a leadership imperative for growth: aligning brand & culture to strategy

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  • A Leadership Imperative for Growth

    ALIGNING BRAND, CULTURE AND STRATEGY

    #socalbma @socalbma

    Steve Patti CMO.!

  • WHAT IS LEADERSHIP?

    DIVERSE RANGE OF DEFINITIONS

    Leadership is the capacity to translate vision into reality. - Warren Bennis As we look ahead into the next century, leaders will be those who empower others. - Bill Gates Leadership is influence nothing more, nothing less. - John Maxwell The only definition of a leader is someone who has followers. - Peter Drucker

    #socalbma

  • WHAT LEADERSHIP SKILLS DO YOU NEED MOST? DIVERSE RANGE OF OPINIONS

    HBR.ORG

    #socalbma

  • Control resources Human (employees, contractors, etc.) Financial (budget) Physical (plant, equipment, etc.)

    Direct actions of others Rank authority Social influence

    Deliver results to meet business objectives Strategy Execution

    WHAT DO LEADERS DO? GENERAL ROLE EXPECTATIONS

    #socalbma

  • Elements of an Annual Plan Executive summary Mission statement Business description Business environment analysis SWOT analysis Industry background Competitor analysis Market analysis Marketing plan Operations plan Financial plan

    LEADERS CREATE STRATEGY

    #socalbma

  • Elements of an Annual Plan Executive summary Mission statement Business description Business environment analysis SWOT analysis Industry background Competitor analysis Market analysis Cultural analysis Brand management plan Marketing plan Operations plan Financial plan

    ...BUT IS IT ENOUGH?

    #socalbma

  • GREAT LEADERS MAKE THE CONNECTION:

    BRAND > CULTURE > STRATEGY Br

    and Benefits:

    Staff engagement Staff commitment Lower turnover Access to talent Lower labor costs Increased ROI

    Cultu

    re

    Benefits: Revenue growth Higher stock price Increased ROI Stable cash flow Lower COC

    Stra

    tegy

    Benefits: Revenue goals Business goals Professional goals

    Winning with customers requires not only the right narrative but the ability to consistently deliver against expectations.

    #socalbma

  • Sales (lack of meaningful positioning) Last look RFP price concessions Executive heavy closing road shows

    Customer service (lack of consistent execution) Financial adjustments to make things right

    Operations (lack of consistent execution) End-of-quarter all hands on deck Late hours

    SIGNS OF GETTING IT WRONG: HEROICS DONT SCALE

    #socalbma

  • Why Align Culture to Strategy?

    THE BUSINESS CASE

    #socalbma

  • Approximately 46% of EBIT is explained by the variable of corporate culture (buy in)

    IMPACT OF CULTURAL ALIGNMENT: FINANCIAL PERFORMANCE

    Source: Corporate Culture and the Bottom Line, Eric Flamholz, University of California at Los Angeles, 2001 (published in European Management Journal, vol 19, number 3)

    #socalbma

  • Firms with strong cultures outperform those with weak cultures

    REASON #1:

    IMPROVED FINANCIAL PERFORMANCE

    Source: Corporate Culture and Performance, Kotter and Heskett, 1992

    Average Increase for 12 Firms with Performance Enhancing Cultures

    Average Increase for 20 Firms without Performance Enhancing Cultures

    Revenue Growth 682% 166%

    Employment Growth 282% 36%

    Stock Price Growth 901% 74%

    Net Income Growth 756% 1%

    #socalbma

  • Markets like steady, predictable performance Firms with highly variable cash flows find

    themselves at a competitive disadvantage: Inability to internally finance discretionary investments. Higher cost of external capital

    Firms with highly variable cash flows have: Lower levels of CapEx investment Lower analyst following Lower S&P bond ratings Higher weighted cost of capital

    REASON #2:

    RELIABILITY OF FIRM PERFORMANCE

    Source: The Strength of Corporate Culture and Reliability of Firm Performance, Jesper Sorenson, Massachusetts Institute of Technology, December 2001

    #socalbma

  • Since strong corporate culture enhances goal alignment (employees less uncertain about the proper course of action in unstructured situations)

    Strong culture enhances employee motivation and performance (if employees lack a clear understanding of the organizations goals, coordination is more difficult)

    Firms that execute well may actually compensate for suboptimal strategies

    REASON #3:

    EXECUTION OF STRATEGY

    Source: The Strength of Corporate Culture and Reliability of Firm Performance, Jesper Sorenson, Massachusetts Institute of Technology, December 2001

    #socalbma

  • If employees differ in their understanding of the environment, they will either: Spend more time debating alternatives Behave inconsistently and therefore be more likely to

    carry out routine tasks poorly

    Strong cultures socialize new members more quickly

    REASON #3: (CONT.)

    EXECUTION OF STRATEGY

    Source: The Strength of Corporate Culture and Reliability of Firm Performance, Jesper Sorenson, Massachusetts Institute of Technology, December 2001

    #socalbma

  • Millennials want meaning from their careers Culture trumps

    compensation; reverse of Boomers/Gen Y

    Culture determines: Recruiting top talent Retaining top talent Delivering superior

    financial performance

    CHANGING WORKFORCE COMPOSITION:

    ARE YOU READY FOR THE SHIFT?

    #socalbma

  • Fortune 500 Telco Goals: move down-market (SMB), sell new product, grow MRR Culture: slow to act, inflexible, lack of personalized services

    Niche enterprise software developer Goals: move up-market (Fortune 500), CIO engagements Culture: hip/cool, Millennial staff, 40-hour week, C-suite heroics

    Mid-market financial institution Goals: move up-market (HHI), trusted advisor, increase CLTV Culture: risk averse, employment for life, anti-sales, slow to adopt

    Mid-market hosting/cloud infrastructure provider Goals: move up-market, cross-sell portfolio to grow MRR Culture: 3 brands operating as cultural tribes, silo delivery despite

    customers buying across portfolio

    EXAMPLES OF CORPORATE MISALIGNMENT: STRATEGY ONLY FOCUS

    #socalbma

  • Brand + Culture + Strategy

    GREAT LEADERS ACT

    #socalbma

  • Q1: Do we have a defined culture and can my employees articulate it?

    Q2: Are we living the culture?

    Q3: Is our culture helping or hurting our ability to deliver against business goals?

    SELF-ASSESSMENT

    #socalbma

  • Culture eats strategy for breakfast. - Peter Drucker

    WHAT GREAT LEADERS UNDERSTAND: CULTURE ENABLES STRATEGY

    Culture Strategy

    #socalbma

  • Culture eats strategy for breakfast. - Peter Drucker

    WHAT GREAT LEADERS UNDERSTAND: CULTURE ENABLES STRATEGY

    Culture Strategy

    #socalbma

  • WHAT GREAT LEADERS UNDERSTAND: BRAND STRATEGY SHAPES CULTURE

    Positioning => Strategy Purpose + Vision + Mission + Values => Culture

    PURPOSE

    VISION

    MISSION

    VALUES

    POSITIONING

    VISION: What we aim to achieve

    POSITIONING: How we differentiate from our competition

    PURPOSE: Why we exist

    MISSION: How we plan to achieve our vision

    VALUES: What we stand for and how we behave

    #socalbma

  • WHAT GREAT LEADERS DO: PURPOSE + POSITIONING = RESULTS

    Brands that center their business on ideals had a growth rate that is more than triple their competitors. Investments in these companies between 2001-2011 would

    have yielded a 382% greater return than the S&P 500.

    Source: Millward Brown and Jim Stengel study, 2012

    #socalbma

  • Benefits of Employment Value Propositions as part of culture and internal branding: Employee engagement: 55% vs. 36% Talent acquisition: 60% vs. 40% of labor market Turnover rate: 10% vs. 16% Compensation: 26% (lower) cost advantage Commitment: 38% vs. 9% high commitment levels

    WHAT GREAT LEADERS DO:

    ENROLL EMPLOYEES IN THE BRAND

    Source: Is There a Strong Correlation for Companies with a Strong Employment Brand Between Employee Engagement Levels and Bottom Line Results? Park and Zhou, Cornell University, Spring 2013

    #socalbma

  • Take Stock Take Action WHAT SHOULD YOU DO?

    #socalbma

  • 1. Understand how brand per formance impacts business per formance (employees, customers, prospects)

    2. Assess the alignment of internal culture 3. Monitor brand per formance across the buyer journey: new

    buyers + existing customers Perception Intent to purchase

    4. Measure financial impact 5. Activate executives to shape culture to improve business

    per formance (delivery alignment to support Sales) 6. Validate or Adjust based on relevance and importance to

    target audience(s)

    STEPS TO ALIGN YOUR ORGANIZATION

    #socalbma

  • MEASUREMENT AND OPTIMIZATION

    Tools exist to enable leaders to monitor and measure brand correlation to financial performance.

    Benchmark Current Brand Performance

    #socalbma

  • MEASUREMENT AND OPTIMIZATION

    Tools exist to enable leaders to monitor and measure brand correlation to financial performance.

    Identify Unseen Opportunities

    for Growth

    #socalbma

  • MEASUREMENT AND OPTIMIZATION

    Tools exist to enable leaders to monitor and measure brand correlation to financial performance.

    Define Dat

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