WHY DO (ONCE-SUCCESSFUL) ORGANISATIONS DIE?

Research shows that many companies “linger” but, over time, their ROSF (return on shareholders’ funds) falls away. Despite clear and overt trend indicators, executives are reluctant to change, to move into new territory, to adopt different strategies. Why?

Ask them and they tell you they ‘just knew’ that the business ‘should’ be doing better. That there are no good reasons for profits to be falling, or sales to be flattening out, returns to be decreasing or channel loyalty to be diminishing… and that they are sure the business will ‘turn the corner’ ‘sooner or later’. When it doesn’t, they are usually able to identify a variable outside their control or predictability, such as “A new competitor entered the market”; “Trends took an unforeseen twist”; “The market changed”…

In truth, they failed to recognise and cope with these factors. It is a clear sign of the absence of Strategic Marketing skills, and a demonstration of the limitations of Operational Marketing management talent.

Operational Marketing people are far superior when it comes to day-to-day, routine management decision making, but when things go wrong, Strategic Marketing skills such as those learned in formal tertiary environments, or from extensive exposure to multiple industries, are often missing… they are the Opportunity Cost of Operational superiority.

Equipped with Operational Marketing experience alone, smart executives, even the most seasoned operators, make mistakes they shouldn’t.

Some of these are:

Confirmation Bias – They seek info that supports their perceptions and dismiss that which opposes their perceptions – even briefing market research to ‘prove’ success, despite market results, as contrary evidence. They can encourage a ‘yes- man’ mentality and reject constructive criticism as ‘negative’. (Unreal budgets usually accompany this bias.).

The Sunk Costs Fallacy – Executives focus on money already spent as justification to maintain stance and validate on-going effort.

Escalation of Commitment – “We just need more money/resources…” goes hand in hand with sunk cost fallacy

Anchoring and adjustment – not updating figures as new evidence comes
to hand, PESTLEED variables (Political, Environmental, Socio-Cultural, Technological, Legal (Compliance), Economic, Ethical and Demographic) change and new competitive dynamics take effect.

Emotional Irrationality & Denial: Propped up by failing self-esteem, fear of revealing weakness, or threat of being exposed as imperfect, some executives just ‘refuse’ to acknowledge the evidence and admit they need help.

To avoid biases, companies need objective, strategic expertise. Strategic training and knowledge creates the ability to see the business from the outside in… with different perspectives that reveal alternative, new and (sometimes profoundly) better opportunities.

Operational Bias Persists Unless Controlled

The problem of Operational Bias is persistent! The absence of consistent, strategic guidance demonstrates a fundamental flaw in the way business assesses the skills necessary for organisational leadership: This has been going on for far too long!

It isn’t deliberate. It is simply mis-directed enthusiasm and determination… There’s a great cartoon with an image of a king who is so focused on going to war with his sword-fighting soldiers and archers, that he refuses to see the salesman selling artillery and Gatling guns.

Why has Tolerance of High Failure Rates Propagated?

The high failure rate of “once-were-successful” businesses makes it clearly apparent, to those who do possess this knowledge, that the rest of world of commerce simply misunderstands or under-estimates the craft of Marketing.

If you are using the word, “Marketing” as a synonym or substitute for “promotion,” “advertising” or “selling”, you’re in a world of pain, most likely without even knowing it.

As a result, executives who do not have the necessary training or adequate business insights to make Strategic Marketing decisions, opt for options they are not ideally equipped to choose… leading to costly, profound, or even commercially fatal mistakes.

The following chapters offer a profound, radical and innovative perspective for business: One that challenges control, and requires re-thinking, of succession planning and career paths. Its promise is an improved platform for optimising organisational performance, corporate direction and business decision-making.

Do We Accept Failure that Shouldn’t Happen?

So, products fail. Brands fail. Businesses fail… or do they? In fact, products do NOT fail, brands do NOT fail. Businesses do NOT fail… by themselves: It is management, making bad decisions, that causes products, brands and businesses to fail!

It is management, making bad decisions, that causes products, brands and businesses to fail!

This perspective should metamorphosize organisational norms in astutely led businesses and give them opportunity to prosper by establishing more appropriately qualified people in the strategic decision-making process.

Adoption of the Hierarchies of Marketing provides logic for succession planning, promises greater management accountability, opportunity for optimal productivity, better measurement and universally better business management. It is the key for large companies to radically introduce break-through growth and productivity.

“The key to break-through growth and productivity.”

Written for innovative and visionary business leaders, this model is also a practical and important perspective for academic and commercial understanding of the Craft of Marketing, the use and advancement of “marketing” as a business discipline and as a field of study and scientific activity.

Adoption of the Hierarchies of Marketing has the potential to re-establish Marketing as a meaningful, respected and potent profession it was in the 1970’s, that can be more profoundly embraced, be more accountable and measurable, to the benefit of organisations, people and the business community.

Payback from Observing the Hierarchies of Marketing:

1. Minimises errors in Management decision making
2. Makes Marketing potent, accountable and measurable, 3. Ensures optimal succession planning
4. Improves resource management
5. Builds sustainable competitive advantage

It will also help to discriminate the specialist nature of Digital Promotions activities which are often misunderstood to be the primary activity of “Marketing” professionals.

The following pages introduce the heterogeneous ‘faces’ of marketing. Readers will learn how the Four Hierarchies of Marketing, once understood, can be used to allocate the right responsibilities to appropriately qualified decision makers, how to develop roles and recruit executives appropriate to skills and training, how to appoint and succession plan marketing and strategic leadership to ensure the business organisation enjoys long term prosperity.