Thursday, September 15, 2011

The Seven Things That Surprise New CEOs - Author: Michael E. Porter, Jay W. Lorsch, Nitin Nohria


Most new chief executives are taken aback by the unexpected and unfamiliar new roles, the time and information limitations, and the altered professional relationships they run up against. Here are the common surprises new CEOs face, and here's how to tell when adjustments are necessary.
Surprise One: You Can't Run the Company
Warning signs:
You are in too many meetings and involved in too many tactical discussions.
There are too many days when you feel as though you have lost control over your time.
Surprise Two: Giving Orders is Very Costly
Warning signs:
You have become the bottleneck.
Employees are overly inclined to consult you before they act.
People start using your name to endorse things, as in "Frank says…"
Surprise Three: It Is Hard To Know What Is Really Going On
Warning signs:
You keep hearing things that surprise you.
You learn about events after the fact.
You hear concerns and dissenting views through the grapevine rather than directly.
Surprise Four: You Are Always Sending A Message
Warning signs:
Employees circulate stories about your behavior that magnify or distort reality.
People around you act in ways that indicate they're trying to anticipate your likes and dislikes.
Surprise Five: You Are Not The Boss
Warning signs:
You don't know where you stand with board members.
Roles and responsibilities of the board members and of management are not clear.
The discussions in board meetings are limited mostly to reporting on results and management's decisions.
Surprise Six: Pleasing Shareholders Is Not The Goal
Warning signs:
Executives and board members judge actions by their effect on stock price.
Analysts who don't understand the business push for decisions that risk the health of the company.
Management incentives are disproportionately tied to stock price.
Surprise Seven: You Are Still Only Human
Warning signs:
You give interviews about you rather than about the company.
Your lifestyle is more lavish or privileged than that of other top executives in the company.
You have few if any activities not connected to the company.

Implications for CEO Leadership

Taken together, the seven surprises carry some important and subtle implications for how a new CEO should define his job.
First, the CEO must learn to manage organizational context rather than focus on daily operations. Providing leadership in this way—and not diving into the details—can be a jarring transition. One CEO said that he initially felt like the company's "most useless executive," despite the power inherent in the job. The CEO needs to learn how to act in indirect ways—setting and communicating strategy, putting sound processes in place, selecting and mentoring key people—to create the conditions that will help others make the right choices. At the same time, he must set the tone and define the organization's culture and values through his words and actions—in other words, demonstrate how employees should behave.
Second, he must recognize that his position does not confer the right to lead, nor does it guarantee the organization's loyalty. He must perpetually earn and maintain the moral mandate to lead. CEOs can easily lose their legitimacy if their vision is unconvincing, if their actions are inconsistent with the values they espouse, or if their self-interest appears to trump the welfare of the organization. They must realize that success ultimately depends on their ability to enlist the voluntary commitment rather than the forced obedience of others. While mastering the conventional tools of management may have won the CEO his job, these tools alone will not keep him there.
Finally, the CEO must not get totally absorbed in the role. Even if others think he is omnipotent, he is still only human. Failing to recognize this will lead to arrogance, exhaustion, and a shortened tenure. Only by maintaining a personal balance and staying grounded can the CEO achieve the perspective required to make decisions in the interest of the company and its long-term prosperity.

source: Harvard Business School Working Knowledge

Tuesday, August 23, 2011

Pay your Undesirable customer not to use your Brand?


Concerned that its image is being tainted by the rowdy stars of reality TV show Jersey Shore, fashion brand Abercrombie & Fitch has taken the unusual step of offering to pay them to not wear its clothes.
Specifically singling out Michael 'The Situation' Sorrentino from MTV's TV show, who prominently wears Abercrombie apparel, the brand announced that it has offered compensation to the hard-partying star to cease wearing A&F products.
 
In a statement, a spokesperson for Abercrombie & Fitch commented: "We are deeply concerned that Mr Sorrentino's association with our brand could cause significant damage to our image. We understand that the show is for entertainment purposes, but believe this association is contrary to the aspirational nature of our brand, and may be distressing to many of our fans. We have therefore offered a substantial payment to Michael 'The Situation' Sorrentino and the producers of MTV's The Jersey Shore to have the character wear an alternate brand.  We have also extended this offer to other members of the cast, and are urgently waiting a response."
 
Now in its fourth season, the popular reality show details the exploits of the loud and hedonistic cast as they carouse around the US state of New Jersey – clearly a lifestyle that Abercrombie & Fitch does not want to associate with its more ‘preppy’ image.
 
But will its move to pay off the cast from using its clothes save its brand from damage – or make ‘the situation’ even worse?
 
Unwanted advocates?
 
A&F certainly isn’t the first brand to attract unwanted advocates. Fashion brand Burberry famously became the uniform of choice with football hooligans and so-called ‘chavs’ in the UK, to the extent that some pubs and clubs banned customers who wore the label. At the time, the brand blamed a downturn in sales on its adoption by this unsavoury element.
 
While there was no high-profile star to crack down on, Burberry did seek to reduce the visibility of its distinctive checked pattern from its goods, including entirely removing its checked baseball caps from its line.
 
In a more recent example, retail outlets targeted by looters in the recent UK riots have had insult added to injury by experiencing a fall in brand perception as a result of their association with this unsavoury element.
 
With Adidas and Nike branded clothing featuring prominently in media coverage of the looting, both labels saw their brand buzz plummet, according to YouGov data. Elsewhere, Blackberry’s association with the rioters has been well-documented, with looters using its Blackberry Messenger to coordinate attacks. This has resulted in its brand buzz dropping from 7.9 to -6 since the unrest.
 
But in the age of endorsements, businesses are also very sensitive to the power and influence wielded by celebrities. Mike Spicer, CEO at Pulse Group, highlights: "Brands are much more aware of the impact that media and celebrity culture have created with the growing need for transparency in the public domain. Brands are now responding more quickly than ever to negative associations and are now choosing celebrities or programmes that are closely aligned to the brand values in order to present it in the most positive, and plausible, way."
 
A bold move
 
And so it is that Abercrombie & Fitch has chosen to address the negative perception that it believes it is attracting via Jersey Shore. And A&F’s announcement – even if it is done as a stunt – has been hailed by some as a very positive move.
 
Customer experience expert, and founder of consultancy smith+co, says: “For me it is a terrific example of a Bold brand in that Abercrombie & Fitch are very clear about what their brand stands for (aspirational lifestyle) and who it is targeted at (preppy teenagers). I think it's innovative offer is a real win/win for the brand because if the cast of The Jersey Shore accept the money NOT to wear its clothes it removes the potential for negative brand associations and if the cast do not accept the money and continue to wear A&F product it then becomes a continuing reminder that these people are not A&F target customers.
 
“In either case it draws attention to the brand and what it stands for. The trouble with most brands is that they are unwilling to make these strategic choices and want to be all things to all people and offend nobody. This is probably the first example of 'negative product placement' - i.e. we will pay you NOT to show our product- and it opens up all kinds of possibilities!”
 
Julian Reiter, MD of brand marketing firm Positive Thinking, agrees: “I think it’s a very brave and brilliant move – it certainly gives the story more talkability and raises an important debate about reputation being central to brand success and the decisions brands need to take to keep their marketing strategies on track. I’m sure it is a publicity stunt, and a hilariously clever one at that! There’s only one clothing firm one the lips of millions of people today – that can hardly do any harm, can it?”
 
Craig Wheeler, managing director at direct response and relationship marketing agencywdmp, believes that its move will strike a chord with many consumers.
 
“My ‘water cooler’ research indicates that I’m not the only person groaning at the prospect of Big Brother being back on our screens and frustrated at the number of reality TV shows filling an already dull TV schedule. So good on Abercrombie and Fitch for trying to protect the brand. It could be seen as a smart PR move, one that will certainly get the brand talked about and deliver column inches. Plus it might also create a positive impression of the brand by striking a chord with like-minded people who are tired of lacklustre reality programmes. At a time when society is taking a stand on a number of recent issues at least we now know that Abercrombie and Fitch are willing to do the same. I wonder if the marketing folk at Burberry wish they had done something similar a few years back.”
 
Backfiring on the brand
 
But not all reactions have been positive, and there are some concerns that the stunt could backfire on the brand.
 
“Companies should avoid negative stories and bad press as much as possible, and in my opinion, A&F has acted in a way that might benefit ‘Jersey Shore’, yet damage its own reputation,” says JR Little, senior consultant at brand agency The Brand Union.
 
“It's a risky move, regardless of how you spin it. If it is for PR purposes only, and it appears to be, it could raise awareness of the brand but it’s unlikely to increase sales. Americans don't like it when corporations pick on individuals. There will always be an Americana bias to support the underdog. In this situation, it appears that a corporation has picked on a guy who has every right to wear what he wants. Sure, his values might not match those of the company (hard argument to buy from a company with many controversies under its distressed-leather belt), but going on the offensive may make A&F appear to be a bully, and simply empowering 'The Situation' to speak out against them on TV and social media (as he already has).”
 
Raman Sehgal, owner of ramarketing, also believes that the label could be playing a dangerous game. “As a big fan of the A&F brand, I think this is quite a risky strategy. It's a very interesting move from a brand equity perspective but one that could backfire big style in terms of financial costs. Brands have to accept they can't control everything. The fashion brands that were given unwanted exposure by criminals in the recent UK riots highlight this point. They, like A&F, have to keep faith in their real target audience in that they will not be swayed by such fad shows and media exposure.”
 
Mark Blayney Stuart, head of research at The Chartered Institute of Marketing, agrees. “It's a strange reaction because trying to control how your brand is perceived is likely to be counter-productive. Better to take the positive effects that come from 'any publicity is good publicity' and don't worry about elements you don't like. Burberry has suffered from its 'chav' association. But the point is, you just have to be robust and get on with it. If Burberry had started paying people it didn't like not to wear its brand, it would have just made things worse (if it had any effect at all).”
 
He adds: “If it is a publicity stunt, it's a weary one. The problem with a story like this is that a conspiracy theory can be quickly read into it. When Gap changed its logo a while ago and then changed it back again, what was an almighty cock-up was being cynically supposed in some areas as a publicity stunt. Which in a way confirms our starting point; at the end of the day, any publicity is, on the whole, good publicity. Trying to influence what other people think about you, however, is doomed.”
 
Jessica Bower of brand development agency Sundance, picks up on this final point: "A&F and other brands would do well to remember that brands exists through how others see them, not always how the brand/company sees itself. That is the inherent challenge in managing brands."    
 
Ultimately, of course, the impact of A&F’s action will only be clear once the dust settles. And while some – including Michael Sorrentino himself – leapt upon the news that the brand’s stock price dipped last week, experts have suggested this was more likely the result of other factors rather than its offer to the cast of Jersey Shore.
 
What is clear, however, is that this story has certainly attracted a lot of attention to Abercrombie & Fitch over the past week. And as Blayney Stuart emphasised: “Any publicity is good publicity.”
 
“They have both generated an enormous amount of press from this (more column inches than their PR company will know what to do with), as well as given themselves a huge platform to reiterate their premium positioning,” concludes Stuart Wood, executive creative director at FITCH. “Maybe they could pay me to stop writing about it.”  

source: MyCustomer.com

Wednesday, March 16, 2011

top 10 half-witted holiday complaints of 2010! Enjoy!


Half-naked women on beaches, sand that is too hot and beds that are too comfy all appear on a list of holiday complaints made last year.
Online travel agency sunshine.co.uk has compiled a list of what it considers to be the top 10 most absurd gripes of 2010, which includes that of a man who spend his holiday in Majorca. He complained that the number of bikini-clad women on the beach caused him and his wife to fall out because he was caught ogling at them "on more than one occasion".
Another who went to the Costa Del Sol was unhappy that his all-inclusive hotel provided too much buffet food because he put on 'at least 5lbs', while a third whinged that his holiday in Portugal had been spoilt because his hotel bed was "too comfy". As a result, he kept oversleeping when he would have "preferred to be up early and making the most of it".
A lady who had holidayed in Lanzarote with her family of four, meanwhile, moaned that the warm weather meant the sand became too hot for her children to walk down to the sea for a swim.
Chris Brown, founder of the website, said that, while the firm was happy to deal with any issues that arose, "we regret we cannot be held responsible for the temperature of the sand, weight gain as a result of the amount of tasty food on offer or the number of fellow English tourists in the vicinity".
The latter complaint referred to a couple who were disappointed by their two week holiday in Marmaris, Turkey, as there were "too many English people around" and they had wanted to experience somewhere "more exotic".
Other gripes included a man who had been to Tenerife but felt ripped off because the Prada sunglasses he had purchased from a street vendor for E4.50 were fakes, and another who felt "pressured" into making love to his wife when on holiday in Bulgaria because the couple in the room next door had made a lot of noise while doing so.
A lady who was intending to go on holiday with a female friend to Dubai was likewise irritated when they got to the airport in the UK without their passports because they had not been reminded to bring them and had not thought them necessary.
But a young woman who went with a group of friends to Ayia Napa in Cyprus was equally unhappy that the reception desk at her hotel was staffed on a 24-hour basis because she felt they were being "judged" for returning to their room at a late hour – even though the resort is renowned for its all-night party culture.
Finally, a male holidaymaker had a good old whinge at the fact that his plane flew too high because his fear of heights stopped him from enjoying his flight to Mauritius.