2 posts from November 2009

Leadership by John Nugent

Cal asked me to write a blog on leadership. So I’ll give it a try by briefly outlining the five key principles I believe lead to excellent leadership. I define excellent leadership as making employees want to come to work in the morning and voluntarily capturing their drive time and shower time thoughts. These five principles:

1. Leadership by example, a principle I first learned as an infantry platoon leader in the Army. The best leaders treat others as they want to be treated and they always treat the “little people” in a company with the same respect as those at the top of the company.

 2. The vision to look long-term but the discipline to deliver results short-term. True leaders set quantifiable objectives throughout the company, communicate them clearly and report on them regularly (to all employees, including every shift at the plants). Another blog will discuss the Objectives/Goals/Strategies/Measurements method of setting company-wide objectives that cascade from the top to the bottom in an organized, understandable method. It is obviously essential that the leader provide the resources (financial, technical and human) to be sure the objectives are achievable.

 3. The creation of an environment/culture where creativity and productivity can flow. Achieving the leadership position in a market or market segment is difficult. It usually means a company has differentiated itself/its products in a meaningful, consumer or customer focused way from its competition. It also usually means that the company is winning by obsoleting itself before the competition can do so. This usually happens when innovation is occurring to spur the company ahead. Innovation means risk-taking - which means a certain level of probability of failure. A true leader will share this risk of failure with his/her employees so that they are encouraged to come forth with the excellent ideas needed to drive for marketplace leadership as opposed to shrink from proposing meaningful action for fear of dismissal or demotion. Sharing occurs when the leader is aware of the initiative and encourages it. A true leader will also give all credit to the employee(s) when innovation succeeds, thus reinforcing the importance of risk-assumption and innovation.

 4. The recruitment and promotion of employees who share the following key characteristics:

 a.       Business people who have a background in a particular function as opposed to people who are only functionally (marketing or sales or finance) focused. Business people keep the whole company in mind when making key decisions.

 b.      People who have a desire to excel and are intelligent (street smarts count), entrepreneurial and honest. These characteristics can rarely be “taught”!

 c.       People who treat the company’s money as their own.

 d.      People who have pride of correctness, not pride of authorship.

 People are the most important asset of a company in the long run. Most large companies have access to essentially the same financial, informational and technical resources. It is the people managing these resources who make the difference between being number one and number two.

 5. An incentive/reward system that is aligned with the company’s objectives and is objective in its payout. Such a system will reinforce the key principles that are making the company successful in the marketplace.

 Although there are many principles for great leadership, I believe a focus on the above five will lead to success in the marketplace. Good luck!!!!!




Value Based Brands

Many years ago an advertising icon, Jerry Della Femina, warned ad agencies about inflating the cost of producing commercials. He likened the inflated costs of advertising to the then bloated cost of movie production. His views, now called blogs, were published in 1969, lifetimes before the Internet.

He said: "The day is coming. When the man who foots the bill is going to revolt. When the manager is going to say ' Why?'. When all is said and done the $ 100,000 dollar commercial (with inflation $ 300,000) wasted commercial is going to disappear forever.

Jerry could not imagine social networking's interactive communication. He had no insight to social-mobile-e-commerce or impact of self-publishing on opinion driven endorsements.  Essentially,Jerry foresaw agencies loosing their ability to give high value to their customers because they were focused on their bottom lines rather than on their customers'. Highly produced commercials and media spending in support of them is disappearing. Lesson learned: Focus on your customer.

The biggest advertiser, P&G is announcing a "stunning new business strategy" to jump-start growth. They claim it is a startling, counter-intuitive way to innovation proposing brands develop values and sense of purpose to invoke the heart and care about human needs. Succeeding at that, so go the natural extension of that strategy, revenue and profit will follow. No duh.

We at MacDuff have long argued that businesses have to find and deliver emotional benefit of their product and services to customers to be successful. Product end benefits support the emotional value claims. This concept is tough for entrepreneurs to grab onto, but is essential to the creation of great companies.

The synopsis of P&G's strategy from Knowledge@Wharton follows, which is not only the way forward for entrepreneurs with tiny businesses in the grand scheme of things, but also the US Government:

  1. Inspire employees to add their hearts to their heads.
  2. Add a third P to performance measurement: potential for impact. (To those who follow MacDuff, this means "change the world".)
  3. If purpose-inspired opportunities and commercial considerations seem to conflict, find another way.