling price and the cost to make the product (i.e. “cost of goods”) which is expressed as a percent of the selling price.  How changes outside or inside you business affect gross margin is key.  This could signify changes that need to be made in either the supply chain, value chain or both. 
• Velocity – velocity refers to the speed that revenue turns over for each dollar of inventory.  For instance, if you have  $10 million in inventory for the year and revenues of $20 million, then your inventory velocity is 2.  This describes how fast you’re moving raw materials to production to getting them on the shelf for customers.  For B2B companies like ourselves, you can track velocity by how much revenue is generated per hour of human capital. 
• Return on assets (ROA) – margin multiplied by velocity equals return on assets.  This is probably one of the best indicators of a healthy business.  Think of this as top of the list in a diagnostic exam.  If your return is lower than cost of capital, your business is in no-man’s land.  Increasing your return on assets can be done using the math – increase velocity and/or increase margin. 
• Growth – there is a distinction between good growth and bad growth.  Bad growth happens when your revenues go up while eroding ROA, customer equity – the health indicators of a business.  Good growth typically happens organically, where the integrity of the ROA and customer equity are increased through diligence in consistently iterating the business model and its building blocks.  The Net Promoter Score is a great performance metric in this game of good growth. 

A full perspective is necessary to unclog bottlenecks in our thought process.  As a complete marketing strategist, you must have 20/20 foresight into the external context and 20/20 insight into the internal operating of the business, whether your own or your clients. 

Next, I will speak on what is step where most miss the leap to becoming a complete marketing strategist – Functions Knowledge.

-johnny

Credits for this chapter
Ram Charan - What the CEO Wants You to Know for the five building blocks of business. 
Kenichi Ohmae – The Mind of the Strategist: The Art of Japanese Business
Strategy + Business - Jared Diamond: The Thought Leader Interview

…and undoubtedly many more!  

eBoost Consulting's Guide to becoming a Complete Marketing Strategist | Part 2: The Big Picture

The big picture.  Many take this into consideration when talking about business – you often overhear consultants or marketing professionals urge their team/boss/client to “take a step back and look at the big picture” but rarely do people take the big picture into consideration in professional development.  Big mistake!  Without seeing the big picture in your development (as a marketing strategist) or in  your talent pool (as an employer developing top marketing personnel), you are severely limiting your work capacity, work capabilities, and ability to discover your best work potential.  Perhaps more insidious is that you will lessen your leadership impact and decrease your company’s chances to achieve the big picture that you urged them to see in the first place! 

The foundation of the eBC Pyramid is Business Acumen.  Understand what key drivers that make up your business model.  Many people mistake this for a template business plan and spend hundreds of thousands of dollars on an MBA education without ever learning how to put the pieces of the puzzle together in a simple language.  Essentially, the business model comes from answering two questions: 1) What customer need is being met?  2) How does your company make money?  As a complete marketing strategist, you can’t perform to your accountabilities if there are deficient components in the business that must be brought up first.  Developing a keen business acumen will allow you to set the proper expectations for your company. 

Functions Knowledge – The biggest deficiency in talent development exists here.  Have you ever witnessed a meeting between the CFO, CMO, COO, CTO, C(insert letter here)O?  It’s akin to putting a Brazilian who only speaks Portuguese, a Chinese person who only speaks Chinese, a French person who only speaks French, and an Aussie who only speaks rugby, alone in the same room.  Communication is limited to awkward body language, makeshift sign language, and ineffective gesturing that can only be described as “pointing-to-things”.  Hijinks ensue.  Good for a sitcom, sure.  Good for business, not so much.  To be a complete marketing strategist, you must become fluent in the functional languages.  This requires an understanding of the key metrics that the functional lines are evaluated on and also an empathy for the accountabilities and responsibilities of the functional heads (CFO, COO, CTO, et al).   A complete marketing strategist is a change agent and change starts with proper communication. 

Marketing Fundamentals – When someone asks me what they should be reading, I reply with Principles of Marketing by Dr. Philip Kotler.  This is my honest answer and when it comes to the moment of facing the reality that this is a textbook that exceeds 1000 pages, most people (99% of the people who asked me this question, I’d estimate) reply with “Can you recommend something I can pick up at Borders?”  I typically don’t even bother offering this recommendation anymore because most want a short, enjoyable book that they can read over a weekend.  But a short, enjoyable book isn't what they need.  Sure, the book was written before I was born, but it’s timeless in the sense that fundamentals are timeless.  In basketball, the fundamentals of dribbling – head up, weight balanced over hips, ball on fingertips – haven’t changed from Cousy to Lebron.  In marketing, the fundamentals – segmentation, targeting, positioning – haven’t either from Kotler to Mikailian.  Learn them properly so you can maximize the next level. 

Marketing Strategy – I haven’t run into any studies on this but I’d surmise that the best marketing strategists would be exceptional chess players.  Not saying that you have to become the Bobby Fischer of marketing (thereby making you eccentric and unattractive to 90% of the opposite sex) but marketing strategy is a complete chess match.  On the other end of the table sits your competition’s marketing strategist.  Be too reliant on one move and you become too predictable.  Be too risk-averse or risk-favorable and you may open your competitors to taking you out with an early attack or waiting you out and taking your market when you have no more ponds.  I LOVE THIS GAME! 

There are ebbs and flows to every strategic reality.  Though a paper deliverable is a good start, more often than not, you’ll have to remain agile to adapt to the fluidity of the match.  There are short-run moves (ex: promotions) and long-run moves (ex: advertising).  Understanding the business engine, functional strategies and proper marketing fundamentals allows you to be creative and put it all together.  Putting it together to get your result (i.e. dominate the competition by capturing the affection of the customers with minimal loss to your own company) is the game you have to love to truly “get” strategy.  Did I mention I freakin' LOVE this game?  Can I get next?  

Tactics – I won’t belabor this for now.  Facebook, Twitter, email marketing, SEO, PPC.  These exist here as do most purported "marketing strategists/consultants" who we appreciate, but really, they are "marketing specialists".  Please don’t get me wrong!  We are addicted to new trends and new technologies.  New trends and new technologies give us more options to choose from, more players to play with, when executing marketing strategy for the business/client we're serving.  After all, the customers are driving these trends and technologies and you’ll need to pay close attention to the pulse of your environment.  But it’s a full understanding the why and how of these tactics that transform a "marketing specialist" to a "complete marketing strategist". 

More on each level of the eBC Pyramid to come on BoostStrapping.  Next Monday, I will begin with a lengthy diatribe on Business Acumen. 

Peace,

-johnny

eBoost Consulting's Guide to becoming a Complete Marketing Strategist | Part 1: Fundamentals

Fundamentals are the key to being a complete marketing strategist.  Everything we do at eBoost Consulting, everything we’ve achieved can be traced to how we approach business fundamentals and apply them to individual marketing cases for clients and ourselves.   

The pyramid above displays the basic building blocks that we use to make a complete marketing leader.  That is, someone who is strategic, cross-functional, intelligent and creative.  Whomever comes to our company, we assess them on how rigorously they’ve attacked the fundamentals and how aggressively do they continue to work at the fundamentals.  If you’re weak on one of these levels, the pyramid falls apart.  Nowadays, the space is ripe with one-trick ponies.  And there are plenty of people with great tactical skill but if they don’t know how to apply those tactics to the big picture, then what good are they?  

But most people, particularly those of the Gen Y clan, don’t want to deal with that.  They’re looking for instant gratification, the shortest route to promotion, to that next title.  Perhaps they don’t learn segmentation practices because they don’t like analytical work.  Perhaps they don’t develop proper communication with Operations or Finance because they rely on communicating with marketing peers with similar communication skills.  Perhaps this is you?  Sure, you can get away with it for a while but the deficiencies will catch up with you sooner or later.   

It’s like they’re so focused on composing a masterpiece that they never master the scales.  And you can’t do one without the other.  The minute you get away from fundamentals – whether its proper preparation, thought-processes, or work ethic – the bottom falls out easily. 

When I was at Whole Foods Market, everyone said I was being held back.  But I was taught the scales there.  I was taught the importance of fundamentals and how to apply them to individual cases and my own propensity to be creative.  The concept of being a complete leader was heavily stressed and imposed.  When I got to eBoost Consulting and applied my learning to include new digital tools, I had a strong foundation to work from.  I knew the way to approach learning and I developed a feel for what would be flashes-in-the-pan or solid tools.  It allows me to be decisive.  It allows me to save time.   

When you understand the building blocks, you begin to see how the entire operation works.  You know what tools to use, which frameworks will click to bring out the best in your team. 

People are often surprised that I spend so much time on the whiteboard in meetings when we made our name on being cutting-edge.  They ask if we knew which frameworks, which tools we were using.  My answer is always no.  Tools change.  But the fundamentals remain the same.  I assess the distinct abilities and personality traits of the personnel in the room because I am always confident in my understanding of fundamentals and my ability to apply the fundamentals to any canvas.  Give me  a $10,000 brainstorming software or give me the back of the napkin.  The results will be the same. 

It comes down to a very simple saying: there is a right way and a wrong way to do things.  Peter Drucker once noted that effectiveness comes before efficiency.  Not the other way around.  Get the fundamentals down to be effective and then your level of efficiency and probability for success will raise. 

More to come on The eBC Pyramid tomorrow.   

-johnny

The above excerpt is adapted from the chapter “Fundamentals” from I Can’t Accept Not Trying: Michael Jordan on the Pursuit of Excellence. 

Marketing on Facebook | 5 Takeaway Lessons

Last Friday, Karen Marchetti (or as we call her, "KMarch" - yes, everyone gets a nickname once indoctrinated in the eBoost Consulting Family) invited us to present at San Diego Software Industry Council on the topic of marketing on Facebook.  Quite cleverly, we entitled it, "Marketing on Facebook | 5 Takeaway Lessons".  This is an off-shoot of a presentation we use to drive home the topic when we train internal corporate marketing teams on leading, managing and executing on social media marketing initiatives. 

Below is the slidedeck - it was featured on the SlideShare homepage this weekend and is currently being showcased on the Business & Mgmt page by their editorial team.  It will remain there for next 16-20 hours. 

Tweet to your Tweeps, peeps!  =)  And let us know your feedback.  This is our first time posting any of our presentations on SlideShare - experimental.  But if the feedback is there, then we'll post more.  We've got dozens of these in the vault...otherwise known as our server. 

-johnny

P.S. - special shout-out to SDSIC for inviting us again to speak.  It's always a blast working with such a professional team that really takes care of its presenters/speakers.  Karen, Jill, and the rest of the crew are amazing.  If you are in the San Diego area and want to stay on top of their events, I highly encourage you to become a fan of SDSIC on Facebook. 

P.P.S- big nod to Garr Reynolds, who inspired this presentation with his work posted on his blog, PresentationZen.  Also, thanks to Nielsen and Forrester for the supporting datapoints. 

Marketing on Facebook | 5 Takeaway Lessons

View more presentations from johnnychan.

Allocating Marketing Resources After the Recession (Pt 1)

Marketing Strategists' Mental Minefields 

Much like love, the marketing strategist's mind can also be a battlefield. 

So you've been marketing in a recession.  You made the necessary adjustments in your marketing mix, shed unprofitable customers and focused in on your most revenue-now marketing initiatives.  This series of posts will describe the way that you can take steps today to ensure that your business performs well on the upswing. 

Step 1: Get your mind right. 

As we've noted before, thoughts turn into actions.  So to get results as a strategists on the flip side of the recession, then your mind has to be reprogrammed.  Needless to say, step 1 in allocating marketing resources after the recession is to get your mind right. 

It's been well cited that the longer and deeper a recession is, the more likely consumers will adjust their attitudes and behaviors permanently.  Their coping mechanisms may become ingrained and define a new normal. 

This is a mental minefield that consumers are prone to and you may be aware of. 

But what marketing strategists often  fail to consider is that they way they strategize may have adjusted as well.  For instance, if your CEO has been urging you to only spend on short-term performance initiatives for the past year, then it may have changed your philosophy more than you realize. 

This is a real phenomena, folks, and if you intend on making the right maneuvers now to capitalize on competitor weaknesses, then there are three types of mental minefields you need to be aware of. 

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1. The Mindfulness Trap - Even if you were to draft a sensational, well-balanced marketing strategy, there will be times when (a) the boat is rocked and you'll have to make adjustments and/or (b) your CEO is mandating that  you need to cut back to initiatives that "only perform" (i.e. short run marketing). The tendency to be pulled into a short-term perspective by the pressure of daily activities.  This scenario is very likely and you'll have to be mindful of where your actions are germinated from. 

2. The Cognitive Trap -  Under duress, most marketing strategists will make the assumption that short-run marketing initiatives and long-run marketing initiatives exist in an either-or world.  That is, if you run branding, then you can't run PPC.  Nonsense!  Nothing exists in a vacuum, and budget is a large component of marketing, you can have your cake and eat it too.  This is where principles such as hedging marketing bets come into play. 

3. The Self-Knowledge Trap - Henry Mintzberg, a pioneering management scholar, once demonstrated that managers often see themselves as strategic visionaries, though in practice they spend a remarkably small proportion of their time on anything strategic.  Instead, they focused more on transactional activities.  The trap here is that there is a disparity between what marketing strategists think and what they actually do.  This isn't to say that you shouldn't be executing on tasks, but if you think tactically more so than strategically, then you may have a problem.  This trap is perhaps the one
we encounter the most during our Executive Education courses.

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What I encourage you to do today is a self-audit on which trap(s) you are most prone to.  Increased self-awareness inevitably leads to improved leadership.   

Till Step 2...

-johnny

MBA Dance Moves with Nick Urbani (Volume 1)

Our Rainmaker Makes It Rain at Executive Education. 

As we're prone to say here on BoostStrapping, everyone wants the know-how but no one ever wants the know-why.  That's a shame because the know-why is where everything starts.  In this video clip, Nick demonstrates why 200 page deliverables on customer data and accompanying text-rich and bullet-point heavy PowerPoint presentations are things of the past.  This segues into an explanation of how personas are changing the why our clients think and communicate about their customers. 

The "B-School 3 Step" & "The Frontline Handjive" are debuted as well.  Someone call Kanye because these moves are bangin'! 

Enjoy!
-johnny

The Ultimate Question presented by The Ultimate CEO

Micha lectures on Net Promoter Score at eBoost Consulting's Executive Education course. 

Please subscribe to our YouTube channel! http://www.youtube.com/eBoostConsulting   We've got five playlists up and a lot more videos to come.  For a month at least when this trial runs out and we'll evaluate the cost.  Until then, enjoy!

BTW, "McLovin" is Micha's nickname that Alpha Delta bestowed on him.  Allison explains it here on the intern blog.  Grey's Anatomy has McDreamy.  We have McLovin. 

SMH. 

-johnny

Executive Education - What an Experience!

12 out of 12 executives agree: you gotta prepare hard if you want to perform easy! 

Whew!  What a weekend here at 7125 El Cajon Blvd.  12 came, 12 graduated, 1 cried.  What an amazing experience ripe with complex problem-solving and meaty discussions about strategic maneuvering.  Did you miss it?  Then you missed out! 

A full recap will be up tomorrow.  In the interim, we finally got to uploading a video primer on Exec Ed.  Photos are from our first Executive Education Day, Demystifying Digital Marketing.  We went with different content this time around since the business context varied a bit.  Next time?  I don't know!  Whatever the business environment dictates, we'll share the tools it takes to succeed. 

See you tomorrow!  I got TimeTracker to do... 

-johnny

25 Random Things about Preparing for the Upturn

T minus 4 until eBoost Consulting's next Executive Education day.

It's almost 8pm, getting dark outside but I'm wired like cable, people!  Nick and I are kicking it here in The Pod, vibing to a J.Dilla tribute mix and working on putting the finishing touches to the data we're highlighting for this Saturday's Executive Education day.  Topic: Preparing for the Upturn. 

Inspired by the 25 Random Things Facebook note, I decided to jot down 25 random things that may not make the cut in the day's session.  Hey, it's only 9 hours...can't expect us to place everything in there, can ya?  

1. Companies that maintain or increase marketing during recessions reap a 3.2:1 sales advantage.
2. A 1% share of voice over your competitors equals a 1% increase in share of market. 
3. On average, only 10% of customers in any category buy exclusively on price.
4. A regression analysis on Twitter's rise in unique visitors and the decrease in the Dow Jones Industrial Average suggest a causal relationship between Twitter and the current recession. 
5. During recessions, tech spending falls more than the GDP. 
6. Customers buy more of less discretionary items in the downturn.
7. Customers increase spending in education, reading, personal insurance, health care, and food at home during recessionary periods.
8.  Know your customers.  
9. Don't  market with a tone of fear.  Market your core values. 
10. Drop your weaker distributors.
11. Focus on reliability and performance in  your marketing message.
12. There's a key distinction between price cuts and discounts that shouldn't be ignored.
13. Acquire brands if you're in a good cash position.
14. Maintain frequency of marketing, decrease duration. 
15. NPS.  Learn to love it. 
16. Euro Sexy Micha Mikailian.  Learn to love him.
17. Shift your resources to your key profit pools.  Use the SNAP to zero in on a concise offering.
18. Those who use the traditional marketing survival kit in downturns often times make the wrong bets in the wrong segments.
19. Anticipate competitor moves. 
20. Plan for long-term customer loyalty programs.
21. Be decisive when given the opportunity to build, buy, sell, or partner.
22. Social media marketing is like guerrilla marketing.  Takes more time than hard costs.
23. Securing a method to budgeting comes before cost cutting. 
24. Increase direct marketing channels. 
25. Email marketing to be used as an acquisition tool in downturn economies, not just a retention tool.  

Ok, that's enough for you.  Another slice of Zia's eggplant pizza for me and Nick (the official caloric sponsor of Executive Education class preparation). 

yours in carbohydrate stupor,
-johnny

Introducing the new BoostStrapping!

BoostStrapping gets a makeover, courtesy of eBoost Consulting's resident Team Player. 

It's a bittersweet week for us here at eBoost HQ.  We're in transition to our next intern class (that's Alpha Episilon Omega for those of you keeping score at home) but that also means saying "see ya later" to Alpha Delta Omega.  I'll write a few reflections from that class in another post but hey, did you see the new digs here at BoostStrapping? 

Two weeks ago, we tasked super intern TP (government name Marc Peterson) to give BoostStrapping an extreme makeover.  Ok, is it just me or does anyone else find it ironic that TP's initials match Ty Pennington of Extreme Home Makeover?  Anyhow, it's always nice to get someone else's look at things and hey, anytime you can put a key business asset in the hands of an intern who is leaving your program, you have to do it. 

The result is all around you, folks.  New slogan to match our mantra, the cityscape to match the mural that greets people as they walk into our offices, the link to the famed eBoost Intern Blog, our eBoost Facebook page and MySpace pages, our corporate website, and to our latest Executive Education program.  He also fixed the RSS bug-a-boo that Kristy B. and Matt Byers pointed out. 

Preeee-tay nice, TP.  Pre-tay nice. 

Anyhow, what do you think?  There's a poll here.  You know what to do. 

-johnny