Profitability, Accountability, Creativity and You Profitability, Accountability, Creativity and You – 20 Tips For Balancing Personal And Corporate Values– 20 Tips For Balancing Personal And Corporate ValuesProfitability, Accountability, Creativity and You Profitability, Accountability, Creativity and You

– 20 Tips For Balancing Personal And Corporate Values– 20 Tips For Balancing Personal And Corporate Values

Robert ShawRobert Shaw

Founder, Demand Chain PartnersFounder, Demand Chain Partnerswww.demand-chain.com

& Prof at Cass Business School& Prof at Cass Business School

Robert ShawRobert Shaw

Founder, Demand Chain PartnersFounder, Demand Chain Partnerswww.demand-chain.com

& Prof at Cass Business School& Prof at Cass Business School

AgendaAgenda

1.1. You, me, themYou, me, them

2.2. Finding time for profitable creativityFinding time for profitable creativity

3.3. Meddling relativesMeddling relatives

4.4. The teenager’s bedroom The teenager’s bedroom

5.5. Pocket moneyPocket money

About youAbout you

Y / NY / NDo other executives meddle and interfere?Do other executives meddle and interfere?

Y / NY / NCan you always trust them to spend money sensibly? Can you always trust them to spend money sensibly?

Y / NY / NDo your agency and internal staff thrive on chaos?Do your agency and internal staff thrive on chaos?

Where next?Where next?

Y / NY / NWould you like more free time to be creative?Would you like more free time to be creative?

About meAbout me

ClientsClients

DemandDemandChainChainPartnersPartners

CassCassBusinessBusinessSchoolSchool

projects

help

rigour

insights

CIMCIM

DMADMA

IPAIPA

ISBAISBA

An important personal lesson

BackgroundBackground

Marketing Director uneasy Marketing Director uneasy about the way salesmen were about the way salesmen were using sales promotionsusing sales promotions

I was asked to stick my nose I was asked to stick my nose in and smell what was in and smell what was happening happening

What I FoundWhat I Found

Christmas promotions widespreadChristmas promotions widespread

Mafia money-laundering scam Mafia money-laundering scam

Shareholders were paying for Christmas bonus Shareholders were paying for Christmas bonus for salesmen and for Mafiafor salesmen and for Mafia

ActionsActions

Sales bonus linked to profit not volumeSales bonus linked to profit not volume

Salesmen moaned and complainedSalesmen moaned and complained

But they cut promotions, maintained sales But they cut promotions, maintained sales volumes and profits soaredvolumes and profits soared

But I got a bloody nose from an Italian But I got a bloody nose from an Italian gentleman in the car parkgentleman in the car park

Another lesson

BackgroundBackground

Marketing Director uneasy about Marketing Director uneasy about the way his managers and the way his managers and agencies were spending moneyagencies were spending money

I was asked to stick my nose in I was asked to stick my nose in and smell what was happening and smell what was happening

What I FoundWhat I Found

Over 3000 “pet projects”Over 3000 “pet projects”

Few could be justifiedFew could be justified

Wastage, re-work, uncosted jobs, over-runs, Wastage, re-work, uncosted jobs, over-runs, lost job bags, late delivery, busy foolslost job bags, late delivery, busy fools

Actions Actions

““Pocket money” was cancelled until they Pocket money” was cancelled until they could justify what is was being spent oncould justify what is was being spent on

They did and the campaigns that then They did and the campaigns that then emerged were brilliantly effective (£300m emerged were brilliantly effective (£300m return on £40m spend)return on £40m spend)

My reading list for todayMy reading list for today

Agenda

1.1. You, me, themYou, me, them

2. Finding time for profitable creativity

3.3. Meddling relativesMeddling relatives

4.4. The teenager’s bedroom The teenager’s bedroom

5.5. Pocket moneyPocket money

Are you a pleasure of pressure person?Are you a pleasure of pressure person?

Prefrontal CortexPrefrontal CortexExecutive FunctionExecutive Function

AdrenalineAdrenaline

DopamineDopamine

fight or flightfight or flight

calm & controlledcalm & controlled

Does your work reflect the real YOU?Does your work reflect the real YOU?

Adrenaline junkiesAdrenaline junkies

High status (Western culture)High status (Western culture)

Firefighters, soldiers and ADDFirefighters, soldiers and ADD

Alert and easily distractedAlert and easily distracted

Little time (< 3 mins)Little time (< 3 mins)

Memory wipingMemory wiping

WastefulWasteful

Excited, stressed, confusedExcited, stressed, confused

Heart attacks and ulcersHeart attacks and ulcers

Dopamine headDopamine head

High status (Eastern culture)High status (Eastern culture)

Poker and computer gamesPoker and computer games

Concentration and focusConcentration and focus

Big time (30-60 mins)Big time (30-60 mins)

Memory retentionMemory retention

EfficientEfficient

Happy, contented, fulfilledHappy, contented, fulfilled

Living to 100+Living to 100+

TipsTips

Time Time

Don’t let “teenagers” and “meddling relatives” raise your adrenaline levelsDon’t let “teenagers” and “meddling relatives” raise your adrenaline levels

Don’t be slave to Outlook and Blackberry – reject Western status of “Busy Fools”Don’t be slave to Outlook and Blackberry – reject Western status of “Busy Fools”

CreativityCreativity

Fight for your freedom and relish it Fight for your freedom and relish it (Peter Jones)(Peter Jones)

Understand the difference between imagination and fantasy Understand the difference between imagination and fantasy (Peter Jones)(Peter Jones)

Take time out to reflect, to drift, make space, ignore anyone who mocks youTake time out to reflect, to drift, make space, ignore anyone who mocks you

Protect your freedom with rigourProtect your freedom with rigour

Agenda

1.1. You, me, themYou, me, them

2.2. Finding time for profitable creativityFinding time for profitable creativity

3. Meddling relatives

4.4. The teenager’s bedroom The teenager’s bedroom

5.5. Pocket moneyPocket money

Meet the meddling relatives

Your kids have it too easyYour kids have it too easy It wasn’t like this in my dayIt wasn’t like this in my day

Don’t trust them Don’t trust them with moneywith money

No pocket money No pocket money if they don’t behaveif they don’t behaveTheir room Their room

is a disgraceis a disgrace

Top 20 Accounting Firm

BackgroundBackground

Marketing run raggedMarketing run ragged

Morale low among 25 marketers Morale low among 25 marketers

Too many chiefs - 90 partners Too many chiefs - 90 partners

Managing partner initiates a review of Managing partner initiates a review of marketing effectivenessmarketing effectiveness

What I foundWhat I found

Much money wastedMuch money wasted

Partner “sales performance” not Partner “sales performance” not managed effectivelymanaged effectively

Campaign process ineffectiveCampaign process ineffective

ActionsActions

Marketing head promoted to Marketing head promoted to partner levelpartner level

Target mkting at 7 growth areasTarget mkting at 7 growth areas

Monthly marketing reviewsMonthly marketing reviews

Partner performance reviewsPartner performance reviews

TipsTips

Meddling Relatives (CEO, CFO)Meddling Relatives (CEO, CFO) Resist ill-informed meddling and interferenceResist ill-informed meddling and interference Actively gather evidence and analysis to stop them meddlingActively gather evidence and analysis to stop them meddling Play to their strengths, since as in Dragon’s Den, Play to their strengths, since as in Dragon’s Den,

you’ll need their supportyou’ll need their support Be selective about who are your allies, both for funding, Be selective about who are your allies, both for funding,

and for experienced advice like when you’re disciplining and for experienced advice like when you’re disciplining the “marketing teenagers”the “marketing teenagers”

Agenda

1.1. You, me, themYou, me, them

2.2. Finding time for profitable creativityFinding time for profitable creativity

3.3. Meddling relativesMeddling relatives

4. The teenager’s bedroom

5.5. Pocket moneyPocket money

Ignore those

warningsigns,

the grumbles

and threats

Getthemtocleanupthe messbeforethe meddlingrelativesarrive

The “idea to demand chain” ™The “idea to demand chain” ™

IdeasIdeasIdeasIdeas ProductionProductionProductionProduction DistributionDistributionDistributionDistribution DemandDemandDemandDemand

projectsprojects collateralcollateral stimulistimuli

costscosts costscosts costscosts

Compliance?Compliance? Audit trail?Audit trail?

Efficiency?Efficiency?

Value for Money?Value for Money?

Fraud?Fraud?

Corporate or self-interest?Corporate or self-interest?ComplexityComplexity

Bottlenecks?Bottlenecks?

Scrap?Scrap?

Re-work?Re-work?Lost work?Lost work?Delays?Delays?

Late?Late?

Inaccurate costingInaccurate costing

Bureaucratic?Bureaucratic?

Hidden commitments?Hidden commitments?

ProfitsProfitsProfitsProfits

Biotechnology Firm

BackgroundBackground

New product development not New product development not delivering effectivelydelivering effectively

Long-term R&D particularly Long-term R&D particularly problematic problematic

What I foundWhat I found

Ideas become pet-projects based Ideas become pet-projects based on personal interestson personal interests

Technology focus not aligned to Technology focus not aligned to clinical demandclinical demand

Actions Actions

Portfolio review process introducedPortfolio review process introduced

Hard pruning of projects to put Hard pruning of projects to put resources where most neededresources where most needed

Accelerate go-to-marketAccelerate go-to-market

Financial services

BackgroundBackground

Directors concerned about Directors concerned about compliance over TCF (Treating compliance over TCF (Treating Customers Fairly) regulationsCustomers Fairly) regulations

Initiated an audit of TCF Initiated an audit of TCF compliancecompliance

ResultsResults

Chaotic signoff of marketing itemsChaotic signoff of marketing items

Lack of audit trail for past customer Lack of audit trail for past customer communicationscommunications

Customer complaints handling haphazardCustomer complaints handling haphazard

Actions Actions

Implemented tight procedures and Implemented tight procedures and systems: signoff and archiving of all systems: signoff and archiving of all collateral and customer contact and collateral and customer contact and complaints historycomplaints history

Cost and time savings: 20-50% for Cost and time savings: 20-50% for different areas of the firmdifferent areas of the firm

Beverages Firm

BackgroundBackground

Massive spend on advertising, Massive spend on advertising, packaging, promotions etc.packaging, promotions etc.

Few projects are subjected to rigorous Few projects are subjected to rigorous reviewreview

Marketing director and finance Marketing director and finance director jointly address the issuedirector jointly address the issue

ResultsResults

All marketing budget-holders must All marketing budget-holders must complete “marketing evaluator” complete “marketing evaluator” template to get budgets releasedtemplate to get budgets released

Actions Actions

At ideas stage, they must prepare At ideas stage, they must prepare “predicted results” calculation down “predicted results” calculation down to financial contributionto financial contribution

Fact based predictionsFact based predictions

Evaluation research budgeted as part Evaluation research budgeted as part of all projectsof all projects

Learning by doingLearning by doing

TipsTips

The teenager’s room (idea to demand chain)The teenager’s room (idea to demand chain) Hold people accountable for consequences of their actionsHold people accountable for consequences of their actions Don’t tolerate compliance risks (in all regulated sectors) Don’t tolerate compliance risks (in all regulated sectors) Insist they “spring-clean” their working practices and processesInsist they “spring-clean” their working practices and processes Where appropriate use a little automation to make process more Where appropriate use a little automation to make process more

efficientefficient Make sure they keep adequate historical records of their actionsMake sure they keep adequate historical records of their actions Ensure there is a process and time for learning from Ensure there is a process and time for learning from

past experiencepast experience If in doubt, get a second opinion If in doubt, get a second opinion

Agenda

1.1. You, me, themYou, me, them

2.2. Finding time for profitable creativityFinding time for profitable creativity

3.3. Meddling relativesMeddling relatives

4.4. The teenager’s bedroom The teenager’s bedroom

5. Pocket money

Global Oil Co.

BackgroundBackground

Massive sums of marketing money Massive sums of marketing money handed out to 60 countries and 5 handed out to 60 countries and 5 channels channels

VP Global Marketing worried that it VP Global Marketing worried that it is being handled like pocket money is being handled like pocket money to kidsto kids

Wants a process that drives Wants a process that drives business performancebusiness performance

What we didWhat we did

Analysis of financial performance Analysis of financial performance and marketing performanceand marketing performance

Model that optimises payback from Model that optimises payback from marketing allocationmarketing allocation

Results Results

Budgeting process guided by Budgeting process guided by modelmodel It creates a level playing fieldIt creates a level playing field It drive business results not It drive business results not

personal egospersonal egos

Entertainment and media

BackgroundBackground

Massive spend on TV advertisingMassive spend on TV advertising

Concerns over efficiency, value for Concerns over efficiency, value for money, compliance of media agencymoney, compliance of media agency

FindingsFindings

““Pocket money” given to media that Pocket money” given to media that people liked that had negative people liked that had negative paybackpayback

Agency “marked own homework”Agency “marked own homework”

Media billing lacked audit trailMedia billing lacked audit trail

Actions Actions

Weekly review of media effectiveness Weekly review of media effectiveness (automated analysis of sales uplift)(automated analysis of sales uplift)

Learning from past historyLearning from past history

Media billing more transparentMedia billing more transparent

““Packages” bought more efficiently Packages” bought more efficiently and transparentlyand transparently

Global drinks conglomerateGlobal drinks conglomerate

BackgroundBackground

Massive spend on sales promotionsMassive spend on sales promotions

Agencies claimed that experiential Agencies claimed that experiential promotions had long term effectspromotions had long term effects

Director was concerned about Director was concerned about whether they should believe the whether they should believe the agenciesagencies

What we foundWhat we found

Agency “marked own homework”Agency “marked own homework”

No long effect was foundNo long effect was found

Because the short-term effect was Because the short-term effect was zero – agencies had faked all the zero – agencies had faked all the analysesanalyses

ResultsResults

All “homework” must be marked by All “homework” must be marked by an independent scoreran independent scorer

Consumer productsConsumer products

BackgroundBackground

Massive spend on advertisingMassive spend on advertising

Concern over whether media budgets Concern over whether media budgets are being used to maximum are being used to maximum effectivenesseffectiveness

What we foundWhat we found

Econometric models show that media Econometric models show that media bursts are too high and resulting in bursts are too high and resulting in audience overexposure and audience overexposure and saturationsaturation

Actions Actions

Media schedules transformed to Media schedules transformed to maximise return on expendituremaximise return on expenditure

TipsTips

Pocket money

Marketing expenditure is not pocket money, so resist temptation to give more money to those who shout loudest and don’t listen to arguments about “Johnny's got more money than me”, “I’m older than him” etc.

Base “pocket money” on rules that apply to everyone

Play to a level playing field

Don’t let them mark their own homework