SPEAKER_00 0:15

Hello, and welcome to our first QA. I hope you're all enjoying the course so far. Certainly from the engagement on LinkedIn in our LinkedIn group. It seems like you are. And if you haven't got onto the LinkedIn group already, please do because it's a really good place to sort of share thinking and ideas from the course itself. This week you're in the strategy module with the wonderful Roger Martin and a guest appearance from Mr. Ritson himself with a primer on marketing strategy. And obviously that's a bit of a contentious one because Roger Martin puts forward the view that actually corporate strategy and marketing strategy are not different. I actually think they are. I think you have to think quite differently about a corporate strategy, and the marketing strategy actually feeds that corporate strategy. Although I also think that bringing into corporate strategy deep consumer understanding is really important and doesn't happen enough. So I would agree with him on that point. The FAQs I did with Professor Roger Martin are good because he adds more uh detail. Some of the FAQs, it was hard to get them to talk more beyond the content they put in the lecture, but he really does. It's a really good conversation. So I'd really recommend that if you get the chance to um to listen to it, you should do. So I'm going to go through the questions that we've had through, um, and then right at the end of this session, I'll I'll talk a little bit about the simulation. And I know that uh some people are already feeling a certain amount of sim anxiety, and I totally get that. Uh, but there is no need to. Uh so I will talk a bit about that right at the end. But let's, we've got a few questions, not lot, not loads, which which says to me that the FAQs is doing its job, uh, because obviously we wanted to make sure that the most obvious questions uh or questions that we knew would come up were answered in these FAQs. Um so I'm just gonna roll through the questions that have come in and invite you all actually to add to these answers if you um if you you you feel think differently, and let's keep the conversation going on the LinkedIn module. So I'll roll through them basically in the order that we've had the module, so starting with some of the leadership questions and starting with um one from Jessica Hamilton. Hi, Jessica. Um and basically what Jessica's saying is that in the leadership module, there's a lot of advice about how we reshape how we approach people in order to lead them, and that depends on the circumstances and the leadership style of the person you're you're leading. So that yeah, that's all about adaptability that we saw in Jay Cott Jay's um module. Uh, and as she says, there's a lot of emphasis on adaptability. But the question from Jessica is but what if you're talking to someone who doesn't apply the same thinking, who never changes their perspective or remains rigid in their style and beliefs, and yet they are the ones in charge. What do you do then? Well, it's a great question, Jessica. And you are right in that Jay takes the view that as future leaders yourselves, what you need to be thinking about and be aware of is your own leadership style and your own ability to adapt to a situation or to the people that you're trying to lead. This question flips the view, and it sounds like you're experiencing right now, and it's a perfectly valid question. If anyone else has any experience with this, please do chip in and let's see if there's any other examples that we could give to Jessica. But based on the experience that I've seen in this area and reading around leadership, I find leadership a fantastically interesting area of management. I think that I would make a couple of points. And let's make it the assumption that you don't want to get a new job, because one thing you can do is leave, but that's easier said than done in today's job climate. So let's make the assumption that you don't want to get a new job. Then you have to find a way to work with it, don't you? You've got to find a way to work with this person. And I I think one way of thinking about this is to take a step back and think about what motivates them to lead in that way. What why? Is it um is it habit? Is it historical? Is it um not being able to see? Is it because it's effective for them? So so step back and think about why would this person lead in that way? And then I what I've seen done very effectively in other companies is how do you build a relationship with them in a different sort of a way? Um, how do you because you you're not going to change that person probably, but you can change the way that you respond to them and you can change the way that you view them. Um, so I think it's about what what's motivating them to lead in that particular way, and how could you develop a relationship with them that works with that particular motivation? The other thing I would do is is watch how others manage their interactions with them. Um I I've done this myself. You know, when I've when I've been working with big teams and you see someone who's particularly effective at managing upwards, which is what we're really talking about, how they do that. Um and they are often people who are very good at at being able to respond with to that particular person at and respond to them knowing their style of management, but at the same time retain some authority. Um what I would also say though is just you you can't not be yourself. So be yourself and be professional. Um and I mean I've over the years I've seen I've seen some really very difficult leaders and how their teams work with them. And very often very, very difficult people, very rigid people don't prevail for that long. Um, I mean, that might not be the situation that you've got right now, but those are just a couple of thoughts from me, actually. What motivates them to act in that way? Can you be build the relationship in a different way? Can you do that and stay you? And what are others doing? All of those, I think, are reasonable ways of looking at this problem. So good luck with that, Jessica. Next, a question from Neave Malone, who says in Jay's module, he talks about leadership as a 360-degree activity leading upwards, which we've just been talking about, and across the organization. How can leaders effectively influence decision making and drive progress when they have no formal authority or direct control over resources or full access to information? How do you then do that? Well, the module to look out for, actually, on this one, is the Alison Frigail, Professor Alison for Gale's module, which comes later down our programme. I think it's maybe, so we've got a reading week next week, and it might be maybe one or two after that. Um, I'll put it in the LinkedIn. Um, she's also written a great book as well, so I would I can really recommend her book. But but her module is on organizational behaviour, but actually what she talks about is influence without authority. So exactly what you're talking about. Um, and she will cover that in detail. And what's brilliant about her module is she gives you specific tools and ways of doing this, and you will get a lot more detail in that module. But for now, what I can tell you is a lot of being able to be effective in organizations where you need to take people with you, both seniors and equals peers, but you have no authority, is a lot a lot goes into the pre-planning, actually. A lot goes into building relationships before you need the relationships. It goes into involving people in the work before you need their validation or their information. Um, and Alison will talk in a lot more detail about this, but a lot it goes in, you can't do it in the moment. This is something that you work towards. Now, a very good example, and just to bring that to life, that I was recently part of was leading a team for innovation, where RD very much had their own agenda and budget. Uh, but and obviously I was part of the customer team, but we needed to work together. Clearly, we did. We couldn't have RD doing one thing and and the customer team having a completely different point of view. So, how did we make it work? Well, I think we we really did what what I've just talked about, which is that we we worked together early on what were the RD team wanting to pursue and why? What was their point of need? Where were they building, where had they already put down some resource or made a made a sort of credit, if you like? Um, and how could we work together to build a joint approach which would be in the interests of both the business and the customer, and developed a process by which we would share learning, uh, understand each other's KPIs, work to align KPIs, because very often what happens is that there are different KPIs that almost contradict each other. So one of the agreements is how can we align our KPIs so that we're all pushing in the same director direction? But this is ongoing work. Uh, I think the big lesson from both this and Allison's module is you've got to start early and build those relationships and build those um journeys together and understand how that team is measured so that you can then work towards it with them. So I hope that's helpful. Really great question though. Thank you, Neve. Um question from Hannah Neal. When it comes to leadership style, is there such a thing as flexing too much? A couple of examples, um, moving from autocratic to democratic too quickly, if you have different team members that respond better to a different leadership type style, how do you manage them both in the room at the same time? I think this is a really valid question, actually, because I think it's it's a question that brings, and I think it's something that you're going to think quite a lot through this course, which is that academic theory, even the area of leadership, which is very human, in on paper is always quite compelling. In practice, we always have to adapt it. We always have to adapt. It doesn't make it worthless because I think it gives us a framework from which we can work, but you do have to adapt it. Um, so in reality, I think you know, Jay's point is you have to be flexible and adapt. But clearly, flipping from one to the other is just weird. Um, and Jay's point about adapting for the appropriate style of the occasion is a good one. But I think, as he would say, this always has to be grounded in a sense of real authenticity, energy and community. Uh, those foundations that Jay also talked about um from the Gotham Jones work around making you a good leader. Like good leaders are also authentic, they have energy and they build community. Now, you've got to be able to do that while also, where appropriate, adapting that leadership style that he talks about as well. So, what's the answer to the question? Well, I would be interested to hear what other people say on this. I think I would say first and foremost, be authentic to yourself. Um, and then secondly, I think you can't flip from one to the other in the room in a room at the same time. That that just is too odd for people. But I think you could, for example, um take a very um democratic view at one point during a process and then become a little bit more visionary or autocratic. And I saw actually I saw this last week in a charity that I was working with, where I observed that the CEO uh with her leadership team, that classic leadership team of what, six, seven people, was very democratic during the conversation, wanting to hear from everybody, wanted to hear everyone's point of view, but then really quite visionary, perhaps even autocratic, when it came to right, this is what we're gonna do. And I think that's probably how how Jay would would see this actually. Great question, though. Thank you. Now we're gonna move out of leadership and into decision analytics. First one from Chris. Um, how what do you do when there are potentially unmanageable amounts of factors in your decision analysis tree? And how do you pick the right ones to map out? Yeah, well, um I'm guessing, Chris, what you're talking about here is the is the options or the variables, which means that you'd end up with just too many branches. Uh when I've used this tool, and I use this tool quite a lot, actually, the framing definitely helps. So that framing that Yale talks about around objectives, options, and risks, actually, if you fill that out and think about it carefully, it reduces the possible variables because you're not just making a long shopping list. Because when you've got to think about all three of those things, it actually reduces the number of variables. So I would start there actually and remove the ones with too much risk or are not centered on the objectives. And that's, and then really work through the decision tree based on the on the options or the variables that really fit the objectives, options, and risks that you've got in your sort of foundational model. So I think that's your grounding. That's what I would do. Uh, good question, another one. Um next up, we have, oh Chris, I wonder whether this is also from you. I've lost a name on it. Apologies. Um Yale's decision analysis model seems like one of those database models that look great on paper. So this is the point I was talking about earlier. But if you lose the comp, if you lose the company in an ordinate amount of money on a decision no one would have risked taking on its own, the excuse that I base my decision on a weighted average of estimated value, which made which made it the correct approach, is going to get you fired, surely. Uh, yeah, probably. But I think I think um what you're saying here is probably the point I just made a bit earlier, which is that academic models in real life can seem impractical. I mean, what I would say about that though is actually if you had used the approach properly with the right data, then that wouldn't have happened. That shouldn't have happened. But anyway, ide you. Academic models can sometimes seem very impractical. And they won't, and and and this one included won't get you out of poor decision making. You can't blame them for that. You can't say, well, I use the best strategic tool out there, and I definitely did port us forces and did a value curve, but it it won't get you back out of poor judgment, and neither will a decision um decision analytics um model either. But that aside, and this one in particular, in general, and what I found over the years is that what these models give us, and you're going to see more as the course progresses, is a framework for thinking through an issue. And this one in particular is good because even if you don't do every calculation, and if I'm honest, uh it would be rare that I or anyone does all the calculations through to the, you know, exactly calculating each branch of the decision tree, often because you haven't got the data actually. Uh I think the the the actual process of writing down your foundational objectives, options, and risks, and then scanning out a decision tree with maybe not even the numbers, but like a plus, minus, plus plus for likelihood, and just working through what options lead to what options, I think um forces us to be more considered about making decisions where there are lots of variables present and different outcomes are based on that. Um, rather than just going with like GAT as Yale would say, or previous experience. I think you don't have to use it in its pure form to get value out of it. And that that's what I how I would recommend using it, actually. Uh, but let me know what you think. That's what I think. I think it's useful not in its pure form. Right, moving on to finance, and a question from Sylvain. And actually, Jessica, there's one that you asked that I think is very similar to this. So I'm going to tackle it within uh the Sylvain question. While it is essential to team up with the finance department, for a marketer, it is notoriously difficult to demonstrate the direct impact of their activities on classic financial KPIs. And I'm smiley about this because this is my pet subject. Um, it's usually a question of proxies or leading indicators. Uh, that's why the budget conversation is so challenging. So, how do you approach this topic in the context of tough budget discussions? I love this question. And in fact, I think I have brought, I did bring this up with Moira on FAQs. So have a listen to them. I think this is one of the thorniest issues in marketing, and I spend a lot of my time talking about it. And in fact, I have a colleague who is currently doing a PhD around putting together marketing KPI frameworks and how you link them to business uh financial outcomes. So watch that space. I will definitely share it when she completes her work. Um yeah, so I'll pick this up with Maurio. So take a listen to this. Look, I understand what you're saying about this. Basically, it's the question that we in marketing use are measured, our KPIs are often, and we set them ourselves, are often proxy measures like increase in awareness or increase in preference or um, you know, getting a bit, yeah, preference or certain brand associations, even. And they, to a finance people, are a long way off a financial outcome for the business. And what we don't do enough of in marketing, I think, is make the connection between those measures and the impact on business outcomes. Because essentially, with all of our marketing activity, what are we trying to do is to create sustainable returns for the business. And we create sustainable returns for the business by marketing uh effectively in order to maintain a price premium, keep our distribution, encourage repeat purchase, get repeat purchase, encourage frequency, to bring more customers to our brand and to keep people buying more and more often. So those are the and those measures then link directly to financial outcomes, to the top line and the bottom line. So I think we in marketing don't do enough, even to make the connection that I've just made and said, look, you know, our job is sustainable returns for the business. The way we achieve that via the customer is via these levers. In order to influence those levers, we have these measures. Now, the bit that we then don't do is an increase in preference score on a brand equity does what for um repeat purchase or ability to hold a price premium? And I think we can be better at doing that. And in fact, Moira's suggestion is that we should work, you've got me going now, you see, is that we should work with finance to work together to try to test the um the assumptions that we make about increases and how they then can influence particular markers of financial markers that we know that we're interested in or we know that finance are interested in. So I think we've got to be we I think we've got to be better at understanding us understanding the connection between, say, brand preference or particular association and willingness to play a price premium or frequency of purchase or our margin robustness or our quality of distribution, we should reverse back out of those and understand what expenditure, what lever influences that, what gives us that revenue durability and sustainability, pricing power, retention and cash flow predictability. Because we tend to stop at our KPIs. Whereas what we should do is either go forwards to pricing power, revenue durability, or start at revenue durability, pricing power, and come back to our marketing levers. And we have to work with finance to do that. Um, and it is possible to do it, and I definitely do speak tomorrow about that in the FAQ. So have a listen to that. But it might not be the answer you want because it involves work and it involves working with finance. Um, I always remember Marg Jobling um at um Nat West actually said in a in a podcast I was working with her on uh you have to make a friend in finance. And that that's a friend, a friend who can help you, who's not going to stand in judgment. And I think that's all part of it. Um, long answer, subject close to my heart. I hope it's helpful. Uh question from Claudia, I think it is. To succeed in different company environments or different roles, do you know any techniques or methods to adapt your risk profile? So, how do you grow from a risk taker to more risk averse or vice versa? Look, um there's quite, I mean, I'd be interested to see what other people say. I think you can't change who you are. You are who you are. But I think because we do work in a corporate, most of us work in a corporate environment, it's a good practice to understand what is the risk profile of the company that I'm working with and then adapt accordingly. So even with companies that I work with on a consultancy basis, you know, I do a lot of work in healthcare and pharma, by nature they're very risk averse, and I understand why, heavily regulated, very litigious. And so I adapt how I, my recommendations, my strategies, I adapt for that because I know that that's the environment they work on. On the other hand, when I'm working with a tech startup, which I am right now, together we agree that we can be um, we can take a more risky, risk-forward, I say, I would say, approach. So I think it's not about you, I think it's about the company that you're working with, actually, and being able to read what risk profile they have. So I hope that's helpful. Uh, question from Paul Summers. The best companies are those where finance and marketing teams work together, agree to create value for their respective shareholders. So it seems logical that together with the commercial team, they should work together as a harmonious trifecta. Oh, yeah. Uh, why do silo mentalities breeding a lack of correct uh collaboration and trust often pervade? Yeah. Why? It's a great question. Uh again, obviously talked a bit with Moira on this one, particularly with finance. I think a lot of this, my observation actually is a lot of this is to do with different KPIs and KPIs not aligning. So if you take commercial marketing and finance, they will get measured on different KPIs. And I think very often what we find is that the KPIs don't actually align together. So that doesn't encourage uh collaboration. There is a brilliant book just come out called The Score, which I can really recommend. I'll put it if I haven't already, maybe I'll put it in the LinkedIn. I'll put it in the LinkedIn. Um, and it it sort of talks about this and talks about how um the pursuit of different goals basically is is toxic in a lot of environments. So I think different KPIs is a problem, but that doesn't mean that it's beyond beyond us to work with our partners in those areas to try to look for alignment in KPIs. And I think that's what we have to do. Um the other thing I think is that very often in marketing we beat ourselves up for not understanding finance. But I think there's a lot of finance that doesn't understand marketing, and that brings me back to Mark Joblin's observation of make a friend in finance, because that can work both ways. It could be useful for finance to have a friend in marketing, and together you can share and build. So I think we should be less critical of ourselves about not understanding finance or commerciality because I think finance often doesn't really understand marketing and brands, and maybe we could do more about that. Um, another question from Alyssia about finance. Moira said in module four that profit after tax goes to shareholders. What does that mean if you want to invest in future growth? Is it an additional pro in an additional project or additional RD? And how do you factor that in to reduce profit? And where on the financial documents is it? You're going to grapple with this in the simulation. But essentially, here, investment projects are usually agreed with shareholders. And there are two types. If it's a tangible asset, which you will grapple with on the simulation, like a new building or a new factory, it can be capitalized and therefore it doesn't hit the PL. In our world of marketing, we're usually not talking about that. We're too when we talk about investment, we're talking about an intangible asset investment, which it may be brand, um, maybe RD, because we see brand as an investment. Um, and even bits of RD actually are seen as an um as not a capital tangible asset. They're seen as an expense. Um, and even though you know you will reap the benefit over the years, it hits the PL in that year. Uh, and I do definitely cover this with Moira. Um, so you know, we view investment in the brand, for example, if we take the classic Binett and Field 6040, we would see the 60 as an investment that's going to bring returns over several years, but we can't treat it financially like an investment. We have to, for regulatory reasons, it will hit the PL in that year. And that's regulatory reasons. It's not probably not the answer you wanted to hear, but it's the answer that is the answer. Um, and the final question comes from Hannah Neil. When it comes to returning cash to shareholders, how do companies choose between dividends and share buybacks? Why would you pick one over the other? Again, something to think about um when you're running the SIM. Um, so both are ways that you could return surplus cash to shareholders. The decision is not really an either-or, it's a question of commitment. So dividends are usually seen as a promise and a sort of like we're going to keep doing this. So a company will often choose dividends if they know that they can commit to it. It has a sort of um permanence to them. Uh certainly marketed investors tend to treat them as sticky. So you a regular dividend then becomes expected. Um, and if you cut the dividend, it can be read as a sign of distress, like a problem, uh, and it can be punished in the share price. So um, whereas buybacks don't carry the same commitment, they're discretionary, they can be ramped up, they can be paused or just stopped quietly without with little penalty. So that's the answer, really. That's how you would choose. If you're gained to dividends, are usually seen as a long-term commitment, and if you don't commit to them, you get punished. Share buybacks are useful because you don't have to make that same commitment, basically. And that's that's generally how those decisions are made. Um, and that brings us to the end of the questions, which was a great set of questions. Thank you everybody for taking the time to put them in. And if you have any follow-ups or you've got anything to add, let's use the LinkedIn for that. And I will definitely remember to put in the book I mentioned, actually. Um next week, so we're coming to the end of the strategy week, and you should all now be making sure that you sign up for the simulation. And my advice on this is don't feel overwhelmed by that really long video that I did about the simulation. Because once you get into it, it does become a lot easier. I would feel overwhelmed by that really long video, but please don't. Please sign up to do the sim because even if you don't do it every single week, you will still get out so much out of the process of just engaging with it. Um, it sort of is a competition, but it's not a competition. Uh, I would I think even if I were only gonna input twice in the forthcoming weeks and I would still do it. In the knowledge I'm doing it for me, not to kind of win anything or to come top of the total shareholder return. I I would definitely do it because I think you're gonna get something out of it. And what I would say is it becomes so much more manageable. So I'm not gonna lie, week one, when you do it next week, which is why we've given you a reading week, is gonna take you, take some time. And what I would do is I would get onto the platform and I would I would move around it and I would look at everything that you're gonna do, and then I would come off the platform and I would think about my strategy. I would think, okay, what is my strategy for how I am going to compete in this market and write it down. And then I would write down some initial thoughts about and what does that strategy mean for how I'm going to invest in marketing, which areas of business I'm going to put an emphasis on, whether I'm going to, which areas of the world I'm going to work in, how much I'm going to do an ESG. So I think rather than look at the decisions and go, oh, I'm going to make that decision, that decision, come back and develop a strategy, an overall approach, and then write down the implications of that approach for the various decisions that you have to make. Then go in and just make some decisions. And I think you can run it as a sort of a test and make sure that you're not doing something stupid like missing something or spending too much money in an area that's going to hit your finances. It will tell you if you've done that. Put those decisions in and let it run. And then the SIM rewards consistency and flexibility. So if you quickly see that you've absolutely screwed up on the strategy, move quickly and early to correct. If you still think your strategy is going to actually work, but you need to respond to the competitive environment, then respond. What the SIM and business don't reward well is a lack of a strategy and a lack of uh consistency in how you're implementing that strategy. So that's my advice. Don't don't feel overwhelmed, do get involved in the SIM, do use the LinkedIn group. We're there to help and support and and enjoy it. Um and keep posting the questions, enjoy the reading week, and we will speak again. Thank you. Goodbye.