What makes a good strategy? Ask a collection of management gurus and you’ll get a variety of answers. Some say that you need a vision. Others emphasize focus on your core competencies. Still others would insist that you innovate your business model and on it goes.
There is also a divide on who should formulate strategy. While some hold that it is a management function, others believe that it should emerge from the bottom-up. Often it is developed by high priced consultants who specialize in strategy (many of whom have never actually run a business themselves.
The veritable Noah’s Ark of voices and theories can be downright stupefying. I would submit that one reason for the confusion and cacophony is that, far from being monolithic, there are three levels of strategy and each requires a very different approach. Here’s an overview:
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Stupid is as stupid does.
As most are aware, The NY Times recently announced that it is finally rolling out their paywall. It’s a classic case of “blame the victim,” trying to punish users instead of learning how to run their business profitably.
They are, in effect, attempting to fit an old newspaper model that depended heavily on classified advertising (they never really made money on distribution) into a new medium. Instead of owning up and adapting to new realities, they are masquerading old myths as a serious business plan.
It won’t work. Here are five reasons why:
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Sometimes it’s hard to tell if technology is something to love or to fear. Are computers making us smarter or dumbing us down? Are genetically modified foods a miracle or a menace?
What’s really scary is how little control we have over it. It seems to have a life of it’s own. Much like with Shelley’s Frankenstein, we’re fearful of unleashing forces that are beyond our control. Will the future be a utopia or a nightmare?
Whatever we might think or feel, technology will progress and we need to decide for ourselves how we will interact with it. Yet before we can do that, we need to understand how it evolves into being. Over the past half century, and especially recently, some very serious and useful ideas have been put forward that can help guide us.
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There is a digital media revolution underway. It seems that every time you turn around, some little snot is telling you that you don’t “get it.” You need to adapt or get run over by the Darwinian forces underway. It’s “survival of the fittest” and you’re just too fat, stupid and lazy to realize it.
Then you take a look at the facts and it’s tough to see what they’re talking about. TV viewership remains at or near all time highs, traditional media companies are not only profitable, but with very respectable margins and after 15 years, digital media, in all of its forms, makes up a fairly small portion of marketers’ budgets.
There is, however, something interesting going on and I’m pretty sure that it’s important. The problem is that it’s not happening in the places we would normally look.
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Making decisions is probably the most important thing that we do. If we are in a position of responsibility, our choices will determine not only our own fate, but those of others as well.
So it’s frustrating that we make almost all of our important decisions under some kind of duress. We rarely have enough time or information. We want to go with our gut, but at the same time feel the great weight of responsibility telling us to be rational.
Fortunately, over the past few decades researchers have gained insight into how our decision process works, what can go wrong and how we can make better decisions.
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Rupert Murdoch and the iPad were supposed to save media: Murdoch, by taking the brave step forward and the iPad by providing an amazing new technological platform. Together, they would create a paid-media nirvana. The party would be over for freeloading consumers and happy days would return for media moguls.
How’s that working out? Well, News Corp’s sites that have instituted paywalls have seen their audience plummet, his launch of “The Daily” has impressed no one and iPad magazine apps, after an initial burst of sampling, have seen sluggish sales. Steve Jobs, of course, wants a 30% cut of subscriptions on his closed platform.
Paid models, obviously, are no panacea. Much of the confusion and nonsense could be avoided by observing one simple principle that explains a lot.
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The great management theorist, Tony Soprano, when confronted by his therapist about modifying his overbearing behavior, asked, “Then how do I get people to do what I want?”
More conventional managers have the same dilemma. Modern businesses are increasingly a collection of highly specialized skills. No one, no matter how smart or vigilant, can keep up with more than a small fraction of them. We are therefore often at the beck and call of those we manage, rather than the other way around.
This can be frustrating for many, inspiring for some and probably confusing for most. Nevertheless, it is a reality that we must not only accept, but embrace.
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Marketers tend to idealize consumers. We like to think of them as happy, good looking, ambitious and technologically forward. We feel that we need to keep up with them or get left behind.
But what if they are none of those things? What if they are even…angry and predisposed against the lifestyle that we like to portray in presentations.
While working in Turkey, I encountered just such a situation. As I dug deeper, I became convinced that it isn’t just a Turkish phenomenon, but a widespread reality that, to a greater or lesser extent, pertains to all markets and it is a reality we, for the most part, are ignoring.
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If Google is so smart, why can’t they follow basic principles laid out in any MBA textbook?
Put simply, Google’s strategy tends to be stupid in much the same way I previously wrote about Apple’s stupid strategy. They don’t follow any of the normal rules that are taught in business schools or that grace the PowerPoint decks of management consultants.
Sure, Google makes a fantastic product, but I doubt many would say that they have a superior plan. In fact, throughout the history of the company they haven’t really seemed to make strategy, at least in the customary sense, a priority. Either they’re doing it wrong or there is something amiss with conventional ideas about strategic planning.
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In the well intentioned pursuit of accountability and a more businesslike approach, the marketing industry has, to a large extent, lost its way. What was once a discipline that prided itself on its ideas, has become one that reveres numbers it doesn’t truly understand.
Like Wall Street, marketers have sought to raise their art to a science through quantification and have even borrowed jargon from their financial brethren. The result is pseudoscience in the guise of professionalism which obscures far more than it reveals.
To truly comprehend where marketing is going wrong and how to fix it, we need to go back to where finance faltered and forge a different path for marketing.
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