Marketing, the new rules of the game

Summary
In business publications we now see a number of measures you can take to look at the future with more confidence. In this column we highlight a few of them. We also mention a number of bandwidthscenario’s which can help you to prepare for a future where the roots of Holacracy are important for your organization; be dynamic, be agile and be nimble. In one of those bandwidth- scenario’s the rules of the game are changing; a consumer buys on price-quality and is less interested in the brand image, a new place for the integral commercial process; online, and less profit but more prosperity, also in organisations internally. Here we further dig into the details and context.

General
In a number of business publications we see what we can do to tackle business issues. Both in marketing and in entrepreneuring you have to be active and pro-active, as a manager and as an entrepreneur. Customers and markets give you guidance. Think and act, sitting there and hoping for better times is not going to be enough although a large number of entrepreneurs think they just might get away with it.

The actual situation
In the Netherlands there are a lot of examples of what consumers do and don’t at the moment. Research done by Harold Claasen of Acxiom Holland as published in the Marketing Tribune (12 th of may 2009, “consumer in crisis”):

•    Consumers are less willing to spend money on good causes
•    They spent less in the supermarket
•    Not much interest to commit to a mortgage
•    Less intention to buy a car, new and second-hand
•    Plans and wishes to change house are decreasing
•    Starters on the housing market don’t want to borrow to buy a house
•    Less intention to spend money on buying premium brands
•    And; they don’t want to spend more money than they have. I you don’t have it, you don’t spend it.

Those trends reflect a loss of confidence in material welfare with far-reaching consequences. Although the research has been done in Holland, we feel safe to assume the results are applicable to most of the western world. Especially the housing market, the reluctance to get into major financial commitments for housing but also for the premium brands in the consumer business seem to be broadly applicable.

What can we do?
A number of suggestions from Rob Beltman, (the 10 golden rules of recession marketing, ICSB):

•    The right proposition at he right moment
•    Use the momentum of change
•    Focus on you core proposition with ease and sharpness
•    Be prepared to do more with the resources you have and count on a tougher battle to get them
•    Love “no-budget”, be an entrepreneur and be creative
•    Focus on the right profitable customers
•    Help your customers out
•    Don’t fight on price only. Even price-fighters don’t fight on price only
•    The show must go on, let them forget the recession
•    And finally, don’t believe anyone, even the authors of the books.

Nothing wrong with the above. Sensible to do and a number of new cost cutting exercises are handy as well. But, are we really going for it? We don’t think so. A large number of entrepreneurs and a large number of marketeers are taking the gamble that 2007 and the first three quarters of 2008 are going to return pretty fast; at last at the end of 2009 or the first quarter of 2010.

Possibly; but instead of spending a lot of energy to answer that question we could see the return of the old situation as one of the bandwidthscenario’s you are going to develop from now on. One of them can very well be the return of old demand levels shortly.

The bandwidth scenario’s
A different bandwidthscenario, based on the following:

•    The bottom has not yet been reached (july 2009), and the material growth might well be replaced with growth in more human values. In the meantime the rules of the game will change.
•    Assume there will be a shift in consumers (and organizations) preference for functionality in their buying behaviour and logically, emphasis on price-quality optimization.
•    If buying behaviour changes, the need to further invest in building premium brands, will decrease. In this scenario you might also see that sales, which used to be seen as a primary process, will be under discussion with regard to its added value.
•    The benchmark is online. Lean and mean by nature, no heavy organisations, network structures, no premium brand limousines but ”Green Wheels”, no impressive offices in premium locations.
•    If those organisations are going to be the benchmark, a new round of cost reductions seems logical. Compare to the benchmark and decide where money has to be spend to meet the new competition and the new rules of the game.

If you assume that the benchmark are small companies with an online commercial process; those companies will determine the new price-quality relationships. Good to check whether your company can compete.

Those companies will need different leadership. Servant leadership or similar concepts will have to be considered. Leadership needs to be more transparent and more democratic. The boss will be more of a facilitator, somebody who carries decision making further, instead of autocratically controlling it. Less isolation of higher management levels will be the result in the end.

In this scenario the old paradigm: “Predict and Control” does not fit very well. We can now think about dynamic steering, and innovation. Dynamic steering as a concept works well with our scenario’s. If you have to change; everything in your organisation is tuned to do so. Change to a new scenario and take care of careful communication about the reasons to do so.

In other words; we can use a new organisational concept as Holacracy very well. We discussed it before on our Dutch site and you can find more details on Holacracy in the White Paper (www.holacracy.com).

Holacracy works with:

•    Dynamic Steering
•    Double Linking
•    Integrative Decision Making

With those starting points we can tackle a number of the issues we discussed.
Why would Marketing and Sales be the first parts of the organization to implement Holacracy? Because you can include your customer into your organization with the double linking concept. Intended to work within the different hierarchical levels in the organization. It asks for more attention to meetings, but by working with (military-like) operations meetings of around 10 minutes every day you might end up with effective action as a result, because the platform is a lot stronger.

Another reason to embrace Holacracy; people like Jeremy Rifkin (“The European Dream”) Brian Robertson (“Holacracy”) and Marilyn Hamilton (“Integral City Meshworks Inc”) think that Europe can play an important role in thinking about new economics and a new way to look at societal issues.

Conclusion
Major issues: a society which heads into another direction and will guide the way organizations have to react. The future is difficult to predict; let alone control. We need new ways to handle that. The above might help to tackle the issue.
Robert J. (Bob) Fetter, july 2009.