Ten Culture Fallacies We Need To Stop (Part 1)

 

 How often has the term “culture” been mentioned in your business in the last 72 hours?

How often has Peter Drucker’s “Culture Eats Strategy” meme popped up in your LinkedIn feed?

I‘m willing to bet the answer is “frequently” or maybe even “too bloody often”

Coupled with terms like Digital Transformation, automation, the future of work, the gig economy and change management, culture is a white hot topic that business leaders can fervently debate and discuss but they can no longer dismiss.

Additionally, with an armada of armchair experts opining on the topic, it is amazing how certain perspectives and opinions have also entered the debate.

Some opinions are stated with unambiguous zealotry in channels like LinkedIn. Perhaps more worryingly, the very executives tasked with addressing the culture topic hold some very strong opinions too.

Here are ten that I’ve seen, discussed and debated.

1) You Can Magically Create A “Innovation”, “Entrepreneur”, “Risk” Culture

It has become increasingly popular for organizations to say they need to build an “innovation” culture or a “creativity” culture or some other bright shiny modifier of their culture.

Truth is you already have a culture.

From the moment your organization had more than one employee, it began to nurture a set of shared behaviours – a culture – that defined how you work together.

Ask yourself – Does your current environment allow people to fail fast without negative consequences? Do you embrace challenging new approaches to your business model from within – regardless of the tenure or rank of the source? What is your organization’s genuine attitude to “risk”?

If your answer was “no” to the examples above, then you’re not building an innovation, creative or entrepreneurial culture. It is the behaviours you support, the behaviours you tacitly or unconsciously reward that set the tone.

You might enjoy Rob Shelton’s article in strategy&business where he gives some great examples of the behaviours that do begin to build an innovation culture.

2) You Can Copy A Culture

With all the ink spilt on the hiring practices at Google, the office environment at Apple or the Holocracy experiment at Zappos, it can be enticing to propose that your organization execute the culture playbook of those organizations and similar fame and fortune will inevitably occur.

Wrong.

Culture is a shared experience built from internal adaptation to external circumstances. As such, each of these cultures has been uniquely built from surviving numerous threats to their survival over the years. Each culture has learnt which specific behaviours to keep, which one’s to modify or end, in order to succeed under the very special set of circumstances and market conditions in which they play.

Unless your organization is literally a carbon copy of their market sector, organizational history, leadership attitudes and experience, partner and supplier network, union and employee relationships, and the myriad of other factors that have created those organizations, you’re never going to copy their culture.

At best, look to these cultures for inspiration but build your own playbook.

3) Foosball tables, plaques on the wall and “Beercart Friday’s” Are Your Culture

Most organizations still fall prey to the misperception that their open plan collaboration pods, hot desking or remote working policy, funky new decor and the “people-2-foosball table density” are indicative of their open and transparent culture.

As Tim Kuppler of Culture University so eloquently states it, those are “climate” not Culture.

Renowned culture academic Edgar Schein goes further by describing the three layers of culture – Artifacts, Espoused Values and Basic Assumptions.

In Schein’s opinion, the layer that you can see, feel, hear, touch is the Artifact layer. But that’s not your Culture. That’s not the layer that governs how people in an organization consciously – and unconsciously – make decisions. That layer is the deepest layer, the layer unseen by outsiders and often unrecognized by employees themselves – the Basic Assumptions layer.

If you’re genuinely interested in understanding what drives an organizational culture, you need to look further than the gleaming artifacts you see when you go into an organization. You need to look deeper than the words and values enshrined on the walls or emblazoned on laminated cards. You need to get to the Basic Assumption level – where the forces that drive decision-making and attitudes in an organization reside. That’s the real Culture.

4) Employee Engagement Is An Objective

If you’re a culture practitioner – or just a human being with any degree of empathy – the annual Gallup Employee Engagement Report is a sobering read.

The most depressing stat being the 87% of employees globally who are not engaged in their role. That is a tremendous amount of intellect, energy and passion that isn’t being applied to an organization. Couple the 87% stat with findings that show that highly-engaged workforces outperform their peers by 147% in earnings and the critical importance of employee engagement becomes very stark.

Unfortunately this typically leads to a binary, knee-jerk “raise employee engagement at all costs” mantra.

Employee engagement is an outcome. It is not an objective.

Like the other classic business imperative – profit – it is an outcome from running your organization effectively and efficiently.

If you want to tackle low employee engagement, you need to intimately understand your current culture (which few organizations are prepared to do) and then tackle the issues you uncover. Only then can you begin to create a culture where employees are clear on their roles, clear on how they can contribute, clear on the behaviours the organization rewards. Then, and only then, will engagement improve.

5) Culture is a “Feel Good” Exercise With No Business Impact

Perhaps not an opinion stated openly anymore but there’s certainly skepticism from many executives that investment in culture ever translates directly to business improvement. Considering that culture deals with the messy, irrational, emotional realities of human beings, it perhaps isn’t surprising that some unenlightened folks may see this as a warm and fuzzy feel-good investment.

Consider for a moment if these elements have a direct business impact.

Turnover and Employee retention

Cost of hiring and training

Inter-departmental silos or open conflict

Employee absenteeism

Inability to change (or innovate) to changes in the market

Employees “just do their job” or “show little initiative”

These are symptoms of a culture that is not operating effectively. A culture where the artifacts, values and tacit assumptions (see point 3 above) are out of sync.

Now consider what your organization might look like if the exact inverse of these situations were the norm.

Personally, and this is a view held by many culture experts, I believe that culture is the source of competitive advantage in today’s economy. The ability to have your employees bring their full energy, intellect, passion, curiosity and desire to participate to your organization is the ultimate business impact.

I’ll be publishing the final 5 culture fallacies in another post next week.

Included in that post will be some of my favourite fallacies.

  • Why Peter Drucker’s culture meme should be banned.
  • Culture is HR’s responsibility
  • Culture is only for employees and has no external impact
  • It takes too long to change culture
  • Changing your culture is possible (always a polarizing one)

 

 

Here’s my question – what fallacies do you feel need to be put to bed immediately?

What are some of the culture fallacies or misperceptions you read about – or hear in your organization?

I’d love to get them out in the open and vanquished once and for all.

Leave your thoughts in the comments below Dear Reader.

Culture & Digital Transformation – All In A Day’s Work at Mark’s

 

Mark’s is a Canadian apparel retail giant that has been in operation since 1977. In 2002 the organization became part of Canada’s iconic Canadian Tire retail operation. Subsequently Canadian Tire has also acquired the Forzani Group, a sporting goods and apparel operation, and their popular brand Sport Chek. In 2012, Mark’s Work Wearhouse, as it was formerly known, went through a rebranding and became Mark’s. This rebrand signaled a strategic move to broaden their offering and to move into casual apparel, and not just industrial and work wear which is where the company had started. Mark’s has also been bolstering its Digital offering and eCommerce operation as well as their traditional bricks-and-mortar stores to drive growth.

I spoke with Johnny Russo, Associate Vice-President eCommerce and Digital Marketing, to understand where the organization was headed and what role Digital Transformation was playing.  

HB: Johnny, thanks for chatting to me today from Montreal. Before we talk about Mark’s, can you give me some personal background and explain your current role?

JR: Absolutely. My path to Mark’s, known as L’Équipeur in Quebec, wasn’t exactly a straight line. I graduated from Concordia University in Montreal and with a passion for Journalism and Sports and I was keen to pursue a career in that field. After writing for the Montreal Canadiens website – but being a huge New Jersey Devils fan, go figure – for a period, I then moved to Ottawa. My first job in Ottawa was not in Journalism, but in Marketing. After 2 years I returned to Montreal and had a couple of roles in manufacturing organizations, and stumbled into Digital Marketing. It was really at Pattison Sign Group that I got bitten by the digital bug and started to develop a real interest in the impact digital was playing in businesses at the time.

After a few years in Manufacturing, I spent some time with two start up companies. And that’s where my love of Digital Marketing and my love for tech collided. But I also loved fashion.

That digital and fashion interest led me to a number of digital-centric roles in the wildly fun and challenging industry of Retail – first at Buffalo Jeans, then at former global powerhouse Mexx, and then at Bentley – where eCommerce was obviously growing at break-neck speed.

I was sold. Digital Marketing meets technology meets eCommerce in Retail. I had found my calling.

eCommerce has gone through extreme growth in the past decade and I’ve been lucky to have been in the center of that. Almost two years ago I got into a conversation with Mark’s about their digital ambitions and how I could contribute to that. In January 2015, I packed my bags and headed out to Calgary to join Mark’s. It has been a wild ride and I’m enjoying every minute of it.

HB: What’s your mandate at Mark’s? What are you being held accountable to deliver digitally for the organization?

JR: My role is two-fold. One part is the obvious requirements to deliver growth for Mark’s. That means driving profitable gains through our online store and making that channel as efficient and effective as possible, while driving traffic to stores, which still represent the large chunk of our overall sales. The second is a longer-term strategic focus which is laying the foundation for Digital. That may sound strange for a company with a well-established eCommerce offering but it’s about creating and monitoring our digital roadmap and putting in place mechanisms to adapt to a changing consumer environment with agility. Case in point, we look at our overall roadmap every 3 months and see what needs to be adapted, altered, or tossed to the side. That’s the speed with which the retail sector operates which can be quite stressful but very exciting at the same time.

 HB: Like everyone else in the digital space, particularly those playing in retail, you must hear the phrase “Digital Transformation” all the time. Can you talk about Mark’s Digital Transformation and your role within it?

JR: Sure. Funny thing happened at Mark’s, and in my career for that matter. I was asked to speak at the ForeSee Summit in April 2017. Our Enterprise Account Manager at the time suggested I speak about the Partner Summit we held the year before, which she had never seen done (essentially, we got all the vendors and core agency partners in one room). However, when I started peeling back the onion a bit, and noticed all the things we had accomplished in the last year, it occurred to me – this was transformation…this was our Digital Transformation.

And then I started a list of all the things my team’s at Buffalo, Mexx, and Bentley had also accomplished. Yup. You guessed it. It was also a Digital Transformation. But you don’t go into your first meeting, or vendor call and say that word. It’s a lot of work and takes a lot of building and breaking to be sure.

And as a national retailer, it shouldn’t surprise you but we’re a very intricate operation here at Mark’s. We have colleagues in our Operations group that are responsible for our Stores and their success, our IT colleagues that can be dealing with everything from security protocols to enable online transactions but even things like our PIM (Product Information Management system) which sounds tiny but is absolutely crucial when we’re talking product performance and onsite merchandising. Then there’s the Marketing team which I sit in and is responsible for driving our traditional and online capabilities and performance. And that’s just internally – we have a diverse group of external partners too. So there are a number of moving parts that are involved and impacted when you’re talking Transformation.

When I joined Mark’s one of the first opportunities I noticed lay in the area of accountability.

With so many moving parts in the organization, being crystal clear on accountability – who did what and who owned what – struck me as a foundational element to get corrected. Reducing complexity and increasing clarity was critical.

We called a Partners Digital Summit in July 2016 to get our entire external partners and internal team aligned on accountability. That was a great springboard for not only gaining alignment and accountability, but also for achieving buy-in for our Roadmap.

HB: That’s a great way to build cohesion across all your partners. Are there other areas where you’re transforming?

JR: Like many organizations, getting an infusion of new and distinct talent is another obvious area. I joined a team of 9 in 2016 and almost immediately began an audit to see where we had gaps and where, importantly, I thought those skills should sit within our Mark’s team rather than inside one of our partners. Sometimes it makes absolute sense to have skills exist inside an agency but, in my opinion, certain critical skills need to be down the hall.

Ultimately that led to a request to secure 7 more team members. Not surprisingly, the initial reaction was No. I wasn’t going to let that stop me so spent time putting together an infinitely more data-driven business case – another digital benefit is all that data of course – and being able to show how our growth would be hampered if we couldn’t scale our digital skills significantly. I’m happy to report that, as of May 2017, we’ve actually doubled our digital team to 18 folks. That means we’ve ended up hiring 9 new colleagues, not just the 7 I’d originally asked for. That’s also testimony to the expectations that Mark’s has for digital and the business growth attached to digital. Mark’s is in Digital to win in a big way.

HB: Hiring new talent can be a quick way to bring new skills to the table but those new faces still have to exist and thrive within an existing organization and culture. Can you talk about those factors too?

JR: An important aspect I noticed immediately when I came over to Mark’s is that there is a real culture of winning. I would say that thread goes across our entire company. We really do want to win and that means building up an environment where winning is possible for each of us.

However, despite that aspiration, I did notice there was a comfort level in the status quo. I heard a lot about “it was always done this way” or “that’s not how we usually do it.” It took a few months to sink in – change is good, and often needed in the retail landscape of today. You don’t look back, you look forward.

I tell my team – to use a baseball metaphor – I’d rather they hit homeruns with a few errors, then 10 singles and no errors. And yes, that can mean taking a few calculated risks along the way, and that’s ok. As a leader, you should leave room for innovation – and innovation won’t always be had on the first try.

So that’s been an important aspect to address – we really want our employees to come in here and try new things and bring new ideas to the table.

To that end, another aspect of our Digital Transformation was education. I spoke to my boss and we realized that if we could raise the digital knowledge across the organization then we’d infuse a heightened level of confidence – and appreciation – for some of the ideas our digital team was trying to initiate.

We started with a full day Digital 101 company-wide. It was all the basics from Paid Search to SEO, Social Media and testing, to key analytics and metrics. We really wanted to ensure that everyone had exactly the same level of knowledge – and, critically, had the opportunity to discuss and debate why these elements were important for Mark’s. A few colleagues told us those sessions were incredibly intense (6 hours long) but we’ve now got a mandate to perform these 2 times per year – a training regimen where we expose our colleagues to new digital thinking, take them through successful cases and talk openly about what we’re doing, which is a big shift from what they were used to, which was traditional media. No one expects a culture to change overnight, but I’ve found that Education and a common understanding of new thinking certainly helps get buy-in. That buy-in and the confidence I spoke of earlier means folks are more likely to be open to something new. We often forget, but people are usually resistant to change because of the unknown. That’s why we endeavored to make Digital known to everyone.

HB: That’s a great point. Is there a different type of person you’re trying to hire at Mark’s because of this transformation?

JR: Retail is a very unique environment. It moves at such a speed that it can be very intimidating and stressful for sure. Personally, I think above all else, you need to hire people who want to learn and have a positive attitude. Someone who can take that stress and still remain positive about the outcome. That being said, the stuff we look for is not a big surprise. We need people who genuinely have a continuous learning headspace. That’s critical for a sector that’s evolving at the pace that ours is. The other is being adaptive. Can the person roll with the punches and consider more than one way to tackle a problem? Continuous learning, adaptiveness and that positive outlook – there’s the magic for us. Everything else I’m sure we can teach them (laughs)

HB: What advice do you give your peers embroiled in the same struggles within their organizations?

JR: I talked home runs earlier and those are great – but in my experience, nothing beats getting a slew of early and quick wins. Particularly within a large and multi-faceted organization. Digital can be such a large area to try tackle that you can spend time spreading yourself way too thin.

Nothing beats a few small wins to build trust and credibility when you’re starting. The other part is that quick wins also build team morale as well. You can’t underestimate the benefit of having your team feeling like they’re making an effort – and that effort is noticed and appreciated.

The other part you can’t underestimate is really understanding the culture you’re operating in. How do they evaluate success? How do they define teamwork? How do they expect you to operate internally? Even if you’re trying to get your organization to do new things, you have to start with an appreciation of the current state first. Just coming in and pushing new ideas with zero understanding of the organization’s existing culture is seldom a recipe for success in my experience.

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This post is part of an ongoing series exploring the intersection of Culture and Digital Transformation – and the challenges organizations face when those two forces meet. This challenge will, I believe, shape the business agenda for the next decade so we all have a lot to learn. 

If you’d like to share your story, please DM me on Twitter @ZimHilton or reach out via LinkedIn.

Find the rest of the series here:

Culture & Digital Transformation: On The Frontlines with SickKids Foundation

Culture & Digital Transformation: How a 145-Year-Old Insurance Company Became A Digital Darling

Digital Transformation & Culture : The Coca-Cola Canada Story

Culture & Digital Transformation: The Beauty Of Entrepreneurial Spirit At L’Oréal Canada

Culture & Digital Transformation : The Power Of Connections at Starbucks Canada

Culture & Digital Transformation – Writing The Book on Culture and Transformation With Klick Health

Writing The Book on Culture and Transformation With Klick Health

 

Toronto-based Klick is an organization that defies many traditional definitions. It is a full service health marketing agency. But its also a training and development company, a creator of CRM software platforms and a consultancy. What can’t be debated is how unique and compelling their culture is. So much so, that they have a New York Times bestselling book – The Decoded Company – that talks directly to how they’ve created a organizational culture for the 21st Century. I sat down in their Toronto offices with Jay Goldman, a member of the Klick Executive team and Managing Director of Klick’s latest business venture Sensei Labs

HB: Thanks for taking time to chat Jay – and thanks for the ice-cream, I mostly just get coffee when I have these chats. Can you give us some background on you and your newest role here at Klick.

JG: My career has gone through a few iterations since I started within IBM’s Lab here in Toronto working on DB2. My degree in Information Systems and Human Behaviour was almost a perfect springboard for what I’ve ended up creating here at Klick. It was a great mix of Computer Science, Psychology and Sociology and going to IBM when I graduated was a perfect way to put what I’d learnt immediately into practice. Since IBM I’ve formed, and then sold, an agency organization and it was after that acquisition I was head-hunted into Klick to help build their initial Strategy offering. That was in 2010 when the organization was about 150 people. That grew into a role to imagine and subsequently build Klick Labs, which is now an actual physical lab on the 7th Floor of our building. I joined the Executive Team in 2012 and in 2014 co-authored The Decoded Company with our co-founders Leerom Segal and Aaron Goldstein and our good friend Rahaf Harfoush. Sensei Labs is the newest part of my role. I am the Co-Founder and Managing Director of our newest division and tasked with building that out.

HB: In comparison to some of the other interviews I’ve done, you’re a relatively young organization. Is Digital Transformation perceived somewhat differently here versus, say, a 100 year-old organization?

JG: Absolutely. We’re set to celebrate our 20th anniversary at Klick this year which means, in many ways, we’re an organization that was born digital. When the organization started, and what is at the core of our DNA, is unmistakably a familiarity and comfort with digital. That certainly sets us apart from organizations that were created earlier and under a different set of circumstances.

Where that difference is perhaps most pronounced is in how we think of the “Transformation” part of that phrase.

Quite simply you can think of Digital Transformation as a project, with a stated goal, budget, timeline and set of deliverables. Or you can think of it as an ongoing part of how you operate. Almost a perpetual state of self-review and self-disruption.

To us “Transformation as a Project” is almost an acknowledgement of failure and is typically driven by a radical need to change because of an imminent or recent disruption in your sector. On the other hand, if Transformation – or more accurately Perpetual or Constant Transformation – is how you always act, then you have more control over your destiny. You’re doing it to yourself before a competitor in the marketplace does.

In some ways that notion of constant transformation is baked into our credo and our culture here at Klick which is this idea of “The Relentless Pursuit of Awesome” For us that means, each day you’re striving to be more awesome than you were yesterday. If you had a great client meeting or technical launch yesterday, congratulations, but was yesterday. Because “awesome” is an ever-changing standard, that credo reinforces we keep needing to raise the bar on ourselves, and our work.

 HB: That’s easier said than done for most organizations though. What other factors play into your ability to keep transformation central to how all of your people think and operate?

JG: True, we definitely have a few advantages over other organizations grappling with Digital Transformation. One is our fiercely-held independence, which means we’re not beholden to a sprawling network agency model where someone in another geography or time zone is making decisions on our future. We have the luxury to make our own decisions and investments as we see fit.

The other is that our founders had no formal business school training when they started Klick. That may sound counter-intuitive but it also meant they had no formalized or regimented approach for tackling problems.

Case in point, we’re very solidly against the notion of “best practices” because that often means you’re utilizing outdated thinking for a current problem.

Best practices are often derived from an organization – which may be in an entirely different sector and have an entirely different set of circumstances – that successfully tried something for a few years, then a consultancy took another few years trying to codify the approach, and then you try implement it yourself for a few years. You’re now 7 or 10 years behind the moment the “best practice” was adopted. At the rate of change today that’s just untenable in our opinion. Case in point there is a series of great videos about Spotify’s engineering culture which have been watched – and probably copied – millions of times. Reality is, those are excellent and perfect for Spotify but you can’t assume they’ll be equally great for you.

Finally, and not surprisingly, our people are a huge part of that ability to keep transforming. We jokingly – and with a certain amount of pride – refer to ourselves as “The Island of Misfit Toys” here at Klick. Or perhaps the more PC-term would be “The Island of Digital Natives”. Many of our folks come here from organizations where they didn’t fit but they’ve found an environment at Klick that allows them to do some of their most rewarding and fun work.

HB: Now we’re getting into some of the juicy Culture stuff. Can you give me a few more examples about Klick’s culture?

JG: Many of the examples are in The Decoded Company. In fact, much of the initial rationale for writing the book was the idea that it would act as a recruitment tool and explain how we do things a little differently here. We have three basic beliefs that we’ve been able to live or imbue since starting Klick. Technology as a Coach springs from the idea that there is no excuse for a standardized, one-size-fits-all approach to growth, learning and development anymore. That may have been true 20 years ago but today we can use data and patterns to help coach us. Data as a 6th Sense is also about leveraging all the amazing data swirling around to help us avoid mistakes we’ve made previously but also to find unique ways to streamline processes, flows and projects that are unnecessarily inefficient. All of these enhancements allow our people to do more meaningful work and grow. The 3rd – Engineered Ecosystems will prevail over Hierarchies – is something we’re all seeing around us. It is how you design your teams and how collaboration can really work when its informed by data.

Those are systems or principles we’ve built the Klick culture on but we absolutely realize that Culture is really the only way to attract unique talent.

To that point, what’s remarkable is that we’ve been able to sustain a 40% annual growth in employees while having such rigorous eye on ensuring we hire the right talent – those Misfit Toys I referenced earlier – that its harder to get hired here than it is to get into Harvard. That’s not a boast, more a reflection of how many submissions we constantly get. So we absolutely merchandise our Culture to ensure we attract the very best talent. For example, and as you’ve seen, we have an ice cream fridge here at Klick.

 

Free ice cream whenever you want. Its just something we’ve always done. Well on one of our recruitment drives down the East Coast we took an ice cream van to a bunch of competitive offices and gave out free ice cream in exchange for a business card. We had lines around the block but it was one way of highlighting a quirky little thing we do here that does make Klick different.

HB: There’s a significant amount of talk about building an Innovation Culture or a Design Culture or a XYZ Culture in order to succeed in a Digital Transformation. What are your thoughts on that?

JG: Personally I think that many of those types of initiatives are destined to fail. In many ways they almost seem to be a response to a terrible experience so they’re implemented in a way that is culturally insensitive to the current organization.

Metaphorically I liken it to the aspirations you have when you create a garden. You can till the soil, fertilize it, remove the weeds, perhaps even decide where to build it based on the amount of sunshine. But at some stage nature takes its course. Certain flowers just aren’t going to grow in those conditions no matter what you do.

One of the phrases that we use in Klick Labs speaks directly to this. “You can’t order Innovation by the pound”. Just like you can’t say you’ll have 3 innovations by the end of Q1 if the conditions aren’t right. If you say you’re driven to innovate but your culture has no appetite or mechanism to accept and embrace failure its never going to happen. At Klick Labs we hold ourselves to no more than a 30% success rate on our experiments because we believe that any higher – say 70%-80% – would mean we weren’t pushing hard enough to do new and smart things. That’s just an example of calibrating your Culture in a realistic manner.

HB: Amazing metaphor and examples Jay. A classic question but what advice do you give your peers and clients grappling with these same issues?

JG: Probably two things. First honestly evaluate exactly what type of organization you are. Be brutal with that evaluation but ensure that you honestly appraise where your strengths and weaknesses lie. Secondly, is this “Transformation as a Project” or is this a bona-fide Transformation that becomes part of how you’re going to change internally and adopt a new mindset. Understanding those motivations and the organizational appetite for Transformation will allow you to more accurately set and manage your expectations and those around you.

HB: Anyone out there that you consider is doing a good job at this?

JG: Definitely. I think Amazon is an obvious example (note – this interview happened before the Whole Foods acquisition) and Jeff Bezos’ notion of operating to different event horizons is intriguing. Elon Musk is another one. Perhaps a little like JFK but he’s been able to attract a pretty remarkable bunch of talent to solve some big meaty problems. And then Satya Nadella over at Microsoft has done a really remarkable job turning that organization around from what it was when Steve Ballmer was at the helm. Innovation and fresh thinking seems more possible and likely at Microsoft than it was a few years ago. That’s all down to creating the right conditions, nurturing that culture.

The Incumbent’s Dilemma

 

By the time you read this post I am sure your eyes will be bleeding from the scads of ink devoted to Amazon’s purchase of Whole Foods last week.

Superlatives like “game-changer”, “genius”, “Bezos Brilliance” have been used by the legions of analysts, armchair and otherwise, on this channel and that praise is certainly justified.

Few, if any, other organizations have that magic mixture of chutzpah, leadership, strategic focus, vision – and lets not forget capital – to make an acquisition of this scale. If it wasn’t enough for many retail players to watch Amazon bulldoze into their backyard, many competitors saw their stock prices fall astronomically too. The Street was quick and merciless in adding another layer of anxiety.

The knives were definitely out for the incumbents

Social media has been just as quick in their ridicule.

The laggards, the asleep-at-the-switch leaders, the old school thinkers, the risk-adverse dinosaurs who must have seen this inevitable move coming were scorned mercilessly. After all the money and (submerged) stock paid to the C-suite and boards of Kroger, Sears, CVS, Costco, what possible excuse could they have to not have anticipated this?

Yes, this acquisition was probably inevitable. Many pundits met the news with a nonchalant shrug and “of course they did” and “Who else but Amazon could” but suggesting that all the incumbents were too busy sipping mint juleps at the country club to take action shows a more dangerous level of “disruptor sycophancy” than legitimate analysis.

Before I continue, perhaps it is important for me to paraphrase the Bard;

“I come to bury Cesar, not to praise him”

This isn’t intended as a vigorous defence of the incumbents.

Its incredibly valid to take shots at them for the decisions they have made – or not made – as Amazon inexorably and relentlessly has grown and spread into categories as diverse as cloud computing, voice, mobile, retail, grocery, automation and, oh yes, selling a few book along the way.

But here’s the rub…

You can’t just cut & paste organizations

This isn’t a cop-out but there genuinely is only one organization that has the unique set of circumstances and attitudes that gave rise to Amazon. Bezos’ attitude to “zero profit” for example, has been previously lambasted and questioned by institutional investors but there’s no doubt that mantra has played a significant role in being able to acquire Whole Foods. In a previous post on Culture and Leadership I made the comparison between Sears and Amazon – a pretty binary comparison – but it still stands.

Both organizations have different legacies of leadership and historical decisions. One has a founder walking the halls and there’s no denying the huge impact that has. The other has a corporate raider at the helm and that guides the decisions he’s made. The fortunes of both companies are an outcome of those differences.

Quite simply no two organizations share identical leadership, governance, culture, partner network, relationship with unions, points of distribution etc. So hammering all companies who cannot operate with the dexterity and deftness of Amazon is incredibly naive.

Mixed messages and mixed signals

Let’s be honest, we’re an (increasingly) fickle bunch.

We’re as quick to roll out pithy statements like “Fail Fast” and “The Best Way To Predict The Future Is Invent It” as we are to hammer stocks and fire CEO’s when they miss analyst predictions by as little as one cent.

You can’t expect ongoing, consistent (and hockey stick style) increases in your stock portfolio while asking leaders to try new business models, explore new technologies and create entirely new categories. Just like we cannot go shopping at Sam’s Club every weekend while simultaneously decrying WalMart’s role in the death of Mainstreet American retail.

We either have to accept – and reward – CEO’s for trying new ventures and failing at them or we have to stop berating them for merely making tiny “safe bets” refinements and modifications.

We can’t have it both ways.

It is infinitely easier to get it wrong than get it right

Armchair analysts are always quick to point out how “obvious” a strategy is with little recollection of how often organizations – and analysts like themselves – have gotten it wrong.

I’m old enough to remember when MySpace and Second Life were technologies that were going to fundamentally change society. And to remember the business media idolatry of Jeff Skilling, Marrisa Mayer, Jeff Immelt and, until recently, Travis Kalanick for their fantastic winning strategies and leadership.

And let’s remember Bezos himself hasn’t exactly been right each and every time. Amazon Fire anyone?

I remember watching this incredible scene from “Hidden Figures” and thinking of the parallels to running a business today.

Trying to return a man safely to earth in a time before supercomputers and server farms must have been as harrowing and perplexing as trying to lead a multi-national today and grappling with the impact of hyper-connected customers, AI and borderless commerce.

The potential to get it wrong – and the consequences of getting it wrong – should never be dismissively waved aside.

I didn’t start this post as a defence of the status-quo and as a hall-pass for incumbent CEO’s to fiddle while Rome burns.

I don’t believe that “Too Big To Fail” should be a moniker they get to wear with pride.

But neither do I believe that our fawning adulation for “Disruptors” and “Unicorns” is healthy either. Some of our most recently anointed Unicorns aren’t exactly living up to their hype.

Business is hard. For incumbents. And for upstarts.

Getting it right is f**king hard. Harder than most of us realize.

Certainly way f**king harder than Hollywood makes it seem.

What say you Dear Reader? Am I giving incumbents too much latitude? Which incumbents do you consider agile enough to survive the new business realities? Is it even possible for incumbents to survive the pace of change in business today?

Finally, I did want to acknowledge a whip-smart colleague of mine – Sarah Thompson at Cossette in Toronto – who challenged my thinking and my references in writing this post. Thank you Sarah for kicking my cranium.

Mimicry Is Not A Strategy

 

Quick show of hands if you’ve ever heard this in an off-site, Planning or Strategy meeting.

“We want to be the Apple of X”

“Can you give me a NIKE-style version of Y?”

The reference point is always the latest envogue organization, talked-about creative piece or Fast Company magazine article.

For a while the catch-phrase was “We’re the UBER of Z” but considering the recent departure of UBER’s CFO and their VP of Global Vehicle Programs, as well as a raft of scandals, the bloom has come off that particular corporate rose quite significantly.

Just to see how prevalent this particular scenario is, I turned to my old friend Google to run a few tests. In short I wanted to test my WWSJD or WWEMD hypothesis – “What Would Steve Jobs Do?” or “What Would Elon Musk Do?”

How to innovate like Apple returned 772,000 results.

How to innovate like Tesla, 1,510,000 results.

And the lowly shark? 396,000 results. Evidently I’m missing something here.

Interestingly, or amusingly, in those searches one of the top 5 results was an article written by Realtor.com – which speaks volumes IMHO.

Trust me, I get the appeal of trying to pries the wisdom of Jobs, Ives, Bezos, Buffet, Munger, Musk, Welch, Gates, or even Kalanick, free and leveraging that for your own organization. Who wouldn’t?

Truth is, you can’t.

One of my favourite thinkers on innovation Greg Satell frequently refers to this as “cargo cult” thinking which is such a wonderful metaphor. The term comes from reports following WW2 that certain South Pacific groups had constructed elaborate runways, airport structures and even fanciful outfits in an attempt to summon the god-like aircraft they’d seen drop supplies to the US Army during the war. Essentially these villagers were blindly mimicking behaviours and actions they’d witnessed and were (erroneously) concluding that they merely needed to do exactly the same and they too would reap the same rewards.

More recently I was discussing the very hot topic of how organizations can build an innovation culture with two of my favourite Kiwis Darren Levy and Neil McGregor. Their point, made in classically blunt New Zealand fashion, was that it was impossible. More to the point, there was no magical “innovation culture” that merely required a convenient 10 step process to manufacture and deploy. Quite simple your organization has the culture it has. Your role as leaders is to determine the aspects of your own unique culture that are impeding innovation from occurring and address those. It certainly wasn’t about doing what Apple does (or did when Steve Jobs returned) or printing off the top 10 secrets for entrepreneurial success.

That’s just not Good Strategy

Richard Rumelt, affectionately referred to as “the Strategists’ Strategist”, is even more direct in his classic book “Good Strategy. Bad Strategy”. In it he derides most strategic plans as nothing more than laundry lists of desirable outcomes. For Rumelt, good strategy means a willingness to recognize and define a challenge and having an executable and realistic plan to address that. Sounds straightforward and remarkably obvious but Rumelt’s point is that so few organizations are willing to do that and rely more on CEO charisma and vision than a honest evaluation of challenges and building a coherent plan to tackle them.

To quote him directly, “A good strategy defines a critical challenge. The purpose of a good strategy is to offer a potentially achievable way of surmounting a key challenge”

Quite simply it’s unlikely, even impossible, that the critical challenge facing Apple or Tesla or UBER or Facebook is not the same critical challenge facing you.

Even if you are miraculously grappling with a huge war chest of cash you need to spend, plans to integrate your solar business with your car business, an imploding unicorn or the ire of brands and businesses over viewability and appropriate content, chances are your business is not a cookie cutter of those titans.

Your leadership isn’t the same. Your partners, suppliers and vendors aren’t the same. Your contracts and negotiated deals aren’t the same. Your employees, your culture and the levels of employee passion and engagement certainly aren’t the same.

Let’s be honest, even those organization’s principal competitors don’t face the same critical challenges as them. WalMart’s challenges in beating Amazon in the online space aren’t the same. What Ford and GM need to galvanize within their employees and their culture is day and night from what’s required of Elon Musk and his marauders over at Tesla to win in the arena of electric-powered or autonomous vehicles.

Trust me I get the appeal.

These organizations and CEO’s have created enormous wealth, global prestige, accolades and fawning customers. Which CEO or leader wouldn’t want their name whispered with the same reverence and envy?

You still have to do the work.

On your own unique organization.

On your own unique critical challenge.

On your own unique achievable way to surmount that challenge.

The poster below hangs in my daughter’s bedroom.

 

She’s entering those delightful (dreadful?) teenage years where peer pressure, fitting in and running with the cool kids become the next chapter in her rite of passage. As we try to ingrain in her the benefits and wonders of individuality, I wonder if Oscar Wilde’s immortal words aren’t as prescient for leaders and organizations too.

Be yourself.

What say you Dear Reader?

HR versus Marketing – The Next C-Suite Confrontation

 

This post originally appeared on Branding Strategy Insider

As business has become more complex and more digitally-driven, the traditional roles and responsibilities of the C-suite have become increasingly interwoven and even confrontational.

In recent years C-suite titles have proliferated beyond all recognition and spurred many debates – Do organization’s really need a Chief Digital Officer or not? – and, more importantly, heated debate about where budget control and accountability should lie.

The overlap between the Chief Information Officer (CIO) and Chief Marketing Officer (CMO) has been well documented for the past decade. With so many emerging technologies and digital channels falling under the purview – and accountability – of Marketing, it’s hardly surprising that Gartner believes CMO budget expenditure will exceed the CIO expenditure this year. Even if there is a liberal sprinkling of hyperbole in all the usual forecasts and predictions, you need only look at the exploding LUMAscape for marketing technology and the ascendency of a CMO-as-technology-buyer isn’t a surprise. It is an inevitability.

In recent months, the number of highly-publicized and much derided snafus in the airline industry suggest to me another impending C-suite battle.

This time the battle will not be over Pixels, but over People.

This time the confrontation will be between Marketing and Human Resources.

Here are three areas where I see this playing out.

Purpose over Policy

Purpose has become one of the hottest areas in management thinking in the past few years. It has become a central mandate of Marketing in many organizations as executives seek new ways to differentiate themselves to prospective clients but also to prospective employees.

Popularized by Simon Sinek in his book “Start With Why” Purpose is typically seen as the ultimate articulation of why an organization exists, where traditional descriptors like Mission Statements defined what an organization was doing to become successful.

What’s more Purpose is seen to actually drive performance and help with both employee acquisition and retention. In their popular book “Corporate Culture and Performance” John Kotter and James Heskett drew significant parallels between organization’s with a strong Purpose and financial performance. And, as we all know, anything that positively impacts the bottomline gets CEO attention.

Historically this hasn’t been the domain of HR. Instead, HR has been more accountable for crucial tasks like labour relations, benefits and compensation, annual leave and annual reviews. These tasks center more on managing people within an organization rather than inspiring them.

In a Purpose-driven organization, the real opportunity doesn’t lie in articulating what is allowed…but what is possible.

Articulating that possibility lies firmly with the CMO today.

Culture as a Differentiator

Marketers spend their lives seeking to create – and market – a compelling differentiator to prospective customers. Tools like positioning statements and classic frameworks like the 4 P’s were built to determine and define these points of differentiation.

As access to markets and technology has obliterated the traditional barriers to entry in many categories, marketers have struggled to find those elusive differentiators. Even more elusive are differentiators that are sustainable and not easily copied by the competition. In many cases organizations are quickly realizing that their own culture is actually a point of differentiation and, considering how long it takes to nurture a great culture, it can’t be easily replicated.

Service-driven organizations are obvious examples where Culture is absolutely a differentiator. Consider how different the experiences at Starbucks, Southwest, Zappos and The Four Seasons are from their competition. But its not just service organizations where culture contributes to success. Internet behemoths like Reed Hastings at Netflix and Jeff Bezos at Amazon both cite their cultures as reasons their organizations have been able to capture market share and mind share so adroitly.

If culture can create meaningful and sustainable differentiation, and that differentiation drives customer preference and loyalty, it is inevitable that forward-thinking CMO’s will want to ensure they have a firm hand in both creating and nurturing their organizational culture.

Brand Experience = Customer Experience AND Employee Experience

In reality all brand experiences are a culmination of an expertly managed customer experience – and that’s often not feasible unless equal rigor is applied to the employee experience.

Simplistically speaking, marketing creates a promise in the market. But invariably it is employees who fulfill or fail on that promise when customers come calling. Case in point, United’s promise of “Fly The Friendly Skies” quickly became fodder for Senate hearings, late night comics and internet memes when their gate crew were anything but friendly. The disconnect between marketing promise and employee fulfillment couldn’t be starker.

For organizations that spend millions tracking metrics like NPS (Net Promoter Score) or instal core KPI’s like Gartner’s “Effortless Experience” the critical necessity to ensure the business delivers and over-delivers on customer’s expectations couldn’t be more important. And, for organizations where executive compensation is directly tied to NPS results, this all comes into very sharp focus.

It is not surprising then that employee experience initiatives are a rapidly growing area for consultancy engagements and F100 company investment. Both realize that spending time on internal audiences (employees) can be even more important than time spent on classic CX and UX endeavours. Author of the excellent book “What Great Brands Do” Denise Lee Yohn penned a great HBR article that outlined all elements of the employee experience journey and how focusing resources (and investment) on each stage would drastically increase not only the caliber of the staff an organization hired but also the critical level of engagement those employees would have.

If creating a world-class brand experience remains the remit of CMO’s, and without fully-engaged employees that’s not possible, it stands to reason that employee experience and engagement should fall under that remit too.

For the record, as a long-time marketing veteran my opinion is entirely subjective.

I’m certainly not debating the capability and competency of HR veterans, merely suggesting that responsibilities like employee engagement, culture, employee experience are going to become areas of sharper focus if organizations want to avoid the social media outrage currently aimed at the airline industry.

Ultimately collaboration, not confrontation, is the hallmark of any well-functioning leadership team. Just as the CMO and the CIO had to find ways to work together to map a successful path forward, the CHRO and CMO will need to find a way to harness the very best of their unique experience and individual acumen.

In the future a “people, not pixels” mantra will – in my opinion – be a source of competitive advantage so marrying Marketing and Human Resources will be absolutely critical.

What say you Dear Reader?

Is this confrontation already brewing? Does Marketing have any legitimacy in this area? Does HR hold all the cards? Where does it makes sense for these two groups to share accountability for culture development?

I really do want to hear your opinion. Please leave your comments below.

Culture & Digital Transformation: The Beauty Of Entrepreneurial Spirit At L’Oréal Canada

 

The L’Oréal Group is a global beauty giant spanning many of the best known and most beloved beauty brands on the planet. A veritable “who’s who” known to consumers and professionals worldwide, the L’Oreal Group includes brands like L’Oréal Paris, Vichy Laboratories, Maybelline New York, Garnier, Lancôme and Yves SaintLaurent.

Recognized for their deep history of scientific research and innovation as well as a rich history of memorable marketing and advertising – “Because We’re Worth It” is one of the most enduring advertising slogans globally – The L’Oréal Group have been operating in Canada for over 59 years and employ over 1,300 Canadians.

I caught up with L’Oréal Canada’s Chief Marketing Officer Stéphane Bérubé in their beautiful downtown Montreal offices to discuss how a 108-year-old organization is able to remain relevant in today’s hyper-competitive market.

HB: Stéphane, Thank you for taking the time to chat today. As CMO for over 39 world famous brands, can you talk about your mandate here at L’Oréal Canada and how digital is transforming your organization?

SB: Sure. Firstly let me set the record straight. I firmly believe that there is no separation between a digital and a traditional business – there’s just operating a business in a digital age. Which is what we’re doing here at L’Oréal Canada. I’ve been at L’Oréal in various roles for 15 years, including GM of the L’Oréal Paris business, so I’ve seen this organization transform before. Today our transformation is about accelerating the digital ability across the company at every part of our operations.

HB: Can you be more specific about what Digital Transformation means at L’Oréal Canada?

SB : Specifically, we have three key Canadian objectives that can only be reached if we’ve built strong digital capabilities in everything we do.

Drive 20% of our sales online. This is about building a great ecommerce capability and doing that in conjunction with our retail partners across the country. L’Oréal Canada enjoys a great relationship with longtime partners like Jean Couteau, London Drug, Shoppers Drug Mart who bring an expertise and a scale we’d never hope to replicate. Our online efforts are about bringing our knowledge and our unique expertise in beauty care to the plate so we can accelerate the growth of the category together.

Gather rich data on 50% of our Canadian customers. We’re driven to build meaningful data on our customers to create an appropriately personalized relationship with them. More than just buying habits and transactional data, this means elements like skin type or preferred hair colouring system. This isn’t just about building marketing programs but also learning from our customers so we can better build new products and innovations.

Lastly, we want to create 100% LOVE for our brands and products. This objective has been about switching our thinking from a traditional investment in creating awareness to building real, genuine engagement with our customers.

None of these are possible unless our digital skills and abilities are world-class.

HB: Those are very aggressive goals. How has the organization had to change to deliver on this?

SB: It starts with a very deliberate “up-skilling” of our internal skills and expertise. We wanted to ensure we had the right skills internally and were building the right expertise amongst our staff. That has meant both hiring experts in social media, CRM, E-Commerce and, increasingly, Data specialists but just as important an increased emphasis on training too.

L’Oréal Canada’s digital training starts from the very top of our organization and goes across all our functional teams from Sales, Operations, Logistics and, of course, Marketing. This isn’t just in Canada but its a global commitment starting from our executive leadership team.

Every aspect of our organization has a robust training program to make sure we’re current in all things digital. With the speed that digital changes in terms of technical details and complexity, this training is absolutely critical.

Beyond hiring and training our people, we’ve also built new in-house capabilities as well. We now operate our own content factory to support our social media efforts. We’ve also built our own trading desk as well to ensure we could control our performance marketing investments.

HB: I’m hearing an amazing global commitment to being a digital first organization and certainly no shortage of investment in skills and capabilities. Has that investment paid off in Canada yet or is the return still to come?

SB: Absolutely there have been several wins for us. Our L’Oréal Paris “Genius App” has been a runaway success allowing customers to “virtually” try out various L’Oreal products before buying them. We’re very proud of that.

Our La Roche-Posay brand has created a UV patch for parents to put on their kids before they go and play in the sun or at the beach. It is actually a piece of connected hardware that tells parents when they need to re-apply sunscreen which is super simple but very very useful for parents.

And we’ve actually had a bit of a Canadian coup with the recent Facebook F8 launch. On the same day as F8 launched, L’Oréal Canada released a bot that allows people to send L’Oréal gifts to their friends using Facebook Messenger. We were overjoyed to seen as a pioneering brand by Facebook who went so far as to feature us on the day that F8 launched. This was fantastic recognition but it was the fact that the idea moved so quickly from ideation to launch that I was most proud of.

In four short months, the Canadian team, working with our partners Automat Technologies here in Montréal, conceived this idea, created it and then launched it. That was a great example of our way to move at the speed of digital.

HB: These are excellent product examples. How else has Digital transformed your efforts at L’Oréal Canada?

SB: In our Marketing efforts we used to equate our advertising or media investment with the health of our brands. While we still spend a considerable amount in media with some of our larger brands, some of our Professional brands like NYX are mostly driven by UGC content and the use of Influencers today. For L’Oréal to participate and remain topical and relevant to our new customers, we’ve had to embrace the power of “how to” videos on YouTube or inspirational images on Instagram as new channels and tactics. These are just other examples of how digital has changed how we advertise or go-to-market today.

HB: Digital consultancy L2 regularly commends L’Oréal for being a Digital leader but that takes more than hiring and training. What do you believe has allowed a global company that’s over 100 years old to embrace Digital like L’Oréal has? 

SB: (Laughs) You’re right that it has taken a lot more than hiring and training to get us this far. We recognize that we still have further to go but we’re proud of how much progress we’ve been able to get in this digital transformation so far. An important part of our success actually goes back all the way to our founders. That is this notion of entrepreneurship and entrepreneurial spirit that really started the company in 1909. From the very beginning our founder Eugene Schueller was relentless in his research and innovation in beauty, hair and fashion but he was equally entrepreneurial in opening up new markets to L’Oréal products. For example L’Oréal products were already selling in the US and Canada a decade after the company started. That kind of international expansion was almost unheard of in 1920. He was a true entrepreneur and, as a fifteen year veteran of this company, I can say that entrepreneurial spirit is very much alive in our DNA and in our culture today.

We’ve always just placed more emphasis on our People than our Process here at L’Oréal and that’s why values like Passion, Innovation and Open-Mindedness are so important to us, and our success. We actually see our business as an adventure – we even have adventure written in our values – and so we want our people to have the autonomy and the desire to keep pushing the envelope.

These values – which really came from our founder – have created a very unique managerial style. In some ways we really do think of ourselves like a start-up that’s always pushing forward. We’re just a 108 year old start-up.

HB: Lots of company’s talk about acting like a start-up. How is L’Oréal Canada able to do it when so many others aren’t?

SB: Some of it comes down to your history which you can’t invent or make up. We’re fortunate our founder was an inventor so the idea of “test and learn” was not a new behaviour at L’Oréal. If anything, it was here from the very beginning. But we have definitely had to revisit some of these values and behaviours as the company became bigger and more successful. It isn’t just about “test and learn” but about being comfortable with failing too. Luckily our organization is about rewarding employees for trying and failing versus not trying and playing it safe. That definitely attracts – and keeps – a certain type of person here at L’Oréal.

But we certainly aren’t perfect.

In fact, the idea of Perfection is one that we’ve struggled with over the years, partially because of the category we operate in and the products we produce. This desire for Perfection meant that we weren’t always comfortable launching something that was anything less than brilliant. We’d review, analyze, debate, reflect and so on. Well that kind of behaviour can’t exist in a digital world. We were losing opportunities and moving way too slow. Now, that doesn’t mean that we don’t still strive for Perfection but we’ve definitely gotten way better at moving faster, at getting products to market quicker, like our Messenger bot for example. It doesn’t need to be Perfect when it launches. That’s what our test and learn is for, to keep making it better and to do it faster.

The other part, which has surprised me I’ll be honest, is a genuine capacity by L’Oréal employees to willingly change themselves. The truth is, company’s don’t, or can’t, transform unless the employees inside the company are willing to transform themselves first. And that’s something that I’ve seen happen all the way down from our CEO to our newest recruits. The way everyone embraced this transformation was incredible and we did this when the company was successful. What was even more amazing that we didn’t wait to transform, we did it when we were growing market share, were cash rich and our stock was almost at a record high. Few companies elect to transform when everything’s going well. That’s another aspect of the L’Oréal culture that makes me very proud.

HB: That is incredible. You’re right most organization’s wait for a crisis or a decline to spur a change. L’Oréal made the change when everything was going well. Amazing. So what advice do you have for your fellow CMO’s who are staring down the barrel of a Digital Transformation? 

SB: For me I hate giving advice because there really isn’t one recipe that fits every organization or company. Perhaps I’m fortunate that our company has always been comfortable with reinvention. That made it easier to align our people to a transformation than it probably would be at other companies. Here’s what I would say. You have to find something in your history, in your roots, that has made your company successful. A strength that is yours but that can be reinvented for a digital age. We’re still L’Oréal but we were able to use our strength of entrepreneurial spirit to change ourselves. You have to find something appropriate in your organization that will let you change.

The other piece of advice I would give “Don’t Wait”. There will never be a better time to start your transformation than right now.

The market is not going to get less competitive and complexities in this area are only going to increase. Start now. Don’t wait.

____________________________________________________________________________

This post is part of an ongoing series exploring the intersection of Culture and Digital Transformation – and the challenges organizations face when those two forces meet. This challenge will, I believe, shape the business agenda for the next decade so we all have a lot to learn. 

If you’d like to share your story, please DM me on Twitter @ZimHilton or reach out via LinkedIn.

Find the rest of the series here:

Culture & Digital Transformation: On The Frontlines with SickKids Foundation

Culture & Digital Transformation: How a 145-Year-Old Insurance Company Became A Digital Darling

Digital Transformation & Culture : The Coca-Cola Canada Story

“Do, THEN Say” – Action Is The Cardinal Business Rule

 

It is Monday April 24th 2017 and I’m anxiously waiting for which poor organization is going to run headlong into the societal wood-chipper known as social media this week.

After all, we’ve had almost an uninterrupted six weeks of some poor CEO or beleaguered CMO doing the Texas-two-step when their organization has publicly dropped the ball and done something that’s raised the collective ire.

A US airline that has shown us that flying them is anything but friendly. And their CEO, who despite winning Communicator Of The Year in March from PRWeek, repeatedly seems unable to get the basics of crisis management right. Though you have to give them kudos for getting re-accommodating trending on Twitter.

A carbonated soft drinks manufacturer who chose to co-opt some of the most polarizing and controversial debates occurring today. Couple that with a high budget TV execution starring a celebrity better known for Revlon not Revolution and noses got rightly out of joint.

A juicing company that has become entirely irrelevant overnight when it was discovered that there actually was no need to juice anything when merely squeezing their juice packages was sufficient. This faux-pas made even more ironic considering they’d managed to raise more than $120 million in VC capital with their business plan.

While each of these high profile stories provided social media oxygen to the “outrage orchestra”, and had numerous marketing folks write lengthy op-ed pieces, this really runs way deeper than a seeming disconnect between advertising content and real life.

Organizations seem to have forgotten the cardinal business rule that you do first, then you say.

And that you need to be doing this at each and every level of your organization.

It really is that binary.

Don’t use phrases like customer-centric when your call center folks are evaluated on the speed with which they get customers off the phone. Or when you’d rather push human beings to a chatbot that is unable to answer even the most basic of customer questions.

Don’t talk about your environmental and societal commitment if you remain determined to treat water as an element that has a market value rather than a resource that is a basic human right. Or you extol the virtues of inclusiveness and diversity yet your executive team has no representation from minorities, women or LGBT within it.

Please don’t talk about “open innovation” or “ideas come from anywhere” if your decisions are still determined by the person with the biggest title or most tenure in the room. Or, if the senior people doing more talking, than active listening, in your meetings.

Please don’t generate whitepapers or thought pieces on the workplace or workforce of the future if your own hiring practices include online screening for keywords on a CV or if you use blunt employee surveys as the only yardstick by which you measure your own culture.

Don’t enshrine values like collaboration on your website and employee handbook when you really mean consensus. Or reward collaboration when your organization actually needs the disruptive power of cooperation more.

Avoid issuing Press Releases talking about your open and innovative Culture when your executives are ill-prepared to follow Tom Peter’s famous maxim of MBWA (Management By Walking Around) and the notion of “open door” is anathematic to your leaders.

I am constantly surprised that we live in a world when anything can be verified in seconds via Google and any soundbyte can reverberate on the other side of the planet in seconds via social media, and yet we still expect customers to act as dumb and blind recipients of our messages? Are we really surprised to see the declining trust in institutions so eloquently captured in Edelman’s Trust Barometer?

In truth actions have never been more important.

Talk, sadly, never cheaper.

Perhaps if our businesses and our leaders were more concerned about the veracity of their actions, than the velocity of their messages, we might just see customer cynicism, employee skepticism and social media outrage disappear.

What say you?

I must acknowledge my friend and all-around good egg Jay Chaney for the “Do then Say” quote. I’ve seldom heard a more profound expression for business and for life. Nice one mate.

Culture & Digital Transformation: On The Frontlines with SickKids Foundation

 

Toronto’s Hospital for Sick Children is globally renowned as one of the most remarkable pediatric facilities in the world. To ensure that the hospital is able to continue to provide its incredible care and research efforts means a transformational approach to how SickKids positions and talks about the brand, and how donors and employees experience the brand . Those activities are driven through the efforts of almost 200 employees at SickKids Foundation.

I met with Mark Jordan, Director, Digital Projects on the Brand Strategy & Communications team at SickKids Foundation to discuss how they’re becoming more digitally adept and how has the organization has built an enviable culture in the charity and not-for-profit sector.

HBMark, what exactly is your role and responsibility here at SickKids Foundation?

MJ: As part of the Brand Strategy & Communications team, I am responsible for leading enterprise-wide projects that predominantly involve marketing of the SickKids brand. As succinctly put as possible, our broader Brand Strategy team’s role is to elevate the SickKids brand, the propensity to donate, and the likelihood to spread the word through the experiences and content we create, and the engagement we are able to achieve as a result. Our team also supports all of the fundraising teams at the Foundation as their marketing ‘engine’.

When I started here 5 years ago, I was responsible for shaping and leading the first of three waves of deepening and improving our digital capabilities. The first wave  involved a vision and a strategy for the digital experiences and places we had already built a presence and engagement in (Facebook, Twitter, LinkedIn, YouTube, our website). The second wave involved deepening the sophistication and maturity of our efforts as well as the experiences and content we were creating, and rolling out things like social listening tools and rationalizing our setup and what we were measuring in tools like Google Analytics. We are now poised to start  building on 12 core digital capabilities we believe will underpin the entire organization moving forward. Those capabilities range from donor facing (e-commerce for example) to internal workplace sharing and collaboration. Overall, we’ve got a strategic direction that will focus our efforts over the coming years, and that perhaps most importantly has buy-in and ownership across the organization.

HB: What does “digital transformation” really mean within the context of your business?

MJ: First and foremost, it is about setting the benchmark for what we mean by ‘transform’. That starts with a donor-centric view. It’s about recognizing that our donor expectations don’t exist in a vacuum just because we’re a charity. That means that we can’t be benchmarking ourselves solely against the other amazing charities in Canada or around the world for that matter. If we implement a commerce experience, our donors compare that to Amazon. If we create a donor services experience, our donors might compare that to the experience they have with WestJet. The bar that we set for ourselves is the same bar that other organizations outside of the non-for profit space are looking to exceed.

Overall, we are transforming the brand from a charity brand to a performance brand, like a Nike or an Adidas.

That transformation needs to be reflected in all the experiences a donor or prospective donor, employee or partner might have with us.

The opportunity becomes delivering that ambition within the natural constraints of our own business. When we transform it has to be with a very clear and unambiguous objective and a goal that drives the transformation.

HB: What objective has been set by SickKids Foundation? How is this driving your organization? 

MJ: We are about to embark on the most ambitious fundraising campaign in the history of SickKids, and indeed in the history of healthcare in Canada. In order to propel SickKids to be at the forefront of the transformation of paediatric healthcare delivery, we are looking to raise an unprecedented amount in donations over the next five years. An ambitious goal to be sure. SickKids has a track record of winning, and we know that we’re up for the challenge.

What does that mean in real terms each and every day?

It means a concerted effort on each of our core pillars that underpin our digital vision: Experience, Culture and Tools. Experience refers to the efforts that envelop our donors and we have to constantly be looking to raise the bar on ensuring we earn their donation by delivering incredible experiences. Culture is how we enable our employees to ‘walk the talk’ in all areas and functions to help deliver those experiences. Tools is the technology layer that enables the experiences we create, through things like intelligent manipulation of data, internal collaboration tools, and integration of donor experiences.

As you can appreciate we operate a very lean operation so we have to maximize every single point.

HB: Can you talk about some of changes and what you’re actively working on?

Everything communicates – SickKids have even emblazoned the new values on the cutlery in their staff kitchen. Ingenious reminder and reinforcement. 

MJ: We’re very fortunate that our sector naturally attracts very passionate employees and equally passionate donors. Unlike perhaps our colleagues in the private sector, we strike a deep cord with both and that’s definitely an advantage. As such, we regularly score very well in the area of Donor Experience and the way we engage and nurture our donors. We literally couldn’t exist without them so that’s something we never take for granted. Scoring well in this area is wonderful but the challenge is to never become complacent. Back to my earlier comments about benchmarking ourselves against the best in class, we’re paying particular attention to ensure our Experiences are always human and simple.

We can’t make it hard to donate, participate, fundraise or buy from us. Every touchpoint is an opportunity to sustain and build upon our high donor experience ratings.

We’ve been working very hard on the Culture component too. Building on the momentum we’ve created with “VS”, and looking to other organizations in the private sector, we’ve recently launched our Employee Promise. Like other organizations we have a great set of values.  Turning those into real, tangible expectations of behavior is something we have looked at more closely as we have transformed the external-facing brand. The alignment between values and behaviours have historically been more implicit than explicit. I’m proud to say we’ve recently unveiled a new well-defined set of behaviours to the organization and they’ve gotten a great reaction.

Our HR Director has been a real champion of this and it’s been great, as part of the Culture working team, to see these articulated and shared internally. Interestingly we took some of our inspiration from our massively popular “VS” brand platform which has really done an incredible job positioning SickKids as a true world leading facility. Taking a page from that attitude and tone, we’ve crafted behaviours which are inspirational but speak to the very heart of the Foundation.Among those, On the Frontlines, Not the Sidelines”, “Act Like A First Responder are very genuine behaviours here, and now we’ve made them more explicit in the context of where we are going as a brand and as an organization.

 

The roll-out of these new behaviours is just underway. Just as we’ve done with our donor journey, we’ve started to map our employee journey from talent spotting and hiring through to reviews, succession planning and even areas like exit interviews. Now the task is to deploy them and keep monitoring, modifying and refining them in the day-to-day actions of our colleagues.

HB: That’s a very audacious move. How do you plan on actually making this happen?

MJ: It will involve the whole organization. Working at the Foundation is a privilege that we don’t take for granted. Beyond articulating the behaviours themselves, we will be looking to highlight examples of how we are acting to live these behaviours every day. In certain areas of the organization it might be easier for employees to see themselves in these new behaviours.

Many of our donor facing roles do much of this intuitively, back to my earlier comment. The responsibility as managers, leaders and the Culture advocates is to ensure that our back-office colleagues understand the intent of these behaviours for their important roles.

Inherently a behaviour like “Act Like A 1st Responder” means being agile, responsive and delivering on promises. That’s something that everyone from Reception to our Accounts Payable can understand and get behind.

 

I’m also having to think about my own behaviours and see which of them I can dial up in line with what’s expected here now. One of the new values “Treat Every Relationship Like A Donor Relationship” has particular resonance with me. I see myself and our team at the Foundation as ambassadors for the brand every day. One example of this for me, in terms of personal behavior, was when I and a group of Directors were out for lunch at a restaurant that had just opened up around the corner. At the end of the meal Itweeted mythanks to the restaurant. Amusingly, in this social media world, that tweet turned into an exchange between myself and the restaurant and then an introduction to my corporate colleagues at the Foundation, culminating  in a $10,000 donation, and now an ongoing multi-year corporate partnership. I call it ‘the $10,000 tweet’. It’s a great personal example of taking every opportunity to use every touchpoint as a way to build a relationship. You never know where a conversation, or a tweet, might turn into something bigger. On the heels of that story, I’ve made a mental note to tweet more. (Laughs)

HB: What advice would you give your peers in the not-for-profit space or those going through a similar experience?

MJ: The one reality we have to deal with is budget restraints that our private sector colleagues may not have as acutely. This can be viewed as a constraint or, on the positive side, a way to really  focus your attention on the things that are most important.

We may not have the same technology purchasing budget as a bank but we have an  incredibly engaged team  of employees who love what they’re doing and the impact they’re having. That’s a distinct advantage we have and its up to us to harness and focus that.

The other is patience. Even within this environment it’s a concerted and deliberate process to define those winning behaviours. Now when we deploy them and learn where the pressure points are, we’re going to have to keep learning. modifying and working them through. That’s okay and we expect it. The great thing is we’re all excited about the momentum we have already created for SickKids. This will just accelerate it.

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This post is part of an ongoing series exploring the intersection of Culture and Digital Transformation – and the challenges organizations face when those two forces meet. This challenge will, I believe, shape the business agenda for the next decade so we all have a lot to learn. 

I intend to highlight organizations that are uniquely traversing this challenge and share their stories.

If you’d like to share your story, please DM me on Twitter @ZimHilton or reach out via LinkedIn.

Culture & Digital Transformation: How a 145-Year-Old Insurance Company Became A Digital Darling

 

The insurance industry in Canada is unlikely to be the first place you go to find examples of innovation, transformation and disruption. However it is within a mid-sized 145-year-old insurer from Waterloo, that some of the most intriguing category innovation is occurring.

Since Economical Insurance launched their direct-to-consumer offering Sonnet in May 2016, the organization has been receiving praise and plaudits from the industry and from Canadians who genuinely feel this is an entirely different type of Insurance organization.

I sat down with Economical Insurance CMO Michael Shostak to talk about driving business and cultural transformation and what a “sleepy Waterloo insurance company” figured out to leap-frog the category.

HB: The Sonnet story has been playing out in the media as a real digital disruptor, can you give me some background on that evolution within Economical?

MS: Absolutely. It’s important to put Sonnet in context of our overall business direction. Before I joined, Economical’s board made a decision to demutualize the company – essentially so we’d have different options available to us to drive growth. The direct-to-consumer model showed real promise but it was always going to be in addition to our traditional broker model. The challenge was to find a meaningful way to build that consumer business.

HB: “Going Digital” seems like a natural solution to that challenge. The Sonnet proposition seems much deeper and broader than that.

MS: Digital was a natural conclusion from the market assessment exercise we went through. Operating in such a large global category, with many de facto standards, means that many of the platforms and processes that power a digital solution already exist. So we purposefully chose to not build anything proprietary or in-house. We wanted to spend our time sweating the details of how we delivered this new service versus creating new versions of technology that already existed. That started with a Brand Purpose exercise to crystalize our thinking and to align the organization on exactly what it was we were creating.

The first step was foundational but very profound. All aspects of the business had to align on what we meant by “customer” – after all for 145 years “customer” meant different things to different people across the company, from broker to end consumer. Following that, what would be our guiding principles in attracting and dealing with that customer.

For me common language is the first demarcation of any cultural change.

Fortunately that exercise was less turbulent than I anticipated. There was a genuine belief that to bring customers over in a category where switching is low and involvement is typically even lower, would require more than just opening a digital channel. We needed a different proposition. We took inspiration from Saturn’s “Different Type of Car Company. Different Type of Car”. We needed to be – and act like – a different kind of Insurance Company. That drove some very powerful ideas which we crystalized into two thoughts. One – we care enough to change everything. Two, and you see this emblazoned on our walls, “Inspiring Customer Confidence” Those mantras gave us permission to start building out our new offering in a meaningful way.

HB: Classically, words on a wall seldom transfer into new behaviours and actions. Particularly in a 145-year-old organization. How did Sonnet avoid that trap?

MS: True but we had a great combination of executive alignment and commitment to experiment in building this out. In addition our board and C-suite include a fair number of executives with varied backgrounds from outside the industry. That immediately gave us a different perspective and different level of executive sponsorship.

Changing everything can feel like an enormous cultural task. We needed to be judicious. One of the first actions we took – and this took a real leap of faith – was to build out a hybrid team of Economical insiders paired with fresh-eyed “outsiders and newbies” to start creating the Sonnet experience. Essentially we took experts with diverse experiences and expertise and told them “Go build something that’s going to Inspire Customer Confidence” I remember early meetings where those hybrid teams would discuss how much latitude they really had to change things. Naturally people would say “Can we really drop this clause if it’s bringing in revenue?” The answer would be “If its not inspiring customer confidence, it has to go and we’ll find a way to address the shortfall” I was pleasantly surprised how quickly this new attitude took root. It actually gave us proof that this could work.

One meeting, in particular, stands out when our colleague from Legal pushed back on a certain decision because he felt it didn’t inspire confidence.

When Legal began championing this new behaviour, it was a genuine “mic drop” moment for me.

As you can imagine that story has subsequently become part of the company mythology and I’ve heard numerous colleagues reference it when they talk to their teams about the new behaviours we expect at Economical.

HB: Brand Purpose. Brand Mantra. These are typically the domain of Marketing. How have your fellow executives helped spread this across the organization?

MS: I’ve been very fortunate to have ongoing encouragement and support from across the ELT. Both our CEO and CHRO saw the value in having a clearly defined Brand Purpose not only for external purposes, but also as an internal rallying cry for employees. One of our priorities is to develop a “One Economical” culture that helps connect the company across diffent business lines and regions, while acknowledging that each will have its own unique personality. Brand Purpose, along with our company Values, gives us the foundation to achieve that. The partnership between Marketing and HR has been pivotal in this respect.

HB: Launching Sonnet to the public is only the first step in your transformation journey? Can you talk to me about keeping that spirit alive with Economical?

MS: We’re engaged in a multi-phased transformation of our business that began with the decision to demutualize. While we may have deliberately prioritized a direct-to-consumer business as our first step, it was always the intent that we’d be embarking on a similar transformation of the existing broker business. Of course it wont be as radical, but the sentiment of inspiring customer confidence is an amazing filter for looking at enhancements across the business. That 2nd Chapter has just begun.

Several things have helped keep the flame alive. One we’ve been engaging in a multitude of small initiatives across the organization to deliberately highlight this wasn’t just about launching Sonnet. For example we contemporized the Economical website from the outdated version that had preceded it. A clear signal of change. The manner in which we communicate across the organization has changed from old-fashioned news bulletins to slick video segments featuring our executives discussing topical events. Employees are actually engaging with those more than ever before. We’ve also seen great success infusing the informal networks that exist in any organization with our war stories from Sonnet – the Legal story I mentioned earlier is a great example. And what’s helped immensely is that several of the Sonnet folks have returned back to Head Office to help craft Chapter Two. They’ve become carriers of the new culture and visible examples of acting and behaving differently here.

It hasn’t just been one thing but a combination of activities that have legitimized and confirmed Economical is transforming it business and its culture. It’s the nudge model of change and its worked for us so far.

HB: That’s remarkable. The organization seems to have genuinely embraced this transformation. What advice for your peers concerned about how they transform their businesses, particularly the large institutional types?

MS: Start small. Create multiple small initiatives that signal change rather than some grand whole-scale reinvention. We’ve all experienced the dreaded desk drop of a T-shirt, coffee mug and screensaver with a new mantra that, twelve months later, has effected no new behaviour. The other benefit of small is its less intimidating. For employees at all levels. Enacting big change can often slow an organization down and create unnecessary, and unhelpful, anxiety. Small and distributed changes would be my advice.

HB: We began by talking about Sonnet as an example of Digital Transformation in Insurance but your story seems more about Culture as the Transformation.

MS: It’s actually both. Sonnet is a digital transformation for sure but there’s nothing particularly unique about how we’ve tackled that from a technology perspective. When folks ask me “How were YOU able to do this ahead of some of the larger, more expected players in the category?” I go back to a simple Venn diagram I always use. If you can 1) intersect an unmet customer need – and the unmet part is critical – with 2) a changing business model and 3) an enabling technology, you’re golden. Do it with 2 out of those 3, you’re likely to be successful for a while at least.

In our case the changing business model wasn’t going direct-to-consumer, that’s not novel. Our changing business model was about how we’d go direct.

The “how” was entirely driven by our people and that needed us to refine our culture in order to succeed.

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This post is part of an ongoing series exploring the intersection of Culture and Digital Transformation – and the challenges organizations face when those two forces meet. This challenge will, I believe, shape the business agenda for the next decade so we all have a lot to learn. 

I intend to highlight organizations that are uniquely traversing this challenge and share their stories.

If you’d like to share your story, please DM me on Twitter @ZimHilton or reach out via LinkedIn.