Friday, April 17, 2009

Most Change Is Meaningless

Too many business problems are diagnosed and treated on a tactical level. Companies change their names, redesign their identities and switch their advertising (agencies) at the drop of a hat. Mostly, they are spinning their wheels. In addition to being grossly inefficient, few companies find solutions to their problems simply by changing tactics.

One of the most frequently cited reasons for executing tactics differently is to make companies appear more “contemporary”. Of course this rationale presupposes that consumers perceive a company to be “outdated”. It also presupposes that simply appearing more contemporary will solve a company’s business problems. Neither is necessarily true. Companies earn negative perceptions over time through their own actions, and superficial tactical changes do little to correct the behaviors creating their problems.

The more difficult challenge is determining what should replace a company’s current marketing elements. Even if we assume it is a worthy goal, there is more than one way to appear “contemporary”. Appearing contemporary can manifest itself as high-tech, innovative, youthful, fashionable or environmentally friendly (just to name a few). Tactical elements designed to communicate one of these interpretations would be different from those designed to communicate the others. Which direction is right?

Wanting to change isn’t strategic. Nor is the act of changing. Without an accurate diagnosis of its business problem, a company can’t know what perceptions will help solve its problems. And without a clearly defined goal, there is no foil for evaluating change. If a company is planning to change its name without the strategic foundation for doing so, it might as well pick something as arbitrary as Buttercup—every other option will be equally arbitrary.

2 comments:

  1. While I agree with your diatribe that companies are often too tactical, especially at the sr. management level, what is missing from your blog is the human element. If you look at typical company today and correlate that to major changes in its product or branding direction you will find that most of the time this is associated with a shake-up at the sr. level followed by the introduction of new management. It could be argued that the need for change initiated the staffing changes but that is a different argument for a separate post.

    As with all so called great leaders, just look at the U.S. political system, the new royalty places all of the woes of the company on the previous administration and sets out to recreate the wheel using their own tactical view of the marketplace. While this fresh approach may be just what the company needed to kick start the desired results often the consequence is the loss of focus on the market place and its needs.

    Rather than focusing on new hip colors and trendy catch phases companies need to focus on their target markets and adjust their “strategic” goals to meet those needs. Once a solid strategy has been established and validated they can then turn to the tactical elements to deliver on that vision.

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  2. True, it is often vanity and self-importance that cause managers to recreate every wheel—sometimes for the better, sometimes the worse. What tends to accelerate the practice is the decreasing tenure of senior management.

    It has been reported that the average tenure of a CEO was 8.3 years in 2006, down from 9.7 in 1999. A full 40 percent of CEOs hold their positions for two years or less. With such a short time at the helm, it’s not surprising that managers show little reverence for the past or great concern for the future. Their bonuses are paid in the here and now.

    Shaking things up has its benefits. Everything changes, so inertia is a company’s enemy. However, without strategic continuity, the change inevitably becomes disjointed, arbitrary and ultimately meaningless.

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