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Looking Forward – but don’t ignore what is behind you!

March 9, 2007 2 comments
I left school many years ago, but I still remember some of the lessons taught by Jeremy Rosen, who was, at that time, my headmaster. I’m still in contact with him – and both of us now have gray hair! In a recent newsletter he writes:

There’s a Russian proverb that goes, ‘He who looks to the past is in danger of losing an eye. But he who ignores the past is in danger of losing two eyes.’

Jeremy Rosen states that he doesn’t know if this is really a Russian proverb – he heard it from Lord Bullock, the historian, biographer of Hitler and Stalin, who was speaking at the Van Leer Institute in Jerusalem many years ago. However the origin is less important in this case than what is being said.

Too often, people make decisions based on insufficient information – they ignore the past, creating excuses saying that the past is a closed book – and base their decisions on the perceived problems of the present, tearing up all that has gone before in an effort to create a desirable future. Others take the opposite view – and dwell in the past, refusing to realize that it is the future that shapes our fortunes, not what has gone before.

In marketing and business the same rules apply. Some are “Risk seekers” – always anticipating a bright future, irrespective of warnings, and ignoring the past. Others are “Risk adverse” scared about what the future may bring – and essentially living in the past. In reality, businesses need to balance both approaches. They need to build for the future, and should grasp emerging opportunities with both hands. However this should be based on knowledge of the risks involved, and this can only come from prior experience and knowledge. Even brand new innovations are built on past knowledge.

There are organizations that seem to focus on past (or should that be passed) glories. They stress how they did this or that – and how they became the market leader through their past actions. However if they fail to see how the present has changed then they will inevitably lose this leadership position. There are numerous companies that have fallen because of this. One of the best examples is J Sainsbury – the UK supermarket giant, currently in the midst of a bidding battle. Sainsburys used to be the largest UK supermarket, but it lost direction, and with it share – it is now no longer the market leader. Sainsbury saw itself as the market leader, but failed to recognize the innovations and different approach of competitors such as Tesco and Asda (owned by Walmart). Essentially, Sainsbury was looking at the past and reveling in it, but in reality was ignoring the past and the lessons it held on success. Sainsbury had grown by being innovative – it was the first UK supermarket, building a major presence by giving customers what they wanted. However by not keeping both eyes open on what was happening in its market, it lost its market position.

A key business skill is being able to anticipate the future (using techniques such as scenario planning). This depends on using drivers and trends from the past to anticipate what could happen in the future. We need to look to the past and learn from it. However our aim should be to build a better future. This cannot come by ignoring what has gone before. Instead we should aim to understand why something happened, so that we can learn from it and not repeat the same mistakes. As George Santayana said in 1905: “Those who cannot remember the past are condemned to repeat it.”

There is a widely known Zen story that shows this in another way:

“When the spiritual teacher and his disciples began their evening meditation, the cat who lived in the monastery made such noise that it distracted them. So the teacher ordered that the cat be tied up during the evening practice. Years later, when the teacher died, the cat continued to be tied up during the meditation session. And when the cat eventually died, another cat was brought to the monastery and tied up. Centuries later, learned descendants of the spiritual teacher wrote scholarly treatises about the religious significance of tying up a cat for meditation practice.”

The importance of lateral thinking!

February 9, 2007 Leave a comment
A story is told about a supermarket that was having problems with gangs meeting in its car park after the supermarket had shut for the night – trading drugs, fighting and generally making a mess and nuisance.

The supermarket tried various conventional solutions to solve the problem: fences, increased security, and the like. Nothing worked long-term and, moreover, they were all expensive. Then somebody thought that perhaps a different approach might work.

The gangs were all trying to look cool, and the supermarket car-park had gained a reputation as a cool place to hang out at night. So what did the supermarket do? They thought about what could make the car park an uncool place to be, and started up a loud-speaker system piping the music of Mantovani over the parking spaces. Quickly the problem disappeared – as what kind of “cool” 16-18 year old wants to be associated with visiting a location that plays the kind of “easy listening” music beloved by their grandparents!

I teach a weekly diploma course at Thames Valley University, as part of the UK’s Chartered Institute of Marketing‘s Marketing Research & Information module. One of the joys of teaching is that you often learn a lot from your students. Last week was no exception, and provides another great example of lateral thinking – combined with a crucial awareness of the importance of ensuring customer satisfaction while still making money!

One of my students had spent some time working as a hospitality manager in a Greek hotel. He was working the night shift, when a package group of 15 tourists arrived at the hotel. They’d just landed, and the time was 3.00am. All were tired, having had a delayed flight, and all were looking forward to the rooms that they’d paid for. Except because they hadn’t turned up, they had been treated as no-shows, and their rooms had been sold on.

Overbooking is a not-infrequent problem faced by hotels. Normally the way round is to find another equivalent hotel, and transfer the overbooked guests there. Nobody is particularly happy about the arrangement.

  • The guests are unhappy as they had been expecting hotel A and got hotel B – and have to move on, when they were looking forward to resting from their journey.
  • The hotel is unhappy as the replacement hotel needs to be as good, if not better than the original. This means that the hotel has to pay for its mistake – financially, and if the replacement hotel is not better, in good will and reputation as well, which can be even more important.
At 3.00am, with tired and irritable visitors desperate to sleep, the problem is even worse. You have to phone around your competitor hotels in the area – speaking to the night staff – to find a replacement. Often the other neighborhood hotels will also be full, meaning that the group will have to be split up – guaranteed to cause problems. Furthermore, you are likely to have to book people in lower quality hotels. You will also need to arrange several taxis to transfer people to the replacements. All told, you have a PROBLEM!

Christos found another way.

The locality ran regular cruises to the Greek island of Santorini – which necessitated an early morning start, and a couple of nights on the island.

Santorini is one of those magical islands that, once visited, you never forget. It offers all that is best of the Greek islands – white washed villages, great beaches and views, fun restaurants, archaeological sites, monasteries and churches. However this is not all – it also has a volcano in the middle of the archipelago, with regular trips to see its caldera. This volcano has been attributed to the destruction of the Minoan civilization on the nearby island of Crete, and even the cause of the plagues that the Biblical book of Exodus mentions as having led to the release of the Israelite slaves from their Egyptian servitude (so, for example, the plague of darkness resulted from a cloud of ash that fell from the volcano). This eruption, 3500 years ago, was undoubtedly one of the largest ever volcanic eruptions during human history – much bigger than the infamous 1883 eruption of Krakatoa. The island has even been linked to the legend of Atlantis.

Christos knew that there were always places on this trip. He also knew that the costs of the trip, including the island hotel costs, would be considerably less than what would need to be paid to competitors to find beds for the group so early in the morning, as well as the less tangible costs in lost goodwill and so on. Accommodation on Santorini was much more basic and low cost – but the surroundings compensated for this.

Rather than apologizing to the group, and then getting on the phone to search for replacement hotels at 3.00am – a depressing and tedious task – he welcomed the group and said that they were really lucky. They were the hotel’s 1000th tour group and as such had qualified for a superb prize – a free trip to Santorini to start their holiday with a bang. The tour bus that would be taking them to the boat would be arriving shortly so there was no point in checking them in. They’d check back into the hotel in 2 days time, after their mini-cruise.

The tourist group may have been tired. But tiredness evaporates in such circumstances, and instead of an unhappy and probably angry crowd, you now had customer satisfaction par excellence. Instead of a short-night’s sleep and then a day recuperating by the pool, this group had been chosen to visit one of the highlights of any trip to Greece – for free. The tour group were overjoyed at their lucky break.

Next morning, the day-shift manager queried why the hotel was paying for 15 tourists to go on the Santorini trip. This was normally seen as a profit center by the hotel – as the margins were considerable. Christos explained the situation: how, instead of paying out to competitor hotels to accommodate the overbooked tourists, the hotel had covered its costs by just diverting the payments already made to the tour. Quickly the wisdom of the decision was realized, and it is now part of the hotel operating manual.

More importantly – this second story shows some of the skills all great marketers need:

  1. Ability to be able to think quickly, laterally and if needed, sidestep conventions and rules;
  2. Awareness of the importance of customer satisfaction: a happy customer leads to a strong reputation, and repeat purchase;
  3. Awareness of the importance of profit and that customer satisfaction needs to be balanced by an ability to make money.
Successful marketing is not all about reading the text books. Generally it is about solving everyday problems using innovative approaches. Many of these require skills in lateral thinking. Such solutions often are low-cost or save money, and build reputation at the same time. There are many examples of how lateral thought has been used to create opportunities or limit threats to the business. These two stories illustrate two different ways problems were solved through lateral thinking.

Leadership and the Terrorist Plague

July 30, 2005 Leave a comment

The last couple of weeks have set me thinking about what leadership is or should be. This entry will be fairly rambling – as I want to throw up ideas. I’m still unsure myself what the ideal leader should be like.

Maureen Sharib’s blog entry (Psychopaths in the Hallowed Halls touched on this. Maureen mentioned an excellent article – a must read at www.fastcompany.com/magazine/96/open_boss.html. This great item looked at the psychology of business leaders. However it did not go far enough in my opinion, by looking at national leaders. If your boss is a psychopath at least you have the option to change jobs. If you live in a democracy, then if the President/Prime Minister is psychopathic then he/she may not get re-elected. But what if you are not in a democracy – what then! Iraq under Saddam Hussein, Syria under Assad, Myamar (Burma), Zimbabwe….

A couple of years ago there was a session at the SCIP London conference (SCIP Europe 2003) entitled “Advanced Analysis: Pychological Profiling” by Jens Hoffman and Everhard von Groote. The aim was to teach methods of leader profiling, and several of the examples were national leaders. Four leadership styles were discussed:

  • Narcissistic (feelings of grandiosity, lack of empathy, need for admiration, power fantasies);
  • Paranoid (General distrust, jealousy, provokes interactions, aggressive, feeling of superiority);
  • Compuslive (High structure, perfectionism, rigid, highly adapted socially);
  • Pyschopathic (Superficial charm, grandiose sense of self worth, a liar, manipulative, no guilt, lack of empathy. Often impulsive and reckless – and lifestyle may be parasitic, feeding off others).

Several national leaders were discussed – Clinton, Margaret Thatcher. There is a wealth of literature on the topic. (For example: Profiling Political Leaders: Cross-Cultural Studies of Personality and Behavior edited by Ofer Feldman – containing essays on several political leaders e.g. on Mao Zedong’s Narcissism).

What worries me about all this is that it gives the impression that those who reach the most senior positions in countries or companies are all suffering from some kind of personality disorder – paranoia, narcissism, pyschopathy and so on.

At the same time, there is a second element to leadership – trust. Without trust, you won’t get people to follow you. Instead you need to rely on control and your status.

In the bible there is an odd story – of Phinehas, who was the great nephew of Moses (and grandson of Aaron). The book of Numbers discribes a plague that came about following an episode of immoral behaviour. (See Numbers ch 25). It appears that none of the leaders of the Israelites did anything to stop this – other than talk. That is until, Phinehas (who was not in the chain of command) caught one couple in flagrante delicto. In a gesture of righteous indignation, Phinehas killed the couple. The strange thing is that instead of being condemned for murder, or taking the law into his own hands, Phinehas is praised, the plague stops – and Phinehas is granted a covenant of peace.

The Jewish Rabbis spent a lot of time on this story – discussing what was meant by it and what was meant by the covenant of peace. They also raised questions on leadership and what it involved.

Re-reading this story (the weekly reading in synagogues this week) set me thinking about all the above issues – what is leadership?

  • Is leadership managing others and controling them?
  • Is it the ability to be decisive – like Phinehas – and take actions which might be unpopular, damning the consequences?
  • Or is it something else?

A lot of this thought has also been tied in with recent events in London. How do you fight terrorism? What do you do with a suspect who runs? (As happened last Thursday, when an innocent man was shot dead – in a Phinehas like act by the police. He’d been linked to one of the bombers, although the link appears coincidental, and when ordered to stop, he ran. He was also wearing a quilted jacket on a hot day. The police thought that this hid a suicide bomb belt, and rather than risk shooting his torso and setting off a possible bomb belt, or allowing him to set it off, they shot to kill).

Mistakes may be made – but in fighting terrorism the leader needs to be prepared to take positive action, even if this is unpopular. Appeasement and other approaches to avoiding an unpleasant decision are not really options as they only sort things out in the short-term – deferring the problem until later. (Think of Chamberlain, the pre-WW2 British Prime Minister who followed a policy of appeasement with Adolf Hitler – letting Hitler carve up a bit more of Europe, and proclaiming peace in our time, while giving Hitler a chance to arm up).

Terrorism is a plague! (Blaming it on the Iraq war, the situation in Palestine/Israel, and so on is just such appeasement in my view. Otherwise how do you explain the weekend bombing in Egypt, or last week’s bombs in Turkey – both unrelated to the Iraq and Palestine issues.) I believe that the only approach is to hit hard at the terrorists and not give them a chance to group up. Obviously you also use other approaches to try and stop people joining the terrorist movements – and without clarity and a willingness to emphasise this is wrong some people will continue to be brainwashed into believing that setting off bombs on buses, trains or in shopping malls is an acceptable way of reaching heaven or achieving political aims. Perhaps this is what the Bible is trying to say when it talks about the covenant of peace. That it is only through strong and decisive actions that will we be able to defeat such plagues and gain peace?

There is leadership story told about Presidents Bush and Clinton.

When President Clinton turned over the reins of government to George W Bush the public and political pundits were all quite surprised how short the two of them met to discuss transition issues. In a recent exclusive, it was revealed what Clinton discussed with Bush.

It appears that Clinton handed Bush three envelopes, each consecutively numbered from 1 to 3. Clinton told Bush that his father, George Bush Senior, had provided him with the same briefing and the same three envelopes, as had all Presidents done from the time of George Washington.

“When things get tough,” said Clinton, “open the envelope marked Number 1 and follow the instructions. If things get worse, open the second envelope. And, when things get really impossible, open the third. Do not,” emphasized Clinton, “open these envelopes under any other circumstances” The envelopes were passed on to a new era of leadership and the two shook hands and took their leaves.

Bush, being an intensely curious and impatient man and one who is frequently up at all hours of the night, became rather curious as to the contents of the envelopes opened the first. He read “Blame your predecessor.” His curiosity piqued, he opened the second. “Blame the Senate.” He then tore open the third. It read “Prepare three envelopes.”

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