Dennis Flad and Nikolas Guido are Directors of Prospire AG, a management consulting company based out of Zurich with a focus on product strategy and development for services companies across Europe. Here they discuss with Darren the importance of aligning business and marketing objectives, strategy and process to drive long term business and brand growth.
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Transcription:
Darren:
Welcome to Managing Marketing. Today we’re in Zurich and I’m sitting down with Dennis Flad and Nik Guido from Prospire, a Swiss consultancy that helps companies develop and implement business transformation strategies. That would be fair, wouldn’t it? Welcome.
Nik & Dennis
Thank you. Thank you.
Nik:
Thank you, Darren. Yes, if you need a short sentence for our company, yes, that’s the core of the business we do. Sure, there are some other parts or some other type of projects we do left and right of it, but that’s the core of it and maybe before you ask the question.
Darren:
Well, I was going to say, the name sort of infers that, doesn’t it? Because Prospire is clearly prosper and inspire. So what brought about that as the name?
Nik:
The idea actually was to find something that combines the inspiration objective for both the employees or our people and the client. Typically project work can be done like “I come in, do the work and leave again” There result is there but where’s the long-term sustainable result you want to achieve? It’s about people, that’s the inspiring part.
You need to trigger maybe some new ideas in people, so they start rethinking their own situation and that again gives us a way to mobilise people for these transformations because part of looking differently at your own job, at your own function in a company is in new opportunities.
And the second is I always believe, or we always believe that things have to grow. They will die sometimes, yes. Trees die, companies die, people die. But I think the aspect of growth to bring something to the real size it has internally, what’s something that’s given to the company, to a person from the beginning, that’s something we want to really release and grow. That’s the prospering part of it.
So really taking care, taking care about all people, taking care about the people of the client and the companies at least at the end.
Darren:
I get from that a sense of reaching its full potential.
Nik:
Yes, I think that in your more sophisticated words that makes it nice.
Darren:
Well the way you explained that Nik, it makes me think of the P3 in TrinityP3 which is helping people achieve commercial purpose through creative process. The only additional part I have is that we focus very much on the creative process whereas now, correct me if I’m wrong Dennis, but the business for you guys is really starting with the strategy and taking that down through the organisation.
Dennis:
That’s absolutely the case. Because the thing is, when you really look at brands and let me say successful brands, then there is usually a clear strategy how we’re positioning our company, what are we doing, what we’re not doing and that is reflected in basically everything such a company does.
So it is reflected in the products they offer to the market, in the services, how they treat their customers in the services as well and even how it finds it’s purity in the marketing. How I talk with my customers, how I reach my customers, what are the images, the messages that I send out? And get that in a real, yeah, aligned and comprehensive view that’s a little bit of our philosophy behind that.
Darren:
Well that infers a huge opportunity because as you said that alignment occurs with successful brands. But how many companies have we all worked with where there’s a disconnect between strategy and marketing, between the business and the various parts of the business? I mean, is that one of the big challenges that you find?
Nik:
Yes, I think this is in general, not only in companies but it’s a big challenge. Sometimes we would like to be a bird, but we are fish. And yes, it takes some evolutionary cycles before this is happening and that’s why I really support Dennis on the sophisticated alignment between strategy, branding, everything designed through to really live to the values and to the strategy and I think this is one of the huge opportunities.
Whenever we start a project we try to at least understand the core DNA of our existing company. And understand what are the strengths. You have to build strategy on existing capabilities, and it takes a long time to build new capabilities in a company. So sometimes people or some companies have a brand or a strategy or even marketing that is not fitting with their inner-core strengths. And finding that out and re-aligning it all of a sudden brings a huge energy to the people and of course then to the market.
Darren:
You know, there’s a lot of talk in business about finding the core purpose of the business. And in marketing, there’s now this talk about creating a core brand purpose and to me, it’s ridiculous to think of them as two separate things. I mean, why would you talk about a business purpose and a brand purpose as being two different things?
Dennis:
I think we look at the problem from the wrong angle when we come with, we need to have the core first. I think every business, when you do a strategy for example or a positioning of your company, first you need to say, okay, what’s actually my promise to my customers? What is that what I want to stand for? And that is then usually the promise is an experience.
So when the customers come to me, what do I want to experience? And that brings us then to the brand, you know? The brand is actually the promise of the experience and that’s what we think. It starts at the strategy, what are we really positioning and goes then down into the products, how you design your prices, how you decide through whom you’re distributing your solutions and how you communicate to the market which is the old four Ps that we know, and I still think they are valid although they are very much into eight Ps or ten Ps I don’t know.
Darren:
I think it’s a competition in marketing to see who can come up with the most Ps, you know? Yeah, I agree with you.
Dennis:
P is the number for the circles. That’s what we’re seeing, everything comes back in a circle.
Darren:
But I think it’s still valid because we deal with a lot of marketers who call themselves marketers, but they only really have influence over one of those Ps which is promotion and advertising or communications. Whereas you guys in your strategy work are really mainly focusing on the other three when you talk about strategy, you’re not talking about a marketing communication strategy, you’re actually talking about product strategy and pricing and the distribution, aren’t you?
Dennis:
Yes, I mean when we start with it of course, usually problems start always with existing companies or even start-ups, which is how do I earn money?
Darren:
Yeah.
Nik:
How can I still keep on earning money?
Dennis:
Yeah, how can I keep on earning money? It’s still business so you need to know markets, what markets are expecting from you, how can I grow in this market? What do my competitors look like? How do they approach the same customers as I’m approaching? What is my legal environment? What is my regulative environment around it? What is the technology trends that I’m jumping on that I’m leveraging? How is my go to market? My delivery? These are all questions that influence at the end what I’m delivering to my customer.
Nik:
And to add something, quite often you have operational issues inside the company too. So somehow we are called in when a problem is appearing. If everything is sound and perfect, then we management consultants are superfluous in this growth.
Darren:
Well, yeah. There’s two roles for management consultants; one is to solve problems that the organisation either can’t solve themselves or two is to show them opportunity that they haven’t seen. So I guess the problem is usually much more of a pain point, so it inspires people to actually take action, doesn’t it?
Nik:
Exactly, there’s a need to do something and everything is running smoothly, bring in the figures like I was expected to. People get comfortable again and even in a comfortable situation it requires quite some work to, the thing is, it requires even more inspirational leadership and focus to get clients in a comfortable situation to re-think their position.
Dennis:
Leaving the comfort zone, which is a typical password, you know, getting out of the comfort zone. It has a lot to do with inspiration. And inspirational leadership as you say and that’s actually the second part of our name. You cannot prosper something if you’re not showing people an inspiration. This is something people probably know.
When you want to build the ship, you can either tell people “Here’s a bar, nails and things, build the ship together”, or you can tell them how beautiful is the air at the sea. And you give them inspiration of how they can actually build the ship and get to the sea so that they can breathe that air.
The same thing is with prospering companies. You say, well you know, probably we have a product line that is struggling, or you have a new competitor entering the market and you don’t know, do I still have the product and so on? And often you have to bring them back and say, “Okay, who is your customer? What do they really want? And how do we get a smile on your customer’s face?”.
And then the inspiration starts again and with inspiration the companies start or the people in the companies start to re-think actually what they do. And probably improve what they do. And that’s a little bit, that’s what we try to, yeah, kick off in the people in our projects.
Darren:
So how to refocus the organisation back onto its core purpose which is to create customers and satisfy customers?
Nik:
And earn money, of course.
Darren:
Well look, it’s interesting because you’ve said that and yet there’s a great quote that I always refer to which is that, “Profit is for an organisation or a company what breathing is for a human being.”
Nik:
Exactly.
Darren:
You don’t live to breathe but if you don’t breathe, you die and a company doesn’t exist purely to make profit but if it doesn’t make profit, it dies. So you know, the idea of what is it that we need to do beyond just making money? Because the end point is, if you get the first part right, then you will make profits. Your core function or your core positioning or your core purpose of fulfilling a need amongst your customers, whoever they are, and that’s what the strategy does, doesn’t it?
Nik:
Yeah, definitely. I just mentioned it because we lost a bit, we went into the, let’s say, the purpose of a company and sometimes people start or companies start thinking about what my purpose is to be, to bring fortune to the people at the cost of the company.
Darren:
Yeah.
Nik:
And that doesn’t work. A company is still a win-oriented organisation, there’s a purpose behind it that ideally is requested or wanted by the customers and they found a way to earn money with it, to invest again and to make them even more successful.
Dennis:
I agree but I think the problem starts when companies become greedy.
Nik:
Greed is very unsexy.
Dennis:
When the shareholder value is bigger than what you actually…
Nik:
When the pockets in the trousers are bigger than…
Dennis:
Yeah, that’s the thing.
Darren:
It’s about striking a balance, isn’t it?
Dennis:
It’s the balance that you need and honestly that balance will become in the future even more important. For example there were some newspaper articles and studies lately about the millennials, you know what kind of values they have. Not only millennials, as well as the generation before the millennials and even the one before.
Darren:
X and Y.
Dennis:
X and Y and Golf. I think they all look for a value-driven economy as well that comes back and says, “It’s not only about money. It’s not only about being greedy and getting the maximum out of it, there must be something more” and when brands or companies don’t get that, I think they struggle sooner or later.
Darren:
I don’t think that’s actually a new consideration. I think human beings have always wanted to feel good about the transactions and the decisions they make. I think what’s happened now is that in a world where everything is bland, they’re looking for a heightened level of feeling good about it, a sort of higher level.
If you go to Maslow’s hierarchy of needs, it’s I don’t just want to get a good car or a nice pair of shoes, I want to also feel a higher level of emotional benefit or feeling from doing that and I think that’s why we’re seeing organisations running around, trying to create a purpose that’s actually way beyond the actual core purpose which is create customers, fulfil their needs and leave them feeling good and wanting more.
Nik:
Leave them feeling valued.
Darren:
Yeah!
Dennis:
I think that is one of the biggest problems a lot of companies have. Do they still value their customers or is it just a cost position that needs to be served as cost-efficient as possible?
Nik:
That’s where I think it’s time for a change in management of a company. We have seen a time, a period now where you optimise everything. Efficiency yes, you can increase your margin, but we have, I think we have been efficient over the purpose of human beings. So we are so efficient that we say its best if you don’t have any human beings on this world anymore.
Darren:
Yeah.
Nik:
That’s kind of killing our own customers and killing the purpose and what we see as well is a lot of people, even in the younger generation doing a lot of offline again, they meet again in person, not only chatting. They’re chatting a lot, but they meet quite often, and they want to have the social contacts again.
Darren:
Yeah, that human connection.
Nik:
The human connection and if you have a service organisation that has no human interface anymore, I mean, try to talk to Google if you want to complain about a search entry or whatever, it’s very hard to find an address or to talk to anyone.
Darren:
I think there’s a phone number in Ireland.
Dennis:
You have a chat bot.
Nik:
I think that’s where the human interface becomes I think, more important and the new generations that have fully integrated those devices which were completely new to us in their lives. They use it differently, they have different views on that, and I think this will be a challenge for the existing companies as well if they don’t embrace this change and see how does this affect the services I’m delivering today in a world where greed was everything so the cheaper I can get the service, the better, without thinking about the consequences.
And now people are saying, “What is this? I need someone I can trust. I don’t trust a machine. Maybe I trust Google, yes but I need someone who is helping me getting organised in this world, so who is it? Is it my friend? Is it people I can talk to where I can see reactions in their faces?” I think a lot of companies will get in trouble with their existing products because their products have been efficient, they’ve been well-designed, they’ve been thought through, but sooner or later, they lack the human touch of it.
Darren:
They’ve extracted everything that they thought was superfluous or extra and got to a very bare bones, but actually people are looking for a richer, deeper interaction than just the bare bones of delivering the service. It’s almost like most products have become utilitarian you know, it’s just to fulfil a very basic need and they’ve forgotten that as human beings as you say, we want that interaction. We want a sense of connection in most transactions.
Dennis:
You bring up a very good point. The utilisation by optimising a lot of products in its delivery, be it chat bots or robotics, and utilising it so they become exchangeable and then suddenly companies are surprised by customers going to competitors because they just say, “Well when the service is already crap then I just go to the cheapest one” and then they’re jumping from one corner to the other.
Or somebody suddenly comes and gives them real brand, real value, with real humans, with real feeling and the delivery of being treated then they go there. Then they don’t go back because that is not a utility then anymore.
Nik:
A couple of days ago I had a discussion with an insurance guy who’s working in the claims department. He said we don’t want any further optimisation of the process of taking the people out of it because when people call us to report their first notice of loss as we call it, they need someone that emotionally can listen to them.
Darren:
Yeah, empathy!
Nik:
Exactly, empathy. They have I don’t know, their house burned down, they had a car accident, that’s a major impact for those people or someone died and it’s about life insurance or whatever. It’s a major impact and if you handle that just by a machine, I think that’s not, we’re not doing ourselves how do you say? What’s the right word for it? I think we are offering services to people, to human beings, that are not if you think about it, it’s beyond our purpose.
Darren:
Yeah.
Nik:
Or it’s below our purpose.
Darren:
Below the purpose, yeah.
Nik:
Below the purpose. We are giving us really bad service and we are proud of it.
Dennis:
And that’s actually where the link to marketing, to communications comes in.
Darren:
Marketing communications, yep.
Dennis:
So because that is the window that is out there, that’s how I communicate with my customers and then the delivery is crap. It’s the worst disaster you can imagine. Nice sunny beaches, people in the sun and on the other side, the service desert, that’s not going to work at all.
Darren:
So from our perspective and the consulting work we do with marketing comms people is that they feel one, they’re too far at the end of the strategic process.
Nik:
I fully agree.
Darren:
They’re right at the end. They are given, “Here’s the proposition, go and communicate that”, they take the budget, they plan it, they optimise it, they make sure that every person that’s possibly in the target audience is going to hear this message and then, either the product, the distribution or the pricing lets the whole thing down because all of the work has been done but not necessarily coordinated to create a whole customer experience.
Like so much work is done in getting the proposition right and the pricing right but then the actual delivery lets them down.
Dennis:
Exactly and that’s where we come in, it has a lot to do with how is the company structured, what is the positioning of the company, how is the product designed that you want to deliver and what are the metrics behind it? How do you measure people? I mean, when you tell your people, “Oh yeah, we are here for you when there’s a problem” but then the call centre agent is managed by the seconds that he wastes with a customer on the phone, well, that is a mismatch!
Darren:
When your KPI is the number of customers you can deal with in an hour rather than the depth of service that you provide, you’re getting a call centre customer officer going, “Yeah, thanks very much, bye!” and hanging up on the customer.
Nik:
Or you get a customer service call centre agent that really can’t help you because this person is not really educated or prepared for the job the person should do or the service should deliver.
Dennis:
Because training empathy is expensive.
Nik:
It’s expensive.
Darren:
And it takes time too and we haven’t got time!
Dennis:
We don’t have time because it costs money.
Darren:
The other big change that’s happened is the pace of competitive change in that almost any category you think of, and I know you guys work across a number of categories, but this idea that you need to constantly be evolving and developing you know, and part of your inspiring I guess is to have a driver for this constant evolution.
Dennis:
Exactly.
Darren:
The thing about that is, it does require, to do it efficiently, an incredible level of collaboration, doesn’t it? Because the speed to market and that development can’t be done in silos or can’t be done by a single company alone.
Dennis:
You need two things. First of all, it needs the leadership.
Darren:
Yes.
Dennis:
Because a leadership, or leader that is not promoting, engaging, motivating, allowing collaboration is not helping people to actually do the collaborating. I mean, the example that you said that marketing people, marketeers are always at the end, and strategy is totally disconnected, that is the problem because there’s no leader in front of it that says Know it.
You all belong together, you really all need to work together and that’s a problem that we often face within companies that actually yeah, that’s often a question about leadership.
Nik:
Leadership starts at the very top because sometimes organisations get some organisational let’s say, efficiency, I use the word again, and to install checks and balances and companies, you need to have a certain silo, so they are there in one or the other and the only person that can trigger the cross-silo thinking is your top management because they allow their people to talk to the others.
To develop a solution that goes across the different business divisions and things like that and to allow really a transformation and it’s amazing when you really connect all the different silos and the different functions and give them the freedom to really design or to develop new ideas because all of a sudden, the company itself can develop an end-to-end production of a new service that goes fast.
As consultants we are just here to support the people, giving them the courage to do things because they are always blocked, “If I do this, I’m not exceeding my competencies or I’m crossing a functional line I’m not supposed to” but when you get this freedom, people are amazing what they can do, organisations are amazing what they can do. And you don’t need to be Google or these high-tech new companies, you can do it with a really old-fashioned company too.
Darren:
It’s interesting you say that because a lot of companies, a lot of traditional companies look to start-ups and tech companies for their sort of secret sauce of how they actually innovate, and it’s not because they have a secret source, it’s because they actually have a culture that drives innovation and a culture that drives it. Because even Google and Facebook have silos.
Dennis:
Or they have this purpose of the company or the promise of a delivery that they want or an experience that they want to deliver. We work a lot with start-ups as well here and especially the collaboration of start-ups which is, apart from collaborating within the company now imagine certain pieces of your product gets delivered by an external party, like a start-up or a think tank or something, then you can imagine how these fights occur.
You have outsourced because it’s more efficient, a certain important piece of your product. How do you get external people into delivering the brands that you brought along, with the promise on the marketing. That’s where it then gets really difficult and that’s why inspirational leadership becomes very, very key.
But we’re losing track here a little bit. Yeah, so start-ups, when you work with them, I think that because they have a very defined purpose, they’re very focused around something, they have a clear idea what kind of experience they want to deliver and that’s why they have this positive mood. This is what we want to deliver, and all these five or six people are target audiences and they all work as a team towards that. Unfortunately, we don’t find that in large organisations anymore.
Darren:
Do you think one of the issues, is because large organisations spend a lot of time incentivising people and that often those incentives are counterintuitive to getting alignment?
Nik:
100% sure it’s right. Incentives are typically one of the first things I try to change, to change the incentives of the management and the team leads so we get the collaboration going because the incentives, they’d rather support the checks and balances set-up then the collaboration.
So, during the transformation you need to set new incentives and new incentive systems or better even, you stop all the incentives and create a purposeful future and people will follow that if you give them time and credibility and appreciation.
Darren:
In fact there’s even evidence that as you mentioned, generation Y and millennials, they don’t want financial incentives because they expect to be paid well and then they want more emotional incentives which is to make them feel good about their time that they’re investing in that organisation. It’s really interesting because baby-boomers and Gen X are the generation of climb the greasy pole, climb the corporate ladder, you know, make your money on your way up, get the big bonus.
Nik:
Nobody ever emotionally thanked us during our work. In those times.
Darren:
It’s interesting how things have changed. It’s not that they don’t want to be paid, they expect to be paid for their work, they just don’t expect to have to held to a random metric of performance to get additional money.
Dennis:
Yes and no. I mean, I have to be honest here, sometimes when I talk with start-ups and these are millennials and Generation Y, this devil of greed sometimes sits on their shoulders as well.
Darren:
Don’t get me wrong, they do want to make money, they just don’t want it to be based on, “Well, you’ve achieved this KPI so here’s your extra money”. They do want to build wealth, but they also want wealth because it gives them power and influence.
Dennis:
Yes, yes, but when it comes down for example to sharing shares with their employees and so on then it’s a lot of, “Oh no no, it’s mine!” That’s what I mean, so greed is actually the biggest enemy of brand based, value based organisations I have to say. That’s my conclusion.
Darren:
And also, the enemy of collaboration?
Dennis:
Yes.
Nik:
Up to a certain point, yes. As long as the greed is common then it will align the objectives but if there’s a group of greedy people and non-greedy people, this is not working long-term.
Dennis:
Yeah sure, when you’re working in a discount or everything is for cheap and cheap and cheap, then of course, yeah. That is as well a brand and the culture and the purpose that you’re with.
Nik:
I think maybe…
Dennis:
But then be honest, that’s what I’m always saying. Then be honest, don’t come in with blooming marketing and say, “Oh we’re doing well we’ll really taking care of everything. That’s not working, you know. That’s why I still think strategy, products, services and marketing need to be aligned across the line.
Darren:
Yeah, there’s a saying for that, when you’re one thing and you’re trying to be something more. It’s putting lipstick on a pig.
Dennis:
Exactly.
Darren:
So you’re saying, don’t put lipstick on a pig. Just say, we’re a pig and we should be happy to be a pig.
Nik:
Be authentic. You are who you are.
Darren:
Well that’s another word that gets thrown around a lot in business these days, being authentic. Being an authentic organisation, being your word, doing what you’re saying you’re going to do, fulfilling your promise to your customers, and yet, that seems hard for a lot of organisations because they’re often torn apart by competing expectations.
Dennis:
And that is again because the strategy, product services and marketing and probably even as well delivery, I mean distribution, are not aligned along a common vision. And again, that has to do with leadership. bBecause then you steer the people wrongly – the distribution guy who is to be the most efficient and then the strategy that says we want to grow in this and this market but the products are not there for that market, and marketing says we only want to talk about the youngsters then things are not fitting together. And that’s what most companies struggle with.
Nik:
And very few companies have an incentive that is based on the success of the overall company.
Darren:
True.
Nik:
I have found working in logistics that I have my logistics objectives and if I really want to achieve them, I really have to focus on getting them done. And I have no time and no incentive to really help my colleague that is trying to reorganise the service delivery to the customer because as my product needs to be delivered differently, sorry, no space, I have to be very efficient. I can’t bring you a Chinese vase to your customer with really soft packaging or whatever. You just stand here and that’s it.
Darren:
There was a great example at the height of McLaren’s dominance of Formula One, every single person that worked for the company, if you said to them, “What’s your purpose?”, they’d say, “To make the car go faster”. Right. So the whole organisation was aligned to a single purpose and I remember a case study because they said even the receptionist when she was asked said, “My job’s to make the car go faster”.
They said, “Well, how do you do that? You’re just the receptionist”. And she said, “I make sure no one gets past me who is going to slow everyone else down getting the car to go faster”. So it was really interesting how you can galvanise a whole organisation behind a single vision and a single call to action.
So when you guys are engaged by a client, and without giving away the secret sauce, what are you looking for in an organisation to see the opportunity from a consulting perspective? You know, they’ve come to you with a problem, but how do you even know that they want to solve the problem? Or that the problem can be solved?
Dennis:
Sometimes they probably think that they’re not a problem, that’s more of the situation that we see, that they see something’s wrong and they have a theory about it but they sometimes need just a little somebody to come here and say, “I understand why you think that is the problem but to be really really honest, (and put the mirror in front of them) that’s not the problem”.
Nik:
It’s similar when you go to the doctor because you have an ache somewhere and you don’t know where it is….. you know where it’s coming from but you’re not sure about it and it takes a good doctor to really find it, especially if it’s a more complicated situation, where the ache is coming from.
And I think it’s similar with our job, that we see the symptoms, some symptoms are just bad numbers, bad quarter or whatever, or bad performance or higher fluctuation of people or a lot of complaints or a lot of warranty costs or whatever.
You need to understand the business model or the operating model, how the company works really. From the outside they look quite alike but in the inside, every company is different. It takes some experience to really quickly understand, grasp, the personality of the company and then say, “Okay, due to that personality, probably in this and this areas we do a first deep dive”.
Darren:
And really start to do the diagnosis, right? Rather than just treat the symptoms.
Nik:
Yeah, we don’t have time. The engagements are quite short typically and it’s not that we have two year’s time or one-years’s time to really analyse everything and dive into the data lake of the company and then search for everything and hopefully find something.
We have to be very focused and within the first week we have to aim for the right potential causes for the symptoms. And then find a solution and that’s typically the first let’s say, the first third of the time we spend and then the rest we spend actually making it happen.
Darren:
Yes.
Nik:
And that’s one of the biggest challenges; finding the solution is very easy, we have a lot of people having ideas, but bringing the ideas down to work in reality that’s a much bigger step.
Darren:
It’s a bit like being able to diagnose the symptom but then the patient doesn’t want to take the medicine. Hey look, we’ve run out of time but thanks for sitting down and having the conversation.
Nik:
It was a pleasure on our side too, thanks.
Dennis:
Yes. Thank you very much.
Darren:
One last question before we go, who’s the worst client you’ve ever had?
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