measurement

4 Steps to Guarantee Your Strategy’s Success

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The importance of good planning and execution seems obvious to most of us, and as we continue creating and finalizing our plans for 2014, that importance is even more evident. A good strategy that is well executed has the ability to impact a market, competitive position or business model. Yet, there are many companies at all stages that invest time in planning, but lack the processes and leadership needed to ensure a strategy achieves the desired results.  Failure is expensive and wastes precious resources.

What causes execution to go wrong? Two common causes: lack of communication and shifting focus of the strategy. Forbes Insights has conducted studies on why strategic plans fail and has found that an almost all CEOs say “communications is critical to the success of their strategic initiatives and that strategic initiatives often fail due to a lack of understanding, commitment and follow-through by key stakeholders.”

It’s not uncommon for companies to change strategies, the challenge is to be sure the organization can support the shift. For example, if your initial strategy is to compete on price, then your processes and focus need to support the execution of this strategy. If you then try to change your strategy to be one of service, the organization may not have the infrastructure for this strategic shift. 

Perhaps a simple way to start addressing execution is to think about how your organization is going to synchronize itself to ensure the right products get to the right customers at the right time. Synchronization is not easy. It can involve reconfiguring supply chains, knowledge of numerous foreign markets, addressing your cost structure and more. Communicating the plan to all the people involved and securing their support are critical to success. It’s common for organizations to resist change. 

Managing change and addressing the resistance, which may be well-founded, are important steps. Once the plan is decided upon, the infrastructure and processes put in place to support it, and the organization is on-board, it all comes down to follow-through. Studies continue to indicate that less than 15% of companies routinely track how well they performed in comparison to their targeted performance. The first year’s goals may be measured because they are often tied to bonus thresholds, it’s the follow through that tends to slip. Companies who invest in putting the right people in place to get the right things done and emphasizing process deliver the best results. Companies that combine attention to process with executive development tend to deliver the best return to shareholders. 

We like the four steps outlined by experts at Wharton that any company can take to improve the odds of execution success:

1. Develop a model for execution. You can adopt Michael Porter’s theory of comparative advantage, William Sharpe’s capital asset pricing model, or some other model. The important point is to have a model that defines the critical variables to support successful implementation of the plan. 

2. Choose the right metrics. Without a doubt sales and market share are going to continue to be the dominant metrics of business, but there are additional metrics that are critical to monitoring performance and success. Keep in mind that marketing is given money to invest on behalf of the organization.  The leadership team wants to know how this money is helping the organization achieve more of something, faster, and less expensively then if that money were directed somewhere else.  Use these mandates to guide your metrics selection. For example, speed to penetrating new markets as a way of understanding marketing’s impact on achieving something faster. 

3. Keep the plan center stage. Once you’ve earned internal and stakeholder buy-in, initiate a formal process that will keep the team engaged and focused. Meetings between the executive team and unit managers should be regular and ongoing and they should foster collaboration, dialogue, and problem resolution in order to maintain momentum. 

 4. Assess performance frequently. Annual reviews don’t allow the organization to make necessary adjustments. Assess the performance frequently to secure real-time feedback on the quality of execution down the line. 

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5 Steps to Improve Your Marketing Accountability

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What is marketing accountability?

Accountability has become another business buzz-word. We all think we know what the word means and we all think we do it. When you review the definition of accountability, it doesn’t really shed much light on its importance, “ac•count•a•bil•i•ty [uh-koun-tuh-bil-i-tee]: the state of being accountable, liable, or answerable.” (Dictionary.com).

We can turn to the AMA for a more specific definition. The AMA defines marketing accountability as:

“The responsibility for the systematic management of marketing resources and processes to achieve measurable gains in return on marketing investment and increased marketing efficiency, while maintaining quality and increasing the value of the corporation.”

Perhaps VEM’s perspective will help drive home the concept. Accountability is the measuring and monitoring of the commitment a person, group, or organization makes to deliver specific, defined results. We have found that accountable marketing organizations are both accountable to the financial and strategic initiatives of the organization. When marketing examines the ROI of a program it is addressing the financial side of the equation.

Measuring marketing’s commitment to moving the needle regarding market share growth or an increase in customer value are examples of being accountable for the strategic initiatives side of the equation. Both necessitate aligning marketing objectives with business outcomes and linking marketing to a company’s financial performance.

Performance Management Takes Measurement

“You can’t manage what you can’t measure.” This time-tested adage from management guru Peter Drucker applies now more than ever given the continuous scrutiny on marketing. Best-in-class marketers understand this idea all too well and are investing in the infrastructure (tools, systems, skills, processes) needed to develop a fully accountable performance-driven outcome-based marketing organization. These organizations aren’t only focused on being more efficient (reducing costs and waste), but improving their effectiveness and strategic value with laser-beam focus being on improving business results.

Notice two operative words: performance-driven and outcome-based. Accountability starts with an outcome, a result that needs to be accomplished. Marketers have tended to concentrate on outputs, the “stuff” we produce, and the ROI on these outputs. Best-in-class marketers are shifting from being output-oriented to outcome-based.

For example, rather than reporting on the number of people who attended a webinar and the associated ROI, these marketers are reporting on the number of qualified opportunities against the expected performance target for a webinar and how many of the opportunities ultimately converted into sales worthy prospects.

Performance-driven marketing organization leverage performance management techniques. Performance management is the process of measuring progress toward achieving key outcomes and objectives in order to optimize individual, group or organizational performance. VisionEdge Marketing research over the past nine years found that marketing performance management is a top priority for the C-Suite (CEOs, CFOs, COOs, etc.).

The bottom line, as marketers we must still prove the business value of marketing, that is we must be ever more diligent and vigilant when it comes to marketing accountability.

The need for marketing to embrace performance management is not new. The Advertising Research Foundation study highlighted this finding back in 2000. Despite the number of tools added to the marketing arsenal, performance management remains elusive for many marketers. Why? In our work we have discovered that many marketing organizations lack the data and tools they need to measure and manage performance and those that have the tools and data often lack the analytics, metrics, performance targeting, and measurement sills. These problems will continue to plague marketing organizations until they focus on and acquire the analytical approaches and skills, the right data and data collection processes, and the right measurement skills and tools.

Most importantly accountable marketing requires develop meaningful action based measures and metrics. This year’s study by Unica (now part of IBM) found that turning data into action, measuring results and effectiveness remain among the top priorities for marketers.

Steps to Improve Your Marketing Accountability

There are two things every marketer can do to improve their accountability. First, ensure the link between marketing objectives and the associated programs, tactics and activities are directly linked to specific quantifiable business outcomes. Second, demonstrate the value of marketing by setting, monitoring and reporting on relevant measurable marketing objectives, metrics and performance targets to the leadership team.

Easier said than done you think? True. But these five initial steps will go a long way toward enabling you to start and accelerate this important journey.

  1. Conduct an audit to identify alignment, data and process gaps.
    It’s hard to know where to go and where to aim if you don’t know your current state. Use the audit to identify and add the right talent, systems, and tools to help automate marketing processes and improve marketing performance. Assess the crucial data, analytical and measurement skills your team needs and provide training.
  2. Create and adopt a performance measurement and management strategy, system and metrics and measurement framework that aligns marketing with the business outcomes.
    Design and select metrics and clear standards of performance that enables marketing to measure its impact, effectiveness, efficiency and value. It’s important to understand the select the right metrics. Marketing metrics should tie to our three primary responsibilities: acquiring, keeping and growing the value of profitable customers. Therefore the metrics we select should in some way indicate the impact marketing is having on market share, customer value, and customer equity.
  3. Engage the leadership team and form strategic partnerships with an extended team of finance, IT, sales, service, etc.
    In 2005 the Tuck School of Business facilitated an executive roundtable with nearly 20 CFOs and CIOs from some of the largest companies in the world, including Cisco, IBM, Eaton, Whirlpool and Citigroup. Why? Because CFOs and CIOs along with other members of the C-Suite “have increasingly become key partners in a variety of initiatives critical to business success.” Performance management is one of these critical business initiatives. CFOs often lead the internal discussion about metrics and performance management. CFOs are also taking the initiative to develop standard, consistent measurements that focus on leading indicators of value creation. CIOs and IT play a major role in creating and maintaining the infrastructure and data needed to support performance management. Marketing accountability is key to performance management. The elevation of their roles plus the leadership team’s renewed focus on productivity, business value and performance management require marketing to build bridges and allies finance and IT and engage them and other key members in the marketing performance management journey.
  4. Create and align processes, policies and practices that ensure the linkage between marketing objectives and programs with business results.
    As a result the marketing organization will be properly and strategically positioned and pulling in the same direction as the rest of the organization. Organizational development research has shown that proper alignment of people and organization’s result in higher productivity for less effort. When you have achieved alignment the link between marketing project, programs and initiatives and the broader company outcomes is explicit. And each member of the marketing team understands the impact of their daily activities on the outcomes. Once you take this step you will be able to prioritize projects based on their value and impact rather than what’s most familiar or easiest.
  5. Develop a multi-level dashboard to report performance and results in real-time to facilitate course adjustments and foster decision making. Make your marketing dashboard an iterative and collaborative effort. A good marketing dashboard facilitates decisions. If your marketing dashboard doesn’t enable you to make course adjustments, know what is and isn’t working, and communicate the value of marketing in financial and strategic impact terms then it’s time for a dashboard makeover.

For many marketing organizations these steps may require process and cultural changes. So marketing accountability is not a journey for the weak or timid. However, there have been enough studies over the years to suggest that by implementing marketing accountability you will be able to hold or add to your marketing budget AND you will become more effective at using marketing to drive business results.