Delegation

On a radio interview I heard, a management writer defined delegation as getting other people to do what you don’t want to do.  Though tongue-in-cheek, he made his point.  

 

Some managers regard delegation as a means of disposal, retaining the things they covet while distributing the leftovers to their subordinates.  When workloads mount, they must assign some of the things they enjoy doing, often fiercely micromanaging those who have been given responsibility for them.

 

It’s a dismal proposition for the staff: either be assigned something that doesn’t matter to the boss and be left alone, or be given responsibility for something of value knowing that the boss will hover over you.  No wonder morale under such managers runs low.

 

Leaders, however, see every task as an intrinsic component of a larger value proposition, no matter how trivial it may seem.  They match the skills of subordinates to the organization’s activities to maximize the overall value that can be harvested by it.  They are conductors of an orchestra, directors of a play.  Their gift lies in the realization that the whole is greater than the sum of the parts, and their attention must then focus on developing high-performing teams.

 

Their staffs are energized, eager, and focused on contributing.  They are keenly aware that mastering abilities will create opportunities to expand their skills and take responsibility for ever-higher components of the organization’s value delivery.

 

All managers delegate.  Leaders delegate masterfully.

Reset or Rewire?

In a 2009 speech about relations with Russia, U.S. Vice President Joe Biden said, “It’s time to press the reset button.”  The phrase, adapted from the common instruction for personal electronics devices, aptly describes what we to do in situations when things simply don’t work properly.

When a pitcher’s throwing mechanics are off, the soufflé doesn’t rise, a process runs afoul, or a tried-and-true sales promotion is getting lackluster results, then pressing the reset button is often the fix.  Especially when a mistake or miscue has been made.  Some minor or unwitting change in how something is performed or executed can lie at the root of the mishap. 

 

Yet, if a pitcher’s mechanics are corrected, the oven temperature for the soufflé is raised, and the miscues in the process and sales promotion are detected and remedied, and the desired result still does not come about, then something else is going on.

 

Doing the Right Things, in the Right Way

Management is concerned with choosing the right things to do, and then ensuring that they are done the right way.  “Don’t fix what’s not broken” is a well-known cliché.  Managers learn to resist go back to the drawing board at the first sign that something isn’t working the way it should. 

 

Rule of Thumb #1: when results fall short, the default course of action should be to first examine implementation.  More times than not, the issue can be found there.  “Pressing the reset button” restores everything to its initial working order.

 

Sometimes, though, the problem lies not in how something is done, but what is being done.

 

What Worked Yesterday May not Work Today

If a policy, strategy, program or activity stops performing well, and no fault can be found in its implementation, then it is no longer serving its intended purpose.  Repeatedly pressing the reset button won’t make it work better.

 

The problem lies not in a reset or restore, but in the wiring.  Things need to be changed.

 

Rule of Thumb #2: when a reset doesn’t fix the problem, then rewire.

Good management is about knowing the difference, and knowing the order in which to proceed with a fix.

Knowing When Something is Strategic

On September 26, I blogged about the distinction between a strategy and a tactic.  In short, a strategy is a plan that describes how resources are organized and focused over the long haul to achieve important aims.  Tactics are the actions that bring a strategy to life.

 

A strategy without action is not useful.  Likewise, tactics performed in the absence of a coordinated plan are like closing one’s eyes and throwing a dart at the board in hopes of hitting a bullseye.

 

I also emphasized that, though we may not realize it, the vast majority of us spend our waking hours executing tactics - not creating strategies.  That’s ok.  After all, tactical execution is what makes strategies work.

 

Of all the tactical actions that a firm takes, some of those actions are so important to the success of the firm in the market that they are said to be strategic, i.e. critical components of the firm’s plan.  All strategies are comprised of tactics; but not all tactics are strategic to the firm.

 

The Canary in the Cage

There’s a simple test to tell if a tactic is vital to the success of a strategy: simply stop doing it and see what happens.

 

If a tactic is critical, stopping it (or altering it in a significant way) will soon affect the firm’s performance.  If the tactic is not integral to the firm’s strategy, then the strategy will continue to perform (though perhaps with some inconvenience or inefficiency). 

 

To illustrate this, look no further than what happened to Coca-Cola when it altered its taste formulation in 1985, weeks later, they were forced to introduce Coca-Cola Classic in response to consumer backlash.  Or, more recently, consider what happened when Netflix changed its pricing model, and then decided to separate its streaming and mail order businesses.

 

Looking at What We Do

Working at something that is recognized as being essential to a firm’s strategy translates into job security.  Being great at it is the best job security one can have.

Where Our Tax Dollars Go

Graphic artist Jess Bachman discovered that the U.S. Federal Government is quite transparent when it comes to telling us where it plans to spend our money.  The only problem is that the data is buried in spreadsheets containing hundreds of thousand of tables when, printed out, weigh 50 pounds.

So, Bachman labored for weeks to find the data, and then convert it to a simple visual, understandable set of information.  Edward Tufte would be proud!

You can purchase it from Amazon as a 24” x 36” glossy poster for $20.  Or, you can simply view it here.  If the web page loads properly, you can click on any part of the poster to magnify it.

Enjoy!

 

Mirrors and Windows

The basic principle underlying all marketing strategy is the creation of value: developing offerings that create value for buyers, while creating value for the firm and its partners.  When both sets of values live in equilibrium, the long term health of the firm improves.

 

As firms get larger, managements become more removed from daily interaction with their markets - with the demands of Wall Street ringing daily in their ears, it is easy to lose sight of the balance.  When achievement of the firm’s strategic objectives becomes a proxy for providing customer value (e.g. “What’s good for General Motors is good for the U.S.A.”) the firm’s health is at risk.

 

When asked once what keeps him awake at night, the CEO of a Fortune 500 company responded, “The thing I fear most is that the office windows become mirrors, reflecting back to us the image of the world as we want to see it.”

 

Does your organization look through windows?  Or does it stare at its own image in mirrors?

 

When was the last time you stepped outside to make sure?

The Choices We Make

A common lament of doctors is that patients don’t follow prescribed treatments.  Sometimes, a patient chooses to follow only the parts of the treatment plan that are agreeable.  At other times, a patient will end up back in the doctor’s office insisting that the treatment plan has been faithfully followed, either embarrassed or fearful to admit that they took some shortcuts.  In doing so, they undermine their own welfare.

 

Managers take similar shortcuts too, and find themselves wondering why a problem persists.  For example ...

 

You present a four-step plan to a boss who agrees with three of the steps, but not the fourth (which may be the lynchpin to the entire plan).  As you’re the expert in the area, and know the three-step version won’t work.  You have an obligation - to your boss and yourself - to stand your ground and explain why.  If your boss remains unconvinced, your only option is to come back with an alternative.  Agreeing to a plan (for which you are accountable) that you know won’t work is not an option.

 

Or, after much back-and-forth debate, your company devises a new marketing plan.  Some parts you like, others you don’t.  You have a choice: agree (though reluctantly) and commit to supporting it; pretend to agree, then privately modify the company’s plan to fit to what you think will work better.  Agreeing to a plan (for which your boss is accountable) to keep your boss happy, and then following your instincts, is likewise not a sound option.

 

All things being equal, make the choice that does not land you back in the doctor’s office worse off than when you began.

The $10B Social Media Ad Gamble

With worldwide spending on advertising expected to reach $500 billion in the next year, it is both a big industry and a major component of marketing spend.  In the 15 years since the internet hit the mainstream, the industry has undergone significant change.  Now, with the rapid rise of social media, the difficulty in effectively allocating advertising dollars has ratcheted up a notch.

 

Advertising Fun Facts

To understand why, let’s begin by examining baseline spend on all forms of advertising.  The table below shows expected 2011 advertising spending (worldwide and for the U.S.) for all media, the subset of online media, and its subset of social media.

 

 

	Global Spend $B	Yr/Yr Growth	U.S. Spend $B	Yr/Yr Growth	5-Year Annual U.S. Growth
All Media	480	3.7%	175	3.8%	3.8%
Online	80	16%	33	18%	14%
Social Media	5.5	146%	3.0	148%	35%

 

Sources: eMarketer, GIA, IAB, Kantar Media, ZenithOptimedia

(Caveat: individual forecasts disagree markedly among themselves and, as with all forecasts, one needs to judge which method seems the most reasonable.  Example: For 2011, the range of global ad spending is a low of $460 million and a high of $492 million.  The discrepancy widens over the term of the forecast horizon.  For the purpose at hand, medians are used.) 

 

In round numbers, online media will soon account for almost 20% of all advertising spend, and is expected to grow in the U.S. by 14% annually through 2016.  The expected growth through 2016 for social media spending (forecasters are cautiously sticking their necks out on this one) is expected to come in between 30% to 40% annually (the midpoint of 35% appears in the table).  Why the broad range?  There are simply too many unknowns with social media advertising: it’s short of history, and long on experimentation.

 

Within two years (2013) forecasters are comfortable calling out a global spend in the neighborhood of $10 billion - with half of that spent in the U.S.  Here is one outlook.

 

 

$10B is a Big Number

Compared to an expected worldwide spend on advertising of over $500B by 2013, $10B seems a mere drop in the bucket.  Here are some benchmarks, though, that put this $10 B figure in perspective.  

$10 billion is about the same as:

• All U.S. online ad spend in 2004
• All U.S. online display advertising in 2011
• All banner ads purchased worldwide in 2011
• The expected total of all U.S. Classified newspaper advertising from 2010 to 2016
• Expected 2011 U.S. online ad expenditures by the computer, financial services, and automobile industries combined.

The $10B Allocation Gamble

From initial online advertising in 1994/95, it took 10 years for the U.S. to reach an aggregate spend of $10B - a period of considerable trial and error (much of the latter).  With new media it often takes years to understand the frameworks and best practices that determine effective promotional spend, and to acquire and refine the skills to pay it off.

 

Social media ad spend is no different - and, arguably, even more challenging to get right.  Shifting ad funds from one medium to another is easy.  Getting the same - or better - performance from those re-allocations is not.  Those who experiment and run by gut instinct are indeed taking a gamble.  Those who approach the opportunity with vigor, and a systematic method of allocating, monitoring and tuning ad spend have the odds in their favor.

 

Managing advertising spend is similar to managing an investment portfolio: one must arrange the portfolio to support strategic goals, then manage it to keep it on pace to achieve those goals.

Effective management is a matter of: 

• having concrete, reliable and valid performance measures
• testing market behavior and planning assumptions before diving in (measure twice; cut once)
• establishing performance milestones at short intervals to determine if programs are paying off as planned

There may as yet be proven certainties in social media advertising, but systematic management can keep it from being an expensive object lesson.