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Ignited: Managers! Light Up Your Company and Career for More Power More Purpose and More SuccessVince Thompson
 Excerpt from Ignited: Managers! Light Up Your Company and Career for More Power More Purpose and More Success From Chapter 9 Ignition Point 4: The Landscape The Power of the Scout One of the most common tendencies of any business is to become inward-focused. It's also one of the most deadly. "Navel-gazing" may be all right for Zen students who want to tune out the world and become more connected with their inner, spiritual essence. But companies that spend too much time navel-gazing are so enamored with and fascinated by themselves--their brilliantly-designed processes, their wonderful corporate culture, their admirable history, their fabulous products and services--that they gradually lose sight of the purpose of it all: serving customers. It's understandable that this should happen. As a company grows, an increasing degree of self-consciousness is necessary and important. Managers need to take time to reflect on how the company operates, to develop systems that are adaptive and flexible, and to massage the culture so that positive traits are encouraged and negative traits are squashed. All of this requires some self-analysis. A company that can't perform such inward-focused analysis is doomed to grow willy-nilly, ending up with structures that make little sense and often don't work. Furthermore, with increasing size comes growing complexity, which inevitably requires rules, standardization, and internal systems of communication. When a company has 6 or 12 or even 50 employees, ideas, strategies, plans, and methods can be shared by osmosis. Get much bigger, and you need ways of making sure that everyone is in the loop and on the same page. Such dreaded phenomena as the weekly staff meeting, the company newsletter, the procedures manual, and even (horrors!) the Human Resources department all come into being. Software systems to organize and link the multiplying parts of the company become increasingly complicated and important.With these phenomena comes a staff of people--small at first, but growing over time--to create, administer, and maintain them. Here is where the risk of navel-gazing arises. As soon as internal systems become important elements in your company's functioning, one or two or a handful of your people will get the mistaken impression that they are the most important elements. These people become “keepers of the systems,” their primary function enforcing the rules: “You need four copies of that form, not three.” “You missed the deadline by two hours.” “We can't solve your customer's problem because our system won't permit it.” “We can't fix that mistake and save a boatload of money because that's not the way we do things around here!” Sometimes we try so hard to get people to drink the Kool-Aid that, after a while, all we want is Kool-Aid. You've looked at the roles of the Process Master and the Linkmaker in changing the systems or, when necessary, working around them to get the right things done in the company. But an equally important role is played by someone I call the Scout. The Scout is the ignited manager who understands the power of the fourth Ignition Point-- the Landscape. The Landscape is the outside world in which our companies operate-- a world of customers, suppliers, competitors, and countless individuals and organizations that impinge on our activities in one way or another. It's a complicated, ever-changing world that no one person can completely master--because as soon as he did, some part of it would have already begun to morph beyond recognition. The best companies devote an extraordinary amount of time and effort to studying the Landscape. Many others, however, get lost in navel-gazing, sometimes to the point where they actually forget about the needs of those people in the outside world that the company actually exists to serve. This is where the Scout comes in. The Scout knows how to study the Landscape, measure its contours, track its changes, and look for the opportunities, resources, pathways, and openings it contains. The Scout knows and cares enough about internal systems, processes, and communication methods to be able to use them effectively. But he isn't focused on them, and he never forgets why they were invented in the first place--not for their own sake, but to enable the company to do a better job of serving the world at large. The Scout's chief way of staying abreast of changes in the Landscape is by constant interaction with the two outside groups with whom most companies have the strongest and most important connections--their customers and their vendors. These relationships offer companies an amazing amount of untapped power. And it's up to ignited managers to make it happen. In terms of sheer person-hours, the connections with customers and vendors are nurtured primarily by front-line employees--sales people, service reps, the production and staff people who use the goods and services vendors provide and make the calls when problems arise. But front-line employees aren't usually well-equipped to act as Scouts. For one thing, they're too busy just getting their routine tasks accomplished to devote significant time to monitoring the environment, drawing conclusions from what they observe, and putting those conclusions to work on behalf of the company. They also generally lack the birds-eye view of the business that's necessary to draw meaning out of discrete bits of data. So the manager in The Middle has the responsibility--and the opportunity-- of making sense of the Landscape by operating as a Scout: serving as the antenna of the company and making sure that the rest of the organization never loses sight of the real world as it shifts and reshapes around them. Knowing Why They Buy: Understanding the Customer Landscape As Peter Drucker, arguably the most insightful management guru in history,famously stated, “The purpose of business is to create and keep a customer.” It's a brilliant definition because it avoids the question-begging that weakens most of the alternatives. Is the purpose of business (as some would have it) to earn a profit? That leaves unanswered the obvious and crucial question: How? Is the purpose of business to produce excellent goods and services? That doesn't explain why. Nor does it define that key word “excellent.” Excellent in what way? For what purpose? Measured by whose standards? By contrast, the Drucker definition puts the focus squarely where it belongs--on the customer, the key person in any business person's universe and the most dynamic force in the most important Landscape every Scout needs to study. The Drucker definition encompasses what's essential from other definitions of business. Thus, a business that succeeds in creating and keeping a customer will inevitably make a profit (because, by definition, a customer is someone who will pay a fair price for what you provide her). It will also produce excellent goods and services (because, otherwise, no customer will be willing to buy). Creating and keeping customers includes, by implication, everything a business does: production, service, sales, marketing, distribution, all centered on the customer and her needs. Unfortunately, however, not every company operates in accordance with the Drucker definition. Many behave as if customers are a nuisance, a mystery, or, at best, an afterthought. Even companies that pride themselves on their excellent service betray their real attitudes toward customers in subtle but significant ways. For example, they trim the ranks of customer-facing workers first when the company belt needs tightening. Or they measure and give incentives to the employees in their call-in centers based on the speed with which they zoom through service calls, rather than on the skill and accuracy with which they solve customer problems. It's up to managers in The Middle to keep the company's eye on the crucial role of the customer--to connect customers to the company and make sure those bonds remain strong. And this begins with knowing customers: talking with them, observing them, listening to their concerns, making their problems our own. When it comes to customers, the Scout is in the know.He or she devotes time every day to understanding the customers and their environment in a way that adds value to their company. He or she meets them on their own turf, watches them buy and use the company's products and services, and talks with them about how competing companies differ from his own. Then the Scout shares knowledge with others in the company via internal white papers, reports, memos, presentations, Web pages, and plenty of elevator talk. And he introduces key customers to colleagues and counterparts in various divisions of the company, making sure that everyone in the firm has the opportunity to actually see and interact with that fabulous beast--the customer--who remains for all too many in business a quasi-mythical creature like the unicorn or the yeti. The Scout as Educator Brian Monahan is a vice president and communications director at Universal McCann, the global media planning and buying agency. He manages 25 employees who share a fascinating challenge--to manage sales of the new interactive media, such as online advertising, within an organization that is a powerhouse of traditional media (television, radio, newspapers, magazines, and the like). This assignment is designed to test Brian's ability to serve as a Scout on behalf of his company. He and his team are literally pioneers, exploring a new media Landscape about which relatively few people in advertising are knowledgeable. Not only must Brian be effective at understanding how this Landscape is affecting the company's customers, but he must also find ways to communicate what he learns in a meaningful, compelling fashion to colleagues who lack his comfort level with the world of new media. Brian usually does not bring customers and clients who are deeply involved in online marketing into meetings with his agency colleagues as an educational tool. “There's a pretty big cultural divide there, and I don't want to make anyone feel uncomfortable or self-conscious about what they do or don't know.” Instead, Brian, as Scout,must find ways to communicate what he learns about the online world to his more traditionally-minded colleagues. In part, the challenge is generational. “Top management is older,” Brian explains. “That means we don't have shared experiences. The music, the movies, the TV shows, the economics, the politicians--everything they grew up with is different from the things my team members and I grew up with. So if we're going to communicate our insights about new media to them effectively, it takes openness on their part and clear explanation on our part.” In other cases, the gap between some of Brian's colleagues and the ultimate customers--the audiences that both Brian's agency and its clients are trying to reach--is based on lifestyles, interests, and values. Brian explains: Getting other people excited about a new idea can be hard if they don't live it themselves. One example is Fantasy Football. Our agency spends millions of dollars on TV spots that are run during NFL telecasts. I've been pushing to carve off just a small share of that to sponsor the AOL Fantasy Football program. But the reactions from different people here at the agency are all over the map. Upscale, techy males usually get it immediately. But others who think that Fantasy Football is for geeks don't get excited about it. One way Brian translates what he discovers as a Scout into terms everyone can grasp is by using the universal language of numbers: To educate our older managers about the Internet and the interactive programs we can sponsor there, I tell them about the quantitative results some of our clients have obtained. It's all about customers and their success, which is easy for anyone to understand. For example, I've made case studies illustrating the business results some clients have enjoyed through search marketing on sites like Google. The numbers prove that it really works, which demonstrates that we need to get really good at this capability or some other company will get the business. Brian also reaches out to colleagues in many departments at the agency, spreading his insights and ideas around in search of allies and supporters who can help convert potential into reality. For example, when working on a promotional deal with The New York Times aimed at marketing to the fans of the paper's world-famous daily crossword puzzle--a devoted, or as some would say, addicted audience--Brian quickly recognized its cross-disciplinary implications. “This is a concept that should be online but in the newspaper, too. That means I have to reach out to another group, tap another budget, and get a different set of people involved in reading and analyzing the data and developing the program.” In the end, the primary driving force that Brian and other Scouts rely on to help them spread their insights throughout their companies is the pressure exerted by evolving customer demands. When the Landscape is shifting in fundamental ways that the Scout is the first to recognize, the competitive equation also shifts in ways that may ultimately threaten a company's very survival. In Brian's world, the shift is about the increasing difficulty his agency's advertising clients are experiencing in reaching their goals. “The drumbeat of client dissatisfaction with TV CPMs is steadily increasing,” he notes. (CPM, or cost per thousand impressions, is the most common measure of the relative cost and effectiveness of various advertising media.) “This is forcing agencies to look for other ways to have an impact. So advertising and relationship marketing have become more aligned, and there's now a greater emphasis on global coordination. And online marketing plays a big role in all of it.” This, then, is what gives the Scout his ultimate authority--the all important voice of the customer, which the Scout is positioned to hear and interpret on his company's behalf. Making Customers into Partners At their best, Scouts are able to forge such close relationships with customers that they turn into partners, helping to design and shape company strategies and programs for everyone's benefit.Here are some of the techniques managers in The Middle have developed to make this possible:
You may be surprised at the simple elegance of some of the discoveries you'll make.When AM/FM Radio hired a fancy consultant to find out what clients wanted, the facilitator who ran dozens of focus groups boiled down the results into these basic propositions:
Most companies like to talk about their closeness to customers. Few really achieve it. Those that do have talented and persistent Scouts who devote a significant chunk of their time to simply being with customers and really listening to what they have to say. Learning from Your Vendors After customers, the second great constituent group that many companies neglect is vendors--those people and organizations that sell you goods and services. Virtually every company relies on vendors to make its own operations possible. They include not just the companies that sell you goods you resell or parts and components that go into your products, but also the companies that provide services of every kind that keep you running, from accountants and lawyers and business consultants, to marketing, advertising, and public relations agencies, and from shipping and logistics companies to suppliers of office services, temporary help, and even the people who mop your floors and water your plants. Vital as our vendor networks are, most companies have unevolved relationships with them, often adversarial and price-centered: “Can you give us a two percent better deal next year than last? If not, we'll be signing up with your competitor--thanks for the ten years of service, and don't let the door hit you on your way out.” Some market-dominating firms, like Wal-Mart, are famous for their willingness to squeeze every last cent out of their vendor deals, using their size and clout to leverage price concessions that improve their own bottom lines while making their vendor relationships antagonistic at best. There's no doubt that price is always important. But if you think about vendors purely in terms of beating them down on cost, you're missing the boat.Vendors have a different perspective on your business and how you do it. In many cases, they work with your competitors and have information about the market, about customers, and about emerging trends that could be disruptive to your company. The closer and more positive your vendor relationships are, the better your chances of learning some of this information early enough to use it for your benefit. Am I talking about corporate espionage here? Not at all--you don't want to put your vendors in the awkward position of having to say no to a request for confidential or proprietary information about another customer of theirs. But your vendors have a unique and often valuable point of view about your company based on their experiences, and you have much to learn from listening to them. The Scout sees vendors as a vital part of his or her network. Among other things, vendors can teach you
Some vendors create incredible value for their customers in ways that go far beyond the traditional customer-seller relationship. A shipping company like UPS can offer remarkable expertise in logistics, warehousing, and customer service developed through decades of experience serving thousands of companies in every industry around the world. An auto parts supplier like Johnson Controls provides its carmaker customers with invaluable insights into auto design trends based on its own intensive research into the habits, needs, and wishes of drivers and passengers. The best advertising agencies are sources of enormous volumes of data and insight into consumer behavior derived from their extensive research studies. If you don't take full advantage of these kinds of resources, you are wasting a large portion of the money your company spends with its vendors. Bose and JIT II--A Manager in the Middle Transforms Vendor Relationships One of the most famous examples of an innovative and hugely beneficial vendor relationship is the JIT (“Just-in-Time”) II supply management system developed in the late 1980s at the Bose Corporation, the maker of high-end audio equipment. Almost 20 years later, JIT II is still considered a powerful model for tapping vendor expertise. Remarkably, this breakthrough program was launched and designed by a manager in The Middle, a director of purchasing and logistics for Bose named Lance Dixon. In Dixon's own account, the idea for improving Bose's supply management program originated when he observed something dysfunctional in his role as Scout: The Bose JIT II approach to supplier relations began in 1987 when I happened to look out my office door and noticed a topnotch salesman for G&F Industries, an excellent manufacturer of plastic parts and related items and a major supplier to Bose Corporation, talking to one of our best buyers. And I realized what they were doing. To remedy the problem, Dixon developed a system whereby Bose's suppliers were brought in-house. JIT II would require that key suppliers station a full-time representative at Bose plants to monitor inventory levels and to manage the demand forecasting, ordering, and replenishment processes between the two companies. Dixon selected plastics and printing to be the first two commodity groups migrated to the new purchasing regime. The planned introduction of JIT II wasn't without controversy. Letting an employee of your supplier walk unhindered around your plant, observing everything, and even reading your business documents, was unheard of. Some Bose executives thought that JIT II would make the company totally reliant on a few selected suppliers. It was uncertain how fair negotiations and prices could be guaranteed in an arrangement where the supplier had full access to confidential Bose information. Dixon himself wasn't sure how to make JIT II attractive to his selected vendors--after all, wasn't there a danger that the supplier representative stationed at Bose would become “captive” to the customer's interests? Understandably, Dixon had a tough job convincing top management that his plan made sense. They had the traditional mentality regarding vendor relationships, which focused on squeezing suppliers on prices. But Dixon realized that the costs associated with managing suppliers, ordering, and warehousing parts--not to mention the losses incurred when Bose was out of stock on a vital component--far outweighed the cost savings Bose could reach through tough negotiations. Dixon pushed ahead. The supplier representatives were brought into Bose's facility in Framingham, Massachusetts. They wore Bose badges, sat in on Bose meetings, and placed orders for the companies' products using Bose purchase orders. Basic purchases using standard parameters required no special approval; larger orders outside the conventional framework needed the signoff of a Bose purchasing supervisor. Within five years, seven major suppliers were participating in JIT II. Bose reported savings of about $1 million a year on overhead alone. And with some key vendors, the new efficiencies were enormous. Dixon noted, “On parts from G&F Industries, moreover, the new system has allowed a reduction in inventories to one-seventh or even oneninth the already low levels we had reached with our conventional Just-in-Time program.” Soon other companies, from IBM and AT&T to Honeywell, Motorola, and Johnson Wax were adapting JIT II for their own purposes. Current business trends, from increased outsourcing to the use of the Internet as a powerful communications medium, have only enhanced the usefulness of this now venerable program. For example, the Foxboro Company, a Massachusetts-based maker of automation systems, has worked with Sun Microsystems and Dell Computer to create customized Web sites that allow Foxboro and its suppliers to communicate globally in real time about their need for parts and components, current price points and specifications, and other data, all of it monitored and used by in-plant vendor representatives. Close vendor relationships like those facilitated by the JIT II system don't just lead to increased efficiencies (valuable as these are). They also produce many other benefits:
JIT II is a brilliant example of how strong vendor connections can enable a Scout to vastly improve the intelligence level of his company, facilitating smarter, faster decisions and saving time, money, and energy. But you don't have to go the JIT II route to enjoy many of these benefits. Just working hard to create and maintain close, positive relationships with vendors and constantly monitoring the ever-changing Landscape in which they operate can yield most of the same results. These results are a lot more meaningful than the savings you can enjoy simply by beating up your suppliers when it comes time to negotiate the next contract. Using the Internet to Scan and Master Your Landscape As you've seen, the Scout adds value to the company by the breadth, depth, and currency of her knowledge of the Landscape in which the company operates--in particular, the competitive arenas where customers and vendors live and work. At one time, Scouts gathered their knowledge of the Landscape primarily through personal, often face-to-face communication--breakfasts, lunches, phone conversations, and general “schmoozing.” All of these are still important. So are the traditional media of mass communication--trade journals, business magazines, newspapers, and television and radio broadcasts that focus on business trends. But today, the Internet has taken on enormous importance for the savvy Scout. While always a brilliant research tool, an explosion of user-generated content on the Internet now available in blogs, social networks, and video sharing takes us to the front lines where we can listen, learn, and interact with consumers directly. Blogs, originally known as weblogs, have inspired a whole new breed of citizen journalist, given platforms to new stars such as celebrity gossiper Perez Hilton and given us guides in the form of BoingBoing.com, specializing in wonderful things, or Techcrunch, a site profiling Internet companies and products. Social networks such as MySpace and Facebook have allowed people to connect with friends, and the friends of their friends, to share their passions as well as likes and dislikes. In social networks, users join groups around their interests. These interest groups might give you insight into a particular market, such as the couple hundred who joined the “Once I start itching my eye I can't stop” group, or you may actually find your own brand being discussed. A quick search revealed dozens of groups mentioning Nordstrom's, groups for employees and customers. One group in particular shares their passion for Nordstrom's branded salad dressing. Video networks such as YouTube, Metacafe, and Break.com have given filmmakers, speechmakers, and aspiring tastemakers a place to share their polished productions or webcam videos.Humor plays a big a role, but so does education. You can learn how to pay for one Coke but get three from a vending machine--something the vending guy needs to see right away--or you can also learn how to run your iPod from a 9-volt battery. The opportunities to see your consumers in action with your brand or talking about your industry seem endless. A quick search under customer service featured recorded customer service calls from Apple and AOL. None too complimentary. The consumer is now empowered and driving the conversation that ultimately defines what a brand is and how you, in your job, should be serving them. All of this threatens the old and traditional rules of corporate communication, which focus on a consistent message and a spin that's approved at the top and pushed down and out. You've probably encountered the slightly paranoid approach that many traditional companies take toward public communications: “It's a reporter on the line? Call our P.R. guy--no, make that our lawyer--and whatever you do, don't say anything!”When this is the prevalent attitude, the wide-open atmosphere of the blogosphere is understandably frightening. Occasional horror stories about consumer-driven blogs reinforce the anxiety. In September 2004, a maker of bicycle locks named Kryptonite was blindsided by a series of postings on blogs frequented by bike lovers that claimed certain models of Kryptonite locks were vulnerable to picking simply by using a plastic pen. Initially disregarding the furor (“It's just a few techies, so no big deal”), Kryptonite soon found its products being pulled off the shelves of bike stores and its sales plummeting. The company has since recovered, introducing a new line of locks with the design flaw remedied. And they have also made monitoring of the blogosphere--and participation in blog forums about biking--a regular part of their public-outreach efforts. Other companies who worry about being hit by a similar nightmare ought to adopt the same policy. There's no doubt that getting involved in blogging requires a mindset adjustment.When a company allows or even encourages its employees to create blogs about their products, services, or industry, it is saying, “We trust you and your judgment enough to give you freedom. We believe that, in the long run, all of us--employees, customers, and the company itself--will benefit from open communication.” This is a confusing time for many companies, and it no doubt feels a bit like the Wild West. That said, burying your head in the sand is no answer to the growing power of user-generated content and online communities. With over 50 million active blogs, 100 million registered users at MySpace, and over 100 million videos viewed each day on Youtube.com alone, we're in for a new world of communication and a new way for you to gain competitive advantage. If you're just beginning to explore this, here are some ideas to help you become more deeply engaged:
Of course, as savvy web users and multitaskers, you're probably surfing the web to explore some of this now.However... know that we've got you covered as well with a list of Internet resources at www.BeIgnited.com. Today, blogs are among the hottest and most rapidly-evolving forms of communication in the world. Tomorrow, there will undoubtedly be some new way of tracking people's changing attitudes, interests, and ideas, perhaps using some technology we can only speculate about today.Whatever it is, the Scout will be among the first to discover it and develop its full potential for the benefit of the business, as well as his or her own career. This excerpt is taken from Ignited: Managers! Light Up Your Company and Career by Vince Thompson, FT Press 2007. Find Items On Similar Subjects  Know-How: The 8 Skills That Separate People Who Perform from Those Who Don't
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