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.

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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

“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.

Digital Transformation & Culture : The Coca-Cola Canada Story

 

The Coca-Cola Company is undeniably one of the most iconic businesses in the world. Approaching its 131st Anniversary in May, Coca-Cola is available in 194 of the 196 countries in the world, making it the most universal soda beverage on the planet.

Renowned for its marketing prowess and its relentless focus on delivering brilliant experiences for their consumers, I was fortunate to sit down with Coca-Cola Canada’s VP of Integrated Marketing Communications, David Allard, to discuss how Digital Transformation and Culture intersect within the Coca-Cola Canada organization.

HB: Give us some context for your role and responsibility here?

DA: When I joined Coca-Cola Canada nine months ago, my initial role was to lead Marketing Services, including driving the digital marketing agenda for the company. Since then, as we looked at the Marketing organization, my role has morphed. We always have to be looking to the future, and what that means for structure, capabilities and how we work with our bottler partners, our customers like WalMart, Loblaws and McDonalds and, ultimately, our consumers. The scope is extensive.

HB: Digital Transformation has almost become a cliché for any project that has a digital component to it. How do you define it here at Coca-Cola Canada?

DA: Too often “Digital Transformation” can be decoded internally as unlocking marketing opportunity. And when you’re responsible for delivering meaningful and relevant experiences to your consumers, Marketing is definitely the first stop on the bus. The larger opportunity of Digital Transformation is how we look at solving problems for our customers and our consumers. In real terms, that means looking at historically siloed aspects of the business and working in a truly collaborative fashion to break those down. Silos that may have formerly existed between IT, Key Account Teams, Operations etc. So while there’s nothing wrong with starting with Marketing and working back into the organization, it doesn’t always have to be an organizational-wide initiative to gain traction.

HB: Collaborating locally, and even globally, with the labyrinth of customers you have must make for an interesting level of collaboration. Talk to me about that dynamic.

DA: It certainly is. Particularly on two fronts. One is looking at how Digital helps us add value to our customer relationships with the WalMarts and so on. Their digital teams are also aggressively looking at how they execute their own digital transformation so there’s an immediate opportunity for shared value right there. Two is how together we add value for our consumers. Delivering those meaningful consumer experiences together.

HB: You’re a successful 130 year old organization. Is this a Culture that embraces the speed of change Digital Transformation is creating or are there elements culturally that are more methodical about change? 

DA: To exist for that long and for our brands to have the stature that they do, change is part of our DNA. But it is more about agility. What has become very apparent globally is our increased emphasis on becoming a learning organization. We have a core value of “acting like an owner” which is easy to see as words on a page. But we’re reinterpreting that value, particularly as it relates to how we look at failure and, importantly, how we look at failure as a way to learn faster. For example in some of our briefing processes we’ve deliberately added more inputs for organization-wide learning, rather than just the traditional marketing research and tracking metrics, as a way to capture and share those lessons and failures more quickly. That’s a new behavior.

HB: Cultural change like the kind you reference needs buy-in, endorsement, executive sponsorship to actually occur successfully. Talk to me about that sponsorship here at Coca-Cola Canada?

DA: The most visible endorsement of this culture change is actually in the area of talent. There’s a deep understanding from our executives that if we want to be different tomorrow then we need to hire differently than we have in the past. And that we need to align the entire organization to the fact that the talent required for the marketing team of the future is very very different. Interestingly, because the templates don’t exist for these types of roles, one of the greatest learnings for me has been the conversations across the company to try and define what is that resource, that new skill set, that different type of individual we want. Is it an IT person or a brand manager? Well actually its both – in one person.

At a global level, watching the hiring of David Godsman as Chief Digital Marketing Officer for the entire global organization shows that this talent recognition starts at the very top of Coca-Cola. We see it here in Canada too. It really feels like we’re very linked up in how we’re seeing the talent needs for the future.

HB: So how are you spreading that new way of thinking and acting across the organization here in Canada?

DA: I think it starts with a tension that I believe is uniquely Coca-Cola Canada. That tension between the stature of our brands and the authenticity in our Culture. Culturally that authenticity means genuinely empowering our people to do the best work of their lives but also recognizing that diversity is an active part of how we work together and solve problems together. So the tension between our aspirations and our culture is where the greatest opportunity sits. It is also going to, ideally, be the greatest enabler of our success.

The other gift we have at Coca-Cola Canada is this incredible global system we can go out to and see what’s worked in other markets and how they’ve tackled these changes. Which means that, like our packaging, we may be 90% globally dictated but it’s the 10% local fingerprint that gives us the agility we need.

HB: Talk to me about how you see the values of Coca-Cola Canada being redefined or reimagined to fit this digitally-transformed organization you’re creating here.

DA: Our values of Collaboration, Acting like an Owner, Inspiring Others have gotten to where we are today. So it’s not about changing those values per se but how each of us individually interpret those values, that will make the difference for the future.

Here’s an example. We recently had a meeting with the head of our North American bottling partners and he talked about pushing the boundaries and asking for forgiveness. His mandate to his people at the bottler was remarkably similar to our IMC idea of learning from failures. That’s when you know the values are genuinely pervasive and intrinsic across Coca-Cola. As a leader I find that inspiring.

HB: As a leader, a culture carrier, what do you see is your role to “walk the talk”? What are you doing to manifest these new behaviours?

DA: Listening “more actively” is the most important behavior for me personally. The other is this idea of acting like an owner; holding myself accountable to be more rigorous in questioning why we do certain things. Being courageous in those moments instead of falling back on process or trying to overly-align everything. If we really aspire to these meaningful experiences for our consumers and customers, then we can’t be afraid to ask questions and challenge the status quo.

More broadly in Canada, we’re moving to a place where we embrace and reward those who take chances and try things that have never been done. They may not all be successes but it’s about reinforcing a learning mentality so our people are not afraid to try new things and “act like an owner”.

HB: Have you had any epiphanies as you’ve gone through this Transformation here?

DA: Actually mine was going through the recruiting process for our new IMC (Integrated Marketing Communications) team. In talking to candidates it was this Eureka moment about balancing the stature of our brands yet instilling this recognition that we at Coca-Cola Canada don’t have all the answers and having the humility and modesty to accept the “not knowing” part. It’s a unique tension but an important one if we’re going to continue to grow as an organization. In particular, that modesty is something I think we should celebrate more because it is quite unique.

HB: What advice would you give your peers going through a similar situation?

DA: Listen, listen, listen is the first part. The other, as marketers, is to remember to use the company values as guidance, not handcuffs, to how we act and make decisions. Lastly, and this is particularly a Canadian reality, is to foster an intimate marketing community – I mean we all know each other already – where we can legitimately share and learn from each other. We’re all going through similar challenges, as CPG marketers or customers, so fostering a sharing mentality would be fantastic.

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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. 

We 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.

Corporate Culture In An Age Of Unicorns and Disruptors

UBER CEO Culture Disruption

 

Poor, poor Travis Kalanick, CEO of UBER.

The last time I witnessed a senior executive combust so quickly and so publicly it was Jeff Skilling.

And, remember, Skilling was being ousted for the largest bankruptcy in US history, the loss of billions in investor dollars and over 20,000 employees losing their jobs, and their life savings, in the process.

Am I sickened by the revelations of rampant sexism and a broken “culture” at UBER?

Absolutely.

I’ve two daughters and I would be livid if they had to contend with a workplace like the one we’re all reading about.

Am I saddened by the trail of questionable, debatable and borderline-illegal activities that UBER have conducted over the past few years while blazing a trail as THE anti-establishment, trustbusting, anti-regulation transportation company?

100%

But here’s what I’m NOT.

Surprised.

I’m not surprised in the least actually.

We have created the environment in which being a “Disruptor” is the most sought-after accolade any CEO can aspire to. Musk, Thiel, Zuckerberg, Chesky – these are all household names.

The same “Celebrity CEO” Cult that’s immortalized ironic quips like Skilling’s one about Enron “We’re the good guys. We’re on the side of angels” and Kalanick’s “We have to bring out the truth about how dark and dangerous and evil the taxi side is”

We’ve brazenly created an entirely new categorization of business – Unicorns – that, as the name suggests, are a mythical bunch of companies with a valuation over a billion dollars and no performance history to validate that amount. How crazy is it that? Vaunted business publication Forbes actually publishes an annual Unicorn List that, guess who tops in 2016? You got it – UBER.

Amusingly, while Kalanick and UBER were being villified in the media, the same group of reporters were breathlessly reporting on the upcoming Snap Inc IPO and a valuation that was bouncing between $25 and $30 billion before finally settling closer to $20 billion.

$20 billion.

For a company that warns they may never be profitable, is hemorrhaging users, acknowledges their core customers aren’t brand loyal and, in their own prospectus, goes so far as saying ““We face significant competition in almost every aspect of our business both domestically and internationally”

Its hard not to agree with L2’s Scott Galloway who contends Snap will ultimately be a social media loser.

I think we’re glorifying the wrong thing people.

I seriously question why aren’t we celebrating business leaders who are creating deep, meaningful, fulfilling cultures AND disrupting established businesses?

We’ve grown accustomed to technology being the yardstick by which we evaluate, and anoint, business disruptors.

I’d contend that an organization’s Culture is potentially just as powerful a disruptor as any digitally-driven business transformation.

Culture as a Force of Disruption

Here are three examples where Culture, not technology, was the disruptive force.

Zappos : A Billion Dollar Culture

In 2009 Jeff Bezos, a man with quite the reputation as a disruptor himself, paid $1.2 billion dollars for another online retailer. Not because there was anything unique in the way that Tony Hsieh sold shoes, not because the Las Vegas organization had some whizzbang technology Bezos needed. No, it was because of the fanatical customer service culture that Zappos had created and nurtured. A customer service culture that drove unparalleled levels of customer loyalty.

Jeff Bezos has made no bones about why Zappos was worth that amount of money

Zappos has a customer obsession which is so easy for me to admire. It is the starting point for Zappos. It is the place where Zappos begins and ends. And that is a very key factor for me. I get all weak-kneed when I see a customer-obsessed company, and Zappos certainly is that.

Zappos also has a totally unique culture. I’ve seen a lot of companies, and I have never seen a company with a culture like Zappos’. And I think that kind of unique culture is a very significant asset.”

Like all good “Disruptors” Zappos continues to innovate and refine their core product – their culture – with bold experiments in Holocracy, a culture ethos intended to flatten operating hierarchy and accelerate decision-making. And they’re not above making money from teaching other executives how to build a world-class culture either. Smart business extension if you ask me.

NETFLIX : From Unknown David to Culture Goliath

If you want to talk celebrated “Disruptor” you’d be hard-pressed not to consider Netflix as a quintessential example. Let’s be honest from toppling Blockbuster to becoming the defacto original content creation studio with massive global hits like “House of Cards” “Orange is the new Black” and others, to pushing regulation on Net Neutrality, Netflix is one of the original technology Disruptors. And one, which in the words of CEO and Founder Reed Hastings, owes a tremendous amount of their success to a unique and cogent corporate culture.

 

In direct contrast to UBER, there are no hall passes for high performers”. There is, however, a well-documented and much admired primer on the Netflix Culture eloquently titled “Freedom and Responsibility” which, if you haven’t downloaded and studied, I would strongly encourage you to.

There is something truly elegant about the very first slide in that deck

“We Seek Excellence. Our culture focuses on helping us achieve excellence”

Patagonia : Winning At Retail By Not Selling Stuff

Few, if any, retail manufacturer would get away with literally telling customers not to buy their stuff and still seeing their brand and business grow exponentially. But Patagonia has. The retail sector is full of “win at all costs” cultures where organizations and employees are in figurative battle to eke out another sliver of margin and turnover rates are high and employee engagement is low. Patagonia seems to escape all of that. And their culture is regularly praised as the reason they enjoy sustained growth, while many of their competitors are struggling, and “freakishly” low employee turnover while others in the sector face perpetual churn.

Let’s be honest, how many organizations in such a grueling category as Retail would be ballsy enough to talk about an anti-growth strategy?

Ultimately, there is no single path to success for any start-up. No disruptive silver bullet.

Often the opportunity does lie in a clever application of new technology to serve customers more efficiently, effectively and profitably than before.

But technology alone isn’t enough as UBER is discovering and Snap Inc investors may be poised to learn in the months ahead. You need something more compelling to attract people to your organization – and to get them to stay. That, my friends, is your Culture.

So, I’ve just one request for all you wanna-be Disruptors and Unicorns out there.

If you genuinely want to go and create something unique and valuable, why not create a world-class culture.

Now, that would be truly mythical.

 

Can Banking Culture Adapt To Today’s Business Transformation?

 

“What business are you really in? Are you in the railroad business or transportation business?”

Harvard Business School professor Theodore Levitt’s classic line from “Marketing Myopia” is as profound today as it was in the late 1950’s when he first published it. His question elegantly forces business leaders to think more broadly about exactly who are the customers they serve, what are the services needed to earn and retain those customers and what type of organizational competency is required to succeed. All three responses would obviously be manifestly different if you answered “railroads” or “transportation”

Levitt’s missive takes on a new dimension when asked against the backdrop of today’s hyper-competitive business environment. Technology has created the perception (or illusion) that the critical choice today is not “railroad or transportation” but rather “analog or digital”

And while the “analog or digital” question may be somewhat rhetorical in 2017, the implications for large mature categories could not be more profound.

What happens to Insurance when we “share” rather than “own” goods?

What happens to Automotive when humans no longer drive?

What happens to Banking when the very definition of “money” is evolving with bitcoin and blockchain?

These are meaty and critical questions to tackle.

And, of course, leaders in all these mature categories are furiously constructing new big, bold strategies to ensure they remain relevant in this new world.

New strategies that are fluid, agile, lean, responsive, frictionless, customer-centric, service-design constructed and digitally-centered.

New strategies that inevitably run headlong into established Cultures that are seldom any of those things.

In fact, if you subscribe to Drucker’s often quoted opinion that “Culture Eats Strategy For Breakfast”, then you could argue that Culture is potentially the largest Achilles Heel in any transformation exercise.

Celebrated culture academic Edgar Schein eloquently argues that Culture is more than just “how we do things around here” but rather a set of sharedvalues and behaviours that become codified and reinforced by an organization’s success. Stands to reason. Conversely if your organization acts and behaves in a way that loses business, you adapt it or you die. If your organization acts and behaves in a way that causes that business to thrive, then you reinforce and reward the behaviours that drove the success. Over time, those shared and reinforced behaviours become your Culture.

Few could argue that banks here in Canada (my homeland) haven’t a proud history of success. By almost any yardstick, they have been incredibly successful.

Canadian banks are a significant contributor to our economy, they are also one of the largest employers across the country too (employing over 350,000 Canadians in 2015) and, internationally, our rather conservative regulatory banking environment is routinely lauded as one of the soundest globally. In fact, despite being so tied to the US economy, the impact of the 2008 crash was less significant on most Canadians because of our sound banking regulations.

And it is these historical successes that have built and nurtured Canadian banking culture today. And the associated values that underpin them.

Values like trust, teamwork and collaboration, accountability, customer relationships, integrity are all listed on the various Canadian banking websites. But you might argue these are category values — I would hardly trust my money and my mortgage to a bank that didn’t exhibit these. TD Bank is the one organization whose values seem to be more dynamic, more purposeful and, importantly, articulated in a way that could directly drive employee behaviour. (Disclosure — I am a client of both TD and CIBC)

So how will business transformation impact these cultures? How might these values need to be refined?

And where are the inevitable pressure points between Strategy and Culture?

Open versus Proprietary

Bank structures and systems are still (largely?) proprietary in nature. An imposing artifact of safety, security and strength as thick and foreboding as a vault door. And entirely appropriate when you wanted to build and project a system where you built, owned and managed everything for your clients. It was your systems, your know-how, your way. That’s not how customers and clients operate today. They want to seamlessly switch and move between their portfolio of financial services and providers — not your portfolio exclusively. They aren’t looking to be shoehorned into one provider, rather they want to use a variety of best-in-class solutions. When your clients expect open API’s and the ability to move seamlessly, your people can’t be operating with a rigid adherence to your process. Nor can your people continue to be rewarded for upselling and cross-selling inferior services just because you want to own the “whole” customer. Look at the hot water Wells Fargo got into when cross-selling was embedded in their culture.

Uncertain versus Certain

Perhaps a generational observation but a long and lucrative career in Banking was historically something coveted and something that Banks actively promoted or dangled in their recruitment efforts. Many banking cultures grew out of the certainty of a long and fruitful career. Being considered a “lifer” was an accolade. That certainty no longer exists. Since 2008 Banks have been reducing headcount at an increasing rate and if you read this sobering tale about life after Wall Street those reductions in headcount have gone deeper and deeper.

People versus Pixels

Banks used to be people-first, now they’re pixel-first. Well-staffed branches with rows of smiling and attentive staff have been systematically replaced by apps, robo-calls and online banking. And why wouldn’t they be? What exactly is a branch these days and why do we need them? What purpose does it serve and to which customers (remember my earlier Levitt?). If the services of my bank branch are conveniently located on the device in my pocket, why do I ever need to go into a physical location? And, as CEO of a publicly traded company with hungry shareholders, why do I need expensive physical real estate and warm human beings to staff them?

What about beyond the branch? What impact will automation, AI and machine learning have on a slew of other banking roles currently delivered by well-paid employees? Do I need brokers, financial advisors and wealth managers when risk tolerances and investment recommendations can be crunched via big data and delivered with an algorithm? If these transformation changes are inevitable (and profitable) how does your culture continue to motivate and reward the employees currently in those roles? Roles that actively being seized up for redundancies and obsolescence.

In my eyes the most significant cultural impact may be in the internal perception of Power.

Banking institutions have centuries of power bred into their cultures. Powerful organizations breed poise, surety and confidence in their people. And that naturally becomes embedded in their cultures. Of course, in the extreme, that can lead to arrogance and impunity too. But power and confidence are typically a self-perpetuating reality.

On the other hand, organizations in transition or in moments of great change can quickly lose any sense of confidence. The three horseman of an organizational apocalypse — Fear, Uncertainty and Doubt — can quickly gallop through an organization and decimate a once-powerful company. If confidence underpins their culture, what happens when that confidence is shaken?

The leadership task for a bank’s C-suite then is increasingly how to model and project a confidence to their employees — not just their customers, clients, regulators and shareholders — that their culture is as responsive as their strategy.

That is no small feat.

This employee quote from 2015 makes my point more eloquently:

“It feels like a different culture,” said one of them. “The bank has described the culture in the past as a caring performance culture and people are a little worried on the caring part because it seems to be a little more businesslike.”

We all know that public trust in institutions is diminishing. Could there be anything more dangerous for your culture than when trust in your institution diminishes amongst your employees?

What say you Dear Reader?

Am I overstating the cultural impact on Banking transformation? Are Banks already addressing these cultural changes head-on? Which ones and how?

While there is certainly no shortage of incubators and start-up style initiatives by Canadian banks, as an observer, these feel like skunkworks outside the larger organization. I’m intrigued because I genuinely believe this will be one of the most intriguing challenges business leaders will face in the years ahead.

Please leave your own comments, opinions and observations below.

Preparing For The Coming “Age Of The Robots”

 

Its quite amazing to recollect but eighteen years ago I sat in a darkened movie theatre, warm popcorn in my lap, and fidgeted like a giddy teenager watching Canadian acting legend Keanu Reeves (truth!) kick the proverbial ass of Agent Smith in a little movie called “The Matrix”. That little movie, and the two sequels that followed, became part of my pop culture references and made the Wachowski brothers and Keanu very very “bankable”

At the time I remember thinking what a creative but dystopian view of the “battle” between man and machine and what dark Science Fiction recesses did that spring from.

These days I don’t believe we’re in the dystopian future manifest in the movie.

But I also no longer consider The Matrix a fanciful fiction either.

Here are perhaps a few bitter (red or blue?) pills to swallow from my recent LinkedIn and Facebook newsfeed.

A human-free “Burger ATM” that McDonalds is testing in Boston.

A robot barista that, according to WIRED, makes a pretty decent latte. Howard Schultz might disagree but the WIRED editorial staff were certainly quite impressed.

The delightfully acerbic Scott Galloway reminded me that Amazon know employs (or deploys) enough robots to fill Madison Square Gardens twice. In some locations, they out-number humans.

Canadian marketing legend (and friend) Mitch Joel eloquently opined about the impact of “High Frequency Marketing” and the impact of automation on the creativity business.

BusinessInsider told a miserable story about the “plight” of UBER drivers forced to sleep in parking lots because they were unable to make ends meet with the organizations consistent desire to “costs out of the system.” Reading that article made me want to #deleteUber even before their NYC airport debacle.

And perhaps in a cruel example of the recency effect, The Wall Street Journal penned this extensive “behind the scenes” piece encouragingly titled “The End of Employees” this week.

Now, before you think I’m hot-jacking some end of the world, Chicken Little, post-apocalypse channel on Netflix, rest assured my social media echo chamber was filled with as many cat videos, Darwin Award contenders and President Donald Trump memes as it ever was. Though I will freely admit President Donald Trump was perhaps “trending” more – if that’s even possible.

These stories are no longer outliers and while we may still not yet have flying cars, we aren’t very far from a driverless car world.

This isn’t news either.

Ironically Aldous Huxley and the amazing Nicholas Carr have written about this “future” for ages.

To me, the fact that this future is so fungible and within reach is the part I’m reeling from. And, despite what my daughters might say, I consider myself quite well-informed.

So, the question looming large in my mind is how do we respond or react to this?

Being an ostrich or, alternatively, Chicken Little isn’t going to cut it.

Hoping Government will sort it is equally amusing, particularly when you consider how poorly Governments (and Business, NGO’s and the Media) scored in Edelman’s most recent Global Trust Barometer.

Here are a few things that I think WE ALL need to reconsider – because, heaven knows, I don’t have the answers.

HOW WE EDUCATE – I absolutely adore Canada (remember Keanu) but I do worry that our Education isn’t progressively and proactively teaching our kids genuine skills for this new world. I absolutely understand that a unionized and free education system has some systemic challenges to change but Education has to be one of the most pressing areas to review and address. I readily admit the struggle is “So what should we teach them then Hilton?”

WHAT WE REWARD – There is no denying the entrepreneurial spirit of Silicon Valley and similar places across the globe has made my 1st World life very cushy. I’m jacking free wifi, drinking a 1% latte bought with my mobile phone, in a comfortable Toronto Starbucks so I can’t moan too much. BUT, our obsession with 90-day analyst calls, social media unicorn IPO’s and “disruptions” like Airbnb and UBER, reinforces a short-term capitalistic, winner-takes-all imperative that is dangerous. If we reward and exalt organizations that see human beings as a disposable asset that merely inflates their OPEX, rather than someone’s Mom, Dad, Son, Wife, Friend, then we can’t be surprised when they “right-size”, “down-size”, “near-source” and “out-source” and “offshore”

HOW WE TAX – Yes, get the pitchforks and torches out because this (wooly-headed Liberal) is going there. Look up from reading this post, look around the room you’re currently in, consider what happens when 50%, 75% or 100% of the people in that room don’t pay tax because they have no taxable income. Look further afield, consider how your government will pay for those pesky “externalities” like roads, bridges, healthcare, the military and yes, even those big big big walls. Yes, that’s taxes not pixies and tooth-fairies that pay for that. While we’re on the subject, does anyone believe that tax dodging and tax avoidance by large corporations and 1-percenters can continue to be passively persecuted?

HOW WE PAY – In Europe the conversation about a Universal Living Wage has taken on some increased shape. But it certainly is not without its detractors and dodgers. The notion of allowing every person to earn enough to “live” isn’t an insane idea. I’m no Economics wizard but allowing people to retain a roof over the heads and, importantly, retain their dignity and pride has to be an objective worth determining. If you don’t believe that much of the anger and frustration we’re seeing spilling on to our TV screens each night isn’t directly related to folks whose dignity and pride has been eroded, then I don’t think you understand humans very much.

HOW WE TALK (TO EACH OTHER) – You’re likely reading this courtesy of Mr Zuckberg or Mr Weiner (Thanks guys) but if you’re swimming in those waters it’s likely a heady churn of indignation, outrage and venting. This delightful article was a stark reminder that none of that indignation helps your mental state. It certainly hasn’t helped mine in recent weeks. I freely admit that answers to the problems facing us – and I’m talking about more than Agent Smith and his armies – are not easy to solve but if you believe they’ll be addressed by shouting, vilifying, ostracizing and marginalizing then you’re part of the problem, not part of the solution.

I didn’t start this post intending to write a Jerry MacQuire “manifesto” but these are uncertain times. Times that call for composure, compassion and constructive discourse. From all of us.

Which path are you going to take?

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In an alternate universe I am a successful futurist and Nobel Peace Prize recipient. And occasional swimsuit model. In THIS life, I get much of my futurist braincandy from way way smarter people like Rohit Talwar, Dean Bubley, Nikolas Badminton, Dan Pontefract, Tom Asacker amongst others. If the future intrigues you, then I strongly encourage you to seek them out and pay attention to the stuff they write about. I guarantee you it’ll kick you in the cranium.

Purpose Begins (And Ends) With Principles

 

Say what you want about the Scots but they have a pretty binary worldview on many things. Growing up with a Scottish mother meant I would get unvarnished and unapologetic missives on a daily basis.

Paraphrasing slightly but her two favourites revolved around two basic opinions:

“Talk Is Cheap” and “You’re known by the company you keep”

Like many parents (including me) she was trying to instill in her wayward son a set of principles or values that she hoped would provide a barometer for my future decisions.

Importantly these were her principles and she certainly wasn’t telling me they had to be mine. In her words – and her deeds – she was providing me a role model.

Principles are as important for organizations as they are for individuals.

Events in the United States over the past week have brought into sharp focus the principles of individuals – and organizations – across the political spectrum.

My intent here isn’t to debate the folly or wisdom of the Executive Orders. Rather to point out that it is in the most difficult times, the most contentious times, the most emotional times that the true mettle of an individual or organization is judged.

And, if you believe Simon Sinek’s view that people buy why you do something not what you do, it is at times like these that organizations show the true mettle of their Purpose.

Not surprisingly Starbucks CEO Howard Schultz has been one of the most vocal business leaders to speak up. In an eloquent, and much praised, open letter entitled “Living Our Values in Uncertain Times” Schultz outlined not only his opinion, but the actions his organization are taking across North America.

Ride-sharing poster-child UBER have received the opposite reaction for their reaction to recent events. By joining an economic advisory board convened by President Trump, CEO Travis Kalanick was arguably stating what his principles were. In fairness, let’s not forget that Tesla CEO Elon Musk is also a member of the same advisory. But it was the action of suspending surge pricing in New York to break a taxi driver boycott that many saw as a flagrant attempt to profit from an emotional situation. For an organization already under fire in Bloomberg magazine for the supposed exploitation of their drivers, this hasn’t been a banner week. Not surprisingly the hashtag #deleteUBER has begun trending.

Principles and Purpose are not a Popularity contest

Let me be very clear on this point.

Just like no brand can be built for everyone, your organization’s Purpose cannot become a popularity contest open to the inherently fickle and forgetful whims of the market.

Your Purpose is yours and only you can write it, build it, nurture it and own it.

Critically, if you’re prepared to nurture it, you must be prepared to defend it – especially when it flies in the face of popular opinion.

In June 2012 Chick-A-Fil COO Dan Cathy spoke out about same-sex marriage and incurred a media storm that raged for the better part of three years. While I may personally find that stance objectionable and ignorant, it was – and remains – the perspective of the organization. Amidst all the calls for boycotts from mayors, LGBT support groups and private citizens, Chick-A-Fil actually saw sales grow 12% in 2012. Evidently a sector of the market actually aligned themselves to the opinion of Mr Cathy.

In 2014 Ben&Jerrys took on, not only the biotech and food industry, but their own parent company Unilever over mandatory GMO labeling on their food. While Ben&Jerry’s has been famously outspoken over the years about subjects like same-sex marriage, gender equality, legalized marijuna and fair trade, taking a stance against one’s parent company gives you a sense for how critically important they believe sticking to their Purpose is.

As a leader you determine what your organization stands for or against. You define the principles that matter to you. As a business leader, it’s your right and obligation to define your organization’s Purpose.

Similarly, as a potential customer it is my right and obligation to support or boycott organizations whose Purpose I align or object to.

Advertising doyen Bill Bernbach said it best when he quipped “I have come to the conclusion that a principle isn’t a principle until it costs you money.” To my mind, he could just as easily have been talking about Purpose.

Ultimately, if you’re unwilling and unable to stick to your Purpose when the going gets tough, I question whether you’re genuinely a Purpose-driven organization.

And, in uncertain times like these, is there no more important obligation than knowing what your Purpose is?

Amazon & Sears – A Cautionary Tale of Two Cultures

‘He would find a hole in the data and then explode’

“I would see people practically combust.”

“There are so many people running for the door not just because the ship is sinking, but because the captain of the ship is screaming at them, blaming it on them, and telling them it’s their fault” 

“The joke in the office was that when it came to work/life balance, work came first, life came second, and trying to find the balance came last.”

“You learn how to diplomatically throw people under the bus”

You might be excused for thinking these quotations stem from some terrifying, corporate Ayn Rand winner-takes-all hell-hole where fear, intimidation and bullying ruled the day.

Ironically these quotations come from employees of two of the most famous retailers on the planet.

And despite the (alarming) similarity in the quotations, one is in stratospheric ascent while the other is, by all accounts, about to become a sad footnote in the retail history books.

Of course, I’m talking about Amazon and Sears

No prize for guessing which stock ticker belongs to Amazon and which belongs to Sears. Case in point, Amazon CEO Jeff Bezos is purported to have made over a billion dollars in one day from all the Alexa hoopla at CES in January this year. Not too shabby for a place where employees practically combust.

 

To further highlight the dichotomy, many consider Amazon to be on an enviable track to become a trillion dollar company and it’s certainly rolling out a rapid-fire slew of innovations (Dash, Alexa) and PR-worthy concepts (GO, Blue Origin). Also, in the type of folklore usually reserved for Silicon Valley start-ups not billion dollar companies, it hasn’t shied away from “failing fast” (Fire) either. Conversely, at Sears, sales are down 37% since early 2013, its debt load has spiked to over $1.6 billion, and the company is losing well over $1 billion annually**

So on the surface you could read these employee comments and conclude both organizations have toxic cultures.

But if the cultures are equally “toxic”, how is one organization a leader while the other is undoubtedly a laggard?

Perhaps the issue is that we’re using the culture term haphazardly. And, perhaps, we’re not acknowledging some key nuances and learning between Amazon and Sears.

For example when we discuss Culture, we often point to phenomenon like remote working, open plan offices, bring your pet to work environments, sushi Fridays and a proliferation of foosball tables as reflective of an open and progressive culture, add in employee engagement surveys and you’re really rocking, but Culture is more nuanced and complex than this. The good folks over at Culture University talk about the differences between “climate” and “culture” and, you guessed it, all those attributes above aren’t culture cues, they’re measures of organizational climate. Just because management insists on trust falls at the annual picnic, doesn’t mean you working in a trusting culture.

Jeff Bezos - Amazon's Culture Champion and Culture Carrier

 

Cultures where the founder still walks the halls (Amazon) operate with an entirely different dynamic than one’s where the founders passed away decades earlier. When the guy whose name is figuratively on the door still presides over who gets blessed and who gets banished, there is little incentive to change the way things are gonna get done. Less than zero if the organization has a history of success. Look at how people describe the vaunted culture of innovation at Apple under Founder Steve Jobs versus under CEO Tim Cook – and that’s only in the space of five years!

Then there’s the issue – as I did myself at the start of this post – of evaluating and labeling a culture “good”, “bad”, “progressive” or “toxic” without evaluating it against the fundamental business criteria that matters – Is the Culture accelerating or impeding the execution of the organization’s strategy?

Does Culture Impact In-Store. Definitely!

 

After all, as acclaimed Culture expert Edgar Schein points out, “The purpose of a company is not to create a nice workplace culture but to function in the economy, to provide goods and services” There is no debate that cultures that tolerate employee abuse or engage in unethical behavior have no place in a civilized society but equally, I would argue, a culture of civility where strategy execution grinds to a halt because of consensus building and bureaucracy is equally bad. Peter Drucker was never more insightful, nor eloquent, than his famous quip “Culture Eats Strategy for Breakfast”

Perhaps the final word is best left to Jeff Bezos who, in trying to counter the scathing New York Times article, had this to say in defense of the Amazon culture:

“The reason cultures are so stable in time is because people self-select. Someone energized by competitive zeal may select and be happy in one culture, while someone who loves to pioneer and invent may choose another. The world, thankfully, is full of many high-performing, highly distinctive corporate cultures. We never claim that our approach is the right one — just that it’s ours — and over the last two decades, we’ve collected a large group of like-minded people. Folks who find our approach energizing and meaningful.”

What are your views on the difference between Amazon and Sears?

How significant, or insignificant, is the Cultural aspect in the success of one and the failure of the other? Is it appropriate to use the “toxic” word in describing both?

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If you want to read deeper into the articles that spurred this post, the Amazon examples sprang from a New York Times expose in August 2015, **The Sears examples from a story covered by Business Insider in January 2017