Questioning in business

Today, in a world where market conditions and challenges have become even more complex, uncertain and subject to radical disruption across all economic sectors, some authors like Clayton Christensen feel that most of the corporate leaders are not still asking the right questions. To explain this it is necessary to come back to the “efficiency era” (early nineties) when it was all about asking “how can we save a little bit of money, make it a little more efficient, where can we cut costs?”. Keith Yamashita calls it the era of small-minded questions.

This explains how market leading companies in the tech sector and other industries are getting blindsided by newcomers offering products or services that may not have been as good, but are simpler, more convenient and more affordable.  Consider, for example, the big telecommunication companies and businesses like WhatsApp, Skype, etc. These new players are innovating at the low end of the market where the real potential for breakthrough innovation is. And why most of the big companies doesn’t pursue disruptive innovation this way too? Simply because they should have to move away from all they had worked so hard to build.

Fortunately Yamashita thinks that this era is ending: “Company leaders are realizing that if they’re only asking the small questions, it’s not going to advance their agenda, their position or their brands. In order to innovate now, they have to ask more expansive questions”.

The old model doesn’t lend itself particularly well to a market that favours speed, flexibility and collaborative inquiry. Changing to the new model where ambitious and open-ended questions like “Why? What if? or How?” are fully present requires difficult shifts in ingrained policies and approaches. Eric Ries, the pioneer of the Lean Startup movement, says, “the industrial economy was all about knowing the answer and expressing confidence. If you did your homework, you were supposed to know. If you had unanswered questions, that meant you did a bad job and wouldn’t get rewarded”. On the other hand, “the pressure on short-term results tends to give questioning out of the equation” (Tony Wagner, Harvard).

Warren Berger admits in his book “A more beautiful question” that even for those inclined to question, the most difficult thing is knowing what to ask... For this reason he suggests to ask questions at the most fundamental level -questions of purpose like:

•       Why are we in business? (And by the way- what business are we really in?)
•       What if our company didn’t exist?
•       What if we could become a cause and not just a company?
•       How can we make a better experiment?
•       If we brainstorm in questions, will lightning strike?
•       Will anyone follow a leader who embraces uncertainty?
•       Should mission statements be mission questions?
•       How might we create a culture of inquiry?

At this point, the big question is: are you prepared to ask the right questions in your business?

Facing the new challenges of marketing

HBR spotlights in its last issue the new challenges of Marketing in the digital age. They address this subject from three different perspectives:

The latest (and the best) in marketing

In other words: what strategies, structures and capabilities should marketers adopt to excel? The Marketing2020 Study surveyed more than 10.000 marketing executives about their organizations’ data analytics capabilities, brand strategy, cross-functional and global interactions, employee engagement, and other factors. High performers excelled in their ability to leverage customer insight, communicate a societal purpose and deliver a rich customer experience. They also demonstrated superior cross-functional collaboration, strategic focus, organizational agility and training through fluid organizational structures where Marketing is a core facilitator.

Here’s how the best meet the challenges of the digital age:

• they use data and analytics to improve marketing effectiveness
• they are clearly connected to the corporate strategy
• their employees are fully engaged with the brand purpose
• they focus on the right metrics
• their training programs are tailored to the specific needs of their business

Marketing collaboration

Marketing organizations must collaborate with other functions more than ever before but structural constraints and communication glitches often isolate them from the information and resources they need. The marketing pioneers are revamping the decision processes at the boundaries between functions, focusing on planning and strategy, execution and operations and infrastructure. It is at the seams between Marketing and the other functions that communication most often breaks down and processes stall. Just to put an example: in many occasions marketers and product developers believe that they have the final say on which features to include in a new product.

Some companies like Nordstrom have improved collaboration between marketing and other functions with simple tools that streamline decision making by establishing clear roles, explicit decision criteria and well-defined processes.

For that reason it is imperative to decide how to decide, assigning roles for key decisions.

Aditya Joshi and Eduardo Giménez suggest that as marketing works jointly with other functions at its boundaries, it must answer questions like:

• Business strategy: Where should we double down on marketing spend? Where should we pull back?

• Sales: How should we align performance metrics to ensure that marketing and sales focus on the same opportunities?

• IT: Should we build, buy or outsource the marketing technologies we need?

• Analytics: What criteria should we use to allocate scarce analytical resources to marketing rather than other functions?

• Pricing: How should we determine the optimal price incentive to prompt desired customer behaviour?

• Finance: How should we set financial expectations for tried-and-true marketing investments versus unproven but promising ones?

Truly understand your consumers

Many companies don’t really understand how many different kinds of relationships customers can have with brands, nor do they know how to reinforce or change those connections. These companies need to get better at capturing data that tell which relationship types their customers are looking for. They must shift customers toward relationships that advance the firm’s strategic goals. That requires understanding the unspoken rules of each type of connection and in many occasions means reorganizing marketing around relationships.

The authors of “Unlock the mysteries of your customer relationships” explain that each type of customer relationship is governed by its own rules. For example:

Basic exchange. The customer enters the relationship to obtain a good product at a fair price and doesn’t want to have to think or do too much.

Business partner. The customer wants to work with the company as a valued and reliable partner to solve problems over the long term.

Fling. The customer wants to experiment with a new identity. He expects the company to provide excitement and not encourage reflection or rational thinking about purchases.

Best friends. The customer is looking for intimacy and emotional support with a two way flow of honest communication and expects that the company won’t disclose personal information or take advantage of his vulnerability.

Buddies. The customer is looking for sustained interaction but doesn’t want a close relationship. He expects that the brand will not make demands or limit his freedom to associate with others.

Master-slave. The customer enters this relationship to intensify feelings of self-worth. He demands that the brand listen, anticipate his every need, satisfy every demand and not ask any question.

An excellent example of understanding this is Harley-Davidson. A team of employees spent time on the road with customers to develop the kind of intimacy that could cement Harley’s status as a best friend.

Related posts:

The Marketing Plan: the unresolved matter for SMEs

Social Media Marketing for B2B SMEs

The big challenges of B2B SMEs

What do high-performing companies do to improve their global competitiveness?

According to the Deloitte's Global Competitiveness in Manufacturing Initiative there are up to 43 different competitive capabilities that can make the difference and can be clasified in 4 groups: qualifiers, game changers, creating advantage and being challenged. 

"Qualifiers" are capabilities for which high performers and the other companies do not significantly differ. 

“Game changers” are capabilities in which high-performers stand apart from the pack and in which they likely will continue to lead. Brand image, leadership and management, business strategy, R&D capabilities, delivery speed, overall manufacturing processes, supplier network strength, and balance sheet strength were some of the game changers that high performers possessed. They are the elements of the genetic code that truly set high performers a cut above the rest.

“Creating advantage” capabilities are those in which high performers currently hold no significant advantage over other companies in current performance, but which are viewed as much more important by high performers than by other companies with regard to future competitiveness. Innovation capabilities, quality of human resources, global marketing, and procurement capabilities dominate the creating advantage group of capabilities for high performers.

“Being challenged” capabilities are those in which high performers currently hold a strong lead, but where they may lose ground as other manufacturers catch up and close the gap.

Obviously not all the competitive capabilities affect in the same way to all the sectors. As an example the industrial products sector has its own insights:

1. Reputation, product quality, and customer perceptions are at a premium: These areas are game changers for this traditionally B2B sector, whereas they are qualifiers for most other manufacturing sectors. High performers in this sector are significantly ahead of other manufacturers in developing a stellar reputation and fostering a strong perception of value and quality in their customers’ eyes, giving them a valuable competitive advantage.

2. Slow to reach global customers and markets: Global sales and marketing capabilities have relatively low values for current competitiveness and future importance and show little differentiation from other industrial products companies even for high performers in this sector. There is room to create significant differentiation in this sector through effective global sales and marketing.

3. Lagging on research and innovation: R&D capabilities, innovative product designs, and the overall quality of human resources are areas where even high-performing manufacturers in this sector rated their capabilities as generally mediocre. These are either game changers or creating advantage capabilities in other manufacturing sectors.

Finally there are some key findings on the future competitive advantages that the Deloitte's study shows:

1. High performers are getting serious about innovation.

2. Talent wars are just beginning. Innovation requires talent, so it is not surprising that high performers are placing considerable emphasis on talent acquisition and human capital development at all levels.

3. Manufacturing is globalizing again. 

4. Supply chain networks are leveraging collaboration for innovation and talent.

In summary this research suggests that high-performing manufacturers are now getting truly focused on the capabilities that drive growth: disruptive innovation, superior talent development and acquisition, finding new global customers, and creating new global markets.

Conversations, the must have for any leader

I share here the English translation of an interview I did a few weeks ago on the blog Leading People:

Today we interview Rafael Ortiz, AFTD Sales & Marketing Director at Graco EMEA. In his team there are people from three continents and in his meetings rarely coincide two people of the same nationality. He also writes regularly in his blog about innovation, marketing and people management.

How do you face the challenge of multiculturalism?

Quite naturally and with common sense. Diversity is always rewarding if you're willing to manage it properly. Although I have a great and very committed team, we must always be willing to listen a lot and be very flexible. This is essential when your collaborators are in twelve different countries and you have a really ambitious business challenge ahead.

What would you say is the secret of success of a team like this?

I think we can not speak of a single ingredient. As with any team you need a lot of communication, emotional intelligence, empathy and above all a shared vision. We spent a lot of time talking each other. As we have very few opportunities to be together, we try to take advantage of every ocassion to have conversations and address the problems and challenges that lie ahead. No effort should be spared in talking with your people. This is a maxim that I always apply.

In addition to communication, a great amount of passion is required. There is nothing more powerful than a team committed to a goal. But you have to make sure that the commitment is maintained over time and the objective is not blurred by the way. For that reason  we must also add perseverance and very much consistency.

Tell us a little bit more about the shared vision that you mentioned before ...

In my opinion it is essential that the team knows where we are going, what moves us and what the business keys and expected behaviors are. It is not only about having clear objectives or action plan to develop. It is also about building together all the conditions for things to move ahead and do it naturally. My mission is to inspire the team and give some guidelines so we do not lose on the road. For  this, as I said before, communication and perseverance are very important. And let me tell you that it works ...

What is your model of leadership?

Although I confess I do not think too much on academic models I must say that the concept “Leading by example” really inspires me. I think the leader should be a model of integrity, commitment and demonstrate this behaviour every single day. It is hardly difficult to get the complicity of a team if you do not put yourself in front of it and get fully involved.

What tools do you use to manage talent in your team?

As a global organization, we use all the usual tools. In our case, the selection process is critical. It is very important that the person who will incorporate lace with our team values​​.

On the other hand I personally believe very much in the dynamics of coaching and I try to apply them both individually and with the team. A curious example that worked very well was the development of a team motto. With this exercise we get further establish ourselves as a high performance team. It helped us make explicit the core values ​​that we have as a group and express them in a very creative way.

How important is traning for you and for your team?

It is fundamental. Throughout the year, coinciding with our team meetings, we often develop technical, product and skills training programs. We try to apply innovative formats. For example, a few weeks ago we had the opportunity to participate in a very interesting training on assertive communication in multicultural enviroments with several role-plays with professional actors.