Archive for June, 2014|Monthly archive page

Social business replaces social media

Busy managers should be excused if they are not current on every development in the social media world. In discussions around digital transformation, one question regularly comes up: “Where is social media heading?” Based on our research and project work, we have identified four emerging social media trends. Overall, social media is morphing from a communication tool to a larger social business enabler.

1.  It is not just for the marketers

Marketing no longer has a monopoly on social media programs. Other groups like HR (for external recruiting), product development (for innovation) and customer services (for product support) are increasingly driving usage on these platforms and delivering business value.

2.  Content strategies are evolving

Most marketing efforts “push” content out more than 90% of the time. Marketers (and other departments) will progressively become more social, seeking a balance between pushing information and engaging their customers in dialogue around the content. Moreover, visual content will likely become more prominent in these social and collaborative conversations. Expect new social apps to better support the embedding of visual content (including live video) into conversations to better deliver sales demos or technical support.

3.  Resetting the community button

Many attempts at community cultivation are failing due to a lack of resources and mismanagement. Equally important is the dearth of dialogue-fostering social elements in the content, such as relevance and uniqueness that cater to specific interests. “At its core, social media is about being social. Your social strategy should be designed to deliver an interesting core message that wants to be shared,” says Marilyn Sinclair, president of communications company All About Words. Companies are steadily getting serious about building focused communities that emphasize social sharing.

4.  The rise of social analytics

To better target business problems, understand customers and generate enterprise-wide ROI, firms are beginning to analyze, listen and learn from customer experiences, and tap into the social pulse of customers, advocates, influencers and their collective networks. These learnings will improve the quality and quantity of social media interactions.

Social business initiatives are all about enabling workers to collaborate with customers through social media to solve problems or capitalize on opportunities. To do this, participant conversations will need to cross functions, locations and devices, blurring the barriers between the internal and external roles. This transition won’t be easy for every firm. Gartner, an IT research firm, predicts, “Through 2015, 80% of social business efforts will not achieve the intended benefits due to inadequate leadership and an overemphasis on technology.”

The following success factors can help a firm exploit the trend towards social business:

  • Make strong leadership and expert change management a priority

When it comes to leveraging IT, the corporate Achilles Heel is often internal adoption. All senior leaders — and not just the CIO — should prioritize social business initiatives, model the right behaviours and deploy the right change resources and tools to drive employee acceptance. For example, some CEOs are appointing Chief Digital Officers to drive digital adoption across the organization. In other cases, companies have created senior, cross-functional steering committees to secure alignment, focus and investment. Technology is merely the delivery system

  • Establish a clear and compelling purpose for social business from the outset

Most organizations look at collaboration as a technology platform issue not as a solution to a specific business problem. Having a platform view isn’t necessarily wrong from an enterprise perspective but it frequently leads to band-aid approaches that don’t get to the root cause of problems and typically get bogged down in organizational inertia.

“Organizations fall in love with the newest ‘thing’ and they want to be cool, but they forget that their objective is to compel an audience to do something specific. Clear, consistent and compelling messaging that address social business needs across all platforms is key,” says Sinclair. “Technology is merely the delivery system.” Social business is best enabled when the business problem drives all key decisions including technology choice.

  • Consider systems and cultural tweaks to support social business

Many companies today are not well organized to conduct social business. For example, community management and customer-service efforts often lack sufficient capabilities including tools, people and skills to deliver credible programs that address customer needs. In other cases, a firm’s organizational dynamics (e.g., siloed structures, and oblique processes), performance measurement tools and culture norms do not promote free flow communication let alone collaboration.

Companies can maximize the value of their social media investments and efforts when they shift from a marketing-centered, “push” approach to an organization-wide, problem-solving strategy that engages both the community and firm. The first step in leveraging social business comes from exploring how a company can meaningfully talk and listen to their customers and stakeholders to collaboratively address their needs through the right business solution.

For more information on our services and work, please visit the Quanta Consulting Inc. web site.

Organizing for global growth

Management guru Alfred Chandler asserted that business excellence comes about when “structure follows strategy.” Unfortunately, many Canadian firms with global ambitions fail to heed this axiom. In their drive to tackle international markets, they often pay insufficient attention to how certain groups, like marketing, end up being organized and perform their functions. This neglect can kibosh even the boldest plans. Fortunately, managers can fall back on a rich trove of best practices.

Companies go global as part of an organic growth strategy or because of an acquisition. The potential returns are great but so are the risks. Given the high stakes, leaders should tread carefully but not too hesitantly.

Managers need to address three key questions up front:

1. Which organizational model — centralized at the home base or decentralized at the local office — can best deliver the growth plan?

2. What are the tradeoffs between a single, global message/program and more tailored, local campaigns?

3. How do you foster integration, collaboration and sharing of best practices between the different offices and teams?

Addressing these questions will expose latent tensions and implementation issues (and new synergies) between various approaches and groups. The story of how two firms addressed the challenge of going global differently illuminates some best practices and key pitfalls. Lets start with a company that has done it right — Manulife Asset Management, the investment arm of insurance giant, Manulife Financial.

Though a global business, it was not leveraging its international marketing and distribution capabilities to market as a local one. The leadership was looking to drive more cross-pollination of best practices and tools, better servicing of local client needs and more efficient processes and practices. A senior Manulife executive, Anthony Ostler, was brought in to reorganize the entire marketing structure. Some of the major changes included: establishing a centralized CMO office; retuning roles and responsibilities, as well as workflows; and promoting richer communication. After 12 months of transformation, the results were impressive. Lead generation and RFP success rates soared and margins widened while overall marketing spend fell.

What they did right:

  • Collaboratively redefined success and the marketing and change strategy that would deliver it, aligning all teams and offices to that single vision
  • Looked at the business holistically but did not shy away from getting the details right, like refining employee career paths, adjusting metrics and optimizing workflows
  • Adopted a “hub and spoke” model that centralized key activities like strategy and RFP creation and decentralized others like product development and local marketing support.

Ostler believes “Focusing on the client experience helped to guide all the decisions and was critical to success. At the same time, efficiencies could be recognized by globalizing certain aspects and we moved aggressively to do this. This client focus coupled with efficiencies helps the business to grow.”

At the other end of the spectrum is a professional services firm that acquired a successful overseas competitor in order to get a foothold in a market it deemed vital for growth, and to ensure retention of its multinational clients. This was not a hostile takeover and the clients viewed it favourably. However, after 18 months the forecasted revenues were not materializing despite significant marketing investment and considerable head office attention.

What they did wrong:

The new firm was managed in a controlling, overly formal fashion that was at odds with the professional services firm’s more entrepreneurial culture and practices. For example, local marketing programs were abruptly cancelled in order to capture early cost savings. Since both offices shared many of the same clients (often on the same project), the acquiring firm assumed the habits and needs of these clients were similar across geographies. In reality, each client subsidiary acted very differently leading to problems and gaps in service and delivery. Finally, the acquiring firm lacked the stamina to fully integrate many of the systems between the two companies. As a result, they were never able to leverage their important knowledge and human capital management systems and achieve the desired productivity and innovation gains.

Going forward:

Since every situation differs, a “one size fits all” approach in areas like organizational design and sales & marketing planning rarely works. Organizational, channel and program integration is not easy but must be relentlessly pursued in order to maximize program efficiency & effectiveness, minimize internal strife and drive collaboration. Using proven change management tools is critical. At its core, excelling as a global company is about dissimilar people working together. Ignoring the needs and aspirations of your teams will compromise organizational performance and business results.

For more information on our services and work, please visit the Quanta Consulting Inc., web site.

Tangerine repositions for growth

Market success, even one based on disruptive innovation, is often fleeting. Many new businesses burn bright but quickly fade away due to competitive moves, changing consumer tastes, or ill-fated acquisitions. This need not happen, as the story of web-based bank ING DIRECT, now rebranded as Tangerine, illustrates.

Dutch bank ING Group introduced ING DIRECT into Canada in 1997 as a phone and web-based retail bank with a unique brand proposition – no fees, higher savings rates, simplicity and approachability. The business was instantly popular, especially among educated and tech-friendly consumers. By 2010, ING had attracted 1.5 million customers and over $20B in deposits, primarily owing to its innovative high interest savings account, no-haggle mortgage, and low-fee mutual funds. The firm was also an early adopter of social media and mobile banking. Despite the success, storms clouds were appearing on the horizon.

ING began to lose market differentiation and was close to its market potential in its core segments. The Big 5 Canadian banks had taken notice and were picking up their game in terms of market competitiveness. Importantly, ING’s savings rate advantage was evaporating in a falling interest rate environment. Finally, ING’s consumers were evolving, looking for a greater variety of products and services. Clearly, the firm was at a strategic crossroads: continue to focus on its core market with a niche, largely “savings” offering, or evolve towards more of an everyday bank that was capable of truly meeting the needs of the emerging “direct” banking consumer.

In 2010, the Company decided to go for growth and reposition ING as a more full-service ‘everyday’ direct bank for individuals, families and small businesses. To do this properly, however, ING needed capital. Their Dutch parent was in no position to deliver, but Scotiabank was, and in 2012, they agreed to acquire ING DIRECT’s Canadian business. As part of the deal, the firm had to undergo a rebranding and name change – which culminated in the launch of the Tangerine brand in April 2014.

“Changing the name of a beloved Canadian brand that always delivered on its promises needed to be approached delicately. Our challenge was in how to leverage the equity of an iconic brand, while forging new ground and establishing leadership in everyday direct banking in Canada,” said Andrew Zimakas, Chief Marketing Officer at Tangerine. “We knew this change would be highly scrutinized by our employees, customers and the market overall.”

Research shows that upwards of 80% of all M&A deals fail to generate incremental shareholder value. Quite often, the acquired brands end up being scuttled. Yet, this did not happen with Tangerine. Management of both companies prudently followed four key principles:

Establish brand primacy
The repositioning has always been a Tangerine marketing-led initiative. This ensured equal attention was paid to crafting and communicating the right narrative and message to the overall market – as well as to each Tangerine employee or brand ambassador. Unlike many acquisitions, this was a growth-focused, value enhancing story, not one of cuts.

All parties understood the value of Tangerine’s unique brand, growth imperative and value proposition – and the importance of not compromising it for short term gain. Safeguarding Tangerine’s brand heritage, authenticity and differentiation were paramount before and after the deal was completed. Going forward, both Scotiabank and Tangerine’s management have remained true to this mission.

Enhance customer value
To remain relevant and ensure message clarity, Tangerine conducted extensive customer and employee research immediately after the deal was consummated. The Company learned that they had to enhance their value proposition to maintain loyalty and to improve their odds of successfully growing the number of customers and the number of products they purchased. To this end, a number of service enhancements were introduced concurrent with the rebranding, including new ATM distribution and a fully responsive web site.

Execute with excellence
Many acquisitions and strategic pivots give short shrift to execution, significantly increasing risk. From the outset, senior leaders understood it would take 12-18 months and sufficient resources to effectively re-brand the operations – which impacted over 3000 consumer touch points across digital properties, call centers, marketing materials etc.

Get the governance right
Having good governance is vital to making deals work. This acquisition featured clear roles & responsibilities around who was leading the Tangerine rebranding and how this effort was plugged into the Scotiabank governance structure. Even though the Tangerine team maintained autonomy, Scotiabank was part of the transformation team from the outset and provided important support for the rebranding strategy and execution.

The Tangerine story is a best practice for strategically repositioning a brand into new markets as well as how to prudently integrate a successful company without compromising its brand values. Many of the lessons include: getting the right people committed to the same goals; understanding and delivering on consumer & employee needs and; executing the transformation with excellence.

For more information on our services and work, please visit the Quanta Consulting Inc., web site.