table consultancies learning

1

Getting into the executive suite

Ten year old observations on what advertising

agencies can learn from management

consultants (still good)

2

the context

3

In 2003 the US APG (advertising account planning group) held a symposium on how agencies can learn from and beat management consultants.

As partners in a consultancy that had recently bested McKinsey in a pitch for a pan-European innovation assignment from Credit Suisse and been hired to train consultants at CGEY!s Center for Business Innovation, we were asked to present a point of view on how consultancies and agencies differ in both approach and practice.

To prepare, we sat down to talk with management consultants, agency people who had worked for consultancies and CEOs and marketing directors familiar with both worlds.

A great deal has changed but we ind that most of what was observed then still has relevance today.

4

our place in the landscape

CEO McKinsey/Bain

Corporate ID

CIO Accenture

CFO Accountants

CMO ???

Ad Director Agency

5

the journey

Communications Strategy

PR

DM

Advertising

Interactive

Corporate Strategy

Analysis & IT Operational

Strategy

Audit Financial

Strategy

Marketing Strategy

Design

1.! Major consulting firms move from corporate strategy toward communications ("top down#)

2.! Communications firms need to move from communication disciplines towards corporate

strategy; the beach-head we need to reclaim is marketing strategies ("bottom up#)

3.! "Bottom up# strategies can work; CPA firms navigated from audit to IT and from financial/

operational strategies to corporate strategies

1

2 2

1

3

3

Source: Rob Scalea, Brand Union

6

"As a leading strategy consulting firm, our Marketing Practice works with clients to build substantial, profitable growth ...

Complementing McKinsey's traditional strengths in industry/client knowledge, strategy, and organization are marketing professionals with deep expertise in branding, sales, pricing, customer relationship management, and e-marketing.#

B2B Branding CRM

marketing practice areas

customer loyalty eConsumer eMarketing

marketing organization spending effectiveness research

marketing strategy pricing sales/channel mgmt.

e.g. McKinsey!s marketing pitch

Link: http://marketing.mckinsey.com

7

"customer relationship management# as part of CRM

e.g. Accenture!s pitch

•!CRM strategies that maximize capabilities

•!Improve ROI

•!Economic value of your brand

•!Effectiveness of marketing operation

•!Insight driven marketing to build brand loyalty and increase ROI

-world class analytics and modeling of customer acquisition, development, retention

-optimize key marketing value levers such as pricing

-positively impact every customer interaction

•!Leadership focus on positioning and customer value

•!Aligning everything the organization does and communicates with the promise of its brand

•!Creating an integrated view of the customer

$marketing & customer strategy!

$customer insight! $customer interaction!

practice areas

Link to CRM practice: http://www.accenture.com/xd/xd.asp?it=enWeb&xd=services\crm\crm_home.xml

8

"Bain has been a thought leader on the subjects of…

–! Customer loyalty

–! Segmentation

–! Profitability

… for two decades. Developing a true customer focus requires clearly measuring how every activity results in

improvement to the product or service in a way that is meaningful to the customer.#

e.g. Bain!s pitch as part of strategy

strategy customers growth

practice areas

Link to $customers! practice: http://www.Bain.com/bainweb/expertise/expertise_capability.asp?capability_id=15

9

CONSULTING WORLD COMMUNICATIONS WORLD

Authority Partner / Supplier

Deductive reasoning Inductive reasoning

Top-down approach Bottom-up approach

Engagement Relationship

Credibility Creativity

"Charge a lot# "Give it away#

Serious Fun

C-level Communications Level

Recommend Deliver

Knowledge Skill

a summary of key differences

10

So how do consultants approach problems?

11

our research sources

interviews with:

Marketing directors and CEOs

Former consultants (less tight lipped once they leave their firm)

A former McKinsey consultant who became a marketing director

Former agency people who became consultants

A former advertising agency head who now runs a strategy consultancy

selected reading

"The Mckinsey Way# by Ethan Rasiel

"The New Organizational Wealth# Karl Erik Sveiby (Ch.9 on McKinsey)

"The Loyalty Effect# Frederick Reicheheld (Bain & Co.)

12

Ask questions that provoke a higher level dialogue, avoiding the advertising $center of gravity!. This is key in developing high level

access.

?

"what!s on your mind?#

13

for example

As an exercise in asking "higher level# questions, 2003 APG, workshop participants

were asked to put together a list of specific

questions that they might ask on first meeting the

CEO of a hypothetical client.

The task was to ask questions that relate to what is

on the $CEOs mind and to avoid a communications and positioning center-of-gravity…

14

question topic areas

1.! Vision and aspiration

What is your vision for the company? Are there challenges that your industry is facing? What business are you in and what business could you be in?

2.! Specific Goals

What would define success? What are your specific expectations? What sort of ROI are you expecting? What!s your timeframe?

3.! Problems

What (or who) is driving this new venture? What threats are you facing? Are there customers you are not attracting?

4.! History and Culture

What is your company!s tolerance for risk and change? What has worked (or not worked) in the past?

5.! Personal

What other businesses do you admire? What keeps you up at night?

15

what!s on your mind?

"It seems that advertising agencies always come to the table with their

solution in hand, whatever the problem.

Consultants work hard to understand the true nature of the problem and that

way they show themselves to be

solution independent.#

- former consultant and CEO

"what!s on your mind?#

?

Consultants define problems from first principles.

16

Turn your consumer planning skills onto the client. For instance "we need to sell more/be

more profitable# is the business equivalent of "I don!t feel well.# Using projective techniques or business analogies can help tease out the real

issues.

listening like a planner

17

Work with the client in defining the boundaries

and scope of the problem…

framing the problem

18

framing the problem

"I have found that you need to have your act together before you brief

agencies. I think they respond well to a tightly defined problem.

That!s why we go to outside consultants to get help with defining the parameters of what the agency has to do. If the

agencies could credibly help us organize the upfront issues we wouldn!t have to

go elsewhere.#

-Former Marketing Director

19

design & identity $below the line! communications

advertising

engaging all of the brand

"Agencies talk about the brand in terms of 360 degrees of communications…

…but that!s only half of the picture...

20

engaging all of the brand

business model

design & identity $below the line!

advertising

…Consultants engage the brand through internal issues, which means they get to the table earlier.#

-Marketing Director

communications

$internal! issues culture

customer experience

21

avoiding the big idea up-front

"It often feels like agencies are shooting in the dark. They can!t possibly know

all the issues and yet they already have

an answer.#

-Marketing Director

How credible would your doctor be if she diagnosed you as you walk through the door? Often they can - but the point is they don!t…

22

9 tricks of the consulting trade

23

1. the audit as management tool

Make sure your clients feel heard – they!ll then trust you and become agents on your behalf within the company. At the very least, speak to anyone who can say "No# to your project.

24

2. collaborative engagements

Don!t be afraid to put your clients to work during strategic development – you!ll deepen your relationship, and they will $sell! you throughout the organization.

25

collaborative engagements

"It's a question of getting the best ideas and not being precious about where they come from, which ad agencies often are. You have to make them believe it was their idea. It's not the easiest way of working.#

-Marketing Director

"Consultants are trained and used to enhance their clients careers which in turn drives business. The focus is on thinking through which internal franchises need to be persuaded to behave or believe a certain thing which will enable the client to gain stature or power. It is not unusual on a project to do a significant syndication document (pitch to internal constituents) every week.#

-Former agency head now running a consultancy

26

3. being accountable

Train everyone to add value and be accountable for the agency!s work.

"No one in advertising takes responsibility anymore. I once sat in a meeting where an account person answered a strategy question

with $I!ll have to go back to the agency and talk to the planner about that!. At McKinsey even the most junior person on an

engagement is expected to be able to speak for the Firm.#

-Former consultant and agency head

"It was a rule that any participant in a meeting had to make at least three valuable contributions, no matter how senior they were.#

Former consultant

27

4. learning by doing

The best way to learn to fly is in a flight-simulator.

Likewise, make use of workshops, as clients more readily understand and embrace strategies they have worked through themselves.

28

5. being MeCe

MeCe: "mutually exclusive, comprehensively exhaustive.#

This is a cornerstone of McKinsey consultant training.

!

Possible solutions

A

B

"

!

!

!

!

!

! C

"

Show your thinking and provide the client with strategic options to work through.

Source: The McKinsey Way; Ethan Rasiel

29

"Always gesticulate with 3 fingers while speaking. You always need to have three major points, each with 3 minor points supporting them. Never have more or fewer than 9 ideas at once.

A quote from my training: "when you bump into the Partner from your study in the hall, and he asks you how's it going, you damn well better three-finger him..."

Just remember, when three-fingering (rude as it may sound, it really is a McKinsey verb), you must first review the three majors, and go into the minors in order, whilst always recapping their appropriate majors.

If you're not worried about getting promoted, or want to foster an image of being a rebel or creative thinker, you can occasionally mix this up and throw in 4 majors. However, only 2 majors is risky as it shows a shallow mind... And five majors would show an inability to fully distill the issue (in a MECE way of course).#

Former McKinsey consultant.

being MeCe

"3#

30

being MeCe

Show your working:

! !

! C

"I!ve noticed that agencies do a hell of a lot of work and then they put just one word on a page so that the solution looks really simple. But reductive thinking doesn!t mean hiding the steps that get you to a solution. CEOs trust facts and numbers.#

- Marketing Director and former consultant

"Consultants show you different strategic options and then they work with you towards making the right choice. Agencies offer you a range of creative solutions but only ever sell one strategic option.#

- Marketing Director

Provide options:

31

Demonstrate the link between the issues you are dealing with and gained or lost opportunities.

6. talking dollars and cents

$

32

talking dollars and cents

$

$$

$$$

Interbrand and Prophet use brand valuation as a first step in obtaining brand consulting assignments

$

33


Quantitative customer segmentation has long been an important consulting tool for identifying business

opportunities (especially at Bain).

http://www.bain.com/bainweb/expertise/tools/mtt/customer_segmentation.asp

insightful segmentation

$

34

"It!s easier to bring discipline to what we do than for consultants to add art and richness to what

they do. I!ve found that when you link your research to revenues, you suddenly get top

management!s ear.

For instance, in one segmentation study, I demonstrated the link between business image and lost opportunity in dollars and cents.#

-Prospero partner and Ex-agency Global Chief Strategy Officer

$


Planners have the skills…

35

"The key differences that McKinsey brings is branding

solutions within a genuine business context.

That means they do the economic modeling for any brand decision (e.g. if a brand wants to stand for

X, how does it deliver it, and what

in detail, are the costs, returns, and the associated roll-out plan).#

- McKinsey Consultant, former advertising planner

7. providing $business context!

Brand

36

8. overcompensating on analytics

Clients will assume that an agency is creative but they might doubt our rigor. Fill documents and proposals with business analogies, facts, and analytics, especially if you

are competing with a consulting firm.

37

"Most general consultants have an engineering, economics or math/science degree. At our

company, we have almost no liberal arts folks. They are biased towards facts versus intuition,

charts versus text, numbers versus words.

The value is that opinions stated exclusively as

such do not appear part of a solution space except as "proven" by reason. Obviously all these

components can be manipulated to tee up any

conclusion including wrong ones but the level of argumentation is quite strong and difficult to

debate.#

- Former advertising agency head now running a

management consultancy

overcompensating on analytics

38

McKinsey branding tools

Paper 1: http://marketing.mckinsey.com/solutions/McK-Branding.pdf

Paper 2: http://www.marketing.mckinsey.com/solutions/Solutions-MSE.pdf

Example: $Brand funnel! – measures attributes that relate to the health of the brand at every stage in the customer!s experience…

One may disagree with the theoretical framework, but at least there is one…

39

Structure the engagement so that it prepares the groundwork for future work. For example at…

9. constantly creating opportunities

CGEY!s Accelerated

Solutions Environment

…their mega-workshops lead to 7x revenue in subsequent assignments. Consultants are present at the inception of new initiatives and can instantly volunteer to take responsibility for the execution of ideas.

link:http://www.us.cgey.com/ase/

40

CGE&Y!s ASE

"At the Accelerated Solutions Environment™ (ASE), we combine our world-class facilitation team, patented, decision-making process, global knowledge bases and innovative workspaces to enable organizations to make better, faster business decisions:

•! Get all of your stakeholders to not only talk about your business strategy, technology architecture or next business improvement initiative, but to actually develop it together

•! Unleash the full potential and creativity of your staff, your leadership team, key suppliers, customers, and subject matter specialists all at once - and agree on a common vision and transformation roadmap

•! Accelerate all phases of your system development projects, reducing months to weeks and weeks to days

•! Identify tens of millions of dollars in opportunities, develop a detailed action plan to realize the benefits, and then commit to each other to go for it

link:http://www.us.cgey.com/ase/

41

appendix 1

How did McKinsey create such a strong brand?

42

culture management

A strong culture built on three simple principles

Client focus:

"First the client,

then the Firm,

then the consultant#

Constant challenges:

"Up or out#

Respect for rigor:

"Obligation to dissent#

43

relationship management

Careful brand-building through relationship management

Honored Alumni

Honored clients

Treat former consultants and

even job seekers like future clients

Put fast trackers at all levels on the McKinsey

team and create clients for life

Continually engage people through

seminars, publishing (e.g.

McKinsey Quarterly), and public speaking.

Thought leadership

44

Thank you

If you have any questions, please feel free to contact us at Table Consulting, a member of the

co:collective

347 236 6629

[email protected]